M/S. KOTHARI METALS LTD.,KOLKATA V. DCIT, CIRCLE - 7(1), KOLKATA

ITA 2138/KOL/2024

AI Insights

The case involves M/s. Kothari Metals Ltd., which appealed against the reassessment order passed by the Deputy Commissioner of Income Tax, Circle-7(1), Kolkata, for the assessment year 2015-16. The reassessment was based on alleged fictitious losses claimed by the assessee in equity/derivative trading. The primary legal contention raised by the assessee was the validity of the reassessment notice issued under section 148, arguing that it was barred by limitation and did not meet the procedural requirements under the law. The Tribunal examined the applicability of TOLA and the compliance with the procedural requirements for issuing reassessment notices.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 46789 (ITAT-KOLKATA)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-03-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2015-2016
• Other Referred Cases: Union of India vs. Rajeev Bansal, Ibibo Group Pvt. Ltd. vs. ACIT, Manish Financial vs. ITA, Coplama Products vs. ITA
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Set aside; Reassessment proceedings; Unexplained expenditure; Onus to prove; Bogus
• Section: 147; 148; 143(3); 250; 153A; 69C; 13; 153C; 20

Judgement Text

"आयकर अपीलीय अधिकरण कोलकाता 'सी' पीठ, कोलकाता में IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA ‘C’ BENCH, KOLKATA श्री जॉजज माथान, न्याधयक सदस्य एवं श्री राक ेश धमश्रा, लेखा सदस्य क े समक्ष Before SHRI GEORGE MATHAN, JUDICIAL MEMBER & SHRI RAKESH MISHRA, ACCOUNTANT MEMBER I.T.A. No.: 2138/KOL/2024 Assessment Year: 2015-16 M/s. Kothari Metals Ltd. Vs. DCIT, Circle-7(1), Kolkata (Appellant) (Respondent) PAN: AABCK0820C Appearances: Assessee represented by : Sunil Surana, AR. Department represented by : Yogesh Mehare, Sr. DR. Date of concluding the hearing : March 6th, 2025 Date of pronouncing the order : March 19th, 2025 ORDER PER BENCH : This appeal filed by the assessee is against the order of the Commissioner of Income Tax (Appeals)-NFAC, Delhi [hereinafter referred to as Ld. 'CIT(A)'] passed u/s 250 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) for AY 2015-16 dated 16.10.2024, Page | 2 I.T.A. No.: 2138/KOL/2024 Assessment Year: 2015-16 M/s. Kothari Metals Ltd. which has been passed against the assessment order u/s 147/144 of the Act, dated 25.05.2023. 2. The assessee has raised the following grounds of appeal: “1. For that the Ld. CIT (A) erred in confirming the order of the AO when notice u/s 148 was barred by limitation, notice u/s 148A(b) having been initiated after six years from the assessment year, the assessment year in question was not covered by TOLA and as admitted by the Ld. ASG in the case of Rajeev Bansal (SC) and so held in the said judgement. 2. For that the Ld. CIT (A) erred in confirming the order of the AO when notice u/s 148 itself was bad in law since sanction was not taken from proper authority. 3. For that the Ld. CIT (A) erred in confirming the order of the AO when notice u/s 148 was also otherwise bad in law since the original assessment was completed u/s 143(3) wherein all facts were fully disclosed. 4. For that Ld. CIT (A) erred in confirming the order of the AO when the notice u/s 148A(b) issued was barred by limitation since the materials were forwarded after the deadline fixed by the Hon'ble Apex Court and further complete materials were never sent along with the show cause notice. 5. For that Ld. CIT (A) erred in confirming the order of the AO when the notice u/s 148 dated 09/04/2021 (which was treated as show cause notice u/s 148A(b) as per Hon'ble Supreme Court), is bad in law since the reasons recorded along with copy of approval prior to the issue of the notice were not forwarded to the assessee in spite of request and there was nothing on record to show that the requirements for reopening were fulfilled. 6. For that the Ld. CIT (A) erred in confirming the order of the AO when the notice u/s 148 dated 30.06.2022 is bad in law as the DIN was not generated as per CBDT circular no. 19/2019. 7. For that the Ld. CIT (A) erred in confirming the order of the AO the notice u/s 148 is bad in law since the case was not stated to be covered by explanation 1 to section 148. 8. For that the Ld. CIT (A) erred in confirming the order of the AO when the order passed u/s 148A(d) was bad in law since the reply and issues raised by the assessee in response to notice u/s 148A(b) were not disposed off in accordance with law. 9. For that the Ld. CIT (A) erred in confirming the order of the AO when the reopening is otherwise bad in law since the approval obtained from specified Page | 3 I.T.A. No.: 2138/KOL/2024 Assessment Year: 2015-16 M/s. Kothari Metals Ltd. authorities was not in accordance with law and the copy of the approval was never sent to the assessee in spite of repeated requests. 10. For that the Ld. CIT (A) erred in confirming the order of the AO when the reassessment is bad in law since no statutory notice was issued when the assessee duly complied with the notice u/s 148 by filing a letter dated 04.07.2022 that the original return filed by the company on 21.09.2015 be treated as return u/s 148 which was sufficient compliance under the law. 11. For that the Ld. CIT (A) erred in confirming the order of the AO when in disallowing derivative loss of Rs. 4,30,56,175/- alleging the same to be bogus when the issue was duly examined in the original assessment completed u/s 143(3), no allegation has been made that the broker with whom the transactions were carried out was involved in execution of non- genuine reversal of trades and who were restrained from securities market by SEBI. 12. For that the Ld. CIT (A) erred in confirming the order of the AO when in disallowing derivative loss of Rs. 4,30,56,175/- when the assessee was never in the list of entities banned by SEBI from dealing in securities market. 13. For that the Ld. CIT (A) erred in confirming the order of the AO disallowing derivative loss of Rs. 4,30,56,175/- when no verification was made by the AO from the exchange or the broker with regard to the transactions and the assessee duly discharged its onus to prove the genuineness of the transactions which were on record. 14. For that the Ld. CIT (A) erred in confirming the order of the AO when adding back Rs. 8,61,123/- as unexplained expenditure u/s 69C on account of alleged commission paid for obtaining the alleged bogus accommodation entry when no evidence has been brought on record to corroborate the same. 15. For the Ld. CIT (A) erred in confirming the order of the AO when on the facts and circumstances of the case, the disallowance of derivative loss of Rs. 4,30,56,175/- only on suspicion and surmises is liable to be deleted.” 3. Brief facts of the case are that the assessee had filed the return of income for AY 2015-16 showing total income of Rs. 12,56,94,120/- u/s 139(1) of the Act. Notice u/s 148 of the Act was issued after passing the necessary order u/s 148A(d) of the Act on 30.06.2022 for the reason that fictitious losses in equity/derivative trading amounting to Rs. 4,30,56,175/- through reversal trading were claimed. Several Page | 4 I.T.A. No.: 2138/KOL/2024 Assessment Year: 2015-16 M/s. Kothari Metals Ltd. opportunities were provided to the assessee and personal hearing through Video Conferencing (in short VC) was also scheduled which was not attended by the assessee on 10.05.2023 but an adjournment application was filed and revised VC was scheduled for 12.05.2023 but the response of the assessee was received on 15.05.2023 which was part response. The Ld. AO issued additional show cause notice and after considering the reply of the assessee, assessed the income at Rs. 16,96,11,420/- in which losses of Rs. 4,30,56,175/- claimed were not allowed and a sum of 2% of buying and selling transactions for claiming fictitious losses of Rs. 4,30,56,175/- i.e. Rs. 8,61,123/- was added on account of payment of commission to the stock broking firms which was incurred out of undisclosed sources and the income was accordingly assessed at Rs. 16,96,11,420/-. Aggrieved with the assessment order the assessee filed an appeal before the Ld. CIT(A) who has discussed the facts of the case, the non-compliance before the Ld. AO, the legal issues raised by the assessee and as no compliance was made to the notices issued for hearing before him, the appeal was decided on merits considering the grounds of appeal and statement of facts filed by the assessee and hence, dismissed. Aggrieved with the order of the Ld. CIT(A) the assessee has filed the appeal before this Tribunal. 4. Rival contentions were heard and the submissions made have been examined. At the outset, the Ld. AR contended that the reopening of assessment for AY 2015-16 was barred on account of decision of the Hon'ble Supreme Court in the case of Union of India vs. Rajeev Bansal [2024] 167 taxmann.com 70 (SC)/[2024] 301 Taxman 238 (SC)/[2024] 469 ITR 46 (SC)[03-10-2024]. Page | 5 I.T.A. No.: 2138/KOL/2024 Assessment Year: 2015-16 M/s. Kothari Metals Ltd. 5. We have heard the rival contentions and also gone through the facts and circumstances of the case. Ground nos. 1, 4, 5 and 8 relate to the reopening being bad in law, specifically in ground no. 1 in which it is averred that the notice u/s 148 of the Act was barred by limitation since the notice u/s 148A(b) of the Act having been initiated after six years from the assessment year, the assessment year in question was not covered by TOLA as admitted by the Ld. ASG in the case of Rajeev Bansal (supra) and so held in the said judgement. The Ld. AR has filed a brief note on the arguments in which ground nos. 2, 6, 7, 8 and 9 are not pressed and ground nos. 11 to 15 are in relation to merits of the case. As regards ground nos. 1, 3, 4 and 5 the submissions are reproduced as under: “The appeal is filed against reassessment order framed by AO. The assessee is firstly agitating Ground No. 1 regarding the validity of the reassessment proceedings as the same is barred by limitation. Reference in this connection is invited to the judgement of Hon'ble Apex Court in the case of Rajeev Bansal pronounced on 03.10.2024. Attention is invited to page 52 para f where the revenue conceded before the Hon'ble Apex Court that for the Asst Year 2015-16 all notices issued on or after 01.04.2021 have to be dropped as they will not fall for completion during the period prescribed under TOLA. The judgement has now also been followed by Delhi High Court in the case of Ibibo Group Pvt. Ltd. vs. ACIT in WP(C) No.17639/2022 judgment and order dated 13/12/2024. It has been held that reopening for Asst Year 2015-16 is not permissible in the extended period as per TOLA on and from 01.04.2021. Attention is also invited to the decision of Rajasthan High Court in Civil Writ Petition No. 3667/2023 pronounced on 27.01. 2025 which has also taken the same view. The aforesaid judgements are also being followed by Coordinate Bench of ITAT. Reference is invited to the decision of Coordinate Bench of Mumbai ITAT in the case of Manish Financial in ITA No. 1505/mum/2024 pronounced on 02.12.2024. Latest judgement in the case of Orbit Financial Capital pronounced on 31/12/2024 in ITA No. 5812/M/2024 is also being filed herewith. Now the Kolkata Bench of ITAT in the case of Coplama Products in ITA No. 1806/Kol/2024 pronounced on 31.01.2025 has also taken the same view. Hence the reassessment may please be quashed. It is also submitted that the aforesaid legal issue was not before CIT(A) since the order of the Apex Court Page | 6 I.T.A. No.: 2138/KOL/2024 Assessment Year: 2015-16 M/s. Kothari Metals Ltd. was delivered after the decision by CIT(A). However it has been held by Hon'ble Bombay High Court in the case of Kansai Nerolac Paints reported in 364 ITR 632 that legal issue if raised before ITAT for the first time has to be decided by the ITAT and cannot be remanded to the lower authorities. Ground No. 2 is not pressed. In ground No. 3 & 5, it is submitted that the original assessment was completed u/s 143(3) wherein all facts were fully disclosed. There was nothing in the reasons recorded prior to issue of initial notice u/s 148 that there was failure on the part of the assessee to disclose truly and fully all material facts necessary for reassessment. Hence since the original notice itself was bad in law, it could not be treated as a valid notice as per Hon'ble Apex Court decision in the case of Ashish Agarwal. Hence the entire reassessment is liable to be quashed. In Ground No. 4, it is submitted that that Ld. CIT (A) erred in confirming the order of the AO when the notice u/s 148A(b) issued was barred by limitation since the materials were forwarded after the deadline fixed by the Hon'ble Apex Court and further complete materials were never sent along with the show cause notice. Hence the entire reassessment is liable to be quashed.” 6. We have gone through the submissions made. Hon'ble Supreme Court in the case of Rajeev Bansal (supra) have held as under: “52. In Ashish Agarwal (supra), this Court held that the benefit of the new regime must be provided for the reassessment conducted for the past periods. The increase of the monetary threshold from Rupees one lakh to Rupees fifty lakh is beneficial for the assessees. Mr Venkataraman has also conceded on behalf of the Revenue that all notices issued under the new regime by invoking the six year time limit prescribed under section 149(1)(b) of the old regime will have to be dropped if the income chargeable to tax which has escaped assessment is less than Rupees fifty lakhs. . . 64. When enacting a statute, the legislature often endeavours to ensure that the provisions of one legislation do not conflict with provisions of another legislation. Interplay (supra) [between Arbitration Agreements under the Arbitration and Conciliation Act 1996 and the Indian Stamp Act 1899, 2023 INSC 1066]. The purpose of the Income-tax Act is to levy tax on income and raise revenues for the functioning of the Government. On the other hand, the purpose of TOLA is to provide relaxation of the time for completion of any actions or proceedings falling for completion within a particular period. Thus, Page | 7 I.T.A. No.: 2138/KOL/2024 Assessment Year: 2015-16 M/s. Kothari Metals Ltd. the two enactments operate in separate and distinct fields. This Court must ensure that the provisions of the two enactments are interpreted harmoniously unless there is an irreconcilable conflict between them. . . b. Reading TOLA into Section 149 68. After 1 April 2021, the Income-tax Act has to be read along with the substituted provisions. The substituted provisions apply retrospectively for past assessment years as well. On 1 April 2021, TOLA was still in existence, and the Revenue could not have ignored the application of TOLA and its notifications. Therefore, for issuing a reassessment notice under section 148 after 1 April 2021, the Revenue would still have to look at: (i) the time limit specified under section 149 of the new regime; and (ii) the time limit for issuance of notice as extended by TOLA and its notifications. The Revenue cannot extend the operation of the old law under TOLA, but it can certainly benefit from the extended time limit for completion of actions falling for completion between 20 March 2020 and 31 March 2021. 69. For instance, Section 149(1)(a) of the new regime specified the time limit of three years from the end of the relevant assessment year for reopening of the assessment. For assessment year 2017-2018, the three year period expired on 31 March 2021. The expiry of time fell within the time period contemplated by Section 3 of TOLA read with its notifications. Resultantly, the Revenue had time until 30 June 2021 to issue a reassessment notice for assessment year 2017-2018 under section 149(1)(a). This harmonious reading gives effect to the legislative intention of both the Income-tax Act and TOLA. Moreover, Sections 147 to 151 are machinery provisions. Therefore, they must be given an interpretation that is consistent with the object and purpose of the Income-tax Act. . . 74. The above table indicates that the specified authority is directly co- related to the time when the notice is issued. This plays out as follows under the old regime: (i) If income escaping assessment was less than Rupees one lakh: (a) a reassessment notice could be issued under section 148 within four years after obtaining the approval of the Joint Commissioner; and (b) no notice could be issued after the expiry of four years; and Page | 8 I.T.A. No.: 2138/KOL/2024 Assessment Year: 2015-16 M/s. Kothari Metals Ltd. (ii) If income escaping was more than Rupees one lakh: (a) a reassessment notice could be issued within four years after obtaining the approval of the Joint Commissioner; and (b) after four years but within six years after obtaining the approval of the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner. 75. After 1 April 2021, the new regime has specified different authorities for granting sanctions under section 151. The new regime is beneficial to the assessee because it specifies a higher level of authority for the grant of sanctions in comparison to the old regime. Therefore, in terms of Ashish Agarwal (supra), after 1 April 2021, the prior approval must be obtained from the appropriate authorities specified under section 151 of the new regime. The effect of Section 151 of the new regime is thus: (i) If income escaping assessment is less than Rupees fifty lakhs: (a) a reassessment notice could be issued within three years after obtaining the prior approval of the Principal Commissioner, or Principal Director or Commissioner or Director; and (b) no notice could be issued after the expiry of three years; and (ii) If income escaping assessment is more than Rupees fifty lakhs: (a) a reassessment notice could be issued within three years after obtaining the prior approval of the Principal Commissioner, or Principal Director or Commissioner or Director; and (b) after three years after obtaining the prior approval of the Principal Chief Commissioner or Principal Director General or Chief Commissioner or Director General. 76. Grant of sanction by the appropriate authority is a precondition for the assessing officer to assume jurisdiction under section 148 to issue a reassessment notice. Section 151 of the new regime does not prescribe a time limit within which a specified authority has to grant sanction. Rather, it links up the time limits with the jurisdiction of the authority to grant sanction. Section 151(ii) of the new regime prescribes a higher level of authority if more than three years have elapsed from the end of the relevant assessment year. Thus, non-compliance by the assessing officer with the strict time limits prescribed under section 151 affects their jurisdiction to issue a notice under section 148. 77. Parliament enacted TOLA to ensure that the interests of the Revenue are not defeated because the assessing officer could not comply with the pre conditions due to the difficulties that arose during the COVID-19 pandemic. Section 3(1) of TOLA relaxes the time limit for compliance with actions that fall for completion from 20 March 2020 to 31 March Page | 9 I.T.A. No.: 2138/KOL/2024 Assessment Year: 2015-16 M/s. Kothari Metals Ltd. 2021. TOLA will accordingly extend the time limit for the grant of sanction by the authority specified under section 151. The test to determine whether TOLA will apply to Section 151 of the new regime is this: if the time limit of three years from the end of an assessment year falls between 20 March 2020 and 31 March 2021, then the specified authority under section 151(i) has an extended time till 30 June 2021 to grant approval. In the case of Section 151 of the old regime, the test is: if the time limit of four years from the end of an assessment year falls between 20 March 2020 and 31 March 2021, then the specified authority under section 151(2) has time till 31 March 2021 to grant approval. The time limit for Section 151 of the old regime expires on 31 March 2021 because the new regime comes into effect on 1 April 2021. 78. For example, the three year time limit for assessment year 2017- 2018 falls for completion on 31 March 2021. It falls during the time period of 20 March 2020 and 31 March 2021, contemplated under section 3(1) of TOLA. Resultantly, the authority specified under section 151(i) of the new regime can grant sanction till 30 June 2021. 79. Under Finance Act 2021, the assessing officer was required to obtain prior approval or sanction of the specified authorities at four stages: a. Section 148A(a) - to conduct any enquiry, if required, with respect to the information which suggests that the income chargeable to tax has escaped assessment; b. Section 148A(b) - to provide an opportunity of hearing to the assessee by serving upon them a show cause notice as to why a notice under section 148 should not be issued based on the information that suggests that income chargeable to tax has escaped assessment. It must be noted that this requirement has been deleted by the Finance Act 2022;33 c. Section 148A(d) - to pass an order deciding whether or not it is a fit case for issuing a notice under section 148; and d. Section 148 - to issue a reassessment notice. 80. In Ashish Agarwal (supra), this Court directed that Section 148 notices which were challenged before various High Courts \"shall be deemed to have been issued under section 148-A of the Income-tax Act as substituted by the Finance Act, 2021 and construed or treated to be show-cause notices in terms of Section 148-A(b).\" Further, this Court dispensed with the requirement of conducting any enquiry with the prior approval of the specified authority under section 148A(a). Under Section 148A(b), an assessing officer was required to obtain prior approval from the specified Page | 10 I.T.A. No.: 2138/KOL/2024 Assessment Year: 2015-16 M/s. Kothari Metals Ltd. authority before issuing a show cause notice. When this Court deemed the Section 148 notices under the old regime as Section 148A(b) notices under the new regime, it impliedly waived the requirement of obtaining prior approval from the specified authorities under section 151 for Section 148A(b). It is well established that this Court while exercising its jurisdiction under Article 142, is not bound by the procedural requirements of law High Court Bar Association v. State of U P [2024] 160 taxmann.com 32/299 Taxman 21 (SC)/[2024] 6 SCC 267. 81. This Court in Ashish Agarwal (supra) directed the assessing officers to \"pass orders in terms of Section 148-A(d) in respect of each of the assesses concerned.\" Further, it directed the assessing officers to issue a notice under Section 148 of the new regime \"after following the procedure as required under section 148-A.\" Although this Court waived off the requirement of obtaining prior approval under section 148A(a) and Section 148A(b), it did not waive the requirement for Section 148A(d) and Section 148. Therefore, the assessing officer was required to obtain prior approval of the specified authority according to Section 151 of the new regime before passing an order under section 148A(d) or issuing a notice under section 148. These notices ought to have been issued following the time limits specified under section 151 of the new regime read with TOLA, where applicable. F. Section 148 notices issued in June-September 2022 i. Scope of Article 142 113. In Ashish Agarwal (supra), this Court allowed the assesses to avail all the defences, including the defence of expiry of the time limit specified under section 149(1). In the instant appeals, the reassessment notices pertain to the assessment years 2013-2014, 2014-2015, 2015-2016, 2016-2017, and 2017-2018. To assume jurisdiction to issue notices under section 148 with respect to the relevant assessment years, an assessing officer has to: (i) issue the notices within the period prescribed under section 149(1) of the new regime read with TOLA; and (ii) obtain the previous approval of the authority specified under section 151. A notice issued without complying with the preconditions is invalid as it affects the jurisdiction of the assessing officer. Therefore, the reassessment notices issued under section 148 of the new regime, which are in pursuance of the deemed notices, ought to be issued within the time limit surviving under the Income- tax Act read with TOLA. A reassessment notice issued beyond the surviving time limit will be time-barred. G. Conclusions 114. In view of the above discussion, we conclude that: Page | 11 I.T.A. No.: 2138/KOL/2024 Assessment Year: 2015-16 M/s. Kothari Metals Ltd. a. After 1 April 2021, the Income-tax Act has to be read along with the substituted provisions; b. TOLA will continue to apply to the Income-tax Act after 1 April 2021 if any action or proceeding specified under the substituted provisions of the Income-tax Act falls for completion between 20 March 2020 and 31 March 2021; c. Section 3(1) of TOLA overrides Section 149 of the Income-tax Act only to the extent of relaxing the time limit for issuance of a reassessment notice under section 148; d. TOLA will extend the time limit for the grant of sanction by the authority specified under section 151. The test to determine whether TOLA will apply to Section 151 of the new regime is this: if the time limit of three years from the end of an assessment year falls between 20 March 2020 and 31 March 2021, then the specified authority under section 151(i) has extended time till 30 June 2021 to grant approval; e. In the case of Section 151 of the old regime, the test is: if the time limit of four years from the end of an assessment year falls between 20 March 2020 and 31 March 2021, then the specified authority under section 151(2) has extended time till 31 March 2021 to grant approval; f. The directions in Ashish Agarwal (supra) will extend to all the ninety thousand reassessment notices issued under the old regime during the period 1 April 2021 and 30 June 2021; g. The time during which the show cause notices were deemed to be stayed is from the date of issuance of the deemed notice between 1 April 2021 and 30 June 2021 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), and the period of two weeks allowed to the assesses to respond to the show cause notices; and h. The assessing officers were required to issue the reassessment notice under section 148 of the new regime within the time limit surviving under the Income-tax Act read with TOLA. All notices issued beyond the surviving period are time barred and liable to be set aside;” 7. Admittedly the notice u/s 148 of the Act was issued on 30.06.2022 i.e. beyond the TOLA period and as per the decision of the Hon'ble Supreme Court such a notice under the old regime could have been issued only up to 31.03.2022 and the benefit of extension of due Page | 12 I.T.A. No.: 2138/KOL/2024 Assessment Year: 2015-16 M/s. Kothari Metals Ltd. date as per TOLA would be applicable only to the notices issued between 01.04.2021 to 30.06.2021 if the limitation for issuing such notices was expiring between 20 March 2020 and 31 March 2021 The limitation for A.Y. 2015-16 was expiring on 31.03.2022, i.e. beyond the period of 20.03.2020 to 31.03.2022, therefore, the benefit of TOLA would not be applicable. Further, in view of the first proviso to section 149(1) of the Act. The time limit for reopening assessments has been reduced from four years to three years. However, in cases where income that escaped assessment amounts to ₹50 lakhs or more, assessments can be reopened within ten years. The new regime prohibits reopening of assessments that were time-barred under the old regime. The provisions of section 149 of the new regime are as under: 149. (1) No notice under section 148 shall be issued for the relevant assessment year,— (a) if three years have elapsed from the end of the relevant assessment year, unless the case falls under clause (b); b) if three years, but not more than ten years, have elapsed from the end of the relevant assessment year unless the Assessing Officer has in his possession books of account or other documents or evidence which reveal that the income chargeable to tax, represented in the form of— (i) an asset; (ii) expenditure in respect of a transaction or in relation to an event or occasion; or (iii) an entry or entries in the books of account, Page | 13 I.T.A. No.: 2138/KOL/2024 Assessment Year: 2015-16 M/s. Kothari Metals Ltd. which has escaped assessment amounts to or is likely to amount to fifty lakh rupees or more:] Provided that no notice under section 148 shall be issued at any time in a case for the relevant assessment year beginning on or before 1st day of April, 2021, if a notice under section 148 or section 153A or section 153C could not have been issued at that time on account of being beyond the time limit specified under the provisions of clause (b) of sub- section (1) of this section or section 153A or section 153C, as the case may be, as they stood immediately before the commencement of the Finance Act, 2021: {emphasis supplied} 8. In this case the notice u/s 148 of the Act was earlier issued on 09.04.2021 which was treated as show cause notice u/s 148A(b) of the Act but the order u/s 148A(d) of the Act has been passed on 30.06.2022 and as per the old provisions of reassessment, the notice u/s 148 of the Act after complying with the procedural requirement as per the amended provisions ought to have been issued by 31.03.2022 after excluding the period granted to file the reply in response to the notice u/s 148A(b) of the Act. Since the limitation for issue of notice u/s 148 of the Act expired on 31.03.2022 under the old regime and for AY 2015- 16 as per page 2 of the assessment order the notice u/s 148 has been issued on 30.06.2022, the benefit of TOLA for extending the limitation for issue of notice u/s 148 of the Act will not be available to the Revenue. Hence, in view of the decisions relied upon by the Ld. AR (supra), the notice issued u/s 148 of the Act on 30.06.2022 is barred by limitation and the assessment order is hereby quashed and appeal of the assessee Page | 14 I.T.A. No.: 2138/KOL/2024 Assessment Year: 2015-16 M/s. Kothari Metals Ltd. is allowed. Other issues are not adjudicated as the assessment order has been quashed. 9. In the result, the appeal filed by the assessee is allowed. Order pronounced in the open Court on 19th March, 2025. Sd/- Sd/- [George Mathan] [Rakesh Mishra] Judicial Member Accountant Member Dated: 19.03.2025 Bidhan (P.S.) Page | 15 I.T.A. No.: 2138/KOL/2024 Assessment Year: 2015-16 M/s. Kothari Metals Ltd. Copy of the order forwarded to: 1. M/s. Kothari Metals Ltd., Ground Floor, Kothari Mansion, 20/, Belvedere Road, Kolkata, West Bengal, 700027. 2. DCIT, Circle-7(1), Kolkata. 3. CIT(A)-NFAC, Delhi. 4. CIT- 5. CIT(DR), Kolkata Benches, Kolkata. 6. Guard File. //True copy // By order Assistant Registrar ITAT, Kolkata Benches Kolkata "