HIGH VALUE EXIM PRIVATE LIMITED,DELHI V. DCIT, CIRCLE-10(1) DELHI/NATIONAL FACELESS CENTRE DELHI, DELHI

ITA 2901/DEL/2025

AI Insights

The case involves High Value Exim Private Limited appealing against the reassessment order for the assessment year 2013-14 issued by the DCIT. The primary contention was that the reassessment order was based on proceedings that were time-barred, and thus, without jurisdiction. The assessee argued that the notice for reassessment was issued beyond the permissible time limit as prescribed under the Income Tax Act, 1961, and interpreted by the Supreme Court in relevant cases. The Tribunal admitted the additional legal grounds raised by the assessee and, after considering the submissions and the legal precedents, quashed the reassessment order.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 840213 (ITAT-DELHI)
• Duration Of Justice: 9 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-02-2026
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2013-2014
• Appeal Filed On: 30-04-2025
• Other Referred Cases: Union of India v. Ashish Agarwal, Union of India v. Rajeev Bansal, Ram Balram Buildhome (P.) Ltd. v. ITO
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Opportunity of being heard; Reassessment proceedings; Period of limitation; Time period of passing order
• Section: 147; 148

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH, ‘B’: NEW DELHI BEFORE SHRI C.N. PRASAD, JUDICIAL MEMBER AND SHRI M. BALAGANESH, ACCONTANT MEMBER ITA No.2901/Del/2025 Assessment Year 2013-14 High Value Exim Private Limited, 6846, Main Bazar, Mehrauli, New Delhi PAN No.AACCK5244K Vs. DCIT Circle – 10 (1) Delhi/ National Faceless Appeal Centre, Delhi Appellant Respondent Appellant Ms. Meenal Goyal, CA Sh. Abhinav Jain, Advocate Ms. Portia Roy, Advocate Sh. Saksham Garg, CA Respondent Ms. Pooja Swaroop, CIT DR Date of Hearing 06.02.2026 Date of Pronouncement 27.02.2026 ORDER PER C.N. PRASAD, JM, This appeal is filed by the assessee against the order of the Ld. CIT(A) / NFAC, Delhi for the A.Y. 2013-14. The assessee filed an application seeking leave of the Tribunal for admission of Additional Grounds of appeal, the following additional grounds are as under :- Printed from counselvise.com Page | 2 (i) That the impugned re-assessment order dated 31.05.2023 passed by the Respondent u/s 147 r.w.s 144B of the Income Tax Act, 1961 (\"the Act\") is premised on the proceedings that were time barred and hence without jurisdiction and liable to be quashed. (ii) That the notice dated 27.07.2022 issued u/s. 148 of the Act seeking reassessment for AY 2013-14 is barred by limitation as per 1st proviso to Section 149 of the Act, as interpreted by the Hon'ble Supreme Court in Union of India v. Ashish Agarwal 444 ITR 1 and Union of India v. Rajeev Bansal 469 ITR 46. (iii) That the surviving period after considering all exclusions as per the ratio of decision in Rajeev Bansal (supra) and as per 4th proviso to Section 149, was 7 days which expired on 13.06.2022. (iv) That pursuant to expiry of limitation on 13.06.2022, the Respondent ceased to have jurisdiction to issue notice u/s 148 of the Act for AY 2014-15 vide Ram Balram Buildhome (P.) Ltd. v. ITO: 477 ITR 133 and 2. Referring to the additional ground the Ld. Counsel for the assessee submitted that these ground are purely legal grounds going to the root of the very validity of the assessment order passed u/s. 147 r.w 144B of the Act and therefore, the same be admitted for adjudication. The reliance was placed on the decision of the Hon’ble Supreme court in the case of National Thermal Power Corporation Ltd. Vs. CIT (229 ITR 383). 3. On hearing both the parties and perusing additional ground raised by the assessee we are of the view that these additional Printed from counselvise.com Page | 3 grounds are purely legal grounds and therefore, respectfully following the decision of the Hon’ble Supreme Court in the case of National Thermal Power Corporation Ltd. Vs. CIT (supra), these additional grounds are admitted. 4. Coming to the additional grounds the Ld. Counsel for the assessee made submissions as under :- “1. That the present Appeal was listed for hearing before this Hon'ble Tribunal on 06.02.2026. 2. That in support of the additional legal ground raised, the Appellant hereby submits a date chart summarizing the sequence of events premised on the ratio of the Hon'ble Supreme Court in Union of India v. Ashish Agarwal: 444 ITR 1 and Union of India v. Rajeev Bansal: 469 ITR 46 and their applicability to the present case of the Appellant. 3. That in the case of Union of India vs. Rajeev Bansal (supra) the Hon'ble Supreme Court has held as under: \"109. If this Court had not created the legal fiction and the original reassessment notices were validly issued according to the provisions of the new regime, the notices under section 148 of the new regime would have to be issued within the time limits extended by TOLA. As a corollary, the reassessment notices to be issued in pursuance of the deemed notices must also be within the time limit surviving under the Income-tax Act read with TOLA. This construction gives full effect to the legal fiction created in Ashish Agarwal (supra) and enables both the assesses and the Revenue to obtain the benefit of all consequences flowing from the fiction. See State of A P v. AP Pensioners Association [2005] 13 SCC 161. [This Court observed that the \"legal fiction undoubtedly is to be construed in such a manner so as to enable a person, for whose benefit such legal fiction has been created, to obtain all consequences flowing therefrom.\"] Printed from counselvise.com Page | 4 110. The effect of the creation of the legal fiction in Ashish Agarwal (supra) was hat it stopped the clock of limitation with effect from the date of issuance of Section 148 notices under the old regime [which is also the date of issuance of the deemed notices). As discussed in the preceding segments of this judgment, the period from the date of the issuance of the deemed notices till the supply of relevant information and material by the assessing officers to the assesses in terms of the directions issued by this Court in Ashish Agarwal (supra) has to be excluded from the computation of the period of limitation. Moreover, the period of two weeks granted to the assesses to reply to the show cause notices must also be excluded in terms of the third proviso to Section 149. 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 149AAssessee; (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.\" (Emphasis Supplied) 4. In this regard, we are respectfully submitting the date chart as under : Printed from counselvise.com Page | 5 Printed from counselvise.com Page | 6 5. In terms of the decisions in Ashish Agarwal and Rajeev Bansal (supra) the following position emerges in the context of the present case: (i) That the period for subject reassessment u/s 149 of the Act (under erstwhile law) is deemed to be extended till 30.06.2021 under TOLA. (ii) That the notice dated 30.06.2021 would be deemed to be notice u/s 148A(b) of the Act. (iii) That the surviving period for re-issuance of Section 148 notice would be the remainder days of the TOLA extended period (viz., up till 30.06.2021) therefore 'none/nil' in the present case. (iv) That the following period stands excluded: - 01.04.2021 to 30.06.2021 Provisions of Act read with TOLA extension - 01.07.2021 to 03.05.2022:- Period prior to adjudication by the SC - 04.05.2022 to 21.05.2022 Information/material & reasons for reopening furnished pursuant to SC directions in Ashish Agarwal (supra) - Up to 06.06.2022:- Period of two-weeks to furnish response to SCN elapsed - Up to 13.06.2022:- Surviving period lapses. 6. That additionally, even after taking into consideration exclusion in terms the 3rd and 4th provisos to Section 149 of the Act, the surviving period expires on 13.06.2022 in case of the Appellant, whereas the notice u/s 148 of the Act was issued on 22.07.2022 viz. after expiry of 39 days from the period of limitation prescribed under the Act read with TOLA. Printed from counselvise.com Page | 7 7. Therefore, applying the ratio of the decisions in Ashish Agarwal and Rajeev Bansal (supra) in the context of the 1\" proviso to Section 149 of the Act, the order u/s 148A(d) as well as the notice u/s 148 of the Act being issued on 22.07.2022 are barred by limitation. 8. For the sake of completeness, it may be noted that the prescribed time period of one month from the end of the month in which reply to SCN is received for passing of order u/s 148A(d) of the Act does not apply, since the overall limitation period for issuance of notice u/s 148 of the Act, is to be seen within the time limits prescribed u/s 149 of the Act. 9. That the Hon'ble Delhi High Court in case of Ram Balram Buildhome (P.) Ltd. v. ITO: 477 ITR 133, held that the time available u/s 148A(d) was \"necessarily truncated\" and the same was required to be passed within the surviving period as per the ratio laid down by the SC in case of Rajeev Bansal (supra). 10. That most recently, your honors had in a similar case of an individual belonging to the same group entity- Sahdev Gupta (PAN No.ACSPG7739G) v. Faceless Assessment Delhi, ITA 4234/DEL/2024 (AY 2013-14) had allowed this very additional ground identical facts and circumstances vide order dated 27.10.2025. Copy of said judgment is enclosed herewith as Annexure-1. 5. On the other hand the Ld. DR made following submissions:- “2. During the course of hearing on 01.12.2025, the Assessee raised additional ground of appeal contending that the reassessment proceedings were barred by limitation for both AY 2013-14 and 2024-15. The Hon'ble Bench was kind enough to grant opportunity on 02.12.2025 to the Revenue to verify the said contention of the Assessee, Accordingly, the appeal was pronounced part-heard and posted on 11.12.2025 for next hearing. Printed from counselvise.com Page | 8 3. In this regard, kindly refer to the trailing email received from the AO. the ACIT. Circle-10(1). Delhi wherein he has submitted, as reproduced below: \"It is respectfully submitted that in this case a notice u/s 148 (old law) for A.Y. 2013-14 was issued on 30.06.2021 within the extended time available under the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 (TOLA) and related Notifications. Pursuant to the judgment of the Hon'ble Supreme Court in Ashish Agarwal and CBDT Instruction No. 01/2022, the said notice has rightly been treated as a show-cause notice u/s 148A(b); the assessee was supplied with the underlying material, given adequate opportunity to respond, and thereafter order u/s 148A(d) and notice u/s 148 under the amended scheme were issued. The subsequent proceedings culminating in the reassessment order dated 31.05.2023 are thus in continuation of a notice which was itself issued within the extended limitation period and are in conformity with the statutory framework and binding directions of the Hon'ble Supreme Court and CBDT. The computation of limitation in the assessee's additional grounds proceeds on an erroneous understanding of the interplay between section 149, the exclusions under the provisos thereto and the saving effected by TOLA read with Ashish Agarwal and Rajeev Bansal. The assessee seeks to treat the limitation as having finally expired on 13.06.2022 and to ignore the fact that the original notice dated 30.06.2021 stood validated and repurposed as a 148A(b) notice by the Hon'ble Supreme Court, and that the subsequent steps taken by the Assessing Officer were only in furtherance of that validly issued notice. On the facts of the present case, the reassessment proceedings cannot be said to be time-barred, and the re-assessment order is not without jurisdictions. Printed from counselvise.com Page | 9 It is further submitted that the assessee did not raise any such objection regarding limitation either in response to the notices issued in reassessment proceedings or before the first appellate authority and has chosen to raise this plea for the first time at the stage of hearing before the Hon'ble ITAT. The additional grounds are clearly an afterthought to dispute jurisdiction at a very belated stage. While the question of admission of additional legal grounds is within the exclusive domain of the Hon'ble Tribunal, the Department may oppose admission on the ground of delay and prejudice to the Revenue, particularly when the assessee had full opportunity to raise these issues earlier and all steps taken by the Assessing Officer were strictly in accordance with the then prevailing legal position and binding instructions. 4. On perusal of page 2 of assessment order for AY 2013- 14, it is seen: (1) SCN u/s 148A(b) issued to the assessee on 21.05.2022 (i.e. provided all information and material to the assessee before 02.06.2022 as per 8.1 of CBDT instructions). (ii) Assessee filed its reply on 03.06.2022 (iii) Contentions of assessee were rebutted vide order u/s 148A(d) of the Act dated 22.07.2022 (iv) Notice u/s 148 of the Act issued on 23.07.2022 (iv) Assessee filed return of income in response to S.148 notice on 17.08.2022 declaring total income of Rs.3,97,75,000/-. 5. It is further pointed out that: (i) escapement of income from taxation was ascertained to be Rs.93,63,95,319/- which was more than Rs.50 lakhs. Printed from counselvise.com Page | 10 (ii) Notice was issued before 31.03.2024 1.e. before expiry of 10 years from end of relevant AY i.e. 31.03.2014 (for AY 2013-14) 6. Similar parameters are there in AY 2014-15 which can be seen from the assessment order. 7. Thus, it is established beyond doubt that all parameters laid down in TOLA, SC decisions of Ashish Aggarwal / Rajeev Bansal as well CBDT Instructions dated 11.05.2022 have been absolutely complied with for both AY 2013-14 and 2014-15, 8. As further pointed out by the AO and as is also apparent from the assessment order a well as CIT(A) order, this ground was never raised either before the AQ or before the CIT(A) and that the assessee complied and cooperating throughout the proceeding The assessment order as well as CIT(A) order have been passed after providing. material evidence to the Assessee along with full opportunity to be heard. 9. In view of the aforementioned facts and circumstances of the case, the additional ground raised by the Assessee w.r.t. 147 proceedings is incorrect, invalid and should be rejected 10. Submitted for kind consideration of the Bench please. 6. After hearing both the sides and perusing the orders of the authorities below and sequence of events narrated in the submissions, we find that notice/ order issued/ passed u/s.148/148A(b) issued on 22.07.2022 was beyond surviving time limit i.e. 13.06.2022. As per the decisions of the Hon’ble Supreme Court in the case of Union of India Vs. Ashish Aggarwal (444 ITR 1 and Union of India vs. Rajeev Bansal 469 Printed from counselvise.com Page | 11 ITR 46 and also the decision of Hon’ble Delhi High court in the case of Ram Balram Buildhome P. Ltd. Vs. ITO (477 ITR 133), since the notice issued u/s.148/148A(b) is beyond the stipulated period the consequential assessment made u/s.147 r.w. 144B of the Act for the A.Y.2013-14 is barred by limitation and the same is hereby quashed. The additional grounds raised by the assessee are allowed. 7. Since we have quashed the assessment by allowing the additional grounds on legal issue, all other grounds raised by the assessee in the appeal on merits as well as other technical issues did not be adjudicated and they are left open. 8. In the result, the appeal of the assessee is partly allowed as indicated above. Order pronounced in the open court on 27.02.2026. Sd/- Sd/- [M. BALAGANESH] [C.N. PRASAD] ACCOUNTANT MEMBER JUDICIAL MEMBER Dated:27.02.2026 NEHA , Sr.P.S.* Printed from counselvise.com Page | 12 Copy forwarded to: 1. Appellant 2. Respondent 3. PCIT 4. CIT(A) 5. DR Asst. Registrar, ITAT, New Delhi Printed from counselvise.com "