SHRI ASHOK JASRAJ JAIN (HUF),MUMBAI vs. DCIT, CIRCLE 19(1), MUMBAI

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ITA 1539/MUM/2026Status: DisposedITAT Mumbai03 August 2026AY 2015-166 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 for reassessment issued under Section 148 on 27.07.2022 was barred by limitation, making the reassessment proceedings and order bad in law. This decision was based on Supreme Court and High Court judgments concerning the application of TOLA and reassessment timelines.

What were the facts?

The assessee filed an appeal against the CIT(A)'s order confirming additions made by the AO. The primary issue revolved around the validity of reassessment proceedings initiated under Section 147 and 148 of the Income Tax Act for AY 2015-16.

What were the issues?

The key legal issue was whether the reassessment notice issued for AY 2015-16 was within the prescribed time limits, considering the provisions of TOLA and subsequent judicial pronouncements.

Which sections of the Income-tax Act were involved?

Section 68,Section 147,Section 148,Section 148A,Section 149

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, MUMBAI BENCHES, MUMBAI

Before: HON’BLE SHRI PAWAN SINGH & HON’BLE SHRI GIRISH AGRAWAL

For Respondent: Shri Surendra Mohan, Sr.DR
Pronounced: 03.08.2026

INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCHES, MUMBAI BENCH: A BEFORE HON’BLE SHRI PAWAN SINGH, JUDICIAL MEMBER AND HON’BLE SHRI GIRISH AGRAWAL, ACCOUNTANT MEMBER ITA 1539/MUM/2026 िनधा�रण वष�/Assmt. Year: 2015-16) ASHOK JASRAJ JAIN (HUF) DCIT, CIRCLE 19(1) 45/12, RAJKOTWALA BLDG PIRAMAL CHAMBER 2ND FLOOR, 1ST LALBAUG PAREL CHARPENTER STREET C.P Vs. MUMBAI-400021, TANK, MUMBAI-400004, MAHARASHTRA MAHARASHTRA (अपीलाथ� Appellant) (��थ� Respondent) Permanent Account Number of AAAHJ0191D Assessee: िनधा�रती �ारा/Assessee represented by: Shri Jalaj Prakash, Advocate राज� व �ारा/Revenue represented by: Shri Surendra Mohan, Sr.DR

सुनवाई की तारीख / Date of conclusion of hearing: 04.05.2026 घोषणा की तारीख / Date of pronouncement: 03.08.2026 आदेश / ORDER PER GIRISH AGRAWAL, ACCOUNTANT MEMBER: This appeal is filed by the assessee against the order of ld. CIT(A)/NFAC vide DIN: ITBA/NFAC/S/250/2025-26/1085352283(1) dated 30.01.2026 for the Assessment Year 2015-16.

2.

Assessee has raised the following grounds of appeal:

1.

On the facts and circumstances of the case and in law, the learned CIT(A) has erred by confirming the additions made by AO in treating sales consideration of shares as unexplained cash consideration u/s 68 of Rs. 2,16,36,103/ and added to total income and without properly appreciating the documentary evidences and judicial decision provided by the Appellant. 2. On the facts and circumstances of the case and in law, the CIT(A) has erred confirming assessment framed by the Assessing Officer u/s 147 r.w.s 144B in the case of the Appellant without affording the Appellant opportunity of cross examining that person though specifically demanded by the Appellant. 3. On the facts and circumstances of the case and in law, the CIT(A) has erred confirming assessment framed by the Assessing Officer u/s 147 r.w.s in the case of the Appellant on the basis of the statement of person searched and without providing the Appellant, list of beneficiaries along with all statement as made available by the investigation Wing of Kolkata and to further provide the page/pages in the list of beneficiaries and statement recorded on oath wherein the name of appellant has been mentioned though specifically demanded by the appellant. 4. That the learned CIT(A) erred in law in confirming the impugned addition made on the basis of general allegations relating to penny stock transactions, without the Assessing Officer placing on record any specific material evidence or demonstrating any direct involvement of the Appellant in the alleged accommodation entry or price manipulation, notwithstanding the Appellant's specific request for such material.”

2.1. Assessee has also raised additional grounds vide application dated 30.04.2026 on legal issue relating to issue of notice u/s 148 as bad in law, invalid, void ab initio, to be quashed. According to the ld. Counsel of the assessee, this issue goes to the root of the matter and all the facts relating to the said issue are already available on record and therefore, needs to be admitted and adjudicated upon. The same are admitted, there being no objection from the other side for their admission.

3.

Brief facts as culled out from the records are that notice u/s. 148 under the old regime of re-assessment was issued on 30.06.2021. Later, pursuant to the judgment in the case of Union of India vs. Ashish Agarwal [2022] 138 taxmann.com 64 (SC), it was directed among other things that notice issued u/s.148 shall be deemed to have been issued u/s. 148A as substituted by the Finance Act, 2021 and construed or treated to be the show cause notice in terms of section 148A(b). In view of this direction, the said notice u/s. 148, dated 30.06.2021 was deemed to be a show cause notice u/s. 148A(b) for which another one was issued on 26.05.2022, complying with the said direction.

3.1. Thereafter, provisions of section 148A(d) were complied with by passing an order, dated 27.07.2022 and issuing a notice u/s.148 of the same date, under the new regime. Assessee has contested by raising additional ground that the notice so issued is bad in law, invalid, void ab initio, to be quashed. Ld. Counsel strongly submitted that it is barred by limitation making the impugned reassessment proceedings and resultant reassessment order bad in law.

4.

At the outset, we find that this issue which relates to AY 2015-16 has been settled in the judgements of the Hon'ble Supreme Court in the case of Union of India vs. Rajeev Bansal [2024] 167 taxmann.com 70 (SC), dated 03.10.2024 wherein reference is made to the submissions made on behalf of the Revenue vide para 19 which is relevant and the same is reproduced hereunder:- “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 assessees 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; Assessm Within 3 Expiry of Within six Expiry of ent Year Years Limitation Years Limitation read (1) (2) read with (4) with TOLA for TOLA for (2) (4) (3) (5) 2013- 31.03.2017 TOLA not 31.03.2020 30.06.2021 2014 applicable 2014- 31.03.2018 TOLA not 31.03.2021 30.06.2021 2015 applicable 2015- 3103.2019 TOLA not 31.03.2022 TOLA not 2016 applicable applicable 2016- 31.03.2020 30.06.2021 31.03.2023 TOLA not 2017 applicable 2017- 31.03.2021 30.06.2021 31.03.2024 TOLA not 2018 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).

4.1. From the above it can be seen that Revenue conceded before the Hon’ble Supreme Court in para 19(f) for dropping all the notices issued on or after 01.04.2021 for A.Y. 2015-16 as they will not fall for completion during the period prescribed under TOLA.

4.2. This issue had come up before the Hon'ble High Court of Delhi in the case of IBIBO Group Pvt. Ltd. vs. ACIT, WP(C)17639 of 2022, dated 13.12.2024 wherein re-assessment action for Assessment Year 2015-16 was held to be not sustainable. Hon'ble Court quashed the notice issued u/s.148 as well as order passed u/s. 148A(d), dated 23.07.2022 for Assessment Year 2015-16 by following the decision in the case of Rajeev Bansal (supra).

5.

In the case of present assessee, period of six years expired on 31.03.2022. Since the notice issued u/s.148 is dated 27.07.2022 it is thus barred by limitation. Accordingly, notice so issued and re- assessment completed thereafter u/s. 147 is liable to be quashed, in view of the decision of Hon'ble Supreme Court in the case of Rajeev Bansal (supra) which was followed by Hon'ble Delhi High Court in the case of IBIBO (supra).

5.1. On the same issue, Hon'ble Supreme Court while dismissing the SLP filed by Revenue in the case of ACIT vs. Nehal Ashit Shah in SLP (Civil) Diary No(s). 57209/2024, dated 04.04.2025 held that it does not survive for further consideration. While holding so, Hon'ble Court noted in para 5 as under: “5. In this regard, reference could also be made to paragraph 19(e) and (f) in the case of Union of India vs. Rajeev Bansal, Civil Appeal No.8629 of 2024 on 03.10.2024 (2024 SCC ONLINE 754) under which the learned Additional Solicitor General for India has made a concession insofar as the assessment year 2015-16 is concerned.”

6.

In view of above stated deliberation, both on facts and law including the applicable jurisprudence, we hold that notice for A.Y. 2015-16 issued on 27.07.2022 u/s 148 of the new regime is barred by limitation and hence bad in law, liable to be quashed, resulting in impugned reassessment proceedings as well as the impugned reassessment order bad in law. Accordingly, additional ground raised by the assessee in its appeal is allowed. Other grounds raised by the assessee in its appeal memo are therefore, rendered academic and needs no separate adjudication.

7.

In the result, appeal filed by the assessee is allowed.

Order is pronounced in the open court on 03 August, 2026

Sd/- Sd/- (Pawan Singh) (Girish Agrawal) Judicial Member Accountant Member Dated: 03 August, 2026 MP, Sr.P.S. Copy to: 1 The Appellant 2 The Respondent 3 DR, ITAT, Mumbai 4 Guard File 5 CIT BY ORDER,

(Dy./Asstt.Registrar) ITAT, Mumbai

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