ANKITA BADAL MITTAL,MUMBAI vs. WARD 3(3)(1), MUMBAI, MUMBAI
Income Tax Appellate Tribunal, “SMC” BENCH, MUMBAI
Before: SHRI SANDEEP GOSAIN
Per: SHRI. SANDEEP GOSAIN, J.M.:
The present appeal has been filed by the assessee challenging the impugned order dt. 15.07.2025 passed under section 250 of the Income Tax Act, 1961 (‘the Act’), by the National Faceless Appeal Centre (NFAC) / CIT(A) for the assessment year 2017-18. The assessee has raised the following grounds of appeal:
1. The Ld. CIT(A) ought to have held that notice under section 148 of the Act dated 30th July, 2022 is issued after time-limit prescribed under section 149 of the Act and accordingly the same is barred by limitation. Consequently, Order passed under section 147 r.w.s. 144B r.w.s. 143(3) (the Order) ought to have been quashed/annulled.
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Ankita Badal Mittal, Mumbai.
The Ld. CIT(A) ought to have held that the AO erred by initiating the reassessment proceedings by issuance of notice u/s 148 of the Act dated 30th July, 2022 and passing the Order based on following propositions and accordingly the Order should be quashed/annulled/addition ought to be deleted: (a) Notice under section was issued by the Juri iction AO instead of issuing the same in faceless manner. (b) Notice under section 148 was issued without obtaining requisite approval under section 151. (c) The Order is passed by the AO in violation of principal of natural justice as the appellant was asked to show cause why addition of Rs. 10,00,000/- should not be made under section 68 of the Act in respect of loan taken from Aneri Fincap Ltd. and after considering the reply of the appellant, the addition was made under section 69A of the Act. (d) The Order is passed without appreciating facts, documentary evidences on records and submissions made by the appellant and based on surmises, conjectures and assumptions. (e) Addition of Rs. 10,00,000/- was made without granting the opportunity for cross examination of the person based on whose statement the addition was made. (f) The Ld. CIT(A) did not provide opportunity for making submissions in virtual/physical hearing despite specific request. (g) Based on the documentary evidence submitted as well as facts and circumstances of the case, the AO erred by treating loan taken of Rs. 10,00,000/- as unexplained money under section 69A of the Act. 3. It is humbly prayed that the reliefs as prayed for hereinabove and/or such other reliefs as may be justified by the facts and circumstances of the case and as may meet the ends of justice should be granted.
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Ankita Badal Mittal, Mumbai.
The appellant craves leave to add, alter, amend and/or rescind any grounds of appeal during the course of the hearing. 2. At the very outset, Ld. AR appearing on behalf of the assessee pressed upon the legal grounds raised by him. It was submitted that notice u/s 148 of the Act in the present case was issued without obtaining requisite approval u/s 151 of the Act and the said notice issued u/s 148 of the Act dated 30.07.2022 is also issued after time limit prescribed u/s 149 of the Act and accordingly the same is barred by limitation. It was further submitted that since the notice was issued after the expiry of prescribed limit and that too without obtaining requisite approval u/s 151 of the Act, therefore consequential order passed u/s 147 r.w.s 144B r.w.s 143(3) of the Act ought to bequashed. Ld. AR relied upon his written submissions which is reproduced herein below: 1. The aforesaid appeal was heard by the Tribunal on 29.10.2025 with a direction to both the parties to file their written synopsis of submission. 2. The present appeal arises out of reassessment order dated 31.05.2023 passed by the Assessment Unit in the Income-tax Department (the AO). Therein, an amount of Rs. 10,00,000 borrowed by the assessee from a finance company viz., Aneri Fincap Ltd. has been treated as unexplained money by invoking the provisions of section 69A of the Income-tax Act (the Act). By its appellate order dated 15.07.2025, the National Faceless Appeal Centre (the NFAC) has dismissed the appeal filed by the Appellant before them. The issues as arising for consideration, in the present appeal are as stated hereafter:
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Ankita Badal Mittal, Mumbai.
a. In the absence of fulfillment of the juri ictional pre- conditions in sections 147 to 151 of the Act, the initiation of reassessment proceedings and passing of the reassessment order is illegal and bad in law inter alia for the following reasons each of which is in the alternative and without prejudice to any others:
i. In the present case, the reassessment proceedings have been initiated by the juri ictional assessing officer, whereas, such juri iction as per section 151A of the Act read with the e-Assessment of Income Escaping Assessment Scheme, 2022, is vested with the Faceless Assessing Officer.
ii Since three years from the end of the assessment year 2017-
18 had expired on 31.03.2021 and the extended period of limitation as per the Taxation and other laws (Relaxation and amendment of certain provisions Act (the TOLA) had expired on 30.06.2021, grant of approval by the Principal Commissioner of Income-tax-17, Mumbai, by Order dated 30.07.2022 was contrary to section 151(ii) of the Act as per which such juri iction vested only with the Principal Chief Commissioner or Principal Director General or Chief Commissioner or Director
General;
As per section 149 of the Act read with the fifth and the sixth proviso thereto, the limitation for issuing the notice under section 148 of the Act for assessment year 2017-18 expired on 14.06.2022, while the said notice has been issued in the present case on 30.07.2022 which is barred by limitation.
iv. The suggestion with respect to escapement of income has been formed by the AO only based on information received from DCIT Central-7(2), Mumbai without any independent application of mind by him. In fact, he has overlooked the fundamental fact of filing of the return of income by the Appellant under section 139(1) on 30.07.2017. Hence, initiation of reassessment proceedings without application of mind is illegal and bad in law.
2. The loan of Rs. 10,00,000 borrowed by the Appellant from Aneri Fincap Ltd. cannot be regarded as 'unexplained money'
and also stands duly reflected in the return of income. Hence, it could not have been assessed under section 69A of the Act.
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Ankita Badal Mittal, Mumbai.
The brief facts as relevant for adjudicating the aforesaid issues are as stated hereafter: a. The Appellant filed her original written of income on 30.07.2017 (see page 1 of the PB). b. On 29.06.2021, she received a notice under section 148 of the Act (see page 1A of the PB). Therefore, two days were available with the AO before the expiry of extended period of limitation on 30.06.2021 as per TOLA including notifications issued thereunder. c. On 24.05.2022, another notice was received referring to section 148A(b) of the Act requiring the Appellant to reply within two weeks from receipt of the notice i.e., by 07.06.2022 (see pages 2 to 6 of the PB). d. In response to the above, the Appellant raised her objections before the AO on 07.06.2022 (see pages 7 to 61 of the PB). Two days as referred to above, would be available to the AO for passing the order under section 148A(d) and issuing the notice under section 148 of the Act. However, in view of the fifth and the sixth proviso below section 149 the AO would get a period of 7 days which would make the limitation to expire on 14.06.2022 e. On 30.07.2022, the AO passed an order under section 148A(d) of the Act rejecting the objections raised by the Appellant (see pages 62 to 71 of the PB). Consequent thereto, notice dated 30.07.2022 has been issued under section 148 of the Act (see pages 72 to 73A of the PB). f. After, scrutinizing the return of income, the AO passed assessment order dated 31.05.2023 making an addition in respect of loan borrowed from Aneri Fincap Ltd. of Rs. 10,00,000 under section 69A of the Act. g. By its appellate order dated 15.07.2025, the NFAC has dismissed the Appellant's Appeal. Hence, the Appellant has filed the present appeal before the Tribunal. 4. In the course of hearing, the Tribunal was pleased to hear the preliminary issues referred to in sub-paragraphs (ii) and (iii) of para 2(a) hereinabove. Hence, the present submissions are also restricted to the same.
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Ankita Badal Mittal, Mumbai.
a. In Dhanraj Govindram Kella v. Income-tax Officer, being
Order dated 08.07.2025 in Special Civil Application No.6387 of 2023 while dealing with assessment year 2017-18 (see the facts at pages 33 to 36), the Court has analysed the relevant provisions in paragraphs 66 to 69 at pages 108 to 111 and, on facts similar to the present case, concluded that the proceedings would be barred by limitation (handed over separately, at the time of hearing). This principle has been subsequently followed by the said High Court in Dilipbhai
Jayantibhai Patel v. Assessment Unit, Income-tax Department
(2025) 179 taxmann.com 40 and RJD Buildcon Ltd. v. ACIT
(2025) 179 taxmann.com 31 and the Delhi High Court in ADM
Agro Industries Latur and Vizag (P.) Ltd. v. ACIT (2025) 174
taxmann.com 725 and Ram Balram Buildhome (P.) Ltd. v. ITO
(2025) 477 ITR 133. Applying the principle laid down to the present case, the limitation expired on 14.06.2022. Therefore, passing of the Order dated 30/07/2022 under section 148A(d) and issue of notice of said date under section 148 is barred by limitation.
b. In a case, where the 148A(d) Order is passed and/or 148
notice issued after the expiry of the period of three years from the end of the relevant assessment year, the specified authority for grant of approval under section 151 is the Principal Chief Commissioner or the Principal Director General or the Chief Commissioner or Director General. In the present case, such approval has been granted by the Principal
Commissioner of Income-tax-17,
Mumbai, rendering the aforesaid condition to be unfulfilled. In this regard, attention is invited to judgment of the juri ictional High Court in Ramesh Bachulal Mehta v. ITO (2025) 177 taxmann.com 606,
(copy handed over separately at the time of hearing) wherein, the High Court has extensively referred to and relied upon the judgment of the Hon'ble Apex Court in the case of UOI v.
Rajeev Bansal 2024 469 ITR 46 (SC) and specifically highlighted the illustration concerning assessment year 2017-
18. (see paragraph 10 thereto). Mumbai Bench of the ITAT in Rahat Mohammed Riyazuddin Shaikh v. ITO (2025) 175
taxmann.com 149 and ACIT v. Ms.Asha P.Kedia (2025) 174
taxmann.com 99 have taken similar view while dealing with assessment year 2017-18. 7
Ankita Badal Mittal, Mumbai.
c. In the written submissions as filed by Ld. DR, reliance has been placed by him on Instruction No. 1/2022 dated
11.05.2022
suggesting otherwise.
It is submitted that, instruction issued by the CBDT which does not confirm with the provisions of the Act and cannot be binding.
Attention is also drawn to decision authored by Your goodself's in case of Amaan Naeem Akhtar Ansari at the Mumbai Tribunal (2025) 178 taxmann.com 689, wherein proposition that where 148A(d) Order is passed and/or 148
notice is issued after the expiry of the period of three years from the end of the relevant assessment year, the specified authority for grant of of approval under section 151 is the Principal Chief the Principal Director General Commissioner or or the Chief Commissioner or Director General has been upheld.
In view of the above, it is submitted that, the Tribunal may be pleased to hold the reassessment proceedings and the consequent reassessment order to be invalid and bad in law. y
3. On the other hand ld. DR relied upon the orders passed by the revenue authorities and also on the written submissions filed before the Bench and the same is reproduced herein below:
In the instant appeal the assessee has contended that the reassessment notice is time-barred and invalid in light of the limitation prescribed under section 149 as amended, whereas the Department respectfully submits that the proceedings are valid. The AR of the assessee has contended that the last date for issue of Notice u/s 148, which was available to Assessing
Officer under 5th & 6th proviso below section 149 was 14th
June 2025 whereas the Notice u/s 148 was issued on 30th
July 2022. It has further been contended that since the notice has been issued after 30th June 2022 (after three years), the sanction should have been taken from Pr. CCIT instead of Pr.
3. In this regard it is respectfully submitted that subsequent to the decision dated 04.05.20222 of the Hon'ble Supreme Court in the case of Union of India v Ashish Agarwal, the CBDT
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Ankita Badal Mittal, Mumbai.
issued Instruction No. 01/2022. In para 6.2 of the said
Instruction, it is mentioned as under:
6.2 Based on above, the extended reassessment notices are to be dealt with as under:
(i) AY 2013-14, AY 2014-15 and AY 2015-16: Fresh notice under section 148 of the Act can be issued in these cases, with the approval of the specified authority, only if the case falls under clause (b) of sub-section (1) of section 149 as amended by the Finance Act, 2021 and reproduced in paragraph 6.1 above. Specified authority under section 151 of the new law in this case shall be the authority prescribed under clause (ii) of that section.
(ii) AY 16-17, AY 17-18: Fresh notice under section 148 can be issued in these cases. with the approval of the specified authority, under clause a) of sub-section (1) of new section 149 of the Act, since they are within the period of three years from the end of the relevant assessment year. Specified authority under section 151 of the new law in this case shall be the authority prescribed under clause (i) of that section."
Para 8.1 of the said Instruction further provides-
"8.1
The procedure required to be followed by the Juri ictional
Assessing
Officer/Assessing
Officer, in compliance with the order of the Hon'ble Supreme Court, is as under:
The extended reassessment notices are deemed to be show cause notices under clause (b) of section 148A of the Act in accordance with the judgment of Hon'ble Supreme Court.
Therefore, all requirement of new law prior to that show cause notice shall be deemed to have been complied with.
The Assessing Officer shall exclude cases as per clarification in paragraph 7.1 above.
Within 30 days i.e. by 2nd June 2022, the Assessing Officer shall provide to the assessees, in remaining cases, the information and material relied upon for issuance of extended reassessment notices.
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Ankita Badal Mittal, Mumbai.
The assessee has two weeks to reply as to why a notice under section 148 of the Act should not be issued, on the basis of information which suggests that income chargeable to tax has escaped assessment in his case for the relevant assessment year. The time period of two weeks shall be counted from the date of last communication of information and material by the Assessing Officer to the assessee.
In view of the observation of Hon'ble Supreme Court that all the defences of the new law are available to the assessee, if assessee makes a request by making an application that more time be given to him to file reply to the show cause notice, then such a request shall be considered by the Assessing Officer on merit and time may be extended by the Assessing Officer as provided in clause (b) of new section 148A of the Act.
After receiving the reply, the Assessing Officer shall decide on the basis of material available on record including reply of the assessee, whether or not it is a fit case to issue a notice under section 148 of the Act. The Assessing Officer is required to pass an order under clause (d) of section 148A of the Act to that effect, with the prior approval of the specified authority of the new law. This order is required to be passed within one month from the end of the month in which the reply is received by him from the assessee. In case no such reply is furnished by the assessee, then the order is required to be passed within one month from the end of the month in which time or extended time allowed to furnish a reply expires.
If it is a fit case to issue a notice under section 148 of the Act, the Assessing Officer shall serve on the assessee a notice under section 148 after obtaining the approval of the specified authority under section 151 of the new law. The copy of the order passed under clause (d) of section 148A of the Act shall also be served with the notice u/s 148. If it is not a fit case to issue a notice under section 148 of the Act, the order passed under clause (d) of section 148A to that effect shall be served on the assessee.
In the instant case, the notice u/s 148 has rightly been issued after obtaining approval of the Principal CIT, who is prescribed authority under section 151(i) in accordance with para 6.2(ii) of the aforesaid CBDTs Instruction.
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Ankita Badal Mittal, Mumbai.
Notice under section 148 has also rightly been issued on 30.07.2022, which is within one month of the filing of reply by the assessee on 07th June 2022 in accordance with para 8.1 of the said CBDT's Instruction. Further, the instructions issued by the CBDT are binding on Assessing Officer, In view of the foregoing, it is humbly prayed that the notice issued under section 148 kindly be held as valid. 4. I have heard the counsels for both the parties, perused the material placed on record, judgements cited before us and also the orders passed by the revenue authorities. From the records I noticed that notice u/s 148A(d) of the Act in the present case was issued on 30.07.2022 and the same was issued after seeking approval from PCIT-17, Mumbai. In this regard reliance is being placed upon the decision of Hon’ble Juri ictional High Court in the case of Ramesh Bachulal Mehta Vs. ITO, [2025] 177 taxmann.com 606 (Bombay), wherein Hon’ble High Court has decided as under: 10. The Hon'ble Supreme Court in the above case has drawn an illustration in paragraph 78 of it's order in the text of Assessment Year 2017-18, wherein it is categorically held that the authority specified under section 1) can accord sanction only upto 30.06.2021. This illustration makes it absolutely clear that when the period of three years from end of relevant Assessment Year expired between 20.03.2020 and 31.03.2021, the extension by virtue of TOLA was upto 30.06.2021 and not beyond. Thus, it can be said that the period of three years from the end of the relevant Assessment Year (here AY 2016-17) expired on 30.06.2021, whereas the Respondent No.1, despite passing the order on 13.07.2022 in repsect of Assessment Year 2016-17, has obtained approval of Respondent No.2 who is not the authority as prescribed under section 151(ii).
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Ankita Badal Mittal, Mumbai.
Since in the above case of Ramesh Bachulal Mehta (supra), it has specifically been mentioned that for A.Y 2017-18, the authorities specified u/s 151(i) of the Act can accord sanction only up to 30.06.2021. But in the present case admittedly the said approval has been sought on 30.07.2022. Thus the same ought to have been sought u/s 151(ii) of the Act, therefore while relying upon the decision of Hon’ble Juri ictional High Court in the case of Ramesh Bachulal Mehta (supra), I am of the view that the approval in the present case had not been sought from the appropriate authority. Therefore notice issued and the consequential order passed u/s 147 r.w.s 144B of the Act stands quashed. 6. Apart from the above, Ld. Ld.AR also filed a detailed particulars containing the time line for issuance of notice as per the decision of Hon’ble Gujarat High Court in the case of Dhanraj taxmann.com 194) and the same is reproduced herein below: Assessment year
-
2017-18
Date of notice u/s 148
-
29.06.2021
No. of surviving available days till 30.06.2021 - 2
Date of providing information u/s 148A(b) – 24.05.2022
Due date to reply to notice u/s 148A(b) – 7.06.2022
Date of reply
-
07.06.2022
Last date for issuance of notice u/s 148 as per 5th and 6th proviso below Sec. 149
-
14.06.2022
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Ankita Badal Mittal, Mumbai.
Date of order u/s 148(d) and u/s 148 - 30.07.2022
Date of issue of notice u/s 148 – 30.07.2022
7. After having gone through the decision of Dhanraj
Govindram Kella (supra), and also considering the particulars of time line mentioned by the assessee which facts have not been disputed by the parties, I find that the notice issued in the present case is after time limit prescribed u/s 149 of the Act and accordingly the same is held to be barred by limitation. Consequently order passed thereafter u/s 147 r.w.s 144B of the Act stands annulled and quashed.
8. Since, I have quashed the impugned notice and consequential orders therefore other grounds raised by the assessee needs no adjudication at this stage as the same are academic in nature in view of my decision on the legal grounds.
9. In the result, the appeal filed by the assessee stands partly allowed.
Order pronounced in the open court on 16/12/2025 (SANDEEP GOSAIN)
(JUDICIAL MEMBER)
Mumbai:
Dated: 16/12/2025
KRK, Sr. PS.
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Ankita Badal Mittal, Mumbai.
Copy of the order forwarded to:
(1)The Appellant
(2) The Respondent
(3) The CIT
(4) The CIT (Appeals)
(5) The DR, I.T.A.T.By order
(Asstt.