MOHD MUSLIM ASGAR ALI MANDAWARIYA,THANE vs. ITO - WARD 3(2), KALYAN

PER PAWAN SINGH, JUDICIAL MEMBER:

dated 31.10.2025 for assessment year (A.Y.) 2016-17. The assessee has

raised following grounds of appeal;

i. On the facts and circumstances of the case and in law, the Learned Commissioner of Income Tax (Appeals) erred in appreciating that the notice u/s 148 and order u/s 148A(d) needs to be issued by Faceless Assessing Officer. However, in the current appeal the same has been issued by the Jurisdictional Assessing Officer and hence thus the notice u/s 148 and the order u/s 148A(d) are bad in law and the whole proceeding needs to be quashed. ii. On facts and in circumstances of the case and in law, the Learned Commissioner of Income Tax (Appeals) erred in upholding the issuance of notice u/s 148 dated 28.03.2023 as the same was without jurisdiction and barred by limitation of time, thereby rendering the assessment order passed by the Learned Assessing Officer as invalid and bad in law.

iii. On facts and in circumstances of the case, the Learned Commissioner of Income Tax (Appeals) erred in upholding the reopening of the assessment without appreciating the time limit provided u/s 149(1)(a) as the income which is alleged to have escaped the assessment is Rs. 17,88,292/- (below Rs. 50 Lakhs). iv. On facts and in circumstances of the case, the Learned Commissioner of Income Tax (Appeals) erred in ascertaining the share of the appellant in the property, without considering the submissions made by the appellant. The actual share of the appellant is 1/3rd of the total amounting to Rs. 17,88,292 on the basis of Index-2 dated 18.04.2015 filed in response to SCN u/s 148A(b). v. On facts and in circumstances of the case and in law, the Learned Commissioner of Income Tax (Appeals) erred in upholding that objections can be raised only before the Order u/s 148A(d) and issuance of Notice u/s 148 without appreciating that the order passed u/s 148A(d) of the Act is neither final assessment order nor creates any demand and remains subject to final Assessment Order to be passed. Reliance is placed on judgements of various high courts in writ petitions filed by various appellants. vi. On the facts and circumstances of the case, the Learned Commissioner of Income Tax (Appeals) erred in upholding the additions of Rs. 17,88,292 u/s 69A of the Act made by the Ld. Assessing Officer on account of unexplained investment without appreciating that the source of investment was accumulated savings from the past incomes. 2. Rival submissions of both the parties have been heard and record perused.

The Ld. Authorized Representative (in short ‘AR’) of the assessee submits

that the case of the assessee for AY 2016-17 was reopened by issuing show

cause notice under Section 148 dated 28.03.2023. Admittedly, the case of

the assessee was reopened after three years from the end of the relevant

assessment year. The escaped income was less than Rs. 50.00 Lacs,

therefore, notice under section 148 is barred by limitation period prescribed under section 149(1)(b) and assessment completed pursuant thereto is

invalid. While explaining the facts, the Ld. AR of the assessee submits that

the notice under section 148(A)(b) dated 19.01.2023 was served upon the

assessee. The said notice was based on information with the AO in ITD

system that the assessee had made a transaction of purchase of immovable

property more than Rs.50.00 Lacs. In response to such show cause notice,

the assessee filed his reply on 20.02.2023, copy of acknowledgement of

reply by ITB Portal is filed on record. In the reply, the assessee explained

the fact that the assessee along with two other co-owner have purchased

immovable property at Rs. 50,80,777/-. All three co-owner paid stamp duty

for registration of transaction at Rs. 2,54,100/- and paid registration

charges of Rs. 30,000/-. Thus, aggregate cost of entire transaction was of

Rs. 53,64,877/-. The assessee is having one-third (1/3) share thus, the

share of assessee is only of Rs. 17,88,292/-. Such fact is clearly discernible

from the acknowledgment of ITB Portal. The AO despite recording such fact

in para 5 of the order passed under Section 148 (A)(d) dated 27.03.2023

and issued notice under Section 148 dated 28.03.2023. The AO ultimately

while passing assessment order, made addition of Rs. 17,88,292/-only. It is

an admitted fact that the case of assessee was reopened beyond three year

and alleged escapement of income was less than Rs.50.00 Lacs, therefore,

notice under Section 148 is barred by limitation period prescribed under

Section 149(1)(b), hence all subsequent action is void ab initio. To support

such issue, the assessee relied upon following case laws;-  Hrishikesh, 175 taxmann.com [2025]1062 (Bombay High Court)

 Vasuki Global Industries Ltd. [2025] 180 Taxmann.com 16 (Gujarat High Court)  Chetak Nandkumar Gandhi, [2025] 181 taxmann.com 769 (Gujarat High Court)  Jothiramalingam Sangeetha [2025] 158 taxmann.com 375 (Madras High Court)  Gedalia Multitrading (P.) Ltd. [2026] 183 taxmann.com 476 (ITAT-Mumbai)  Akshay Deepak Talim [2026] 183 taxmann.com 426 (ITAT-Mumbai)  Amit Jain [2025] 170 taxmann.com 2 (Supreme Court of India)  Rajeev Bansal [2024] taxmann.com 70 (Supreme Court of India)  Ganesh Dass Khanna [2023] 156 taxmann.com 417 (Delhi High Court) 3. On the other hand, the learned senior departmental representative (Ld. Sr.

DR) for the revenue supported the order of lower authorities.

through the orders of lower authorities carefully. We have also deliberated

on various case laws relied upon by Ld. AR of the assessee. We find that

there is no much dispute about factual aspect of the case. We find that in

response to show cause notice under Section 148(A)(b) dated 19.01.2023,

the assessee while explaining the fact specifically contended that he along

with two other co-owner purchased immovable property and his share in the

said property is only of Rs. 17,88,292/-. Such fact has not been disputed by

AO. We find that despite recording such fact, the AO passed order under

Section 148A(d) and issued notice under Section 148 dated 28.03.2024. the

AO failed to appreciate the facts that alleged income escaped is less than Rs.

50.00 lacs. The case of assessee sought to be reopened was for AY 2016-17.

We find that notice under Section 148 is beyond the limit prescribed under

Section 149(1)(b) as escaped income was less than Rs. 50.00 Lacs. Thus, notice under Section 148 is invalid. Considering the fact that notice is invalid,

therefore, subsequent action initiated thereon is void ab initio. In the result,

ground No. 1 to 5 of the appeal is allowed. Further, considering the fact that

we have held the notice under Section 148 as invalid, therefore, adjudication

on ground No. 6 of appeal have become academic.

Order was pronounced on 04/06/2026 in open Court.

Sd/- Sd/- MAKARAND VASANT MAHADEOKAR PAWAN SINGH ACCOUNTANT MEMBER JUDICIAL MEMBER

MUMBAI, Dated: 04/06/2026 Z.U., P.S

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

Page 5 of 6