Na Roto Machine & Moulds India Vs ACIT (ITAT Ahmedabad)
Notice u/s 148 Issued 20 Days Late – ITAT Applies Rajeev Bansal & Gujarat HC, Quashes Reopening as Time-Barred
Assessee filed return for AY 2017-18. Later, reassessment was initiated based on survey material found in the case of a third party, alleging Assessee received Rs.6,00,000/- in cash for sale of machinery. Original notice u/s 148 was issued on 30.06.2021 under old regime, which, pursuant to Supreme Court judgment in Ashish Agarwal, was treated as deemed notice u/s 148A(b) of the new regime.
Assessee was supplied material on 23.05.2022 & filed replies on 13.06.2022 & again on 30.07.2022. AO then passed order u/s 148A(d) & issued fresh notice u/s 148 on 26.08.2022. Assessee argued before Tribunal that this notice was time-barred, relying on the Supreme Court in Union of India vs. Rajeev Bansal (2024) 167 taxmann.com 70 (SC).
As per Rajeev Bansal, for deemed notices issued between 01.04.2021–30.06.2021, only the “surviving time” (remaining days before 30.06.2021) under the Income-tax Act read with TOLA is available to issue fresh notice u/s 148 after completion of 148A procedure. In this case, since the original notice was issued on 30.06.2021, only 1 day of surviving time remained (extendable to 7 days). Therefore, after Assessee’s final reply on 30.07.2022, AO had to issue the new notice on or before 06.08.2022. However, AO issued notice on 26.08.2022, i.e., 20 days beyond the permissible limit.
