DCIT Vs Sterling Agro Industries Limited (ITAT Delhi)
The appeal before the Income Tax Appellate Tribunal, Delhi Bench, concerned reassessment proceedings for AY 2014-15 where the Assessing Officer added Rs. 11.23 crore alleging accommodation entries in the form of bogus milk sales. The Commissioner (Appeals) had allowed the assessee’s appeal, holding that the notice issued under Section 148 on 27.07.2022 was time-barred under Section 149, considering the Supreme Court’s rulings in Union of India v. Ashish Agarwal and Rajeev Bansal. The Tribunal examined the limitation timeline and noted that, after applying statutory exclusions and the legal fiction created by the Supreme Court, the extended deadline for issuing notice expired on 17.06.2022. Since the reassessment notice was issued beyond this date, it was held to be barred by limitation and void ab initio. Consequently, the reassessment proceedings were quashed. The Revenue’s appeal was dismissed, and the assessee’s cross-objection on the legal issue was allowed.
I. Background & Procedural History
1. The assessee filed return for AY 2014-15 on 30.09.2014 declaring income of ₹81.60 Cr.
2. Assessment completed u/s 143(3) on 13.10.2016.
3. Reassessment completed u/s 147/143(3) on 31.12.2019.
4. Based on Investigation Wing information alleging accommodation entries of ₹11.23 Cr, proceedings were initiated.
5. Notice u/s 148 (old regime) issued on 29.06.2021.
6. TOLA extended the outer time for issuance till 30.06.2021.
7. Supreme Court delivered judgment in Ashish Agarwal on 04.05.2022.
8. AO issued 148A(b) communication on 27.05.2022.
9. Assessee filed reply on 10.06.2022.
10. AO passed order u/s 148A(d) and issued fresh notice u/s 148 (new regime) on 27.07.2022.
11. CIT(A) allowed appeal holding notice time-barred.
12. Revenue filed appeal; assessee filed cross objection.
II. Legal Issues Before ITAT
1. Whether notice dated 27.07.2022 under section 148 (new regime) was within limitation?
2. Whether extended time under TOLA permitted issuance beyond surviving limitation?
3. Whether reassessment was valid after Ashish Agarwal and Rajeev Bansal?
III. Assessee’s Arguments (Cross Objection)
