Time-Barred Section 148 Notice Quashed by Delhi ITAT in Amba Shakti Ispat Case

Amba Shakti Ispat Ltd. Vs DCIT (ITAT Delhi)

₹6.11 Crore Addition Falls: Reopening Notice Misses the Limitation Deadline

The issue

An allegation of accommodation entries may provide a reason to investigate, but can it sustain reassessment proceedings initiated through a time-barred notice?

The Delhi ITAT held that the notice under section 148 dated 29 July 2022 was issued beyond the permissible limitation under section 149. Following the Supreme Court’s decision in Union of India v. Rajeev Bansal (2024) 469 ITR 46 (SC) and the coordinate Bench ruling in Mukesh v. ITO, the Tribunal quashed the reassessment proceedings.

Consequently, an assessment involving an addition of ₹6,11,25,229 under section 69A read with section 115BBE could not survive.

The background: Accommodation-entry information triggers reopening

The assessee had filed its return for AY 2014-15, declaring total income of ₹74,20,160.

Subsequently, the Investigation Wing furnished information concerning accommodation entries allegedly provided by M/s Kamakhya Enterprises, operated by Shri Pawan Mishra. Based on this information, the Assessing Officer initiated reassessment proceedings.

The original notice under the erstwhile section 148 was issued on 29 June 2021. Following the Supreme Court’s directions in Union of India v. Ashish Agarwal (2022) 444 ITR 1 (SC), the matter proceeded through the new reassessment framework.

A notice under section 148A(b), accompanied by the relevant material, was issued on 25 May 2022, allowing the assessee to respond by 9 June 2022. The assessee filed its reply on that date.

Thereafter, the Assessing Officer passed the order under section 148A(d) and issued the fresh section 148 notice dated 29 July 2022. According to the assessee’s submission reproduced in the order, the ITBA portal reflected actual issuance on 30 July 2022.

The assessment and first appeal

The Assessing Officer treated the alleged accommodation entries as unexplained money and made an addition of ₹6.11 crore under section 69A, applying section 115BBE.

The reassessment order dated 29 May 2023, described by the Tribunal as a best judgment assessment under section 147 read with section 144B, determined total income at ₹6,85,45,389.

The CIT(A) dismissed the assessee’s appeal and confirmed the addition by an order dated 13 April 2026.

Before the Tribunal, the assessee raised several objections, including challenges to the reopening procedure, natural justice and the addition itself. However, the decisive argument concerned limitation and the Assessing Officer’s jurisdiction.

The assessee’s argument: The surviving period had expired

The assessee submitted a detailed chronology calculating the time available for issuing the fresh notice after applying Rajeev Bansal.

Its central contention was that the Department could not treat the conversion of the original notice under Ashish Agarwal as granting an unrestricted fresh period for reopening. The fresh notice still had to satisfy section 149, after accounting for the applicable extensions and exclusions.

The assessee argued that the notice issued in late July 2022 fell outside that permissible period and that neither the Assessing Officer nor the CIT(A) had properly considered this jurisdictional objection.

The Departmental Representative requested that the matter be restored to the Assessing Officer for fresh consideration. The Tribunal, however, decided the limitation issue itself.

The Tribunal’s reasoning

The Tribunal held that Rajeev Bansal governed the interaction between the old reassessment provisions, the amended provisions and the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020—TOLA.

It examined whether the notice dated 29 July 2022 could survive the limitation prescribed under section 149 and concluded that it could not.

The Tribunal also followed Mukesh v. ITO, ITA No. 1489/Del/2025, order dated 26 September 2025, concerning the same assessment year. In that case, a fresh section 148 notice dated 8 July 2022 had been held time-barred.

The discussion reproduced from Mukesh referred to Tyagi Pipe Craft Ltd. v. ITO and the Delhi High Court’s decision in Ram Balram Buildhome v. ITO. The relevant principle was that the time available for passing an order under section 148A(d) cannot override the outer limitation governing issuance of the section 148 notice.

The ruling

The Tribunal held that the notice dated 29 July 2022 was barred by limitation and quashed the reassessment proceedings. The assessee’s appeal was allowed.

The relief was therefore based on lack of valid jurisdiction, rather than a finding that the alleged accommodation entries were genuine.

Author’s comments

The decision demonstrates why a date-wise limitation working should precede arguments on the merits of a reassessment. Even a substantial addition cannot sustain an assessment founded on an invalid notice.

However, the order contains inconsistencies in the assessee’s reproduced deadline calculation. Accordingly, those dates should not be adopted mechanically for another case. The applicable exclusions, surviving period and statutory minimum period must be independently examined.

Ashish Agarwal permitted the procedural conversion of notices; it did not dispense with limitation. A reopening must still reach the taxpayer within the time the law allows.

Cases Discussed

Union of India v. Rajeev Bansal, (2024) 469 ITR 46 (SC)

Union of India v. Ashish Agarwal, (2022) 444 ITR 1 (SC)

Mukesh v. ITO, ITA No. 1489/Del/2025, order dated 26.09.2025

Tyagi Pipe Craft Ltd. v. ITO, ITA No. 147/Del/2025, order dated 23.07.2025

Ram Balram Buildhome v. ITO & Anr., 445 ITR 1 (Delhi)

FULL TEXT OF THE ORDER OF ITAT DELHI

The appeal of the assessee is directed against the order dated 13.04.2026 of ld. CIT(A)-24, New Delhi passed u/s 250 of the Income Tax Act, 1961 (hereinafter referred to as “the Act”) wherein the appeal against the best judgment Assessment Order u/s 147 r.w.s. 144B of the Act dated 29.05.2023 was dismissed.

2. Facts in brief as culled out from the orders of the authorities below are that the assessee filed its return of income for A.Y. 2014-15 declaring total income of Rs.74,20,160/-. Subsequently, information was received from the Investigation Wing regarding accommodation entries allegedly provided by M/s Kamakhya Enterprises, operated by Shri Pawan Mishra. On the basis of such information, reassessment proceedings were initiated u/s 147/148 of the Act. During the reassessment proceedings, the Assessing Officer observed that the assessee had allegedly obtained accommodation entries and, after considering the material gathered during investigation, made an addition of Rs.6,11,25,229/- u/s 69A r.w.s. 115BBE of the Act. The assessment was accordingly completed u/s 147 r.w.s. 144B of the Act determining the total income at Rs. 6,85,45,389/-.

3. Aggrieved by the assessment order, the assessee filed appeal before the ld. CIT(A) who has dismissed the same and confirmed the addition made in the assessment order.

4. Aggrieved by the impugned order of the ld. CIT(A), the assessee is in appeal before the Tribunal and raising following grounds:

“1. The LD. AO has erred in issuing notice u/s 148 alongwith order u/s 148A(d) on 29.07.2022 in violation of relevant judgment of Hon’ble SUPREME COURT OF INDIA CIVIL APPELLATE/ORIGINAL JURISDICTION in the case of Union of India & Ors. … Appellants Versus Rajeev Bansal …Respondent (Civil Appeal No 8629 of 2024), which mandate the date of issue u/s 148 notice to be computed as 15.06.2022 being the last date, thus the notice was time barred and invalid.

2. That the jurisdictional LD.AO has erred to issue notice under old provision of section 148, which is wholly without jurisdiction and bad in law on all the parameters, thus changing into the invalid SCN u/s 148A(b), relying on apex court judgment of Ashish Agarwal 444 ITR 1, is also bad in law and procedure laid down under the Act.

3. That the LD.AO had erred in not following the Proper Procedure u/s 148A which is bad in law and procedure laid down under the Act.

4. That impugned notice u/s 148 is issued by LD. AO in violation and infringement of mandatory applicable binding CBDT Notification/instructions/circulars etc. in totally arbitrary manner without due application of mind.

5. That the LD. AO has erred in passing order u/s 148A (d) and also issuing notice u/s 148 on 29.07.2022, without following principle of natural justice on the basis of information received from the LD.AO, is bad in law and procedure laid down under the Act.

6. That the LD.AO has erred to prove that how information available with him had succeed to “tangible Material in possession” as required by section 148 read with section 148A (d) of the Income tax Act, 1961 and thus is bad in law and procedure laid down under the Act.

7. That the LD.AO has erred to issue notice u/s 148, without following the law and procedure laid down u/s 147 to 153, is bad both in law and procedure of the Income tax Act 1961.

8. That the LD.AO had erred in both law and facts in making assessment without adhering to the statutory procedure under section 144B nor adhering to the assessment provision under section 147 to 153, thus bad in law and procedure laid down under the Act.

9. That impugned assessment order is passed by LD. AO in violation and infringement of mandatory applicable binding CBDT Notification/instructions/circulars etc. in totally arbitrary manner without due application of mind. 10. That the Ld.AO had erred to invoke the proposed addition u/s 68 in the Show cause notice and then wrongly made addition u/s 69A in the assessment order was bad in law.

10. That the Ld.AO had erred to invoke the proposed addition u/s 68 in the Show cause notice and then wrongly made addition u/s 69A in the assessment order was bad in law.

11. That the Ld. AO has erred in making the addition under section 69A, as the same is against the mandatory procedure prescribed under the said section.

12. That impugned assessment order is passed by LD. AO in violation of constitutional provisions of Art. 14 and Art. 265 and is against Real Income theory.

13. That in the order u/s 250, the CIT (A) Delhi failed to considering/appreciating the Submission along with relevant document confirming the impugned addition without considering the documentary evidence submitted before the CIT (Appeal).

14. The assessee craves leave to add, amend, delete or alter any grounds of appeal on or before the hearing of this appeal.

15.It is therefore prayed that the assessment made by the Ld. AO under the facts and circumstances of the case be quashed, additions made be please deleted and any other relief your honour deems fit be also allowed in the interest of Justice.”

5. We have heard the ld. AR and ld. DR and also examined the record. At the very outset, ld. AR has referred page No. 2 & 3 of the written submission filed before us containing the table for calculation of time barred notice u/s 148 of the Act. It was argued that the case is covered by the judgment of Hon’ble Supreme court of India in Union of India & Ors. vs . Rajeev Bansal (2024) 469 ITR 46. (SC). It was therefore argued that since neither AO nor the Ld. CIT(A) has considered the said aspects regarding the notice u/s 148 of the Act was barred by limitation, therefore, the appeal be allowed and the assessment order be quashed.

6. We have also heard the ld. DR who was supplied with the paper book, and after going through Page No. 2 & 3 of the written submission containing the table for the calculation of time-barred notice u/s 148 of the Act, the ld. DR has submitted that the Bench may consider the submissions with respect to the applicability of the judgment of Hon’ble Supreme Court in Rajeev Bansal case (supra) in its own discretion and has prayed for restoring the file to the AO for deciding the matter afresh.

7. We have considered the rival submissions and have perused the material on record. Page no. 2 & 3 of the written submission containing the details in respect of notice dated 29.07.2022 u/s 148 of the Act being time barred is extracted as under:

8. Before us, the learned counsel for the assessee pressed legal ground, challenging the jurisdiction of the Assessing Officer to initiate reassessment proceedings as the notice u/s 148 of the Act is barred by limitation. It was submitted that in view of the judgment of the Union of India & Ors. vs. Rajeev Bansal (2024) 469 ITR 46. (SC), the re-assessment proceedings initiated under the old or un-amended provisions of section 148, read with the extensions granted under the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 (“TOLA”), are without authority of law.

9. It was contended that for Assessment Year 2014-15, the limitation for issuance of notice is under the amended provisions of section 148, therefore, the Assessing Officer could not have resorted to the old provisions by invoking TOLA. Admittedly, in the present case, the notice u/s 148 pursuant to section 148A(d) was issued on 29.07.2022, well beyond the permissible limitation.

10. We have heard rival submissions of the parties including the challenge to the jurisdiction of the Assessing Officer to issue notices u/s 148 of the Act beyond the limitation period. The controversy lies in a narrow compass—whether the notice issued u/s 148 on 29.07.2022 for A.Y. 2014-15 is barred by limitation. The Hon’ble Supreme Court in Union of India vs. Rajeev Bansal (supra) has conclusively interpreted the interplay between the amended provisions of sections 148 and 149, the old regime, and TOLA. Significantly, the Revenue itself conceded before the Hon’ble Supreme Court that for A.Y. 2015-16, all notices issued on or after 01.04.2021 are liable to be dropped, as they would not fall for completion within the period prescribed under TOLA.

11. The Hon’ble Supreme Court further held that the extended ten-year limitation u/s 149(1)(b), as amended, operates prospectively, and for earlier assessment years, the test is whether the six-year period under the old regime was still alive on the date of issuance of notice. Applying the aforesaid test to the facts of the present case, it is undisputed that the six-year limitation for A.Y. 2014-15 expired on 30.06.2021. The notice u/s 148 having been issued on 29.07.2022, the same is clearly barred by limitation.

12. We also note that identical issues have been examined and decided by Co-ordinate Bench of the Delhi Tribunal in the case of Mukesh Vs. ITO order dated 26.09.2025 passed in ITA No. 1489/Del/2025 for A.Y. 2014-15 was quashed as time- barred, following Rajeev Bansal (supra). For ready reference, findings of the Co-ordinate Bench of the Tribunal is reproduced as under:

“6. We have heard both the parties and perused the material available on record. The Ld. Assessee’s Representative submitted a table/chart of date and events for the purposes of calculating the period of limitation in issuing the for notice u/s 148 of the Act, which is reproduced for the purpose of convenience:

7. As could be seen the(Old) Act was corroborated from 148A(d) of IT Act. T been substituted b wherein notice u/s 1 Section 148 of the have been issued a subject matter of v Courts and ultimate Court in the case reported in 444 IT Judgment of the Hon Agarwal (supra), th Act on 25.05.2022 f which fact is evident assessee has not ma was never served as order u/s 148A(d) o issue notice u/s 14 question that arise subsequent notice is to be treated as time Hon’ble Supreme C Rajeev Bansal report ITA N o. 5667/Del/2026 a Shakti Ispat Ltd. 48 of n from the above, “ The Notice u/s 14 issued on 30.06.2021, which can the order dated 08.07.2022 passed The provision of Section 148 of the Act y Finance Act. 2021 w.e.f. 01.04.2 148 of the Act as per the old provision Act applicable upto 31.03.2021 could after 31.03.2021. This issue per serious writ petitions filed in various Elyot settled by the Hon’ble Supreme of Union of India Vs. Ashish Aga TR 1 (SC) dated 04.05.2022. After Hon’ble Supreme Court in the case of As he Id AO issued letter u/s 148A(b) of fixing date for compliance on 09.06.2 nt from notice u/s 148A(b) of IT Act. ado compliance of the said notice as s s per the Assessee. The Ld. AO passed of the Act on 08.07.2022 and proceeded to the the 48 of the Act on 08.07.2022. Now es for consideration as to whether sued u/s 148 of the Act on 08.07.202 me barred or not in the light of decision Court in the case of Union of India ted in 469 ITR 46 (SC). No. 5667/Del/2026 a Shakti Ispat Ltd. 48 of

8. In an identical situation the Co-ordinate Bench of the Tribunal in the case of Tyagi Pipe Craft Ltd. Vs. ITO in ITA No. 147/Del/2025 vide order dated 23/07/2025, held as under:-

5. Hence, in view of the observation of the Hon’ble Supreme Court in the case of Rajeev Bansal (supra), the extended due date for issuance of notice u/s 148 of the Act expired on 26.06.2022 and since, the notice u/s 148 of the Act is issued on 23.07.2022, the said notice is to be treated as barred by limitation and consequentially reassessment proceedings would be liable to be quashed as void ab initio. This issue was also subject matter of consideration by the Hon‟ble Jurisdictional High Court in the case of Ram Balram Buildhome Vs. ITO &Anr reported in 445 ITR 1 (Del) dated 30.01.2025. Relevant operative portion of the said order is reproduced herein below:-

“65. Thus, in the facts of the present case, the last date for issuance of notice under Section 148 of the Act for AY 2013-14 under the statutory framework, as was existing prior to 01.04.2021 was 31.03.2020, that is, six years from the end of the relevant assessment year.

66. By virtue of Section 3 (1) of TOLA time for completion of specified acts, which fell during the period 20.03.2020 to 31 12.2020 were extended till 30.06.2021 [Notification No.38/21 dated 27.04.2021]. Thus, the notice dated 01.06.2021 was issued twenty- nine days prior to the expiry of period of limitation for issuing a notice under Section 148 of the Act as was extended by TOLA. As noted above, the period from 01.06.2021, the date of issuance of notice, and 04.05.2022, being the date of decision of the Supreme Court in Union of India & Ors. v. Ashish Agarwal is required to be excluded by virtue of the third proviso to Section 149 (1) of the Act.

67. Additionally, the period from the date of decision in Union of India & Ors. v. Ashish Agarwal2 till the date of providing material , as required to the accompanied with a notice under Section 148A (b) of the Act. is required to be excluded. Thus, the period between 04.05.2022 to 30.05.2022, the date on which the AO had issued the notice under Section 148A (b) of the Act in furtherance of his earlier notice dated 01.06.2021, is also required to be excluded by virtue of the third proviso to Section 149 (1) of the Act as held by the Supreme Court in Union of India & Ors. v. Rajeev Bansal.

68. In addition to the above, the time granted to the petitioner to respond to the notice dated 30.05.2022- the period of two weeks-is also required to be excluded by virtue of the third proviso to Section 149 (1) of the Act. The petitioner had furnished its response to the notice under Section 148A (b) of the Act on 13.06.2022. Thus, the period of limitation began running from that date.

69. As noted above, by virtue of TOLA, the AO had period of twenty nine days limitation left on the date of commencement of the reassessment proceedings, which began on 01.06.2021, to issue a notice under Section 148 of the Act. The said notice was required to be accompanied by an order under Section 148A (d) of the Act. Thus, the AO was required to pass an order under Section 148A (d) of the Act within the said twenty-nine days notwithstanding the time stipulated under Section 148A (d) of the Act. This period expired on 12.07.2022.

70. Since the period of limitation, as provided under Section 149 (1) of the Act, had expired prior to issuance of the impugned notice on 30.07.2022. The said is squarely beyond the period of limitation.

71. It is contended on behalf of the Revenue that the AO is required to pass an order under Section 148A (d) of the Act by the end of the month following the month on which the reply to the notice under Section 148A (b) of the Act was received. Thus, the order under Section 148A (d) of the Act as well as the notice under Section 148 of the Act (both dated 30.07.2022) are within the prescribed period. This contention is without merit as it does not take into account that proceedings under Section 148A of the Act necessarily required to be completed within the period available for issuing notice under Section 148 of the Act, as prescribed under Section 149 of the Act. Thus, the time available to the AO to pass an order under Section 148A (d) of the Act was necessarily truncated and the same was required to be passed on or before 12.07.2022. The fourth proviso to Section 149 of the Act did not come into play as the time period available for the AO to pass an order under Section 148A (d) of the Act was in excess of the seven days.

72. In view of the above, we find merit in Mr. Sehgal’s contention that the impugned notice dated 30.07.2022 has been issued beyond the period of limitation.

73. The petition is accordingly allowed and the impugned order dated 30.07.2022 passed under Section 148A (d) of the Act; the impugned notice dated 30.07.2022 issued under Section 148 of the Act; and the assessment order dated 30.05.2023 framed under Section 147 of the Act pursuant to the notice dated 30.07.2022 for AY 2013-14, are set aside. Pending application is also disposed of.” 6. Respectfully following the said decision, we hold that the notice issued u/s 148 of the Act on 23.07.2022 is barred by limitation. Accordingly, ground No. 1 raised by the assessee is allowed.”

9. Considering the above facts and the also applying the ratio laid down by the Hon’ble Supreme Court in the case of Rajiv Bansal (supra), we are of the opinion that notice issued u/s 148 of the Act dated 08/07/2022 is barred by the period specified u/s 149 of the Act, consequently, the re-assessment proceedings initiated thereupon is hereby quashed.

10. In the result, Appeal of the Assessee is allowed.”

13. Considering the above facts and circumstances and also applying the ratio laid down by the Hon’ble Supreme Court in the case of Rajeev Bansal (supra) and respectfully following the co-ordinate Bench decision in Mukesh Vs. ITO (supra), we are of the opinion that the notice issued u/s 148 of the Act dated 29.07.2022 is barred by limitation as having been issued beyond the period specified u/s 149 of the Act. Consequently, the re-assessment proceedings initiated thereupon is hereby quashed.

14. In the result, the appeal of the assessee is allowed. Order Pronounced in the Open Court on 07/10/2026.