Reassessment notice u/s. 148 and order u/s. 148A(d) for AY 2013-14 issued 47 days after reply due date held time-barred after excluding TOLA, sub-judice, reasons-supply, and reply periods; surviving 7-day limit not met, quashing proceedings.

ORDER 

Per Saktijit Dey, Vice President:

This is an appeal by the assessee challenging the order dated 26.06.2024 passed by National Faceless Appeal Centre (NFAC), Delhi for the Assessment Year (A.Y.) 2013-14.

2. Before we proceed to decide the substantive issue arising for consideration, it is necessary to provide a brief factual background. This appeal was earlier disposed of by the Coordinate Bench vide order dated 12.12.2024. Subsequently, assessee filed a miscellaneous application seeking rectification/recall of the appellate order on the ground that while deciding the appeal, the Bench had failed to decide Ground No. 2.a and 2.b. While deciding the miscellaneous application, the Bench having found merit in the submissions of assessee, recalled the order for the limited purpose of deciding Ground No. 2.a and 2.b raised in the Memorandum of appeal. This is how the appeal came up for hearing before us.

3. In Ground No.2a and 2.b, the assessee has challenged the validity of reopening of assessment under section (u/s.) 147 of the Income Tax Act, 1961 (in short the ‘Act’) as also the assessment order passed in pursuance thereof. It is the say of the assessee before us that the assessment order dated 30.05.2023 passed u/s. 147 r.w.s. 144 of the Act is barred by limitation, hence void ab initio.

4. Before us, learned counsel submitted that the outer limit for reopening of assessment under the old regime was a period of six years, which for the assessment year under dispute expired on 31.03.2020. Whereas, he submitted, the Assessing Officer (AO) issued a notice u/s. 148 of the Act under the old regime on 24.06.2021. He submitted, on application of extended time limit as per Taxation and Other Laws Amendment Act (‘TOLA’), the notice u/s. 148 of the Act could have been issued on or before 30.06.2021. He submitted, in case of Union of India v. Ashish Agarwal [2022] 138 taxmann.com 64 (SC), the Hon'ble Supreme Court in judgement dated 04.05.2022 held that the notice issued u/s. 148 of the Act under the old regime would be treated as show cause notice u/s. 148A(b) of the Act under new regime. He submitted, in terms with the decision of Hon’ble Supreme Court in case of Union of India v. Ashish Agarwal (supra), the Assessing Officer issued a notice u/s. 148A(b) of the Act on 26.05.2022 calling upon the assessee to furnish reply by 13.06.2022. He submitted, assessee did not reply to the show cause notice. Whereas, the Assessing Officer passed the order u/s. 148A(d) and issued the notice u/s. 148 of the Act on 30.07.2022.

5. Drawing our attention to the ratio laid down in the decisions of Hon’ble Supreme Court in case of Union of India v. Ashish Agarwal (supra) and Union of India v. Rajeev Bansal [2024] 167 taxmann.com 70/301 Taxman 238/469 ITR 46 (SC), learned counsel submitted, after excluding the period, which is available to the Assessing Officer in terms with these decisions the order u/s. 148A(d) as also the notice u/s. 148 of the Act should have been issued on or before 19.06.2022. Whereas, the AO has passed the order u/s. 148A(d) and issued the notice u/s. 148 of the Act on 30.07.2022, which are barred by limitation. In support, he relied upon the following decisions:

1. Krishna Naitik Patel vs. Assessment Unit 175 taxmann.com 814 (Guj)

2. Gurpreet Singh vs. DCIT 176 taxmann.com 673 (Bombay HC)(Goa)

3. Sandeep Singh Saluja vs. IT Dept. 176 taxmann.com 882 (MP)

4. Ram Balram Buildhome (P.) Ltd. vs. ITO 171 taxmann.com 99/477 ITR 133 (Del)

5. Prolife Industries Ltd. vs. ITO 178 taxmann.com 272 (Guj)

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