Case Law Details
Mangal Singh Vs ITO (ITAT Delhi)
The Delhi ITAT held that reassessment proceedings initiated for Assessment Year 2015-16 were invalid as the notice issued under Section 148 of the Income Tax Act on 27.07.2022 was barred by limitation under Section 149(1). The Tribunal noted that although the CIT(A)/NFAC had correctly recognized the jurisdictional defect in the reassessment proceedings, it erred in merely setting aside the assessment instead of annulling it. Relying on the Supreme Court’s decision in Rajeev Bansal and the Delhi High Court’s ruling in MakeMyTrip India Pvt. Ltd., the Tribunal observed that the Revenue itself had conceded that notices issued on or after 1 April 2021 for AY 2015-16 were unsustainable. Since the notice under Section 148 was issued beyond the prescribed limitation period, the reassessment proceedings were void ab initio. Consequently, the Tribunal quashed the notice and allowed the assessee’s appeal, granting complete relief.
Core Issue. Whether a notice issued under section 148 on 27.07.2022 for AY 2015-16 was barred by limitation under section 149(1), thereby rendering the entire reassessment proceedings void.
Facts. The assessee’s assessment for AY 2015-16 was reopened on the basis of an original notice under section 148 dated 30.06.2021, which, pursuant to the Supreme Court decision in Ashish Agarwal, was treated as a notice under section 148A(b). Thereafter, a fresh notice under section 148 was issued on 27.07.2022/28.07.2022. Based on this notice, the AO passed a reassessment order under section 147 read with sections 144 and 144B on 26.05.2023, assessing total income at ₹2.30 crore.
The CIT(A) held that the reassessment suffered from a jurisdictional defect and set aside the assessment. However, instead of annulling the proceedings, the CIT(A) granted liberty to the AO to frame a fresh assessment. The assessee challenged this action before the Tribunal, contending that the notice itself was time-barred and therefore the entire reassessment deserved to be quashed.
ITAT Findings. The Tribunal noted that the assessment year involved was AY 2015-16 and the impugned notice under section 148 was issued on 27.07.2022. It relied upon the decision of the Delhi High Court in Makemytrip India Pvt. Ltd. v. DCIT, which in turn referred to the Revenue’s concession recorded by the Supreme Court in Union of India v. Rajeev Bansal that for AY 2015-16, all notices issued on or after 01.04.2021 would have to be dropped as being barred by limitation.
The Tribunal held that once the very notice under section 148 was barred by limitation under section 149(1), the assumption of jurisdiction itself failed. Consequently, there was no question of merely setting aside the assessment or granting liberty for fresh proceedings.
Held
The notice under section 148 dated 27.07.2022 was held to be barred by limitation under section 149(1) and was accordingly quashed. As the notice itself was invalid, the reassessment proceedings were void ab initio. The assessee’s appeal was allowed.
Cases Relied Upon
Union of India v. Rajeev Bansal 2024 (10) TMI 264 (SC-LB)
The Supreme Court recorded the Revenue’s concession that for AY 2015-16, notices issued on or after 01.04.2021 could not survive in view of the limitation provisions and TOLA framework.
Makemytrip India Pvt. Ltd. v. DCIT 2025 (4) TMI 46 (Delhi HC)
The Delhi High Court, relying on Rajeev Bansal, held that reopening notices for AY 2015-16 issued after 01.04.2021 were barred by limitation and liable to be quashed
Union of India v. Ashish Agarwal 2022 (5) TMI 240 (SC) The Supreme Court held that reassessment notices issued under the old law between 01.04.2021 and 30.06.2021 would be deemed to be show-cause notices under section 148A(b) under the new reassessment regime.
FULL TEXT OF THE ORDER OF ITAT DELHI
This captioned appeal has been filed by the learned Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre-Delhi (hereinafter referred as `CIT(A)/NFAC’) order dated 06.01.2026 arising from the assessment order dated 26.05.2023 under Section 147 r.w.s 144 r.w.s 144B of the Income Tax Act, 1961 (hereinafter referred as the ‘the Act’) by the Assessment Unit, ITD(`A0′) concerning Assessment Year (A.Y.) 2015-16.
3. Brief facts of the case are that the assessment order was passed on 26.05.2023 u/s 147 r.w.s 144 r.w.s 144B of the Act by the AO for A.Y. 2015-16 by assessing the total income of Rs.2,30,66,976/-. For making such assessment, a notice u/s 148 was issued on 27.07.2022/28.07.2022 by the JAO. The assessee submitted that the above notice u/s 148 was barred by limitation under the amended provisions of section 149(1) of the Act, effective from 01.04.2021. Learned CIT(A)/NFAC vide order dated 06.01.2026 set aside the assessment order.
4. Aggrieved, assessee was in appeal before us with the following grounds:
1. That on the facts and in law, the Ld. Commissioner of Income-tax (Appeals), NFAC has erred in setting aside the reassessment order instead of quashing the same, despite having categorically held that the assumption of jurisdiction by the Assessing Officer under section 148 of the Income-tax Act, 1961 was invalid and contrary to law.
2. That the Ld. CIT(A) has erred in law in exercising powers under section 251 of the Act to set aside an assessment which is void for lack of jurisdiction, whereas settled law mandates that such an assessment deserves to be annulled and not remanded.
3. Reassessment proceedings u/s 147 are void ab initio as notice u/s 148 is barred by limitation; therefore entire assessment deserves to be quashed. Ld. CIT(A) has failed to appreciate that no valid notice under section 148 of the Act was served upon the appellant within the prescribed limitation and in accordance with law, rendering the entire reassessment proceedings null and void, leaving no scope for fresh assessment.
4. That the Ld. CIT(A) erred in law in granting liberty to the Assessing Officer to frame a fresh assessment, despite the fact that the limitation prescribed under the Act for initiating proceedings had already expired, and therefore no proceedings were legally permissible.
5. That the Ld. CIT(A) erred in holding that the assessment L order suffered from jurisdictional infirmity, yet failed to grant complete relief by annulling the assessment, thereby causing grave prejudice to the appellant.
6. That the impugned order of the Ld. CIT(A), in so far as it sets aside the assessment instead of quashing the same, is arbitrary, illegal, unsustainable in law and contrary to the settled judicial precedents laid down by the Honble Supreme Court and various High Courts
7. The notice under section 148 was issued in a manner contrary to the guidelines provided in the Notification dated 29.03.2022, which mandates that notices under section 148 should be issued in a faceless manner. Since the notice was not issued through the faceless system, it is invalid and does not comply with the prescribed legal procedure, further rendering the reassessment proceedings void.
8. That the appellant craves leave to add, alter, amend or withdraw any of the above grounds at the time of hearing.”
5. The solitary issue is that the learned CIT(A)/NFAC has erred in setting aside the reassessment order instead of quashing the same on account of notice u/s 148 being barred by limitation.
6. At the outset, learned Counsel of the assessee challenged the validity of notice u/s 148 and stated that originally the notice u/s 148 was issued on 30.06.2021 which was treated as show cause notice u/s 148A(b) by virtue of the decision of the Supreme Court In Union of India & Others v. Ashish Agarwal: (2022) 1 SCC 617. It was urged that the AO issued notice u/s 148 of the Act on 27.07.2022/28.07.2022 which is time barred in the light of the decision of the hon’ble Supreme Court in the case of Union of India vs. Rajeev Bonsai, [2024] 469 ITR 46 (SC).
7. Per contra the Id DR relied on the orders of the AO/CIT(A)/NFAC.
8. We have heard the rival submissions and have perused the material. We find that the assessment year involved is AY 2015-16 for which the original notice u/s 148 was issued on 30.06.2021 and the subsequent notice u/s 148 was issued on 27.07.2022. In such facts, we take recourse to the decision of the hon’ble Delhi Court in the case of Makemytrip India Pvt Ltd P.(C) 2557/2023 dated 24.03.2025 which noted the decision of Rajeev Bonsai where the Revenue had conceded that no notice u/s 148 can be issued for AY 2015-16, being beyond the period of limitation u/s 149(1) as under:
8. In a subsequent decision in Union of India and Others v. Rajeev Bansal: 2024 INSC 754, the Supreme Court considered the manner of applicability of the provisions of Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 [TOLA]. During the said proceedings it was conceded on behalf of the Revenue that TOLA was not applicable for reopening the assessments for AY 2015-16. The said concession was recorded in paragraph 19(f) of the said decision. Paragraphs 19 (e) and 19(f) of the said decision are relevant and are set out below: –
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(f) The Revenue concedes that for the assessment year 2015-2016, all notices issued on or after 1 April 2021 will have to be dropped as they will not fall for completion during the period prescribed under the TOLA.”
9. In the facts and circumstance of the instant case, we are of the considered view that as the Revenue itself has conceded before the Supreme Court that AY 2015-16 can not be reopened u/s 148 being barred by limitation under the provision of section 149(1), the notice u/s 148 dated 27.07.2022 is considered as barred by limitation prescribed u/s 149(1) and accordingly quashed. Grounds are allowed.
10. In the result, appeal of the assessee ITA No. 1329/Del/2026 is allowed.
Order pronounced in the open court on 10.06.2026
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