ITO v. Pushpak Realities Pvt. Ltd.

Case snapshot

Sections / provisions: 147; 148; 148A; 149; TOLA

Questions before the Court / Tribunal

• TOLA limitation after Rajeev Bansal for AYs 2013-14 to 2015-16: The reported Tribunal order applies the Supreme Court's Rajeev Bansal judgment and quashes reassessment notices issued in July 2022 as time-barred for the assessment years before it. Because the Supreme Court transition jurisprudence is complex, the official order should be reconciled carefully to the surviving-period computation.

Material facts and background

6. For A.Y.2015-16 first notice and second notice was issued on 23/04/2021 and 26/04/2021 and assessee objection was disposed of on 13/12/2021. However, later on ld. AO issued a letter dated 28/05/2022 stating that now in view of the decision of the Hon’ble Supreme Court in the case of Ashish Agarwal notice u/s.148 was issued on 26/04/2021 as notice issued u/s. 148A(b) finally, the ld. AO passed an order u/s.148A(d) on 28/07/2022 and notice u/s.148 was issued on 29/07/2022. 7. In all the years, the ld. CIT (A) has quashed the notice after holding as under:A.Y.2013-14 7.1 The ld. CIT(A) while quashing the notice has relied upon the judgment of the Hon’ble Bombay High Court in the case of Siemens Financial Services Pvt. Ltd. reported in 457 ITR 647 and had quashed the notice. A.Y.2014-15 7.2. Ld. CIT(A) relied upon the judgment of the Hon’ble Bombay High Court in the case of Godrej Industries vs. ACIT in Writ Petition 450 of 2023 holding that notice u/s.148 for A.Y. 201415 could not have been issued on or after 01/04/2021 and the reopening notice issued on 31/07/2022 for A.Y.2014-15 was barred by limitation and after quoting such judgment he held that the facts in the case of Godrej...

5 ITA No.4816, 4814 & 4812/Mum/2024 Pushpak Realities Pvt. Ltd.

7.3. In 2015-16, ld. CIT(A) relied upon the judgment of Hexaware Technologies Ltd., and held that notice issued u/s.148 have been issued beyond the time limit of six years which had expired on 31/03/2022 and here the notice has been issued after the due date. 8.

We find that now this issue has been settled by the latest

judgment of the Hon’ble Supreme Court in the case of Union of India vs. Rajeev Bansal in Civil Appeal No.8629 of 2024 alongwith other civil appeal numbers. The Hon’ble Supreme Court had referred to the submissions made on behalf of the Revenue vide para 19 which is quite relevant and same is reproduced hereunder:19. Mr N Venkataraman, learned Additional Solicitor General of India, made the following submissions on behalf of the Revenue: a. Parliament enacted TOLA as a free-standing legislation to provide relief and relaxation to both the assessees and the Revenue during the time of COVID- 19. TOLA seeks to relax actions and proceedings that could not be completed or complied with within the original time limits specified under the Income Tax Act, b. Section 149 of the new regime provides three crucial benefits to the assesses: (i) the four-year time limit for all situations has been reduced to three years, (ii) the first proviso to Section 149 ensures that re-assessment for previous assessment years cannot be undertaken beyond six years, and (iii) the monetary threshold of Rupees fifty lakhs will apply to the re- assessment for previous assessment years, c. The relaxations...

6 ITA No.4816, 4814 & 4812/Mum/2024 Pushpak Realities Pvt. Ltd.

Appellant / assessee submissions

The judgment copy does not separately set out this component in a distinct section; refer to the full order and the reasoning section below.

Revenue / respondent submissions

of service of notice, therefore, the appeals are being disposed off after considering the relevant material and the arguments to be verified by the ld. DR. The validity of notice u/s.148 /148A has been challenged by the Revenue that Ld. CIT (A) has quashed the notices on the ground that it is barred by limitation. The main contention of the revenue is that the notices issued u/s.148 have been deemed to be extended by Section 3 of TOLA, therefore, all the notices sent are within time limit and same is in consonance of the judgment of the Hon’ble Supreme Court in the case of Union of India vs. Ashish Agarwal reported in (2023) 1 SCC 617. With the help of relevant dates mentioned in the assessment as well as appellate order following chronology of dates for the issue of notice u/s. 148 is culled out: A.Y.

Court / Tribunal analysis and reasoning

have to be dropped as they will not fall for completion during the period prescribed under TOLA; g. Section 2 of TOLA defines "specified Act" to mean and include the Income Tax Act. The new regime, which came into effect on 1 April 2021, is now part of the Income Tax Act. Therefore, TOLA continues to apply to the Income Tax Act even after 1 April 2021; and h. Ashish Agarwal (supra) treated Section 148 notices issued by the Revenue between 1 April 2021 and 30 June 2021 as showcause notices in terms of Section 148A(b). Thereafter, the Revenue issued notices under Section 148 of the new regime between July and August 2022. Invalidation of the Section 148 notices issued under the new regime on the ground that they were issued beyond the time limit specified under the Income Tax Act read with TOLA will completely frustrate the judicial exercise undertaken by this Court in Ashish Agarwal (supra). 9. Thus it can be seen that, one very important fact which has been stated by the Revenue before the Hon’ble Supreme Court in para 19 (f) wherein the Revenue concedes that for the A.Y.201516, all notices issued on or after 1 April 2021 will have to be dropped as they will not fall for...

74. The above table indicates that the specified authority is directly co-related to the time when the notice is issued This plays out as follows under the old regime (i) If income escaping assessment was less than Rupees one lakh (a) a reassessment notice could be issued under Section 148 within four years after obtaining the approval of the Joint Commissioner, and (b) no notice could be issued after the expiry of four years, and (ii) If income escaping was more than Rupees one lakh (a) a reassessment notice could be issued within four years after obtaining the approval of the Joint Commissioner: and (b) after four years but within six years after obtaining the approval of the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner 75. After 1 April 2021, the new regime has specified different authorities for granting sanctions under Section 151 The new regime is beneficial to the assessee because it specifies a higher level of authority for the grant of sanctions in comparison to the old regime. Therefore, in terms of Ashish Agarwal (supra), after 1 April 2021, the prior approval must be obtained from the appropriate authorities specified...

01/04/2021 the new regime has specified different authorities for granting sanction u/s.151 and since it is a beneficial to the assessee because it specifies the higher level of authority for the grant of sanctions in comparison to the old regime, therefore, in terms of Shri Ashish Agarwal judgment, after 01/04/2021 the prior approval must be obtained from the competent authorities specified u/s.151 of the new regime and then their Lordships have clearly held in para 76 that the non-compliance by the AO to the restricted time limit prescribed u/s.151 affects the jurisdiction to issue a notice u/s.148. 13. In para 94 the Hon’ble Supreme Court has mentioned about the three important periods to see the limitation which are as under:“4. Before we proceed, we need to bear in mind three important periods: i. The period up to 30 June 2021 – this period is covered by the provisions of the Income Tax Act read with TOLA;

ii. The period from 1 July 2021 to 3 May 2022 – the period before the decision of this Court in Ashish Agarwal (supra); and iii. The period after 4 May 2022 – the period after the decision of this Court in Ashish Agarwal (supra). This period is covered by the directions issued by PART F this Court in Ashish Agarwal (supra) and the provisions of the Income Tax Act read with TOLA. a. Third proviso to Section 149 95. The third proviso to Section 149 reads thus: “Provided also that for the purposes of computing the period of limitation as per this section, the time or extended time allowed to the assessee, as per show-cause notice issued under clause (b) of section 148A or the period during which the proceeding under section 148A is stayed by an order or injunction of any court, shall be excluded.” 96. The third proviso excludes the following periods to calculate the period of limitation: (i) the time allowed to the assessee under Section 148A(b); and (ii) the period during which the proceedings under Section 148A are “stayed by an order or injunction of any court.” 14. Finally, after analyzing the judgment of Shri Ashish Agarwal in various time limits provided in the Act and the time...

Operative decision and relief

Supreme Court as noted above, all the notices issued on or after 01/04/2021 will have to be dropped as they will not fall for completion during the period prescribed under TOLA. Here notice u/s. 148 for the A.Y. 2015-16 has been issued on 28/07/2022 which is admittedly barred by limitation under the new provision of Section 149(1) and it is not covered under TOLA. Accordingly, all the notices are quashed being barred by limitation on the reasons given above and we are not going on the reasons given by the ld. CIT (A) for quashing the notice. 17. Since the issue involved was squarely covered by the judgment of the Hon’ble Supreme Court in the case of Shri Rajeev Bansal therefore, the same has been decided on the principle laid down by the Hon’ble Supreme Court. 18.

Copy of the Order forwarded to : 1. The Appellant 2. The Respondent. 3. CIT 4. DR, ITAT, Mumbai 5. Guard file. //True Copy// BY ORDER, (Asstt. Registrar) ITAT, Mumbai

Authorities and precedents appearing in the judgment

• Union of India vs. Ashish Agarwal reported in (2023) 1 SCC
• Supreme Court in the case of Union of India vs. Ashish
• High Court in the case of Godrej Industries vs. ACIT in Writ
• India vs. Rajeev Bansal in Civil Appeal No.8629 of 2024

This list is machine-assisted from the judgment text and is not a substitute for checking the full citation chain in the PDF.

Ratio and legal principle

The decision turns on TOLA limitation after Rajeev Bansal for AYs 2013-14 to 2015-16. The operative result is classified as Quashed Or Set Aside. Read the rule only with the statutory version, factual findings and precedent chain recorded in the full judgment.

Why this judgment matters

The case is relevant to taxpayers, advisers and litigators dealing with TOLA limitation after Rajeev Bansal for AYs 2013-14 to 2015-16. Its practical value lies in the interaction between the statutory text, the evidentiary record and the procedural route followed in this case.

Practitioner action points

• Reconstruct the reassessment timeline: original assessment, section 148A notice/reply, approval authority, notice date and the applicable section 149 limitation window.
• Preserve the complete response to section 148A(b), objections and proof of disposal; jurisdictional defects are often decided from the documentary chronology.
• For litigation, attach the full judgment/order to the working paper and cite the paragraph/page supporting the proposition rather than relying on a headnote alone.

Full judgment and source trail

Read / download the clean local judgment copy

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