DY COMMISSIONER OF INCOME TAX, PUNE vs. MADHUKAR CHANDRAKANT SURVASE, PUNE

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH “B”, PUNE BEFORE SHRI R. K. PANDA, VICE PRESIDENT AND SHRI VINAY BHAMORE, JUDICIAL MEMBER आयकर अपील सं. / ITA Nos.2114 & 2118/PUN/2024 िनधा�रण वष� / Assessment Years : 2015-16 & 2017-18 ACIT, Central Circle-2(2), Vs. Madhukar Chandrakant Pune. Survase, 624-1/2B, Pokale Vasti, Bibwewadi- 411037. PAN : AVHPS7475H Appellant Respondent C.O. Nos.37 & 38/PUN/2024 (Arising out of ITA Nos.2114 & 2118/PUN/2024) िनधा�रण वष� / Assessment Years : 2015-16 & 2017-18 Madhukar Chandrakant Vs. ACIT, Central Circle-2(2), Survase, Pune. 624-1/2B, Pokale Vasti, Bibwewadi- 411037. PAN : AVHPS7475H Appellant Respondent Revenue by : Shri Umesh Phade Assessee by : Shri M. R. Bhagwat Date of hearing : 13.05.2026 Date of pronouncement : 14.07.2026 आदेश / ORDER PER BENCH : These appeals filed by the Revenue are directed against the order dated 09.07.2024 passed by Ld. CIT(A), Pune- 12 [‘Ld. CIT(A)’] for the assessment years 2015-16 and 2017-18

2 ITA Nos.2114 & 2118/PUN/2024 C.O. Nos.37 & 38/PUN/2024 respectively. The assessee is also in Cross Objections against the appeals of the Revenue. ITA No.2114/PUN/2024, A.Y. 2015-16 : 2. The Revenue has raised the following grounds of appeal :- “1) On the facts and in the circumstances of the case and in law, the Ld CIT(A) has erred in quashing the notice issued u/s 148 of the Act without appreciating the fact that notice u/s 148 of the Act, issued on 30.06.2021 is well within the extended time limit as provided by Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 (TOLA). 2) On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in not considering the fact that the order u/s 148A(d) passed/notice issued u/s 148 of the Act on 26.07.2022 was on the basis of the directions of the Hon'ble Supreme Court in the case of Union of India & Others Vs. Ashish Agarwal in Civil Appeal No. 3005/2022 dated 04.05.2022, the Finance Act 2021 and CBDT Instruction no. 1/2022 dated 11.05.2022. Further, Hon'ble Supreme Court in Civil Appeal No 8629 of 2024 Union of India & ors. Versus Rajeev Bansal with others has held that the directions in Ashish Agarwal (supra) will extend to all the ninety thousand reassessment notices issued under the old regime during the period 01.04.2021 to 30.06.2021. 3) The appellant craves leave to add, amend, modify or alter any of the grounds of appeal.” 3. Facts of the case, in brief, are that the assessee is an individual engaged in the business of civil construction and building contracts and has filed his return of income on 22.02.2016 by declaring an income of Rs.10,25,040/-. During the course of survey u/s 133A of the IT Act conducted in the case of Katagaon Group at Solapur on 19.03.2021, it was found that the assessee has

3 ITA Nos.2114 & 2118/PUN/2024 C.O. Nos.37 & 38/PUN/2024 paid an amount of Rs.2,90,00,000/- to Shri Suresh M. Katgaon and Smt. Surekha M. Katgaon to execute the tender for excavating sand. Accordingly, the case of the assessee was reopened u/s 147 of the IT Act and original notice u/s 148 of the IT Act was issued on 30.06.2021 and thereafter, following due procedure as prescribed by Hon’ble Supreme Court in the case of UOI vs. Ashish Agarwal in Civil Appeal No.3005/2022 dated 04.05.2022, fresh notice u/s 148A(b) of the IT Act was issued on 02.06.2022 and order u/s 148A(d) was passed on 26.07.2022 and fresh notice u/s 148 of the IT Act was issued to the assessee on 26.07.2022. In response to above notice, return of income was furnished by the assessee on 04.08.2022 declaring income of Rs.10,25,040/- which is same as disclosed in the original return of income filed u/s 139 of the IT Act. Subsequently, notices u/s 143(2), 142(1) and show cause notice u/s 144 of the IT Act respectively were issued to the assessee. Since the assessee did not furnish complete details regarding source of investment of Rs.2,90,00,000/-, therefore, the Assessing Officer vide order dated 30.05.2023 completed the assessment proceedings u/s 147 r.w.s. 144 of the IT Act by determining total income of the assessee at Rs.3,00,25,040/- as against the income of Rs.10,25,040/- returned by the assessee. The

4 ITA Nos.2114 & 2118/PUN/2024 C.O. Nos.37 & 38/PUN/2024 above assessed income includes addition of Rs.2,90,00,000/- on account of unexplained investments u/s 69 of the IT Act. 4. Being aggrieved with the above assessment order, the assessee preferred an appeal before Ld. CIT(A). After considering the reply and submissions of the assessee, Ld. CIT(A) allowed the appeal of the assessee. 5. It is the above order against which the Revenue is in appeal before this Tribunal. 6. Ld. DR appearing from the side of the Revenue submitted before us that the order passed by Ld. CIT(A) is unjustified. In this regard, Ld. DR relied on in the cases of Union of India vs. Ashish Agarwal in Civil Appeal No.3005/2022 order dated 04.05.2022 and also on Union of India vs. Rajeev Bansal in Civil Appeal No.8629/2024 order dated 03.10.2024. Ld. DR accordingly contended that the notice u/s 148 of the IT Act issued on 30.06.2021 is well within the extended time period as provided by Taxation And Other Laws (TOLA) and submitted that the notice u/s 148 of the IT Act issued under the old regime during the period 01.04.2021 to 30.06.2021 are valid and therefore, Ld. CIT(A) committed mistake in allowing the appeal of the assessee.

5 ITA Nos.2114 & 2118/PUN/2024 C.O. Nos.37 & 38/PUN/2024 7. Ld. AR appearing from the side of the assessee submitted that the order passed by Ld. CIT(A) is justified. It was also submitted by Ld. AR that Ld. CIT(A) has allowed the appeal of the assessee by holding that the notice issued u/s 148 of the IT Act is not in accordance with law therefore, the proceedings u/s 148 as well as notice u/s 148 is bad in law. Accordingly, it was requested by Ld. AR that the appeal filed by the Revenue deserves to be dismissed. 8. We have heard Ld. Counsels from both the sides and perused the material available on record including the written submission furnished by Ld. DR. In this regard, we find that Ld. ASG (Additional Solicitor General of India) has categorically conceded before Hon’ble Supreme Court in the case of Union of India vs. Rajeev Bansal (supra) that for assessment year 2015-16 the notices u/s 148 of the IT Act cannot be issued by taking benefit of TOLA since they were required to be issued after 01.04.2021, only under new regime and therefore, needs to be withdrawn. We find that this concession given by Ld. ASG was due to the fact that TOLA was not applicable for assessment year 2015-16, therefore, Hon’ble Supreme Court also held that the impugned notices issued u/s 148 of the IT Act taking the benefit of TOLA were invalid and bad in

6 ITA Nos.2114 & 2118/PUN/2024 C.O. Nos.37 & 38/PUN/2024 law since TOLA was not applicable for assessment year 2015-16 and the cases for assessment year 2015-16 were not getting time barred between 20.03.2020 to 31.03.2021, therefore, question of extending the period for issue of notice for assessment year 2015- 16 under TOLA does not arise and therefore, in the instant case in hand the impugned original notice issued u/s 148 of the IT Act on 30.06.2021 was held to be invalid and bad in law by Ld. CIT(A). 9. In view of our above discussion, we do not find any infirmity in the impugned order passed by Ld. CIT(A), accordingly, the same is confirmed and the grounds raised by the Revenue are dismissed. 10. In the result, the appeal filed by the Revenue in ITA No.2114/PUN/2024 for A.Y. 2015-16 is dismissed. C.O. No.37/PUN/2024, A.Y. 2015-16 : 11. Since we have already dismissed the appeal of the Revenue in ITA No.2114/PUN/2024 for assessment year 2015-16, the Cross Objection No.37/PUN/2024 for A.Y. 2015-16 becomes infructuous and the same is accordingly dismissed. 12. In the result, the Cross Objection No.37/PUN/2024 for A.Y. 2015-16 filed by the assessee is dismissed.

7 ITA Nos.2114 & 2118/PUN/2024 C.O. Nos.37 & 38/PUN/2024 C.O. No.38/PUN/2024, A.Y. 2017-18 : 13. The assessee has raised the following ground in cross objection :- “1) The reassessment as framed is without jurisdiction and void ab- initio as it is contrary to the provisions of section 151A of the Income Tax Act, 1961. 2) The notice u/s 148 dated 26/07/2022 and the subsequent reassessment proceedings emanating therefrom are invalid because the Assessing Officer issued the said notice without a DIN. 3) The reassessment be held as invalid and cancelled. 4) Such other orders be passed as deemed fit and proper. 5) The appellant prays for leave to add to, or amend his grounds of appeal and lead evidence.” 14. The assessee has raised the following additional ground in cross objection :- “On the facts and in the circumstances of the case and in law the notice under section 148 of the Act dated 26th July 2022 for assessment year 2017-2018 issued by the assessing officer is time barred after taking into account the “Surviving Period” for the reassessment notices issued between 1st April 2021 to 30th June 2021 and hence the reassessment notice as well as the consequential reassessment order passed may be quashed and set aside.” 15. With regard to above additional ground raised by the assessee in his cross objection, we find that it is purely a legal issue and the relevant facts are already on record, therefore, we admit the same and proceed to adjudicate this additional ground first.

8 ITA Nos.2114 & 2118/PUN/2024 C.O. Nos.37 & 38/PUN/2024 16. In this regard, we find that it is the contention of the assessee that the fresh notice issued on 26.07.2022 u/s 148 of the IT Act is time barred since issued beyond the surviving time period as described by Hon’ble Supreme Court in the case of Union of India vs. Rajeev Bansal [2024] 167 taxmann.com 70 (SC) which was also followed by Hon’ble Jurisdictional High Court of Bombay in the case of Gurpreet Singh vs. DCIT [2025] 176 taxmann.com 673 (GOA) wherein it was held that the impugned notice issued u/s 148 of the IT Act is invalid and bad in law being issued beyond surviving time period by observing as under :- “15. In terms of the decisions in Ashish Agrawal and Rajeev Bansal (supra), the following position emerges in the context of the present case :- (i) The period for subject reassessment in terms of Section 149 of the old regime is deemed to be extended till 30/06/2021 under the TOLA. (ii) The notice dated 29/06/2021 would be deemed to be notice under Section 148A(b). (iii) The surviving period by excluding the date of re-issuance of notice on 29/06/2021 would be the remainder days in the month of June 2021 (30/06/2021 - 28/06/2021), namely, two days. (iv) On 30/06/2021, the extension in terms of the TOLA would come to an end. (v) The period that stands excluded is : (a) The period up to 30/06/2021, which is covered by the provisions of the IT Act read with the TOLA. (b) The period from 01/07/2021 to 03/05/2022 being the period

9 ITA Nos.2114 & 2118/PUN/2024 C.O. Nos.37 & 38/PUN/2024 before the decision of the Hon'ble Supreme Court in Ashish Agarwal (supra). (c) The Period from 04/05/2022 till 20/05/2022, which is the date when the material was furnished and the reasons for reopening were given to the Petitioner. (d) The period of two weeks time for reply to be filed by the Petitioner, which ended on 04/06/2022 and the extended time to file reply (additional reply was filed by the Petitioner on 28/06/2022). Further extension was given to the Petitioner in pursuance to notice dated 14/07/2021 giving additional time of one week in view of change in the incumbent to the Office, which period ended on 21/07/2022. 16. By considering all the exclusions, the remainder days for conclusion of the procedure for passing of an order in terms of Section 148A(d) and issuance of notice under Section 148 would be two days from 21/07/2022 and the same would expire of 23/07/2022. Applying the ratio of the decisions in Ashish Agarwal and Rajeev Bansal (supra) in the context of the 1st proviso to Section 149 we are therefore of the opinion that the notice under Section 148 dated 29/07/2022 is time barred. The order under Section 148A(d) as well as the notice issued under Section 148 are dated 29/07/2022 which is much after the surviving period which expired on 21/07/2022. 17. In light of the above, the contentions raised by the Revenue lack foundation in terms of law. Although the Revenue has contended that the order dated 29/07/2022 passed under Section 148A(d) and the notice issued under Section 148 were within the timelines contemplated by the decisions in Ashish Agarwal and Rajeev Bansal (supra), the same lacks substance. In the written synopsis, an attempt was made to justify the timelines by contending that in terms of Section 148A(d), the period mandated for passing of the order was within one month from the end of the month in which the reply referred to is received or where no such reply is furnished within one month from the end of the time by which the extended time allowed to furnish reply as per clause (b) expired. Relying on the said provision it was contended that the replies are dated 03/06/2022 and 28/06/2022 and going by the same, the end of the month would be 30/06/2022. Hence the expiry of time would be on 31/07/2022. It is therefore contended that the order is passed within the one month time contemplated under Section 148A(d). 18. The said contention is fundamentally misconceived. A notice under Section 148 of the IT Act accompanied by an order under Section 148A(d) is required to be issued within the time stipulated under Section 149 of the IT Act. Section 148A(d) does not govern the

10 ITA Nos.2114 & 2118/PUN/2024 C.O. Nos.37 & 38/PUN/2024 computation of time as contemplated in terms of Section 149 of the IT Act. The entire process under Section 148A(a) to (d) and the issuance of notice under Section 148 has to be completed within the total time available in terms of Section 149(1) of the IT Act for issuance of notice under Section 148. A notice issued under Section 148 of the IT Act which is beyond the time line stipulated under Section 149(1) is non-complaint and invalid. The timeline under Section 148A(d) is for the Assessing Officer to comply with the stipulations and the streamlining contemplated under Section 148A. This is primarily to bring in transparency and accountability into the system and is intended for the benefit of the assessees. However to suggest that Section 148A(d) extends the time limit under Section 149(1) and/or has a bearing on the time under Section 149(1) is a submission which is misconceived and lacks legal sanctity. 19. It was urged by the Revenue that the decision of this Court in Hexaware Technologies Limited (supra) was under challenge before the Hon'ble Supreme Court and hence the Court could consider awaiting its outcome. The decision in Hexaware Technologies Limited has not been stayed. Since we have proceeded on the basis of the law laid down in Ashish Agarwal and Rejeev Bansal (supra), this contention cannot be accepted. Reference to various decisions has been made. In fact, the decisions referred to are inconsistent with the case set up by the Respondents. Except for the decision in Ashish Acharatlal Varaiya (supra), other judgments are rendered prior to the decision in Rajeev Bansal (supra) and /or do not consider the said decision. Hence the said judgments do not in any manner assist us in deciding the controversy in issue especially in the context to the limited issue that is raised by the Petitioner herein. 20. At this point we deem it appropriate to note that the Delhi High Court in the case of Ram Balram Buildhome (P.) Ltd. v. ITO [2025] 171 taxmann.com 99 (Delhi)/2025 SCC OnLine Del 481 dealt with an identical issue. It considered the principles laid down in Ashish Agarwal and Rajeev Bansal (supra) and concluded that the notice issued under Section 148 under the IT Act was time barred. In the facts of that case as well, the AY was 2013-2014 and the notice under Section 148 issued to the assessee was dated 01/06/2021. The date of furnishing material to the Petitioner in that case was 30/05/2022. The said Petitioner furnished its response to the notice under Section 148A(b) of the IT Act on 13/06/2022. In this factual backdrop, the Delhi High Court applying the ratio of the decisions in Ashish Agarwal and Rajeev Bansal (supra) came to the conclusion that the remainder period with the Assessment Officer was twenty-nine days from 01/06/2021 when the reassessment proceedings commenced for issuing notice under Section 148 of the IT Act. The limitation for passing of the order under Section 148A(d) expired on 12/07/2022. Accordingly, the notice under Section 148A of the IT Act issued on

11 ITA Nos.2114 & 2118/PUN/2024 C.O. Nos.37 & 38/PUN/2024 30/07/2022 was held to be beyond limitation and the same was quashed. The Delhi High Court also relied on the observations made in the case of Raminder Singh v. Asstt. CIT [2023] 156 taxmann.com 148/[2024] 461 ITR 368 (Delhi)/2023 DHC 6672-DB wherein it was held that one month from the end of the month in which the time available to the assessee to respond to the notice under clause (b) of Section 148A expires is available to the Assessment Officer to pass an order under Section 148A(d) of the IT Act. It was further held that notice under Section 148 of the IT Act that is not accompanied by an order under Section 148A(d) of the Act would be non-compliant with the IT Act and no such notice could be issued beyond the period as specified under Section 149(1) of the IT Act. This decision of the Delhi High Court is consistent with our view based on the interpretation of the decisions in Ashish Agarwal and Rajeev Bansal (supra). 21. For all these reasons, we hold that the notice dated 29/07/2022, issued by Respondent no.1 under Section 148 of the IT Act is beyond the time period specified under Section 149(1) of the IT Act. It is therefore quashed. Consequently, the impugned assessment order dated 29/05/2023 passed on the basis of the impugned notice also stands quashed and set aside. Rule is made absolute in aforesaid terms with no order as to costs.” 17. Respectfully following the above judgement of Hon’ble Bombay High Court in the case of Gurpreet Singh (supra), we are of the considered opinion that if the original notice u/s 148 of the IT Act was issued between 01.04.2021 to 30.06.2021 by taking the benefit of TOLA and fresh notice u/s 148 of the IT Act was issued beyond the surviving time period, it is required to be declared as invalid and bad in law. Accordingly, now in the light of above judgement (supra), we proceed to verify that whether the impugned fresh notice u/s 148 of the IT Act dated 26.07.2022 was issued within the surviving time period or beyond the surviving time

12 ITA Nos.2114 & 2118/PUN/2024 C.O. Nos.37 & 38/PUN/2024 period. In order to compute the surviving/balance time as per the decision of the Hon’ble Bombay High Court in the case of Gurpreet Singh (supra), it is relevant to note the following dates: - Sl. No. Particulars Date 1. Period of Limitation under the Old Act 31.03.2021 2. Original Notice issued u/s 148 30.06.2021 3. Extended Limitation as per the TOLA 30.06.2021 4. Surviving Time Nil 5. Date of Decision of Ashish Agarwal 04.05.2022 6. Notice u/s 148A(b) 02.06.2022 7. 15 days Time Given to reply 17.06.2022 8. Assessee’s Reply due on 17.06.2022 Not filed 9. Surviving Time Limit 0 days 10. Extended Time Limit upto 7 days 24-06-2022 11. Time limit upto which fresh notice u/s 148 24-06-2022 Could be issued 12. Order passed u/148A(d) 26-07-2022 13. Fresh Notice u/s 148 26-07-2022 18. From the perusal of above chart, it is apparent that last date upto which fresh notice u/s 148 of the IT Act could have been issued was 24.06.2022, whereas the impugned fresh notice u/s 148 of the IT Act in the instant case was issued on 26.07.2022 which is admittedly beyond the surviving time limit as prescribed by Hon’ble Supreme Court in the case of UOI vs. Rajeev Bansal (supra) and also in the light of decision of Hon’ble Bombay High Court in the case of Gurpreet Singh (supra). Accordingly, we are of the considered opinion that the impugned notice u/s 148 of the

13 ITA Nos.2114 & 2118/PUN/2024 C.O. Nos.37 & 38/PUN/2024 IT Act dated 26.07.2022 was time barred since issued beyond the time limit prescribed under the Income Tax Act. 19. In view of our above discussion, we find force in the additional ground raised by the assessee and accordingly declare the impugned notice dated 26.07.2022 issued u/s 148 of the IT Act as void ab initio and bad in law. Therefore, the same is quashed. Consequently, the entire re-assessment proceedings and assessment order passed u/s 147 r.w.s. 144 of the IT Act for assessment year 2017-18 are also quashed. Since we have already allowed the cross objection on additional ground, the other grounds raised by the assessee becomes academic hence not adjudicated. 20. In the result, the Cross Objection no.38/PUN/2024 for A.Y. 2017-18 filed by the assessee is allowed. ITA No.2118/PUN/2024, A.Y. 2017-18 : 21. Since we have already allowed the Cross Objection No.38/PUN/2024 for A.Y. 2017-18, the appeal of the Revenue in ITA No.2118/PUN/2024 for A.Y. 2017-18 become infructuous hence dismissed accordingly. 22. In the result, the appeal filed by the Revenue in ITA No.2118/PUN/2024 for A.Y. 2017-18 is dismissed.

14 ITA Nos.2114 & 2118/PUN/2024 C.O. Nos.37 & 38/PUN/2024 23. To sum up, both the appeals filed by the Revenue in ITA Nos.2114 & 2118/PUN/2024 for A.Ys. 2015-16 & 2017-18 are dismissed and the Cross Objection No.37/PUN/2024 for A.Y. 2015-16 filed by the assessee is dismissed and the Cross Objection No.38/PUN/2024 for A.Y. 2017-18 filed by the assessee is allowed, as indicated above. Order pronounced on this 14th day of July, 2026. Sd/- Sd/- (R. K. PANDA) (VINAY BHAMORE) VICE PRESIDENT JUDICIAL MEMBER पुणे / Pune; �दनांक / Dated : 14th July, 2026. Sujeet/DOC Sujeet Kumar Digitally signed by Sujeet Kumar Sharma Sharma Date: 2026.07.14 14:39:22 आदेश क� �ितिलिप अ�ेिषत / Copy of the Order forwarded to : +05'30' अपीलाथ� / The Appellant. 1. ��यथ� / The Respondent. 2. 3. The CIT(A), Pune-12. 4. The Pr. CIT/CIT concerned. िवभागीय �ितिनिध, आयकर अपीलीय अिधकरण, “B” ब�च, 5. पुणे / DR, ITAT, “B” Bench, Pune. गाड� फ़ाइल / Guard File. 6. आदेशानुसार / BY ORDER, // True Copy // Assistant Registrar आयकर अपीलीय अिधकरण, पुणे / ITAT, Pune.