Manubhai Keshavlal &Co. Vs ITO (ITAT Ahmedabad)
ITAT Ahmedabad: Reassessment Annulled as Notice u/s 148 Issued Beyond Surviving Limitation Period — Invalid under Rajeev Bansal & TOLA Framework
Assessee, a partnership firm engaged in trading at Visnagar, filed its return for AY 2016-17. Later, AO reopened the assessment u/s 147, issuing a notice u/s 148, & added ₹3,71,367/- treating it as the value of a tour package received in the course of business, taxable as a benefit u/s 28(iv). The firm challenged not just the addition but the very validity of the reassessment, contending that the notice u/s 148 was time-barred under the amended provisions of Section 149 & the Supreme Court’s interpretation in UOI v. Rajeev Bansal (2024) 469 ITR 46 (SC).
Assessee filed a detailed timeline to demonstrate that the notice issued was legally untenable even after considering the relaxation allowed under the Taxation & Other Laws (Relaxation & Amendment of Certain Provisions) Act, 2020 (TOLA) & the Supreme Court directions in UOI v. Ashish Agarwal [(2022) 444 ITR 1 (SC)].
The chronology as presented by the Assessee was as follows:
| Particulars | Date / Reference |
|---|---|
| Original notice issued u/s 148 (old law) | 30.06.2021 |
| Extended last date under TOLA | 30.06.2021 |
| Information & material supplied to Assessee pursuant to Ashish Agarwal (SC) | 26.05.2022 |
| Last date to file reply to the said material | 12.06.2022 |
| Actual date of filing reply by Assessee | 01.06.2022 |
| Minimum surviving period available for new notice under 3rd proviso to Sec 149(1) | 7 days |
| Final expiry of surviving limitation | 19.06.2022 |
| Date of new notice issued u/s 148 | 27.07.2022 |
Assessee’s contentions
- Once the surviving limitation period ended on 19 June 2022, any notice issued thereafter (as on 27 July 2022) became time-barred & therefore void ab initio.
- Assessee relied upon-
UOI v. Rajeev Bansal & Ors. (2024) 469 ITR 46 (SC) — holding that the “surviving period” after Ashish Agarwal conversion cannot extend beyond the balance period left under old limitation or the statutory minimum of seven days, whichever is longer;
