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TMI Blog2025 (5) TMI 722X X X X Extracts X X X X X X X X Extracts X X X X ..... even 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. Finance Act, 2021, as passed by the Parliament, came into force on 01/04/2021. That vide the Finance Act, 2021, Sections 148 to 151 were ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... led 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 (b) of the IT Act, as also intimating change of incumbent of office. The said letter also indicated the analysis of information received and the basis of forming reason to believe and escape of income. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 including the approval, order under Section 148A (d) dated 29/07/2022 was passed and notice under Section 148 was issued on 29/07/2022. (x) That the Order dated 29/07/2022 was passed as per the mandate of the law and the reassessment proceedings were within the statutory time limit. It were not time barred on a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eme, 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 Bansal (supra) was only 2 days and that the period of 2 days expired on 23/07/2022. This conclusion could be drawn after considering all the exclusions contemplated under 3rd proviso to substituted Section 149 and the exclusions directed by the Hon'ble Supreme Court in the case of Ashish Agarwal (supra) as interpreted in case of Rajeev Bansal (supra). The notice dated 29/07/2022 was thus liabl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent 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 compliance in respect of notice under Section 148A (b) of the IT Act would be 30/06/2022 as the replies were dated 03/06/2022 and 28/06/2022. The period of one month had to be counted from 30/06/2022, which would fall on 30/07/2022. (viii) The Learned counsel for the Respondents has referred to judgments in :- (a) Union of India Vs. Ashish Agarwal, [2022] 138 taxmann.com 64(SC); (b) Rajeev Bansal Vs. Union of India, [2023] 147 taxmann.com 549 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 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 third proviso excludes "the time or extended time allowed to the assessee". Resultantly, the entire time allowed to the assessee to respond to the show-cause notice has to be excluded for computing the period of limitation. In Union of India Vs. Ashish Agarwal, this Court provided two weeks to the assessees to reply to the show-cause notices. This period of two weeks is also liable to be excluded from the computation of limitation given the third proviso to Section 149. Hence, the total time that is excluded for computation of limitation for the deemed not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he 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 provide the information and material relied upon by the Revenue to the assesses within a period of thirty days to enable the assesses to respond to the notice within a period of two weeks after which Assessing Officer had to pass an order under Section 148A (d) of the IT Act. The Hon'ble Supreme Court expressly observed that all defences available under Section 149 (a) of the IT Act would continue to be available to all the assessees. However, in the said judgment, the Hon'ble Supreme Court did not delve into the aspect whether reassessment notices were within the time stipulated under the IT Act read with TO ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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.No. Date Event 1 29/06/2021 Notice under erstwhile Section 148 (deemed to be under new Section 148(b)) 2 04/05/2022 Judgment of the Hon'ble Supreme Court in Ashish Agarwal (supra) 3 20/05/2022 Notice conveying reasons for reopening and relied-upon material 4 03/06/2022 Reply filed by Petitioner to notice under Section 148A (b) 5 04/06/2022 Two weeks elapsed from issuance of Notice under Section 148A (b) 6 28/06/2022 Second reply filed by Petitioner to Notice under Section 148A (b) 7 14/07/2022 Notice of change of incumbent and grant of additional one week time to file reply 8 21/07/2022 Additional one-week time elapsed 9 29/07/2022 Order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 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 terms of Section 148A (d), the period mandated for passing of the order was within one month from the end of the month in which the reply referred to is received or where no such reply is furnished within one month from the end of the time by which the extended time allowed to furnish reply as per clause (b) expired. Relying on the said provision it was contended that the replies are dated 03/06/2022 and 28/06/2022 and going by the same, the end of the month would be 30/06/2022. Hence the expiry of time would be on 31/07/2022. It is therefore contended that the order is passed within the one month time contemplated under Section 148A (d). 18. The said contention is fundamentally misconceived. A notice under Section 148 of the IT Act accompanied by an order under Section 148A (d) is required to be issued within t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 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) came to the conclusion that the remainder period with the Assessment Officer was twenty-nine days from 01/06/2021 when the reassessment proceedings commenced for issuing notice under Section 148 of the IT Act. The limitation for passing of the order under Section 148A (d) expired on 12/07/2022. Accordingly, the notice under Section 148A of the IT Act issued on 30/07/2022 was held to be beyond limitation and the same was quashed. The Delhi High Court also relied on the observations made in the case of Raminder Singh V/s. Asst. Commissioner of IT(Circle) reported in 2023 DHC 6672-DB wherein it was held that one month from the end of the month in which the time available to the assessee to respond to the notice under clause (b) of Section 148A expires is available to the Assessment Officer to pass an order under Section ..... X X X X Extracts X X X X X X X X Extracts X X X X
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