NIRAV HASMUKHRAIL DAVE,MUMBAI vs. ITO, MUMBAI

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ITA 5410/MUM/2026Status: DisposedITAT Mumbai07 September 2026AY 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 Act was barred by limitation, following the Supreme Court's decision in Union of India vs. Rajeev Bansal. Consequently, all subsequent proceedings were deemed invalid.

What were the facts?

The assessee challenged the validity of reopening of assessment under Section 147 of the Income Tax Act, 1961, as being barred by limitation. The first notice under Section 148 was issued on June 29, 2021.

What were the issues?

Whether the reopening of assessment under Section 147 was valid and within the prescribed period of limitation, considering the impact of TOLA and the Supreme Court's ruling in Union of India vs. Rajeev Bansal.

Which sections of the Income-tax Act were involved?

Section 147,Section 148,Section 148A

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, MUMBAI BENCHES, MUMBAI

Before: SHRI SAKTIJIT DEY & SHRI G.M. DOSS

Pronounced: 07.09.2026

आदेश / ORDER PER SAKTIJIT DEY, VICE PRESIDENT:

This is an appeal by the assessee against order dated 20.02.2026 of National Faceless Appeal Centre (‘NFAC’ for short), Delhi for the Assessment Year (AY for short) 2015-16.

2.

As per the revised ground no. 1, the assessee has challenged the validity of reopening of assessment u/s.147 of the Act as barred by limitation.

3.

We have heard the parties and perused the materials available on record. It is the say of the assessee before us that as held by Hon'ble Supreme Court in the case of Union of India vs. Rajeev Bansal [2024] 167 tamann.com 70 (SC), the process of reopening of

assessment u/s.147 of the Act in respect of A.Y. 2015-16 has to be initiated within the

prescribed period of limitation provided under the old regime and could not be further

extended by TOLA. Thus, he submitted, the reopening of assessment beyond the

prescribed period of limitation is invalid.

4.

Learned Department Representative (‘ld. DR’ for short) could not controvert the

aforesaid submissions of the assessee.

5.

Having considered the contentions of the parties and perused the materials

available on record, it is noted that the first notice u/s.148 of the Act was issued on

29.06.2021. Thereafter, following the decision of the Hon'ble Supreme Court in the case

of Union of India vs. Rajeev Bansal (supra), the AO issued a notice u/s. 148A(b) on

27.05.2022 and after passing an order u/s. 148A(d) of the Act on 30.06.2022, on the

very same date he issued a notice u/s.148 of the Act. In case of Union of India vs. Rajeev

Bansal (supra), the Hon'ble Supreme Court, based on a concession made by the

Additional Solicitor General, has observed as under:

19.

Mr N Venkataraman, learned Additional Solicitor General of India, made the following submissions on behalf of the Revenue: a. Parliament enacted TOLA as a free-standing legislation to provide relief and relaxation to both the assesses and the Revenue during the time of COVID-19. TOLA seeks to relax actions and proceedings that could not be completed or complied with within the original time limits specified under the Income Tax Act; b. Section 149 of the new regime provides three crucial benefits to the assesses: (i) the four-year time limit for all situations has been reduced to three years; (ii) the first proviso to Section 149 ensures that re-assessment for previous assessment years cannot be undertaken beyond six years; and (iii) the monetary threshold of Rupees fifty lakhs will apply to the re- assessment for previous assessment years; c. The relaxations provided under Section 3(1) of TOLA apply “notwithstanding anything contained in the specified Act.” Section 3(1), therefore, overrides the time limits for issuing a notice under Section 148 read with Section 149 of the Income Tax Act;

d. TOLA does not extend the life of the old regime. It merely provides a relaxation for the completion or compliance of actions following the procedure laid down under the new regime; e. The Finance Act 2021 substituted the old regime for re-assessment with a new regime. The first proviso to Section 149 does not expressly bar the application of TOLA. Section 3 of TOLA applies to the entire Income Tax Act, including Sections 149 and 151 of the new regime. Once the first proviso to Section 149(1)(b) is read with TOLA, then all the notices issued between 1 April 2021 and 30 June 2021 pertaining to assessment years 2013-2014, 2014-2015, 2015-2016, 2016-2017, and 2017-2018 will be within the period of limitation as explained in the tabulation below:

Assessment Within 3 Expiry of Within six Expiry of Year Years Limitation Years Limitation read with read with TOLA for (2) TOLA for (4) (1) (2) (3) (4) (5) 2013-2014 31.03.2017 TOLA not 31.03.2020 30.06.2021 applicable 2014-2015 31.03.2018 TOLA not 31.03.2021 30.06.2021 applicable 2015-2016 31.03.2019 TOLA not 31.03.2022 TOLA not applicable applicable 2016-2017 31.03.2020 30.06.2021 31.03.2023 TOLA not applicable 2017-2018 31.03.2021 30.06.2021 31.03.2024 TOLA not applicable

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; g. Section 2 of TOLA defines “specified Act” to mean and include the Income Tax Act. The new regime, which came into effect on 1 April 2021, is now part of the Income Tax Act. Therefore, TOLA continues to apply to the Income Tax Act even after 1 April 2021; and h. Ashish Agarwal (supra) treated Section 148 notices issued by the Revenue between 1 April 2021 and 30 June 2021 as show-cause notices in terms of Section 148A(b). Thereafter, the Revenue issued notices under Section 148 of the new regime between July and August 2022. Invalidation of the Section 148 notices issued under the new regime on the ground that they were issued beyond the time limit specified under the Income Tax Act read with TOLA will completely frustrate the judicial exercise undertaken by this Court in Ashish Agarwal (supra).

6.

The Hon'ble Supreme Court in case of Asst. CIT vs. Nehal Ashit Shah (in Special

Leave Petition (Civil) Diary No(s).57209/2024 (Arising out of impugned final judgment

and order dated 09.05.2024 in WP No.1201/2023 passed by the High Court of Judicature

at Bombay) has reiterated the same view.

7.

Thus, keeping in view the ratio laid down in the aforesaid decisions of Hon'ble

Supreme Court, we hold that the notice issued u/s.148 of the Act is barred by limitation.

Hence, all proceedings consequent thereupon are also invalid. Accordingly, we quash

the assessment order and set aside the impugned order of learned first appellate

authority. Since, the assessee has succeeded on the legal ground, rest of the grounds

having become academic for the purpose of the present appeal, are kept open.

8.

In the result, the appeal is allowed as indicated above. Order pronounced in the open court on 07.09.2026.

Sd/- Sd/-

G.M. DOSS SAKTIJIT DEY ACCOUNTANT MEMBER VICE PRESIDENT Mumbai Dated: 07.09.2026 Roshani, Sr. PS Copy to: NIRAV HASMUKHRAIL DAVE, 428 RAWAL BLDG NO- 1 2,DR.D.B.MARG,GRANT ROAD(E),MUMBAI-400004, MAHARASHTRA ITO, PIRAMAL CHAMBERS, 2 5TH FL, LALBAUG, PAREL, MUMBAI-400012, MAHARASHTRA 3 THE PCIT / CIT, 4 THE D.R., ITAT, MUMBAI BENCH 5 GUARD FILE

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