ARIF SHAIKH,THANE vs. ITO, WD-2(1), THANE

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ITA 5469/MUM/2025Status: DisposedITAT Mumbai10 November 2025AY 2015-164 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the notice issued under section 148 of the Income-tax Act, 1961, dated 04.04.2022, is indeed barred by limitation. The Tribunal respectfully followed the binding decision of the Hon'ble Supreme Court in Rajiv Bansal (supra). The Court had held that for Assessment Year 2015-16, any notice issued on or after April 1, 2021, would be invalid as it would fall outside the prescribed period for completion under the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 (TOLA). Consequently, the notice dated 04.04.2022 was deemed invalid in law. As the impugned reassessment order was founded on this invalid notice, it lacked legal sanctity and was therefore quashed. The appeal of the assessee was allowed.

What were the facts?

The assessee, Arif Shaikh, filed an appeal against the order of the National Faceless Appeal Centre (NFAC), Delhi, for Assessment Year 2015-16. The NFAC order was passed under section 250 of the Income-tax Act, 1961, and emanated from an order of the Assessment Unit (AO) passed under sections 147, 144, and 144B. The AO's order, dated 16/02/2024, was a best judgment assessment made after reopening the case via a notice under section 148 dated 04/04/2022. The AO made additions totaling Rs.1,49,10,203/- for unexplained money, undisclosed contractual receipts, and unexplained investment. The assessee had appealed to the NFAC, which allowed the appeal for statistical purposes due to the ex-parte order by the AO. The assessee then filed the present appeal before the ITAT, challenging the AO's jurisdiction for issuing the section 148 notice.

What were the issues?

1. Whether the notice issued under section 148 of the Income-tax Act, 1961, dated 04.04.2022, for Assessment Year 2015-16, is barred by limitation? Assessee's Contention: The assessee argued that the notice under section 148, issued on 04.04.2022, is barred by limitation. The assessee relied on the judgment of the Hon'ble Supreme Court in Union of India v. Rajiv Bansal (2024) 167 Taxmann.com 70 (SC), specifically the observation that for Assessment Year 2015-16, all notices issued on or after 1 April 2021 would have to be dropped as they would not fall for completion during the period prescribed under TOLA. Revenue's Contention: The Revenue supported the findings of the revenue authorities and relied upon the orders passed by them. No specific arguments against the assessee's contention on limitation were recorded.

Which sections of the Income-tax Act were involved?

Section 250,Section 147,Section 144,Section 144B,Section 148,Section 69A,Section 69

AI-generated summary — verify with the full judgment below

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Income Tax Appellate Tribunal, MUMBAI BENCH “A”, MUMBAI

Before: SHRI. ANIKESH BANERJEE & MISS. PADMAVATHY S

For Appellant: Shri Bhupendra Shah
For Respondent: Shri Surendra Mohan (SR.DR.)
Hearing: 06/11/2025Pronounced: 10/11/2025

Arif Shaikh vs ITO, Ward-2(1), Shop No.9 Above HDFC Bank 6th Floor, Asher IT Park, Road Near Bhayander Flyover, No.16Z, Wagle Industrial Estate, Bhayander (W), Thane-401 106 Thane (West)-400 604 PAN: BXNPS4427G APPELLANT RESPONDENT Assessee by : Shri Bhupendra Shah Respondent by : Shri Surendra Mohan (SR.DR.) Date of hearing : 06/11/2025 Date of pronouncement : 10/11/2025 O R D E R Per Shri Anikesh Banerjee (JM): The instant appeal of the assessee was filed against the order of the National Faceless Appeal Centre (NFAC), Delhi [for brevity, ‘Ld.CIT(A)’] passed under section 250 of the Income-tax Act, 1961 (in short, ‘the Act’) for assessment year 2015-16, date of order 09/12/2024. The impugned order was emanated from the order of the Assessment Unit, Income-tax Department (for brevity, the “Ld.AO”) passed u/s147 r.w.s. 144 r.w.s. 144B of the Act, date of order 16/02/2024.

Arif Shaikh 2. The brief facts of the case are that the assessee’s case was reopened vide issuance of notice u/s 148 dated 04/04/2022. The assessment was completed with addition for unexplained money u/s 69A of the Act amount to Rs.39,12,500/-, undisclosed contractual receipt – Rs.3,63,510/-, unexplained money amount to Rs.46,74,748/- and unexplained investment u/s 69 amount to Rs.14,88,445/-. The aggrieved assessee filed an appeal before the Ld.CIT(A) and challenged the order of the Ld.AO. The assessee raised grounds, both on legality as well as merit of the case before the Ld.CIT(A). Finally, the appeal order was passed and the appeal was allowed for statistical purpose due to exparte order passed by the Ld.AO u/s 144 of the Act. Being aggrieved, the assessee failed an appeal before us by challenging the jurisdiction of the Ld. AO for issuance notice U/s 148 of the Act, before us.

3.

The Registry has reported that the appeal was filed with a delay of six months and twenty days. The assessee has submitted a petition for condonation of delay, accompanied by an affidavit duly executed on 30.08.2025 by the assessee himself, wherein the reasons for the delay have been duly explained. The Ld. DR did not raise any serious objection to the condonation of delay of six months and twenty days. Upon due consideration, we find that the assessee has demonstrated sufficient cause for the delay in filing the appeal. Accordingly, the delay of six months and twenty days is condoned, and the appeal is admitted for adjudication on merits.

4.

The Ld. AR filed a paper book comprising pages 1 to 48, which has been placed on record. The Ld. AR first drew our attention to the notice issued under section 148 of the Act, placed at page 1 of the APB. The said notice was issued on Arif Shaikh 04.04.2022 by the Ld. AO. The Ld. AR contended that the said notice is barred by limitation, placing reliance on the judgment of the Hon’ble Supreme Court in Union of India v. Rajiv Bansal (2024) 167 Taxmann.com 70 (SC). The relevant portion of the said judgment reads as under: “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.”

5.

The Ld. DR, on the other hand, supported the findings of the revenue authorities and relied upon the orders passed by them.

6.

We have carefully heard the rival submissions and perused the documents placed on record. It is an undisputed fact that the notice under section 148 was issued on 04.04.2022. Respectfully following the binding decision of the Hon’ble Supreme Court in Rajiv Bansal (supra), we hold that any notice issued after 01.04.2022 is barred by limitation. Consequently, the said notice is invalid in law, and therefore, the impugned reassessment order, being founded on such an invalid notice, has no legal sanctity and is hereby quashed.

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