MRS. ROSILY JOHNY KANICHUNNAN ,MUMBAI vs. ITO WARD 42(3)(2), MUMBAI

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ITA 1280/MUM/2026Status: DisposedITAT Mumbai29 July 2026AY 2015-1610 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 under section 148, issued on 24.04.2022 for AY 2015-16, was invalid and barred by limitation as per the Supreme Court's decision in Rajeev Bansal. Consequently, the assessment order was quashed.

What were the facts?

The assessee's case was reopened under section 147, and an ex parte assessment was made. The CIT(A) set aside the assessment order and remanded the case back to the AO. The assessee appealed this decision, arguing that the notice under section 148 was invalid as it was issued after the prescribed limitation period.

What were the issues?

The primary issue was the validity of the notice issued under section 148 for reassessment after the prescribed limitation period, considering the Supreme Court's ruling on the applicability of TOLA.

Which sections of the Income-tax Act were involved?

Section 147,Section 144,Section 69,Section 251(1)(a),Section 148,Section 149,Section 151A

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “D” BENCH, MUMBAI

Before: SMT. BEENA PILLAI, JM & SHRI ARUN KHODPIA, AM

Hearing: 29.07.2026

आयकरअपीलीयअिधकरण�ायपीठमुंबईम�। IN THE INCOME TAX APPELLATE TRIBUNAL “D” BENCH, MUMBAI BEFORE SMT. BEENA PILLAI, JM & SHRI ARUN KHODPIA, AM I.T.A. No.1280/Mum/2026 (Assessment Year: 2015-16) Mrs. Rosily Johny Kanichunan ITO, 42(3)(2), Mumbai Kanichunnan House, Karuvapadi, Kautilya Bhavan, Bandra Kurla Vs. P.O. Aripalam, Irinjalakuda Complex, Bandra East, (VIA) Kerala - 680688 Mumbai-400051 PAN: AQZPK9465A Assessee- अपीलाथ� / Appellant Revenue-��थ�/ Respondent :

Assesseeby : Shri K.A. Vaidyalingan Revenueby : Shri Amit Kumar Singh, Sr. DR : 22.07.2026 Date of Hearing : 29.07.2026 Date of Pronouncement

O R D E R Per Arun Khodpia, AM: This appeal is preferred by the assessee, directed against the order of the Commissioner of Income Tax Appeals, National Faceless Appeal Centre (NFAC), Delhi [in short, “the Ld. CIT(A)”], dated 04.12.2025 for the Assessment Year (AY) 2015-16,arisesout of the assessment order under section 147 r.w.s 144 of the Income Tax Act, 1961 [in short, “the Act”] dated 29.02.2024, passed by Assessment Unit, Income Tax Department [in short, “the Ld. AO”].

ITA No. 1280/Mum/2026 Mrs. Rosily Johny Kanichunnan 2. The grounds of appeal raised by the assessee are as under: “1. The learned CIT(A) erred in setting aside the assessment order and remanding back to the file of the learned AO without affording any opportunity of being heard to the Appellant and without issuing any notice mandatorily required u/s. 250 of the Income tax Act, 1961. 2. The learned CIT(A) erred in setting aside the order of assessment and restoring the case back to the file of the learned AO with a direction to do fresh assessment thereby again granting an opportunity of the LAO to remove the infirmities in the assessment order which is otherwise a nullity and bad in law ab initio on the ground that (i) no notice u/s. 148 could have been issued for the year under consideration after 1.4.2021 as per the judgment of the Hon. Supreme Court in the case of Rajeev Bansal (2024) 167 taxmann.com 70 and (ii) that the impugned assessment order was completed pursuant to notice u/s. 148 which is not in accordance with the provisions of Section 151A of the Act. 3. The learned CIT(A) erred in restoring the matter back to the file of the LAO in spite of the fact that the Appellant in reply to the notice bearing DIN: ITBA/NFAC/S/25/2025-26/1082433878(1) dated 10.11.2025 from the learned CIT(A) seeking clarification in respect of condonation of delay had submitted before him the fact that her case is covered by the judgment of the Hon. Supreme Court in Rajeev Bansal (supra) and requested the learned CIT(A) to quash the same, which he failed to do. 4. The learned CIT(A) erred in not adjudicating Grounds 1 and 2 relating to the very validity of the entire reassessment proceedings raised before him before restoring the matter to the file of the LAO.”

3.

Briefly stated, the case of assessee was reopened u/s 147 of the Act and assessment was concluded ex parteon 29.02.2024, following the provisions of section 144 on best judgment assessment basis.No compliance by the assessee before the AO, so an addition of Rs.1,06,50,000/- on account of unexplained assessment u/s 69 of the Act was made. The assessee preferred an appeal before the Ld. CIT(A), who restored the appeal of assessee back to the file of Ld. AO by setting aside the assessment order passed, invoked his powers vested in Proviso to Section 251(1)(a) of the Act, since it was passed on ex parte basis u/s 144 of the Act. Ld. CIT(A).

ITA No. 1280/Mum/2026 Mrs. Rosily Johny Kanichunnan 4. Being aggrieved with the order of Ld. CIT(A), the assessee is in appeal before us.

5.

At the outset, Ld. Counsel of the assessee submitted that the assessee has raised a ground before the Ld. CIT(A) challenging the validity of assessment on legal aspect that the assessment is invalid and bad in law, as the notice u/s 148 in the present case was issued on 24.04.2022 for AY 2015-16, is invalid and bad in law, having been barred by limitation as per 1st Proviso to section 149 of the Act. It is submitted that the Ld. CIT(A) has set aside the order of assessment and restored it back to the file of Ld. AO with a direction to fresh assessment, thereby granting an opportunity to the Ld. AO to remove the infirmities in the assessment order, which is otherwise a nullity and bad in law ab initio on the ground that (i) no notice u/s 148 could have been issued for the year under consideration (AY 2015-16) after 01.04.2021 as per judgment of Hon’ble Apex Court in the case of Union of India vs. Rajeev Bansal [2024] 167 taxmann.com 70 and (ii) that the impugned assessment order was completed pursuant to notice u/s 148 which is not in accordance with the provisions of section 151A of the Act.

6.

On this aspect, Ld. Counsel of the assessee submitted that this issue has been decided by various courts in following cases listed as under:

1 DEEPAK STEEL & POWER LIMITED CIVIL APPEAL NO.5177TO 5179 OF 2025, SUPREME COURT 2 SPICY SANGRIANOTES PVT.LTD. W.P.NO. 1325 OF 2023, BOMBAY HIGH COURT

ITA No. 1280/Mum/2026 Mrs. Rosily Johny Kanichunnan 3 CHERIAN NALLATHUABRAHAM ANNAMMA W.P. NO.32774 OF 2025, BOMBAY HIGH COURT 4 SELVAKUMARVETHAMONICKAM NADAR W.P. NO.41554 OF 2025, BOMBAY HIGH COURT 5 NILESH HARESH PARWANIITA NO.266/MUM/2025m ITAI. MUMBAI

7.

He referred to the judgment of Hon’ble Apex Court in the case of Deepak Steel & Power Limited (supra) wherein the Hon’ble Apex Court has categorically held that the Revenue has made a concession in the case of Rajeev Bansal (supra) that for the AY 2015-16, all notices issued on or after 1st April, 2021 will have to be dropped as they would not fall for completion during the period prescribed under the Taxation and Other Laws (Relaxation and Amendment Of Certain Provisions) Act, 2020. Nothing further is required to be adjudicated in this matter as the notice so far as the present litigation is concerned dated 25th June, 2021. It is also noticed from the judgment by Hon’ble Jurisdictional High Court in the case of Spicy Sangria Hotels Pvt. Ltd.(supra.) wherein Hon’ble Bombay High Court has referred to the case of assessee pertaining to AY 2015-16 and has imported the observation of Hon’ble Apex Court in the case of Rajeev Bansal (supra),where in paragraph 19(f), it has been recorded that the Ld. ASG has made the concession for AY 2015-16, that all notices issued on or after 1st April 2021, will have to be dropped as they will not fall for completion during the period prescribed under Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020. Therefore, notice issued in the case of Spicy Sangria Hotels Pvt. Ltd.(supra.) on 28.07.2022 after 4

ITA No. 1280/Mum/2026 ITA No. Mrs. Rosily Johny Kanichunnan Mrs. Rosily Johny Kanichunnan 1st April, 2022 was directed to be dropped with the aforesaid observation to not April, 2022 was directed to be dropped with the aforesaid observation to not April, 2022 was directed to be dropped with the aforesaid observation to not proceed any further. The notice therefore, was quashed and set aside by the The notice therefore, was quashed and set aside by the The notice therefore, was quashed and set aside by the Hon’ble Court.

8.

Further, in the case of Further, in the case of Cherian Nallathu Abraham Annamma Cherian Nallathu Abraham Annamma vs. ITO (supra) Hon’ble Bombay High Court had discussed this issue at length wherein Hon’ble Bombay High Court had discussed this issue at length wherein Hon’ble Bombay High Court had discussed this issue at length wherein Hon’ble Court has held as under: Hon’ble Court has held as under: “6. We have heard the learned counsel for the parties. It is not in dispute that the 6. We have heard the learned counsel for the parties. It is not in dispute that the 6. We have heard the learned counsel for the parties. It is not in dispute that the present petition relates to asst. yr. 2015 present petition relates to asst. yr. 2015-16. Further, it is also undisputed that the her, it is also undisputed that the notice under s. 148 has been issued on 5th April, 2022 which is at p. 52 of notice under s. 148 has been issued on 5th April, 2022 which is at p. 52 of notice under s. 148 has been issued on 5th April, 2022 which is at p. 52 of thepaperbook. Once these are the facts, paras 19 (e) and (f) of the judgment of the thepaperbook. Once these are the facts, paras 19 (e) and (f) of the judgment of the thepaperbook. Once these are the facts, paras 19 (e) and (f) of the judgment of the Hon'ble Supreme Court in the case of Rajeev Bansal (supra) b Hon'ble Supreme Court in the case of Rajeev Bansal (supra) become relevant. They ecome relevant. They read as under: 19. Mr. N Venkataraman, learned Addl. Solicitor General of India, made the following 19. Mr. N Venkataraman, learned Addl. Solicitor General of India, made the following 19. Mr. N Venkataraman, learned Addl. Solicitor General of India, made the following submissions on behalf of the Revenue : submissions on behalf of the Revenue : e. The Finance Act 2021 substituted the old regime for reassessment with a new e. The Finance Act 2021 substituted the old regime for reassessment with a new e. The Finance Act 2021 substituted the old regime for reassessment with a new regime. The first proviso to s. 149 does not expressly bar the application of TOLA. Sec. proviso to s. 149 does not expressly bar the application of TOLA. Sec. proviso to s. 149 does not expressly bar the application of TOLA. Sec. 3 of TOLA applies to the entire IT Act, including ss. 149 and 151 of the new regime. 3 of TOLA applies to the entire IT Act, including ss. 149 and 151 of the new regime. 3 of TOLA applies to the entire IT Act, including ss. 149 and 151 of the new regime. Once the first proviso to s. 149(1)(b) is r/w TOLA, then all the notices issued between Once the first proviso to s. 149(1)(b) is r/w TOLA, then all the notices issued between Once the first proviso to s. 149(1)(b) is r/w TOLA, then all the notices issued between 1st April, 2021 and 30th June, 2021 pertaining to asst. yrs. 2013 2021 and 30th June, 2021 pertaining to asst. yrs. 2013-2014, 2014 2014, 2014-2015, 2015-2016, 2016-2017, and 2017 2017, and 2017-2018 will be within the period of limitation as 2018 will be within the period of limitation as explained in the tabulation below: explained in the tabulation below:

f. The Revenue concedes that for the asst. yr. 2015 f. The Revenue concedes that for the asst. yr. 2015-16, all notices issued on or after 1st issued on or after 1st April, 2021 will have to be dropped as they will not fall for completion during the April, 2021 will have to be dropped as they will not fall for completion during the April, 2021 will have to be dropped as they will not fall for completion during the period prescribed under TOLA;" period prescribed under TOLA;" (emphasis supplied)

ITA No. 1280/Mum/2026 Mrs. Rosily Johny Kanichunnan 7. From the above it is clear, that the Department has conceded before the Hon'ble Supreme Court that all the notices issued under s. 148 after 1st April, 2021 for asst.yr. 2015-16 have to be dropped. In the present case, the Notice under s. 148 is dt. Sth April 2022 and therefore, has to be dropped. 8. The decision in Rajeev Bansal (supra) has been subsequently followed by the Hon'ble Supreme Court in Deepak Steel & Power Ltd. (supra). Paragraphs 4 and 5 of the said order is reproduced hereunder: 4. The learned counsel appearing for the revenue with his usual fairness invited the & Ors. vs. Rajeev Bansal, 2024 Sud Online SC 2693, more particularly, para 19(f) attention of this Court to a three judge bench decision of this Court in Union of India which reads thus: "19. (f) The Revenue concedes that for the asst. yr. 2015-16, all notices issued on or after 1st April, 2021 will have to be dropped as they will not fall for completion during the period prescribed under the Taxation and other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020." 5. As the revenue made a concession in the aforesaid decision that is for the asst. yr. 2015-16, all notices issued on or after 1st April, 2021 will have to be dropped as they would not fall for completion during the period prescribed under the taxation and other laws (Relaxation and Amendment of certain Provisions Act, 2020). Nothing further is required to be adjudicated in this matter as the notices so far as the present litigation is concerned is dt. 25th June, 2021. (emphasis supplied) 9. Similarly, even in the matter of Nehal Ashit Shah (supra), the Hon'ble Supreme Court, relying upon paras 19 (e) and (f) of the decision in case of Rajeev Bansal (supra), dismissed the SLP filed by the Revenue. Paragraph 5 of the said order is reproduced hereunder: "5. In this regard, reference could also be made to paras 19(e) and (f) in the case of Union of India vs. Rajeev Bansal, (supra) under which the learned Additional Solicitor General for India has made a concession insofar as the asst. yr. 2015-16 is concerned." 10. Lastly, this very Bench has on 6th Oct., 2025, in the matter of Spicy Sangria (supra), allowed the petition filed by the petitioner therein by noting that since, the notice under s. 148 was issued after 1st April, 2021, the same was required to be set aside in light of the concession made by the Revenue before the Hon'ble Supreme Court in the case of Rajeev Bansal (supra). 11. In light of the above discussion, we find merit in the submissions as canvassed by the Petitioner. The Revenue has categorically made a concession that for asst. yr. 2015-16 they would drop all notices issued under s. 148 after 1st April, 2021. Once this is the position, it is appropriate that the notice under s. 148 dt. 5th April, 2022, and the consequential assessment order, notice of demand, penalty notices/orders as well as the recovery notices be quashed and set aside. It is accordingly so ordered.”

ITA No. 1280/Mum/2026 ITA No. Mrs. Rosily Johny Kanichunnan Mrs. Rosily Johny Kanichunnan 9. Similar findings are accorded by the Hon’ble Bombay High Court in the accorded by the Hon’ble Bombay High Court in the accorded by the Hon’ble Bombay High Court in the case of Selvakumar Vethamonickam Nadar vs. ITO (supra) Selvakumar Vethamonickam Nadar vs. ITO (supra)and ITAT Mumbai and ITAT Mumbai in the case of Assistant Commissioner of Assistant Commissioner of Income Tax vs. Nilesh Haresh Income Tax vs. Nilesh Haresh Parwani (supra).

10.

Per contra, Ld. DR supported the orders of Revenue Authorities. Per contra, Ld. DR supported the orders of Revenue Authorities. Per contra, Ld. DR supported the orders of Revenue Authorities.

11.

On a thoughtful consideration of the facts of present case and materials On a thoughtful consideration of the facts of present case and materials On a thoughtful consideration of the facts of present case and materials available on record, without going into the merits of the case or available on record, without going into the merits of the case or the facts which the facts which are the basis of addition by Ld. AO, first we are dealing with the legal aspect are the basis of addition by Ld. AO, first we are dealing with the legal aspect are the basis of addition by Ld. AO, first we are dealing with the legal aspect raised by the Ld. Counsel of the assessee. The notice u/s 148 in the present case raised by the Ld. Counsel of the assessee. The notice u/s 148 in the present case raised by the Ld. Counsel of the assessee. The notice u/s 148 in the present case for AY 2015-16 was issued on 24.04.2022, copy of which is extracted as under: was issued on 24.04.2022, copy of which is extracted as under: was issued on 24.04.2022, copy of which is extracted as under:

ITA No. 1280/Mum/2026 ITA No. Mrs. Rosily Johny Kanichunnan Mrs. Rosily Johny Kanichunnan 12. Further, since the issue regarding issuance of notice u/s 148 for AY 2015- Further, since the issue regarding issuance of notice u/s 148 for AY 2015 Further, since the issue regarding issuance of notice u/s 148 for AY 2015 16 after 1st April, 2022 has been deliberated upon by the Hon’ble Courts and ha April, 2022 has been deliberated upon by the Hon’ble Courts and had April, 2022 has been deliberated upon by the Hon’ble Courts and ha held that as per para 19(e) and 19 and 19(f) of the decision in the case of Rajeev Bansal Rajeev Bansal otice u/s 148 can be issued after 1st April, 2021 for AY 2015 (supra),no notice u/s 148 can be issued after 1 April, 2021 for AY 2015-16, as conceded by the Revenue that all notices issued on or after 1st April, 2021 will conceded by the Revenue that all notices issued on or after 1 April, 2021 will have to be dropped, as they will not fall for completion during the period as they will not fall for completion during the period as they will not fall for completion during the period prescribed under ‘TOLA’. The . The relevant finding from the order of Hon’ble Apex finding from the order of Hon’ble Apex Court in the case of Rajeev Bansal (supra) Rajeev Bansal (supra) which is reproduced by Hon’ble which is reproduced by Hon’ble Bombay High Court in the case of Bombay High Court in the case of Selvakumar Vethamonickam Nadar vs. ITO Selvakumar Vethamonickam Nadar vs. ITO (supra) is extracted as under: is extracted as under: “19. Mr. N Venkataraman, learned Venkataraman, learned Addl. Solicitor General of India, made the Addl. Solicitor General of India, made the following submissions on behalf of the Revenue: following submissions on behalf of the Revenue: e) The Finance Act 2021 substituted the old regime for reassessment with a new e) The Finance Act 2021 substituted the old regime for reassessment with a new e) The Finance Act 2021 substituted the old regime for reassessment with a new regime. The first proviso to s. 149 does not expressly bar the application of TOLA. Sec. regime. The first proviso to s. 149 does not expressly bar the application of TOLA. regime. The first proviso to s. 149 does not expressly bar the application of TOLA. 3 of TOLA applies to the entire IT Act, including ss. 149 and 151 of the new regime. 3 of TOLA applies to the entire IT Act, including ss. 149 and 151 of the new regime. 3 of TOLA applies to the entire IT Act, including ss. 149 and 151 of the new regime. Once the first proviso to s. 149(1)(b) is r/w TOLA, then all the notices issued between Once the first proviso to s. 149(1)(b) is r/w TOLA, then all the notices issued between Once the first proviso to s. 149(1)(b) is r/w TOLA, then all the notices issued between 1st April, 2021 and 30th June, 2021 pertaining to asst. yrs. 2013 1st April, 2021 and 30th June, 2021 pertaining to asst. yrs. 2013-14, 2014 14, 2014-15, 2015-16, 2016-17, and 2017-18 will be within the period of limitation as explained in the 18 will be within the period of limitation as explained in the 18 will be within the period of limitation as explained in the tabulation below:

(f) The Revenue concedes that for the asst. yr. 2015 (f) The Revenue concedes that for the asst. yr. 2015-16, all notices issued on or after 16, all notices issued on or after 1st April. 2021 will have to be dropped as they will not 1st April. 2021 will have to be dropped as they will not fall for completion during the fall for completion during the period prescribed under TOLA;" period prescribed under TOLA;"

ITA No. 1280/Mum/2026 Mrs. Rosily Johny Kanichunnan (emphasis supplied)” 13. From the aforesaid observations of Hon’ble Apex Court in the case of Rajeev Bansal (supra), Hon’ble Apex Court in the case of Deepak Steel & Power Limited (supra) as well as in other cases referred to (supra) by Hon’ble High Courts, it is held that notice issued u/s 148 after 1st April 2021 for the assessment year 2022 are to be dropped as conceded by the Revenue before the Hon’ble Apex Court in Rajeev Bansal (supra), therefore in consequential assessment, notice of demand, penalty notice & orders as well as recovery notices are directed to be quashed and set aside.

14.

Coming to the facts of the present case, wherein, ostensibly the notice u/s 148 was issued on 24.04.2022 for AY 2015-16, which falls out of the prescribed limitation as per 1st Proviso to section 149 of the Act, in terms of aforesaid discussion, therefore respectfully following the directive principles laid down by Hon’ble Apex Court and followed by various Hon’ble Courts, we find it appropriate to set aside the notice u/s 148 issued on 24.04.2022 and accordingly, the consequential assessment which is impugned before us have to be struck down.

15.

As the notice u/s 148 is directed to dropped and assessment under which the addition/disallowance was made is quashed. Consequently, the substantive addition renders to be vacated and therefore, any other contention raised by the

ITA No. 1280/Mum/2026 Mrs. Rosily Johny Kanichunnan assessee on legal premise as well as on merits of the facts becomes academic only and therefore, are not adjudicated.

16.

In result, the appeal of assessee stands allowed, in above terms.

Order pronounced in the open court on 29-07-2026.

Sd/- Sd/- (BEENA PILLAI) (ARUN KHODPIA) JUDICIAL MEMBER ACCOUNTANT MEMBER

Mumbai, Dated : 29-07-2026. Ankit K., Sr. PS

Copy of the Order forwarded 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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