ACIT-19(3), MUMBAI, MUMBAI vs. SRIMY JEWELS, MUMBAI

PDF · subscribers
ITA 4817/MUM/2026Status: DisposedITAT Mumbai29 July 2026AY 2013-148 pages

In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that the notice issued under Section 148 on July 28, 2022, was beyond the surviving limitation period available as of June 30, 2021, as per the Supreme Court's decision in Rajeev Bansal. Therefore, the reassessment proceedings were invalid.

What were the facts?

The Assessing Officer (AO) received information about accommodation entries and issued a notice under Section 148 in June 2021. Following the Ashish Agarwal judgment, a fresh notice under Section 148A(b) was issued in May 2022, with an order under Section 148A(d) and notice under Section 148 in July 2022. The assessee argued the notice was beyond the survival period.

What were the issues?

The primary issue was whether the reassessment notice issued under the amended provisions was within the limitation period, considering the Supreme Court's rulings on saved notices and surviving limitation periods.

Which sections of the Income-tax Act were involved?

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

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, MUMBAI BENCH “G” MUMBAI

Before: SHRI OM PRAKASH KANT & SHRI PAWAN SINGH

For Appellant: Shri Lalchand Choudhary, CA
For Respondent: Shri Rajgopal Parthasarathi – SR
Pronounced: 29/07/2026

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “G” MUMBAI

BEFORE SHRI OM PRAKASH KANT (ACCOUNTANT MEMBER) AND SHRI PAWAN SINGH (JUDICIAL MEMBER)

ITA No. 4817/MUM/2026 Assessment Year: 2013-14

Assistant Commissioner of Srimy Jewels, JE 3010, Bharat Income Tax 19(3), Room Diamond Bourse Bandra Kurla No.513, 5th Floor, Piramal Vs. Complex Bandra (East), Mumbai chamber Parel Mumbai – – 400051, Maharashtra. 400012, Mumbai, Maharashtra. PAN NO. ABFFS 1932 D Appellant Respondent

Assessee by : Shri Lalchand Choudhary, CA

Revenue by : Shri Rajgopal Parthasarathi – SR DR.

: 24/07/2026 Date of Hearing Date of pronouncement : 29/07/2026

ORDER PER OM PRAKASH KANT, AM

This appeal by the assessee is directed against the order dated 18.02.2026, passed by the learned Commissioner of Income Tax (Appeals) – National Faceless Appeal Centre, Delhi [in short, ‘the Ld. CIT(A)’], for Assessment Year (in short ‘A.Y’), 2013-14, raising following grounds:-

Srimy Jewels 2 ITA No. 4817/MUM/2026

1.

"Whether, on the facts and in the circumstances of the case and in law, the Id. CITIA) erred in holding that the notice issued under section 148 of the Income-tax Act, 1961 on 21.06.2021 for A.Y. 2013-14 was barred by limitation, without considering the statutory extensions granted by the Taxation and Other Laws (Relaxation and Amendment of Certain Pravisions) Act, 2020 ("TOLA Act") due to the COVID-19 pandemic?" 2. "Whether, on the facts and in the circumstances of the case and in law, the lad CIT(A) erred in interpreting the Supreme Court judgment in Union of India u. Ashish Agarwal (2022) as rendering the reassessment notice under section 148 invalid, when the Hon'ble Supreme Court had expressly preserved such notices as show cause notices under section 148A(b) and mandated compliance with procedural safeguards?" 3. "Whether, on the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in ignoring the extended limitation period provided under amended section 149(1)(b) of the Income-tax Act, 1961, which allows reassessment up to ten years in cases where escaped income exceeds Rs.50 lakh, particularly when the unaccounted credits in the assessee's accounts exceeded this threshold? 4. "Whether, on the facts and in the circumstances of the case and in law, the Id. CIT(A) erred in holding the reassessment proceedings under section 147 r.w.s. 1448 as invalid and without jurisdiction, despite the Assessing Officer having complied with the timelines and procedural requirements prescribed under section 148A(d)?" 5. "Whether, on the facts and in the circumstances of the case and in law, the Id CIT(A) erred in quashing the assessment order on limitation grounds, when the assessee had misconstrued the computation of the statutory timeline under section 148A(d), thereby depriving the Revenue of its legitimate right to reassess escaped income?" 6. "Whether, on the facts and in the circumstances of the case and in law, the id. CIT(A) erred in not appreciating that the legal fiction created by the Supreme Court in Ashish Agarwal allows the Revenue adequate time to complete reassessment proceedings, and whether the CIT(A)'s restrictive interpretation undermines the legislative intent behind the reassessment provisions?" 7. "Whether, on the facts and in the circumstances of the case and in low, the Ld. CIT(A) erred in not construing the limitation provisions under the Income-tax Act liberally in favour of the Revenue to prevent escape of income, especially when all procedural safeguards had been complied with? 8. "Whether, on the facts and in the circumstances of the case and in law, the Ld. CIT(A) decision conflicts with settled judicial precedents emphasizing substantial

Srimy Jewels 3 ITA No. 4817/MUM/2026

compliance over strict adherence to limitation periods in reassessment proceedings?" 2. In the grounds, the Revenue is mainly agitated with the finding of the learned CIT(A) on the validity of the reassessment in view of limitation in issuing notice under Section 148 of the Act.

3.

Briefly stated, the facts of the case are that the assessee filed its return of income on 25.09.2013, declaring total income at Rs.37,23,140/-. Thereafter, the Assessing Officer received information that a search in the case of Shri Rajendra Jain was conducted on 03.10.2013, wherein he accepted that he was engaged in providing accommodation entries to various beneficiaries through shell entities including M/s. Dharam Impex and M/s Mani Prabha Impex. The Assessing Officer observed that the assessee purchased Diamonds from M/s. Dharam Impex and M/s Mani Prabha Impex during the year under consideration. Accordingly, the Assessing Officer recorded reasons to believe and issued notice under Section 148 of the Act under the old provisions on 21.06.2021.

4.

Thereafter, in the light of the decision of the Hon'ble Supreme Court in the case of Union of India v. Ashish Agarwal [(2022) 444 ITR 1 (SC)] the Assessing Officer issued notice under Section 148A(b) of the Act on 20th May, 2022, and passed order u/s 148A(d) on 28.07.2022 followed by notice under Section 148. Thereafter, he completed the reassessment proceedings.

Srimy Jewels 4 ITA No. 4817/MUM/2026

5.

Before the learned CIT(A), the assessee challenged the validity of the reassessment proceedings on the ground that notice under Section 148 issued under the amended provisions on 28th July, 2022 was beyond the survival period provided under the decision of the Hon'ble Supreme Court in the case of Ashish Agarwal (Supra). The learned counsel referred to the decision of the Hon'ble Supreme Court in the case of Union of India v. Rajeev Bansal [(2024) 167 taxmann.com 70 (SC)]. wherein it is held that notice under Section 148 under the amended provisions, if issued beyond the survival period, is barred by limitation and, therefore, the entire reassessment proceedings vitiated.

6.

The learned CIT(A), accordingly, after considering the submissions of the parties in detail and computing the survival period, held that the notice under Section 148 issued under the amended provisions as beyond the survival period.

7.

We have considered the rival submissions and perused the material available on record. The short controversy before us is whether the notice issued under section 148 of the Act on 28.07.2022 was issued within the period of limitation available to the Assessing Officer after giving effect to the legal fiction created by the Hon'ble Supreme Court in Union of India v. Ashish Agarwal (supra), as subsequently explained and authoritatively interpreted in Union of India v. Rajeev Bansal (supra).

Srimy Jewels 5 ITA No. 4817/MUM/2026

8.

The Hon'ble Supreme Court in Rajeev Bansal (supra) has held that although the notices issued between 01.04.2021 and 30.06.2021 under the unamended provisions stand saved by virtue of the legal fiction created in Ashish Agarwal (supra), the Assessing Officer is entitled to issue a fresh notice under section 148 of the substituted provisions only within the period of limitation surviving as on 30.06.2021. The judgment further explains, particularly in paragraphs 112 and 114(h), that after completion of the procedure under section 148A, the Assessing Officer gets only the balance period which remained available on 30.06.2021, and any notice issued beyond such surviving period is barred by limitation.

9.

Therefore, the controversy essentially turns upon the correct computation of the surviving period. The relevant dates are undisputed and emerge from the record itself:

Particulars Date Original notice u/s 148 (old regime) 21.06.2021 10 days (including Balance period available till 30.06.2021 21.06.2021) Information supplied under section 148A(b) 28.05.2022 pursuant to Ashish Agarwal Reply of assessee 09.06.2022

Srimy Jewels 6 ITA No. 4817/MUM/2026

Particulars Date Balance surviving period available to AO 10 days thereafter Last permissible date for issuing notice u/s 19.06.2022 148 Actual notice issued u/s 148 28.07.2022

10.

Thus, on application of the principle laid down in Rajeev Bansal (supra), the Assessing Officer was required to issue the notice under section 148 on or before 19.06.2022. However, the notice admittedly came to be issued only on 28.07.2022, i.e., after expiry of the surviving period available under law. Consequently, the notice was ex facie barred by limitation.

11.

Before us, the learned Departmental Representative was unable to point out any error either in the above chronology or in the computation of the surviving period adopted by the learned CIT(A). No alternative computation consistent with the principles laid down by the Hon'ble Supreme Court in Rajeev Bansal (supra) was placed before us. In the absence of any factual or legal infirmity in the computation made by the learned CIT(A), we find ourselves in agreement with his conclusion.

12.

Once the jurisdictional notice issued under section 148 is held to be barred by limitation, the Assessing Officer lacks the

Srimy Jewels 7 ITA No. 4817/MUM/2026

jurisdiction to assume reassessment proceedings. The defect being jurisdictional, it strikes at the very root of the proceedings and is incapable of being cured by subsequent compliance with the procedure prescribed under section 148A or by obtaining sanction under section 151. The consequential order passed under section 147 read with section 144B, therefore, cannot survive.

13.

We, accordingly, uphold the order of the learned CIT(A) quashing the reassessment proceedings. The grounds raised by the Revenue are dismissed.

14.

In the result, the appeal of the Revenue is dismissed.

Order pronounced in the open Court on 29/07/2026.

Sd/- Sd/- (PAWAN SINGH) (OM PRAKASH KANT) JUDICIAL MEMBER ACCOUNTANT MEMBER

Mumbai; Dated: 29/07/2026 M. Ranganath Vittal , Sr. P.S.

Srimy Jewels 8 ITA No. 4817/MUM/2026

Copy of the Order forwarded to :

1.

The Appellant 2. The Respondent. 3. CIT 4. DR, ITAT, Mumbai 5. Guard file.

BY ORDER, //True Copy// (Assistant Registrar) ITAT, Mumbai

More judgments on Section 148

All 35,022 judgments and leading authorities on Section 148 →

Recent GST High Court judgments

Search GST case law →