MR VINAY NARAYAN KEDIA,MUMBAI vs. INCOME TAX OFFICER, WARD 22(3)(6), MUMBAI

ITA 5289/MUM/2024Status: DisposedITAT Mumbai31 December 2025AY 2015-169 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal allowed Grounds 1 to 3 of the assessee's appeal. The primary issue addressed was the validity of the notice issued under Section 148. The Tribunal, respectfully following the Supreme Court's decision in UOI vs. Rajeev Bansal and the decisions cited by the assessee, held that the impugned notice dated 26.07.2022 was barred by limitation. The Court in Rajeev Bansal observed that TOLA does not apply to AY 2015-16, and therefore, the last date to issue notice under the new provisions of Section 148 was 31.03.2021. Since the notice was issued on 26.07.2022, it was clearly beyond the period of limitation. Consequently, the Tribunal quashed the notice under Section 148, rendering the consequential assessment proceedings bad in law. As a result, the additions made in the assessment order were deemed to have no legal standing. The Tribunal expressly did not decide on Ground 4 concerning the addition of Rs. 1,26,49,760/- as it was consequential to the quashed notice.

What were the facts?

The assessee, Mr. Vinay Narayan Kedia, filed an appeal against the order dated 23/08/2025 passed by the National Faceless Appeal Centre (NFAC), Delhi, for Assessment Year 2015-16. The case was reopened based on information from the DDIT(Inv.) Unit-6(3), New Delhi, alleging the assessee was a beneficiary of bogus long-term capital gains from penny stock of M/s. Solis Marketing Limited. The Assessing Officer (AO) made an addition of Rs. 1,26,49,760/- under Section 68 of the Income Tax Act, 1961, representing the amount invested in the alleged penny stock. The CIT(A) upheld the AO's action. The assessee's appeal to the ITAT challenges the validity of the notice issued under Section 148, the approvals granted under Sections 151 and 148B, and the addition made on account of alleged non-genuine capital gains.

What were the issues?

1. Whether the notice issued under Section 148 of the Income Tax Act, 1961, dated 26.07.2022, is bad in law and without jurisdiction, considering it was issued beyond the period of limitation for Assessment Year 2015-16? - Assessee's contention: The notice under Section 148 dated 26.07.2022 is beyond the period of limitation, as the Supreme Court in UOI vs. Rajeev Bansal held that TOLA does not apply to AY 2015-16, making 31.03.2021 the last date to issue notice under the new provisions. Reliance was placed on Mohammed Yaseen vs. ITO and ACIT vs. Thakurdas Jhamtani. - Revenue's contention: The Revenue relied on the orders passed by the authorities below but could not controvert the assessee's arguments on the limitation issue. 2. Whether the approval granted by the specified authority under Section 151 of the Act for issuing the notice under Section 148 was mechanical and without application of mind, rendering the notice bad in law? - Assessee's contention: The approval under Section 151 was mechanical and without application of mind. - Revenue's contention: Not recorded. 3. Whether the approval granted by the authority under Section 148B of the Act was mechanical and without application of mind, rendering the consequent assessment order bad in law? - Assessee's contention: The approval under Section 148B was mechanical and without application of mind. - Revenue's contention: Not recorded. 4. Whether the consideration on sale of long-term capital assets, being shares of Solis Marketing Limited, was non-genuine, and therefore, exemption under Section 10(38) of the Act was rightly denied, and the addition under Section 68 was justified? - Assessee's contention: The shares were purchased as investments in an earlier year, their sale generated capital gains, and being long-term capital assets, the gains were eligible for exemption under Section 10(38). The AO failed to prove that the cash emanated from the assessee's coffers. - Revenue's contention: Not recorded.

Which sections of the Income-tax Act were involved?

Section 148,Section 148A,Section 148B,Section 149,Section 151,Section 10(38),Section 68

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Income Tax Appellate Tribunal, “F” BENCH, MUMBAI

Before: SMT. BEENA PILLAI & SHRI MAKARAND VASANT MAHADEOKAR

For Appellant: Shri Rajiv Khandelwal, A/R
For Respondent: Ms. Kavitha Kaushik, Sr. D/R
Hearing: 09.12.2025Pronounced: 31.12.2025

Per Smt. Beena Pillai, JM: Present appeal filed by assessee arises out of order dated 23/08/2025 passed by NFAC, Delhi [hereinafter “the Ld. CIT(A)”] for assessment year 2015-16 on following grounds of appeal:- “1. The Commissioner of Income-tax (Appeals) at the National Faceless Appeal Centre (NFAC) (hereinafter referred to as the CIT(A)) erred in upholding the action of the officer at the Assessment Unit hereinafter referred to as the Assessing Officer) in issuing notice under Section 148 of the Act. The appellant contends that on the facts and in the circumstances of the case and in law, the issue of notice under Section 148 is without juri iction and hence, the con

The order continues below.

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