RAJESH KUMAR KHANNA ,MUMBAI vs. INCOME TAX OFFICER WARD 42(1)(4), MUMBAI

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “J(SMC)”, MUMBAI BEFORE SHRI OM PRAKASH KANT, ACCOUNTANT MEMBER AND SHRI ANIKESH BANERJEE, JUDICIAL MEMBER ITA No.1676/Mum/2026 (Assessment year: 2017-18)

Rajesh Kumar Khanna vs ITO Ward 42(1)(4), Mumbai D/2, Plot No.603, Akarshan Kautilya Bhavan, C41-43, Avenue 3, CHS, Sector-6, Charkop, Near Videsh Bhavan, Bandra East, Kandivali-(W), Mumbai- Mumbai-400051 400067 PAN:AIXPK4013C APPELLANT RESPONDENT Assessee by : Ms. Neha Paranjpe Adv. & Shri Akhilesh Deshmukh Adv. Revenue by : Shri Aditya Rai (Sr.DR) Date of hearing : 10/06/2026 Date of pronouncement : 15/06/2026 O R D E R Per:Anikesh Banerjee (JM): The instant appeal of the assessee filed against the order of the NFAC, Delhi [for brevity the “Ld. CIT(A)”], order passed under section 250 of the Income Tax Act, 1961 (for brevity ‘the Act’) for Assessment Year 2017-18, date of order 29.08.2024. The impugned order emanated from the order of the Assessment Unit Income Tax Department (for brevity the ‘Ld. AO’) order passed under section 147 r.w.s. 144B of the Act date of order 30.03.2023.

2 ITA No.1676/Mum/2026 Rajesh Kumar Khanna 2. The Registry reported that the appeal had been filed with a delay of 476 days. In support of the condonation request, the Ld. AR filed a notarised affidavit duly sworn by the assessee on 29.05.2026, explaining the reasons for the delay. The Ld. AR also filed a separate petition seeking condonation of the delay in filing the appeal before the Tribunal. The Ld. DR argued that the assessee had filed the appeal before the Ld. CIT(A) with delay of 114 days. The assessee is a habitual defaulter in filing appeal. The Ld. DR strongly opposed the request and contended that the assessee had failed to establish any sufficient cause warranting condonation of such a substantial delay of 476 days. 3. However, considering the facts and circumstances of the case, we are of the considered view that an appropriate cost should be imposed upon the assessee to underscore the importance of timely compliance with proceedings under the Income-tax Act. Accordingly, while condoning the delay, we direct the assessee to pay a cost of Rs.5,000/- (Rupees Five Thousand Only) to the credit of the Income Tax Department under the appropriate “Other Head” within a period of two months from the date of receipt of this order. Accordingly, the delay of 476 days in filing the appeal is condoned, and the appeal is admitted for adjudication on merits subject to payment of the cost as mentioned above. 4. The brief facts of the case are that the assessee filed the return u/sec. 139 declaring total income Rs.2,94,800/-. The information was received from I & CI, Mumbai that the assessee sold immovable property with sale consideration of Rs.25lakh against the market value as per stamp duty valuation authority Rs.30,80,368/-. Thus the value as per stamp duty authority exceeds the sale

3 ITA No.1676/Mum/2026 Rajesh Kumar Khanna consideration amount of Rs.5,80,368/- which is taxable u/sec. 50C of the Act. On finding this issue the Ld. AO issued notice u/sec. 148 dated 14.06.2021. 5. Pursuant to the judgment of the Hon’ble Supreme Court in Union of India v. Ashish Agarwal reported in (2022) 138 Taxmann.com 64 (SC) dated 04.05.2022 and in accordance with CBDT Instruction No. 01/2022 dated 12.05.2022, the Ld. AO passed an order under section 148A(d) of the Act on 25.07.2022. Before passing the said order, the Ld. AO furnished the relevant information and documents to the assessee and provided a reasonable opportunity of being heard. Thereafter, notice under section 148 of the Act was issued on 25.07.2022. Subsequently, the assessment was completed by making additions aggregating to Rs. 34,06,968/- under sections 69 and 69C of the Act. Aggrieved by the assessment order, the assessee preferred an appeal before the Ld. CIT(A). The Ld. CIT(A), after granting adequate opportunities to the assessee, passed the appellate order ex parte and upheld the assessment order primarily on account of non-prosecution by the assessee. Being further aggrieved, the assessee has preferred the present appeal before the Tribunal. 6. The Ld. AR filed a paper book comprising pages 1 to 122, which has been taken on record. The Ld. AR also raised an Additional Ground challenging the jurisdiction of the Ld. AO to issue notice under section 148 of the Act on the ground that the same was barred by limitation. Elaborating upon the legal ground, the Ld. AR submitted that the notice issued under section 148 was beyond the period prescribed under the Act and, therefore, the reassessment proceedings were without jurisdiction. In support of this contention, the Ld. AR invited our attention to page 1 of the APB, containing the notice issued under

4 ITA No.1676/Mum/2026 Rajesh Kumar Khanna section 148 of the Act dated 14.06.2021. The relevant extract of the notice is reproduced here under:

5 ITA No.1676/Mum/2026 Rajesh Kumar Khanna Supreme Court in Ashish Agarwal v. Union of India reported in (2022) 138 Taxmann.com 64 (SC), such notices are deemed to be issued under Section 148A(b) of the Act. Accordingly, the Ld. AO issued fresh notices under Section 148A(b) on 28/05/2022 and passed orders under Section 148A(d) on 25/07/2022, before the expiration of the statutory timeline. The Ld. AR contended that the Ld. AO erroneously extended the time limit for issuing notices under the new regime by adding "surviving days" from the old regime, calculated at seven days. For AY 2016-17, the Ld. AR argued that the notice issued under the new regime exceeded the prescribed limitation period. Reference was made to Union of India v. Rajeev Bansal, (2024) 167 Taxmann.com 70 (SC), which clarified that any notice issued beyond the surviving time limit is time-barred.

6 ITA No.1676/Mum/2026 Rajesh Kumar Khanna is considered by the Hon’ble Apex Court. Respectfully considering the order of Hon’ble Apex Court in Rajeev Bansal (supra) the relevant paragraphs are reproduced as below:- “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 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. 113. In Ashish Agarwal (supra), this Court allowed the assesses to avail all the defenses, including the defence of expiry of the time limit specified under section 149(1). In the instant appeals, the reassessment notices pertain to the assessment years 2013-2014, 2014-2015, 2015-2016, 2016-2017, and 2017-2018. To assume jurisdiction to issue notices under section 148 with respect to the relevant assessment years, an assessing officer has to: (i) issue the notices within the period prescribed under section 149(1) of the new regime read with TOLA; and (ii) obtain the previous approval of the authority specified under section 151. A notice issued without complying with the preconditions is invalid as it affects the jurisdiction of the assessing officer. Therefore, the reassessment notices issued under section 148 of the new regime, which are in pursuance of the deemed notices, ought to be issued within the time limit surviving under the Income-tax Act read with TOLA. A reassessment notice issued beyond the surviving time limit will be time-barred.”

7 ITA No.1676/Mum/2026 Rajesh Kumar Khanna 9. We consider the ruling and calculated the limitation for issuance notice U/s 148 of the Act which is as follows: - below: Sr No. The total time to be excluded for As per facts of the Assessee’s Page No. computation of limitation as per Case Rajiv Bansal Order (Para 12) 1 The notice u/s 148, dated The notice u/s 148 issued on 1 01.05.2021 issued under the old law. 14.06.2021 under old The same was treated as a deemed reassessment proceedings which show cause notice u/s 148A(b) was treated as deemed show pursuant to the decision of UOI vs. cause notice u/s 148A(b) as per Ashish Agarwal [2022] 444 ITR 1 (SC) the new reassessment proceedings. Thus, the Assessing Officer will have "Thus, the Assessing Officer had sixty-one days [days from 1 May only sixteen (16) days available, 2021 till 30 June 2021] to issued i.e., from 14.06.2021 to notice u/s 148 of the new regime. 30.06.2021, for issuance of notice under section 148 under the new reassessment regime." 2 The time starts ticking for the The notice u/s. 148A(b) was 2-4 Assessing Officer after receiving the issued on 28.05.2022 providing response of the Assessee. the time to file response till 17.06.2022. The Assessee did not In this instance, if the assessee file any response in reply to this submits the response on 18th June notice. 2022. Hence, the limitation to issue The Assessing officer will have Sixty- notice u/s 148 of the Act starts one day from 18 June 2022 to issue a from 17.06.2022 i.e. on expiry of reassessment notice u/s 148 of the the specified time mentioned in new regime the notice u/s 148A(b) of the Act. Thus the Assessing Officer had 16 days time from 17.06.2022 to issue a notice u/sec. 148 under the new regime. 3 Thus in this illustration, the time The time limit for issuance of a --

8 ITA No.1676/Mum/2026 Rajesh Kumar Khanna limit for issuance of a notice u/sec. notice u/sec. 148 as per the new 148 of the new regime will end on regime ended on 03.07.2022 18th August 2022. 4 Notice issued under section 148 of - The notice under section 148 of 11-12 the Act the Act was issued on 25.07.2022, whereas the period of limitation for issuance of such notice expired on 03.07.2022. Accordingly, the notice issued under section 148 is barred by limitation, without jurisdiction, and liable to be quashed and set aside.

The issue was duly followed by the order of the Hon’ble High Court of Delhi in the case of IBIBO group Pvt Ltd vs ACIT W.P.(C) 17639/2022, date of order 13/12/2024 and allowed in favour of the assessee.

9 ITA No.1676/Mum/2026 Rajesh Kumar Khanna adding the surviving period 16 days the due date for issuance notice u/sec 148 was ended on 03/07/2022. But the notice u/sec 148 was issued on 25/07/2022. The Ld. DR could not present any contrary facts or rulings to refute the submissions of the Ld. AR. Respectfully following the decisions in Ashish Agarwal (supra) and Rajeev Bansal (supra), we hold that the notice issued under Section 148 for AY 2017-18 is invalid, rendering the subsequent assessment proceedings null and void. Accordingly, the Additional Ground raised by the assessee is allowed. Since we have adjudicated the issue of limitation in favor of the assessee, the remaining grounds of appeal are rendered academic and do not require further deliberation. Accordingly, the appeal filed by the assessee is allowed in terms of, and subject to, the direction contained hereinabove. 12. In the result, the appeal of the assessee bearing ITA No.1676/Mum/2026 is allowed. Order pronounced in the open court on 15th day of June 2026. Sd/- Sd/- (OM PRAKASH KANT) (ANIKESH BANERJEE) ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai,िदनांक/Dated: 15/06/2026 SAUMYASr.PS Copy of the Order forwarded to: अपीलाथ�/The Appellant , 1. 2. �ितवादी/ The Respondent. 3. आयकरआयु� CIT 4. िवभागीय�ितिनिध, आय.अपी.अिध., मुंबई/DR, ITAT, Mumbai 5. गाड�फाइल/Guard file.

10 ITA No.1676/Mum/2026 Rajesh Kumar Khanna BY ORDER, //True Copy// (Asstt. Registrar), ITAT, MUMBAI