Ashish Gupta Vs ITO (ITAT Delhi)
Delhi ITAT: AY 2015-16 Reassessment Notice Issued After 1 April 2021 Time-Barred – Supreme Court’s Rajeev Bansal Applied; ₹1.33 Crore Penny-Stock Addition Quashed
The assessee had filed the return for AY 2015-16 declaring income of ₹9.18 lakh. The AO received information alleging that ₹1.33 crore claimed exempt under Section 10(38) represented bogus LTCG arising from sale of shares of penny-stock company PMC Fincorp Ltd. Reassessment proceedings were accordingly initiated.
In reassessment, the AO made an addition of ₹1,33,15,164 under Section 68 and a further ₹4,23,697 under Section 69C towards alleged unaccounted commission on the share transaction. CIT(A)/NFAC confirmed the assessment.
Before the ITAT, the assessee challenged the very validity of the reassessment, contending that the Section 148 notice was barred by limitation in view of the Supreme Court judgment in Union of India v. Rajeev Bansal.
The Tribunal noted that the case related to AY 2015-16 and the Section 148 notice had been issued on 29.06.2021. It specifically referred to the Supreme Court’s decision in Rajeev Bansal, where the Revenue itself had conceded that TOLA does not apply to AY 2015-16 and that all reassessment notices for AY 2015-16 issued on or after 1 April 2021 would have to be dropped.
Applying the Supreme Court ruling, the ITAT held that since the notice was issued on 29.06.2021, it was beyond the permissible limitation period. Consequently, the Section 148 notice itself as well as the resultant reassessment under Section 147 were quashed as time-barred and legally unsustainable.
Accordingly, the assessee’s appeal was allowed, resulting in the consequential deletion of the ₹1.33 crore Section 68 addition and ₹4.23 lakh Section 69C addition, without requiring adjudication of the penny-stock transaction on merits.
Key takeaway: For AY 2015-16, reassessment notices issued on or after 1 April 2021 cannot be rescued by TOLA. Following the Supreme Court’s ruling in Rajeev Bansal, such notices are barred by limitation, and the entire consequential reassessment—including additions relating to alleged bogus penny-stock LTCG-must fall.
Cases Discussed:
FULL TEXT OF THE ORDER OF ITAT DELHI
The instant appeal filed by the assessee is directed against the order dated 02.12.2025 passed by Learned Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as ‘ld. CIT(A)/NFAC], under section 250 of the Income Tax Act, 1961 [hereinafter referred to as, ‘Act’] arising from the assessment order passed on 29.05.2023 under section 147 r.w.s. 144B of the Act by the Assessment Unit, Income Tax Department (hereinafter referred as ‘the AO’) for the Assessment Year 2015-16.
