VIPENDRA RAVINDRA MANDAL,THANE vs. INCOME TAX OFFICER- WARD 22(3)(6), MUMBAI

The learne dismissing th of Indexed im appellant w evidence sub 2. Briefly stated, t not file any regular r consideration. Based Portal maintained by “Risk Management St Central Board of D (hereinafter “AO”) no property for a consi return of income. Co the Income-tax Act, upon the assessee to said property. As th assessee, the AO, aft authority, passed an thereafter issued a no assessee to file a retu return declaring lon property and claime computing the said g acquisition as well as consideration. Vip ITA ed CIT(A) NFAC has erred in law and he Ground No.3 in respect of allowing the mprovement cost / expenses as claim without properly considering the f bmitted. the facts of the case are that t return of income for the assessm d on information received throu y the Income-tax Department u trategy – Non-filing of Return” fo Direct Taxes (CBDT), the As oted that the assessee had sold ideration of ₹71,00,000/-, yet onsequently, a notice under Sec 1961 (hereinafter “the Act”) was o explain the income arising from here was no compliance on t ter obtaining due approval from n order under Section 148A(d) otice under Section 148 of the A urn of income. In response, the ng-term capital gains on the s ed deduction under Section 54 gains, the assessee reduced the s the indexed cost of improveme pendra Ravindra Mandal 2 A No. 1819/MUM/2025 on facts in e deduction med by the facts and he assessee did ment year under ugh the Insight under the head rmulated by the ssessing Officer d an immovable had not filed a ction 148A(b) of s issued, calling m the sale of the the part of the m the prescribed of the Act and Act requiring the assessee filed a sale of the said 4 of the Act. In indexed cost of ent from the sale

1 In the reassess absence of support indexed cost of impr long-term capital ga deduction under Sect ₹75,000/- towards in 2.2 On appeal, the l deduction claimed disallowance of the in additions sustained before the Income-tax as reproduced above. 3. Before us, the L containing pages 1 to 4. In relation to counsel that the inco below the monetary issuance of notice un three years in terms the judgment of the Nema v. PCIT (2023) “income chargeable consideration. It was Vip ITA sment order dated 25.01.2024, ting documentary evidence, rovement of ₹21,35,398/- while ain. The AO, however, allowe tion 54 of the Act and also allow nterest on borrowed capital. ld. CIT(A) granted partial relief i under Section 54, but ndexed cost of improvement. Ag by the Ld. CIT(A), the assess x Appellate Tribunal (ITAT) rais . Ld. Counsel for the assessee file o 57. Ground No. 1, it was submit ome chargeable to tax in the pr y threshold of ₹50 lakhs as nder Section 148 of the Act bey s of Section 149(1)(b). Reliance Hon’ble Madhya Pradesh High 458 ITR 690 (MP), wherein it w to tax” does not mean t s argued that after giving effect pendra Ravindra Mandal 3 A No. 1819/MUM/2025 the AO, in the disallowed the e computing the d the claim of wed deduction of in respect of the sustained the ggrieved with the see is in appeal ing the grounds ed a Paper Book tted by learned resent case was prescribed for yond a period of e was placed on h Court in Nitin was held that the the gross sale t to the indexed cost of acquisition/im the Act, the resultant ₹50 lakhs. Therefore 15.03.2023, pertaini the permissible three 5. Per contra, l submitted that info received regarding th by the assessee who return of income was u/s 148A(b) of the ascertain whether, acquisition/improvem would be less than ₹ Nitin Nema (supra) w had duly responded furnished computati whereas, in the pres return of income nor 6. We have consid material on record. T under Section 148 under Section 149( provision is extracted Vip ITA mprovement and deduction und t taxable income in the present , the issuance of notice under ing to assessment year 2016-1 e-year limit and thus void. learned Departmental Repre ormation from a credible sou he sale of an immovable propert o had not filed any return of in s filed and the assessee didn’t c Act, the AO had no record after allowing credit for in ment or deductions if any , the 50 lakhs. It was contended that as distinguishable, as in that ca d to the notice under Sectio on showing taxable income be sent case, the assessee neither responded to the statutory noti dered the rival submissions an The core issue is whether the im was issued beyond the limita 1)(b) of the Act. For ease of d as under: pendra Ravindra Mandal 4 A No. 1819/MUM/2025 der Section 54 of case was below Section 148 on 17, was beyond esentative (DR) urce had been ty for ₹71 lakhs ncome. Since no comply to notice or material to ndexed cost of taxable income t the decision in ase the assessee on 148A(b) and elow ₹50 lakhs, r filed a regular ices. nd perused the mpugned notice ation prescribed f reference, the [Time limit for notices un 149. (1) No notice under se (a) if three years an relevant assessme (b) if three years and t have elapsed from t Officer has in his p related to any asse income chargeable t to amount to fifty la (2) No notice to show ca assessment year,- (a) if three years have the case falls under (b) if three years, but relevant assessme escaped assessmen to or is likely to amo 6.1 On a plain re escapement of incom than ₹50 lakhs, a n within a period of assessment year. The of the Hon’ble Delhi 2830/2022), observe can only proceed on absence of a return o sale consideration a assessment. The CIT advantage of his ow thereafter, upon reop Vip ITA nder sections 148 and 148A. ection 148 shall be issued for the relevant nd three months have elapsed from ent year, unless the case falls under c three months, but not more than five year the end of the relevant assessment year u possession books of account or other do t or expenditure or transaction or entries to tax, which has escaped assessment, a akh rupees or more. ause under section 148A shall be issu elapsed from the end of the relevant asse r clause (b); not more than five years, have elapsed nt year unless the income chargeable nt, as per the information with the Assess ount to fifty lakh rupees or more.] eading, it is evident that whe me represented in the form of a notice under Section 148 can three years from the end o e CIT(A), while placing reliance High Court in Rohit Kumar v. I d that at the stage of recording the basis of the material availa or other details, may reasonably as the amount of income whic T(A) further held that an assess wn default in failing to file pening, claim that the taxable in pendra Ravindra Mandal 5 A No. 1819/MUM/2025 t assessment year,- m the end of the clause (b); rs and three months, unless the Assessing cuments or evidence which show that the amounts to or is likely ued for the relevant essment year, unless from the end of the e to tax which has sing Officer, amounts ere the alleged an asset is less be issued only of the relevant on the decision ITO (W.P.(C) No. reasons, the AO able, and in the y take the entire ch has escaped see cannot take a return, and ncome would be below ₹50 lakhs so CIT(A) accordingly rej as under: “5.7 In the p assessment, t than 50 lakh return of inco various judici the gross rece not have kno information a am of the con of the transac appellant has and disclosin it failed to d advantage of reopening cla lakhs, the inc be allowed to this ground is 6.2 In the present 148A(b) giving the a corresponding to the was forthcoming. In contrary material, pr income that had es 148A(d) was passed authority under Sec Section 148 was issu in the order u/s 14 under: Vip ITA as to render the proceedings i jected the contention of the ass present case it is seen that at the time the alleged escapement was Rs 71,00,00 hs. It may be noted that as the appella ome for the year and therefore, with du ial decision that the income chargeable eipts/consideration in any business trans own or worked out the capital gain a vailable with the AO in the form of return nsidered view that AO was correct in ass ction as undisclosed and as income charg s the responsibility of filing the appeal wit ng the transaction and income in the retu do so. An assessee cannot be allowed f his own wrongi.enot filing return of aim that even if the total transaction w come out if it less than Rs 50 lakhs and claim that the reopening is invalid. Henc s thus treated as dismissed.” case, the AO issued a notice assessee an opportunity to expl e sale consideration of ₹71 lakh n such circumstances, the A roceeded to treat the full sale c scaped assessment. The order d with the prior approval o ction 151 of the Act, and th ued accordingly. The relevant ob 48A(d) of the Act by the AO is pendra Ravindra Mandal 6 A No. 1819/MUM/2025 invalid. The Ld. sessee observing e of reopening of 00 which is more ant had not filed ue respect to the to tax cannot be saction, AO could as there was no n etc. Therefore, I suming the whole geable to tax. The thin the due date urn of income but d to take undue income and on was above Rs 50 on technicalities ce, the appeal on e under Section lain the income hs. No response AO, having no consideration as r under Section of the specified he notice under bservation made s reproduced as “Order unde In this case I the Risk Man Portal mainta Head RMS (R F.Y. 2015-16 section 148, Strategy (RM has escaped a 2. In this case Information code Informa AIR-007 Sold im valued more TDS-194IA (R) TDS Sta conside immova 194IA 2.1. In view o and verificati assessee from filed its return u/s 143(3)/1 year under mentioned f implication is the Return Of that the asse immovable pr under conside Further, an opportunit vide Showcau information of was sent to through Spee along with su transactions notice was du Vip ITA er clause (d) of section 148A of the Inc Act, 1961 Information has been received in accord nagement Strategy formulated by CBDT ained by the Income Tax Department u Risk Management Strategy-Non filing of R 6 (Α.Υ. 2016-17). In view of the explana such information provided by Risk Ma MS) constitutes/ suggest income chargea assessment for A.Y. 2016-17. e, the information is available as under: ation description F.Y. mmovable property at Rs. 30,00,000 or 2015-16 atement - Sales eration on sale of able property (Section 2015-16 of the above information available with ion of status of Return Of Income file m e-filing portal, it is found that the asses n of income. No assessment has been ma 47/144 of the IT. Act. It is seen that d consideration, the assessee undertoo financial transactions wherein gross Rs.71,00,000/-. Since, the assessee has f Income for the relevant year, it is clear essee has not offered the receipts from roperty of Rs. 71,00,000/- as income for eration. in accordance with section 148A(b) of th ty of being heard was provided to the use notice u/s 148A(b)of the I.T. Act a f insight portal dated 08.02.2023. The s the assessee through e-filing Portal ed Post requiring it to furnish the releva upporting documentary evidence with resp as cited above, to this office by 17.02.2 uly served upon the assessee. Vide the a pendra Ravindra Mandal 7 A No. 1819/MUM/2025 come-tax dance with on Insight under the Return) for ation 1 to anagement able to tax Amount (in Lakhs) 71 71 this office ed by the ssee is not ade earlier during the ok above financial as not filed rly evident m sale of r the year he I.T. Act, assessee, along with said notice and also ant details pect to the 2023. This above said showcause n subject transa the year unde IT Act should section 148 of of information has escaped relevant to AY However, till assessee aga Income tax explanation f filed its ITR d involving eva available with tax for A.Y.20 Accordingly, notice u/s 14 5. Further, it i of Rs. 71,00 account repre Section 149(1 6. The Order the specified Mumbai) u/s. 148 of the In proceedings f 6.3 In the case of N Pradesh High Court supposed to conside chargeable to tax. Th reproduced as under “9. From the clear is tha fundamental and income ch being assiste and taxation, Vip ITA otice the assessee was also asked as to actions amount shall not be treated as er concerned and why the order u/s 148A not be passed and subsequently the no of the Act should not be issued to you on n which suggests that income chargeab assessment in your case for the FY Y 2016-17. date no response has been received ainst the opportunity provided u/s 148A Act, which establishes that assessee for issue discussed above. The assesse despite having high value of financial tr asion of tax. It is also evident from in h Assessing Officer that the income cha 016-17 has escaped assessment mention it is concluded that this is a fit case fo 8 of the I.T. Act. is to be mentioned that the escapement t 0,000/- from sale proceeds credited i esents in the form of asset as per pro ) of the I.T. Act.” u/s. 148A(d) is passed with the prior ap authority (Pr. Chief Commissioner of Inc . 151 of the Income Tax Act, 1961. The N ncome Tax Act for reopening of the as for A.Y. 2016-17 is issued accordingly Nitin Nema vs. PCIT (supra) the H t observed that revenue auth r sale consideration of the prop he relevant finding of the Hon’bl : aforesaid discussion what comes out at the Revenue has failed to unders difference between sale consideration on hargeable to tax on the other. The Revenu ed by thousands of experts in the field has committed such elementary mistak pendra Ravindra Mandal 8 A No. 1819/MUM/2025 o why the income of A(d) of the tice under n the basis ble to tax Y 2015-16 from the A(b) of the e has no e has not ransaction nformation argeable to ned above. for issuing to the tune into bank ovisions of pproval of come Tax, Notice u/s. ssessment Hon’ble Madhya horities are not perty as income le High Court is loud and stand the n one hand ue despite of finance ke leading to harassmen the present av been compell precious time more pressing 9.1 Thus, the cost and c compensatory 6.4 The ratio laid dow in Nitin Nema (supr purposes of determi assessment under se which is to be reckon case, it is an admitt escaped assessment Consequently, no no be issued against the the period of three ye 6.5 The statutory income escaping asse the fact that the asse proceedings under proceedings, the as income likely to hav learned CIT(A), howe Hon’ble Delhi High C the stage of recording Vip ITA nt to the assessee who has been compe voidable piece of litigation. More so, this led to decide this frivolous matter w e and energy which could have been u g matters. e Revenue deserves to be saddled with e correspondingly the petitioner is en y cost.” wn by the Hon’ble Madhya Prad ra) makes it abundantly clea ining the monetary limit of in ection 149(1)(b) of the Act, it is t ned, and not the gross receipts ted position that the net incom t falls below the threshold o otice under section 148 of the A e assessee for reopening an asse ears. threshold of ₹50,00,000/- in essment continues to operate, n essee did not make a representa section 148A. During the ssessee categorically explained ve escaped was less than ₹50 ever, placing reliance on the ju Court in Rohit Kumar v. ITO (sup g reasons, the Assessing Officer pendra Ravindra Mandal 9 A No. 1819/MUM/2025 lled to file Court has wasting its utilized in exemplary ntitled to desh High Court ar that, for the ncome escaping the net income s. In the present me likely to have f ₹50,00,000/-. Act could validly essment beyond respect of net notwithstanding ation during the e reassessment d that the net 0,00,000/-. The udgment of the pra), held that at r was justified in treating the entire s absence of further de 6.6 We are, howeve Hon’ble Supreme Cou ITR 192 (SC), wherei the interpretation of be adopted. Respectf Supreme Court, we Madhya Pradesh Hig supports the assesse 6.7 In the light of income chargeable t below the monetary notice under section Accordingly, the reas the assessee are held the assessee’s appeal 6.8 Since we have unsustainable in la required to be adjudi

In the result, th Order pronoun (RAJ KUMAR C JUDICIAL M Mumbai; Dated: 22/09/2025 Rahul Sharma, Sr. P.S.