ITAT Delhi Quashes AY 2015-16 Reassessment — Section 148 Notice Issued on 31 March 2022 Held Barred by Limitation; TOLA Benefits Unavailable

Background and Case Overview

The Income Tax Appellate Tribunal, Delhi Bench, recently delivered a significant ruling in Inckah Infrastructure Technologies Pvt. Ltd. Vs DCIT (ITAT Delhi), concerning the validity of reassessment proceedings initiated for Assessment Year 2015-16. The assessee had preferred an appeal against the order of the CIT(A)/NFAC, Delhi bearing DIN & Order No. ITBA/NFAC/S/250/2025–26/1079035348(1) dated 29 July 2025, which had arisen from reassessment proceedings conducted under Section 147 and Section 148 of the Income Tax Act, 1961.

The central controversy revolved around whether a reassessment notice issued under Section 148 on 31 March 2022 — that is, well after 1 April 2021 — could be legally sustained for AY 2015-16, particularly in light of the question of whether the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 (TOLA) extended the limitation period applicable to such notices.

The Tribunal's answer was categorical and unambiguous: it could not. The reassessment was quashed in its entirety as void ab initio.

What is TOLA and Why Does It Matter?

The Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 (TOLA) was enacted during the COVID-19 pandemic to extend various statutory time limits under direct and indirect tax laws. For reassessment proceedings under Section 148 of the Income Tax Act, 1961, TOLA had the effect of pushing forward the limitation deadlines, thereby allowing the Revenue to issue notices that would otherwise have been time-barred under the normal statutory scheme.

However, the critical legal question that emerged across multiple judicial forums was: for which assessment years does TOLA's extension actually operate? Specifically, does TOLA's relaxation benefit extend to AY 2015-16, or does the outer limitation wall under the Act remain intact irrespective of TOLA?

The Revenue's Own Concession — A Decisive Factor

The Tribunal noted a particularly striking aspect of this controversy: the Revenue itself had conceded before the Hon'ble Supreme Court that TOLA's provisions would not rescue notices issued on or after 1 April 2021 in respect of AY 2015-16. This concession, recorded in the landmark judgment of Union of India v. Rajiv Bansal (2024) 469 ITR 46 (SC), effectively sealed the debate.

Paragraph 19(f) of the Supreme Court's ruling in Union of India and Ors. v. Rajeev Bansal, reported in 2024 SCC OnLine SC 2693, captured this concession in unambiguous terms:

"19. (f) The Revenue concedes that for the assessment year 2015-2016, all notices issued on or after April 1, 2021 will have to be dropped as they will not fall for completion during the period prescribed under the Taxation and other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020."