ITAT Raipur Quashes Section 148A(b) Notice for Lack of Seven Clear Days

By CA Sandeep Kanoi Income Tax Judiciary September 8, 2026

TaxGuru Citation: 2026 taxguru.in 12697
Case Name: DCIT-1(1) Vs Avani Ferro Alloys Pvt. Ltd. (ITAT Raipur)
Appeal Number: Only available for paid members
Date of Judgement/Order: Only available for paid members
Related Assessment Year: 2015-16
Courts: All ITAT, ITAT Raipur

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DCIT Vs Avani Ferro Alloys Pvt. Ltd. (ITAT Raipur)

ITAT Raipur Quashes Reassessment Notice as Time-Barred for A.Y. 2015-16; ITAT Raipur Holds Invalid Section 151 Approval Vitiates Reassessment

Summary: The Raipur Bench of the ITAT dealt with four Revenue appeals concerning Avani Ferro Alloys Pvt. Ltd. for assessment years 2015-16 to 2018-19. The appeals arose from reassessment proceedings in which additions were made principally on account of alleged bogus sales and, in one year, a further disallowance under section 40(a)(ia) of the Income Tax Act, 1961. For A.Y. 2015-16, the Assessing Officer had made an addition of Rs.6,92,46,463/- under section 68 r.w.s. 115BBE in respect of alleged bogus sales. Although the CIT(A)/NFAC deleted the addition on merits, it had rejected the assessee’s challenge to reassessment.

The assessee invoked Rule 27 before the Tribunal and contended that the reassessment notice was time-barred. The Tribunal admitted the legal ground, relying on the principles stated in Peter Vaz and Dahod Sahakari Kharid Vechan Sangh Ltd. It then held, following the decisions cited before it, including Union of India v. Rajeev Bansal and Deepak Steel and Power Pvt. Ltd. v. CBDT, that the notice under section 148 for A.Y. 2015-16 was barred by limitation. The reassessment proceedings were therefore quashed and the Revenue’s appeal was dismissed as infructuous. For A.Y. 2016-17, the CIT(A)/NFAC had already quashed the reassessment on limitation.

The Tribunal admitted the assessee’s Rule 27 grounds and held that the approval for the section 148 notice had been obtained from the PCIT although, after more than three years from the end of the relevant assessment year, the specified authority was the Principal Chief Commissioner or Principal Director General. The reassessment proceedings were accordingly quashed and the Revenue’s appeal was dismissed. For A.Y. 2017-18, the Assessing Officer made additions of Rs.5,29,08,798/- and Rs.93,90,807/- on alleged bogus sales. The CIT(A)/NFAC deleted the additions on merits but rejected the assessee’s challenge concerning the specified authority. The Tribunal admitted the Rule 27 ground and held that, since more than three years had elapsed, approval by the PCIT instead of the specified authority under section 151(ii) vitiated the reassessment proceedings.

The Revenue’s appeal was dismissed. For A.Y. 2018-19, the Assessing Officer made an addition of Rs.2,26,88,030/-, including alleged bogus sales of Rs.2,22,97,520/-. The CIT(A)/NFAC deleted the addition on merits. Before the Tribunal, the assessee invoked Rule 27 contending that the notice under section 148A(b), dated 16.03.2022, allowed response by 23.03.2022 and therefore did not provide the mandatory seven clear days. The Tribunal relied on Bijendra Singh, which in turn referred to Pioneer Motors, and also noted PCCIT v. Smt. Komarla Yogendra Keertana and Atul Mahavirprasad Paldecha. Holding that both terminal dates must be excluded when calculating a period expressed as “not less than” seven days, the Tribunal held that the statutory minimum was not provided. The section 148A(b) notice was quashed and the Revenue’s appeal was dismissed. Thus, the common order ultimately dismissed all four Revenue appeals.

Cases Discussed

Peter Vaz vs. CIT — (2021) 436 ITR 616 (Bom.)
Dahod Sahakari Kharid Vechan Sangh Ltd. vs. CIT — (2006) 282 ITR 321 (Guj.)
ITO vs. Bishambhar Dayal Agrawal — (2024) 161 taxmann.com 1063 (Raipur – Trib.)
Union of India vs. Rajeev Bansal — (2024) 167 taxmann.com 70 (SC)
Deepak Steel and Power Pvt. Ltd. vs. CBDT — (2025) 476 ITR 369 (SC)
Sharda Jain vs. PCIT & Ors. — order dated 12.02.2026 (Chhattisgarh High Court)
Sapna Srivas Samal vs. ITO — ITA No.4798/MUM/2025, order dated 13.11.2025
Damanjeet Singh Oberoi vs. DCIT — ITA No.317/RPR/2025, order dated 01.01.2026
Veena Jain vs. ITO — as discussed in the order
Cherian Nallathu Abraham Annamma vs. ITO — (2025) 179 taxmann.com 433 (Bom.)
Gigantic Mercantile (P.) Ltd. vs. ACIT — (2024) 165 taxmann.com 646 (Bom.)
PCCIT vs. Smt. Komarla Yogendra Keertana — (2025) 307 Taxman 106 (Kar.)
Bijendra Singh vs. PCCIT — (2025) 478 ITR 493 (Raj.)
Pioneer Motors (Private) Ltd. vs. Municipal Council, Nagrecoil — AIR 1967 SC 684
Atul Mahavirprasad Paldecha vs. ITO — (2025) 307 Taxman 331 (Guj.)
Union of India & Ors. vs. Shri Ashish Agrawal & Ors. — Civil Appeal No.3005/2022, order dated 04.05.2022
Assistant Commissioner of Income-tax vs. Nehal Ashit Shah — SLP (C) No.57209/2023
Spicy Sangria Hotels Pvt. Ltd. vs. Income-tax Officer — W.P.1325 of 2023, decided on 06.10.2025
National Thermal Power Co. Ltd. v. CIT — (1998) 229 ITR 383 (SC)

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FULL TEXT OF THE ORDER OF ITAT RAIPUR

The above batch of 4 appeals filed by the Revenue are directed against the separate orders of the Ld. CIT(A) / NFAC, Delhi as mentioned above. For the sake of convenience, all these appeals were heard together and are being disposed off by this common order.

2. Facts of the case, in brief, are that the assessee is a private limited company and filed its return of income for the impugned assessment year on 27.09.2015 declaring total income at Nil. The case of the assessee was reopened by recording the following reasons:

3. Accordingly notice u/s 148 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) dated 21.07.2022 was issued in response to which the assessee filed its return of income on 02.09.2022. Thereafter, notice u/s 143(2) was issued and served on the assessee on 09.02.2023. Subsequently notice u/s 142(1) along with a questionnaire was issued and served on the assessee in response to which the assessee filed the requisite details. The Assessing Officer during the course of assessment proceedings asked the assessee to offer its explanation on the issue of genuineness of the sales made to Rajendra Ispat of Rs.38,52,914/-, Pratyush Steels of Rs.2,48,77,003/- and Abhishek Enterprises of Rs.4,05,16,546/- by producing the relevant details. Rejecting the various explanations given by the assessee, the Assessing Officer made addition of Rs.6,92,46,463/- to the total income of the assessee on account of bogus sales to the above parties as unexplained credit u/s 68 r.w.s. 115BBE.

4. Before the Ld. CIT(A) / NFAC the assessee, apart from challenging the addition on merit, challenged the validity of the re-assessment proceedings. However, the Ld. CIT(A) / NFAC dismissed the grounds challenging the validity of the re-assessment proceedings. So far as the merit of the case is concerned, the Ld. CIT(A) / NFAC deleted the addition by observing as under:

“7.2 Ground Nos.2, 3 and 4: These grounds pertain to the addition of Rs.6,92,46,463 on account of alleged bogus sales and includes payments on account of Central Excise Duty and VAT of Rs.84,96,684 and Rs.18,09,676 on account of refunds of advances to certain parties. Since all the grounds are related, they are being taken together.

7.2.1 After carefully reviewing the assessment order passed by the Assessing Officer (AO) and considering the submissions made by the appellant. I find that several crucial aspects have not been addressed in the impugned order. It is seen that the AO has reached certain conclusions based on statements made by proprietors of Abhishek Enterprises, Rajendra Ispat and Pratyush Steels during an action under Section 133A of the Act. The statement made has been extended to cover the appellant whereas it contends that its name is not specifically mentioned in the statement- this stand has not been contradicted by the AO either in the assessment order. The statement referenced in the assessment order mentions only alleged bogus transactions with specific companies, namely Omax Mining Pvt. Ltd., R K Transport and Construction Ltd., and Promise Enterprises. There is no mention of the appellant, though this could have been reproduced from the said statement, if at all it was mentioned there. While a statement of a party might be starting point in a scrutiny proceeding, the proceeding itself can only be based on material in each individual case.

7.2.2 The AO did not elaborate on the confirmations submitted by the consignees, nor did the AO explain why the confirmations from each consignee, along with their acknowledgment of the sale invoices and excise input details, were deemed irrelevant in the overall context of the matter.

7.2.3 Furthermore, the stock register submitted by the appellant, which linked the alleged sales quantities to the corresponding purchase quantities, has not been found to have any shortcomings.

7.2.4 Additionally, the AO did not mention whether any independent enquiry was conducted to verify the appellant’s claims in terms of delivery of goods to consignees and the details in the bills raised quantities, prices and mode of transportation etc. There is no finding in the case to show that the appellant was receiving cash back from the buyers or that there was another route of receipts of the said cash apart from the payments received through banking channels for the alleged sales. The AO also failed to raise any concerns about the book entries, audit report, or sales quantities, which were part of the appellant’s submissions during the assessment proceedings and the books of accounts have not been rejected.

7.2.5 The CENVAT and GST documentation submitted matches the results of the appellant for the relevant Financial Year in terms of sales figures and stock details.

7.2.6 The issue regarding the sales to final consignees through entities covered u/s 133A of the Act was also raised during appellate proceedings and has been explained and found acceptable.

7.2.7 In view of the foregoing, considering the details on record and the weight they lend in favour of preponderance of probability the addition on this account is directed to be deleted and the grounds of appeal are allowed.”

5. Aggrieved with such order of the Ld. CIT(A) / NFAC the Revenue is in appeal before the Tribunal by raising the following grounds:

(1) Whether on the facts and in the circumstance of the case and in law, the Ld. CIT(A) was justified in deleting the additions made by the AO to the tune of Rs.6,92,46,463/- u/s 68 of the Act on account of bogus sales relying upon the submission of the assessee and thereby ignoring the facts brought on the record by the AO.

(2) Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) has erred while deciding the appeal in favour of the appellant, failed to allude to relevant facts on record, misread the evidence and its probative value thereby giving rise to perversity in the order of CIT(A), which itself gives rise to Question of Law as held in several case laws including in the case of Sudarshan Silk and Sarees 300 ITR 205 (SC)?

(3) Any other ground which may be adducted at the time of hearing.

6. The assessee made an application under Rule 27 of the Income Tax (Appellate Tribunal) Rules, 1963 for raising the legal grounds which read as under:

1. The aforesaid appeal filed by the Revenue is listed for hearing on 06.11.2025. In this regard it is respectfully submitted that the assessee with the help of Rule 27 wish to support the order of Ld. CIT(A) on the following Legal ground of appeal:

(a) On the facts and in circumstances of the case and in law, the notice dated 09.06.2021 issued u/s 148 of the Act for AY 2015-16 (under the old regime) by the Ld. AO, which was later deemed to be a notice issued u/s 148A(b) (under the new regime) of the Act as per the direction of the Hon’ble Supreme Court in the case of UOI Vs. Ashish Agrawal, is time-barred as per the recent verdict of the Hon’ble Supreme Court in the case of UOI Vs. Rajeev Bansal where it was held that no notice under section 148 of the new regime can be issued at any time for an assessment year beginning on or before 01-04-2021, if it is barred at the time when the notice is sought to be issued because of the “time limits specified under the provisions of section 149(1)(b) of the old regime.” As the concerned notice issued u/s 148 (under the new regime) was not issued during the surviving time limit, hence, it is time-barred. Further, for AY 2015-16, in the case of Rajeev Bansal, the Revenue itself has contended and accepted before the Hon’ble SC, that all the notices issued on or after 01.04.2021 will have to be dropped as they will not fall for completion during period prescribed under TOLA. Therefore, the assessment made on the background of this time-barred notice is void ab initio, invalid, illegal, and bad in law, and deserves to be quashed.

2. It is submitted that above ground is purely legal and goes to the root of the matter and all the material facts necessary for the adjudication of the above ground are on record. Therefore, the same may kindly be admitted and adjudicated as per law.

3. It is further submitted that the above legal ground though raised in our cross objection is misplaced hence, the same is hereby raised under Rule 27 as per the direction of the Hon’ble Bench in this regard.

7. It was argued that the above grounds raised as per Rule 27 are legal in nature and raised for the first time before the Tribunal which go to the root of the matter and the respondent-assessee is entitled to urge legal issue by way of application under Rule 27 on the basis of facts already available on record which though not arose before the Assessing Officer and the Ld. CIT(A).

8. Referring to the decision of the Hon’ble Bombay High Court in the case of Peter Vaz vs. CIT reported in (2021) 436 ITR 616 (Bom), he submitted that the Hon’ble High Court in the said decision has held that where the Tribunal in the impugned order has come to the conclusion that the issues raised in the cross objections are legal issues, the Tribunal should not have stopped the assessee from raising the issue in appeals instituted by the Revenue, even without the necessity of filing any cross objections.

9. Referring to the decision of the Hon’ble Gujarat High Court in the case of Dahod Sahakari Kharid Vechan Sangh Ltd. vs. CIT reported in (2006) 282 ITR 321 (Guj), he drew the attention of the Bench to paras 15, 16, 17 and 18 which read as under:

“15. Taking up the second issue first. The Tribunal has committed an error in law in holding that the assessee having not filed cross objection against findings adverse to the assessee in the order of Commissioner (Appeals), the said findings had become final and remained unchallenged. The Tribunal apparently lost sight of the fact that the assessee had succeeded before the Commissioner (Appeals). The appeal had been allowed and the penalty levied by the assessing officer deleted in entirety. In fact, there was no occasion for the assessee to feel aggrieved and hence, it was not necessary for the assessee to prefer an appeal. The position in law is well settled that a cross objection, for all intents and purposes, would amount to an appeal and the cross objector would have the same rights which an appellant has before before the Tribunal.

16. Section 253 of the Act provides for appeal to the Tribunal. Under Sub-section (1), an assessee is granted right to file an appeal; under Sub-section (2), the Commissioner is granted a right to file appeal by issuing necessary direction to the assessing officer; Sub-section (3) prescribes the period of limitation within which an appeal could be preferred. Section 253(4) of the Act lays down that either the assessing officer or the assessee, on receipt of notice that an appeal against the order of Commissioner (Appeals) has been preferred under Sub- section (1) or Sub-section (2) by the other party, may, notwithstanding that no appeal had been filed against such an order or any part thereof, within 30 days of the notice, file a memorandum of cross objections verified in the prescribed manner and such memorandum shall be disposed of by the Tribunal as if it were an appeal presented within the period of limitation prescribed under Sub-section (3). Therefore, on a plain reading of the provision, it transpires that a party has been granted an option or a discretion to file cross objection.

17. In case a party having succeeded before Commissioner (Appeals) opts not to file cross objection even when an appeal has been preferred by the other party, from that it is not possible to infer that the said party has accepted the order or the part thereof which was against the respondent. The Tribunal has, in the present case, unfortunately drawn such an inference which is not supported by the plain language employed by the provision.

18. If the inference drawn by the Tribunal is accepted as a correct proposition, it would render Rule 27 of the Tribunal Rules redundant and nugatory. It is not possible to interpret the provision in such manner. Any interpretation placed on a provision has to be in harmony with the other provisions under the Act or the connected Rules and an interpretation which makes other connected provisions otiose has to be to avoided. Rule 27 of the Tribunal Rules is clear and unambiguous. The right granted to the respondent by the said Rule cannot be taken away by the Tribunal by referring to provisions of Section 253(4) of the Act. The Tribunal was, therefore, in error in holding that the finding recorded by the Commissioner (Appeals) remained unchallenged since the assessee had not filed cross objections.”

10. Referring to the decision of the Raipur Bench of the Tribunal in the case of ITO vs. Bishambhar Dayal Agrawal reported in (2024) 161 taxmann.com 1063 (Raipur – Trib.), he drew the attention of the Bench to paras 15 and 16 of the order of the Tribunal which read as under:

“15. Coming to the issue as to whether the assessee respondent, in the absence of any cross-appeal or a cross-objection, could assail the validity of the jurisdiction that the A.O assumed for reopening the concluded assessment despite the fact that neither any such issue was raised before the CIT(Appeals) nor was adverted to by the latter while disposing off the appeal, we find that the said issue had been looked into at length by the Hon’ble High Court of Bombay in the case of Peter Vaz Vs. CIT, Central Circle, Bangalore (supra). Before adverting to the view taken by the Hon’ble High Court on the aforesaid issue, we shall briefly cull out the facts involved in the appeal before the Hon’ble High Court in the context of which the latter had looked into the scope of Rule 27.

(i) The assessee before the Hon’ble High Court had, in the proceedings before the Tribunal, filed cross-objections, which involved a delay of 248 days. The crossobjections filed by the assessee were dismissed by the Tribunal, which declined to condone the delay therein involved. On further appeal, it was the claim of the assessee that as it had assailed the validity of the jurisdiction that was assumed by the A.O u/s.153C of the Act, which was purely an issue of law, therefore, there was no justification on the part of the Tribunal in refusing to consider such significant issue. It was the claim of the assessee that as he was under Rule 27 of the Income Tax Appellate Tribunal Rules, 1963, only supporting the order passed by the CIT(Appeals) before the Tribunal, which was already in his favor, thus, there was no necessity for filing of a cross-objection.

(ii) After deliberating on the contentions of the assessee, the Hon’ble High Court found favor with the same. Adverting to the issue as to whether the assessee could have assailed the validity of the jurisdiction u/s.153C of the Act before the Tribunal without filing any cross-objection, the Hon’ble High Court observed that as the assessee wished to raise an issue that was at least prima facie going to the root of jurisdiction to initiate proceedings under Section 153C of the Act, therefore, having regard to the provisions of Rule 27, the Tribunal should have permitted the assesseerespondent to have supported the order of CIT (Appeals) on this ground, even without the necessity of filing any cross-objections. Relying on the judgment of the Hon’ble High Court of Gujarat in the case of Dahod Sahakari Kharid Vechan Sangh Ltd. Vs. CIT (2006) 200 CTR 265 (Guj), the Hon’ble High Court observed that the right that accrued to the assessee respondent under Rule 27 of the Income Tax Appellate Tribunal Rules, 1963 could not have been taken away by the Tribunal by referring to the provisions of Section 253(4) of the Act. The Hon’ble High Court had observed that though the issue as regards the validity of the jurisdiction assumed by the A.O u/s. 153C of the Act was not raised before the CIT(Appeals), but having regard to the provisions of Rule 27 of the Income Tax Appellate Tribunal Rules, 1963, as also the provisions of Section 260A(7) read with provisions of Order XLI Rule 22 of the CPC as interpreted by the Hon’ble Supreme Court in the case of S. Nazeer Ahmed Vs. State Bank of Mysore (2007) 11 SCL 75, the ITAT should not have precluded the assessee from assailing the issue as regards the validity of the jurisdiction assumed by the A.O u/s.153C of the Act in the course of hearing of the appeal instituted by the revenue, even without the necessity of filing any crossobjection. Based on its aforesaid observations, the Hon’ble High Court observed that in terms of Rule 27 of the Income Tax Appellate Tribunal Rules, 1963, the assessee was entitled to support the order of the CIT(Appeals) before the Tribunal even without the necessity of filing any cross-objection. For the sake of clarity, the observations of the Hon’ble High Court are culled out as under (relevant extract):

“38. In the present case, it is not as if the issue of non-fulfillment of jurisdictional parameters of Section 153C was raised but rejected by the CIT (Appeals). Such an issue was not raised before the CIT (Appeals). Having regard to the provisions of Rule 27 of the Appellate Tribunal Rules, 1963 as also the provisions of Section 260A(7) read with Order XLI Rule 22 of CPC as interpreted by the Hon’ble Supreme Court in S. Nazeer Ahmed (supra) we think that the ITAT should not have precluded the assessees from raising the issue in the appeals instituted by the Revenue, even without the necessity of filing any cross-objections. Accordingly, the additional substantial question of law is required to be answered in favor of the Appellants/assessees and against the Revenue.” (emphasis supplied by us)

16. Considering the aforesaid judgment of the Hon’ble High Court of Bombay in the case of Peter Vaz Vs. CIT, Central Circle, Bangalore (supra), we are of the view that the assessee respondent before us, by triggering Rule 27 of the Income Tax Appellate Tribunal Rules, 1963, is well within his right to assai the validity of the jurisdiction assumed by the A.O for reopening of his concluded assessment u/s.147 of the Act.

11. He accordingly submitted that the legal grounds raised by the assessee through the application under Rule 27 be accepted.

12. The Ld. DR on the other hand strongly objected to the admission of the legal grounds raised by the assessee in the application under Rule 27.

13. After hearing both the sides and considering that the facts for adjudication of these grounds are already available on record which though not arose before the Assessing Officer or the Ld. CIT(A), we, respectfully following the decision of the Hon’ble Bombay High Court in the case of Peter Vaz vs. CIT (supra) and the decision of the Hon’ble Gujarat High Court in the case of Dahod Sahakari Kharid Vechan Sangh Ltd. (supra), admit the legal grounds raised by the assessee through the application under Rule 27.

14. The Ld. Counsel for the assessee submitted that the first notice u/s 148 (un- amended) with DIN was issued on 09.06.2021 after obtaining the approval from the PCIT, Raipur by complying with TOLA. He submitted that post the direction of the Hon’ble Supreme Court in the case of Union of India & others vs. Shri Ashish Agrawal & others vide Civil Appeal No.3005/2022 order dated 04.05.2022, second notice u/s 148 (under the new tax regime) with separate DIN was issued on 21.07.2022 after obtaining approval from CCIT, Raipur. He submitted that relaxation under the TOLA is not applicable in assessee’s case for assessment year 2015-16 since TOLA provisions are applicable only to cases where the time limit for issuing notices expired between 20.03.2020 to 31.03.2021 as has been held by the Hon’ble Supreme Court in the case of Union of India vs. Rajeev Bansal reported in (2024) 167 taxmann.com 70 (SC). He submitted that the notice u/s 148 has been issued beyond the time limit of 6 years which had expired on 31.03.2022. However, the Assessing Officer in the instant case has issued notice on 21.07.2022 i.e. after the due date. He submitted that TOLA will extend the time limit for grant of sanction by the authority specified u/s 151. He submitted that the test to determine whether TOLA will apply to section 151 of new tax regime is this “Ifth the time limit of three years from the end of an assessment year falls between 20 March, 2020 and 31st March, 2021.” He submitted that in the instant case the notice was issued on 21.07.2022. Thus, the original time limit of six years for assessment year 2015-16 was 31.03.2022. He submitted that the Revenue itself has contended before the Hon’ble Supreme Court that for assessment year 2015-16 all the notices issued on or after 01.04.2021 will have to be dropped as they will not fall for completion during the period prescribed under TOLA. Since in the instant case the notice u/s 148 for assessment year 2015-16 has been issued on 21.07.2022, therefore, the same is barred by limitation under the new provisions of section 149(1) and it is not covered under the scope of TOLA.

15. The Ld. Counsel for the assessee filed the following table to explain the surviving period for assessment year 2015-16 to issue order u/s 148A(d) along with the notice u/s 148:

16. Referring to the following decisions, he submitted that the notice issued u/s 148 being barred by limitation, the same is liable to be quashed and the consequent proceedings under such invalid notice become null and void:

i) Union of India vs. Rajeev Bansal reported in (2024) 167 taxmann.com 70 (SC)

ii) Deepak Steel and Power Pvt. Ltd. vs. CBDT reported in (2025) 476 ITR 369 (SC)

iii) Sharda Jain & Others vs. PCIT & Ors vide WPT No.57 of 2023 (Chhattisgarh HC)

iv) Sapna Srivas Samal vs. ITO vide ITA No.4798/MUM/2025, order dated 13.11.2025

v) Damanjeet Singh Oberoi vs. DCIT vide ITA No.317/RPR/2025 order dated 01.01.2026 for assessment year 2015-16

vi) Cherian Nallathu Abraham Annamma vs. ITO reported in (2025) 179 taxmann.com 433 (Bom)

17. The Ld. DR on the other hand submitted that the Assessing Officer has followed due procedure of law while issuing notice u/s 148. Therefore, the grounds raised by the assessee challenging the validity of the re-assessment proceedings be dismissed.

18. We have heard the rival arguments made by both the sides, perused the orders of the Assessing Officer and the Ld. CIT(A) / NFAC and the paper book filed on behalf of the assessee. We have also considered the various decisions cited before us. We find the assessment year involved in the instant case is assessment year 2015-16 and the first notice was issued u/s 148 on 09.06.2021. The period of limitation as per TOLA is 30.06.2021. Thus, the surviving period was 21 days. The Assessing Officer provided information to the assessee in the light of the decision of the Hon’ble Supreme Court in the case of Union of India & others vs. Shri Ashish Agrawal & others (supra) on 23.05.2022. The assessee filed its reply on 16.06.2022. The Assessing Officer should have passed the order u/s 148A(d) and notice u/s 148 on or before 07.07.2022. However, in the instant case he has passed the order u/s 148A(d) and issued the notice u/s 148 on 21.07.2022 with a delay of 14 days. Under these circumstances, we have to see as to whether the notice issued u/s 148 on 21.07.2022 for the assessment year 2015-16 is barred by limitation or not.

19. We find the Hon’ble Supreme Court in the case of Deepak Steel and Power Pvt. Ltd. vs. CBDT (supra) has held that where the Revenue made a concession that for assessment year 2015-16, all notices issued on or after 1-4-2021 would have to be dropped as they would not fall for completion during period prescribed under Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020, impugned notice issued under section 148 dated 25-6-2021 was to be quashed and set aside. The relevant observations of the Hon’ble Supreme Court read as under:

“3. We heard Mr. Saswat Kumar Acharya, the learned counsel appearing for the appellants(assessee) and Mr. Chandrashekhar, the learned counsel appearing for the revenue.

4. The learned counsel appearing for the revenue with his usual fairness invited the attention of this Court to a three judge bench decision of this Court in Union of India and Ors. v. Rajeev Bansal, reported in 2024 SCC OnLine SC 2693, more particularly, paragraph 19(f) which reads thus:-

“19. (f) 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.”

5. As the revenue made a concession in the aforesaid decision that is for the assessment year 2015-2016, all notices issued on or after 1st April, 2021 will have to be dropped as they would not fall for completion during the period prescribed under the taxation and other laws (Relaxation and Amendment of certain Provisions Act, 2020). Nothing further is required to be adjudicated in this matter as the notices so far as the present litigation is concerned is dated 25.6.2021.

6. In view of the aforesaid, in such circumstances referred to above the original writ petition nos.2446 of 2023, 2543 of 2023 and 2544 of 2023 respectively filed before the High Court of Orissa at cuttack stands allowed.

7. The impugned notice therein stands quashed and set aside.

8. The relief in terms of prayer (a) is granted.

9. The appeals stand disposed of in the above terms.

10. Pending application(s), if any, stand disposed of.”

20. We find the Hon’ble Chhattisgarh High Court at Bilaspur in the case of Sharda Jain vs. PCIT & ors and batch of other appeals (supra) vide order dated 12.02.2026, following the decision of the Hon’ble Supreme Court in the case of Deepak Steel and Power Pvt. Ltd. vs. CBDT (supra), has observed as under:

“2. With regard to notices issued for assessment year 2015-16, in the matter of Union of India vs. Rajeev Bansal reported in (2024) 167 taxmann.com 70 (SC) considered before the Honb’le Supreme Court in para 19(f) as under- “19 f. The Revenue concedes that for the assessment year 2015-16, all notices issued on or after 1 April 2021 will have to be dropped as they will not fall for completion during the period prescribed under TOLA.

3. Further in the matter of Deepak Steel and Power Limited vs. Central Board of Direct Taxes & Ors. reported in 305 Taxman 169 (SC), the Hon’ble Supreme Court while dealing with the order passed under Section 148(A)(d) of the Income Tax Act. 1961 (for short “Act, 1961”) and notices Issued under Section 148 of the Act, 1961 in para 5 held has under-

“5. As the revenue made a concession in the aforesaid decision that is for the assessment year 2015-16, all notices issued on or after 1 April, 2021 will have to be dropped as they would not fall for completion during the period prescribed under the taxation and other laws (Relaxation and Amendment of certain Provisions Act, 2020). Nothing further is required to be adjudicated in this matter as the notices so far as the present litigation is concerned is dated 25.06.2021.”

4. Taking into consideration the reassessment proceedings made by the revenue and observation made by the Hon’ble Supreme Court in the matter of Deepak Steel (supra) the orders issued under Section 148 (A)(d) Act, 1961 and notices issued under Section 148 of Act, 1961 are hereby quashed.

5. With the above observations and directions, all the writ petitions are disposed of.”

21. We find the Mumbai Bench of the Tribunal in the case of Sapna Srivas Samal vs. ITO (supra) has quashed the notice issued u/s 148 for assessment year 2015-16 by observing as under:

“4. It is submitted by the learned AR that the impugned assessment proceedings for assessment year 2015-16 was time barred for which reliance is placed on the decision of the Supreme Court in case of Union of India vs Rajeev Bansal, 469 ITR 46 (SC). It is also submitted that the reopening by the Jurisdictional Assessing Officer (JAO) was invalid as the reopening, if any, was required to be made by the Faceless Assessing Officer (FAO). It is submitted that the JAO had not made an independent inquiry as required under Section 148A(d) of the Act and the same is passed without granting opportunity of personal hearing through video conferencing as held by the Bombay High Court in Chander Arjandas Manwani (2021) 130 taxmann.com 445 (Bombay). It is further submitted that the AO failed to appreciate that the immoveable property was purchased jointly by the assessee along with her husband and thus, the impugned addition for the entire amount could not be made against the assessee.

5. The learned DR has submitted that the assessee is a non-filer and had been totally non responsive to the various notices issued. It is thus submitted that the assessee cannot complain about any alleged breach of principles of natural justice. The learned DR has referred to the assessment order in order to point out that several notices were issued to the assessee which were not replied/complied.

6. Considering the submissions we do find that the assessee has been totally non responsive. The assessee even did not file any return for the relevant assessment year nor any return in response to the notice under Section 148AD of the Act. The appeal filed before the CIT(A) was also delayed and has been dismissed on the ground of limitation. Notwithstanding the inaction on the part of the assessee at every stage of the proceedings starting from the filing of return under Section 139(1) of the Act and thereafter in response to notice under Section 148A of the Act and the fact that there were no responses to the notices issued during the assessment proceedings, we are constrained to allow the appeal on the ground that the reopening notices were barred by limitation. The issue of limitation which arises in this appeal is no longer res integra and is covered by the decision of Supreme Court in the case of Rajeev Bansal (supra). The Supreme Court, inter alia, held that the provisions of the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 (‘TOLA’ for short) do not extend the period for issuance of notice for reopening. It only extends the period for issuance of notices, making compliances and passing orders which fall for such compliance or otherwise during the period from 20.03.2020 to 31.03.2021. The period for such compliance falling during the aforesaid period stood extended to 31.06.2021. Insofar as assessment year 2015-16 is concerned, the Supreme Court has noticed a concession on behalf of the Revenue that in respect of the said assessment year, all reassessment notices issued on or after 01.04.2021 would be invalid. We thus find that the notice in the present case issued on 22.04.2023 was invalid as a consequence of which the subsequent proceedings would also stand invalidated. Only on this technical ground of limitation we find that the appeal deserves to be allowed. In that view of the matter, the appeal is allowed. The impugned addition stands deleted.”

22. Similar view has been taken by the Co-ordinate Bench of the Tribunal in the case of Damanjeet Singh Oberoi vs. DCIT (supra) by observing as under:

“10. We have heard the rival arguments made by both the sides, perused the orders of the Assessing Officer and Ld. CIT(A) / NFAC and the paper book filed on behalf of the assessee. We have also considered the various decisions cited before us. It is an admitted fact that the assessee filed his return of income on 30.06.2016. A survey action u/s 133A of the Act was carried out on 30.05.2017 in the case of Babylon Group who are engaged in hotel sector. The Assessing Officer, after recording reasons, reopened the assessment and accordingly issued notice u/s 148 of the Act on 30.06.2021. Subsequently on the basis of decision of Hon’ble Supreme Court in the case of Union of India vs. Ashish Agarwal (supra), the Assessing Officer issued notice u/s 148A(b) of the Act on 21.05.2022. After considering the reply of the assessee the Assessing Officer passed an order u/s 148A(d) of the Act on 25.07.2023 and issued notice u/s 148 of the Act on 26.07.2023 under the new regime. Thereafter, the Assessing Officer completed the assessment u/s 147 r.w.s. 144B of the Act wherein he made addition of Rs.1,00,00,000/- u/s 69A of the Act. We find the Ld. CIT(A) / NFAC upheld the re- assessment proceedings as well addition on merit. Under these circumstances, we have to see as to whether the notice issued u/s 148 of the Act for the assessment year 2015-16 on 26.07.2023 is a valid notice or not.

11. We find an identical issue had come up before the Hon’ble Delhi High Court in the case of Veena Jain vs. ITO (supra) wherein the Hon’ble High Court has held that for assessment year 2015-16, notices issued under section 148 on or after 1-4-2021 would have to be dropped as they would not fall for completion during period prescribed under TOLA. The relevant observations of Hon’ble High Court read as under:

–

12. Similarly, we find the Hon’ble Bombay High Court in the case of Cherian Nallathu Abraham Annamma vs. ITO (supra) has held that where the Assessing Officer issued reopening notice to assessee for assessment year 2015-16 on 5-4 – 2022, since revenue had categorically made a concession before Supreme Court in case of Union of India v. Rajeev Bansal [2024] 167 taxmann.com 70/ 301 Taxman 238/ 469 ITR 46 (SC) that for assessment year 2015- 16 it would drop all notices issued under section 148 after 1-4-2021, impugned notice dated 5-4- 2022 and all consequential orders/notices would not survive. The relevant observations of Hon’ble High Court read as under:

“2. The present Petition has been filed primarily, with a prayer to quash and set aside (i) the order passed under Section 148A(d) and the Notice issued under Section 148, both dated 5th April 2022 (Exhibit B and C); (ii) the reassessment order dated 27th May 2024 passed under Section 147 read with Section 143(3) of the Act; (iii) notice of demand of even date raised for an amount of Rs.4,43,17,910/- for the Assessment Year (‘A.Y.’) 2015- 16 (Exhibit E1 and E2); as well as (iv) the recovery notices issued for r ecovery of demand dated 2nd July 2025 and 9th September 2025 (Exhibit G and I) and the consequential penalty notices and orders.

3. At the outset, it has been fairly stated by Mr.Gandhi, that the Petitioner herein has filed an Appeal against the reassess ment order passed. However, he submitted that no hearing has taken place despite the Appeal being filed more than one year back. Further, he stated that notices for recovery of demand have been issued on two occasions and the Petitioner has been threatened with coercive steps. He submitted that if the present Writ Petition is allowed then, he shall withdraw the Appeal.

4. It is contended by the Petitioner that the Notice issued under Section 148 for A.Y.2015-16 is dated 5th April 2022. Since it is issued after 1st April 2021, it is without jurisdiction and has to be withdrawn in light of the concession made by the Department before the Hon’ble Supreme Court in case of Union of India V/S Rajeev Bansal reported in [2024] 469 ITR 46 (SC). Further, reliance is placed on the order dated 2nd April 2025 passed by the Hon’ble Supreme Court in case of Deepak Steel and Power Limited V/S Central Board of Direct Taxes & Ors in SLP (C) No.5632/2023 and an order dated 4th April 2025 passed in the case of Assistant Commissioner of Income-tax V/S Nehal Ashit Shah in SLP (C) No.57209/2023. Further, our attention is also drawn to the decision of this Court in Spicy Sangria Hotels Pvt Ltd V/S Income-tax Officer [W.P.1325 of 2023 decided on 6th October 2025]. Once the Notice under Section 148 is bad in law, all the consequential orders/notices would also not survive, is the submission.

5. The learned counsel for the Respondent does not dispute the above position. However, he contends that an Appeal has been filed by the Petitioner and that this Petition need not be entertained.

6. We have heard the learned counsel for the parties. It is not in dispute that the present petition relates to A.Y.2015-16. Further, it is also undisputed that the notice under Section 148 has been issued on 5th April 2022 which is at page 52 of the paper book. Once these are the facts, paragraphs 19 (e) and (f) of the judgment of the Hon’ble Supreme Court in the case of Rajeev Bansal (supra) become relevant. They read as under:-

19. Mr. N Venkataraman, learned Additional Solicitor General of India, made the following submissions on behalf of the Revenue:-

a…. e. The Finance Act 2021 substituted the old regime for reassessment with a new regime. The first proviso to Section 149 does not expressly bar the application of TOLA. Section 3 of TOLA applies to the entire Income-tax Act, including Sections 149 and 151 of the new regime. Once the first proviso to Section 149(1)(b) is read with TOLA, then all the notices issued between 1 April 2021 and 30 June 2021 pertaining to assessment years 2013-2014, 2014-2015, 2015- 2016, 2016-2017, and 2017-2018 will be within the period of limitation as explained in the tabulation below:

f. The Revenue concedes that for the assessment year 2015- 16, all they will not fall for completion during the period prescribed under TOLA;”

(emphasis supplied)

7. From the above it is clear, that the Department has conceded before the Hon’ble Supreme Court that all the notices issued under Section 148 after 1st April 2021 for A.Y.2015-16 have to be dropped. In the present case, the Notice under Section 148 is dated 5th April 2022 and therefore, has to be dropped.

8. The decision in Rajeev Bansal (supra) has been subsequently followed by the Hon’ble Supreme Court in Deepak Steel and Power Limited (supra). Paragraphs 4 and 5 of the said order is reproduced hereunder:-

4. The learned counsel appearing for the revenue with his usual fairness invited the attention of this Court to a three judge bench decision of this Court in Union of India and Ors. v. Rajeev Bansal, reported in 2024 SCC OnLine SC 2693, more particularly, paragraph 19(f) which reads thus:-

“19. (f) 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.”

5. As the revenue made a concession in the aforesaid decision that is for the assessment year 2015-2016, all notices issued on or after 1st April, 2021 will have to be dropped as they would not fall for completion during the period prescribed under the taxation and other laws (Relaxation and Amendment of certain Provisions Act, 2020). Nothing further is required to be adjudicated in this matter as the notices so far as the present litigation is concerned is dated 25.6.2021.

(emphasis supplied)

9. Similarly, even in the matter of Nehal Ashit Shah (supra), the Hon’ble Supreme Court, relying upon paragraphs 19 (e) and (f) of the decision in case of Rajeev Bansal (supra), dismissed the SLP filed by the Revenue. Paragraph 5 of the said order is reproduced hereunder:-

“5. In this regard, reference could also be made to paragraph 19(e) and (f) in the case of Union of India vs. Rajeev Bansal, Civil Appeal No.8629 of 2024 on 03.10.2024 (2024 SCC ONLINE 754) under which the learned Additional Solicitor General for India has made a concession insofar as the assessment year 2015-16 is concerned.”

10. Lastly, this very Bench has on 6th October 2025, in the matter of Spicy Sangria (supra), allowed the petition filed by the Petitioner therein by noting that since, the notice under Section 148 was issued after 1st April 2021, the same was required to be set aside in light of the concession made by the Revenue before the Hon’ble Supreme Court in the case of Rajeev Bansal (supra).

11. In light of the above discussion, we find merit in the submissions as canvassed by the Petitioner. The Revenue has categorically made a concession that for A.Y.2015-16 they would drop all notices issued under Section 148 after 1st April 2021. Once this is the position, it is appropriate that the notice under Section 148 dated 5th April 2022, and the consequential assessment order, notice of demand, penalty notices/orders as well as the recovery notices be quashed and set aside. It is accordingly so ordered.

12. In light of this order, Mr. Gandhi, the learned counsel appearing on behalf of the Petitioner undertakes to withdraw the Appeal filed by him before the CIT (Appeals) within a period of 2 weeks from today. The said undertaking is accepted. If for any reason, the present order is challenged by the Revenue and is set aside, then the Appeal filed by the Petitioner before the CIT (Appeals) will automatically stand revived and the same shall be prosecuted on its own merits and in accordance with law.

13. Rule is made absolute in the above terms and the Writ Petition is also disposed of in terms thereof. No orders as to cost.

14. This order will be digitally signed by the Private Secretary/ Personal Assistant of this Court. All concerned will act on production by fax or email of a digitally signed copy of this order.”

13. The various other decisions relied on by the Ld. Counsel for the assessee as per the case law compilation also support his case to the above proposition. Since the facts of the in the instant case are identical to the facts of the cases decided by the Hon’ble Delhi High Court and the Hon’ble Bombay High Court cited (supra), therefore, in absence of any contrary decision brought to our notice by the Ld. DR, we respectfully following the decisions cited (supra) quash the notice issued u/s 148 of the Act dated 26.07.2023. Accordingly, we set aside the order of the Ld. CIT(A) / NFAC and allow the grounds raised by the assessee.

14. In the result, the appeal filed by the assessee is allowed.”

23. In view of the above decisions cited (supra), we hold that the notice issued u/s 148 on 07.07.2022 for assessment year 2015-16 is barred by limitation and therefore, the same is liable to be quashed. Since the notice issued u/s 148 is an invalid notice, the subsequent proceedings on the basis of such invalid notice become null and void. Accordingly, the re-assessment proceedings are liable to be quashed. We hold and direct accordingly.

24. Since the assessee succeeds on this first legal ground as per the application under Rule 27 and the re-assessment proceedings have been quashed being not in accordance with law, the appeal filed by the Revenue becomes infructuous. Accordingly, the same is dismissed.

25. In the result, the appeal filed by the Revenue is dismissed.

ITA No.89/RPR/2025 (A.Y. 2016-17)

26. Facts of the case, in brief, are that the assessee filed its original return of income on 27.09.2015 declaring total income at Nil. The case of the assessee was reopened u/s 147 and a notice u/s 148 dated 14.07.2022 was issued and served on the assessee. Subsequently, in view of the judgment of Hon’ble Supreme Court in the case of Union of India & others vs. Shri Ashish Agrawal & others vide Civil Appeal No.3005/2022 order dated 04.05.2022, a notice u/s 148 was issued on 14.07.2022 in response to the said notice the assessee filed its return of income on 24.08.2022 declaring total income at Nil. The Assessing Officer in the order passed u/s 147 r.w.s. 144B on 29.05.2023 determined the total income of the assessee at Rs.3,48,32,306/- where he made addition of Rs.3,44,36,173/- on account of bogus sales of Rs.72,42,973/- to Rajendra Ispat, Rs.91,68,755/- to Pratyush Steels and Rs.1,80,24,445/- to Abhishek Enterprises respectively. Further, the Assessing Officer made addition of Rs.3,96,133/- by invoking the provisions of section 40(a)(ia).

27. Before the Ld. CIT(A) / NFAC the assessee, apart from challenging the addition on merit, challenged the validity of the re-assessment proceedings. The Ld. CIT(A) / NFAC quashed the re-assessment proceedings on the ground that the notice issued u/s 148 is barred by limitation by observing as under:

28. Since the Ld. CIT(A) / NFAC quashed the re- assessment proceedings, he did not adjudicate the grounds on merit.

29. Aggrieved with such order of the Ld. CIT(A) / NFAC the Revenue is in appeal before the Tribunal by raising the following grounds:

(1) Whether on the facts and in the circumstance of the case and in law, the Ld. CIT(A) was justified in treating the notice u/s 148 of the Act issued time barred for first file however the action taken in the second file was rectified and regularised following the directions of the Apex Court in relation to TOLA, which provided an opportunity to the assessce.

(2) Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) has erred while deciding the appeal in favour of the appellant for A.Υ.2016-17 however the same issue i. e. notice u/s 148 digitally signed on 01.07.2021 was also involved in A.Y 2015- 16 wherein Ld. CIT(A) dismissed the appeal of the assessee.

(3) Whethe r on the facts and in the circumstance of the case and in law, the Ld. CIT(A) was justified in treating the notice u/s 148 of the Act issued time barred in view of the provision of section 292BB of the Act.

(4) Any other ground which may be adducted at the time of hearing.

30. The Ld. Counsel for the assessee filed an application under Rule 27 by raising the following legal grounds:

(a) The Ld. JAO has erred on the issue of notice u/s 148 of the IT Act, 1961 dated as 30 June 2021 and digitally signed on dt. 01 July 2021 at 1:43 pm being time barred even after considering TOLA w.r.t. judgment by Hon’ble Apex Court in the case of Ashish Agarwal and in the case of Union of India & Ors. V. Rajeev Bansal and accordingly was beyond the time limit to consider the notices issued even after considering the extended time under TOLA in between 01 April 2021 to 30 June 2021 and therefore overall proceedings are Void as time barred and out of jurisdiction. The assessment proceeding is liable to be quashed.

(b) The Ld. AO also erred on obtaining the approval for re-issue of notice u/s 148 dt. 14.07.2022 after considering TOLA w.r.t. judgment by Hon’ble Apex Court in the case of Ashish Agarwal in violation of provision of section 151 of the Income Tax Act, 1961 where such approval was mentioned to be obtained from Hon’ble Pr. Commissioner of Income Taxi, Raipur in place of Pr. Chief Commissioner of Income Tax or Chief Commissioner of Income Tax of relevant jurisdiction and therefore the notice and further proceeding is liable to be quashed and set aside.

2. It is submitted that above grounds are purely legal and goes to the root of the matter and all the materials facts necessary for the adjudication of the above grounds are on record. Therefore, the same may kindly be admitted and adjudicated as per law.

3. It is further submitted that the above legal grounds are hereby raised under Rule 27 as per the direction of the Hon’ble Bench in this regard.

31. Referring to various decisions cited (supra) he submitted that the legal grounds raised by the assessee through the application under Rule 27 be accepted.

32. The Ld. DR on the other hand strongly objected to the admission of the legal grounds raised by the assessee in the application under Rule 27.

33. After hearing both the sides and in the light of our observations in ITA No.88/RPR/2025, we admit the legal grounds raised by the assessee in the application under Rule 27.

34. The Ld. Counsel for the assessee at the outset drew the attention of the Bench to the following table and submitted that the notice has been issued beyond the surviving period by 21 days. Therefore, the same is barred by limitation:

35. The Ld. Counsel for the assessee in his next plank of argument submitted that the Assessing Officer in the instant case has obtained the sanction from the PCIT instead of the specified authority i.e. the Principal Chief Commissioner or the Principal Director General which is discernable from the notice issued u/s 148, copy of which is placed at pages 409 to 410 of the paper book.

36. Referring to the decision of Hon’ble Bombay High Court in the case of Gigantic Mercantile (P.) Ltd. vs. ACIT reported in (2024) 165 taxmann.com 646 (Bom) where in case of assessee, proceedings for reassessment were initiated and sanction for reassessment was granted by Principal Commissioner, since more than three years had lapsed from end of relevant assessment year, and sanction had not been granted by any authority empowered under section 151(ii), impugned proceedings were to be quashed. He accordingly submitted that the re-assessment proceedings are liable to be quashed in view of the above.

37. The Ld. DR on the other hand submitted that the notice is not barred by limitation and the Assessing Officer has rightly obtained the approval from the PCIT. Therefore, the re-assessment proceedings cannot be held to be invalid.

38. We have heard the rival arguments made by both the sides, perused the orders of the Assessing Officer and the Ld. CIT(A) / NFAC and the paper book filed on behalf of the assessee. We have also considered the various decisions cited before us. A perusal of the record shows that the original notice u/s 148 was issued on 01.07.2021 after obtaining the approval from the Range-1, Raipur by applying TOLA being time barred. Subsequently on the basis of direction of Hon’ble Supreme Court in the case of Union of India & others vs. Shri Ashish Agrawal & others (supra), the second notice issued u/s 148 with a separate DIN on 14.07.2022 after obtaining approval from the PCIT, Raipur which reads as under:

–

39. The above shows that t his date falls beyond the statutory period of three years from the last date of the relevant assessment year 2016-17 i.e. 31.03.2017. In such a case, the approval granted by the PCIT is invalid, because under Section 151(ii) of the Act, the specified authority for the assessee ought to be the Pr.CCIT/Pr.DGIT, as held by the Hon’ble Supreme Court in the case of Rajeev Bansal (supra). Since in the instant case the approval has been obtained from the PCIT the Principal Director General, therefore, such approval being not obtained from the specified authority, therefore, the legal ground raised by the assessee in the application under Rule 27 is accordingly allowed. Since the assessee succeeds on this legal ground, the other grounds challenging the validity of the re-assessment proceedings are not being adjudicated being academic in nature. In view of the above discussion, the appeal filed by the Revenue is dismissed.

40. In the result, the appeal filed by the Revenue is dismissed.

ITA No.90/RPR/2025 (A.Y. 2017-18)

41. Facts of the case, in brief, are that the assessee filed its original return of income on 27.10.2017 declaring total income at Nil. The case of the assessee was reopened u/s 147 on account of bogus sales to the extent of Rs.5,29,08,798/- to Rajendra Ispat, Pratyush Steels and Abhishek Enterprises respectively. Accordingly, a notice u/s 148 dated 15.07.2022 was issued and served on the assessee. The Assessing Officer completed the assessment u/s 147 r.w.s. 144B wherein he made addition of Rs.5,29,08,798/- on account of bogus sales. Further, the Assessing Officer also made addition of Rs.93,90,807/- on account of bogus sales to Amrit Steel Rolling Mill. Thus, the Assessing Officer determined the total income of the assessee at Rs.6,22,99,605/-.

42. In appeal, the Ld. CIT(A) / NFAC deleted the addition by observing as under:

“7.2 Ground Nos. 2 and 3: These grounds pertain to the addition of Rs.5,29,08,798 on account of alleged bogus sales and includes payments on account of Central Excise Duty and VAT of Rs.80,08,951.

7.2.2 The AO did not elaborate on the confirmations submitted by the consignees, nor did the AO explain why the confirmations from each consignee along with their acknowledgment of the sale invoices and excise input details, were deemed irrelevant in the overall context of the matter.

7.2.5 The CENVAT and GST documentation submitted matches the results of the appellant for the relevant Financial Year in terms of sales figures and stock details.

7.2.6 The issue regarding the sales to final consignees through entities covered u/s 133A of the Act was also raised during appellate proceedings and has been explained and found acceptable.

43. The Ld. CIT(A) / NFAC also deleted the addition of Rs.93,90,807/- on account of bogus sales to Amrit Steel Rolling Mill by observing as under:

“7.3 Ground No.4: This pertains to the addition of Rs.93,90,807 on account of transactions with M/s Amrit Steel Rolling Mill, which have been held to be bogus by the AO. The appellant has contended that the AO erred in making this addition under section 68 of the IT Act, 1961 whereas the receipts are on account of periodical settlement of account from the party, i.e. M/s Amrit Steel Rolling Mill as per mutual sales/purchase transaction and all confirmations, Invoices, bank transaction and stock records were ignored.

7.3.1 A perusal of the material on record, which was also submitted during the assessment proceedings, as also the Assessment Order shows that the addition hinges on the use of the word ‘Self in the invoices raised. It has been explained by the appellant, in its response dated 13.12.2024 stated that, the billing procedure under CENVAT invoicing procedure which was applicable under old regime of central excise era ie prior to GST era where the central excise duty credit was to pass on to the consignee who is manufacturer and when the consignee is ultimate buyer, then Consignee is termed as ‘Self in the column of Buyer which is correct and accordingly the same is duly disclosed in the monthly central excise retum based of relevant stock/excise record We hereby reproduce its one sale invoice. On perusal of above sales invoice, your honour would observe that in this sales Invoice since the buyer and consignee are same and accordingly the name and address of Amrit Steel Rolling Mill are mentioned in the ‘Consignee’ space given in Invoice and accordingly the buyer is same and therefore ‘Self mentioned in the Buyer space provided in the Invoice.

7.3.2 The submissions made by the appellant have been considered and it is seen that Assessment Order does not go into the merits of the submission and the supporting documentation. Further, the books of accounts have not been rejected and there is no reasoning regarding the rejection of Central Excise Duty and VAT. All in all, the addition is not sustainable and the same is directed to be deleted. The ground stands allowed.”

44. He, however, dismissed the grounds challenging the validity of the re- assessment proceedings.

45. Aggrieved with such order of the Ld. CIT(A) / NFAC, the Revenue is in appeal before the Tribunal by raising the following grounds:

(1) Whether on the facts and in the circumstance of the case and in law, the Ld CIT(A) was justified in deleting the additions made by the AO to the tune of Rs.5.29,08,798/- u/s 68 of the Act on account of bogus sales relying upon the submission of the assessee and there by ignoring the facts brought on the record by the AO.

(2) Whether on the facts and in the circumstance of the case and in law, the Ld. CIT(A) was justified in deleting the additions made by the AO to the tune of Rs.93,90,807/- u/s 68 of the Act on account of bogus sales relying upon the submission of the assessee and there by ignoring the facts brought on the record by the AO.

(3) Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) has erred while deciding the appeal in favour of the appellant, failed to allude to relevant facts on record, misread the evidence and its probative value thereby giving rise to perversity in the order of CIT(A), which itself gives rise to Question of Law as held in several case laws including in the case of Sudarshan Silk and Sarees 300 ITR 205 (SC)?

(4) Any other ground which may be adducted at the time of hearing.

46. The Ld. Counsel for the assessee filed an application under Rule 27 by raising the following legal grounds:

(a) That the Ld. JAO issued a notice under section 148 dated 15.07.2022 to assessee after lapse of more than three years from end of relevant assessment year after obtaining approval from Pr. Commissioner of Income Tax 1, Raipur which is not a specified authority under clause (ii) of section 151 and therefore the reassessment proceedings is unlawful and Void. The reassessment proceeding is liable to be quashed.

2. It is submitted that above ground is purely legal and goes to the root of the matter and all the materials facts necessary for the adjudication of above ground are on record. Therefore, the same may kindly be admitted and adjudicated as per law.

3. It is further submitted that the above legal ground is hereby raised under Rule 27 as per the direction of the Hon’ble Bench in this regard.

47. Referring to various decisions cited (supra) he submitted that the legal grounds raised by the assessee through the application under Rule 27 be accepted.

48. The Ld. DR on the other hand strongly objected to the admission of the legal grounds raised by the assessee in the application under Rule 27.

49. After hearing both the sides and in the light of our observations in ITA No.88/RPR/2025, we admit the legal grounds raised by the assessee in the application under Rule 27.

50. We have heard the rival arguments made by both the sides, perused the orders of the Assessing Officer and the Ld. CIT(A) / NFAC and the paper book filed on behalf of the assessee. We have also considered the various decisions cited before us. We find the only issue to be decided in the appeal as per grounds raised in the application under Rule 27 is that the approval has been obtained from the PCIT instead of the specified authority i.e. the Principal Chief Commissioner or the Principal Director General which is in violation of clause (ii) of section 151. We find the assessment year involved is assessment year 2017-18 and the Assessing Officer in the instant case has issued the notice u/s 148 on 15.07.2022 by obtaining approval from the PCIT-1, Raipur. We find when the assessee challenged the approval obtained from the PCIT instead of the specified authority i.e. the Principal Chief Commissioner or the Principal Director General, the Ld. CIT(A) / NFAC dismissed the grounds raised by the assessee by observing s under: “7.6 Ground No.7: the appellant sought to introduce a new ground of appeal regarding the “Specified Authority” in this case. It is relevant to state that in the case of Union of India and Ors vs Ashish Agrawal & Ors, the Hon’ble Supreme Court, in light of the Taxation and Other Laws (Relaxation and Amendment) Act (TOLA), regularised these proceedings, ruling that the reopening of cases under the old regime in compliance with the time limits set forth in Section 149 of the Income Tax Act (prior to the amendment), was valid. It also confirmed that the approval under Section 151, as per the old regime, remained applicable. Therefore, based on this understanding, the approval granted by the Hon’ble Principal Commissioner of Income Tax-1, Raipur, is valid and cannot be challenged. This ground of appeal filed by the appellant stands dismissed.”

51. Identical issue has already been decided by us in the preceding assessment year holding that obtaining approval from the specified authority for issue of notice u/s 148 vitiates the re-assessment proceedings. Since in the instant case also more than 3 years elapsed from the end of the relevant assessment year, the specified authority is the Principal Chief Commissioner or the Principal Director General. Since the Assessing Officer in the instant case has obtained approval from the PCIT who is not the specified authority, therefore, the reopening of the assessment by issue of notice u/s 148 by obtaining approval from the PCIT vitiates the entire re-assessment proceedings. Accordingly, we quash the re-assessment proceedings and the grounds raised by the assessee in the application under Rule 27 is allowed. Since the re-assessment proceedings have been quashed, the appeal filed by the Revenue becomes infructuous and accordingly the same is dismissed.

52. In the result, the appeal filed by the Revenue is dismissed.

ITA No.91/RPR/2025 (A.Y. 2018-19)

53. Facts of the case, in brief, are that the assessee filed its return of income on 16.10.2018 declaring total income of Rs.54,64,680/-. The case of the assessee was reopened on the ground that the assessee has made bogus sales of Rs.2,22,97,520/- to Abhishek Enterprises during the impugned assessment year and accordingly a notice u/s 148 was issued on 30.03.2022. The assessee in response to the same furnished its return of income on 19.05.2022. Subsequently the Assessing Officer issued notice u/s 143(2) on 18.10.2022. Thereafter, notice u/s 142(1) along with a questionnaire was issued and served on the assessee, in response to which the assessee filed the requisite details. The Assessing Officer completed the assessment u/s 147 r.w.s. 144B on 27.03.2023 determining the total income of the assessee at Rs.2,81,52,710/- wherein he made addition of Rs.2,26,88,030/- which includes the bogus sales of Rs.2,22,97,520/- to Abhishek Enterprises and certain other additions / disallowances.

54. In appeal, the Ld. CIT(A) / NFAC deleted the addition by observing as under:

“7.2. Ground No. 2: After carefully reviewing the assessment order passed by the Assessing Officer (AO) and considering the submissions made by the appellant, I find that several crucial aspects have not been addressed in the impugned order. It is seen that the AO has reached certain conclusions based on statements made by proprietor of Abhishek Enterprises during an action under Section 133A of the Act. The statement made has been extended to cover the appellant whereas its name is not specifically mentioned in the statement- this stand has not been contradicted by the AO either in the assessment order. While a statement of a party might be starting point in a scrutiny proceeding, the proceeding itself can only be based on material in each individual case.

7.2.1 The issue raised regarding the discrepancy in the amount of the alleged bogus sales-a difference of Rs.83.21 lakhs has not been considered in the order. It is seen that the same represents a refund of the advance against sales and cannot be treated as a part of sales, though it is included in the total transactions, bringing the sales figure down to Rs.1,39,76,509/- instead of Rs.2,22,97,520, as stated in the order.

7.2.2 The AO did not elaborate on the confirmations submitted by the consignees. nor did the AO explain why the confirmations from each consignee, along with their acknowledgment of the sale invoices and excise input details, were deemed irrelevant.

7.2.3 Furthermore, the stock register submitted by the appellant which linked the alleged sales quantities to the corresponding purchase quantities has not been found to have any shortcomings.

7.2.6 The issue regarding the sales to final consignees through entities like Abhishek Enterprises was also raised during appellate proceedings and has been explained and found acceptable.

7.2.7 In view of the foregoing, the addition on this account is directed to be deleted and the ground of appeal is allowed.”

55. Aggrieved with such order of the Ld. CIT(A) / NFAC the Revenue is in appeal before the Tribunal by raising the following grounds:

(1) Whether on the facts and in the circumstance of the case and in law, the Ld. CIT(A) was justified in deleting the additions made by the AO to the tune of Rs.2,22,97,520/- u/s 68 of the Act on account of bogus sales relying upon the submission of the assessee and there by ignoring the facts brought on the record by the AO.

(3) Any other ground which may be adducted at the time of hearing.

56. The Ld. Counsel for the assessee filed an application under Rule 27 by raising the following legal grounds:

1. The aforesaid appeal filed by the Revenue is listed for hearing on 11.02.2026. In this regard it is respectfully submitted that the Respondent- assessee with the help of Rule 27 wish to support the order of Ld. CIT(A) on the following Legal ground of appeal:

“That the notice dated 16th March, 2022 vide DIN & Notice No. ITBA/AST/F/148A(SCN)/2021-22/1040893537(1) issued by the Ld. Jurisdictional Assessing officer, Raipur (hereinafter referred as JAO) u/s 148A(b) of the Income Tax Act is invalid and bad in law being issued by the Ld. JAO on 16.03.2022 and allowing time to respond the notice on or before 23.03.2022, thus clear 7 days time for compliance has not been provided to the assessee. That, in notice u/s 148A(b) of the Act is concerned, excluding the date of issuance of notice and date of compliance sought for mandatorily a clear cut 7 days was required. Therefore, on this score alone, the notice issued u/s 148A(b) of the Act is void ab initio, invalid, illegal and bad in law hence, deserves to be quashed and all the subsequent proceedings becomes a nullity and non-est in the eyes of law.

2. That above legal ground of appeal raised through this separate application under Rule 27 of ITAT Rules, by the Respondent-assessee for the admission and adjudication before the Hon’ble Bench is purely legal and deal with the root of the matter of the case, which do not require investigation into, or examination of, any new facts or evidence that were already available before the Assessment Unit-Income Tax Department & Ld. JAO. This legal ground of appeal merely involve interpretation of the provisions of the Income Tax Act, 1961, which the Hon’ble Bench, is otherwise competent to do, in view of the principles laid down by the Hon’ble Supreme Court in the case of National Thermal Power Co. Ltd. V. CIT (1998) 229 ITR 383 (SC), Therefore, the same may kindly be admitted.

57. Referring to various decisions cited (supra) he submitted that the legal grounds raised by the assessee through the application under Rule 27 be accepted.

58. The Ld. DR on the other hand strongly objected to the admission of the legal grounds raised by the assessee in the application under Rule 27.

59. After hearing both the sides and in the light of our observations in ITA No.88/RPR/2025, we admit the legal grounds raised by the assessee in the application under Rule 27.

60. The Ld. Counsel for the assessee submitted that the notice issued u/s 148A(b) on 16.03.2022 is void ab initio. He submitted that the notice called for a response on or before 23.03.2022 which does not constitute a clear 7 days as required by the mandatory provisions of section 148A(b). He submitted that the statutory mandate requires a period of ‘not less than seven days’ to be provided for compliance. He submitted that in computing this period, both the date of issuance and the date of compliance must be excluded. Consequently the jurisdictional notice is rendered void and all subsequent proceedings emanating from it are a ‘nullity and non-est in the eyes of law’.

61. Referring to the decision of Hon’ble Karnataka High Court in the case of PCCIT vs. Smt. Komarla Yogendra Keertana reported in (2025) 307 Taxman 106 (Kar), he submitted that the Hon’ble High Court in the said decision has held that where impugned notice issued u/s 148A(b) did not provide the assessee minimum statutory period of seven days to respond, same was rightly quashed.

62. Referring to the decision of Hon’ble Rajasthan High Court in the case of Bijendra Singh vs. PCCIT reported in (2025) 478 ITR 493 (Raj), he submitted that the Hon’ble High Court in the said decision following the decision of Hon’ble Supreme Court in the case of Pioneer Motors (Private) Ltd. vs. Municipal Counsel, Nagrecoil reported in AIR 1967 SC 684 has held that both the terminal dates have to be excluded for the purpose of complying with the requirement of words ‘not less than.. days”.

63. The Ld. DR on the other hand submitted that the Assessing Officer has issued notice u/s 148A(b) on 16.03.2022 asking the assessee to submit its details on or before 23.03.2022. Thus, a period of 7 days have been given. Therefore, the arguments advanced by the Ld. Counsel for the assessee are liable to be rejected and the notice issued is to be held as valid notice.

64. We have heard the rival arguments made by both the sides, perused the orders of the Assessing Officer and the Ld. CIT(A) / NFAC and the paper book filed on behalf of the assessee. We have also considered the various decisions cited before us. We find the Assessing Officer issued a notice under clause (b) of section 148A on 16.03.2022 by asking the assessee to submit the details in the portal on or before 23.03.2022, the details of which are as under:

65. Under these circumstances, we have to see as to whether a period of 7 days as mandated by the provisions of section 148A(b) are fulfilled or not. We find an identical issue had come up before Hon’ble Rajasthan High Court in the case of Bijendra Singh vs. PCCIT (supra). The Hon’ble High Court in the said decision while deciding the aspect of calculating the days in a case where the provision requires a notice of ‘not less than particular days’ Hon’ble Supreme Court in the case of Pioneer Motors (Private) Ltd. vs. Municipal Council (supra) has observed as under:

“10. Section 148A(b) of the Act requires providing opportunity of being heard to the assessee by serving upon him/her notice to show cause within such time, as may be specified in the notice being ‘not less than seven days’ but not exceeding thirty days from the date, on which such notice is issued.

11. The aspect of calculating the days in a case where the provision requires a notice of ‘not less than particular days’, has been dealt with by the Hon’ble Supreme Court in the Pioneer Motors (Private) Ltd. vs. The Municipal Council, Nagrecoil: AIR 1967 SC 684, wherein it has, inter-alia, been laid down as under:

“The words “not being less than one month” do imply that clear one month’s notice was necessary to be given, that is, both the first day and the last day of the month had to be excluded. To put it in the language used by Maxwell on Interpretation of Statutes, 10th Edition, p. 351:-

“..when…….. ‘not less than’ so many days are to intervene, both the terminal days are excluded from the computation.”

12. It has been laid down by the Hon’ble Supreme Court that both the terminal days have to be excluded for the purpose of complying with the requirement of words ‘not less than …. days “. Admittedly, in the present case, the notice dated 16.03.2022 was issued/posted on 17.03.2022 and the date fixed for response was 23.03.2022. Excluding two days i.e. the date of sending of the notice as well the last date indicated, even if the notice was received by the petitioner, the same falls short of seven days’ period, as envisaged by provisions of Section 148A(b) of the Act; and as such, for violation of mandatory provisions of Section 148A(b) of the Act, the notice issued to the petitioner cannot be sustained.”

66. We find the Hon’ble Karnataka High Court in the case of PCCIT vs. Smt. Komarla Yogendra Keertana (supra) has held that where impugned notice issued u/s 148A(b) did not provide the assessee minimum statutory period of seven days to respond, the same is liable to be quashed.

67. Similar view has been taken by Hon’ble Gujarat High Court in the case of Atul Mahavirprasad Paldecha vs. ITO reported in (2025) 307 Taxman 331 (Guj). Since in the instant case the Assessing Officer has not given the mandatory period of clear 7 days for replying to the notice issued under clause (b) of section 148A, therefore, such notice being not in accordance with law is liable to be quashed. We, accordingly, hold that the notice issued by the Assessing Officer on 16.03.2022 under clause (b) of section 148A is not in accordance with law and therefore, the same is quashed. Since the assessee succeeds on this legal ground, the appeal filed by the Revenue becomes infructuous and the same is dismissed.

68. In the result, all the 4 appeals filed by the Revenue are dismissed.

Order pronounced in the open Court on 6th August, 2026.