31st March Notice, 1st April Delivery – Delhi ITAT Quashes Reassessment for Crossing Into New 148A Regime

Mubarak Overseas Private Limited Vs CIT(A) (ITAT Delhi)

31st March Notice, 1st April Delivery – Delhi ITAT Quashes Reassessment for Crossing Into New 148A Regime

The Delhi ITAT in Mubarak Overseas Pvt. Ltd. quashed the reassessment proceedings holding that though the notice u/s 148 was digitally signed on 31.03.2021, it was actually dispatched and delivered on 01.04.2021, by which time the new reassessment regime under Sections 148A/149 had already come into force.

The assessee produced RTI information and ITBA portal screenshots showing that the notice, though dated 31.03.2021, was served only on 01.04.2021 at 7:17 AM. Relying on the Delhi ITAT ruling in SVR Creation Pvt. Ltd. and the Delhi High Court judgment in Suman Jeet Agarwal, the Tribunal held that such notices fall under “Category C” cases and must be treated only as a deemed show-cause notice u/s 148A(b).

Since the AO proceeded directly with reassessment without following the mandatory procedure prescribed under Section 148A, the Tribunal held that the very assumption of jurisdiction was invalid. Consequently, the reassessment order was declared null and void, and the Revenue’s appeal became infructuous.

FULL TEXT OF THE ORDER OF ITAT DELHI

These cross appeals preferred by the assessee and the revenue against the orders of the Ld. National Faceless Appeal Centre (NFAC), Delhi (hereinafter referred to as the First Appellate Authority or ‘the ld. FAA’ for short) in appeals filed before him against the orders of the ld. Assessing Officer (hereinafter referred to as the Ld. AO, for short) passed u/s 143(3)/144/147 of the Income-tax Act, 1961 (hereafter referred to as ‘the Act’). Further details of the orders of the lower authorities are as under : –

2. On hearing both sides we find that assessee has raised additional ground which is reproduced below:

“ADDITIONAL GROUND No. 1:-

“That the proceedings U/s 147 / 148 are without jurisdiction and bad in law.”

ADDITIONAL GROUND No. 2:-

“That under the facts and circumstances of the case, the proceedings are without jurisdiction as no notice U/s. 148A has been issued in terms of Hon’ble Supreme Court case in case of Ashish Agarwal.”

3. As the additional ground is pure question of law which can be decided on the basis of admitted facts the same is admitted for hearing.

4. Ld. Counsel has relied information received by the assessee under the Right to Information Act, 2005 which establishes that notice u/s 148 was issued on 31.03.2021 and the copy of this available at page No. 5 of the paper book. Then at page No. 6 screen shot copy of ITBA portal is provided wherein notice u/s 148 of the Act is shown to be delivered on 01.04.2021 at 7.17 AM. Meaning thereby that though notice is dated 31.03.2021 which was sent and delivered subsequently on 01.04.2021 but by then new regime had come into operation and a Coordinate Bench in ITA No. 1899/Del/2024 SVR Creation Pvt. Ltd. Vs. PCIT dated 05.03.2025 has taken into consideration the same set of facts and observed in para 8 as follows:

“8. In the instant case, from the perusal of the notice issued u/s 148, we find the said though was digitally signed on 31st March, 2021 however, the same is sent to the assessee only on 01/04/2021 which is evident from the email send to assessee, as available at paper book page 2 filed by assessee. The Hon’ble Jurisdictional High Court in the case of Suman Jeet Agarwal vs. ITO in WP(C) No.10/2022, CM Appeal No.16/2022 vide order dated 27/09/2022 has categorized those cases under category-C, where the notices u/s 148 of the Act were issued u/s 148 of the Act are served upon the assessee on or after 01/04/2021. As per Hon’ble High Court in such cases, following directions are given:

“31.2 Category C: The petitions challenging notices falling under category “C” which are digitally signed on 31st of March, 2021, are disposed of with the directions to the JAO’s to verify and determine the date and time of dispatch as recorded in the ITBA portal in accordance with the law laid down in this judgment as the date of issuance. If the date and time of dispatch recorded is on or after 1st of April, 2021, the notices are to be considered as show cause notice, under section 148-A(b) as per the directions of the Apex Court in the case of Ashish Agarwal (supra) judgment”

As observed above, the notice in the present case was dispatched/served upon the assessee on 01/04/2021, thus the same should be treated as notice u/s 148A(b) and AO should complete the consequent proceedings as provided u/s 148A of the Act. However, the AO has proceeded to pass the order u/s 148 r.w.s 144B of the Act on the notice so issued u/s 148 on 31/03/2021 served upon the assessee on 01/04/2021. Thus, in view of the order of Hon’ble jurisdictional High Court in the case of Suman Jeet Agarwal (supra), we hold the order so passed without following the procedure prescribed u/s 148 of the Act is bad in law and is invalid.”

5. Ld. DR relied the impugned order and grounds. However, we are of considered view that the decision relied squarely applies to facts of case. The appeal of assessee is allowed as the assumption of jurisdiction itself is vitiated and the consequent assessment order becomes null and void. The appeal of the department is thus, rendered infructuous and accordingly, dismissed.

Order pronounced in the open court on 22.05.2026