JMD VENTURES LIMITED ,MUMBAI, MAHARASHTRA vs. ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE 8(2), MUMBAI

PER PAWAN SINGH, JUDICIAL MEMBER: 1. These three appeals by the assessee are directed against the separate

orders of ld. Commissioner of Income Tax (Appeals) - 48,Mumbai, [for

short “CIT(A)”] all dated 24.02.2026, for the assessment years (AYs)2013-

14, 2014-15& 2015-16.

appeals, certain facts in all the appeals are also common. Therefore, with

the consent of both the parties all three appeals were clubbed, heard

together and are decided by way of common order to avoid the conflicting

decisions.

assessee in appeal before A.Y. 2013-14 has raised following grounds of

appeal.

“1.That on the facts and in law, the Ld. CIT(A) erred in confirming the reassessment order passed under section 147 of the Income-tax Act, 1961 for Assessment Year 2013-14, which is illegal, arbitrary, without jurisdiction and liable to be quashed. 2. That the impugned Assessment proceedings are hopelessly barred by limitation. 3. That the impugned order passed by the Ld. CIT (A) is perverse and patently illegal. 4. That the learned CIT(A) erred in sustaining the addition based on statements of third parties without furnishing copies of such statements and without granting the Appellant opportunity of cross-examination. 5. That the Ld. CIT(A) failed to appreciate that the reassessment proceedings initiated under sections 147/148 are invalid and initiated without any Jurisdiction and proper application of mind by the Assessing Officer. 6. That the Assessment proceedings have been initiated without obtaining mandatory prior approvals of the specified authority u/s 151 of the Act. 7. That the Ld. CIT(A) erred in sustaining the rejection of books of accounts under section 145(3) of the Act. 8. That the Ld. CIT(A) erred in confirming the addition of Rs.2,48,95,231 made by the Assessing Officer by estimating commission income at the rate of 0.5% of the alleged turnover, which is arbitrary, without any cogent material and contrary to settled principles governing best judgment assessment. 9. That the Ld. CIT(A) failed to appreciate that the Assessment proceedings have been conducted in violation of principle of Natural Justice. 10. The learned CIT(A) erred in upholding the initiation of penalty proceedings under section 271(1)(c) and levy of interest under sections 234A, 234B, 234C and 234D of the Act.”

perused. The Learned Authorised Representative (‘Ld. AR’) of the assessee

submits that in all three appeals, the assessee has raised legal grounds

against the validity of Notice under Section 148 and reopening under

Section 147 of the Income Tax Act. The Notice under Section 148 was

issued beyond period of limitation. Hence, the reopening is invalid and a

consequential order is passed thereafter is void ab initio. The Ld. AR of the

assessee, while explaining the facts, furnished certain details by the way of

short written synopsis, explaining the date of filling of return of income,

return income and the assessment completed under Section 143(3) of in

the following manner.

A.Y. Date of Filling Returned Assessment Date Income 2013-14 30.09.2013 1,00,84,650/- 31.12.2016

2014-15 30.09.2014 1,23,48,370/- 29.12.2016

2015-16 26.09.2015 1,73,04,100/- 29.12.2016

under Section 148 in all the three years were issued on 29.06.2021 under

the erstwhile provisions of Section 148, which existed prior to substitution

by Finance Act, 2021. The notices were issued under pre-amended Section

of 148. Though, the provisions of Section 147 to Section 148 were

substituted with effect from 01.04.2021. Similar, notice were issued in a

number of cases and such similar notices were challenged before various

High Courts across the country and ultimately the controversy were settled by Hon’ble Apex Court in Union of India Vs. Ashish Agarwal, (2022) 444

ITR 1 (SC), wherein, it was held that such notice issued under pre-

amended Section i.e. in between 01.04.2021 to 30.04.2021 to be treated

as a show-cause notice under the substituted Section of 148A(b) of the

Income Tax Act and directed the Assessing Officers (‘AO’) to provide

relevant material to the assessee’s within 30 days from the date of decision

of the Hon’ble Apex Court. In the said decision, a specific direction was

issued, that the assessee be given two weeks time to respond such

deemed notices. In compliance of the decision of the Hon’ble Apex Court,

the AO provided material to the assessee in June 2022. The assessee

responded to such notices within time. Thereafter, a fresh notice under

Section 148 dated 23.07.2022, were issued in all the three years. The Ld.

AR of the assessee submits that notices under Section 148 were issued

beyond the surviving period allowed by the Hon’ble Apex Court in Union of

India vs. Ashish Agarwal (Supra), while explaining the scope of The

Taxation and Other Laws (Relaxation and Amendment of Certain Provisions)

Act, 2020 (‘TOLA’) and the effect of subsequent decision of Apex Court in

Union of India Vs. Rajeev Bansal, (2024) 469 ITR 46 (SC),the Ld. AR of the

assessee submits that in the above said decision the Hon’ble Apex Court

has considered the interplay between the decision in case of Ashish

Agarwal & TOLAand the substituted provisions of Section 147 to 148 of the

Income Tax Act, and held that after 01.04.2021, the IT Act must be read

along with the substituted provisions, TOLA would continue to apply to the substituted provisions if any action fell for completion between 20.03.2020

and 31.03.2021 and the surviving/balance time limit is to be calculated by

computing the number of days between the date of issuance of the

deemed notice and 30.06.2021.It was held that the time excluded for

computation of limitation includes: (i) the period from the date of issuance

of the deemed notice till the date of supply of relevant information by the

AO; and (ii) the two-week period allowed to the assessee to respond. The

reassessment notice under Section 148 must be issued within the 'surviving

period' after accounting for all exclusions and any notice issued beyond

such period is time-barred with respect to AY 2015-16 specifically, the

Revenue itself, through the learned Additional Solicitor General of India,

made a categorical concession before the Hon’ble Supreme Court that

notices for AY 2025-16 would stand barred by limitation.Further, the

revenue conceded that notice under Section 148 for A.Y. 2015-16 issued on

or after 01.04.2021 will have to be dropped as they were not falling for

completion during the period prescribed under TOLA. Further, the decision

in the case ofUnion of India Vs. Rajeev Bansal(supra) has been reaffirmed

in the subsequent decision by the Hon’ble Apex Court in ITO Vs. Sri Sai

Kumar Mateti & Batch in SLP (Civil) No. 8682 of 2024 dated 04.05.2026.

the chart of dates and events for all three assessment years showing the

surviving period and the limitation period available to AO for passing the order under Section 148A(b) and notice under Section 148, in the following

manner:-

Table (A)- A.Y. 2013-14 Date Event

Table (B) A.Y. 2014-15 Date Event

Table –(C) A.Y. 2015-16 Date Event

years the notice under Section 148 was issued beyond the surviving period of two days runs from the date of expiry of reply. The limitation period for

A.Y. 2013-14 expired on or above 18.06.2022 and for A.Y.2014-15 on

16.06.2022. The notice under Section 148 was issued on 23.07.2022. Thus,

the same is hopelessly barred by the limitation. Similarly, for A.Y. 2015-16

as per the decision of Hon’ble Apex Court in the case of Sri. Sai Kumar

Mateti (Supra), the time limitation for issuance of notice under Section 148

was expired on 31.03.2022. In A.Y. 2015-16, the notice was also issued

only on 23.07.2022. Thus, the same is hopelessly time barred. To support

his submissions, the ld AR of the assessee also relied on the following

decisions of Bombay High Court; � Guru Udyog Private Limited Vs ITO & others in WP No.5076 of 2026, � Gurpreet Singh Vs DCIT & others in WP No. 315 of 2023.

of lower authorities and also furnished his short-written synopsis on all the

grounds of appeal, which, we have taken on record. In his written synopsis,

the Ld. Sr. CIT-DR for the revenue on issue of limitation for issuing notice

under section 148 submitted that the case of assessee was reopened on

the basis of certain evidences and information gathered in the search and

survey action in case of Trimix IT Infrastructure & services Limited on

18.12.2017. in the survey action it was revealed that the assessee was part

of syndicate of network engaged in providing accommodation entry without

actual movement of goods. Initially notice under section 147 was issued on

29.06.2021, which was issued within the extended period of limitation available under TOLA and notification issued thereunder. After the decision

of Supreme Court in UOI Vs Ashish Agarwal, the said notice was treated as

notice under section 148A(b). The AO furnished material to the assessee

on 02.06.2022 and after allowing opportunity to the assessee passed order

under section 148A(d) on 23.07.2022 and completed assessment on

31.05.2023 in all three assessment years. The plea of assessee that notice

under section 148 issued on 23.07.2022 is barred by limitation is misplaced.

The AO in the present case meticulously complied each of the direction of

the Apex Court. The reliance placed in case of Rajeev Bansal (supra) is

misplaced the decision in Rajeev Bansal (supra) does not lay down that

every reassessment proceeding initiated pursuant to Ashish Aggarwal Case

(supra) automatically become time barred by limitation. The applicability of

time limit depends on the statutory frame work governing the particular

case, including operation of TOLA. The assessee failed to demonstrate how

the ratio of Rajeev Bansal(supra) invalidates the assessment proceedings,

when the AO strictly acted as per the directions of the Apex Court. The

decision in Rajeev Bansal cannot be read in isolation. The reassessment in

the present case originates from the search and survey action in the

present case. To support his submissions, the ld CIT-DR for the revenue

relied on the decision of Delhi High Court in BKR Capital (P) Limited Vs ITO

(2026) 187 taxmann.com 10 (Delhi), wherein it was held that section 149

has to be interpreted harmoniously by giving effect to all its provisions and

not merely by First Proviso. It was also held that where the proceedings under section 148A are validly initiated within limitation, the time consumed

in complying with the mandatory procedure including allowing opportunity

cannot render the subsequent notice under section 148 barred by

limitation.

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

deliberated on the case laws relied by the parties. There is no dispute that

the case of assessee for all three assessment years was reopened under

section 147.Notice under Section 148 in all the three years were issued on

29.06.2021. The said notices were issued under the erstwhile provisions of

Section 148. After the decision of Hon’ble Apex Court in Court in the case

of Ashish Agarwal reported in 444 ITR 1 (SC), notice under section 148A(b)

was issued on 01.06.202, wherein dated 29.06.2021 was treated as notice

under section 148A(b). Reasons recorded were provided to the assessee on

02.06.2022. The assessee filed his reply on 14/6/2022, thus, time limit up

to which surviving the limit under the Act read with the Taxation and Other

Laws (Relaxation of certain provisions) Ordinance, 2020 (TOLA) expires was

only up to 15.06.2022. The AO passed order under section 148A(d) on

23.07.2022 and simultaneously notice under section 148 was also issued on

23.07.2022, which is at all beyond the surviving period. Thus, notice under

section148 is invalid in AY 2013-14 and in AY 2014-15. Therefore, the

assessment order passed on the basis of such notice is void-ab initio.

(supra), the provisions of TOLA are not applicable for AY 2015-16 and

reopening is liable to be dropped. Hon’ble Bombay High Court in Virjinia

Foods [(2025) 179 taxmann.com 626 (Bom)] has categorically held that

notices issued for A.Y. 2015-16 on or after 01.04.2021 are invalid, taking

note of the concession Rajiv Bansal (supra)Thus, the re-assessment

proceeding initiated by AO is invalid and the assessment order in all three

years has become void-ab-initio.

revenue is not applicable on the facts of present appeal, as the facts of the

decision of Delhi High Court in BKR Capital (P) Limited Vs ITO (supra) is at

variance, firstly the said decision related to AY 2017-18. Further, in the said

case it was held that section 149 has to be interpreted harmoniously by

giving effect to all its provisions and not merely by First Proviso. It was also

held that where the proceedings under section 148A are validly initiated

within limitation, the time consumed in complying with the mandatory

procedure including allowing opportunity cannot render the subsequent

notice under section 148 barred by limitation. However, the legal issue vis-a

vis controversy for issuing notice under section 148 under erstwhile

provisions, when the provisions in the statue itself has been substituted,

were settled by Hon’ble Apex Court by setting the principle of surviving

period, which has not been adhere to by AO. Thus, we do not find merit in the submissions of ld CIT-DR for the revenue. Hence, the assessee

succeeded on the primary submissions on legal issue.

hence, adjudication on merit on various other issued have become

academic.

allowed.

Order pronounced in open Court on 02.07.2026

Sd /- Sd/-

Sd/- Sd/- VIKRAM SINGH YADAV PAWAN SINGH ACCOUNTANT MEMBER JUDICIAL MEMBER

Mumbai, Dated: 02/07/2026 Aditi Pandare, PS Aditi Pandare, PS Aditi Pandare, PS Aditi Pandare, PS Copy of the order forwarded to: (1) The Assessee; (2) The Revenue; (3) The PCIT / CIT (Judicial); (4) The DR, ITAT, Nagpur; and By order (5) Guard file.

Assistant Registrar ITAT, Mumbai