LOMBARD PORTFOLIO PRIVATE LIMITED,NEW DELHI V. DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE 13(1), DELHI, NEW DELHI

ITA 5945/DEL/2024

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Lombard Portfolio Pvt. Ltd. appealed against the reassessment order for the Assessment Year 2013-14, which involved an addition of Rs.62,50,000 as unexplained credit under Section 68 r.w.s 115BBE of the Income Tax Act. The reassessment was based on allegations that the company was involved in funding share trading through shell companies and provided bogus accommodation entries. The primary legal contention was the procedural validity of the notice under Section 148, which was challenged on grounds of being issued beyond the statutory time limit following the Supreme Court's decision in Ashish Agarwal. The Tribunal found that the notice was indeed issued beyond the permissible period, rendering the entire reassessment proceedings void ab initio.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 773947 (ITAT-DELHI)
• Duration Of Justice: 9 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-09-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Assessment Year: 2013-2014
• Appeal Filed On: 21-12-2024
• Other Referred Cases: Union of India & Ors. Vs. Ashish Agarwal in Civil Appeal No. 3005/2022
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MANOJ TIWARI
• Assessee Lawyers: GURDEV SINGH CHAWLA
• Keywords: Unexplained cash credit; Accommodation entries; Bogus
• Section: 147; 148; 68; 133(6)

Judgement Text

"P a g e | 1 ITA No.5945/Del/2024 Lombard Portfolio Pvt. Ltd. (AY: 2013-14) THE INCOME TAX APPELLATE TRIBUNAL “E” BENCH, DELHI BEFORE MS. MADHUMITA ROY, JUDICIAL MEMBER & SHRI AMITABH SHUKLA, ACCOUNTANT MEMBER ITA No.5945/Del/2024 (Assessment Year: 2013-14) Lombard Portfolio Pvt. Ltd. D-248, Office No. 103, Street No. 10, Laxmi Nagar East, New Delhi 110092 Vs. DCIT, Circle 13(1) C.R. Building, New Delhi – 110002 \u0001थायीलेखासं./जीआइआरसं./PAN/GIR No: AABCF2598J Appellant .. Respondent Appellant by : Sh. Gurdev Singh Chawla, CA Respondent by : Sh. Manoj Tiwari, Sr. DR Date of Hearing 28.07.2025 Date of Pronouncement 25.09.2025 O R D E R PER MADHUMITA ROY, JM: The instant appeal filed by the assessee is directed against the order passed by the Ld. NFAC, Delhi dated 18.11.2024 arising out of the Assessment Order dated 30.05.2023 passed by the National Facelss Assessment Centre, Delhi, under Section 147 r.w.s 144B of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) for Assessment Year 2013 -14. Printed from counselvise.com P a g e | 2 ITA No.5945/Del/2024 Lombard Portfolio Pvt. Ltd. (AY: 2013-14) 2. The assessee filed its return of income for Assessment Year 2013- 14 on 29.09.2013 declaring income at Rs.5,70,99,380/-. On the basis of information that the assessee was connected with the funding for the purpose of trading in the shares of M/s JSPL (P) Ltd. through shell companies, in order to verify the genuineness of such transactions of the assessee with M/s JSPL Pvt. Ltd. for the Financial Year 2012-13 notice under Section 133(6) were sent to the assessee on 25.03.2021. The assessee submitted the sources of funds. The case was selected for scrutiny for accommodation entries, as per the information that the assessee parties are engaged in providing bogus accommodation entries in the form of loans whose account was further used as a conduit for layering of funds with the other entities and the companies have not carried out any genuine business, the creditworthiness and genuineness of the transaction since remained unexplained, to the tune of Rs.62,50,000/- as unexplained credits, notice under Section 148 of the Act dated 30.06.2021 was issued to the assessee. 3. In terms of the order passed by the Hon’ble Apex Court in the case of Union of India & Ors. Vs. Ashish Agarwal in Civil Appeal No. 3005/2022 dated 04.05.2022, the assessee was provided with the information and also offered an opportunity to explain the issue for reopening by and under a communication dated 02.06.2022 whereupon the assessee filed a reply on 27.06.2022 which was disposed of by passing an order under Section 148A(d) dated 30.07.2022. A further notice under Section 148 of the Act upon taking prior approval of the PCCIT, Delhi was issued on the assessee; such proceeding was culminated in making addition of Rs.62,50,000/- as unexplained credit Printed from counselvise.com P a g e | 3 ITA No.5945/Del/2024 Lombard Portfolio Pvt. Ltd. (AY: 2013-14) under Section 68 r.w.s 115BBE of the Act which was in turn confirmed by the First Appellate Authority. Hence, the instant appeal before us. 4. However, the assessee before us, has challenged the entire proceeding on account of jurisdictional error. The same is, therefore, liable to be quashed as is the ultimate prayer made by the assessee. The assessee’s case before us is this that the notice under Section 148 of the Act under the old regime was issued on 30.06.2021. Further, in terms of the order passed by the Hon’ble Apex Court in the case of Union of India & Ors. Vs. Ashish Agarwal in Civil Appeal No.3005/2022 dated 04.05.2022 a notice dated 02.06.2022 under section 148A (b) of the Act was issued alleging the appellant received unsecured loan amounting to Rs.62,50,000/- which remained unexplained and as such there was reasons to believe that an amount of Rs.62,50,000/- escaped assessment in the case of the appellant for Assessment Year 2013-14. The assessee duly filed its reply on 27.06.2022 upon which order under Section 148A(d) dated 30.07.2022 was issued upon approval granted by the Ld. PCIT. 5. The assessee joins issue to this effect that once the order under Section 148 of the Act issued on 30.07.2022 i.e. not within the grace period of 7 days from the date of reply filed by the assessee i.e. 27.06.2022 the same is not in terms of the order passed by the Hon’ble Supreme Court in the case of Union of India Vs. Ashish Agarwal (supra); the same is barred by limitation and therefore, liable to be quashed. It was further contended by the Ld. Counsel appearing for the assessee that the law declared by the Hon’ble Apex Court is become the law of the land and binding on all Courts within the territory of India. In that view Printed from counselvise.com P a g e | 4 ITA No.5945/Del/2024 Lombard Portfolio Pvt. Ltd. (AY: 2013-14) of the matter the law laid down by the Hon’ble Apex Court in the case of Union of India Vs. Ashish Agarwal (supra) has not been adhered to and order impugned, therefore, is void and liable to be quashed as was the crux of the submissions made by the Ld. AR. We note that on this factual and legal aspect of the matter the Ld. DR has neither been able to controvert nor relied upon any judgment in order to justify alleged delayed issuance of impugned notice under Section 148 of the Act. 6. We have heard the rival submissions made by the respective parties and we have further perused the relevant materials available on record. 7. It is an admitted fact that the time surviving from the date of issuance of deemed show cause notice till the expiry of the period as extended by TOLA is 7 days. The period of deemed stay to be excluded as per the 3rd proviso to Section 149 of the Act is from the date of original notice under Section 148 of the Act till date allowed to file a reply to the assessee. In the case in hand time is from 30.06.2021 to 27.06.2022. If that be so, then the last date of issuance of notice under Section 148 of the Act should be 04.07.2022 i.e. 7 days from 27.06.2022. As the actual date of issuance of notice under Section 148 of the Act is admittedly on 30.07.2022 the same is found to be barred by limitation as contended by the Ld. AR is found to be correct and therefore, acceptable in view of the judgment passed by the Hon’ble Apex Court in the case of Union of India & Ors. Vs. Ashish Agarwal in Civil Appeal No. 3005/2022 dated 04.05.2022 which has been failed to be controverted by the Ld. DR. 8. As the department issued the impugned notice under Section 148 of the Act admittedly on 30.07.2022 instead of on or before 04.07.2022 the said notice is found to be void and illegal, bad in law and without Printed from counselvise.com P a g e | 5 ITA No.5945/Del/2024 Lombard Portfolio Pvt. Ltd. (AY: 2013-14) jurisdiction and thus, liable to be quashed. The re-assessment proceeding is, thus, found to be void-ab-initio and not sustainable in the eyes of law and therefore, quashed. 9. The appeal preferred by the assessee is allowed. Order pronounced in the open court on 25.09.2025 Sd/- (Amitabh Shukla) Sd/- (Madhumita Roy) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated 25.09.2025 Rohit, Sr. PS Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI Printed from counselvise.com "