ARCHIT NANDKUMAR KOTWAL, MUMBAI,MUMBAI vs. INCOME TAX OFFICER - 22(1)(6), MUMBAI, MUMBAI

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ITA 2539/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 issued under Section 148 for AY 2015-16, dated 05.04.2022, was barred by limitation. This decision was based on Supreme Court and High Court rulings concerning the applicability of TOLA and the time limits for reassessment.

What were the facts?

The assessee's appeal concerns Assessment Year 2015-16, where reassessment proceedings were initiated. A notice under Section 148 was initially issued, which was later deemed a show cause notice under Section 148A(b) following a Supreme Court judgment. Subsequently, a notice under Section 148 of the new regime was issued.

What were the issues?

The primary issue was whether the reassessment proceedings initiated by issuing a notice under Section 148 of the Income Tax Act were bad in law due to being barred by limitation.

Which sections of the Income-tax Act were involved?

Section 148,Section 148A,Section 149,Section 234A,Section 234B

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 Aditya M. Rai, Sr. DR
Pronounced: 03.08.2026

INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCHES, MUMBAI BENCH: J(SMC) BEFORE HON’BLE SHRI PAWAN SINGH, JUDICIAL MEMBER AND HON’BLE SHRI GIRISH AGRAWAL, ACCOUNTANT MEMBER ITA 2539/MUM/2026 िनधा�रण वष�/Assmt. Year: 2015-16) INCOME TAX OFFICER - ARCHIT NANDKUMAR 22(1)(6), MUMBAI KOTWAL 108, 1ST FLOOR, PIRAMAL C/6 PRATHMESH HSG. CHAMBER, LAL BAUG, SOCIETY, VEER SAVARKAR Vs. PAREL MARG, PRABHADEVI, MUMBAI-400025, MUMBAI-400012, MAHARASHTRA MAHARASHTRA (��थ� Respondent) (अपीलाथ� Appellant) Permanent Account Number of AOZPK1305D Assessee: िनधा�रती �ारा/Assessee represented by: Shri Ankush Karanpuria, CA राज� व �ारा/Revenue represented by: Shri Aditya M. Rai, 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. Commissioner of Income Tax (Appeals), NFAC, Delhi vide DIN: ITBA/NFAC/S/250/2025-26/1084257164(1) dated 31.12.2025 for the Assessment Year 2015-16.

2.

Assessee has raised the following grounds of appeal:

1) On the facts and in the circumstances of the case and in law, the reassessment proceedings are bad in law. The Appellant prays that the impugned order be quashed. 2) On the facts and in the circumstances of the case and in law, the Ld. AO erred in computing the income under the head Income from Salary at Rs. 34,97,563 in the computation sheet, as against Rs. 33,07,775 as accepted in the impugned order. The Appellant prays that the Ld. AO be directed to consider Rs. 33,07,775 as income under the head Income from Salary in the computation sheet. 3) On the facts and in the circumstances of the case and in law, the Ld. AO erred in not granting the TDS credit of Rs. 7,22,815 in the computation sheet annexed to the impugned order. The Appellant prays that the Ld. AO be directed to grant the TDS credit of Rs. 7,22,815. 4) On the facts and in the circumstances of the case and in law, the Ld. AO erred in not considering the self-assessment tax paid of Rs. 11,280 in the computation sheet annexed to the impugned order. The Appellant prays that the Ld. AO be directed to consider the self-assessment tax paid of Rs. 11,280. 5) On the facts and in the circumstances of the case and in law, the Ld. AO erred in levying interest u/s 234A and 234B at Rs. 8,03,454 and Rs. 8,50,716 respectively. The Appellant prays that the Ld. AO be directed to delete/ appropriately reduce the interest levied u/s 234A and 234B of the Act. 6) The Appellant craves leaves to add to, alter, amend and / OR delete the above grounds of appeal.

2.1. In the present appeal, ground no. 1 raised by the assessee is on the legal and jurisdictional issue of notice issued u/s 148 being bad in law. Accordingly, we take up the same as it goes to the root of the matter.

3.

Brief facts as culled out from the records are that notice u/s. 148 under the old regime was issued on 05.04.2021. Later, pursuant to the judgment in 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 05.04.2021 was deemed to be a show cause notice u/s. 148A(b) for which another one was issued on 23.03.2022, complying with the said direction.

3.1. Thereafter, provisions of section 148A(d) were complied with by passing an order, dated 05.04.2022 and issuing a notice u/s.148 of the same date under the new regime. Assessee has contested that the notice so issued is bad in law, liable 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 judgement 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).

4.3. In the case of present assessee, period of six years expired on 31.03.2022. Since the notice issued u/s.148 is dated 05.04.2022 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 High Court of Delhi in the case of IBIBO (supra).

5.

Also, 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.”

5.1. 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 05.04.2022 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, ground no. 01 raised by the assessee in its appeal is allowed. Other grounds in the appeal memo are thus, rendered academic.

6.

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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