Income Tax Appellate Tribunal - Delhi
M/S Ambica Timber Trade Private ... vs Income Tax Officer Ward 2(1) Cr Building ... on 25 March, 2026
IN THE INCOME TAX APPELLATE TRIBUNAL
DELHI BENCH 'G' : NEW DELHI
BEFORE SHRI YOGESH KUMAR US, JUDICIAL MEMBER AND
MS. RENU JAUHRI, ACCOUNTANT MEMBER
ITA No.6096/Del/2025
Assessment Year : 2013-14
M/s. Ambica Timber Trade Vs. ITO
Private Limited Ward- 2(1)
73/8, Swaran Park, Main Delhi
Rohtak Road Nangloi,
New Delhi
PAN NO. AAJCA0443P
(Appellant) (Respondent)
: Shri Pranshu Singhal, CA
Assessee by
Revenue by : Shri Sahil Kumar Bansal, Sr. DR
Date of hearing : 26.02.2026
Date of pronouncement : 25.03.2026
ORDER
PER YOGESH KUMAR US, JM
This appeal by the assessee is directed against the order of learned CIT(A), NFAC, Delhi dated 28.06.2021.
2. Brief facts of the case are that, the assessee filed return of income declaring total income of Rs.24,16,570/- for A.Y. 2013-14. The case of the assessee was reopened on the basis of information received from DDIT (Investigation)-III, Gurgaon, Haryana that a 5 ITA No.6096/Del/2025 search and seizure operation was carried out in the case of M/s. Spaze Group on 17.02.2016 who were indulged in taking/ purchase accommodation entries through non-genuine proprietorship/ partnership/ company concern. A per the report of Investigation Wing, the Assessee company had received accommodation entries. An assessment order was passed u/s.147 r.w.s. 144B of the Act with determined total assessed income of Rs.8,51,32,380/- and addition was made on account of unexplained cash credit u/s.68 of the Act of Rs.8,27,15,810/- for the year under consideration.
3. Aggrieved by the order of the Assessment Order, Assessee preferred an appeal before the CIT(A), the CIT(A) vide order dated 22.07.2015, dismissed the appeal of the assessee.
4. The Ld. Counsel for the Assessee vehemently submitted that the notice issued u/s 148 of the Act is beyond the period of limitation as per the ratio laid down by the Hon'ble Supreme Court in the case of Union of India Vs. Rajeev Bansal in Civil Appeal No. 8629 of 2024 on 03-10-2024.
5. Per contra, the Ld. Departmental Representative submitted that issuance of the notice and the initiation of the assessment proceedings are well within the limitation, thus relying on the order of the Lower Authorities, sought for dismissal of the Appeal. 5 ITA No.6096/Del/2025
6. We have heard both the parties and perused the material available on record.
7. In the present case, the Ld. Counsel submitted the table computing the period of limitation as per decision of Hon'ble Supreme Court in the case of Rajeev Bansal (supra), which has been followed by Hon'ble High Court of Delhi in the case of Ram Balram Build Home (P.) Ltd. (Supra) and ADM Agro Industries Lature and Vizag (P.) Ltd. (supra), which is reproduced as under:- 5 ITA No.6096/Del/2025
8. The Hon'ble supreme Court in the case of Rajeev Bansal (supra) held as under:
"108. The Income Tax Act read with TOLA extended the time limit for issuing reassessment notices under Section 148, which fell for completion from 20 March 2020 to 31 March 2021, till 30 June 2021. All the reassessment notices under challenge in the present appeals were issued from 1 April 2021 to 30 June 2021 under the old regime. Ashish Agarwal (supra) deemed these reassessment notices under the old regime as show cause notices under the new regime with effect from the date of issuance of the reassessment notices. The effect of creating the legal fiction is that this Court has to imagine as real all the consequences and incidents that will inevitably flow from the fiction. Therefore, the logical effect of the creation of the legal fiction by Ashish Agarwal (supra) is that the time surviving under the Income Tax Act read with TOLA will be available to the Revenue to complete the remaining proceedings in furtherance of the deemed notices, including issuance of reassessment notices under Section 148 of the new regime. The surviving or balance time limit can be calculated by computing the number of days between the date of issuance of the deemed notice and 30 June 2021.
109. If this Court had not created the legal fiction and the original reassessment notices were validly issued according to the provisions of the new regime, the notices under Section 148 of the new regime would have to be issued within the time limits extended by TOLA. As a corollary, the reassessment notices to be issued in pursuance of the deemed notices must also be within the time limit surviving under the Income Tax Act read with TOLA. This construction gives full effect to the legal fiction created in Ashish Agarwal (supra) and enables both the assesses and the Revenue to obtain the benefit of all consequences flowing from the fiction.
110. The effect of the creation of the legal fiction in Ashish Agarwal (supra) was that it stopped the clock of limitation with effect from the date of issuance of Section 148 notices under the old regime [which is also the date of issuance of the deemed notices]. As discussed in the preceding segments of this judgment, the period from the date of the issuance of the deemed notices till the supply of relevant information and material by the assessing officers to the assesses in terms of the directions issued by this Court in Ashish Agarwal (supra) has to be excluded from the computation of the period of limitation. Moreover, the period of two weeks granted to 5 ITA No.6096/Del/2025 the assesses to reply to the show cause notices must also be excluded in terms of the third proviso to Section 149.
111. The clock started ticking for the Revenue only after it received the response of the assesses to the show causes notices. After the receipt of the reply, the assessing officer had to perform the following responsibilities: (i) consider the reply of the assessee under Section 149A(c); (ii) take a decision under Section 149A(d) based on the available material and the reply of the assessee; and
(iii) issue a notice under Section 148 if it was a fit case for reassessment. Once the clock started ticking, the assessing officer was required to complete these procedures within the surviving time limit. The surviving time limit, as prescribed under the Income Tax Act read with TOLA, was available to the assessing officers to issue the reassessment notices under Section 148 of the new regime.
112. Let us take the instance of a notice issued on 1 May 2021 under the old regime for a relevant assessment year. Because of the legal fiction, the deemed show cause notices will also come into effect from 1 May 2021. After accounting for all the exclusions, the assessing officer will have sixty-one days [days between 1 May 2021 and 30 June 2021] to issue a notice under Section 148 of the new regime. This time starts ticking for the assessing officer after receiving the response of the assessee. In this instance, if the assessee submits the response on 18 June 2022, the assessing officer will have sixty-one days from 18 June 2022 to issue a reassessment notice under Section 148 of the new regime. Thus, in this illustration, the time limit for issuance of a notice under Section 148 of the new regime will end on 18 August 2022."
9. As per the Judgment of Hon'ble Supreme Court decision in case of Rajeev Bansal (supra), the notice u/s 148 of the Act was required to be issued on or before 20-06-2022. Therefore, the notice dated 28-07-2022 is barred by limitation specified u/s 149 of the Act, consequently, the re-assessment proceedings initiated thereupon is hereby quashed.