RAJESH BATRA,NEW DELHI V. ITO WARD 29(1), DELHI

ITA 4419/DEL/2025

AI Insights

The case involves three appeals by the same assessee, Shri Rajesh Batra, against the orders of the Ld. CIT(A)-NFAC, Delhi, for the assessment years 2012-13, 2014-15, and 2015-16. The primary legal issue in ITA No.4420/Del/2025 was the limitation period for issuing a notice under section 148 of the Income Tax Act, 1961, which was found to be beyond the permissible limit, leading to the voiding of the assessment order for AY 2014-15. For ITA Nos. 4419/Del/2025 and 4421/Del/2025, the appeals were remanded back to the Ld. AO due to the assessee's inability to present facts previously, attributed to a communication gap with the tax counsel.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 792046 (ITAT-DELHI)
• Duration Of Justice: 4 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-12-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2012-2013
• Appeal Filed On: 17-07-2025
• Other Referred Cases: Ram Balram Buildhome (P) Ltd. vs. ITO, Md. Salim Abdul Hakim Khan vs. ITO, Rajeev Bansal vs. ITO, Ashish Agarwal vs. ITO
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJESH KUMAR DHANESTA
• Assessee Lawyers: LALIT MOHAN
• Keywords: Set aside; Opportunity of being heard; Period of limitation
• Section: 147; 148

Judgement Text

"ITA Nos.4419, 4420 & 4421/Del/2025 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “B”NEW DELHI BEFORE SHRIMAHAVIR SINGH, HON’BLE VICE PRESIDENT AND SHRISANJAY AWASTHI, ACCOUNTANT MEMBER आ.अ.सं/.I.T.A Nos.4419, 4420 & 4421/Del/2025 िनधा रणवष /Assessment Years:2012-13, 2014-15 & 2015-16 SHRI RAJESH BATRA, B-96, Shivalik, New Delhi. PAN No.AAHPB4919N बनाम Vs. INCOME TAX OFFICER, Ward 29(1), Delhi. अपीलाथ\u0014 Appellant \u0016\u0017यथ\u0014/Respondent Assessee by Shri Lalit Mohan, CA Revenue by Shri Rajesh Kumar Dhanesta, Sr. DR सुनवाईक\bतारीख/ Date of hearing: 09.12.2025 उ\u000eोषणाक\bतारीख/Pronouncement on 09.12.2025 आदेश /O R D E R PER SANJAY AWASTHI, ACCOUNTANT MEMBER: 1. This is a batch of three appeals belonging to the same Assessee, which are being disposed of through a single order for the sake of convenience. ITA No.4419/Del/2025 pertaining to AY 2012-13 arises from the order dated 30.06.2025, passed by Ld.CIT(A)-NFAC, Delhi, u/s 250 of the Income Tax Act, 1961 (hereinafter referred to as “the Act”). ITA No.4420/Del/2025 for AY 2014-15 arises from the order u/s 250 of the Act, dated 30.06.2025 passed by the Ld. CIT(A)-NFAC, Delhi. Finally, ITA No.4421/Del/2025 for AY 2015-16 arises from the order u/s 250 of the Act, dated 30.06.2025, passed by the Ld.CIT(A)-NFAC, Delhi. The common point in all these three cases is that the assessee did not make Printed from counselvise.com ITA Nos.4419, 4420 & 4421/Del/2025 2 any presentation of facts before the Ld. CIT(A). While the issues on facts are similar, but for AY 2014-15 there is an additional legal issue through which the limitation aspect of the notice issued u/s 148 of the Act has been presented as a separate item of adjudication. Accordingly, ITA No.4420/Del/2025 pertaining to AY 2014-15 will be taken up first. 2. ITA No.4420/Del/2025 AY 2014-15 : In this case the Ld. AR has filed a summary of events and has indicated as to which case law applies to each aspect of the proceedings. The summary sheet may be extracted as under: “MAY IT PLEASE YOUR HONOURS: At the outset, it is submitted that notice dated 22.07.2022 issued by Ld. Income Tax Officer, Ward 29(1), New Delhi u/s 148 of the Act is beyond the period of limitation and therefore cannot be sustained. Reliance is placed upon the judgment of the Hon’ble High Court of Delhi in the case of Ram Balram Buildhome (P) Ltd. vs. ITO reported in 477 ITR 133 (Del) (pages 32 – 52 of the Paper Book). A tabular chart in support of contention of appellant is as under: S.No. Particulars Appellant’s case (page of Paper Book) Rajeev Bansal 469 ITR 46(SC) Para 111 Ram Balram Buildhome (P) Ltd. (pages 32 – 52 of PB) 6848/Mum/2024 dated 27.02.2025 Md. Salim Abdul Hakim Khan vs. ITO i) Assessment Year 2014-15 - 2013-14 2013-14 ii) First notice issued u/s 148 of the Act 29.06.2021 (I) 01.05.2021 1.6.2021 30.06.2021 iii) Surviving time till 30.06.2021 (if less than 7 days, extended to 7 days as per Proviso to section 149(1) of the Act) 1 days, thus extended to 7 days 61 days 29 days 0 days, thus extended to 7 days iv) SCN issued u/S 148A(b) of the Act in pursuance 01.06.2022 to be complied on or before -- 30.05.2022 28.05.2022 to be complied within 15 days i.e. Printed from counselvise.com ITA Nos.4419, 4420 & 4421/Del/2025 3 to directions of Hon’ble Apex Court in the case of Ashish Agarwal dated 04.05.2022 reported in 444 ITR 1 (SC) 16.06.2022 (7-9) 12.06.2022 v) Reply filed on (if any) -- 18.06.2022 13.06.2022 -- vi) Period to be excluded as per Para 110 of Rajeev Bansal dated 03.10.2024 reported in 469 ITR 46 (SC) 29.06.2021 to 01.06.2022 And 01.06.2022 to 16.06.2022 01.05.2021 to 18.06.2022 1.06.2021 to 30.05.2022 And 30.05.2022 to 13.06.2022 30.06.2021 to 28.05.2022 And 28.05.2022 to 12.06.2022 vii) Period expired to issue notice us/ 148 of the Act 23.06.2022 (16.06.2022 + 7 days) 18.08.2022 (18.06.2022 + 61 days) 12.07.2022 (13.06.2022 + 29 days) 19.06.2022 (12.06.2022 + 7 days) viii) Second notice issued u/s 148 of the Act 22.07.2022 (12-14) -- 30.07.2022 28.07.2022 2.1 Since this issue goes to the root of the matter, hence the Ld. DR was asked to present arguments on this aspect, especially on the fact sheet provided by the Ld. AR. The Ld. DR supported the orders of the authorities below in this regard. 2.2 We have carefully considered the documents before us and have gone through the facts sheet also. After the Rajiv Bansal case [469 ITR 46 (SC)], there is absolute clarity regarding the dates by which notices could be issued, especially for AYs 2014-15 and 2015-16. The relevant portion from the Rajiv Bansal case may be extracted 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. Printed from counselvise.com ITA Nos.4419, 4420 & 4421/Del/2025 4 …. 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, 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 are assessment 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. …… Printed from counselvise.com ITA Nos.4419, 4420 & 4421/Del/2025 5 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 (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. Printed from counselvise.com ITA Nos.4419, 4420 & 4421/Del/2025 6 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 2021. TOLA will accordingly extend the time limit for the grant of sanction by the authority specified under section 151. The test to determine whetherTOLA will apply to Section 151 of the new regime is this: if the time limit ofthree years from the end of an assessment year falls between 20 March2020 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 ofSection 151 of the old regime, the test is: if the time limit of four years fromthe end of an assessment year falls between 20 March 2020 and 31 March2021, then the specified authority under section 151(2) has time till 31March 2021 to grant approval. The time limit for Section 151 of the oldregime expires on 31 March 2021 because the new regime comes into effecton 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 timeperiod of 20 March 2020 and 31 March 2021, contemplated undersection 3(1) of TOLA. Resultantly, the authority specified undersection 151(i) of the new regime can grant sanction till 30 June2021. 79. Under Finance Act 2021, the assessing officer was required to obtainprior approval or sanction of the specified authorities at four stages: a. Section 148A(a) - to conduct any enquiry, if required, with respect to theinformation which suggests that the income chargeable to tax has escapedassessment; b. Section 148A(b) - to provide an opportunity of hearing to the assessee byserving upon them a show cause notice as to why a notice under section148 should not be issued based on the information that suggests thatincome chargeable to tax has escaped assessment. It must be noted thatthis 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 casefor 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 noticeswhich were challenged before various High Courts \"shall be deemed to havebeen issued under section 148-A of the Income-tax Act as substituted by theFinance Act, 2021 and construed or Printed from counselvise.com ITA Nos.4419, 4420 & 4421/Del/2025 7 treated to be show-cause notices interms of Section 148-A(b).\" Further, this Court dispensed with therequirement of conducting any enquiry with the prior approval of thespecified authority under section 148A(a). Under Section 148A(b), anassessing officer was required to obtain prior approval from the specifiedauthority before issuing a show cause notice. When this Court deemedthe Section 148 notices under the old regime as Section 148A(b)notices under the new regime, it impliedly waived the requirementof obtaining prior approval from the specified authorities undersection 151 for Section 148A(b). It is well established that this Courtwhile exercising its jurisdiction under Article 142, is not bound by theprocedural 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 assessesconcerned.\" Further, it directed the assessing officers to issue a notice underSection 148 of the new regime \"after following the procedure as requiredunder section 148-A.\" Although this Court waived off the requirement ofobtaining prior approval under section 148A(a) and Section 148A(b), it didnot waive the requirement for Section 148A(d) and Section 148. Therefore,the assessing officer was required to obtain prior approval of the specifiedauthority according to Section 151 of the new regime before passing an orderunder section 148A(d) or issuing a notice under section 148. These noticesought to have been issued following the time limits specified under section151 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 allthedefences, including the defence of expiry of the time limit specified undersection 149(1). In the instant appeals, the reassessment notices pertain tothe assessment years 2013-2014, 2014-2015, 2015-2016, 2016-2017, and2017-2018. To assume jurisdiction to issue notices under section 148 withrespect to the relevant assessment years, an assessing officer has to: (i)issue the notices within the period prescribed under section 149(1) of thenew regime read with TOLA; and (ii) obtain the previous approval of theauthority specified under section 151. A notice issued without complyingwith the preconditions is invalid as it affects the jurisdiction of the assessingofficer. Therefore, the reassessment notices issued under section 148of the new regime, which are in pursuance of the deemed notices,ought to be issued within the time limit surviving under the Incometax Act read with Printed from counselvise.com ITA Nos.4419, 4420 & 4421/Del/2025 8 TOLA. A reassessment notice issued beyond thesurviving time limit will be time-barred. G. Conclusions 114. In view of the above discussion, we conclude that: a. After 1 April 2021, the Income-tax Act has to be read along with thesubstituted provisions; b. TOLA will continue to apply to the Income-tax Act after 1 April 2021 if any action or proceeding specified under the substitutedprovisions 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 Actonly to the extent of relaxing the time limit for issuance of areassessment notice under section 148; d. TOLA will extend the time limit for the grant of sanction by the authorityspecified under section 151. The test to determine whether TOLA will applyto Section 151 of the new regime is this: if the time limit of three yearsfrom the end of an assessment year falls between 20 March 2020and 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 offour years from the end of an assessment year falls between 20 March 2020and 31 March 2021, then the specified authority under section 151(2) hasextended time till 31 March 2021 to grant approval; f. The directions in Ashish Agarwal (supra) will extend to all the ninetythousand reassessment notices issued under the old regime during theperiod 1 April 2021 and 30 June 2021; g. The time during which the show cause notices were deemed to be stayedis from the date of issuance of the deemed notice between 1 April 2021 and30 June 2021 till the supply of relevant information and material by theassessing officers to the assesses in terms of the directions issued by thisCourt in Ashish Agarwal (supra), and the period of two weeks allowed tothe assesses to respond to the show cause notices; and h. The assessing officers were required to issue the reassessment noticeunder section 148 of the new regime within the time limit surviving underthe Income-tax Act read with TOLA. All notices issued beyond the survivingperiod are time barred and liable to be set aside;” Printed from counselvise.com ITA Nos.4419, 4420 & 4421/Del/2025 9 2.3 Respectfully following the case of Rajiv Bansal (supra) it deserves to be held that the notice issued u/s 148 on 22.07.2022 is barred by limitation. Accordingly, the consequential assessment order is treated as void. Since the assessment order itself has been struck down, hence, we do not deem it fit to adjudicate on any other ground. 3. ITA Nos. 4419 & 4421/Del/2025: In these two appeals the assessee is seen to have challenged the legality of the issue of notice by the “Faceless” AO when that could not have been done before 29.03.2022. Furthermore, it was fairly admitted by the Ld. AR that they could not make a presentation of facts before the Ld. CIT(A) due to a communication gap between the Assessee and the Tax Counsel. Alternatively, it was prayed by the Ld. AR that the matter may be remanded back to the file of the AO for fresh assessment so that the assessee has a chance to present the facts before him. 3.1 The Ld. DR relied on the orders of the authorities below. 3.2 We have carefully considered the rival submissions and have gone through the records before us. We are considerably persuaded by the alternative submission of the Ld. AR that the assessee deserves a second chance to prove his bona fides through a presentation of facts before the Ld. AO so that all the issues, including the legal and jurisdictional issue, can be dealt with by the Ld. AO. Accordingly, we deem it fit to set aside the impugned orders for AYs 2012-13 & 2015-16 and thereafter, Printed from counselvise.com ITA Nos.4419, 4420 & 4421/Del/2025 10 remandthese two years to the file of the Ld.AO for fresh assessment. Needless to say, the Ld. AO would give an adequate opportunity of being heard and would also deal with the legal and jurisdictional issues which may be presented before him. 4. In the result ITA No.4420/Del/2025 is allowed. ITA Nos. 4419 & 4421/Del/2025 are allowed for statistical purposes, having been remanded back to the file of the Ld. AO. Order pronounced in the open court on 09.12.2025 Sd/- Sd/- (MAHAVIR SINGH) (SANJAY AWASTHI) VICE PRESIDENT ACCOUNTANT MEMBER Dated: 11.12.2025 *Kavita Arora, Sr. P.S. Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI Printed from counselvise.com "