VIJAY KUMAR SONI,DELHI vs. ITO WARD 47(1), DELHI

Q: Which sections of the Income-tax Act were involved?

Section 147, Section 148, Section 148A(d), Section 144B, Section 149(1)(b)

ITA 5459/DEL/2025Status: DisposedITAT Delhi12 June 2026AY 2014-157 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the assessee's case was barred by limitation and the notice issued under Section 148 of the Act was invalid and beyond the period of limitation. The reasoning was based on the fact that the profit embedded in the transactions was ₹4,27,778/-, which is substantially below the ₹50 lakhs threshold prescribed under Section 149(1)(b) of the Act for issuing a notice beyond three years, where income is represented in the form of an 'asset'. The Tribunal relied on the judgment of the Hon'ble Bombay High Court in the case of Ram Nebhnani HUF, which held that only the net income from buy and sell transactions can be brought to tax, not the entire sum, and that the department has the onus to justify reopening. Since the notice under Section 148 was quashed as invalid, the Tribunal did not proceed to decide the merits of the case. The operative direction was to quash the notice and allow the assessee's appeal on this issue.

What were the facts?

The assessee, Shri Vijay Kumar Soni, filed an appeal against the order of the CIT(A), NFAC, Delhi, dated August 7, 2025. The assessment for the Assessment Year (AY) 2014-15 was made by the Assessing Officer (AO), Assessment Unit, vide order dated May 30, 2023, under Section 147 read with Section 144B of the Income-tax Act, 1961. The AO had assumed jurisdiction under Section 147 read with Section 148A(d) and issued a notice under Section 148 dated June 29, 2022. The department received information from the Investigation Wing, Mumbai, suggesting the assessee engaged in commodity trades through NSEL via M/s Anand Rathi Commodities Limited, involving client code modifications and tempered contract notes, with total transactions amounting to ₹2,48,18,275/-. The AO inferred that income represented by these transactions had escaped assessment.

What were the issues?

1. Whether the assumption of jurisdiction under Section 147 read with Section 148A(d) of the Act and the issuance of notice under Section 148 dated June 29, 2022, by the AO were valid, and consequently, whether the appellate order confirming this action was bad in law. The assessee argued that the precondition specified under Section 149(1)(b) of the Act for issuing a notice after the lapse of three years from the end of the assessment year was not satisfied, as the income alleged to have escaped assessment was not represented by an 'asset'. The assessee contended that the profit element embedded in the transactions was only ₹4,27,778/-, which is significantly below the ₹50 lakhs threshold stipulated in Section 149(1)(b). The assessee also argued that the notice under Section 148, unamended, was issued on April 16, 2021, which was beyond the time limit under the unamended Section 147. The revenue, represented by the Senior DR, did not controvert the facts or the law laid down by various courts.