TaxTMI 
TaxTMI 
2025 (5) TMI 722
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....the Assessment Year ("AY") 2013-14 on 31/03/2014 declaring an income of Rs. 37,17,840/- (Rupees Thirty Seven Lakh Seventeen Thousand Eight Hundred Forty Only). b. Thereafter, the case of the Petitioner was selected for scrutiny by issuance of notice under Section 143 (2) of the Income Tax Act, 1961 (for short, "the IT Act"). After detailed inquiries through notices under Section 142 (1) of the Act, the assessment was completed by an order dated 23/02/2016 passed under Section 143 (3) of the IT Act by the Assistant Commissioner of Income Tax, Circle 53 (1) New Delhi, at the assessed income of Rs. 60,60,370/- (Rupees Sixty Lakh Sixty Thousand Three Hundred Seventy Only). c. On 31/03/2020 the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 (for short, "the TOLA") was enacted. As a result, the time limit for completion or compliance of actions under the IT Act that were due for completion or compliance during the period from 20/03/2020 and 31/12/2020 was extended to 31/03/2021. d. Respondent No. 2 vide Notification dated 31/03/2021 further extended the aforesaid time limit beyond 31/03/2021 till 30/04/2021. e. Finan....
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.... issued the notice under pre-substituted Section 148 of the IT Act, as deemed to be notice under Section 148A (b) of the IT Act. m. Petitioner, through his Chartered Accountant filed objections and reply to the notice vide reply letter dated 03/06/2022 on the ground that the necessary material was not supplied to the Petitioner by the Assessing Officer, that the inquiry contemplated under Section 148A (a) was not undertaken and that the reasons given for re-opening were unjustified. n. Subsequently, the Petitioner filed an additional reply vide Reply Letter dated 28/06/2022 and categorically raised the objections to material document not being supplied, jurisdiction and limitation and an express objection was taken that no intimation of change of incumbent in office was communicated to the Petitioner as required under Section 129 of the IT Act. An additional ground was taken that in view of the decision of the Hon'ble Supreme Court in Ashish Agarwal (supra), the re-opening of proceedings was time barred under Section 149 of the IT Act as amended by the Finance Act of 2021. o. Respondent No. 1 issued a Letter dated 14/07/2022 with reference to Section 148A....
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.... the tune of Rs. 7,14,74,863/- as against the receipt of Rs. 1,00,19,308/-. (iv) That the Petitioner was called for examination under Section 131 of the IT Act by the Investigating Officer and the officer obtained bank statements from the concerned branches and made a study to come to the conclusion that there is a gap of Rs. 6,13,76,555/-. (v) Petitioner acted in contravention of the IT Act by not explaining the sources of money and that the case of the Petitioner was re-opened in view of the provisions under Section 147 of IT Act with prior approval of Principal CIT under Section 151 of the IT Act. (vi) That in terms of the judgment in Ashish Agarwal (supra), the procedure and time lines contemplated were complied with. (vii) That assessment was re-opened in terms of Section 147 of the IT Act. (viii) That notice was issued and proceedings conducted within the timeline notified under the TOLA. (ix) Reliance was placed on the decision in UOI vs Rajeev Bansal, (2024) 469 ITR 46 to contend that the time limit to re-open the proceedings in the present case was extended to 30/06/2021 and that after following the entire procedure inc....
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....t copy of approval/sanction under Section 151. (vii) Non-grant of personal hearing under Section 148A (d) of the IT Act despite a specific request made by the petitioner. (viii) Non-supply of documents/material under Section 148A (b). (ix) Impugned notice was in contravention of Section 151A of the said Act and the e-assessment of Income Escaping Assessment Scheme, 2022. 6. Although multiple grounds as mentioned above have been raised in the writ petition, the learned Advocate for Petitioner has limited his challenge to the point that the order under Section 148A (d) and the notice under Section 148 dated 29/07/2022 was time barred in view of the first proviso to substituted Section 149 as interpreted by the Hon'ble Supreme Court in Ashish Agarwal and Rajeev Bansal (supra). Reliance is also placed on the Delhi High Court judgement in Ram Balram Buildhome vs ITO [2025 SCC OnLine Del 481] to contend that on identical facts and consistent with the interpretation of the Petitioner in the instant case, order under Section 148A (d) and notice under Section 148 were quashed. It is urged that the remainder period as per the ratio of the decision in Rajeev Bans....
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.... Reassessment proceedings were well within the statutory time limit and were not time-barred in view of the first proviso to Section 149 (1) of the IT Act, which was made applicable from 01/04/2021. (vi) That the time limit to re-open the proceedings in the present case within the meaning of Section 147 had been extended to 30/06/2021. The first notice under Section 148 of the IT Act was dated 29/06/2021and that the assessment order passed under Section 147 read with 144B of the IT Act was passed under the e-Assessment of Income Escaping Assessment Scheme, 2022 where the assessment was done on automated allocation. Hence, the aspect of absence of jurisdiction was without substance. (vii) The order dated 29/07/2022 was passed within the time stipulated under Section 148A (d) in as much as the first reply was uploaded on 03/06/2022 and the additional reply was uploaded on 28/06/2022. Going by the mandate of Section 148A (d) which contemplates that an order under Section 148A (d) was to be passed within one month from date of compliance from notice under Section 148A (b), the limitation would be till 31/07/2022. It is contended that the end of the month for complianc....
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....matter of challenge before the Hon'ble Supreme Court in SLP no. 21188/2024. 9. In view of the controversy involved, it is necessary to refer to the decisions in Ashish Agarwal and Rajeev Bansal (supra). Since the decision in Ashish Agarwal (supra) has been considered in Rajeev Bansal (supra), it would be advantageous to refer to its observations in this regard in paragraphs 106 and 107. It held as under :- "106. .................. To summarize, the combined effect of the legal fiction and the directions issued by this Court in Union of India Vs. Ashish Agarwal, (2023) 1 SCC 617 is that the show-cause notices that were deemed to have been issued during the period between April 1, 2021 and June 30, 2021 were stayed till the date of supply of the relevant information and material by the Assessing Officer to the assessee. After the supply of the relevant material and information to the assessee, time begins to run for the assessees to respond to the show-cause notices. 107. The third proviso to Section 149 allows the exclusion of time allowed for the assessees to respond to the show-cause notice under Section 149A(b) to compute the period of limitation. The thi....
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....ct read with Taxation and other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020, was available to the Assessing Officers to issue the reassessment notices under Section 148 of the new regime. 113. 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 Taxation and other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020. A reassessment notice issued beyond the surviving time limit will be time-barred." 11. Thus, the effect of the judgment in Ashish Agarwal (supra) was that whilst upholding the contention of the assesses that from 01/04/2021, the new regime applied and the issuance of notices under the old regime were contrary to law, the Hon'ble Supreme Court in exercise of powers under Article 142 of the Constitution of India directed that notices issued under Section 148 of the old regime be construed as notices under Section 148A (b) of the new regime and the enquiry contemplated under Section 148A (a) was done away with as a one-time measure. The Assessing Officers were directed to p....
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....der Section 151 (2) has extended time till 31/03/2021 to grant approval; f. The directions in Ashish Agarwal (supra) would extend to all the reassessment notices issued under the old regime during the period 1/4/2021 and 30/06/2021; g. The time during which the show-cause notices were deemed to be stayed would be from the date of issuance of the deemed notice between 01/04/2021 and 30/06/2021 till the supply of relevant information and material by the Assessing Officers to the assessees in terms of the directions issued in Ashish Agarwal (supra), and the period of two weeks allowed to the assessees to respond to the show-cause notices, and h. The Assessing Officer was required to issue the reassessment notice under Section 148 of the new regime within the time limit surviving under the IT Act read with TOLA. All notices issued beyond the surviving period would be time barred and liable to be set aside. 14. As stated earlier, the instant case is premised on ratio laid down in the case of Rajeev Bansal (supra) and the applicability of the principles laid down to the facts of the present case. The sequence of events in the case in hand is as under : Sr....
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.... view of change in the incumbent to the Office, which period ended on 21/07/2022. 16. By considering all the exclusions, the remainder days for conclusion of the procedure for passing of an order in terms of Section 148A (d) and issuance of notice under Section 148 would be two days from 21/07/2022 and the same would expire of 23/07/2022. Applying the ratio of the decisions in Ashish Agarwal and Rajeev Bansal (supra) in the context of the 1st proviso to Section 149 we are therefore of the opinion that the notice under Section 148 dated 29/07/2022 is time barred. The order under Section 148A (d) as well as the notice issued under Section 148 are dated 29/07/2022 which is much after the surviving period which expired on 21/07/2022. 17. In light of the above, the contentions raised by the Revenue lack foundation in terms of law. Although the Revenue has contended that the order dated 29/07/2022 passed under Section 148A (d) and the notice issued under Section 148 were within the timelines contemplated by the decisions in Ashish Agarwal and Rajeev Bansal (supra), the same lacks substance. In the written synopsis, an attempt was made to justify the timelines by contending that in ....
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....dents. Except for the decision in Ashish Acharatlal Varaiya (supra), other judgments are rendered prior to the decision in Rajeev Bansal (supra) and /or do not consider the said decision. Hence the said judgments do not in any manner assist us in deciding the controversy in issue especially in the context to the limited issue that is raised by the Petitioner herein. 20. At this point we deem it appropriate to note that the Delhi High Court in the case of Ram Balram Buildhome Pvt. Ltd. vs. Income Tax Officer & Anr. [2025 SCC OnLine Del 481] dealt with an identical issue. It considered the principles laid down in Ashish Agarwal and Rajeev Bansal (supra) and concluded that the notice issued under Section 148 under the IT Act was time barred. In the facts of that case as well, the AY was 2013-2014 and the notice under Section 148 issued to the assessee was dated 01/06/2021. The date of furnishing material to the Petitioner in that case was 30/05/2022. The said Petitioner furnished its response to the notice under Section 148A (b) of the IT Act on 13/06/2022. In this factual backdrop, the Delhi High Court applying the ratio of the decisions in Ashish Agarwal and Rajeev Bansal (supra)....