DCIT, CIRCLE- 19(1), DELHI V. RAKSHIT BUILDCON PVT. LTD., DELHI

ITA 4727/DEL/2024

AI Insights

The case involves an appeal by the Revenue against the order of the Commissioner of Income Tax (Appeals), which had deleted additions made by the assessing officer regarding alleged bogus short-term capital losses and loans from a purported bogus entity. The Revenue contended that the CIT(A) erred in not appreciating the detailed investigations and findings of the Investigation Wing regarding these issues. The assessee, Rakshit Buildcon Pvt. Ltd., supported the CIT(A)'s decision and raised additional legal grounds concerning the jurisdiction and procedural validity of the reassessment proceedings under section 148 of the Income Tax Act, 1961. The Tribunal's decision primarily focused on the legality of the reassessment notice, which was found to be issued beyond the statutory time limit, rendering it invalid.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 787605 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 1 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-11-2025
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2017-2018
• Appeal Filed On: 09-10-2024
• Other Referred Cases: PCIT vs Rajeev Bansal, Ram Balram Buildhome (P) Ltd. vs PCIT, Southern Gujarat Chamber Trade and Industrial Development Centre vs ITO, DCIT vs Prasad Shetty
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AJAY KUMAR ARORA
• Assessee Lawyers: SALIL AGGARWAL
• Keywords: Difference of opinion; Change of opinion; Reassessment proceedings; Question of law; Period of limitation; Bogus
• Section: 148

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘A’: NEW DELHI BEFORE SHRIS.RIFAUR RAHMAN, ACCOUNTANT MEMBER and SHRI ANUBHAV SHARMA, JUDICIAL MEMBER ITA No.4727/DEL/2024 (Assessment Years : 2017-18) DCIT, Circle 19 (1), vs. Rakshit Buildcon Pvt. Ltd., Delhi. C – 1/207, 2nd Floor, Sector 11, Rohini, New Delhi – 110 085. (PAN : AAECR2414E) (APPELLANT) (RESPONDENT) ASSESSEE BY : Shri Salil Aggarwal, Sr. Advocate Shri Shailesh Gupta, CA REVENUE BY : Shri Ajay Kumar Arora, Sr. DR Date of Hearing : 06.11.2025 Date of Order : 21.11.2025 O R D E R PER S.RIFAUR RAHMAN, ACCOUNTANT MEMBER : 1. The Revenue has filed appeal against the order of ld. Commissioner of Income Tax (Appeals), Delhi-23 [“ld. CIT(A)”, for short] dated 14.08.2024 for AY 2017-18. “(i) \"Whether on facts and circumstances of the case and in law, the Ld. CIT(A), has erred in not appreciating that detailed investigation was already carried out by the Investigation Wing on the issue of Bogus Short Term Capital Loss from Alankit Group and the assessee was not able to substantiate its claim with evidences.\" Printed from counselvise.com 2 ITA No.4727/DEL/2024 (ii) \"Whether on the facts of the case and in law, the Ld.CIT(A) has erred in not appreciating that the information received from the Investigation Wing is a valid piece of information.\" (iii) \"Whether on the facts and circumstances of the case, the Ld. CIT(A) has erred in not appreciating that it WDS established by the Investigation Wing after detailed investigation that Aneri Fincap is bogus/paper entity and the assessee was not able to substantiate the Loan of Rs.75,00,000/- from the aforesaid bogus entity.\" (iv) \"Whether on the facts and circumstances of the case, the Ld. CIT(A) has erred in deleting the addition of Rs.75,00,000/- on the issue of loan from bogus entity and also in deleting the commission of Rs.2,25,000/ on the aforesaid accommodation entry of Rs.75,00,000/-.\" 2. At the outset of the hearing, ld. AR of the assessee submitted that the captioned appeal is filed by the Revenue, however, the assessee seeks to rely upon the order of ld. CIT (A) deleting the additions on merit, by contending that the order of ld. CIT (A) need be upheld even on the ground that the assessment so framed is without jurisdiction as the same is a legal ground, which was taken before ld. CIT (A) as well, however, the same can be taken at any stage of the proceedings even de hors Rule 27 of Income Tax Appellate Tribunal Rules, 1963. He further submitted that since the assessee had succeeded in the appeal fully on merits, it did not prefer an appeal, however the Revenue has filed the instant appeal, the assessee seeks to support the order of the ld. CIT (A) as provided in Rule 27 of the Income Tax Appellate Tribunal Rules. As such, in view of Rule 27 of the Income Tax Appellate Tribunal Rules, 1963, the assessee Printed from counselvise.com 3 ITA No.4727/DEL/2024 seeks to raise, urge and argue the ground challenging the initiation of proceedings, in an appeal filed by the Revenue. He thus prayed that the assessee be permitted to make its submissions in respect of the contention as was being specifically raised vide ground nos. 2 and 4 before the ld. CIT (A) and was also decided by him in his impugned order. He, therefore, prayed, this application be taken as a notice of motion to raise the following legal grounds, in support of the order of the ld. CIT (A) :- \"Additional Ground No.1 : That on the facts and circumstances of the case, it is apparent that the instant reassessment proceedings so initiated are with non application of mind, based on change of opinion and also without satisfying the statutory preconditions of provisions of section 147/ 148 of the Act. That further, the instant proceedings are also barred by limitation as per judgment of Hon'ble Apex Court in the case of PCIT vs Rajeev Bansal reported in 469 ITR 46 and Hon'ble Delhi High Court in the case of Ram Balram Buildhome (P) Ltd. vs PCIT reported in 477 ITR 133. Additional Ground No.2 : That on the facts and circumstances of the case the approval accorded under section 151 of the Act is a mechanical and arbitrary approval without there being any application of mind and also without satisfying the statutory preconditions of the Act and as such, the assessment so framed is null and void and deserves to be quashed. Additional Ground No.3 : That on the facts and circumstances of the case the assessment so framed is illegal and without jurisdiction, as the instant proceedings have been initiated by jurisdictional assessing officer (JAO) instead of faceless assessing officer (JAO). \" He, therefore prayed, that proceeding initiated u/s 148 of the Income Tax Act, 1961 were bad in law and order of ld. CIT (A) need be upheld even Printed from counselvise.com 4 ITA No.4727/DEL/2024 on the ground of wrongful assumption of jurisdiction on the part of AO to have framed assessment under section 148 of the Act. It is submitted that this submission is being made in view of Rule 27 of the Income Tax Appellate Tribunal Rules and is otherwise well settled proposition of law that the respondent is entitled to raise a legal ground at any stage of the proceedings, even though he may not have filed an appeal against such an order. In this regard, he relied on the following decisions :- (i) 83 ITR 223 (Born) (B.R.Bamsi vs. CIT) (ii) 129 ITR 475 (All) (Moralia & Sons vs. CIT) (iii) 220 ITR 398 (Ker) (CIT vs. Cochin Refineries Ltd) (iv) 176 CTR 406 (Gau) (Assam Company (I) Ltd vs. CIT) (v) 102 ITD 189 (Del) (ITO vs. Gurvinder Kaur) (vi) 284 ITR 80 (SC) CIT V. Varas International P.Ltd. (vii) 149 Taxmann 456 (Guj) Kharid Vechan Sangh Ltd. vs CIT. (viii) 397 ITR 282 (All) CIT vs Jindal Polyster Ltd. He, therefore, prayed that the assessee may be permitted to urge the aforesaid grounds as raised and mentioned in para 3 above. 3. On the other hand, ld. DR of the Revenue objected to the same. 4. After considering the submissions of both the parties, we observe that as held in the case of B.R. Bamsi (supra), the assessee has raised new question of law, even if they did not file a cross objection provided that the new ground is a point of law and does not require new evidence to be recorded. Therefore, the additional ground can be used as a defence against the appeal under consideration. Hence, the additional ground Printed from counselvise.com 5 ITA No.4727/DEL/2024 raised by the assessee under Rule 27 is admitted for adjudication. 5. With regard to the additional grounds taken by the assessee, ld. AR for the assessee submitted that as per additional legal ground no. 1 so raised by assessee, the notice issued under section 148 dated 21.07.2022 is time barred being beyond the surviving period and the same is demonstrated as per the chart enclosed at page 10 of the paper book filed by the assessee. For the sake of brevity, the said chart is also reproduced below :- AY Date of Notice u/s 148 Under TOLA No. of days of surviving time available till 30.06.2021 Date of providing information u/s 148A(b) Due date and date of reply Date of order u/s 148A(d) And notice u/s 148 Last date for Issuance of notice under section 148 as per surviving time (2.6.2022 + 37 days) 2017-18 25.05.2021 37 days 19.05.2022 02.06.2022 21.07.2022 (time barred) 08.07.2022 6. He submitted that in view of the aforesaid, it is amply clear that the impugned notice issued under section 148 of the Act dated 21.07.2022 is beyond the surviving period and time barred as provided by Hon’ble Apex Court in the case of PCIT vs Rajeev Bansal reported in 469 ITR 46 and reliance is also placed on case laws referred in Paper Book at Sl.No.8 to 14. (i) Southern Gujarat Chamber Trade and Industrial Development Centre vs ITO (Gujarat HC) reported in 179 taxmann.com 55. (ii) DCIT vs Prasad Shetty (ITAT Mumbai) reported in 126 ITR (T) 124 7. Accordingly, he pleaded that the additional ground may be allowed and the notice issued by the AO u/ s 148 is liable to be quashed. Printed from counselvise.com 6 ITA No.4727/DEL/2024 8. On the other hand, ld. DR of the Revenue relied on the findings of the lower authorities on this issue. 9. Considered the rival submissions and material placed on record. We observe that the issue is squarely covered by the decision of Hon’ble Supreme Court in the case of PCIT vs Rajeev Bansal (supra) in favour of the assessee and the Hon’ble Supreme Court held as under :- “111. The clock started ticking for the Revenue only after it received the response of the assesses to the show causes notices. After the receipt of the reply, the assessing officer had to perform the following responsibilities: (i) consider the reply of the assessee under section 149A(c); (ii) take a decision under section 149A(d) based on the available material and the reply of the assessee; and (iii) issue a notice under section 148 if it was a fit case for reassessment. Once the clock started ticking, the assessing officer was required to complete these procedures within the surviving time limit. The surviving time limit, as prescribed under the Income-tax Act read with TOLA, was available to the assessing officers to issue the reassessment notices under section 148 of the new regime. 112. Let us take the instance of a notice issued on 1 May 2021 under the old regime for a relevant assessment year. Because of the legal fiction, the deemed show cause notices will also come into effect from 1 May 2021. After accounting for all the exclusions, the assessing officer will have sixty-one days [days between 1 May 2021 and 30 June 2021] to issue a notice under section 148 of the new regime. This time starts ticking for the assessing officer after receiving the response of the assessee. In this instance, if the assessee submits the response on 18 June 2022, the assessing officer will have sixty-one days from 18 June 2022 to issue a reassessment notice under section 148 of the new regime. Thus, in this illustration, the time limit for issuance of a notice under section 148 of the new regime will end on 18 August 2022.” 10. Further we observe that Hon’ble Gujrat High Court (supra) in Southern Printed from counselvise.com 7 ITA No.4727/DEL/2024 Gujarat Chamber Trade and Industrial Development Centre vs ITO (Gujarat HC) has decided the same issue as under :- “Section 149, read with sections 148 and 148A, of the Income-tax Act, 1961 - Income escaping assessment - Time limit for issuance of notice (TOLA) - Assessment year 2016-2017 - Assessing Officer issued impugned notice under section 148 on 18-7-2022 for relevant assessment year - Whether in view of decision of Supreme Court in case of Rajeev Bansal [2024] 167 taxmann.com 70/301 Taxman 238/469 ITR 46 (SC), considering period of limitation from date of issuance of notice under section 148 read with TOLA upto 30-6-2021, limitation for issuance of impugned notice under section 148 would be 17-6-2022 and thus, impugned notice dated 18-7-2022 having been issued beyond 'surviving time' would be invalid - Held, yes [Paras 7 and 9] [In favour of assessee]” 11. We also observe that ITAT, Mumbai Bench in DCIT vs Prasad Shetty (ITAT Mumbai) (supra) has decided the issue as under :- “Section 149, read with sections 148 and 148A, of the Income-tax Act, 1961 - Income escaping assessment - Time limit for issuance of notice - Assessment year 2017-18 - Assessee filed its return of income for assessment year 2017-18 - Assessing Officer issued a notice under section 148 dated 28-6-2021 - Thereafter, Assessing Officer issued a show cause notice under section 148A(b) dated 24-5-2022 - Since assessee did not file any reply within due date given, i.e., 7-6-2022, Assessing Officer passed an order under section 148A(d) dated 28-7-2022 and issued a notice under section 148 dated 28-7-2022 - It was noted that original notice under section 148 was issued on 28-6-2021 and therefore, last date on which notice could have been issued under old regime was up till 30-6-2021 and thus, surviving time as laid down by Supreme Court in case of Union of India v. Rajeev Bansal [2024] 167 taxmann.com 70/301 Taxman 238/469 ITR 46 (SC) was only two days which was to be calculated from 28-6-2021 to 30-6-2021 - Whether therefore, only two days would be available to Assessing Officer from time granted to assessee to give reply to notice that was between 7-6-2022 to 9-6-2022 - Held,yes - Whether thus, he was required to pass order under section 148A(d) and issue notice Printed from counselvise.com 8 ITA No.4727/DEL/2024 under section 148 on or before 9-6-2022 and accordingly, impugned notice under section 148 dated 28-7-2022 did not fit in 'surviving time limit' as laid down by Supreme Court in case Rajeev Bansal (supra) - Held, yes - Whether therefore, notice under section 148 dated 28-7-2022 was barred by limitation, and was to be quashed - Held, yes [Para 12] [In favour of assessee]” 12. Respectfully following the aforesaid decisions, we hold the impugned reassessment proceedings to be bad in law and quashed as such and accordingly, allow the additional grounds taken by the assessee. 13. With regard to other grounds raised by the Revenue, the same are kept open at this stage. 14. In the result, the appeal filed by the Revenue is dismissed. Order pronounced in the open court on this day 21ST of November, 2025. SD/- SD/- (ANUBHAV SHARMA) (S.RIFAUR RAHMAN) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated: 21.11.2025 TS Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI Printed from counselvise.com "