TARUN BALI,MUMBAI vs. INCOME TAX OFFICER WARD 42(3)(4), MUMBAI, MUMBAI

Ld. Counsel for the assessee submitted that the quantum appeal in ITA No. 1215/Mum/2026 was already listed for hearing on 08.07.2026 and covered by the decision of Hon’ble Supreme Court in the case of Union of India vs. Rajeev Bansal reported in (2024) 469 ITR 46 (SC).

Ld. Counsel for the assessee further submitted that the reassessment was completed u/s 143(3) read with section 147 of the Act for AY 2013-14 by the Assessing Officer and the assessee had challenged the reopening of the assessment u/s 147 as bad in law on the ground that the notice issued u/s 148 dated 27.07.2022 was pursuant to the procedure laid down by the Hon'ble Supreme Court in the case of Union of India vs. Rajeev Bansal reported in (2024) 469 ITR 46 (SC) and Union of India vs. Ashish Agarwal reported in (2022) 444 ITR 1 (SC). Ld. Counsel submitted that the said notice issued u/s 148 dated 20.07.2022 is beyond the surviving limitation period and, therefore, the reassessment made pursuant to such notice u/s 148 is bad in law. Ld. Counsel therefore submitted that since the reassessment order itself is bad in law, the penalty proceedings initiated and the penalty levied u/s 271(1)(c) of the Act cannot survive. Reliance was placed on the decision of the Hon'ble Bombay High Court in the case of Ravi Kumar Kailashnath Jaiswal v. ACIT in WP(L) No. 36517 of 2025, dated 19.11.2025.

Heard the rival contentions, perused the orders of the authorities below and the material placed before us. We observe that the quantum appeal of the assessee in ITA No. 1215/Mum/2026 came up for hearing before the Coordinate Bench of the Tribunal on 08.07.2026 and the Tribunal, vide order dated 24.07.2026, allowed the appeal of the assessee by holding that the notice issued u/s 148 of the Act on 27.07.2022 was after the expiry of the surviving limitation period and, therefore, the assumption of jurisdiction by the Assessing Officer for completion of the assessment u/s 147 of the Act was barred by limitation and unsustainable in law. While holding so, the Coordinate Bench relied on the decision of the Hon'ble Bombay High Court in the case of Ravi Kumar Jaiswal v. ACIT (supra).

Therefore, since the quantum appeal of the assessee is allowed by quashing the reassessment order passed u/s 143(3) read with section 147, the penalty levied u/s 271(1)(c) has no legs to stand. Accordingly, the penalty order is set aside and the penalty levied is deleted.

In the result, the appeal of the assessee is allowed.