2025 (7) TMI 1474 - AT - Income Tax

Validity of reopening of assessment - Period of limitation - TOLA - effect of new regime - HELD THAT - After the judgement of Ashish Agarwal 2022 (5) TMI 240 - SUPREME COURT a fresh notice was issued u/s 148 of the Act on 29.07.2022. The issue is settled and now rests by the judgement of Rajeev Bansal 2024 (10) TMI 264 - SUPREME COURT (LB) In regard to AY 2014-15 the period of limitation as per section 149 of the Act would have been 31.03.2021. The period of limitation as per the Act r.w. TOLA stood extended till 30.06.2021. The original notice u/s 148 of the Act which was deemed to be a show cause notice u/s 148A(b) of the Act was issued on 17.06.2021. Thus the time surviving from the date of issuance of deemed show cause notice till expiry of period as extended by TOLA from 17.06.2021 to 30.06.2021 work out to be 13 days. Thus the period of notice stood extended till 15.06.2022 and the last date for issuing notice was 28.06.2022 but the notice was issued on 29.07.2022. AR has successfully established that the notice was issued beyond the period of limitation. Assessee appeal allowed.

Summary

The Appellate Tribunal (ITAT Delhi) allowed the assessee's appeal against the order of the Ld. Commissioner of Income-tax (Appeals) for AY 2014-15. The key issue was the validity of the assessment completed under section 147 of the Income Tax Act, 1961, challenged on the ground that the notice issued under section 148 was barred by limitation. The Tribunal noted that the original notice under section 148 was issued on 17.06.2021, deemed a show cause notice under section 148A(b). The limitation period, extended by the Taxation and Other Laws (Relaxation of Certain Provisions) Act (TOLA), expired on 30.06.2021. Although the last permissible date to issue the notice was 28.06.2022, the fresh notice was issued only on 29.07.2022, beyond the limitation period. Relying on the Supreme Court's rulings in Union of India & Ors vs. Ashish Agarwal and Union of India & Ors vs. Rajeev Bansal (2024) 469 ITR 46, the Tribunal held that "the notice was issued beyond the period of limitation." Consequently, the assessment order under section 147 was quashed.