VINODRAY NAGJIBHAI THACKER,BHUJ vs. ITO, WARD-4, GDHAM(BHUJ-2)/, BHUJ

The grounds of appeal raised by the assessee in ITA No. 194/Rjt/2026, are as follows : 1. That, the Ld. CIT(A) has wrongly confirmed the reopening of the assessment u/s 147 of the Income Tax Act, 1961.( a). The reopening of assessment is barred by limitation (b). The reopening of assessment has been made without following the procedure as prescribed u/s 148A of the Act (c). The Approval Memo does not contain the signature of the Designated Authority (d). The approval u/s 151 of the Act has been obtained from incorrect authority ( e ) .

Both these appeals filed by the assessee are barred by limitation by 627days, each. The assessee moved separate petitions for condonation of delay explaining the reasons for delay. The contents and the reasons for delay in both the petitions for condonation of delay are similar and identical. Therefore, a sample of petition for condonation of delay, is reproduced, as follows: “1. That, I am an individual regularly assessed to tax since past many years. 2. That, I am a retired employee and I am relieved from employment since the year 2017. 3. That, I am in receipt of the order of the Ld. CIT(A) dated 15/03/2024 with respect to the dismissal of appeal filed in Form 35. 4. That, the appeal before Hon'ble ITAT, Rajkot is to be filed within 60 days from the date of receipt of the order of Ld. CIT(A) i.e. 14/05/2024. 5. That, the notices are served digitally and through email. However, the notices has not been served on my registered email address. The notices have been served on the mail ID of previous consultant and therefore I was not aware about the issuance of notices and order passed by the Ld. CIT(A). The screenshot of email addresses on which the notice is served has been reproduced hereunder.

The Ld. Counsel for the assessee submitted that the delay has mainly occurred in both the appeals, on similar and identical facts and the reasons for delay in both the appeals are same and identical. The ld. Counsel submitted that assessee is a retired government employee and was entirely dependent on his tax consultant. However, the tax consultant of the assessee committed the mistake in filing the appeal, therefore, assessee should not be penalized. Another reason, Ld. Counsel for the assessee, submitted that the assessee was feeling severe illness since last two years and therefore could not pay attention on his taxation matters hence delay in both the appeals are on the similar facts and reasons therefore delay in filing of both these appeals should be condoned in the interest of justice.

On the other hand, Ld. DR for the revenue proposed the prayer of assessee for condonation of delay and stated that delay should not be condoned in filing these appeals, as the assessee has failed to explain the sufficient cause for delay.

I have heard, both the parties, on this preliminary issue and noted that because of the mistake of the tax consultant of the assessee, the assessee should not be penalized. For that reliance is placed on the decision of I.T.A.T., 'C' Bench, Kolkata in the case of M/s. Garg Bros. Pvt. Ltd. & Others vs. DCIT [ITA Nos.2519 to 2521/Kol/2017, order dated 18.04.2018], wherein under similar set of facts and reasons, the Hon'ble Tribunal was pleased to condone the delay of 211 days by holding as under: "3. We have heard both the parties on this preliminary issue. Having regard to the reasons given in the application for condonation of delay, we are of the considered opinion that assessee was under a bona fide belief that the impugned order of Pr. CIT was not appealable before this Tribunal since they were not advised by their Tax Consultants about this legal right. Later on, when a Senior Lawyer advised them to file an appeal, the assessees immediately took steps to file the appeals. Therefore, the delay caused. We note that delay was occurred because of the wrong advice of the Tax Professional for which assessees cannot be penalized. For the ends of justice, we condone the delay and admit the appeal for hearing. We note that Hon'ble Supreme Court has clearly laid down the legal position that in the matter of condonation of delay, the cause of the delay and not the length of delay should be considered. In this regard, I rely upon the relevant portion of the Hon'ble Supreme Court judgment in the case of Mool Chandra Vs. Union of India & ANR. (Civil Appeal Nos. 8435 -8436 Of 2024) wherein it was held as under: Page | 5

Facts of the assessee’s case on merit, as per lead case in ITA No.195/RJT/2026 are that the assessee is an individual and has filed his income tax return (ITR) for the assessment year (A.Y.) 2017-18 on 12.07.2017 declaring gross total income of Rs.5,23,946/-. As per the information received from Verification module of INSIGHT system under High Risk CRIU/VRU Information (Under verification) category, it was seen that the assessee has entered into the following transaction during the year under consideration. On further verification from the Return of Income filed by the assessee, it is seen that the assessee is having a total income of Rs.5,95,780/-, however, the assessee had made unexplained investment by making payment in cash amounting to Rs.40,35,000/-. It was seen that the income earned by the assessee does not commensurate with the transaction of Investment made by the assessee and hence, it is evident that the amount of Rs.40,35,000/- had escaped taxation. Accordingly, the case of the assessee was re-opened for assessment year (A.Y.) 2017-18 by issue of notice u/s.148 of the Act dated 31.03.2021. In response to the notice u/s148 of the Act, the assessee was required to file the income tax return (ITR) within a month of receipt of the notice. However, the assessee had not filed the ITR till date. Subsequently. notice u/s.142(1) of the Act dated 14.01.2022 was issued to the assessee seeking certain information and documents fixing the date of compliance on 21.01.2022. But on the said date, the assessee chose not to comply and submit any documents as called for. Again, notices u/s 142(1) of the Act were issued on 24.01.2022 and 17.02.2022 fixing the date of compliance on 07.02.2022 and 25.02.2022 respectively. But the assessee failed to respond to the said notices also. Hence, a show cause notice u/s 144 of the I.T. Act was issued on 09.03.2022. The relevant portion of the said notice is reproduced as under.

On technical issue, Ld. Counsel for the assessee submitted that Ld. CIT(A) has wrongly confirmed the reopening of the assessment u/s 147 of the Act, as the notice issued u/s 148 of the Act was time barred and it was issued on 01.04. 2021. However, it should have been issued on or before 31st March, 2021, therefore, assessment order should be quashed, as the notice issued under section 148 of the Act, is time barred. Learned Counsel also pointed out that in both the assessment years, same issue is involved, therefore, reassessment proceedings should be quashed for both assessment years.

I have heard, both the parties and carefully gone through the submission put forth on behalf of the assessee along with the documents furnished and the case laws relied upon, and perused the fact of the case including the findings of the ld CIT(A) and other materials brought on record. I note that Ld. CIT(A) has wrongly confirmed the reopening of the assessment u/s 147 of the Income Tax Act, 1961 in both assessment years. The issue is pertaining to both the years under consideration. The assessee is a government employee earning salary income and income from other sources during the year under consideration. The assessee has filed the return of income u/s 139 of the Act on 03/08/2016 for the assessment year (A.Y.) 2016-17 and on 12/07/2017 for the assessment year (A.Y.) 2017-18. A copy of acknowledgement of ITR for both the Assessment Years is furnished by the assessee vide paper book page no. 42, 43 of the paper book. The reassessment proceedings have been initiated by issuing a notice u/s 148 of the Act, dated 31/03/2021 for both the Assessment Years. The reopening of assessment is challenged by the assessee on the following counts: (a).The reopening of assessment is barred by limitation. (b)The reopening of assessment has been made without following the procedure as prescribed u/s 148A of the Act. (c )The Approval Memo does not contain the signature of the Designated Authority and the reasons to believe are also not signed by the AO. (d).The approval u/s 151 of the Act has been obtained from incorrect authority. (e) The Approval u/s 151 of the Act is mechanical in nature. (f )The reopening has been made on the basis of incorrect and ambiguous facts and without proper application of mind by the AO and by the Designated Authority

I note that reopening of assessment is barred by limitation and the issue is pertaining to both the years under consideration. The notice u/s 148 of the Act dated 31/03/2021 has been issued by the Ld. AO on 01/04/2026 for both the Assessment Years. In order to substantiate the claim, a copy of the screenshot of the Income Tax Portal has been submitted by the assessee, which is pasted, as under:

I also note that the date mentioned on the notice cannot be regarded as "date of issuance", it is only when the notice has been triggered by the Ld. AO for getting uploaded, the notice can be termed as "issued". It is noted that, the expression "issue" in its legal interpretation means that the issuer of the notice must after drawing up the notice and signing the notice, overt act to ensure the due dispatch of notice to the addressee. The use of ITBA portal by the Department for issuing the notice in no manner mitigates against or dispense with the legal requirement of the Department to ensure the due dispatch of the notice u/s 148 of the Act to satisfy the test of Section 149 of the Act. Upon the evidences and screenshot produced hereinabove, it has been clearly established that the notice u/s 148 of the Act has not been served upon the assessee within the period of limitation as prescribed u/s 149 of the Act. It is a fairly settled law that, the service of notice u/s 148 of the Act is a mandatory requirement under the statute for framing the assessment u/s 147 of the Act. In the absence of a valid service of notice u/s 148 of the Act, the consequential action flowing there from would necessarily have to be declared as invalid. For that reliance is placed on the following judgements: (i)Acropolis Realty (P.) Ltd v. ITO [2024] 168 taxmann.com 406 (Delhi) Section 149(1)(a), provides that no notice u/s 148 shall be issued beyond the period of three years except in cases that fall within the scope of section 149(1)(b). It is clear from the annexure to the said impugned notice that the assessee's income, which has possibly escaped assessment is below the threshold limit of 50 lakhs Therefore, the time limit as provided in clause (b) of section 149(1) is not applicable. It is thus the petitioner's case that the impugned notice was issued beyond the period prescribed under the Act and therefore the same is liable to be set aside (Para 4]. (ii)Brett Lee v. ACIT International Taxation [2024] 163 taxmann.com 71 (Delhi-Trib.) It is now fairly well settled that service of notice under section 148 is a mandatory statutory requirement for framing an assessment under section 147. In absence of a valid service of notice under section 148, the consequential action flowing there from would necessarily have to be declared as invalid. [Para 4.5] Therefore, it is an established fact on record that notice u/s 148 of the Act was never served on the assessee within the period of limitation prescribed under the Statute It is now fairly well settled that service of notice u/s 148 of the Act is a mandatory statutory requirement for framing an assessment u/s 147. In absence of a valid service of notice u/s 148 of the Act, the consequential action flowing there from would necessarily have to be declared as invalid.

In view of the reasons set out above, as also bearing in mind entirety of the case, I am of the considered view that the reasons recorded by the Assessing Officer, as set out earlier, were not sufficient reasons for reopening the assessment proceedings. I, therefore, quash the reassessment proceedings. As the reassessment itself is quashed, all other issues on merits of the additions, in the impugned assessment proceedings, are rendered academic and infructuous.

In the result, both the appeals filed by the assessee are allowed. Order is pronounced in the open Court on 03/07/2026.