CHANDRAKANT BHIVA GAVADE,MUMBAI vs. DCIT CC-2(4), MUMBAI

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ITA 7541/MUM/2025Status: DisposedITAT Mumbai23 June 2026AY 2013-146 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 notice issued under Section 148 on March 24, 2021, for AY 2013-14 was beyond the prescribed limitation period. Consequently, the notice and all subsequent proceedings were quashed as invalid.

What were the facts?

The assessee challenged the reassessment proceedings initiated by a notice under Section 148 for AY 2013-14, arguing it was barred by limitation. The notice was issued on March 24, 2021, more than six years after the end of the assessment year.

What were the issues?

Whether the notice issued under Section 148 for reassessment was within the period of limitation prescribed by the Act.

Which sections of the Income-tax Act were involved?

Section 148,Section 149,Section 147

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, MUMBAI BENCHES, MUMBAI

Before: HON’BLE NARENDER KUMAR CHOUDHRY & HON’BLE ARUN KHODPIA

Pronounced: 23.06.2026

आदेश / ORDER

PER NARENDER KUMAR CHOUDHRY, JUDICIAL MEMBER: This appeal has been preferred by the Assessee against the order dated 10.11.2025, impugned herein, passed by the National Faceless Appeal Centre(NFAC)/Ld. Commissioner of Income Tax (Appeals) (in short Ld. Commissioner) u/s 250 of the Income Tax Act, 1961 (in short ‘the Act’) for the A.Y. 2013-14.

2.

The present proceedings arise out of a notice issued under Section 148 of the Income-tax Act, 1961 ("the Act") on 24.03.2021 seeking to reopen the assessment for Assessment Year 2013-14.

3.

The Assessee has challenged the validity of the reassessment proceedings on various grounds including to the effect that the notice issued under Section 148 is barred by limitation and consequently all proceedings undertaken pursuant thereto are void ab initio.

4.

As the above ground raised, prima facie appears to be legal in nature and emanates from the record available, specifically the assessment order and therefore the same was allowed to be raised.

5.

Coming to the record, which reveals that notice under Section 148 of the Act was issued on 24.03.2021 for Assessment Year 2013-14 after elapsing of 6yrs from the end of relevant assessment year. The reasons recorded indicate that the Assessing Officer formed a belief that income chargeable to tax had escaped assessment to the tune of Rs. 179310/-.

6.

The Assessee contended that for Assessment Year 2013-14 the statutory period prescribed for reopening the assessment had expired on 31.03.2020 and, therefore, the notice itself was without jurisdiction.

7.

On the contrary the Ld. DR supported the orders passed by the Authorities below.

8.

Heard the parties and perused the material available on record. The issue requiring adjudication is ‘whether the notice issued under Section 148 on 24.03.2021 for Assessment Year 2013-14 is legally sustainable and within the period of limitation prescribed under the Act’.

9.

Admittedly, Assessment Year 2013-14 as involved in this case ended on 31.03.2013 and under the provisions of Section 149 of the Act, as applicable at the relevant time, a notice under Section 148 could ordinarily be issued within six years from the end of the relevant assessment year, where the escaped income exceeded the prescribed monetary threshold. Accordingly, the six-year period for Assessment Year 2013-14 expired on 31.03.2020.

10.

Admittedly the impugned notice under Section 148 was issued on 24.03.2021, i.e., after the expiry of the aforesaid limitation period. And thereafter no other orders and notice u/s 148A(b) or 148A(d) and 148 respectively were passed and issued as per TOLA or the judgment in the case of Union of India v. Rajiv Bansal [(2024) 167 taxmann.com 70 (SC)]. Further escaped income, which was taken into consideration for reopening of assessment under section 147 of the Act, was Rs. 179310/- only, which was less than Rs. 50 lakhs, the prescribed threshold monetary limit for reopening the case, after elapsing of 03 years from the end of relevant assessment year. Even no material has been brought on record to demonstrate that the case falls within any exceptional category providing for an extended limitation period. Jurisdiction to reopen an assessment can be assumed only upon issuance of a valid notice within the period prescribed by law. Limitation goes to the root of jurisdiction. Once the statutory period expires, the Assessing Officer lacks authority to initiate reassessment proceedings.

11.

In the present case, the notice dated 24.03.2021 having been issued beyond the permissible period of limitation for Assessment Year 2013- 14, the same is without jurisdiction and liable to be quashed along with all proceedings undertaken in pursuance of such invalid notice, as unsustainable in law.

12.

We observe that identical notice dated 31-03-2021 u/s 148 of the Act issued for the AY 2013-14 has also been dealt with Hon’ble Co-ordinate Bench in the case of Jasaram K. Rathod Vs Income Tax Officer {ITA No. 5687/Mum/2025 decided on 30.12.2025} and quashed the same along with assessment order, by observing and holding as under:

7.

Heard the parties and perused the material available on record. Admittedly in the instant case six years from the end of the relevant assessment year i.e., AY. 2013-14, expired on 31-03-2020 and, therefore, the AO by taking refuge of TOLA, issued notice dt. 31-03-2021 u/s. 148 of the Act. But thereafter admittedly no notice or order either under section 148A(b) or 148A(d) or 148 of the Act, has ever been passed/issued by the AO. Further escaped income, which was taken into consideration for reopening of assessment under section 147 of the Act, was Rs.22,50,000/- only, which was less than Rs. 50 lakhs and the sanction for issuing the notice u/s 148 of the Act has been taken from the Ld. PCIT but not from the Pr. CCIT. 8. Thus, on the aforesaid latches and anomalies, the notice dated 30-03 2021 alongwith assessment order dated 29/03/2022 is liable to quashed, in view of the relevant provisions of TOLA, judgment of Hon'ble Apex Court in Union of India v. Ashish Agarwal (2022 SCC Online SC 543) and CBDT instruction no, 1/2022 Dated: 11" May. 2022 and judgement in Union of India Vs. Rajiv Bansal, Civil Appeal No. 8629 of 2024, dt. 03-10-2024, specifically, wherein the Hon'ble Apex Court has also laid down as under: a. After 1 April 2021, the Income Tax Act has to be read along with the substituted provisions; b. TOLA will continue to apply to the Income Tax Act after 1 April 2021 if any action or proceeding specified under the substituted provisions of the Income Tax Act falls for completion between 20 March 2020 and 31 March 2021; c. Section 3(1) of TOLA overrides Section 149 of the Income Tax Act only to the extent of relaxing the time limit for issuance of a reassessment notice under Section 148; d. TOLA will extend the time limit for the grant of sanction by the authority specified under Section 151. The test to determine whether TOLA will apply to Section 151 of the new regime is this: if the time limit of three years from the end of an assessment year falls between 20 March 2020 and 31 March 2021 to grant approval; 9. Thus, on the aforesaid analyzations, the notice dated 30-03-2021 alongwith assessment order dated 29/03/2022, is accordingly quashed. 10. In the result, the Assessee’s appeal is allowed.”

13.

Thus, in view of the foregoing discussion, it is held that the notice issued under Section 148 of the Income-tax Act, 1961 on 24.03.2021 for Assessment Year 2013-14 is barred by limitation and is therefore invalid in law. Resultantly, the notice issued under Section 148 dated 24.03.2021 along with assessment order passed in pursuance to such notice, is hereby quashed accordingly.

14.

In the result, appeal filed by the Assessee is allowed.

Order pronounced in the open court on 23.06.2026.

Sd/- Sd/- ARUN KHODPIA NARENDER KUMAR CHOUDHRY ACCOUNTANT MEMBER JUDICIAL MEMBER (Tarun Kushwaha) Sr. Private Secretary

Copy to: CHANDRAKANT BHIVA GAVADE, ROOM NO. 5, SAI SIDDHI CHAWL. 1 A.P. WADI. CHEMBUR., MUMBAI-400071, MAHARASHTRA DCIT CC-2(4), ROOM NO. 802, 8 TH FLOOR, 2 PRATISHTHA BHAVAN, M.K.ROAD., MUMBAI-400020, MAHARASHTRA 3 THE PCIT / CIT, 4 THE D.R., ITAT, MUMBAI BENCH 5 GUARD FILE TRUE COPY

ASSISTANT REGISTRAR / SR. PRIVATE SECRETARY I.T.A.T., MUMBAI

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