Reassessment Beyond Surviving Limitation Invalid: ITAT Raipur in Smt. Seema Daga Vs ITO

1. Background and Outcome

In Smt. Seema Daga Vs ITO (ITAT Raipur), the Raipur Bench of the Income Tax Appellate Tribunal allowed the assessee’s appeal for Assessment Year 2013-14 by striking down a reassessment initiated through a notice under Section 148 dated 25.07.2022.

The Tribunal held that this notice was issued after the expiry of the surviving limitation period as computed under the Income Tax Act 1961 read with the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 (TOLA) and the principles laid down by the Supreme Court in:

  • Union of India Vs Rajeev Bansal, (2024) 469 ITR 46 (SC)
  • Union of India Vs Ashish Agarwal, 444 ITR 1 (SC)

The Raipur Bench followed its own earlier ruling in Inder Jaggi Vs ITO, ITA No.56/RPR/2026, AY 2013-14, dated 14.05.2026, as well as other precedents, and concluded that the reassessment notice was time-barred. Once the notice under Section 148 was held invalid, all consequential proceedings were treated as void, and the remaining issues on merits were not examined.

The appeal arose from the order of the CIT(Appeals)/NFAC, Delhi dated 15.06.2026 for AY 2013-14.

The sole substantive legal ground pressed before the Tribunal was:

  • The notice under Section 148 dated 25.07.2022 for AY 2013-14 was beyond the legally permissible limitation period;
  • Consequently, the reopening under Section 147 was without jurisdiction and liable to be annulled.

No adjudication on the merits of addition was sought once the jurisdictional issue was decided in favour of the assessee.

3. Chronology of Events and Limitation Computation

The assessee’s counsel submitted a detailed chronology in tabular form, which the Tribunal reproduced and relied upon. The key dates and their legal effect were as follows:

3.1 Key Dates under Old Law and TOLA

  • 31.03.2020 – Original last date to issue notice under Section 148 as per the pre‑amendment law for AY 2013-14.
  • 30.06.2021 – Last date for issuing notice under Section 148 after extension granted under TOLA and connected notifications.
  • 30.06.2021 – Actual date on which the Assessing Officer (AO) issued the old-regime notice under Section 148. This notice was later treated as a deemed show-cause notice under Section 148A(b) in terms of Union of India Vs Ashish Agarwal.

Thus, the AO availed the very last day of the extended limitation period under TOLA to issue the original notice. As a result, practically no real time remained under the unextended limitation.

3.2 Post–Ashish Agarwal Steps

Following the Supreme Court’s judgment in Union of India Vs Ashish Agarwal, 444 ITR 1 (SC) on 04.05.2022, the old-regime notices issued between 01.04.2021 and 30.06.2021 were treated as show-cause notices under Section 148A(b) of the new regime, subject to certain procedural compliances.

In the present case:

  • 23.05.2022 – The AO issued a show-cause communication under Section 148A(b) and supplied the underlying information/material to the assessee.
  • The assessee did not file any reply to this show-cause notice.

The assessee’s submissions treated the two-week response period as expiring on 07.06.2022, noting that even 06.06.2022 could be taken as the cut-off, but relying on 07.06.2022 as a “conservative” computation.

3.3 Surviving Limitation and Seven-Day Protection

The assessee’s computation, based on TOLA and Rajeev Bansal, was as follows:

  • From the issuance of the original notice on 30.06.2021 (old regime) up to 30.06.2021 (TOLA-extended last date), there was effectively 1 surviving day of limitation under the combined regime.
  • Under the fourth proviso to Section 149, where the surviving limitation is less than 7 days, it gets enhanced to a minimum of 7 days after the expiry of the period allowed for reply under Section 148A(b).

Therefore, the assessee argued:

  1. Treat 07.06.2022 as the date on which the two-week period for response to Section 148A(b) show cause expired.
  2. Apply the 7-day protective extension under the fourth proviso to Section 149.
  3. The last possible date for issuing a valid fresh notice under Section 148 (new regime) thus became 14.06.2022.

However, the AO proceeded as under:

  • Section 148A(d) order passed on 19.07.2022;
  • Fresh notice under Section 148 issued on 25.07.2022.

On the assessee’s computation, therefore: