ITAT Quashes Black Money Assessment as TOLA Extensions Not Cover Black Money Act

Smt. Bindu Todi Vs DDIT (Inv) (ITAT Delhi)

The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) allowed the appeal filed by the assessee against the order passed under Section 10(3) of the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015, for Assessment Year 2018-19, holding that the assessment proceedings were barred by limitation.

The assessee, an individual and proprietor of M/s Jade Knits, was stated to have been a director of Woodstock Universal Ltd., a company incorporated in the British Virgin Islands on 10.04.2007 and struck off on 01.11.2014. One share valued at USD 1 had been issued to the assessee by the company. The Assessing Officer alleged that certain payments received by the assessee from the foreign entity, amounting to USD 11,020 and USD 25,000 during 2008, had not been disclosed in the return of income. Based on this allegation, additions aggregating to Rs.15,66,870 were made under the Black Money Act.

The assessee challenged the assessment primarily on the ground that it was time-barred. It was argued that notice under Section 10(1) of the Black Money Act had been issued on 10.04.2018. Under Section 11 of the Act, an assessment order is required to be passed within two years from the end of the financial year in which such notice is issued. Accordingly, the limitation period expired on 31.03.2021. However, the assessment order was passed only on 17.02.2022.

The Revenue contended that the limitation period stood extended under the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 (TOLA), through various notifications issued by the Central Government. According to the Department, the last notification dated 17.09.2021 extended the period up to 31.03.2022, rendering the assessment order valid.

The Tribunal examined the provisions of TOLA and the notifications issued thereunder. It observed that TOLA defined “specified Acts” to include the Black Money Act. However, while the initial notifications extended timelines for all specified Acts, the later notifications, including Notification No.113/2021 dated 17.09.2021, extended the limitation period only for proceedings under the Income-tax Act and the Prohibition of Benami Property Transactions Act.

The Tribunal held that no corresponding extension had been granted for completion of assessments under the Black Money Act. It further noted that the references for exchange of information with authorities in the British Virgin Islands and Singapore had been initiated and concluded prior to issuance of notice under Section 10(1) of the Black Money Act. Therefore, the exclusion contemplated under Explanation 1 to Section 11 of the Act was not applicable.

Since the notice under Section 10(1) had been issued on 10.04.2018, the assessment was required to be completed by 31.03.2021. As the assessment order had been passed on 17.02.2022, the Tribunal concluded that it was barred by limitation.

Accordingly, the ITAT quashed the assessment proceedings. Having allowed the appeal on the legal issue of limitation, the Tribunal treated the remaining grounds as academic and kept them open without adjudication. 

FULL TEXT OF THE ORDER OF ITAT DELHI

This appeal is preferred against the order dated 30-01-2025 passed u/s 10(3) of the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 (herein after referred “the Act”) by the Commissioner of Income Tax (Appeals) -3 Gurgaon in short “Ld. CIT(A)) pertaining to the assessment order dated 17-02-2022 for A.Y.2018-19.

2. The assessee has raised the following legal ground in appeal:

2. That the Ld. CIT(A) erred in law and on facts in upholding the assessment order dated 17-02-2022 passed under section 10(3) of the Black Money Act, without appreciating that the proceedings initiated by AO, under section 10 of the BMA vide notice dated 10-04-2018 were barred by limitation as having been initiated after inordinate delay, post receipt of alleged information from FT& TR reference.

3. The brief facts of the case are that the assessee is a individual. The assessee is a proprietor of M/s Jade Knits having residence at A064 ICON Apartment DLF Phase V. Gurgaon Haryana. The assessee along with other namely Mr. Brijesh Kumar Agarwal and Mr. Harish Kumar were directors of the company M/s Woodstock Universal Ltd. (WUL) located Britsh Virgin Islands and was incorporated on 10-04-2007 and was struck off on 01-11-2014. The company M/s Woodstock Universal Ltd. 18-00 Suntech City Towers Singapore was authorized to issue 50,000 shares of a singles class out of which one share was issued to the assessee by the company on 03-08-2007 having value of USD 1.00. There were certain credits in the bank account of the assessee which was not disclosed in the return of income. Therefore, proceedings of the Act were initiated by issuing the notice u/s 10(1) of the Act. During the assessment proceedings the Assessing Officer collected the evidence by making the reference to the Singapore authority and completed the assessment after making the additions of Rs. 15,66,870/-under the Act. According to AO the WUL made the payment to the assessee which was not disclose in the return of income as follows:

4. Aggrieved the order of the Assessing Officer the assessee preferred the appeal before the Ld. CIT(A) who vide his order dated 30-01-2025 dismissed the appeal. Being aggrieved the order of the Ld. CIT(A), the assessee is in appeal before the Tribunal.

5. The Ld. AR of the assessee submitted that the assessment is barred by limitation. In this regard chart of date enumerating the relevant facts pertaining to the issue has filed which is reproduce as under:

6. He further submitted that the assessment order is barred by limitation and the assessment can be framed by 31-03­2021 because the notice u/s 10(1) Of the BMA was issued on 10-04-2018. As per the section 11 of the Black Money Act the assessment shall be framed after the expiry of two years from the end of the financial year in which the notice under sub section (1) of the section 10 of the Act was issued by the Assessing Officer. In this case notice under section 10(1) of the BM Act was issued on 10-04-2018 then assessment can be framed by 31-03-2021 after the expiry of two years of the financial year. The assessment order was passed on 17-02­2022 which is time barred.

7. The section 11 of the BM Act reproduce as under:

11. Time limit for completion of assessment and reassessment.—

(1) No order of assessment or reassessment shall be made under section 10 after the expiry of two years from the end of the financial year in which the notice under sub-section (1) of section 10 was issued by the Assessing Officer.

(2) Notwithstanding anything contained in sub-section (1), an order of fresh assessment in pursuance of an order passed under section 18 setting aside or cancelling an assessment, may be made at any time before the expiry of the period of two years from the end of the financial year in which the order under section 18 is received by the Principal Commissioner or the Commissioner.

(3) The provisions of sub-section (1) shall not apply to the assessment or reassessment made in consequence of, or to give effect to, any finding or direction contained in an order under section 15 or section 18 or section 19 or section 22 of this Act or in an order of any court in a proceeding otherwise than by way of appeal under this Act and such assessment or reassessment may, subject to the provisions of sub-section (2), be completed at any time, before the expiry of the period of two years from the end of the financial year in which such order is received by the Principal Commissioner or the Commissioner.

Explanation 1.—In computing the period of limitation for the purpose of this section—

(i) the time taken in reopening the whole or any part of the proceeding; or

(ii) the period during which the assessment proceeding is stayed by an order or injunction of any court; or

(iii) the period commencing from the date on which a reference or first of the references for exchange of information is made by an authority competent under an agreement referred to in section 90 or section 90A of the Income-tax Act or under section 73 of this Act and ending with the date on which the Principal Commissioner or the Commissioner last receives, the information so requested or a period of one year, whichever is less, shall be excluded:

Provided that where immediately after the exclusion of the aforesaid time or period, the period of limitation referred to in sub-sections (1), (2) and (3) available to the Assessing Officer for making an order of assessment or reassessment, as the case may be, is less than sixty days, such remaining period shall be extended to sixty days and the aforesaid period of limitation shall be deemed to be extended accordingly.

Explanation 2.—Where, by an order referred to in sub-section (3), any undisclosed foreign income and asset is excluded from the total undisclosed foreign income and asset for an assessment year in respect of an assessee, then, an assessment of such undisclosed foreign income and asset for another assessment year shall, for the purposes of section 10 and this section, be deemed to be one made in consequence of, or to give effect to, any finding or direction contained in the said order.

8. The Ld. Authorized Departmental Representative submitted as per section 11 of the BM Act no order of assessment shall be made after the expiry of two years from the end of the financial year in which the notice under section 10(1) of the Act was issued. In this case notice was issued in the financial year 2018-19 and the ends of the F.Y. was 31­03-2019 the assessment should be passed by 31-03 2021 in the normal circumstances. He also stated that the Parliament enacted the Act “The Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act 2020 (in short “TOLA”) with effect from 31-03-2020 to extend the time limit for the assessment. He further submitted that by issuing the notifications on various dates the time limit of framing the assessment was extended. The last notification was issued on 17-09-2021 by which the time limit was extended by 31-03­2022. He further submitted that the assessment order was passed in the extended time which is within time. The Notifications issued by the Ministry of Finance are reproduced as under:

NOTIFICATION
New Delhi, the 31st December, 2020

S.O. 4805(E).— In exercise of the powers conferred by sub-section (1) of section 3 of the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 (38 of 2020) (hereinafter referred to as the Act) and in supersession of the notification of the Government of India in the Ministry of Finance, (Department of Revenue) No. S.O. 2020 dated the 29th October, 2020, published in the Gazette of India, Extraordinary, Part-II, Section 3, Sub-section (ii), dated the 29th October S.O. 3906(E), dated the 29th October, 2020, except as respects things done or omitted to be done before such supersession, the Central Government hereby specifies, for the completion or compliance of action referred to in sub-section (1) of clause (a) of sub-section (1) of section 3 of the Act,—

(A) clause (a) of sub-section (1) of section 3 of the Act,—

(i) the 30th day of March, 2021 shall be the end date of the period during which the time limit specified in, or prescribed or notified under, the specified Act falls for the completion or compliance of such action as specified under the said sub-section; and

(ii) the 31st day of March, 2021 shall be the end date to which the time limit for completion or compliance of such action shall stand extended:

Provided that when the specified Act is the Direct Tax Vivad Se Vishwas Act, 2020 (3 of 2020), the provisions of this clause shall have effect as if—

(a) for the figures, letters and words “30th day of March, 2021”, the figures, letters and words “30th day of January, 2021” had been substituted; and

(b) for the figures, letters and words “31′ day of March, 2021”, the figures, letters and words “31^st day of January, 2021″ had been substituted:

Provided further that where the specified Act is the Income-tax Act, 1961 (43 of 1961) and completion or compliance of action referred to in clause (a) of sub-section (1) of section 3 of the Act is an order under sub-section (3) of section 92CA of the Income-tax Act, 1961, the provision of this clause shall have the effect as if—

(a) for the figures, letters and words “30^th day of March, 2021″, the figures, letters and words “30^th day of January, 2021″ had been substituted; and

(b) for the figures, letters and words “311” day of March, 2021″, the figures, letters and words “31⁵` day of January, 2021″ had been substituted;

(B) clause (b) of sub-section (1) of section 3 of the Act, where the specified Act is the Income-tax Act, 1961 (43 of 1961) and the compliance for the assessment year commencing on the 1 day of April, 2020 relates to –

(i) furnishing of return under section 139 thereof, the time limit for furnishing of such return, shall –

(a) in respect of the assessees referred to in clauses (a) and (aa) of Explanation 2 to sub-section (1) of the said section 139, stand extended to the 15^th day of February 2021; and

(b) in respect of other assessees, stand extended to the 10^th day of January, 2021:

Provided that the provisions of the fourth proviso to sub-section (1) of section 3 of the Act shall, mutatis mutandis apply to these extensions of due date, as they apply to the date referred to in sub-clause (b) of clause (i) of the third proviso thereof^.,

(ii) furnishing of report of audit under any provision of that Act, the time limit for furnishing of such report of audit shall stand extended to the 15^th day of January, 2021.

2. This notification shall come into force from the date of its publication in the Official Gazette.

[Notification No. 93/2020/F. No. 370142/35/2020-TPL]
VIPUL AGARWAL, Director (Tax Policy and Legislation Division)

MINISTRY OF FINANCE
(Department of Revnue)
(CENTRAL BOARD OF DIRECT TAXES)
NOTIFICATION
New Delhi, the 27th February, 2021

S.O. 966(E).—In exercise of the powers conferred by sub-section (1) of section 3 of the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 (38 of 2020) (hereinafter referred to as the said Act), and in partial modification of the notification of the Government of India in the Ministry of Finance, (Department of Revenue) No.93/2020 dated the 31^st December, 2020, published in the Gazette of India, Extraordinary, Part-II, Section 3, Sub-section (ii), vide number S.O. 4805(E), dated the 31′ December, 2020 (hereinafter referred to as the said notification), the Central Government hereby specifies, for the purpose of sub-section (1) of section 3 of the said Act, that,—

(A) where the specified Act is the Income-tax Act, 1961 (43 of 1961) (hereinafter referred to as the Income-tax Act) and the completion of any action, as referred to in clause (a) of sub-section (1) of section 3 of the said Act, relates to passing of any order—

(a) for imposition of penalty under Chapter XXI of the Income-tax Act, —

(i) the 29^th day of June, 2021 shall be the end date of the period during which the time limit specified in or prescribed or notified under the Income-tax Act falls, for the completion of such action; and

(ii) the 30^th day of June, 2021 shall be the end date to which the time limit for completion of such action shall stand extended;

(b) for assessment or reassessment under the Income-tax Act, and the time limit for completion of such action under section 153 or section 153B thereof, —

(i) expires on the 31″ day of March, 2021 due to its extension by the said notification, such time limit shall stand extended to the 30^th day of April, 2021;

(ii) is not covered under (i) and expires on 31^st day of March, 2021, such time limit shall stand extended to the 30^th day of September, 2021;

(B) where the specified Act is the Prohibition of Benami Property Transaction Act, 1988, (45 of 1988) (hereinafter referred to as the Benami Act) and the completion of any action, as referred to in clause (a) of sub-section (1) of section 3 of the said Act, relates to issue of notice under sub-section (1) or passing of any order under sub-section (3) of section 26 of the Benami Act,—

(i) the 30^th day of June, 2021 shall be the end date of the period during which the time limit specified in or prescribed or notified under the Benami Act falls, for the completion of such action; and

(ii) the 30^th day of September, 2021 shall be the end date to which the time limit for completion of such action shall stand extended.

[Notification No. 10/2021/F. No. 370142/35/2020-TPL]
SHEFALI SINGH, Under Secy., Tax Policy & Legislation Division

Note: The principal notification was published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (ii) vide S.O. No. 4805 dated 31st December, 2020.

MINISTRY OF FINANCE
(Department of Revenue)
(CENTRAL BOARD OF DIRECT TAXES)
NOTIFICATION
New Delhi, the 31st March, 2021

S.O. 1432(E).—In exercise of the powers conferred by sub-section (1) of section 3 of the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 (38 of 2020) (hereinafter referred to as the said Act), and in partial modification of the notification of the Government of India in the Ministry of Finance, (Department of Revenue) No.93/2020 dated the 31st December, 2020, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (ii), vide number S.O. 4805(E), dated the 31st December, 2020, the Central Government hereby specifies that,—

(A) where the specified Act is the Income-tax Act, 1961 (43 of 1961) (hereinafter referred to as the Income-tax Act) and, —

(a) the completion of any action referred to in clause (a) of sub-section (1) of section 3 of the Act relates to passing of an order under sub-section (13) of section 144C or issuance of notice under section 148 as per time-limit specified in section 149 or sanction under section 151 of the Income-tax Act, —

(i) the 31′ day of March, 2021 shall be the end date of the period during which the time-limit, specified in, or prescribed or notified under, the Income-tax Act falls for the completion of such action; and

(ii) the 30^th day of April, 2021 shall be the end date to which the time-limit for the completion of such action shall stand extended.

Explanation.— For the removal of doubts, it is hereby clarified that for the purposes of issuance of notice under section 148 as per time-limit specified in section 149 or sanction under section 151 of the Income-tax Act, under this sub-clause, the provisions of section 148, section 149 and section 151 of the Income-tax Act, as the case may be, as they stood as on the 31st day of March 2021, before the commencement of the Finance Act, 2021, shall apply.

(b) the compliance of any action referred to in clause (b) of sub-section (1) of section 3 of the said Act relates to intimation of Aadhaar number to the prescribed authority under sub-section (2) of section 139AA of the Income-tax Act, the time-limit for compliance of such action shall stand extended to the 30^th day of June, 2021.

(B) where the specified Act is the Chapter VIII of the Finance Act, 2016 (28 of 2016) (hereinafter referred to as the Finance Act) and the completion of any action referred to in clause (a) of sub-section (1) of section 3 of the said Act relates to sending an intimation under sub-section (1) of section 168 of the Finance Act, —

(i) the 31″ day of March, 2021 shall be the end date of the period during which the time-limit, specified in, or prescribed or notified under, the Finance Act falls for the completion of such action; and

(ii) the 30^th day of April, 2021 shall be the end date to which the time-limit for the completion of such action shall stand extended.

[Notification No. 20/2021/F. No. 370142/35/2020-TPL]
SHEFALI SINGH, Under Secy., Tax Policy and Legislation Division

Note : The principal notification was published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (ii) vide S.O. No. 4805 dated 31^st December, 2020.

MINISTRY OF FINANCE
(Department of Revenue)
(CENTRAL BOARD OF DIRECT TAXES)
NOTIFICATION
New Delhi, the 27th April, 2021

S.O. 1703(E).— In exercise of the powers conferred by sub-section (1) of section 3 of the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 (38 of 2020) (hereinafter referred to as the said Act), and in partial modification of the notifications of the Government of India in the Ministry of Finance, (Department of Revenue) No. 93/2020 dated the 31s^t December, 2020, No. 10/2021 dated the 27′¹‘ February, 2021 and No. 20/2021 dated the 31⁵‘ March, 2021, published in the Gazette of India, Extraordinary, Part-II, Section 3, Sub­section (ii), vide number S.O. 4805(E), dated the 31^st December, 2020, vide number S.O. 966(E) dated the 27th February, 2021 and vide number S.O. 1432(E) dated the 31″ March, 2021, respectively (hereinafter referred to as the said notifications), the Central Government hereby specifies for the purpose of sub-section (I) of section 3 of the said Act that. —

(A) where the specified Act is the Income-tax Act, 1961 (43 of 1961) (hereinafter referred to as the Income-tax Act) and, —

(i) the completion of any action, referred to in clause (a) of sub-section (I) of section 3 of the said Act. relates to passing of any order for assessment or reassessment under the Income-tax Act, and the time limit for completion of such action under section 153 or section I538 thereof, expires on the 3e day of April. 2021 due to its extension by the said notifications, such lime limit shall further stand extended to the 30 day of Tune. 2021:

(ii) the completion of any action, referred to in clause (a) of sub-section (I) of section 3 of the said Act, relates to passing of an order under sub-section (13) of section 144C of the Income-tax Act or issuance of notice under section 148 as per time-limit specified in section 149 or sanction under section 151 of the Income-tax Act, and the time limit for completion of such action expires on the 306 day of April, 2021 due to its extension by the said notifications, such time limit shall funher stand extended to the 30^th day of lune, 2021.

Explanation.— For the removal of doubts, it is hereby clarified that for the purposes of issuance of notice under section 148 as per time•limit specified in section 149 or sanction under section 151 of the Income-tax Act, under this sub•clause, the provisions of section 148, section 149 and section 151 of the Income-tax Act, as the case may be, as they stood as on the 31″ day of March 2021, before the commencement of the Finance Act, 2021, shall apply.

(B) where the specified Act is the Chapter VIII of the Finance Act. 2016 (28 of 2016) (hereinafter referred to as the Finance Act) and the completion of any action, referred win clause (a) of sub-section (I) of section 3 of the said Act, relates to sending an intimation under sub-section (I) of section 168 of the Finance Act, and the time limit for completion of such action expires on the 3e day of April, 2021 due to its extension by the said notifications, such time limit shall further stand extended to the 30^th day of June. 2021.

(Notification No. 38/2021/ F. No. 370142/35/2020-TPL)
RAJESII KUMAR BHOOT. Jt. Secy. Tax Policy & Legislation Division

Note: The principal notification was published in the Gazette of India, Extraordinary, Pan II, Section 3, Sub-section (ii) vide S.O. No. 4805 dated 31st December, 2020.

MINISTRY OF FINANCE
(Department of Revenue)
(CENTRAL BOARD OF DIRECT TAXES)
NOTIFICATION
New Delhi, the 25th June, 2021

S.O. 2580(E). In exercise of the powers conferred by sub-section (1) of section 3 of the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 (38 of 2020) (hereinafter referred to as the said Act), and in partial modification of the notifications of the Government of India in the Ministry of Finance, (Department of Revenue) No. 93/2020 dated the 31st December, 2020, published in the Gazette of India, Extraordinary, Part-II, Section 3, Sub-section (ii), vide number S.O. 4805(E), dated the 31st December, 2020 and No. 10/2021 dated the 27th February, 2021, published in the Gazette of India, Extraordinary, Part-II, Section 3, Sub-section (ii),vide number S.O. 966(E) dated the 27^th February, 2021 and No. 20/2021 dated the 31^st March, 2021, published in the Gazette of India, Extraordinary, Part-II, Section 3, Sub-section (ii),vide number S.O 1432(E) dated the 31s^t March, 2021 and No. 38/2021 dated 27^th April, 2021, published in the Gazette of India, Extraordinary, Part-II, Section 3, Sub-section (ii), vide number S.O. 1703(E) dated the 27^th April, 2021, (hereinafter referred to as the said notifications), the Central Government hereby specifies for the purpose of sub-section (1) of section 3 of the said Act, that, —

(A) where the specified Act is the Income-tax Act, 1961 (43 of 1961) (hereinafter referred to as the Income-tax Act) and,—

(i) the completion of any action, referred to in clause (a) of sub-section (1) of section 3 of the said Act, relates to passing of any order ,-

(a) for assessment or reassessment under the Income-tax Act, and the time limit for completion of such action under section 153 or section 153B thereof, expires on the 30^thday of June, 2021 due to its extension by the said notifications, such time limit shall further stand extended to the 30^th day of September, 2021;

(b) for imposition of penalty under Chapter XXI of the Income-tax Act.—

(i) the 29^th day of September, 2021 shall be the end date of the period during which the time limit specified in, or prescribed or notified under, the Income-tax Act falls for the completion of such action; and

(ii) the 30^th day of September, 2021 shall be the end date to which the time limit for completion of such action shall stand extended;

(ii) the compliance of any action, referred to in clause (b) of sub-section (1) of section 3 of the said Act, relates to intimation of Aadhaar number to the prescribed authority under sub-section (2) of section 139AA of the Income-tax Act, the time-limit for such the compliance of such action shall stand extended to the 30^th day of September, 2021;

(B) where the specified Act is the Chapter VIII of the Finance Act, 2016 (28 of 2016) (hereinafter referred to as the Finance Act) and the completion of any action, referred to in clause (a) of sub-section (1) of section 3 of the said Act, relates to sending an intimation under sub-section (1) of section 168 of the Finance Act, and the time limit for completion of such action expires on the 30^th June, 2021 due to its extension by the said notifications, such time limit shall further stand extended to the 30^th day of September, 2021.

[Notification No. 74/2021/ F. No. 370142/35/2020-TPL]
SHEFALI SINGH, Under Secy., Tax Policy and Legislation Division

Note : The principal notification was published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (ii) vide S.O. No. 4805(E) dated 31st December, 2020 and was last amended vide S.O. 1703(E) dated 27^th Apri1,2021.

MINISTRY OF FINANCE
(Department of Revenue)
(CENTRAL BOARD OF DIRECT TAXES)
NOTIFICATION
New Delhi, the 17th September, 2021

S.O. 3814(E).—In exercise of the powers conferred by sub-section (1) of section 3 of the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 (38 of 2020) (hereinafter referred to as the said Act), and in partial modification of the notifications of the Government of India in the Ministry of Finance, (Department of Revenue) No. 93/2020 dated the 31st December, 2020, published in the Gazette of India, Extraordinary, Part-II, Section 3, Sub-section (ii), vide number S.O. 4805(E), dated the 31st December, 2020 and No. 10/2021 dated the 27th February, 2021, published in the Gazette of India, Extraordinary, Part-II, Section 3, Sub-section (ii),vide number S.O. 966(E) dated the 27th February, 2021 and No. 20/2021 dated the 31st March, 2021, published in the Gazette of India, Extraordinary, Part-II, Section 3, Sub-section (ii), vide number S.O 1432(E) dated the 31st March, 2021and No. 74/2021 dated 25th June, 2021, published in the Gazette of India, Extraordinary, Part-II, Section 3, Sub-section (ii), vide number S.O. 2580(E) dated the 25th June, 2021, (hereinafter referred to as the said notifications), the Central Government hereby specifies for the purpose of sub-section (1) of section 3 of the said Act, that,—

(A) where the specified Act is the Income-tax Act, 1961 (43 of 1961) (hereinafter referred to as the Income-tax Act) and, —

(a) the completion of any action, referred to in clause (a) of sub-section (1) of section 3 of the said Act, relates to passing of any order for imposition of penalty under Chapter XXI of the Income-tax Act, —

(i) the 30th day of March, 2022 shall be the end date of the period during which the time-limit specified in, or prescribed or notified under, the Income-tax Act falls for the completion of such action; and

(ii) the 31st day of March, 2022 shall be the end date to which the time-limit for completion of such action shall stand extended;

(b) the compliance of any action, referred to in clause (b) of sub-section (1) of section 3 of the said Act, relates to intimation of Aadhaar number to the prescribed authority under sub-section (2) of section 139AA of the Income-tax Act, the time-limit for such the compliance of such action shall stand extended to the 31st day of March, 2022.

(B) where the specified Act is the Prohibition of Benami Property Transaction Act, 1988, (45 of 1988) (hereinafter referred to as the Benami Act) and the completion of any action, as referred to in clause (a) of sub-section (1) of section 3 of the said Act, relates to issue of notice under sub-section (1) or passing of any order under sub-section (3) of section 26 of the Benami Act,—

(i) the 30th day of June, 2021 shall be the end date of the period during which the time-limit specified in or prescribed or notified under the Benami Act falls, for the completion of such action; and

(ii) the 31st day of March, 2022 shall be the end date to which the time-limit for completion of such action shall stand extended.

[Notification No. 113/2021/ F. No. 370142/35/2020-TPL-Part 1]
SHEFALI SINGH, Under Secy., Tax Policy and Legislation Division

Note: The principal notification was published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (ii) vide S.O. 4805(E) dated 31st December, 2020 and was last amended vide S.O. 2580(E) dated 25th June, 2021.

9. We have heard the parties and gone through the material available on record. The Ld. AR of the assessee submitted that in the Act TOLA the specified Act defined in section 2(b) and specified Act means (i) the Wealth -tax Act, 1957 (ii) the Income- tax Act, 1961 (iii) the Prohibition of Benami Property Transactions Act, 1988 (iv) Chapter VII of the Finance Act 2004 (v) Chapter VII of the Finance Act 2013 (vi) the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act 2015 (vii) Chapter VIII of the Finance Act, 2016 or (viii) the Direct Tax Vivad se Vishwas Act, 2020. He further submitted that the time period was extended for the above specified Act by the TOLA. After that, by the Notification No. 93/2020 dated 31-12-202 the limit for completion was extended by 31-03-2021, for all the specified Act defined in the TOLA. By the Notification No. 10/2021 dated 27-02-2021 the limit for completion was extended by 31-03-2021 for the specified Act the Income -tax Act. Further by notification No. 20 /2021 dated 31-03-2021, notification No. 38/2021 dated 27-04 2021and Notification no. 74/2021 dated 25-06-2021 extended the date for complication of the action for the specified Act the Income -tax Act. Lastly by notification no. 113/ 2021 dated 17-09-2021 the time limit was extended for the specified Act’ the Income tax Act by 31­03-2022 not for the all the specified Act as defined in TOLA. He also submitted that the assessment was not framed within the time limit therefore the assessment is time barred.

10. We find that the TOLA was enacted by the Parliament with effect from 31-03-2020 to extend the time limit of the specified Act which was defined in the section 2(b) of the Act for completing the actions. This time limit was extended by issuing the various notification. The Ministry of Finance by issuing the Notification No.113/2021 dated 17-09-2021 extended the time limit for completion of any action for the specified Act i.e Income-tax Act and the Prohibition of Benami Property Transaction Act, 1988, not for all the specified Act as defined under section 2(b) of the TOLA. The time limit for completion the assessment under Black Money Act was not extended by this notification. The assessment should not be made after the expiry of two years from the end of the financial year in which the notice under section 10(1) of the Act was issued. The explanation provides relaxation in respect of the period commencing from the date on which a reference for exchange of information is made by an authority competent and ending with the date on which the Principal Commissioner or the Commissioner last receives, the information so requested or a period of one year, whichever is less shall be excluded. In the instant case the notice under section 10(1) of the Act was issued on 10-04-2018 and both the FT 86 FR references were made and received well before the intimation of proceedings under section 10(1) of the Act, and assessment should be made by 31-03-2021 but order was passed on 17-02-2022, which is time barred. Accordingly, the assessment proceedings liable to be quashed and quashed accordingly.

11. Since we have decided the legal ground in favour of the assessee the other grounds have become academic and keep them open for adjudication.

12. In the result, appeal of the assessee is allowed.

Order pronounced in the open court on 05.06.2026.