ARTLINE FINANCE PVT LTD,DELHI V. DCIT,CENTRAL CIRCLE-8, DELHI

ITA 3705/DEL/2025

AI Insights

The case involves Artline Finance Pvt. Ltd. appealing against an order from the Commissioner of Income Tax (Appeals)-24, New Delhi, concerning an assessment for the year 2013-14. The primary contention was that the notice issued under Section 148 of the Income Tax Act, 1961, dated 31/07/2022, was barred by limitation. The appellant's counsel argued that according to the Supreme Court's judgment in Rajeev Bansal, the notice was not issued within the permissible time frame. The Departmental Representative countered that the notice was within the prescribed limits. The Tribunal examined the timelines and relevant judicial decisions, ultimately finding in favor of the appellant, Artline Finance Pvt. Ltd.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 785234 (ITAT-DELHI)
• Duration Of Justice: 4 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-10-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Assessment Year: 2013-2014
• Appeal Filed On: 04-06-2025
• Other Referred Cases: Union of India and others Vs. Rajeev Bansal [2024] SCC Online SC 2693, Union of India & Ors. v. Ashish Agarwal, ADM Agro Industries Latur and Vizag (P.) Ltd. Vs. ACIT [2025] 174 taxmann.com 725 (Delhi), Ram Balram Buildhome Pvt. Ltd. v. Income Tax Officer and Anr.: Neutral Citation No.: 2025:DHC:547-DB
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: HARPREET KAUR HANSRA
• Assessee Lawyers: AMIT GOEL; PRANAV YADAV
• Keywords: Set aside; Reassessment proceedings; Period of limitation
• Section: 148

Judgement Text

"1 ITA No. 3705/Del/2025 Artline Finance Pvt. Ltd. Vs. DCIT IN THE INCOME TAX APPELLATE TRIBUNAL DELHI (DELHI BENCH ‘F’ NEW DELHI) BEFORE SHRI YOGESH KUMAR U.S., JUDICIAL MEMBER AND SHRI NAVEEN CHANDRA, ACCOUNTANT MEMBER ITA No. 3705/Del/2025 (A.Y. 2013-14) Artline Finance Pvt. Ltd. (earlier known as ArtlineVinimay Pvt. Ltd.) No. 8 Ground Floor, Todal Mal Lane, Bengali Market, Delhi PAN: AACCA5237E Vs DCIT Central Circle-8 Delhi Appellant Respondent Assessee by Sh. Amit Goel, Adv, Shri Pranav Yadav, Adv Revenue by Ms.Harpreet Kaur Hansra, Sr. DR Date of Hearing 16/10/2025 Date of Pronouncement 29/10/2025 ORDER PER YOGESH KUMAR, U.S. JM: The above captioned Appeal is filed by the Assessee against the order of Ld. Commissioner of Income Tax (Appeals)-24, New Delhi (Ld. CIT(A)’ for short) dated 29/05/2025 for Assessment Year 2013-14. 2.The Ld. Counsel for the Assessee, arguing on the Ground No. 1 of the Appeal, vehemently submitted that the noticedated 31/07/2022 issued u/s 148 of the Income Tax Act, 1961 ('Act' for short) is barred by limitation and by relying on the Judgment of Hon'ble Supreme Court in the case of Union of India and others Vs. Rajeev Bansal [2024] SCC Online SC 2693, sought for quashing the assessment order. Printed from counselvise.com 2 ITA No. 3705/Del/2025 Artline Finance Pvt. Ltd. Vs. DCIT 3. Per contra, the Ld. Departmental Representative submitted that Ground No. 1 of the Assessee regarding the contention that notices issued u/s 148 of the Act is barred by limitation is devoid of merit. Further submitted that, issuing of the notice and the initiation of the assessment proceedings are well within the limitation prescribed under the Act, thus relying on the order of the Lower Authorities, sought for dismissal of the Appeal. 4. We have heard both the parties and perused the material available on record. It is the case of the Ld. Assessee's Representative that notices issued u/s 148 of the Act dated 31/07/2022 for Assessment Year 2013-14 is barred by limitation in view of the Judgment of Hon'ble Supreme Court in the case of Rajeev Bansal (supra). The Hon'ble High Court of Delhi in the case of ADM Agro Industries Latur and Vizag (P.) Ltd. Vs. ACIT [2025] 174 taxmann.com 725 (Delhi), by considering Judgment of Hon'ble Supreme Court in the case of Union of India &Ors. v. Ashish Agarwal (supra) and other judicial precedents decided the similar issue in following manners:- “4. In compliance with the directions issued by the Supreme Court in the case of Union of India &Ors. v. Ashish Agarwal (supra), the Assessing Officer [AO] provided information and material to the Assessee on 25.05.2022. The Assessee was granted two weeks’ time to respond to the said notice. The Assessee responded to the notice dated 25.05.2022 by a letter dated 09.06.2022. Printed from counselvise.com 3 ITA No. 3705/Del/2025 Artline Finance Pvt. Ltd. Vs. DCIT 5. The AO passed an order under Section 148A(d) of the Act on 19.07.2022. According to the Assessee, the same was beyond the period as stipulated for issuance of notice under Section 148 of the Act. 6. In the present case, the period of six years from the end of the assessment year for issuing a notice under Section 148 of the Act expired on 31.03.2020. Thus, in terms of Section 149 of the Act, a notice under Section 148 of the Act could not be issued. However, the said period was extended by the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 [TOLA]. Consequently, the time limit for issuing such a notice was extended to 30.06.2021. The original notice under Section 148 of the Act was issued on 30.06.2021, which was the last date of expiry of the period of limitation. 7. As noted above, the said notice was deemed to be a notice under Section 148A(b) of the Act by virtue of the decision of the Supreme Court in Union of India &Ors. v. Ashish Agarwal (supra). The Supreme Court also granted further time to provide the material, which was required to accompany such notice. As explained by the Supreme Court in the case of Union of India v. Rajeev Bansal: 2024 SCC OnLine SC 2693, the period from the date of the issuance of the notice till 04.05.2022, the date on which the Supreme Court had rendered the decision in Union of India &Ors. v. Ashish Agarwal (supra), is required to be excluded. Additionally, the time provided till the date of providing the material, which should have accompanied a notice under Section 148A(b) of the Act, as well as the time available to the assessee to respond to the said notice is also required to be excluded by virtue of the Fourth Proviso to Section 149(1) of the Act, as applicable at the material time. 8. In the present case, the time period for issuance of notice under Section 148 of the Act expired on 16.06.2022. However, the impugned notice was issued on 20.07.2022, which is beyond the said period. Thus, the notice was beyond the period of limitation. 9. This court in Ram BalramBuildhome Pvt. Ltd. v. Income Tax Officer and Anr.: Neutral Citation No.: 2025:DHC:547-DB observed as under: - “53. As is apparent from the plain language of the fourth proviso to Section 149(1) of the Act, it extends the period of limitation for issuing a notice under Section 148 of the Act so as to provide the AO a minimum of seven days to pass an order under Section 148A(d) of the Act. If the time available to the AO to decide whether it is a fit case for issuance of notice under Section 148 of the Act in terms of Section 148A(d) of the Act is less than seven days after excluding the period as provided under the third proviso, then the period of three years or ten years as prescribed is required to be extended by such period so as to make available to the AO at least seven days to pass an order under Section 148A(d) of the Act and issue a notice under Section 148 of the Act. Illustratively, if the show cause notice under Section Printed from counselvise.com 4 ITA No. 3705/Del/2025 Artline Finance Pvt. Ltd. Vs. DCIT 148A(b) of the Act is issued to an assessee, on the last date on which issuance of such a notice under Section 148 of the Act is permissible, that is, on the last day of expiry of three years from the end of the relevant assessment year or ten years from the end of the assessment year as the case may be, the time made available to the assessee to respond to a notice under Section 148A(b) of the Act (being a minimum of seven days but not exceeding thirty days as provided in the notice plus such further time as extended pursuant to an application), is required to be excluded for the calculation of the period of three years or ten years as the case may be. And, an additional period of seven days is made available for the AO to pass an order. Thus, the period of limitation in such case would be three years (after excluding the time provided to the assessee to respond to the notice under Section 148A(b) of the Act) and seven days, or a period of ten years (after excluding the time provided to the assessee to respond to the notice under Section 148A(b) of the Act) and seven days as the case may be. 54. It is obvious, that in such a case, the AO would not have a time for passing an order under Section 148A(d) of the Act as stipulated under the said Clause, that is, one month from the end of the month in which the assessee furnishes a reply to the notices issued under Section 148A(b) of the Act. As noted above, the AO is required to complete the entire procedure for issuance of notice under Section 148 of the Act within the period as prescribed under Section 149 of the Act. Plainly, if the AO is unable to complete such procedure within the period of limitation, the AO would cease to have the jurisdiction to issue such a notice. *** *** *** 65. Thus, in the facts of the present case, the last date for issuance of notice under Section 148 of the Act for AY 2013-14 under the statutory framework, as was existing prior to 01.04.2021 was 31.03.2020, that is, six years from the end of the relevant assessment year. 66. By virtue of Section 3(1) of TOLA time for completion of specified acts, which fell during the period 20.03.2020 to 31.12.2020 were extended till 30.06.20218. Thus, the notice dated 01.06.2021 was issued twenty-nine days prior to the expiry of period of limitation for issuing a notice under Section 148 of the Act as was extended by TOLA. As noted above, the period from 01.06.2021, the date of issuance of notice, and 04.05.2022, being the date of decision of the Supreme Court in Union of India &Ors. v. Ashish Agarwal is required to be excluded by virtue of the third proviso to Section 149(1) of the Act. 67. Additionally, the period from the date of decision in Union of India &Ors. v. Ashish Agarwal till the date of providing material, as required to the accompanied with a notice under Section 148A(b) of the Act, is required to be excluded. Thus, the period between Printed from counselvise.com 5 ITA No. 3705/Del/2025 Artline Finance Pvt. Ltd. Vs. DCIT 04.05.2022 to 30.05.2022, the date on which the AO had issued the notice under Section 148A(b) of the Act in furtherance of his earlier notice dated 01.06.2021, is also required to be excluded by virtue of the third proviso to Section 149(1) of the Act as held by the Supreme Court in Union of India &Ors. v. Rajeev Bansal. 68. In addition to the above, the time granted to the petitioner to respond to the notice dated 30.05.2022 – the period of two weeks – is also required to be excluded by virtue of the third proviso to Section 149(1) of the Act. The petitioner had furnished its response to the notice under Section 148A(b) of the Act on 13.06.2022. Thus, the period of limitation began running from that date. 69. As noted above, by virtue of TOLA, the AO had period of twenty- nine days limitation left on the date of commencement of the reassessment proceedings, which began on 01.06.2021, to issue a notice under Section 148 of the Act. The said notice was required to be accompanied by an order under Section 148A(d) of the Act. Thus, the AO was required to pass an order under Section 148A(d) of the Act within the said twenty-nine days notwithstanding the time stipulated under Section 148A(d) of the Act. This period expired on 12.07.2022. 70. Since the period of limitation, as provided under Section 149(1) of the Act, had expired prior to issuance of the impugned notice on 30.07.2022. The said is squarely beyond the period of limitation.” 10. Concededly, the said controversy is covered in favour of the Assessee by the decision of this court in Ram BalramBuildhome Pvt. Ltd. v. Income Tax Officer and Another (supra). 11. The present petition is, accordingly, allowed and all proceedings initiated pursuant thereto are set aside. The pending application is also disposed of.” 5. In the present case, the Ld. Counsel submitted the table computing the period of limitation as per the Judgment of Hon'ble Supreme Court in the case of Rajeev Bansal (supra), which has been followed by Hon'ble High Court of Delhi in the case of Ram Balram Build Home (P.) Ltd. (Supra) and ADM Agro Industries Lature and Vizag(P.) Ltd. (supra). The table computing the period of limitation is reproduced as under :- Printed from counselvise.com 6 ITA No. 3705/Del/2025 Artline Finance Pvt. Ltd. Vs. DCIT S. No. Particulars Date A Date of original notice issued u/s 148 30/06/2021 B Time remaining till 30.06.2021 NIL C Date of notice issued u/s 148A(b) 31.05.2022 D Due date for filing of reply to notice issued u/s 148A(b) 15.06.2022 E Reply/objection filed on 14.06.2022 F Extended date by which notice should have been issued u/s 148 (E + B) 14.06.2022 G Actual date of notice issued u/s 148 31.07.2022 H Is notice issued is valid? No 6. As per the Judgment of Hon’ble Supreme Court decision in case of Rajeev Bansal (supra), the notice u/s 148 of the Act was required to be issued on or before 14/06/2022. Therefore, the notice dated 31/07/2022 issued by the A.O. u/s 148 of the Act is barred by limitation specified u/s 149 of the Act, consequently, the re- assessment proceedings initiated thereupon is hereby quashed. 7. In the result, Appeal of the Assessee is allowed. Order pronounced in the open court on 29th October, 2025. Sd/- Sd/- (NAVEEN CHANDRA) (YOGESH KUMAR U.S.) ACCOUNTANT MEMBER JUDICIAL MEMBER Date:- 29 .10.2025 R.N, Sr.P.S* Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI Printed from counselvise.com 7 ITA No. 3705/Del/2025 Artline Finance Pvt. Ltd. Vs. DCIT Printed from counselvise.com "