The Income Tax Appellate Tribunal, Delhi has delivered a significant ruling on the validity of reassessment proceedings under Section 148 of the Income-tax Act, 1961 for Assessment Year 2015-16. The tribunal held that notices issued under Section 148 on or after 01.04.2021 are barred by limitation, as the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 (TOLA) does not apply to this assessment year. This decision reinforces the Supreme Court's concession in Union of India v. Rajiv Bansal and aligns with recent coordinate bench rulings.
Background & Facts
The Dispute
The appellant, Sh. Arun Yadav, a resident of Delhi, was subjected to reassessment proceedings for Assessment Year 2015-16. The Assessing Officer issued a Section 148 notice on 07.04.2022, reopening the assessment under Section 147 read with Section 144 of the Income-tax Act, 1961. The appellant challenged the validity of this reopening before the Income Tax Appellate Tribunal (ITAT), Delhi.
Key Facts
- The appellant's PAN: ALHPY1977A
- Section 148 notice issued on 07.04.2022 for AY 2015-16
- Reassessment completed under Section 147 r.w.s. 144 of the Act
- The appellant contested the reopening on grounds of limitation, relying on the Supreme Court's decision in Union of India v. Rajiv Bansal
- The Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre (CIT(A)/NFAC) dismissed the appeal via order dated 11.02.2026 (DIN: ITBA/NFAC/S/250/2025-26/1085866403(1))
Procedural History
- 07.04.2022: Section 148 notice issued by the Assessing Officer
- 11.02.2026: CIT(A)/NFAC dismissed the appeal (Order No. ITBA/NFAC/S/250/2025-26/1085866403(1))
- 01.06.2026: ITAT Delhi heard the appeal (ITA No. 3731/Del/2026)
- 01.06.2026: ITAT pronounced the order, allowing the appeal
Relief Sought
The appellant sought quashing of the Section 148 notice dated 07.04.2022 and the consequent reassessment order, arguing that the reopening was barred by limitation under the TOLA provisions.
The Legal Issue
The central question before the tribunal was whether Section 148 notices issued on or after 01.04.2021 for Assessment Year 2015-16 are valid, given that the TOLA does not apply to this assessment year, rendering such notices barred by limitation.
Arguments Presented
For the Appellant
- Relied on the Supreme Court's decision in Union of India v. Rajiv Bansal, where the Revenue conceded that Section 148 notices issued on or after 01.04.2021 for AY 2015-16 would not fall within the prescribed period under TOLA and must be dropped
- Cited the ITAT's coordinate bench decision in Sh. Deepak Agarwal v. DCIT (ITA No. 2307/Del/2025), which quashed a similar reopening
- Argued that the reopening was void ab initio as it was based on a time-barred notice
For the Respondent
- Supported the orders of the Assessing Officer and CIT(A), contending that the reopening was valid
- Did not dispute the applicability of the Supreme Court's concession but sought to uphold the reassessment on other grounds
The Court's Analysis
The tribunal examined the limitation aspect of the Section 148 notice in light of the Supreme Court's decision in Union of India v. Rajiv Bansal. The Revenue had conceded in this case that for AY 2015-16, Section 148 notices issued on or after 01.04.2021 would not comply with the TOLA provisions and must be dropped. The tribunal noted:
"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 further relied on the coordinate bench's decision in Sh. Deepak Agarwal v. DCIT, which held that Section 148 notices issued on or after 01.04.2021 for AY 2015-16 are barred by limitation. The coordinate bench had observed:
"Above decisions squarely apply to the fact situation of the assessee and therefore respectfully following the above decisions, we hold that the notices issued u/s 148 on or after 1.4.2021 for reopening the assessment for the AY 2015-16 are barred by limitation and consequently the reassessment made based on such notices are bad in law and void ab initio."
The tribunal adopted this reasoning mutatis mutandis and rejected the Revenue's contentions, holding that the reopening was invalid due to the time-barred Section 148 notice.
The Verdict
The ITAT allowed the appellant's appeal, quashing the Section 148 notice dated 07.04.2022 and the consequent reassessment order. The tribunal held that the reopening was barred by limitation, as the TOLA does not apply to Assessment Year 2015-16 for notices issued on or after 01.04.2021. All other issues on merits were rendered academic.
What This Means For Similar Cases
Reopening Under Section 148: A Limitation Landmine
- Section 148 notices issued on or after 01.04.2021 for AY 2015-16 are barred by limitation and void ab initio
- Assessees can challenge reassessment proceedings initiated on the basis of such time-barred notices
- The Revenue's concession in Union of India v. Rajiv Bansal binds all lower authorities, including ITAT benches
Precedent Reliance: Coordinate Bench Decisions
- Tribunals are bound to follow coordinate bench decisions unless distinguished or overruled
- In this case, the ITAT Delhi relied on Sh. Deepak Agarwal v. DCIT to quash the reopening, reinforcing the binding nature of such rulings
- Practitioners should cite recent coordinate bench decisions to strengthen arguments on limitation
Practical Implications for Assessees
- Assessees facing reassessment for AY 2015-16 based on Section 148 notices issued post-01.04.2021 should challenge the validity of the notice
- The onus is on the Revenue to justify the reopening within the prescribed limitation period
- This judgment provides a strong precedent to quash reassessments initiated on time-barred grounds
