VILLOT CARDOZO,MUMBAI vs. INCOME TAX OFFICER WARD 41(3)(4), MUMBAI, MUMBAI

IN THE INCOME TAX APPELLATE TRIBUNAL “F” BENCH, MUMBAI BEFORE SHRI SANDEEP SINGH KARHAIL, JUDICIAL MEMBER SHRI BIJAYANANDA PRUSETH, ACCOUNTANT MEMBER

ITA No. 1159/Mum./2026 (Assessment Year : 2015-16) Villot Cardozo 1702, Modispaces Pearly Shell, Tank Road, Malad Orlem, Malad West, Mumbai - 400064 ……………. Appellant PAN : AFJPC7378F v/s

Income Tax Officer, Ward – 41(3)(4), Kautilya Bhavan, ……………. Respondent Mumbai - 400051 Assessee by : Shri Dharan Gandhi Revenue by : Shri Vikas Chandra, Sr. DR

Date of Hearing – 22/04/2026 Date of Order – 14/05/2026

O R D E R PER SANDEEP SINGH KARHAIL, J.M. The assessee has filed the present appeal against the impugned order dated 13.11.2025 passed under section 250 of the Income Tax Act, 1961 (“the Act”) by the learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi [“learned CIT(A)”], for the assessment year 2015-16.

In this appeal, the assessee has raised the following grounds: - 2. “1. Notice u/s 148 of the Act dated 28.04.2022 is barred by limitation. 2. The notice u/s 148 is bad in law and without jurisdiction as the jurisdictional requirement of section 147 to 151A of the Act.

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into a transaction of the sale of immovable property during the year under consideration. Accordingly, after conducting necessary enquiries as stipulated under section 148A(a) of the Act with prior approval of the specified authority, a show-cause notice under section 148A(b) of the Act was issued on 25.03.2022, granting opportunity to the assessee. Vide this notice, the assessee was also provided the details/documents for issuing the notice under section 148A(b) of the Act. The assessee was asked to furnish his reply with cogent and corroborative documentary evidence, on or before 22.04.2022. In response, the assessee submitted that the immovable property, which was sold during the year, was jointly owned with his mother, and therefore, the income that can be assessed in the hands of the assessee is only 50% of the sale consideration, which was less than the limitation prescribed for reopening the assessment after the expiry of three years. After considering the submissions of the assessee, an order under section 148A(d) of the Act was passed on 28.04.2022, declaring that it is a fit case for issuance of notice under section 148 of the Act. On the very same date, i.e., 28.04.2022, a notice under section 148 of the Act was issued to the assessee. Vide order dated 18.03.2024 passed under section 147 read with section 144B of the Act, the Assessing Officer (“AO”), after taking into consideration, the details filed by the assessee arrived at the conclusion that the assessee has earned long term capital gains of Rs. 17,72,299/-, out of which, the assessee invested Rs. 8,62,500/- for purchasing another property for taking benefit under section 54 of the Act. Accordingly, the balance amount of Rs. 9,09,799/- was added in the hands of the assessee. The learned CIT(A), vide impugned order, upheld the validity of the notice issued under section 148 of the Act. On merits, the learned CIT(A)

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also did not find any infirmity in the findings of the AO in making the addition of long-term capital gains after granting benefit under section 54 of the Act. Being aggrieved, the assessee is in appeal before us.

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prior to its substitution by the Finance Act, 2021, such notice cannot be issued even under the new provisions for any assessment year beginning on or before 01.04.2021. Accordingly, the Hon’ble Jurisdictional High Court held that in respect of assessment year 2015–16, since the period of six years as per the erstwhile provisions of section 149(1)(b) expired on 31.03.2022, any notice issued thereafter under section 148 of the Act is time-barred. The relevant findings of the Hon’ble Jurisdictional High Court in Hexaware Technologies Ltd. (supra) are reproduced as follows: -

“24. As regards issue no. 2, Section 149 of the Act reads as under : 149. Time limit for notice.—(1) No notice under section 148 shall be issued for the relevant assessment year,— (a) if three years have elapsed from the end of the relevant assessment year, unless the case falls under clause (b); [(b) if three years, but not more than ten years, have elapsed from the end of the relevant assessment year unless the Assessing Officer has in his possession books of account or other documents or evidence which reveal that the income chargeable to tax, represented in the form of— (i) an asset; (ii) expenditure in respect of a transaction or in relation to an event or occasion; or (iii) an entry or entries in the books of account, which has escaped assessment amounts to or is likely to amount to fifty lakh rupees or more:] Provided that no notice under section 148 shall be issued at any time in a case for the relevant assessment year beginning on or before 1st day of April, 2021, if 28[a notice under section 148 or section 153A or section 153C could not have been issued at that time on account of being beyond the time limit specified under the provisions of clause (b) of sub- section (1) of this section or section 153A or section 153C, as the case may be], as they stood immediately before the commencement of the Finance Act, 2021: Provided further that the provisions of this sub-section shall not apply in a case, where a notice under section 153A, or section 153C read with section 153A, is required to be issued in relation to a search initiated under section 132 or books of account, other documents or any assets requisitioned under section 132A, on or before the 31st day of March, 2021:

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[Provided also that for cases referred to in clauses (i), (iii) and (iv) of Explanation 2 to section 148, where,— (a) a search is initiated under section 132; or (b) a search under section 132 for which the last of authorisations is executed; or (c) requisition is made under section 132A, after the 15th day of March of any financial year and the period for issue of notice under section 148 expires on the 31st day of March of such financial year, a period of fifteen days shall be excluded for the purpose of computing the period of limitation as per this section and the notice issued under section 148 in such case shall be deemed to have been issued on the 31st day of March of such financial year: Provided also that where the information as referred to in Explanation 1 to section 148 emanates from a statement recorded or documents impounded under section 131 or section 133A, as the case may be, on or before the 31st day of March of a financial year, in consequence of,— (a) a search under section 132 which is initiated; or (b) a search under section 132 for which the last of authorisations is executed; or (c) a requisition made under section 132A, after the 15th day of March of such financial year, a period of fifteen days shall be excluded for the purpose of computing the period of limitation as per this section and the notice issued under clause (b) of section 148A in such case shall be deemed to have been issued on the 31st day of March of such financial year:] Provided also that for the purposes of computing the period of limitation as per this section, the time or extended time allowed to the assessee, as per show-cause notice issued under clause (b) of section 148A or the period during which the proceeding under section 148A is stayed by an order or injunction of any court, shall be excluded: Provided also that where immediately after the exclusion of the period referred to in the immediately preceding proviso, the period of limitation available to the Assessing Officer for passing an order under clause (d) of section 148A 30[does not exceed seven days], such remaining period shall be extended to seven days and the period of limitation under this sub-section shall be deemed to be extended accordingly. Explanation.—For the purposes of clause (b) of this sub-section, "asset" shall include immovable property, being land or building or both, shares and securities, loans and advances, deposits in bank account. [(1A) Notwithstanding anything contained in sub-section (1), where the income chargeable to tax represented in the form of an asset or expenditure in relation to an event or occasion of the value referred to in clause (b) of sub-section (1), has escaped the assessment and the investment in such asset or expenditure in relation to such event or

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occasion has been made or incurred, in more than one previous years relevant to the assessment years within the period referred to in clause (b) of sub-section (1), a notice under section 148 shall be issued for every such assessment year for assessment, reassessment or recomputation, as the case may be.] (2) The provisions of sub-section (1) as to the issue of notice shall be subject to the provisions of section 151.] The first proviso to Section 149 of the Act provides that no notice under section 148 shall be issued at any point of time in a case for a relevant assessment year beginning on or before the 1st day of April 2021, if a notice under section 148 could not have been issued at that time on account of being beyond the time limit specified under the provision of clause (b) of sub-section (1) of this Section, as it stood immediately before the commencement of the Finance Act, 2021. The term 'at that time' in the first proviso refers to the date on which notice under section 148 is to be issued by the Assessing Officer. The term 'at that time' has to refer to the term 'at any time' used earlier in the said proviso. The reference to 'at any time' is to the date of the notice to be issued by the Assessing Officer and, therefore, the term 'at that time' would also refer to the said date. On the said date, if a notice could not have been issued under the erstwhile provision of Section 149(1)(b) of the Act, for any assessment year beginning on or before the 1st day of April 2021, the notice cannot be issued even under the new provisions. 25. Section 149(1)(b) of the erstwhile provisions provided a time limit of six years from the end of the relevant assessment year for issuing notice under section 148 of the Act. For the relevant assessment year, being Assessment Year 2015-2016, 6th year expired on 31st March 2022. The notice under section 148 of the Act, in the present case, is issued on 27th August 2022, i.e., clearly beyond the period of limitation prescribed in Section 149 read with the first proviso to the said section. This is squarely covered by paragraphs 36 and 37 of New India Assurance (supra) which has been reproduced above in paragraph 23.” (Emphasis supplied) 8. As in the present case, the year under consideration is the assessment year 2015–16, and the notice under section 148 of the Act was issued on 28.04.2022, respectfully following the decision of the Hon’ble Jurisdictional High Court in Hexaware Technologies Ltd. (supra), we are of the considered view that the said notice is barred by limitation, and thus, the same is quashed. Consequently, the entire reassessment proceedings culminating in

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the assessment order passed under section 147 read with section 144B of the Act are also quashed.

Sd/- Sd/- SANDEEP SINGH KARHAIL BIJAYANANDA PRUSETH JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DATED: 14/05/2026 Prabhat Copy of the order forwarded to: (1) The Assessee; (2) The Revenue; (3) The PCIT / CIT (Judicial); (4) The DR, ITAT, Mumbai; and (5) Guard file. By Order

Assistant Registrar ITAT, Mumbai