MUKESH KUMAR JHAWAR,KOLKATA vs. I.T.O., WARD - 36(1), KOLKATA

Per Rajesh Kumar, AM:

This is an appeal preferred by the assessee against the order of the National Faceless Appeal Centre, Delhi (hereinafter referred to as the “Ld. CIT(A)”] dated 13.02.2026 for the AY 2015-16.

“3. FOR THAT on a true and proper interpretation of the scope and ambit of the provisions of s. 147 of the Income Tax Act, 1961, the Ld. Commissioner of Income Tax (Appeals)-N.F.A.C. was absolutely in error in upholding the action of the Ld. Income Tax Officer, Ward 36(1). Kolkata of issuing notice u/s. 148 of the Act on 01-04-2021 which is barred by limitation and the

ITA No. 1632/KOL/2026 Mukesh Kumar Jhawar; A.Y. 2015-16 purported conclusion reached on that behalf is completely unfounded, unlawful, and untenable in law.” 3. The facts in brief are that the assessee filed the return of income on 30.03.2016, declaring total income at ₹6,02,240/-. Thereafter the ld. AO received information from Director of Income Tax, Investigation, Mumbai with detailed note on Bombay Stock Exchange listed penny stocks, wherein it is stated that Goenka Business and Finance Limited & Ejecta Marketing Ltd. are penny stocks. Thereafter, the ld. AO noted that the income to the extent of ₹65,91,812/- has escaped assessment. Accordingly, notice u/s 148 of the Act was issued on 31.03.2021, a copy of which is available at page no.111 of the Paper Book. The assessee has not filed any return of income in response to the said notice. Thereafter, the notice u/s 142(1) of the Act, along with questionnaire were issued but there was no compliance and finally the assessment was framed u/s 147 read with section 144B of the Act dated 26.03.2022 in addition of ₹65,91,812/-, was made by the ld. AO on account of bogus long term capital gain u/s 69A of the Act in respect of sale of script Appu Marketing (later name changed to Ejecta Marketing Ltd.), which was treated as penny stock. The ld. AO also added commission u/s 69C of the Act of ₹3,29,590/- at the rate of 5% for arranging said accommodation.

ITA No. 1632/KOL/2026 Mukesh Kumar Jhawar; A.Y. 2015-16 “view notice for e-proceedings”. The ld. AR therefor prayed that the said notice is barred by limitation. The ld. AR relied on the decisions of the co-ordinate bench in case of Sandeep Kumar Shah Vs. ITO (2023) 157 taxmann.com 819 (Kolkata- Trib.) dated 30.11.2023 and in case of M/s Osian Stock Broking Pvt. ltd. vs. ITO in ITA No. 375/KOL/2022, vide order dated 12th may, 2023. The ld. AR therefore prayed that reopening of assessment as well as consequent assessment framed by the ld. AO is bad in law and may kindly be quashed. The ld. DR on the other hand relied on the orders of the authorities below.

After hearing the rival contentions and perusing the materials available on record, we find that the notice u/s 148 of the Act was issued on 31.03.2021, a copy of which is available at page no.111 of the Paper Book. We also note from the “view Notices for e-proceedings”, which is available at page no.133 of the Paper Book that the said notice was in fact issued on 01.04.2021. In our opinion, the notice issued by the ld. AO is barred by limitation as the same was issued on 01.04.2021. The case of the assessee is squarely covered by the decision of the co-ordinate Bench in case of Sandeep Kumar Shah Vs. ITO (supra), wherein it has held as under:-

“5. We have heard rival contentions and perused the record placed and carefully gone through the decision relied upon by the assessee. The legal issue raised by the assessee in the additional ground is that notice u/s 148 of the Act is time barred and, therefore, the reassessment proceedings carried out are without jurisdiction and liable to be quashed. We notice that the assessee, who is an individual, filed his return of income for Assessment Year 2010-11 on 29/07/2010 declaring income of Rs.6,24,228/-. The return was processed u/s 143(1) of the Act and thereafter the ld. Assessing Officer received certain information from DDIT (Inv.) and proceeded to reopen the assessment proceedings by way of issuance of notice u/s 148 of the Act. The time limit for issuing notice for Assessment Year 2010-11 was expiring on Page | 3

ITA No. 1632/KOL/2026 Mukesh Kumar Jhawar; A.Y. 2015-16 31/03/2017. After obtaining the necessary approval of ld. Pr. CIT - 17, Kolkata, notice dt. 31/03/2017 was issued but it was served on 01/04/2017 at 01:06 A.M.. Copy of the notice dt. 31/03/2017 and the email addressed to the assessee for serving notice are reproduced below:-

ITA No. 1632/KOL/2026 Mukesh Kumar Jhawar; A.Y. 2015-16 notice was dt. 31/03/2021 but it was actually uploaded for communication on 01/04/2021 at 03:00 A.M.. The Hon’ble Court held that since the provisions w.e.f. 01/04/2021 has been amended issuing of notice u/s 148A of the Act was mandatory before issuing notice u/s 148 of the Act, and in absence thereof all subsequent proceedings are not sustainable in law and same are quashed. We further notice that this Tribunal in the case of Osian Stock Broking Pvt. Ltd. (supra) considering similar type of issue pertaining to the issue of notice u/s 143(2) of the Act being time barred has held as follows:- "3. The assessee has contested the impugned addition on various ground, inter alia, that the Assessing Officer had no reason to believe that the income of the assessee has escaped assessment; that the concerned Assessing Officer did not have territorial jurisdiction to frame the assessment and further that the notice issued u/s 143(2) of the Act was time barred and, therefore, the assessment framed was void ab initio. 4. At the outset, the ld. counsel for the assessee has submitted that since the question relating to the issue of notice u/s 143(2) of the Act hits at the very validity of the assessment order, therefore, the said issue may be adjudicated first. The ld. counsel has further submitted that the last date for issue of notice u/s 143(2) was on 30.09.2015. He has further submitted that though the notice has been shown to be signed on 30.09.2015 itself however, the same was sent at the email address of the assessee 03.11.2015. He, therefore, has submitted that by mere signing of the notice by the concerned Assessing Officer, it would not mean that the same was issued on the said date. That the date of issue of the said notice would be the date on which the email was sent on 03.11.2015. He, in this respect, has relied upon the decision of the Hon’ble Jurisdictional High Court in the case of ‘MarudharVintrade Pvt. Ltd. v. Union of India & Ors.’ in WPA No.4382 of 2022 order dated 12.04.2022. 5. The ld. DR, on the other hand, has submitted in this case the notice for reopening of the assessment u/s 148 of the Act was issued within the time. That once the notice u/s 148 of the Act was issued, there was no relevance of delayed issuance of notice u/s 143(2) of the Act. He has further submitted even otherwise the identity of issuance of notice will be the date on which the Assessing Officer signed the said notice which was on 30.09.2015 and hence it cannot be said that the notice u/s 143(2) of the Act was time barred. 6. We have heard the rival contentions and gone through the records. The notice in this case has been shown to be signed on 30.09.2015, however, the same was emailed to the assessee on 03.11.2015. The Hon'ble Jurisdictional Calcutta High Court in the case of MarudharVintrade Pvt. Ltd. v. Union of India & Ors.' (supra) considering the facts that the notice u/s 148 of the Act was signed on March 31 2021, however, it was actually uploaded for communication on April 1 2021 at 3 a.m. thereby treating the 1st April 2021 as issuance of impugned notice u/s 148 of the Act, quashed the reassessment proceedings holding that the provisions of Finance Act 2021 would be applicable from 01.04.2021 and therefore, before issuance any notice u/s 148 of the Act, the Assessing Officer was required to observe the statutory formalities u/s 148A of the Act. In the case in hand also, the notice was set in Page | 5

ITA No. 1632/KOL/2026 Mukesh Kumar Jhawar; A.Y. 2015-16 motion only on 03.11.2015, in our humble view, signing of the notice would not constitute as issuance of notice. The date of issuance of notice would be when it is set in motion for delivery to the assessee. So far as the contention of the ld. counsel that the issue of notice u/s 143(2) of the Act within the prescribed period in relation to the reassessment proceedings u/s 147/148 was not mandatory, we find that the issue has been settled by the various High Courts holding that even in the case of reassessment proceedings u/s 147/148 of the Act, the issuance of notice within the specified period u/s 143(2) of the Act is mandatory and that the Assessing Officer cannot assume jurisdiction u/s 143(3) of the Act without issuance of notice u/s 143(2) of the Act and this defect cannot be cured by taking recourse to the deeming fiction provided u/s 292BB of the Act. Reliance in this respect can be placed on the decision of the Delhi High Court in the case of PCIT v. Shree Jai Shiv Shankar Traders Pvt. Ltd. IT Appeal No. 1068 of 2013 dated 18.02.2015; Hon’ble Madras High Court in the case of Sapthagiri Finance & Investment v. ITO reported in (2013) 90 DTR (Mad) 289); Hon’ble Delhi High Court in the case of DIT v. Society for Worldwide Interbank Financial Telecommunications reported in [2010] 232 CTR 265/323 ITR 249 (Del); Hon'ble Allahabad High Court in the case of CIT v. Solarpur Cold Storage (P.) Ltd (2014) 50 taxmann.com 105 (All); Honble Allahabad High Court in the case of CIT v. Rajeev Sharma reported in [2011] 336 ITR 678 (All.). Since the Assessing Officer did not issue notice u/s 143(2) of the Act within the specified time period, therefore, the Assessing Officer could not have assumed jurisdiction to frame the assessment u/s 143(3) of the Act and, therefore, the impugned assessment order is bad in law and the same is accordingly held to be non est. Since we have allowed the appeal of the assessee on the aforesaid legal ground, therefore, at this stage, the other grounds raised by the assessee have been rendered academic in nature. 7. In the result, the appeal of the assessee stands allowed." 7. From perusal of the above judgments and decisions it remains a legally settled position that the notice should not only be issued but also be served before the expiry of time limit provided under the Act. In other words, if the last date for issuing notice u/s 148 of the Act is 31/0/2017, then the notice should be served on or before 31/03/2017. In the instant case, the ld. Assessing Officer was required to serve notice on the assessee on or before 30/03/2017 but it was finally served on 01/04/2017 and, therefore, since the notice u/s 148 of the Act was not issued within the specified time period, the Assessing Officer could not have assumed jurisdiction to frame the reassessment order u/s 147/143(3) of the Act. Therefore, the impugned assessment order dt. 22/12/2017 is bad in law and non est. Additional ground raised by the assessee is allowed. Since we have allowed the additional ground and quashed the assessment order, the remaining legal grounds as well as the grounds raised on merits are rendered academic in nature.”

ITA No. 1632/KOL/2026 Mukesh Kumar Jhawar; A.Y. 2015-16 6. The case of the assessee is also covered by the decision of co- ordinate Bench in case of M/s Osian Stock Broking Pvt. Ltd. Vs. ITO (supra), wherein it has held as under:-

“4. At the outset, the ld. counsel for the assessee has submitted that since the question relating to the issue of notice u/s 143(2) of the Act hits at the very validity of the assessment order, therefore, the said issue may be adjudicated first. The ld. counsel has further submitted that the last date for issue of notice u/s 143(2) was on 30.09.2015. He has further submitted that though the notice has been shown to be signed on 30.09.2015 itself however, the same was sent at the email address of the assessee 03.11.2015. He, therefore, has submitted that by mere signing of the notice by the concerned Assessing Officer, it would not mean that the same was issued on the said date. That the date of issue of the said notice would be the date on which the email was sent on 03.11.2015. He, in this respect, has relied upon the decision of the Hon’ble Jurisdictional High Court in the case of ‘MarudharVintrade Pvt. Ltd. vs. Union of India & Ors.’ in WPA No.4382 of 2022 order dated 12.04.2022. 5. The ld. DR, on the other hand, has submitted in this case the notice for reopening of the assessment u/s 148 of the Act was issued within the time. That once the notice u/s 148 of the Act was issued, there was no relevance of delayed issuance of notice u/s 143(2) of the Act. He has further submitted even otherwise the identity of issuance of notice will be the date on which the Assessing Officer signed the saidnotice which was on 30.09.2015 and hence it cannot be said that the notice u/s 143(2) of the Act was time barred. 4. We have heard the rival contentions and gone through the records. The notice in this case has been shown to be signed on 30.09.2015, however, the same was emailed to the assessee on 03.11.2015. The Hon’ble Jurisdictional Calcutta High Court in the case of MarudharVintrade Pvt. Ltd. vs. Union of India & Ors.’ (supra) considering the facts that the notice u/s 148 of the Act was signed on March 31 2021, however, it was actually uploaded for communication on April 1 2021 at 3 a.m. thereby treating the 1st April 2021 as issuance of impugned notice u/s 148 of the Act, quashed the reassessment proceedings holding that the provisions of Finance Act 2021 would be applicable from 01.04.2021 and therefore, before issuance any notice u/s 148 of the Act, the Assessing Officer was required to observe the statutory formalities u/s 148A of the Act. In the case in hand also, the notice was set in motion only on 03.11.2015, in our humble view, signing of the notice would not constitute as issuance of notice. The date of issuance of notice would be when it is set in motion for delivery to the assessee. So far as the contention of the ld. counsel that the issue of notice u/s 143(2) of the Act within the prescribed period in relation to the reassessment proceedings u/s 147/148 was not mandatory, we find that the issue has been settled by the various High Courts holding that even in the case of reassessment proceedings u/s 147/148 of the Act, the issuance of notice within the specified period u/s 143(2) of the Act is mandatory and that the Assessing Officer cannot assume jurisdiction u/s 143(3) of the Act without issuance of notice u/s 143(2) of the Page | 7

ITA No. 1632/KOL/2026 Mukesh Kumar Jhawar; A.Y. 2015-16 Act and this defect cannot be cured by taking recourse to the deeming fiction provided u/s 292BBof the Act. Reliance in this respect can be placed on the decision of theDelhi High Court in the case of PCIT vs. Shree Jai Shiv Shankar Traders Pvt. Ltd. IT Appeal No.1068 of 2013 dated 18.02.2015; Hon’ble Madras High Court in the case of Sapthagiri Finance & Investment vs. ITO reported in (2013) 90 DTR (Mad) 289); Hon’ble Delhi High Court in the case of DIT vs. Society for Worldwide Interbank Financial Telecommunications reported in (2010) 323 ITR 249 (Del); Hon’ble Allahabad High Court in the case of CIT vs. Solarpur Cold Storage P Ltd (2014) 50 Taxmann.com 105 (All); Hon’ble Allahabad High Court in the case of CIT vs. Rajeev Sharma reported in [2011] 336 ITR 678 (All.). Since the Assessing Officer did not issue notice u/s 143(2) of the Act within the specified time period, therefore, the Assessing Officer could not have assumed jurisdiction to frame the assessment u/s 143(3) of the Act and, therefore, the impugned assessment order is bad in law and the same is accordingly held to be non-est. Since we have allowed the appeal of the assessee on the aforesaid legal ground, therefore, at this stage, the other grounds raised by the assessee have been rendered academic in nature. 5. In the result, the appeal of the assessee stands allowed.” 7. We therefore respectfully following the above decisions quash the reopening of assessment as well as the assessment framed by the ld. AO as being barred by limitation. The appeal of the assessee is allowed on legal issue.

Order pronounced on 03.09.2026.

Sd/- Sd/- (PRADIP KUMAR CHOUBEY) (RAJESH KUMAR) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) Kolkata, Dated: 03.09.2026 Sudip Sarkar, Sr.PS

ITA No. 1632/KOL/2026 Mukesh Kumar Jhawar; A.Y. 2015-16

Copy of the Order forwarded to: 1. The Appellant 2. The Respondent 3. CIT DR, ITAT, 4. 5. Guard file. BY ORDER, True Copy//

Manish Bhoi Dy. Registrar Income Tax Appellate Tribunal, Kolkata