ITO Vs Ilesh Infracap Private Limited (ITAT Ahmedabad)
Limitation Fatality -TOLA Clock Runs Out- Surviving Time Kills Reopening – ITAT Ahmedabad Strikes Down Time-Barred 148 Notices
Assessee filed ROI for AY 2014-15 declaring Nil income. AO reopened the case based on credit entries of ₹4,34,67,000 in the IDBI Bank account & completed reassessment u/s 147 r.w.s 144B treating the entire amount as unexplained. CIT(A) deleted the addition. Before Tribunal, Assessee supported CIT(A)’s order through a Rule 27 application, challenging the very validity of the 148 notice.
The initial notice u/s 148 dated 30.06.2021 was quashed by Gujarat High Court, but pursuant to Supreme Court decision in Ashish Agarwal, it was treated as a deemed notice u/s 148A(b). Revenue thereafter issued notice u/s 148A(b) on 31.05.2022, Assessee replied on 07.06.2022, but AO passed order u/s 148A(d) & issued fresh notice u/s 148 only on 27.07.2022.
Tribunal examined the timeline & held that, as per Supreme Court in Rajeev Bansal (2024) 167 taxmann.com 70, the AO was required to issue the new 148 notice within the surviving limitation period under TOLA, which for this case was only 1 day, extendable to 7 days. Since Assessee replied on 07.06.2022, AO had time only till 14.06.2022, but issued the notice on 27.07.2022, rendering it time-barred.
