IMTIYAZ ABDULREMAN ,BIJAPUR vs. INCOME TAX OFFICER, WARD-1 & TPS , BIJAPUR

PER KESHAV DUBEY, JUDICIAL MEMBER:

This appeal at the instance of the assessee is directed against the order of the ld. CIT(A)/NFAC dated 16.09.2025 vide DIN & Order No. ITBA/NFAC/S/250/2025-26/1080791246(1) passed u/s 250 of the Income Tax Act, 1961 (in short “the Act”) for the assessment year 2013-14.

ITA No.2327/Bang/2025 Imtiyaz Abdulrehman Jamakhandi, Bijapur Page 2 of 23

ITA No.2327/Bang/2025 Imtiyaz Abdulrehman Jamakhandi, Bijapur Page 3 of 23

ITA No.2327/Bang/2025 Imtiyaz Abdulrehman Jamakhandi, Bijapur Page 4 of 23 3. The Assessee has also raised the following additional grounds of appeal:

3.1 We have heard both the parties on admission of additional grounds. The Lucknow bench of the Hon’ble Allahabad High Court in the case of CIT Vs. Sahara India (2012) 347 ITR 331 held that a legal issue can be raised at any stage but there shall be good reason for admitting the additional ground. In our Opinion all the facts are already on record and there is no necessity of investigation of any fresh facts for the purpose of the adjudication of above grounds. Further we are also of the opinion that the additional grounds raised in the present case are purely legal in nature & therefore these are critical for a fair adjudication of the matter. The Hon’ble

ITA No.2327/Bang/2025 Imtiyaz Abdulrehman Jamakhandi, Bijapur Page 5 of 23 Madras High Court in the case of CIT Vs Indian Bank (2015) 230 Taxman 635 (Madras) held that Rule 11 of the I.T. Rules makes it clear that the assessee has the right to raise additional grounds and if the same is beneficial to the assessee, the same should be considered by the Tribunal.

3.2 Further, the Hon’ble Karnataka High Court in the case of Gundathur Thimmappa & Sons vs. CIT, Mysore, reported in (1968) 70 ITR 70 held that when the point raised by the assessee is a point which went to the root of the matter and affected not merely his liability to pay tax but also jurisdiction of the Tribunals and Authorities themselves to subject the amount concerned to tax, the Appellate Tribunal had the discretion to permit point of law to be raised for the first time in appeal because the question went to the root of the case. The Hon’ble Supreme Court in the case of National Thermal Power Co. Ltd. Vs CIT (1998) 229 ITR 383 held that undoubtedly, the Tribunal will have the discretion to allow or not allow a new ground to be raised. But where the Tribunal is only required to consider a question of law arising from the facts which are on record in the assessment proceedings, we fail to see why such a question should not be allowed to be raised when it is necessary to consider that question in order to correctly assess the tax liability of an assessee. Accordingly, we are inclined to admit the additional legal grounds for the purpose of adjudication as there was no investigation of any fresh facts otherwise on record and these are critical for a fair adjudication of the matter.

3.3. Thus, in the present case the assessee has primarily challenged the legal issue by way of raising additional grounds of appeal apart from the grounds on merits of the case. The

ITA No.2327/Bang/2025 Imtiyaz Abdulrehman Jamakhandi, Bijapur Page 6 of 23 additional legal ground raised by the assessee is that the notice issued u/s 148 of the Act is beyond the limitation period and accordingly the Re-assessment order passed u/s 147 of the Act is liable to be quashed. We deemed it fit & proper to first adjudicate this legal ground as raised by the assessee with regard to issuance of notice u/s 148 of the Act being barred by limitation and if necessity so desires, we will also consider the grounds on the merits of the case.

4.1 It is worthwhile to note that in wake of the pandemic, the Central Government announced a complete lockdown on the entire nation, in the backdrop of which, limitation periods falling between March 20, 2020 to March 31, 2021 were extended up to June 30, 2021 by way of taxation and other laws (Relaxation and Amendment of certain provisions) Act, 2020 (‘TOLA’). While

ITA No.2327/Bang/2025 Imtiyaz Abdulrehman Jamakhandi, Bijapur Page 7 of 23 this extension was in operation, the Parliament enacted Finance Act, 2021 which completely amended the extant reassessment regime. However, the revenue continued to issue notices basis the un-amended provisions taking the benefit of TOLA. Thus, in the present case the notice u/s 148 of the Act was also issued under the un-amended provisions of the Act but issued after 01/04/2021 i.e. after the amendment of the provisions of section 147 to 151 of the Act. The said notice was unsustainable as it was issued in accordance with the statutory regime as existed prior to 31/03/2021. Various High Courts had set aside such notices that were issued after 31/03/2021 without following the procedure as prescribed under section 148A of the Act. The Revenue filed a special leave petition before the Hon’ble Supreme Court against the decision of the Hon’ble Allahabad High Court quashing the notice u/s 148 of the Act.

4.2 The Hon’ble Supreme Court in the case of UOI Vs. Ashish Agarwal reported in (2022) 444 ITR 1 had passed a judgment dated 04/05/2022 by invoking Article 142 of the constitution & directed that section 148 notices which were challenged before the various High Courts “shall be deemed to have been issued under section 148A of the Act as substituted by the Finance Act, 2021 and construed or treated to be show-cause notices in terms of section 148A(b) of the Act.” Further, the Apex Court dispensed with the requirement of conducting any enquiry with the prior approval of the specified authority under section 148A(a) of the Act. Accordingly, as per the direction of the Hon’ble Supreme Court, the information on the basis of which this case was reopened had been provided to the assessee vide show the cause notice u/s 148A(b) of the Act dated 24.05.2022. The assessee was required to furnish his response/reply by 09.06.2022 at 11AM. The assessee requested for

ITA No.2327/Bang/2025 Imtiyaz Abdulrehman Jamakhandi, Bijapur Page 8 of 23 adjournment on 09.06.2022 by stating that he is collecting the bank statements for the FY 2012-13. Thereafter, as per the directions of the Hon’ble Supreme Court and on the basis of material information available on record, the AO passed an order u/s. 148A(d) of the Act on 21.07.2022 holding that it is a fit case for the issuance of notice u/s. 148 of the Act for the AY 2013-14. The AO thereafter issued notice u/s. 148 of the Act for the AY 2013-14 on the same day i.e. on 21.07.2022 directing the assessee to file a return in the prescribed form within 30 days from the service of notice.

4.3 The assessee in response to the notice u/s 148 of the Act, again filed the return of income on 20.08.2022. The AO, thereafter, issued notices u/s. 143(2) and 142(1) of the Act on various dates along with the show cause notices. The AO after considering the submissions of the assessee held that in the absence of any explanation with documentary evidence from the assessee with regard to the excess credit found in his bank accounts and sources of amount utilized to make payment to the owners of land added the entire amount of Rs.1 Crore u/s 68 of the Act r.w.s. 115BBE of the Act. Thus the AO completed the Re-assessment proceedings on a total assessed income of Rs.1 Crore u/s 147 of the Act.

ITA No.2327/Bang/2025 Imtiyaz Abdulrehman Jamakhandi, Bijapur Page 9 of 23 documents. During the appellate proceedings the assessee did not produce any credible documentary evidence such as bank statements, remittance certificates or confirmation supported by income tax returns of the alleged contributors and accordingly held that AO was justified in treating the sum of Rs.1 Crore as unexplained cash credit u/s 68 of the Act r.w.s. 115BBE of the Act.

ITA No.2327/Bang/2025 Imtiyaz Abdulrehman Jamakhandi, Bijapur Page 10 of 23

ITA No.2327/Bang/2025 Imtiyaz Abdulrehman Jamakhandi, Bijapur Page 11 of 23

ITA No.2327/Bang/2025 Imtiyaz Abdulrehman Jamakhandi, Bijapur Page 12 of 23

ITA No.2327/Bang/2025 Imtiyaz Abdulrehman Jamakhandi, Bijapur Page 13 of 23

ITA No.2327/Bang/2025 Imtiyaz Abdulrehman Jamakhandi, Bijapur Page 14 of 23

ITA No.2327/Bang/2025 Imtiyaz Abdulrehman Jamakhandi, Bijapur Page 15 of 23

ITA No.2327/Bang/2025 Imtiyaz Abdulrehman Jamakhandi, Bijapur Page 16 of 23

ITA No.2327/Bang/2025 Imtiyaz Abdulrehman Jamakhandi, Bijapur Page 17 of 23

ITA No.2327/Bang/2025 Imtiyaz Abdulrehman Jamakhandi, Bijapur Page 18 of 23

“10. In view of the above and for the reasons stated above, the present Appeals are allowed in part. The impugned common judgments and orders passed by the High Court of Judicature at Allahabad in Writ Tax No. 524 of 2021 and other allied tax appeals/petitions, is/are hereby modified and substituted as under : (i) The impugned s. 148 notices issued to the respective assessees which were issued under unamended s. 148 of the IT Act, which were the subject matter of writ petitions before the various respective High Courts shall be deemed to have been issued under s. 148A of the IT Act as substituted by the Finance Act, 2021 and construed or treated to be show-cause notices in terms of s. 148A(b). The AO shall, within thirty days from today provide to the respective assessees information and material relied upon by the Revenue, so that the assessees can reply to the show-cause notices within two weeks thereafter; (ii) The requirement of conducting any enquiry, if required, with the prior approval of specified authority under s. 148A(a) is hereby dispensed with as a onetime measure vis-a-vis those notices which have been issued under s. 148 of the unamended Act from 1st April, 2021 till date, including those which have been quashed by the High Courts. Even otherwise as observed hereinabove holding any enquiry with the prior approval of specified authority is not mandatory but it is for the concerned AOs to hold any enquiry, if required; (iii) The AOs shall thereafter pass orders in terms of s. 148A(d) in respect of each of the concerned assessees; Thereafter after following the procedure as required under s. 148A may issue notice under s. 148 (as substituted); (iv) All defences which may be available to the assesses including those available under s. 149 of the IT Act and all rights and contentions which may be available to the concerned assessees and Revenue under the Finance Act, 2021 and in law shall continue to be available. 11. The present order shall be applicable PAN India and all judgments and orders passed by different High Courts on the issue and under which similar

ITA No.2327/Bang/2025 Imtiyaz Abdulrehman Jamakhandi, Bijapur Page 19 of 23 notices which were issued after 1st April, 2021 issued under s. 148 of the Act are set aside and shall be governed by the present order and shall stand modified to the aforesaid extent. The present order is passed in exercise of powers under Art. 142 of the Constitution of India so as to avoid any further appeals by the Revenue on the very issue by challenging similar judgments and orders, with a view not to burden this Court with approximately 9000 appeals. We also observe that present order shall also govern the pending writ petitions, pending before various High Courts in which similar notices under s. 148 of the Act issued after 1st April, 2021 are under challenge. 12. The impugned common judgments and orders passed by the High Court of Allahabad and the similar judgments and orders passed by various High Courts, more particularly, the respective judgments and orders passed by the various High Courts particulars of which are mentioned hereinabove, shall stand modified/substituted to the aforesaid extent only. All these appeals are accordingly partly allowed to the aforesaid extent.”

10.1 In pursuance of aforesaid directions issued by the Apex Court, PAN INDIA which applied to the assessee and the notice u/s 148 of the Act dated 30/06/2021 also, which was directed to be treated as a notice u/s 148A(b) of the Act (as amended), the AO furnished /provide information to the assessee vide show cause notice u/s 148A(b) of the Act dated 24.05.2022. The assessee was required to furnish his response/reply by 09.06.2022. The assessee had requested for adjournment on 09.06.2022 by stating that he is in the process of collecting bank statements for the FY 2012-13 and accordingly need some time for providing the documents. Thereafter, as per the directions of the Hon’ble Supreme Court and on the basis of material information available on record, the AO passed an order u/s. 148A(d) of the Act on 21.07.2022 holding that it is a fit case for the issuance of notice u/s. 148 of the Act for the AY 2013-14. The AO thereafter issued notice u/s. 148 of the Act on the same day i.e. on 21.07.2022 directing the assessee to file a return in the prescribed form within 30 days from the service of notice. It is the specific contention of the assessee that having regard to the directions issued in Ashish Agarwal’s case, the impugned order u/s 148A(d) and notice u/s 148 of

ITA No.2327/Bang/2025 Imtiyaz Abdulrehman Jamakhandi, Bijapur Page 20 of 23 the Act had to be issued on or before 15/06/2022 and the same having been issued on 21/07/2022 was clearly barred by limitation as held by the Apex Court in the case of Union of India Vs. Rajeev Bansal reported in 469 ITR 46. Thus, the main contention of the assessee is that the notice issued u/s 148 of the Act dated 21/07/2022 for the AY 2013-14 is time barred as it was issued beyond the surviving period as specified in the case of Rajiv Bansal (supra). The relevant paragraph is reproduced below for ease of reference & convenience-

“110. The effect of the creation of the legal fiction in Ashish Agarwal (supra) was that it stopped the clock of limitation with effect from the date of issuance of Section 148 notices under the old regime [which is also the date of issuance of the deemed notices]. As discussed in the preceding segments of this judgment, the period from the date of the issuance of the deemed notices till the supply of relevant information and material by the assessing officers to the assesses in terms of the directions issued by this Court in Ashish Agarwal (supra) has to be excluded from the computation of the period of limitation. Moreover, the period of two weeks granted to the assesses to reply to the show cause notices must also be excluded in terms of the third proviso to Section 149. 111. The clock started ticking for the Revenue only after it received the response of the assesses to the show causes notices. After the receipt of the reply, the assessing officer had to perform the following responsibilities: (i) consider the reply of the assessee under section 149A(c); (ii) take a decision under section 149A(d) based on the available material and the reply of the assessee; and (iii) issue a notice under section 148 if it was a fit case for reassessment. Once the clock started ticking, the assessing officer was required to complete these procedures within the surviving time limit. The surviving time limit, as prescribed under the Income-tax Act read with TOLA, was available to the assessing officers to issue the reassessment notices under section 148 of the new regime. 112. Let us take the instance of a notice issued on 1 May 2021 under the old regime for a relevant assessment year. Because of the legal fiction, the deemed show cause notices will also come into effect from 1 May 2021. After accounting for all the exclusions, the assessing officer will have sixty-one days [days between 1 May 2021 and 30 June 2021] to issue a notice under section 148 of the new regime. This time starts ticking for the assessing officer after receiving the response of the assessee. In this instance, if the assessee submits the response on 18 June 2022, the assessing officer will have sixty-one days from 18 June 2022 to issue a reassessment notice under section 148 of the new

ITA No.2327/Bang/2025 Imtiyaz Abdulrehman Jamakhandi, Bijapur Page 21 of 23 regime. Thus, in this illustration, the time limit for issuance of a notice under section 148 of the new regime will end on 18 August 2022.”

10.2 Thus, we are of the considered opinion that the Apex Court has laid down the law to consider such notice as valid notice or invalid notice depending upon the surviving time left between the date of issuance of notice u/s 148 of the Act read with section 3(1) of TOLA up to 30/06/2021 and the issuance of notice u/s 148 of the Act pursuant to the directions issued by the Hon’ble Apex Court in the case of Ashish Agarwal (Supra). In our opinion, the manner of computation of surviving period and limitation are as follows-

1) The surviving or balance time limit can be calculated by computing the number of days between the date of issuance of the deemed notice and 30 June 2021. (Para- 108)

2) The clock starts ticking for the Revenue only after it received the response of the assesses to the show causes notices. (Para- 111)

3) The AO has to consider the reply of the assessee under section 149A(c); take a decision under section 149A(d) based on the available material and the reply of the assessee; and issue a notice under section 148 if it was a fit case for reassessment. Once the clock started ticking, the assessing officer was required to complete these procedures within the surviving time limit. (Para 111)

4) The AO required to issue notice u/s 148 of the new regime within the time limit surviving under the Act read with TOLA. All notices issued beyond the surviving period are time barred and liable to be set aside. [ Para 114 (h)].

ITA No.2327/Bang/2025 Imtiyaz Abdulrehman Jamakhandi, Bijapur Page 22 of 23

10.3 Before proceeding further, it is worthwhile here to note down the important dates for consideration- SL No. Particulars Dates 1) Date of issue of original Notice during 1/4/21 30/06/2021 to 30/6/21 2) Date of supply of information as per judgment 24/05/2022 of Ashish Agarwal 3) Date by which reply to be submitted as per SCN 09/06/2022 4) Date of reply filed by the assessee for the above 09/06/2022 (As noted in Order u/s 148A(d) [Assessee seeks adjournment] Date of Passing the Order U/s 148A(d) 5) 21/07/2022 6) Date of issue of notice u/s 148 as per new 21/07/2022 regime

Applying the above Principles laid down by the Hon’ble Supreme Court to the facts of the instant case and adopting the conservative computation, the notice u/s 148 of the Act will be time barred by 36 days as detailed below- Sl No. Particulars Computation Dates 1. Date of issue of original notice u/s 148 A 30.6.21 within the extended period 2. Last date of extended period under TOLA B 30.6.21 3. Balance (on inclusive method) C=B-A 1 day 4. Minimum days available as per 4th proviso D 7 days to section 149(1) 5. Surviving period (para 108 to 113 of E (Higher of 7 days Rajeev Bansal) C & D) 6. Date of response filed by the assesse to F 9.6.22 SCN u/s 148A (b) [Assessee seeks adjournment] 7. Date on which period of 2 weeks allowed G 9.6.22 to the assesse to respond to notice ends (Deemed stay as per 3rd Proviso to section 149 and para 114 (g) of Rajeev Bansal) 8. Last date for issuing notice u/s 148 (i.e., H=E+G 15.6.22 9.6.22 + 7 days) 9. Actual date of issuance of notice u/s 148 I 21.07.22 10. Notice is time barred by (para 114 {h} of J=I-H 36 days Rajeev Bansal)

ITA No.2327/Bang/2025 Imtiyaz Abdulrehman Jamakhandi, Bijapur Page 23 of 23

10.4 While arriving at the time barring by 36 days, we have also considered the application of 4th proviso to section 149(1) of the Act, which govern time limit for issuance of notice u/s 148 of the Act. However, the judgment of Hon’ble Apex Court in the case of Rajeev Bansal (supra) did not specify the application of 4th Proviso to section 149(1) of the Act. In view of the above, the order passed u/s 148A(d) of the Act as well as notice issued u/s 148 of the Act both dated 21.07.2022 is hereby quashed and set aside being barred by limitation and all consequential proceedings are also quashed and set aside.

Order pronounced in the open court on 22nd July, 2026

Sd/- Sd/- (Prashant Maharishi) (Keshav Dubey) Vice President Judicial Member

Bangalore, Dated 22nd July, 2026. VG/SPS

Copy to:

Asst. Registrar, ITAT, Bangalore.