L M TRADECOM PRIVATE LIMITED (THROUGH RAVI KUMAR JAIN BEING EX-DIRECTOR OF COMPANY),UTTAR PRADESH vs. ASST. CIT, CENTRAL CIRCLE 4(3), MUMBAI, MUMBAI

The brief facts of the case are that the assessee filed the return of income declaring total income at Rs.3,46,112/-. The assessee is trader of equity share & derivative. The case was reopened by issuing notices u/s 148A(b) of the Act. The reassessment was completed by making an addition of Rs. 1,76,04,072/- under section 69C of the Act by deeming 2% of the total premium value aggregating to Rs. 88,02,03,575/- as cash commission. Aggrieved assessee filed an appeal before the Ld. CIT(A). The Ld. CIT(A) upheld the impugned assessment order. Aggrieved assessee filed an appeal before us.

The Ld. AR contended that the notice issued under section 148A(b) of the Act on 29/06/2021 is void ab initio, in view of the judgment of the Hon’ble Supreme Court in UOI v. Rajiv Bansal (2024) 469 ITR 46 (SC). The Ld. AR further placed reliance on the decision of the Hon’ble Bombay High Court in Spicy Sangria Hotels Pvt. Ltd. v. Income Tax Officer, Ward-13(2)(1), Mumbai; Writ Petition No. 1325 of 2023, wherein the Court has duly considered and applied the ratio of the aforesaid Hon’ble Supreme Court judgment in UOI v. Rajiv Bansal (supra). The relevant observations of the Hon’ble Bombay High Court at paragraphs 3 to 5 are reproduced below:— “3. Admittedly in the facts of the present case, the Notice issued under Section 148 is after 1st April 2021 (namely, on 28th July 2022). This being the case, we find that in the facts of the present case, the Notice issued under Section 148 dated 28th July 2022 would have to be dropped and cannot be proceeded with further. 4. We accordingly quash and set aside the said notice dated 28th July 2022 issued under Section 148 of the IT Act.

Rule is accordingly made absolute in the aforesaid terms and the Writ Petition is also disposed of in terms thereof. However, there shall be no order as to costs.”

TheLd.AR further argued and respectfully relied on the order of the order of the Hon’ble Bombay High Court in case of Verjinia Foods Limited vs the Income Tax Officer, Ward-1(1), Kalyan W.P. No.1428 OF 2023, date of order 06/10/2025 wherein it has been held as under:- “(a) Firstly, it is submitted that the Hon'ble Supreme Court in it's order dated 6th January 2025 [in SLP(Civil) Diary No. 54301/2024 (part of group matter in SLP(Civil) Diary No. 56892/2024)] had held that the case of the Petitioner was squarely covered by the decision in the case of 'Union of India Vs. Rajeev Bansal [2024] 469 ITR 46 (SC)' and that the case of the Petitioner would be governed by the reasoning discussed in the said decision. It is submitted that the Hon'ble Supreme Court in para 19(f) of the said decision in the case of Rajeev Bansal (supra) has recorded the submission of the Ld. Additional Solicitor General of India, that in respect of Assessment Year 2015-16, all the notices issued on or after 1stApril 2021 would 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 [for short "TOLA"]. Once the Ld. Additional Solicitor General of India has already conceded to drop the re-assessment proceedings in respect of the A.Y.2015-16 where Notices under Section 148 are issued on or after 1st April 2021, the Assessing Officer ought to have dropped the re-assessment proceedings and certainly could not proceed to pass the re-assessment order, (b) Secondly, it is contended that even otherwise, the Writ Petition filed by the Petitioner, being Writ Petition No. 1428 of 2023, was also disposed on the ground that the case of the Petitioner was governed by the decision of this Court in Hexaware Technologies Limited v. ACIT (supra) and that the Jurisdictional Assessing Officer (Respondent No. 1) could not issue any Notice under Section 148 in light of the provisions of Section 151A. This aspect was not the subject matter of dispute before the Hon'ble Supreme Court in Union of India Vs. Rajeev Bandal (supra). Accordingly, even in the light of the decision of this Court in the case of Hexaware Technologies Limited v. ACIT (supra), the re-assessment proceedings could not continue.

The learned Counsel for the Revenue does not dispute that the Hon'ble Apex Court in Rajeev Bansal's case [paragraph 19(f)] records the submissions made by the Ld. Additional Solicitor General of India about the Revenue conceding that for the A.Y. 2015-16, all notices issued on or after 1stApril 2021 will have to be dropped as they would not fall for completion during the period prescribed under TOLA. However, it is his submission that in the operative part of the order in Rajeev Bansal's case [paragraph 114 Conclusion], the Hon'ble Apex Court has not made any distinction in respect of reassessment notices issued for the A.Y.2015-16 and the assessment notices issued for any other assessment year. He, therefore, contends that as per his reading of the said order in Rajeev Bansal (supra), it appears that though a concession has been made by the Ld. ASG in respect of the A.Y.2015-16, the said concession does not appear to have been judicially recognized by the Hon'ble Apex Court. He, however, fairly admits that the reassessment proceedings could not have been proceeded further as the order dated 9th May 2024 of this Court in the Writ Petition No. 1428 of 2023 has quashed and set aside the Notice dated 5th April 2022 issued under Section 148 of the Act on two separate grounds one that it was time barred and the other being on the basis of the judgment of this Court in Hexaware Technologies Limited V. ACIT (supra). The judgment of this Court in Hexaware Technologies Limited (supra) is not yet set aside or modified by the Hon'ble Apex Court.

In rejoinder, the learned Counsel for the Applicant/Petitioner submitted that the issue of concession made by the Ld. ASG in respect of A.Y.2015-16 in Rajeev Bansal's case, came up for consideration before different High Courts where it is held that Notices issued under Section 148 after 1st April 2021 for A.Y.2015-16 would be bad in law. In this regard he relied upon the following judgments: (a) ITO vs. Venkatlal Iyyappa Rajana [2025] 178 taxmann.com 410 (Karnataka) [05-08-2025] (b) Pratishtha Garg Vs. Assistant Commissioner of Income-tax Central [2025] 171 taxmann.com 264 (Delhi) [19-12-2024] (c) Lalit Gulati vs. Assistant Commissioner of Income-tax [2025] 174 taxmann.com 273 (Delhi) [02-05-2025].”

The Ld. DR relied on the orders of the revenue authorities but was unable to rebut the submissions of the Ld. AR by citing any contrary judicial precedent.

We have carefully considered the rival submissions, examined the material available on record, and taken note of the judicial precedents. The assessee’s challenge is fundamentally on the jurisdictional ground namely, that the notice issued under section 148A(b) dated 29/06/2021 is void ab initio, being issued beyond the period of limitation for A.Y. 2015-16, and squarely covered by the binding decisions of the Hon’ble Supreme Court in UOI v. Rajiv Bansal (supra) and the Hon’ble Bombay High Court in Spicy Sangria Hotels Pvt. Ltd. (supra) and Verjinia Foods Ltd. (supra). The legal position that emerges from these authorities is unambiguous & all reassessment notices issued for A.Y. 2015-16 on or after 01/04/2021 are barred by limitation and must be dropped, as they do not fall within the extended period permissible under TOLA. The Hon’ble Bombay High Court has repeatedly applied this principle and quashed reassessment notices in identical fact situations. In the present case, the impugned notice under section 148A(b) was issued on 29/06/2021, well beyond the legally permissible period. Consequently, the reassessment proceedings lack of jurisdiction from their inception. The Ld. DR, despite relying on the orders of the revenue authorities, was unable to produce any contrary decision to rebut the judicial precedents cited by the Ld. AR. In view of the above, the legal ground pertaining to the validity of the reassessment notice goes to the root of jurisdiction and is sufficient to vitiate the entire proceedings. Once the notice itself is void ab initio, the consequent reassessment order cannot survive. Accordingly, the additions made under sections 69C of the Act become purely academic and need not be adjudicated on merits. We therefore hold that the reassessment proceedings initiated under section 148A(b) are invalid, and the reassessment order passed pursuant thereto is liable to be quashed. As the issue is decided on the jurisdictional legal ground, the grounds on merits are rendered academic and are not adjudicated.

In the result, the appeal of the assessee bearing ITA No.4988/Mum/2026 is allowed. Order pronounced in the open court on 29th day July 2026.