ASSISTANT COMMISSIONER OF INCOME TAX, DELHI V. PREM CHAND PRAVESH KUMAR, DELHI

CO 120/DEL/2025

AI Insights

The case involves an appeal by the Assistant Commissioner of Income Tax (ACIT), New Delhi against Prem Chand Pravesh Kumar concerning the assessment year 2014-15. The core issue was the validity of the notice issued under section 148 of the Income-tax Act, 1961, for reassessment. The assessee challenged the jurisdiction of the Assessing Officer, arguing that the notice was barred by limitation. The Tribunal examined the timelines and legal provisions applicable, particularly in light of the amendments introduced by the Finance Act, 2021, and relevant Supreme Court decisions. The Tribunal found that the notice was indeed issued beyond the permissible period, leading to the quashing of the reassessment proceedings.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 774747 (ITAT-DELHI)
• Duration Of Justice: 30 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 10-09-2025
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2014-2015
• Appeal Filed On: 11-08-2025
• Other Referred Cases: Union of India vs Rajeev Bansal, Ram Balram Buildhome Vs. ITO & Anr
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: OM PRAKASH
• Assessee Lawyers: VED JAIN
• Keywords: Set aside; Reassessment proceedings; Period of limitation; Reopening of assessment
• Section: 147; 148

Judgement Text

"Page | 1 INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “C”: NEW DELHI BEFORE SHRI M. BALAGANESH, ACCOUNTANT MEMBER AND SHRI SUDHIR KUMAR, JUDICIAL MEMBER ITA No. 736/Del/2025 (Assessment Year: 2014-15) ACIT, New Delhi Vs. Prem Chand Pravesh Kumar, (through Erstwhile Partner Sanchit Garg), 292, Katra Peran, Tilak Bazar, Delhi- 110006 (Appellant) (Respondent) PAN: AAJFP9925A CO No. 120/Del/2025 (In ITA No. 736/Del/2025) (Assessment Year: 2014-15) Prem Chand Pravesh Kumar, (through Erstwhile Partner Sanchit Garg), 292, Katra Peran, Tilak Bazar, Delhi- 110006 Vs. ACIT, New Delhi (Appellant) (Respondent) PAN: AAJFP9925A Assessee by : Shri Ved Jain, Adv Shri Pawan Garg, CA Ms. Ishika Dua, CA Revenue by: Shri Om Prakash, Sr. DR Date of Hearing 08/09/2025 Date of pronouncement 10/09/2025 O R D E R PER M. BALAGANESH, A. M.: 1. The appeal in ITA No. 736/Del/2025 filed by the revenue and CO 120/Del/2025 filed by the assessee for AY 2014-15, arise out of the order Printed from counselvise.com Page | 2 of the National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as „ld. NFAC, in short] in Appeal No. ITBA/NFAC/S/250/2024- 25/1071406478(1) dated 20.12.2024 against the order of assessment passed u/s 147 r.w.s. 144B of the Income-tax Act, 1961 (hereinafter referred to as „the Act‟) dated 27.05.2023 by the Assessing Officer, Assessment Unit, Income Tax Department (hereinafter referred to as „ld. AO‟). Identical issue is involved in both these appeals and hence they are taken up together and disposed of by this common order for the sake of convenience. 2. At the outset, we find that the Cross Objections preferred by the assessee is delayed by 33 days. Considering the reason adduced in the condonation petition, we are inclined to condone the delay and admit the Cross Objection of the assessee for adjudication. 3. The Ground No. 2 raised by the assessee is challenging the validity of assumption of jurisdiction u/s 147 of the Act, wherein, it has been pleaded that the notice u/s 148 of the Act is barred by limitation. This goes to root the matter and hence, is taken up first for adjudication. 4. We have heard the rival submissions and peruse the materials available on record. We find that the assessee had challenged the validity of assumption of jurisdiction by the Learned AO under section 147 of the Act. The Learned AR before us argued that the notice issued under section 148 of the Act is barred by limitation in view of the decision of the Hon‟ble Supreme Court in the case of Union of India vs Rajeev Bansal reported in 469 ITR 46 (SC). In support of this proposition, the Learned AR placed on record the table containing the list of dates and events as under:- Printed from counselvise.com Page | 3 A. Key Facts S. No. Particulars Date Relevant Pg. No. of Paperbook 1. Notice issued u/s 148 (unamended provisions prior to Finance Act, 2021) 30.06.2021 Page 19 2. Letter communicating information with reference to section 148A(b) pursuant to SC decision in Ashish Agarwal 26.05.2022 Page 42-43 3. Reply filed by the assessee 09.06.2022 Page 49-90 4. Order u/s 148A(d) 26.07.2022 Page 110-115 5. Notice issued u/s 148 (amended provisions post Finance Act, 2021) 26.07.2022 Page 116-117 B. Computation of limitation as per decision of UOI vs. Rajeev Bansal: S. No. Particulars Particulars SC Paras 1. Assessment Year 2014-15 2. Period of limitation u/s 149 [3 years or 6 years] 6 years 3. Original Period of limitation u/s 149 31.03.2021 4. Extended period of limitation as per Income Tax Act read with TOLA 30.06.2021 Paras 65-69 5. Sanction to be obtained u/s 151 till 30.06.2021 [within 6 years] PCIT 6. Date of original notice u/s 148 - deemed SCN u/s 148A(b) 30.06.2021 7. Time surviving from date of issuance of deemed SCN till expiry of period as extended by TOLA [from 30.06.2021 till 30.06.2021] 1 day Paras 109- 113 8. Period of deemed stay to be excluded as per fifth proviso to section 149 [Date of Original 148 till extended time allowed to file reply to assessee] 30.06.2021 to 09.06.202 2 Paras 105- 107 9. Last date for issuing notice u/s 148 [09.06.2022 + 1 day] 10.06.2022 Para 111- 113 10. Further extension as per sixth proviso to section 149 [time period extended to 7 days] 16.06.2022 11. Actual date of issuance of notice u/s 148 26.07.2022 12. Hence, notice u/s 148 of the Act issued on 26.07.2022 is barred by Limitation Para 111- 113 Printed from counselvise.com Page | 4 5. Hence, in view of the decision of the Hon'ble Supreme Court in the case of Rajeev Bansal (supra), the extended due date for issuance of notice u/s 148 of the Act expired on 10-06-2022 and since, the notice u/s 148 of the Act is issued on 26-7-2022, the said notice is to be treated as barred by limitation and consequentially reassessment proceedings would be liable to be quashed as void ab initio. This issue was also subject matter of consideration by the Hon‟ble Jurisdictional High Court in the case of Ram Balram Buildhome Vs. ITO & Anr reported in 445 ITR 1 (Del) dated 30.01.2025. Relevant operative portion of the said order is reproduced herein below:- “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 30.06.2021 [Notification No.38/21 dated 27.04.2021]. 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 Agarwal2 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 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 Bansal4. 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 Printed from counselvise.com Page | 5 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. 71. It is contended on behalf of the Revenue that the AO is required to pass an order under Section 148A (d) of the Act by the end of the month following the month on which the reply to the notice under Section 148A (b) of the Act was received. Thus, the order under Section 148A (d) of the Act as well as the notice under Section 148 of the Act (both dated 30.07.2022) are within the prescribed period. This contention is without merit as it does not take into account that proceedings under Section 148A of the Act necessarily required to be completed within the period available for issuing notice under Section 148 of the Act, as prescribed under Section 149 of the Act. Thus, the time available to the AO to pass an order under Section 148A (d) of the Act was necessarily truncated and the same was required to be passed on or before 12.07.2022. The fourth proviso to Section 149 of the Act did not come into play as the time period available for the AO to pass an order under Section 148A (d) of the Act was in excess of the seven days. 72. In view of the above, we find merit in Mr. Sehgal's contention that the impugned notice dated 30.07.2022 has been issued beyond the period of limitation. 73. The petition is accordingly allowed and the impugned order dated 30.07.2022 passed under Section 148A (d) of the Act; the impugned notice dated 30.07.2022 issued under Section 148 of the Act; and the assessment order dated 30.05.2023 framed under Section 147 of the Act pursuant to the notice dated 30.07.2022 for AY 2013-14, are set aside. Pending application is also disposed of.” Printed from counselvise.com Page | 6 6. Respectfully following the said decision, we hold that the notice issued u/s 148 of the Act on 26-7-2022 is barred by limitation. Accordingly, the Ground No. 2 raised by the assessee in his Cross Objection is allowed. 7. Since, reopening of assessment has been quashed hereinabove, the adjudication of the other grounds raised by the assessee in the Cross Objection and the grounds raised by the revenue becomes academic in nature and they are left open. 8. In the result, the Cross Objection of the assessee is allowed and appeal of the revenue is dismissed. Order pronounced in the open court on 10/09/2025. -Sd/- -Sd/- (SUDHIR KUMAR) (M. BALAGANESH) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated: 10/09/2025 A K Keot Copy forwarded to 1. Applicant 2. Respondent 3. CIT 4. CIT (A) 5. DR:ITAT ASSISTANT REGISTRAR ITAT, New Delhi Printed from counselvise.com "