PCIT Vs Vikas Sharma (Allahabad High Court)
Summary: The Allahabad High Court dismissed the Revenue’s Income Tax Appeal arising from the order of the Income Tax Appellate Tribunal, Delhi Bench ‘E’, New Delhi dated 30.12.2025 in ITA No. 3495/DEL/2025 for Assessment Year 2013-14. The Tribunal had dismissed the Revenue’s appeal and confirmed the first appeal order passed by the CIT Appeal on 05.03.2025.
The appeal before the High Court was filed under Section 365 of the Income Tax Act, 2025. The dispute concerned the limitation applicable to reassessment proceedings arising from a notice under Section 148 of the Income Tax Act, 1961.
The Court recorded that the notice under Section 148 had been issued for AY 2013-14 on 09.06.2021. Referring to the Supreme Court’s decision in Union of India Vs. Ashish Agarwal, 2022 SCC OnLine SC 543, the Court noted the 15-day timeline provided to the Revenue to furnish the ‘reasons to believe’ and recorded that the period expired on 30.06.2021. The order records that the Revenue furnished the ‘reasons to believe’ on 17.05.2022, and that the assessee did not file any reply thereto.
Relying on the Supreme Court’s decision in Union of India Vs. Rajeev Bansal, 2024 SCC OnLine SC 2693, the Court recorded that the Revenue had surviving limitation of 22 days, computed with reference to the original notice dated 09.06.2021 and the end date of 30.06.2021. On that basis, the Revenue could issue a show-cause notice under Section 148(A)(b), at the latest, by 22.06.2022. However, the show-cause notice was issued on 29.06.2022, after the available period had expired.
The High Court observed that the notice was therefore issued beyond limitation, despite the two Supreme Court decisions having protected the Revenue in the relevant context. The Court further clarified that, to the extent the timeline noted arose from the reading of the Supreme Court orders and not from an independent consideration, that aspect might not survive further deliberation if non-issuance had been occasioned by conduct of the assessee. Nevertheless, the issue of limitation was required to be tested on its own strength in accordance with the clear law laid down by the Supreme Court.
On the facts and reasoning recorded in the order, the High Court held that the Tribunal had committed no error in confirming the order passed by the appellate authority. The Revenue’s appeal consequently lacked merit and was dismissed.
Cases Discussed
- Union of India Vs. Ashish Agarwal, 2022 SCC OnLine SC 543.
- Union of India Vs. Rajeev Bansal, 2024 SCC OnLine SC 2693.
FULL TEXT OF THE JUDGMENT/ORDER OF ALLAHABAD HIGH COURT
1. Heard Sri Ankur Agarwal, learned Senior Standing Counsel for the revenue and perused the record.
2. The present Income Tax Appeal has been filed under Section 365 of the Income Tax Act, 2025 arising from order of the Income Tax Appellate Tribunal Delhi Bench ‘E’ : New Delhi dated 30.12.2025, in Income Tax Officer, Ward 2(2)(1), Ghaziabad passed in ITA No. 3495/DEL/2025 for the Assessment Year 2013-14. By that order, the learned tribunal has dismissed the revenue’s appeal and thereby confirmed the first appeal order passed by the CIT Appeal dated 05.03.2025 for the Assessment Year 2013-14.
3. Undeniably, the notice under Section 148 of the Income Tax Act, 1961 was issued to the petitioner for the Assessment Year 2013-14, on 09.06.2021. Considering the 15 days timeline provided to the reveue to furnish the ‘reasons to believe’ to the assessee, in terms of the order passed by the Supreme Court in Union of India Vs. Ashish Agarwal, 2022 SCC OnLine SC 543, that time expired on 30.06.2021. Here, the revenue furnished the ‘reasons to believe’ to the assessee, before that, on 17.05.2022. However, the assessee did not file any reply thereto. Considering the decision in Union of India Vs. Rajeev Bansal, 2024 SCC OnLine SC 2693, the revenue had surviving limitation of 22 days (computed with reference to original notice dated 09.06.2021 and the end date 30.06.2021). Thus, the revenue could issue show cause notice under Section 148(A)(b), latest by 22.06.2022. Here that notice was issued on 29.06.2022 i.e. after a week. Clearly, the notice was issued beyond limitation, twice protected by the Supreme Court, in the interest of revenue.
4. To the extent, the timeline above noted arises on the reading of the orders of the Supreme Court and not on any independent consideration, it may not survive for any further deliberation, if the reason for non-issuance was occasioned by any conduct offered by the assessee. Issue of limitation is to be tested on its own strength in terms of the clear law laid down by the Supreme Court.
5. In view of the above, the tribunal has not committed any error in confirming the order passed by the appeal authority.
6. The present appeal lacks merit and is accordingly dismissed.
