SUSHMA MIMANI,KOLKATA V. ITO, WARD 32(1), , KOLKATA

ITA 462/KOL/2025

AI Insights

The case involves an appeal by Sushma Mimani against the order of the National Faceless Appeal Centre, Delhi, concerning the reopening of her income tax assessment for the year 2013-14. The primary legal issue was the validity of the notice issued under Section 148 of the Income-tax Act, 1961, which was claimed to be barred by limitation. The tribunal examined the timeline of notices and the applicable legal provisions following the Supreme Court's decision in Union of India v. Ashish Agarwal, which clarified the procedural requirements for issuing notices under the new regime post-31.03.2021. The tribunal found that the notice issued to the assessee was beyond the permissible time limit, leading to the allowance of the assessee's appeal.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 772236 (ITAT-KOLKATA)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-08-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Assessment Year: 2013-2014
• Other Referred Cases: ADM Agro Industries Latur and Vizag private Limited Vs. ACIT, Rajeev Bansal, Union of India v. Ashish Agarwal, Mon Mohan Kohli v. Assistant Commissioner of Income Tax & Anr., Ram Balram Buildhome Pvt. Ltd. v. Income Tax Officer and Anr.
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S.B. CHAKRABORTHY
• Assessee Lawyers: SUNIL SURANA
• Keywords: Set aside; Reassessment proceedings; Period of limitation; Reopening of assessment
• Section: 147; 148

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL “D” BENCH, KOLKATA BEFORE SHRI RAJESH KUMAR, AM AND SHRI PRADIP KUMAR CHOUBEY, JM ITA No. 462/KOL/2025 (Assessment Year: 2013-14) Sushma Mimani 29, Jeevan Jyoti, Shakespeare Sarani, Kolkata-700017, West Bengal Vs. Income Tax Officer, Ward 32(1), 10, Middleton Row, Kolkata-700071West Bengal (Appellant) (Respondent) PAN No. ADUPM9987H Assessee by : Shri Sunil Surana, AR Revenue by : Shri S.B. Chakraborthy, DR Date of hearing: 21.05.2025 Date of pronouncement: 28.08.2025 O R D E R Per Rajesh Kumar, AM: This is an appeal preferred by the assessee against the order of the National Faceless Appeal Centre, Delhi (hereinafter referred to as the “Ld. CIT(A)”] dated 04.02.2025 for the AY 2013-14. 02. This appeal was heard on 21st May, 2025 and the order ought to have been passed within 90 days as per Rule 35 of ITAT Rules 1963. The draft order was dictated and was prepared within 90 days from the date of hearing however could not be pronounced due to Hon’ble Judicial Member, Shri Pradip Kumar Choubey being on leave from 18th August, 2025 to 22nd August, 2025. Therefore, this is being pronounced on 25th August, 2025. Printed from counselvise.com Page | 2 ITA No. 462/KOL/2025 Sushma Miman; A.Y. 2013-14 03. The assessee pressed ground no.2 which is against the assessment reopened u/s 147 read with section 148 of the Income-tax Act, 1961 (the Act) despite the fact that the notice issued u/s 148 of the Act is barred by limitation. 04. The facts in brief are that the assessment year involved is A.Y. 2013- 14 and assessee filed the return of income declaring total income of ₹6,10,297/-. The assessee’s case has been identified and flagged by Directorate of Income tax (system), CBDT in accordance with the risk management strategy formulated by the Board as per the provisions of clause (i) of Explanation 1 to Section 148 of the Act on 26.07.2022. As per the order of Hon'ble Supreme Court in the case of Rajeev Bansal reported in 469 ITR 46, the AO had no surviving time left to issue the notice u/s 148 of the Act under new regime as the first notice was issued on 30.06.2021 and the surviving time has to be calculated from 30th June, 2021 to 30th June, 2021. Notice u/s 148A(b) was issued on 25.05.2022 and in terms of third proviso to Section 139(1) of the Act, now, 5th Proviso, the time given to the assessee to reply, was 14 days which expired on 08.06.2022, surviving time expired on same day on 08.06.2022, which is time for issue of notice u/s 148 of the Act. However, notice u/s 148 was issued under the new regime on 26.07.2022. 05. After hearing the rival contentions and perusing the materials available on record, we find that the notice has been issued on 26.07.2022, whereas the time to issue notice expired on 08.06.2022. The chronology of events is extracted below: - EVENT A.Y. 2013-14 First Notice u/s 148 of the Act under old regime 30.06.2021 As per the order of the SC in Rajeev Bansal, the learned AO had no surviving day time to issue notice 0 day Printed from counselvise.com Page | 3 ITA No. 462/KOL/2025 Sushma Miman; A.Y. 2013-14 u/s 148 of the Act under new regime (day between 30-06-2021 and 30-06-2021) Notice u/s 148A(b) of the Act issued 25.05.2022 Time given to assessee to reply was 14 days which expires on (Third proviso to section 149(1), now 5th) 08.06.2022 Surviving Time of 0 day (30-06-2021-30-06-2021) expires on which is the time barring date for issue of notice u/s 148 08.06.2022 Notice u/s 148 of the Act under new regime issued on 26.07.2022 06. The case of the assessee is squarely covered by the decision of ADM Agro Industries Latur and Vizag private Limited Vs. ACIT in W.P.(C) 4583/2023 vide order dated 06.05.2025, wherein the facts of the decision passed by the Hon'ble court is extracted below: - “2. The initial notice under Section 148 of the Act for AY 2013-14 was issued on 30.06.2021. The said notice was unsustainable as it was issued in accordance with the statutory regime as stood prior to 31.03.2021. This court in the case of Mon Mohan Kohli v. Assistant Commissioner of Income Tax & Anr.: Neutral Citation No.: 2021:DHC:4181- DB had set aside such notices that were issued after 31.03.2021 without following the procedure as prescribed under Section 148A of the Act. Some of the other High Courts also took a similar view and struck down notices that were issued under Section 148 of the Act after 31.03.2021 but under the unamended provisions relating to the re- assessment of income that had escaped assessment. 3. The Revenue appealed the decisions rendered by various High Courts to the Supreme Court of India. In Union of India v. Ashish Agarwal: 2022 SCC OnLine SC 543 which was one of such appeals arising from the decision of the Allahabad High Court the Supreme Court delivered its decision on 04.05.2022, whereby it concurred with the view that the amended provisions which came into force after 31.03.2021 would be applicable to notices issued thereafter. However, the Supreme Court also issued certain directions in exercise of powers under Article 142 of the Constitution of India. The Court directed that all notices that were issued under Section 148 of the Act after 01.04.2021 till the date of the said decision (04.05.2022), including those that had been set aside by the High Courts, would be construed as show cause notices under Section 148A(b) of the Act. The Assessing Officers were directed to provide the information and material relied upon by the Revenue for issuance of such notices, to the respective assessees within a period of thirty days from the date of the decision so as to enable the respective assessees to respond to the same. 4. In compliance with the directions issued by the Supreme Court in the case of Union of India & Ors. v. Ashish Agarwal (supra), the Assessing Officer [AO] provided information and material to the Assessee on 25.05.2022. The Assessee was granted two weeks' time to respond to the said notice. The Assessee responded to the notice dated 25.05.2022 by a letter dated 09.06.2022. Printed from counselvise.com Page | 4 ITA No. 462/KOL/2025 Sushma Miman; A.Y. 2013-14 5. The AO passed an order under Section 148A(d) of the Act on 19.07.2022. According to the Assessee, the same was beyond the period as stipulated for issuance of notice under Section 148 of the Act. 6. In the present case, the period of six years from the end of the assessment year for issuing a notice under Section 148 of the Act expired on 31.03.2020. Thus, in terms of Section 149 of the Act, a notice under Section 148 of the Act could not be issued. However, the said period was extended by the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 [TOLA]. Consequently, the time limit for issuing such a notice was extended to 30.06.2021. The original notice under Section 148 of the Act was issued on 30.06.2021, which was the last date of expiry of the period of limitation. 7. As noted above, the said notice was deemed to be a notice under Section 148A(b) of the Act by virtue of the decision of the Supreme Court in Union of India & Ors. v. Ashish Agarwal (supra). The Supreme Court also granted further time to provide the material, which was required to accompany such notice. As explained by the Supreme Court in the case of Union of India v. Rajeev Bansal: 2024 SCC OnLine SC 2693, the period from the date of the issuance of the notice till 04.05.2022, the date on which the Supreme Court had rendered the decision in Union of India & Ors. v. Ashish Agarwal (supra), is required to be excluded. Additionally, the time provided till the date of providing the material, which should have accompanied a notice under Section 148A(b) of the Act, as well as the time available to the assessee to respond to the said notice is also required to be excluded by virtue of the Fourth Proviso to Section 149(1) of the Act, as applicable at the material time. 8. In the present case, the time period for issuance of notice under Section 148 of the Act expired on 16.06.2022. However, the impugned notice was issued on 20.07.2022, which is beyond the said period. Thus, the notice was beyond the period of limitation. 9. This court in Ram Balram Buildhome Pvt. Ltd. v. Income Tax Officer and Anr.: Neutral Citation No.: 2025: DHC:547-DB observed as under: - \"53. As is apparent from the plain language of the fourth proviso to Section 149(1) of the Act, it extends the period of limitation for issuing a notice under Section 148 of the Act so as to provide the AО а minimum of seven days to pass an order under Section 148A(d) of the Act. If the time available to the AO to decide whether it is a fit case for issuance of notice under Section 148 of the Act in terms of Section 148A(d) of the Act is less than seven days after excluding the period as provided under the third proviso, then the period of three years or ten years as prescribed is required to be extended by such period so as to make available to the AO at least seven days to pass an order under Section 148A(d) of the Act and issue a notice under Section 148 of the Act. Illustratively, if the show cause notice under Section 148A(b) of the Act is issued to an assessee, on the last date on which issuance of such a notice under Section 148 of the Act is permissible, that is, on the last day of expiry of three years from the end of the relevant assessment year or ten years from the end of the assessment year as the case may be, the time made available to the assessee to respond to a notice under Section 148A(b) of the Act (being a minimum of seven days but not exceeding thirty days as provided in the notice plus such further time as extended Printed from counselvise.com Page | 5 ITA No. 462/KOL/2025 Sushma Miman; A.Y. 2013-14 pursuant to an application), is required to be excluded for the calculation of the period of three years or ten years as the case may be. And, an additional period of seven days is made available for the AO to pass an order. Thus, the period of limitation in such case would be three years (after excluding the time provided to the assessee to respond to the notice under Section 148A(b) of the Act) and seven days, or a period of ten years (after excluding the time provided to the assessee to respond to the notice under Section 148A(b) of the Act) and seven days as the case may be. 54. It is obvious, that in such a case, the AO would not have a time for passing an order under Section 148A(d) of the Act as stipulated under the said Clause, that is, one month from the end of the month in which the assessee furnishes a reply to the notices issued under Section 148A(b) of the Act. As noted above, the AO is required to complete the entire procedure for issuance of notice under Section 148 of the Act within the period as prescribed under Section 149 of the Act. Plainly, if the AO is unable to complete such procedure within the period of limitation, the AO would cease to have the jurisdiction to issue such a notice. *** *** 65. Thus, in the facts of the present case, the last date for issuance of notice under Section 148 of the Act for AY 2013-14 under the statutory framework, as was existing prior to 01.04.2021 was 31.03.2020, that is, six years from the end of the relevant assessment year. 66. By virtue of Section 3(1) of TOLA time for completion of specified acts, which fell during the period 20.03.2020 to 31.12.2020 were extended till 30.06.20218. Thus, the notice dated 01.06.2021 was issued twenty-nine days prior to the expiry of period of limitation for issuing a notice under Section 148 of the Act as was extended by TOLA. As noted above, the period from 01.06.2021, the date of issuance of notice, and 04.05.2022, being the date of decision of the Supreme Court in Union of India & Ors. v. Ashish Agarwal is required to be excluded by virtue of the third proviso to Section 149(1) of the Act. 67. Additionally, the period from the date of decision in Union of India & Ors. v. Ashish Agarwal till the date of providing material, as required to the accompanied with a notice under Section 148A(b) of the Act, is required to be excluded. Thus, the period between 04.05.2022 to 30.05.2022, the date on which the AO had issued the notice under Section 148A(b) of the Act in furtherance of his carlier notice dated 01.06.2021, is also required to be excluded by virtue of the third proviso to Section 149(1) of the Act as held by the Supreme Court in Union of India & Ors. v. Rajeev Bansal. 68. In addition to the above, the time granted to the petitioner to respond to the notice dated 30.05.2022 the period of two weeks is also required to be excluded by virtue of the third proviso to Section 149(1) of the Act. The petitioner had furnished its response to the notice under Section 148A(b) of the Act on 13.06.2022. Thus, the period of limitation began running from that date. 69. As noted above, by virtue of TOLA, the AO had period of twenty-nine days limitation left on the date of commencement of the reassessment proceedings, Printed from counselvise.com Page | 6 ITA No. 462/KOL/2025 Sushma Miman; A.Y. 2013-14 which began on 01.06.2021, to issue a notice under Section 148 of the Act. The said notice was required to be accompanied by an order under Section 148A(d) of the Act. Thus, the AO was required to pass an order under Section 148A(d) of the Act within the said twenty-nine days notwithstanding the time stipulated under Section 148A(d) of the Act. This period expired on 12.07.2022. 70. Since the period of limitation, as provided under Section 149(1) of the Act, had expired prior to issuance of the impugned notice on 30.07.2022. The said is squarely beyond the period of limitation.\" 10. Concededly, the said controversy is covered in favour of the Assessee by the decision of this court in Ram Balram Buildhome Pvt. Ltd. v. Income Tax Officer and Another (supra). 11. The present petition is, accordingly, allowed and all proceedings initiated pursuant thereto are set aside. The pending application is also disposed of.” 07. Accordingly, respectfully following the ratio laid in the above decision. same we hold that the reopening of assessment is barred by limitation. 08. In the result, the appeal of the assessee is allowed. Order pronounced in the open court on 28.08.2025. Sd/- Sd/- (PRADIP KUMAR CHOUBEY) (RAJESH KUMAR) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) Kolkata, Dated: 28.08.2025 Sudip Sarkar, Sr.PS Copy of the Order forwarded to: BY ORDER, True Copy// Sr. Private Secretary/ Asst. Registrar Income Tax Appellate Tribunal, Kolkata 1. The Appellant 2. The Respondent 3. CIT 4. DR, ITAT, 5. Guard file. Printed from counselvise.com "