DCIT Vs Rakshit Buildcon Pvt. Ltd. (ITAT Delhi)
Reassessment notice held time-barred as per SC in Rajeev Bansal; Revenue appeal dismissed; merits kept open
In this Revenue appeal against Rakshit Buildcon Pvt. Ltd., Tribunal examined both the merits addition relating to alleged bogus loan entries from Aneri Fincap & the legal challenge to the validity of reassessment proceedings. While Revenue pressed that Investigation Wing had identified the lender as a paper entity & that assessee failed to substantiate its claim, assessee invoked Rule 27 of ITAT Rules contending that the reassessment itself was void, time-barred & issued without jurisdiction.
Assessee raised additional legal grounds asserting that notice u/s 148 dated 21.07.2022 was issued beyond the “surviving time” available under the new reassessment regime read with TOLA, as interpreted by Hon’ble Supreme Court in PCIT vs Rajeev Bansal (469 ITR 46). Tribunal admitted these additional legal grounds, holding that a respondent may raise pure questions of law at any stage, even without filing cross-objection, following B.R. Bamsi (83 ITR 223), Varas International (284 ITR 80) & several other authorities.
On examining the statutory timeline, Tribunal noted that the original notice u/s 148 under the old regime was dated 25.05.2021—leaving only 37 days of limitation surviving beyond 30.06.2021. Show-cause u/s 148A(b) was issued on 19.05.2022; reply was filed on 02.06.2022; order u/s 148A(d) & notice u/s 148 were finally issued on 21.07.2022. Tribunal held, relying squarely on Supreme Court’s binding interpretation, that once the response is received, AO must complete the 148A(d)–148 cycle strictly within the remaining surviving period. Since the notice dated 21.07.2022 overshot the surviving limitation period, the reassessment was time-barred & without jurisdiction.
Tribunal further relied on Gujarat High Court in Southern Gujarat Chamber of Trade (179 taxmann.com 55) & Mumbai ITAT in DCIT vs Prasad Shetty (126 ITR (Trib.) 124), both quashing similar notices issued after expiry of surviving time post-Rajeev Bansal.
Accordingly, Tribunal quashed the reassessment proceedings in entirety as being bad in law. Consequently, all additions on merits—including alleged bogus loan of ₹75 lakh & accommodation-entry commission—were rendered academic. Revenue’s appeal was dismissed with all other issues kept open.
FULL TEXT OF THE ORDER OF ITAT DELHI
