KARUNASHANKER SHUKLA,THANE vs. ITO 3(2), KALYAN

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ITA 8835/MUM/2025Status: DisposedITAT Mumbai29 June 2026AY 2015-20166 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal decided to adjudicate the ground of appeal challenging the reassessment proceedings as barred by limitation, citing a Supreme Court decision. The merits of the case were not argued.

What were the facts?

The assessee's appeals challenge reassessment proceedings initiated under Section 147 and penalty proceedings under Section 271(1)(c) for AY 2015-16. The reassessment was based on alleged escapement of income due to the purchase of immovable property.

What were the issues?

The key legal issue is whether the reassessment proceedings are barred by limitation, as per the Supreme Court's ruling in the Rajeev Bansal case.

Which sections of the Income-tax Act were involved?

Section 147,Section 144,Section 144B,Section 271(1)(c)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “E” BENCH MUMBAI

Before: SHRI AMIT SHUKLA & SHRI GIRISH AGRAWAL

Hearing: 23.06.2026Pronounced: 29.06.2026

IN THE INCOME TAX APPELLATE TRIBUNAL “E” BENCH MUMBAI BEFORE SHRI AMIT SHUKLA, JUDICIAL MEMBER AND SHRI GIRISH AGRAWAL, ACCOUNTANT MEMBER ITA Nos. 8835 and 8836/MUM/2026 Assessment Year: 2015-16 Karunashanker Shukla Income Tax Officer – 3(2), D 26, Godawari Apartment, Thane Agra Road, Thankarpada, Thane – 421 301, Vs. Maharashtra (PAN : CBWPS3059N) (Appellant) (Respondent) Present for: Assessee : Shri Viraj Mehta, CA Revenue : Smt Sujatha Iyyanger, Sr. DR Date of Hearing : 23.06.2026 Date of Pronouncement : 29.06.2026 O R D E R PER BENCH: These two appeals filed by the assessee are against the orders of National Faceless Appeal Centre (NFAC), Delhi vide Order No. ITBA/NFAC/S/250/2025-26/1083344495(1) and ITBA/NFAC/S/250/2025-26/1083344516(1) both dated 05.12.2026, passed against the assessment orders by Assessment Unit, u/s. 147 r.w.s. 144 r.w.s. 1448 and of the Income-tax Act, 1961 (hereinafter referred to as the “Act”), dated 18.02.2024, for Assessment Year 2015- 16.

2 ITA Nos. 8835 and 8836/Mum/2026 Karunashanker Shukla AY 2015-16 2. These two appeals, one relating to quantum proceeding u/s. 147 r.w.s. 144 and the other relating to imposition of penalty u/s. 271(1)(c) are for Assessment Year 2015-16.

2.1. Assessee vide ground no.3 before us, challenges the impugned reassessment proceedings, contesting that it is barred by the limitation in view of the decision of Hon'ble Supreme Court in the case of Union of India vs. Rajeev Bansal [2024] 167 taxmann.com 70 (SC). Since the said ground of appeal goes to the roots of the matter being jurisdictional issue, the same is taken up for adjudication. Merits of the case have not been argued upon by either party nor any submission made to that effect. Accordingly, we draw facts from the records relating to said legal ground, argued before the Bench.

3.

Notice u/s. 148 was issued on 08.04.2022 alleging that there is an escapement of income from assessment on account of purchase of immovable property for a consideration of Rs.55,19,250/- which was registered with the office of Joint/Sub registrar office, Panvel-1 on 06.02.2015. Assessee is a non-filer. Assessment was completed ex parte by making an addition of Rs. 55,19,517/- u/s. 69 treating the same as unexplained investment. There was a delay of 388 days in filing the first appeal before the ld. CIT(A), which according to the ld. CIT(A) has not been satisfactorily explained by furnishing ‘sufficient cause’ as required u/s. 249(3). Ld. CIT(A) provided three opportunities by fixing the dates for hearing to which nothing was responded. The appeal was thus, dismissed as not maintainable.

4.

On the fact that notice u/s. 148 was issued on 08.04.2022 under the new regime of reassessments, we find that this issue has been

3 ITA Nos. 8835 and 8836/Mum/2026 Karunashanker Shukla AY 2015-16 settled in the case of Rajeev Bansal (supra) wherein reference is made to the submissions made on behalf of the Revenue vide para 19 which is relevant and the same is reproduced hereunder:- “19. Mr N Venkataraman, learned Additional Solicitor General of India, made the following submissions on behalf of the Revenue: a. Parliament enacted TOLA as a free-standing legislation to provide relief and relaxation to both the assessees and the Revenue during the time of COVID- 19. TOLA seeks to relax actions and proceedings that could not be completed or complied with within the original time limits specified under the Income Tax Act, b. Section 149 of the new regime provides three crucial benefits to the assesses: (i) the four-year time limit for all situations has been reduced to three years, (ii) the first proviso to Section 149 ensures that re-assessment for previous assessment years cannot be undertaken beyond six years, and (iii) the monetary threshold of Rupees fifty lakhs will apply to the re- assessment for previous assessment years, c. The relaxations provided under Section 3(1) of TOLA apply "notwithstanding anything contained in the specified Act." Section 3(1), therefore, overrides the time limits for issuing a notice under Section 148 read with Section 149 of the Income Tax Act; d. TOLA does not extend the life of the old regime. It merely provides a relaxation for the completion or compliance of actions following the procedure laid down under the new regime; e. The Finance Act 2021 substituted the old regime for re-assessment with a new regime. The first proviso to Section 149 does not expressly bar the application of TOLA. Section 3 of TOLA applies to the entire Income Tax Act including Sections 149 and 151 of the new regime. Once the first proviso to Section 149(1)(b) is read with TOLA, then all the notices issued between 1 April 2021 and 30 June 2021 pertaining to assessment years 2013-2014, 2014-2015, 2015-2016, 2016-2017 and 2017-2018 will be within the period of limitation as explained in the tabulation below; Assessme Within 3 Years Expiry of Within six Years Expiry of nt Year (2) Limitation (4) Limitation read (1) read with with TOLA for (4) TOLA for (2) (3) (5) 2013- 31.03.2017 TOLA not 31.03.2020 30.06.2021 2014 applicable 2014- 31.03.2018 TOLA not 31.03.2021 30.06.2021 2015 applicable 2015- 3103.2019 TOLA not 31.03.2022 TOLA not 2016 applicable applicable

4 ITA Nos. 8835 and 8836/Mum/2026 Karunashanker Shukla AY 2015-16 2016- 31.03.2020 30.06.2021 31.03.2023 TOLA not 2017 applicable 2017- 31.03.2021 30.06.2021 31.03.2024 TOLA not 2018 applicable

f. The Revenue concedes that for the assessment year 2015-16, all notices issued on or after 1 April 2021 will have to be dropped as they will not fall for completion during the period prescribed under TOLA; g. Section 2 of TOLA defines "specified Act" to mean and include the Income Tax Act. The new regime, which came into effect on 1 April 2021, is now part of the Income Tax Act. Therefore, TOLA continues to apply to the Income Tax Act even after 1 April 2021; and h. Ashish Agarwal (supra) treated Section 148 notices issued by the Revenue between 1 April 2021 and 30 June 2021 as show-cause notices in terms of Section 148A(b). Thereafter, the Revenue issued notices under Section 148 of the new regime between July and August 2022. Invalidation of the Section 148 notices issued under the new regime on the ground that they were issued beyond the time limit specified under the Income Tax Act read with TOLA will completely frustrate the judicial exercise undertaken by this Court in Ashish Agarwal (supra).

4.1. Thus, it can be seen that Revenue conceded before the Hon’ble Supreme Court in para 19(f) for dropping all the notices issued on or after 01.04.2021 for A.Y. 2015-16 as they will not fall for completion during the period prescribed under TOLA.

4.2. This issue had come up before the Hon'ble Delhi High Court in the case of IBIBO Group Pvt. Ltd. vs. ACIT, WP(C)17639 of 2022, dated 13.12.2024 wherein re-assessment action for Assessment Year 2015- 16 was held to be not sustainable. Hon'ble Court quashed the notice issued u/s.148 as well as order passed u/s. 148A(d), dated 23.07.2022 for Assessment Year 2015-16 by following the decision in the case of Rajeev Bansal (supra).

4.3. In the case of present assessee, since the notice issued u/s.148 is dated 08.04.2022, period of six years expired on 31.03.2022 and is

5 ITA Nos. 8835 and 8836/Mum/2026 Karunashanker Shukla AY 2015-16 thus, barred by limitation. Accordingly, notice so issued and re- assessment completed thereafter u/s. 147 is liable to be quashed, in view of the decision of Hon'ble Supreme Court in the case of Rajeev Bansal (supra) which was followed by Hon'ble Delhi High Court in the case of IBIBO (supra).

4.4. Hon'ble Supreme Court while dismissing the SLP filed by Revenue in the case of ACIT vs. Nehal Ashit Shah in SLP (Civil) Diary No(s). 57209/2024, dated 04.04.2025 held that it does not survive for further consideration. While holding so, Hon'ble Court noted in para 5 as under: “5. In this regard, reference could also be made to paragraph 19(e) and (f) in the case of Union of India vs. Rajeev Bansal, Civil Appeal No.8629 of 2024 on 03.10.2024 (2024 SCC ONLINE 754) under which the learned Additional Solicitor General for India has made a concession insofar as the assessment year 2015-16 is concerned.”

5.

In view of above stated deliberation, both on facts and law including the applicable jurisprudence, we hold that notice for A.Y. 2015-16 issued on 08.04.2022 u/s 148 of the new regime is barred by limitation and hence bad in law, liable to be quashed, resulting in impugned reassessment proceedings as well as the impugned reassessment order bad in law. Accordingly, ground no. 3 raised by the assessee in this respect is allowed. All the other grounds of appeal are thus, rendered academic in nature.

6.

Since the appeal on the quantum proceeding has been held to be in favour of the assessee as the re-assessment proceedings initiated and the impugned order so passed has been held to be bad in law and quashed, consequential penalty proceedings and its imposition u/s. 271(1)(c) has no legs to stand. Since the foundation itself has been

6 ITA Nos. 8835 and 8836/Mum/2026 Karunashanker Shukla AY 2015-16 eroded, the appeal against imposition of penalty is rendered infructuous. Accordingly, the same is dismissed as infructuous.

7.

In the result, both the appeals filed by the assessee are allowed.

Order is pronounced in the open court on 29 June, 2026

Sd/- Sd/- (Amit Shukla) (Girish Agrawal) Judicial Member (Accountant Member) Dated: 29 June, 2026 MP, Sr.P.S. Copy to : 1 The Appellant 2 The Respondent 3 DR, ITAT, Mumbai 4 Guard File 5 CIT BY ORDER,

(Dy./Asstt.Registrar) ITAT, Mumbai

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