The Delhi Bench of the Income Tax Appellate Tribunal has set aside a reassessment order for Assessment Year 2015-16, holding that the notice under Section 148 issued on 15.04.2021 was time-barred under the Supreme Court's binding precedent in Union of India v. Rajeev Bansal. This ruling reaffirms the non-negotiable nature of limitation periods in re-assessment proceedings under the old regime, even where the Revenue claims procedural compliance.
Background & Facts
The Dispute
The assessee, Shri Balaji Infradevelopers Pvt. Ltd., filed its original return for A.Y. 2015-16 declaring total income of Rs. 50,30,794. The Assessing Officer (AO) initiated reassessment proceedings under Section 147 read with Sections 144 and 144B, alleging that an amount of Rs. 1,14,12,829 debited to M/s Inter Ocean Videsh Ltd. constituted unexplained expenditure under Section 69C. The AO further alleged that M/s Inter Ocean Videsh Ltd. was a paper company controlled by Mr. Neeraj Jain and had filed forged audit reports for A.Y. 2014-15 and 2015-16. No assessment under Section 143(3) had been completed for A.Y. 2015-16.
Key Facts
- The AO issued notice under Section 148A(b) on 24.04.2018 based on information received.
- The assessee filed its return on 31.05.2021, identical to the original return.
- The AO issued notice under Section 142(1) and a show-cause notice.
- The assessee submitted partial documents, which the AO found insufficient.
- The AO completed reassessment on 24.03.2022, adding Rs. 1,14,12,829 under Section 69C and raising the total income to Rs. 1,64,43,620, resulting in a tax demand of Rs. 1,13,77,284.
- The notice under Section 148, as recorded in the paper book, was purportedly dated 31.03.2021.
- However, the ITBA e-proceedings record, admitted by the Revenue, showed the actual date of issuance as 15.04.2021.
- The assessee challenged the jurisdiction of the AO on grounds of limitation and lack of prior approval under Section 151.
Procedural History
- 24.03.2022: Assessment order under Section 147 read with Sections 144 and 144B passed.
- 17.10.2024: CIT(A)/NFAC dismissed the appeal and upheld the reassessment.
- 15.04.2021: Notice under Section 148 issued (as per ITBA record).
- 12.06.2024: Appeal filed before ITAT Delhi (ITA No. 565/Del/2026).
- 18.05.2026: Hearing conducted.
- 27.05.2026: Judgment pronounced.
The Parties' Positions
For the Appellant
The appellant contended that the notice under Section 148 was issued on 15.04.2021, which was beyond the six-year limitation period under the old regime. The six-year period for A.Y. 2015-16 expired on 30.06.2021. The appellant relied on the Supreme Court's judgment in Union of India v. Rajeev Bansal (2024) 469 ITR 46 (SC), which held that for A.Y. 2015-16, all notices issued on or after 01.04.2021 are time-barred because they could not be completed within the extended period under TOLA. The appellant also cited the coordinate bench decision in Sh. Deepak Agarwal v. DCIT (ITA No. 2307/Del/2025) dated 23.07.2025, which quashed a notice issued on 30.07.2022 for the same assessment year.
For the Respondent
The Revenue did not dispute the date of issuance of the notice as 15.04.2021, as recorded in the ITBA e-proceedings. The Senior DR conceded that the Revenue had made a similar concession before the Supreme Court in Rajeev Bansal. The Revenue requested that the matter be remanded to the AO for fresh consideration, but offered no legal rebuttal to the limitation argument.
Relief Sought
The appellant sought quashing of the reassessment order dated 24.03.2022, setting aside the addition of Rs. 1,14,12,829 under Section 69C, and cancellation of interest levied under Sections 234B and 234C.
The Legal Issue
The central question was whether a notice under Section 148 of the Income Tax Act, 1961, issued on 15.04.2021 for Assessment Year 2015-16, is barred by limitation under the old regime, in light of the Supreme Court's ruling in Union of India v. Rajeev Bansal and the provisions of the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 (TOLA).
Arguments Presented
For the Appellant
The appellant argued that the six-year limitation period under the pre-amendment Section 149(1)(a) for A.Y. 2015-16 expired on 30.06.2021. The notice issued on 15.04.2021 fell within this period, but the Supreme Court in Rajeev Bansal held that even notices issued before the expiry of six years but on or after 01.04.2021 are invalid because they could not be completed within the extended period under TOLA. The Revenue itself conceded this position before the Supreme Court. The appellant further relied on the coordinate bench decision in Deepak Agarwal, which applied the same principle to a notice issued on 30.07.2022. The appellant emphasized that the ITBA record, being an official Revenue document, is conclusive evidence of the actual date of issuance.
For the Respondent
The Revenue did not contest the factual assertion that the notice was issued on 15.04.2021. It conceded that the Supreme Court in Rajeev Bansal had held that for A.Y. 2015-16, notices issued on or after 01.04.2021 are time-barred. The Senior DR did not dispute the applicability of the precedent and left the matter to the Tribunal's discretion, effectively abandoning any substantive defense.
The Court's Analysis
The Tribunal examined the Supreme Court's judgment in Union of India v. Rajeev Bansal (2024) 469 ITR 46 (SC), which settled the legal position on the interplay between the old and amended provisions of Sections 148 and 149, and the TOLA. The Court held that the extended ten-year limitation under the amended Section 149(1)(b) operates prospectively and does not revive time-barred assessments under the old regime. For assessment years prior to the amendment, the test is whether the six-year period under the old regime was still alive on the date of issuance of the notice.
"The Revenue concedes that for the assessment year 2015-2016, all notices issued on or after April 1, 2021 will have to be dropped as they will not fall for completion during the period prescribed under the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020."
The Tribunal noted that the notice in question was issued on 15.04.2021, as confirmed by the Revenue's own e-proceedings record. This date is squarely within the period identified by the Supreme Court as time-barred for A.Y. 2015-16. The Tribunal further observed that the coordinate bench in Deepak Agarwal had reached the same conclusion for a notice issued on 30.07.2022, reinforcing the uniformity of interpretation.
The Tribunal rejected the Revenue's request for remand, holding that the jurisdictional defect is incurable. A notice issued beyond limitation cannot be cured by remand, as the initiating act itself is void ab initio. The Tribunal emphasized that the Revenue's concession before the Supreme Court binds all subordinate authorities. The addition of Rs. 1,14,12,829 under Section 69C, along with interest under Sections 234B and 234C, was therefore unsustainable.
The Verdict
The appeal of the assessee is allowed. The reassessment order dated 24.03.2022 is quashed. The addition of Rs. 1,14,12,829 under Section 69C is deleted. The interest levied under Sections 234B and 234C is cancelled. The order of the CIT(A) dated 17.10.2024 is set aside. The case is closed with no further proceedings permitted on the same assessment year.
What This Means For Similar Cases
Notices Issued on or After 01.04.2021 for A.Y. 2015-16 Are Void
- Practitioners must immediately challenge any reassessment notice issued on or after 01.04.2021 for A.Y. 2015-16, regardless of whether it falls within the six-year window.
- The Revenue's concession in Rajeev Bansal is binding and cannot be circumvented by technical arguments on date of issuance.
- E-proceedings records from ITBA are admissible as conclusive evidence of the actual date of notice issuance.
Limitation Is a Jurisdictional Defect
- A notice issued beyond limitation renders the entire reassessment void ab initio.
- Remand to the AO is not a remedy; the defect cannot be cured.
- Any addition, interest, or penalty based on such a notice must be deleted outright.
Precedent Binding Across Tribunals
- Coordinate benches of the ITAT are bound by each other's rulings on identical legal issues.
- Decisions in Rajeev Bansal and Deepak Agarwal form a binding precedent for all income tax tribunals.
- Practitioners should cite these cases in all pending matters involving A.Y. 2015-16 reassessments.
