The appeal was filed by the assessee against the Final Assessment Order dated 11 March 2025 passed under Section 147 read with Section 144C(13) of the Income-tax Act, 1961, pursuant to the directions issued by the Dispute Resolution Panel for Assessment Year 2015-16.

At the outset, the assessee challenged the very initiation of reassessment proceedings on the ground that the notice issued under Section 148 of the Act was barred by limitation and therefore invalid in law. It was contended that the reassessment proceedings initiated after 1 April 2021 for AY 2015-16 were unsustainable in view of the statutory time limits prescribed under Section 149, even after considering the relaxations granted under the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 (TOLA).

The assessee relied heavily on the judgment of the Supreme Court in Union of India vs Rajeev Bansal, wherein the Revenue expressly conceded that for Assessment Year 2015-16, any notice issued on or after 1 April 2021 would be required to be dropped as it would fall beyond the permissible period of limitation. This legal position was further reinforced by subsequent decisions of the Supreme Court and various High Courts, consistently holding that reassessment proceedings for AY 2015-16 initiated after the said date are time-barred and liable to be quashed.

Upon examination of the factual timeline, it was noted that although the original notice under the erstwhile provisions was issued on 8 April 2021, the subsequent notice under Section 148 pursuant to the procedure laid down in Ashish Agarwal was ultimately issued on 29 July 2022. The Tribunal observed that, in light of the authoritative pronouncement in Rajeev Bansal, the benefit of TOLA could not extend the limitation period for AY 2015-16 beyond 31 March 2022.

The Tribunal further placed reliance on the Supreme Court’s decision in Deepak Steel and Power Ltd. vs CBDT, wherein reassessment notices issued after 1 April 2021 for AY 2015-16 were categorically quashed on the ground of limitation, holding that no further adjudication on merits was required once the notice itself was invalid.

Accordingly, the Tribunal held that the impugned notice issued under Section 148 of the Act was bad in law, being barred by limitation. Consequently, the assessment order passed under Section 147 read with Section 144C(13) was also quashed. Since the reassessment itself was rendered invalid, the remaining grounds raised by the assessee were held to be academic in nature.
As a result, the appeal of the assessee was allowed in full.

Source Link- https://itat.gov.in/public/files/upload/1767158043-5htBwY-1-TO.pdf

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