RAJESH PARUMAL RAGHANI,ULHASNAGAR vs. INCOME TAX OFFICER WARD 2(2), KALYAN, KALYAN

Briefly stated, the facts borne out from the record are that the assessee is an individual stated to be engaged in the business of trading in agricultural produce. According to the Assessing Officer, information received through the NMS Module of the Insight Portal revealed that the assessee had made cash deposits aggregating to Rs.53,75,539/- in the bank accounts maintained with IDBI Bank and Dena Bank during the relevant previous year. Since no return of income had been filed for the year under consideration, the Assessing Officer formed a prima facie belief that income chargeable to tax had escaped assessment. Consequently, proceedings under the reassessment provisions were initiated by issuance of notice under section 148A(b), followed by an order passed under section 148A(d), and thereafter notice under section 148 dated 04.04.2022 came to be issued for reopening the assessment for Assessment Year 2015-16.

The assessment records further reveal that according to the Assessing Officer, despite issuance of statutory notices during the course of reassessment proceedings, there was no effective compliance from the side of the assessee. The Assessing Officer, therefore, proceeded to complete the assessment ex parte under section 147 read with section 144, treating the entire cash deposits of Rs.53,75,539/- as unexplained money under section 69A of the Act and brought the same to tax. Aggrieved by the reassessment order, the assessee preferred an appeal before the

At the time of hearing, the Ld. Counsel for the assessee sought admission of an additional legal ground challenging the very assumption of jurisdiction under section 147 of the Act. The additional ground, which goes to the root of the matter, assails the validity of the notice issued under section 148 dated 04.04.2022 on the ground that the same is ex facie barred by limitation in view of the law now authoritatively declared by the Hon’ble Supreme Court in Union of India vs. Rajeev Bansal [(2024) 469 ITR 46 (SC)] and thereafter reiterated in Deepak Steel & Power Ltd. vs. CBDT [(2025) 476 ITR 369 (SC)]. Since the issue raised is purely legal, arises from undisputed facts already borne out from the assessment records and does not require any further investigation into facts, we admitted the additional ground for adjudication in accordance with the settled principles of law governing admission of pure questions of law.

Elaborating his submissions, the Ld. Counsel submitted that the issue involved in the present appeal is no longer open to debate. Inviting our attention to the judgment of the Hon’ble

Per contra, the Ld. Departmental Representative strongly relied upon the orders passed by the Assessing Officer as well as the learned CIT(A). However, during the course of hearing, he could not dispute the admitted factual position emerging from the assessment records that the impugned notice under section 148 was issued on 04.04.2022 in respect of Assessment Year 2015-16, nor could he point out any distinguishing factual or legal feature which would persuade us to take a view different from the one consistently taken by the Hon’ble Supreme Court and thereafter followed by the Hon’ble jurisdictional Bombay High Court.

We have carefully considered the rival submissions, perused the orders of the authorities below and examined the entire material available on record. The foundational fact relevant for deciding the present appeal is undisputed, namely, that the reassessment proceedings for Assessment Year 2015-16 have been initiated by issuance of notice under section 148 dated 04.04.2022. Thus, the foundational question which arises for our consideration is whether such notice, admittedly issued after 01.04.2021, could validly confer jurisdiction upon the Assessing Officer to initiate reassessment proceedings for Assessment Year 2015-16. In our considered opinion, the answer to the aforesaid question is no longer res integra and

The controversy relating to reassessment notices issued under the substituted provisions of sections 147 to 151 after the enactment of the Finance Act, 2021 has now attained finality. In Union of India vs. Rajeev Bansal [(2024) 469 ITR 46 (SC)], while considering the effect of the substituted reassessment provisions vis-à-vis the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 (TOLA), the Hon’ble Supreme Court specifically recorded the categorical concession made on behalf of the Revenue that for Assessment Year 2015-16 all notices issued on or after 01.04.2021 would necessarily have to be dropped, since such notices would not fall within the extended period contemplated under TOLA. The significance of the aforesaid concession cannot be diluted or ignored, for it was consciously noticed and recorded by the Hon’ble Supreme Court while adjudicating the legal consequences flowing from the reassessment regime under the substituted provisions. Once such concession stands incorporated in the judgment of the Hon’ble Supreme Court and forms an integral part of the decision rendered by the highest Court of the land, the legal position governing reassessment notices for Assessment Year 2015-16 stands placed beyond any pale of controversy. The Tribunal, being bound by the law so

The legal principle emerging from Rajeev Bansal (supra) did not remain confined merely to the concession recorded therein. The Hon’ble Supreme Court thereafter had the occasion to directly apply the said principle in Deepak Steel & Power Ltd. vs. CBDT [(2025) 476 ITR 369 (SC)]. Their Lordships, after noticing the concession recorded in Rajeev Bansal (supra), unequivocally held that where the impugned notice pertained to Assessment Year 2015-16 and had been issued after 01.04.2021, nothing further survived for adjudication and such notice deserved to be quashed. Thus, what initially emanated from the concession recorded in Rajeev Bansal (supra) has thereafter crystallised into a binding declaration of law by direct judicial application in Deepak Steel & Power Ltd. (supra). Consequently, the legal proposition now admits of no ambiguity whatsoever that every notice issued under section 148 on or after 01.04.2021 in relation to Assessment Year 2015-16 is inherently without jurisdiction and incapable of sustaining reassessment proceedings.

The matter, however, does not rest there. The Hon’ble jurisdictional Bombay High Court, while considering an almost identical issue in Mitra Biswas vs. Income Tax Officer (Writ Petition (L) No.3068 of 2026 dated 03.02.2026), after exhaustively considering both the aforesaid judgments of the

Applying the aforesaid settled legal position to the facts of the present case, we find that there is absolutely no dispute that the notice under section 148 initiating reassessment proceedings has been issued on 04.04.2022 in respect of Assessment Year 2015-16. Thus, the very assumption of jurisdiction by the Assessing Officer stands vitiated in view of

We are, therefore, unable to persuade ourselves to uphold either the assumption of jurisdiction by the Assessing Officer or the order passed by the learned CIT(A). The controversy now stands conclusively settled by the judgments of the Hon’ble Supreme Court and has thereafter been consistently applied by the Hon’ble jurisdictional Bombay High Court. Judicial discipline requires that once the law has been authoritatively declared by the constitutional courts, the same must be applied in its true letter and spirit to all cases governed by identical facts. Respectfully following the ratio laid down by the Hon’ble

In view of our foregoing discussion and in the light of the binding judicial precedents referred to hereinabove, we hold that the reassessment proceedings initiated by issuance of notice under section 148 dated 04.04.2022 for Assessment Year 2015- 16 are wholly without jurisdiction and unsustainable in law. Consequently, the assessment framed under section 147 read with section 144 being founded upon an invalid assumption of jurisdiction cannot be sustained and is hereby quashed. Since the reassessment itself stands annulled, all additions made therein automatically cease to survive and the grounds raised by the assessee on the merits of the additions are rendered

In the result, the appeal of the assessee in ITA No.2519/Mum/2026 is allowed.

This appeal by the assessee is directed against the impugned order dated 16.12.2025 passed by the National Faceless Appeal Centre (NFAC), whereby the learned CIT(A) has confirmed the penalty levied by the Assessing Officer under section 271(1)(c) of the Act.

Briefly stated, the penalty proceedings emanate from the reassessment completed under section 147 read with section 144, wherein the Assessing Officer had treated the cash deposits aggregating to Rs.53,75,539/- as unexplained money under section 69A of the Act and, on the basis of such addition, initiated penalty proceedings alleging concealment of income and furnishing of inaccurate particulars thereof. The Assessing Officer thereafter levied penalty under section 271(1)(c), which came to be confirmed by the learned CIT(A). Aggrieved by the said appellate order, the assessee is in appeal before us.

At the time of hearing, both the parties fairly submitted that the fate of the present penalty appeal is entirely dependent upon

We have considered the rival submissions and perused the material available on record. While adjudicating the connected quantum appeal hereinabove, we have held that the very initiation of reassessment proceedings by issuance of notice under section 148 dated 04.04.2022 is void and without jurisdiction, and accordingly the reassessment order itself has been quashed. Once the assessment giving rise to the impugned penalty no longer survives in the eyes of law, the penalty levied under section 271(1)(c), being purely consequential thereto, cannot have any independent existence. It is trite law that when the very foundation upon which the penalty rests is removed, the superstructure erected thereon necessarily falls. In the present case, since the reassessment proceedings themselves have been annulled on the jurisdictional issue, the consequential penalty levied under section 271(1)(c) cannot be sustained. We, therefore, direct the Assessing Officer to delete the impugned penalty.

In the result, the appeal of the assessee in ITA No.2518/Mum/2026 is allowed.