M/S H.A. Share and Brokers Pvt. Ltd. v. ITO, Ward 11 (1) & Ors.

1. The petitioner has filed the present petition, inter alia, impugning notices dated 30.06.2021 issued under Section 148 of the Income Tax Act, 1961 [the Act], 14.05.2022 issued under Section 148A(b) of the Act and 22.07.2022 issued under Section 148 of the Act; order dated 22.07.2022 issued under Section 148A(d) of the Act; letter dated 23.05.2022 issued under Section 148A(b) of the Act; the reassessment order dated 15.05.2023 issued under Section 147 read with Section 144B of the Act; and further proceedings relating to the aforesaid notices in respect of assessment year [AY] 2015-16.

2. The petitioner is a private limited company and is engaged in the business of trading in securities, commodities, currency and derivatives. The petitioner filed its return of income for the AY 2015-16 on 29.09.2015, declaring income of ₹22,50,999/-.

3. The Assessing Officer [AO] issued a notice dated 30.06.2021 under Section 148 of the Act seeking to reopen the assessment for AY 2015-16. Although the said notice was issued after 31.03.2021, the procedure as prescribed under Section 148A of the Act was not followed. The notice was premised on the provisions relating to reassessment as were in force prior to 31.03.2021.

4. Thereafter, by a communication dated 14.05.2022, the AO referred to the decision of the Supreme Court in Union of India & Ors. v. Ashish Agarwal: (2022) 444 ITR 1 and forwarded certain information, which, according to the AO, suggested that the petitioner’s income had escaped assessment. The said communication also mentioned that in terms of the aforementioned decision in Union of India & Ors. v. Ashish Agarwal (supra), the impugned notice issued under Section 148 of the Act was deemed to be a notice under Section 148A(b) of the Act.

5. The petitioner responded to the said notice on 06.06.2022.

6. The AO passed an order dated 22.07.2022 under Section 148A(d) of the Act holding that it was a fit case for issuance of a notice under Section 148 of the Act in respect of AY 2015-16. The said order was forwarded to the petitioner along with a notice dated 22.07.2022 issued under Section 148 of the Act.

7. The petitioner contends that the proceedings initiated pursuant to the impugned notice dated 22.07.2022 are required to be set aside in view of the concession made by the Revenue before the Supreme Court in Union of India and Ors. v. Rajeev Bansal: 2024 INSC 754.

8. It is relevant to refer to paragraph 19(e) and 19(f) of the decision of the Supreme Court in Union of India and Ors. v. Rajeev Bansal (supra), which sets out the concession as made on behalf of the Revenue: “The Finance Act 2021 substituted the old regime for reassessment with a new regime. The first proviso to Section 149 does not expressly bar the application of TOLA. Section 3 of TOLA applies to the entire Income-tax Act, including Sections 149 and 151 of the new regime. Once the first proviso to Section 149(1)(b) is read with TOLA, then all the notices issued between 1 April 2021 and 30 June 2021 pertaining to assessment years 2013-14, 2014-15, 2015-16, 2016-17, and 2017-18 will be within the period of limitation as explained in the tabulation below: Assessment year Within 3 Years Expiry of Limitation read with TOLA for (2) Within six Years Expiry of Limitation read with TOLA for (4) (1) (2) (3) (4) (5) 2013-2014 31-3-2017 TOLA not applicable 31-3-2020 30-6-2021 2014-2015 31-3-2018 TOLA not 31-3-2021 30-6-2021 2015-2016 31-3-2019 TOLA not 31-3-2022 TOLA not 2016-17 31-3-2020 30-6-2021 31-3-2023 TOLA not 2017-2018 31-3-2021 30-6-2021 31-3-2024 TOLA not f. The Revenue concedes that for the assessment year 2015- 16, all notices issued on or after 1 April 2021 will have to be dropped as they will not fall for completion during the period prescribed under TOLA;”

9. In view of the above concession, the impugned notice and the proceedings relating thereto are required to be set aside. We may also note the decision of the Supreme Court in Deepak Steel and Power Ltd. v. Central Board of Direct Taxes and Ors.: Civil Appeal No.5177/2025, decided on 02.04.2025. The said appeal arose from orders passed by the Hon’ble High Court of Orissa and Cuttack declining to entertain a batch of petitions filed by the Assessees. The attention of the Supreme Court was drawn to the concession made on behalf of the Revenue in Union of India & Ors. v. Rajeev Bansal (supra) and noting the same, the Supreme Court allowed the appeals. The relevant extract of the said decision is set out below:

10. In view of the above, the impugned notices, the impugned order dated 22.07.2022, the impugned letter dated 23.05.2022 and the impugned reassessment order dated 15.05.2023, are set aside. Concededly, the controversy is also covered in favour of the petitioner by the decision of this court in Makemytrip India Pvt. Ltd. v. Deputy Commissioner of Income Tax Circle 16 (1) Delhi & Anr.: Neutral Citation No.: 2025:DHC:1892- DB.

11. The petition is, accordingly, allowed and the reassessment proceedings initiated in respect of AY 2015-16 pursuant to the impugned notices are set aside. The pending application shall also stand disposed of.