SHILPA RAKESH PATIL,ALIBAUG vs. INCOME TAX OFFICER, WARD 42(3)(3), MUMBAI, MUMBAI

आयकरअपीलीयअिधकरण�ायपीठमुंबईम�। IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH, MUMBAI BEFORE SMT. BEENA PILLAI, JM & SHRI ARUN KHODPIA, AM I.T.A. No. 2304/Mum/2026 (Assessment Year:2017-18) Shilpa Rakesh Patil Income Tax Officer Ward 42(3)(3), B-12, Nav Alibag CHS, Mumbai Chendhare, Alibag, Raigarh Vs. Kautilya Bhavan, C-41 to C-43, G (MH), Alibag H.O., Raigad- Block, Bandra Kurla Complex, Bandra 402201 (East), Mumbai-400051 PAN: BNEPP2554A Assessee- अपीलाथ� / Appellant Revenue-��थ�/ Respondent :

Assesseeby : Shri Suresh Kumar Gundher : Shri Sandeep Jumale – Sr. DR Revenueby : 29.04.2026 Date of Hearing : 27.05.2026 Date of Pronouncement

O R D E R Per Arun Khodpia, AM: The captioned appeal is preferred by the assessee, directed against the order of the Commissioner of Income Tax Appeals, National Faceless Appeal Centre (NFAC), Delhi [in short,“the Ld. CIT(A)”], dated 29.12.2025, for assessment year (AY) 2017-18,arises from the assessment order u/s147 of the Income Tax Act, 1961 [in short,“the Act”] dated 20.04.2023, passed byAssessment Unit, Income Tax Department [in short,“the Ld.AO”].The grounds of appeal raised by the assessee are as under:

ITA No. 2304/Mum/2026 Shilpa Rakesh Patil “Ground 1: Reassessment Invalid As No Addition Made On Original Reasons The learned CIT(A) erred in upholding the reassessment, ignoring that the AO traveled beyond the scope of the "reasons to believe" recorded for reopening, in violation of the principle laid down in CIT vs. Jet Airways (I) Ltd. (Bombay HC). Therefore the reassessment is void and liable to be quashed. Ground 2: Notice u/s 148 Issued By Officer Without Jurisdiction The learned CIT(A) erred in ignoring that the notice u/s 148 dated 28.07.2022 was issued by DCIT, Circle 8(2)(1), Mumbai, while the jurisdictional Assessing Officer (JAO) who initiated reopening was ITO, Ward 34(3)(5), Mumbai. Notice Date Issued by 01.06.2021 (Original Notice) ITO Ward 34(3)(5) 28.07.2022(Fresh Notice) DCIT, Circle 8(2)(1) As held in PCIT vs. HexawareTechnologiesLtd. (Bombay HC), a notice u/s 148 issued by an officer not having jurisdiction over the assessee is null and void.The officer who records "reasons to believe" must also issue the notice. The notice and consequent assessment are without jurisdiction and void ab initio. Ground 3: Notice u/s 148 Time-Barred-Surviving Period Violation The learned CIT(A) erred in not adjudicating that the fresh notice u/s 148 dated 28.07.2022 wasissued beyond the surviving period under Taxation and Other Laws, as per Union of India vs. Rajeev ansal (SC) and WavesTradelinePvt. Ltd. vs. ITO (ITAT). Particulars Notice date Original notice u/s 148(A) 01.06.2021 Surviving Period 30 Days (01.06.2021 to 30.06.2021) Deemed Notice u/s 148A(b) 01.06.2022, replydue by10.06.2022 Fresh notice u/s 148 should have been 10.06.2022 +30 days issued by 10.07.2022 Actual Notice issued on 28.07.2022 18 days late The Revenue must complete the 148A process and issue fresh notice within the surviving period. Notice issued beyond surviving period is time-barred and void. The reassessment is time-barred and liable to be quashed. Ground 4: Addition u/s 69A Unsustainable - Deposits Not Income But Business Collections Without prejudice to the above jurisdictional grounds, the learned CIT(A) erred in confirming the addition of 9,93,000 u/s 69A, ignoring that the cash deposits in SB A/c No. 33370200000257 were customer collections in the ordinary course of business as a Business Correspondent, and not the Appellant's income. Also ignoring the fact that the appellant husband Rakesh RavindraPatilhas given affidavit to the effect that Rs8,11,000/- belonged to him which was deposited and subsequently transferred through RTGS In his account due to operational and commercial exigency on same day 2

ITA No. 2304/Mum/2026 Shilpa Rakesh Patil dated 03.01.2017. Rest 1,82,000/-were received from the customers during the ordinary course of business. Hence addition of 9,93,000/- is bad in law and facts. Ground 5: Arbitrary Estimation Of Commission Income Without prejudice, the learned CIT(A) erred in upholding the addition of 1,27,439 as estimated commission at 1.5%, without any material to reject the commission income Rs 67,952/-already declared and evidenced in Form 26AS.” 2. The re-opening assessment u/s 147 r.w.s 143(3) of the Act in present case was completed, by making addition on account of commission income amounting to Rs.1,27,439/- and unexplained money u/s 69A of the Act for Rs.9,93,000/-. The assessee carried the matter before the Ld. CIT(A), who had dismissed the appeal of assessee and upheld the order of Ld. AO. 3. Being aggrieved, the assessee is in appeal before us. 4. At the outset, Ld. AR of the assessee drew our attention to a chart consisting of dates of events in the present case, raising the contention that notice u/s 148 was issue beyond the limitations discussed and stipulated by the Hon’ble Apex Court in the case of Union of India and Others vs. Rajeev Bansal[2024] 469 ITR 46(SC).The charts produced before us isextracted as under: Assessee’s Name Particulars Shilpa Rakesh Patil Date of Original Notice issued u/s 148 01.06.2021 Time Remaining till 30.06.2021 (A) 29 days Date of Notice u/s 148A(b) 01.06.2022 Due date for filing of Reply to notice u/s 10.06.2022 148A(b) Reply filed No Extended date by which notice should B+A have been issued u/s 148 Actual date of notice issued u/s 148 28.07.2022 Is Notice issued is valid? No

ITA No. 2304/Mum/2026 Shilpa Rakesh Patil 5. Copy ofthe notice u/s 148 is placed in the assessee’s paper book at page nos. 5 and 6, issued on 28.07.2022 for the assessment year 2017-18. Ld. AR submitted that under old regime the original notice u/s 148 was issued on 1st June, 2021, and later the notice u/s 148A(b) was issued on 1st June, 2022 in compliance to the directions of Hon’ble Apex Court in the case of Union of India and Ors. vs. Ashish Agarwal [2022] 444 ITR 1 (SC). The assessee also placed reliance on the decision of ITAT Mumbai in the case of Smt. Indubala Jayant Jain vs. ITO for assessment year 2010-11 in ITA No.4953/Mum/2024. Accordingly, the surviving time was 29 days (30th June, 2021 – 1st June 6. 2021). The due date of filing of reply as per notice u/s 148A(b) was 10th June, 2022. However, the assessee has not furnished any reply before the Ld. AO, therefore, from the due date by which the reply was to be furnished by the assessee i.e., 10th June, 2022 + the surviving period of 29 days, the order u/s 148A(d) and the notice u/s 148 was to be issued by 9th July, 2022, whereas the notice u/s 148 in the present case was issued on 28th July, 2022. The same, therefore, should be considered as time-barred and violative of the time limits laid down by Hon’ble Supreme Court in the case of Rajeev Bansal (Supra).The assessment, therefore framed on the basis of such invalid notice, becomes non est and is liable to be quashed. 7. Ld. DR on the other hand vehemently supported the orders of Revenue Authorities.

ITA No. 2304/Mum/2026 Shilpa Rakesh Patil 8. We have considered the rival submissions, perused the material available on record and the case laws relied upon by the assessee. In the facts of the present case, the notice u/s 148 for re-opening of assessment was issued in terms of the directions of Hon’ble Apex Court in the case of Rajeev Bansal (supra) having discussed therein the judgment by the Hon’ble Apex Court in the case of Ashish Agarwal (supra). The allegation of the assessee is that the notice u/s 148 in the present case was issued beyond the timelines discussed and laid down by the Hon’ble Apex Court in the aforesaid cases. For better applications of the sttled law, the relevant paragraphs from the Rajiv Bansal (supra) are reproduced as under:

ITA No. 2304/Mum/2026 Shilpa Rakesh Patil

PART F required to complete these procedures within the surviving time limit. The surviving time limit, as prescribed under the Income Tax Act read with TOLA, was available to the assessing officers to issue the reassessment notices under Section 148 of the new regime. 112. Let us take the instance of a notice issued on 1 May 2021 under the old regime for a relevant assessment year. Because of the legal fiction, the deemed show cause notices will also come into effect from 1 May 2021. After accounting for all the exclusions, the assessing officer will have sixty-one days [days between 1 May 2021 and 30 June 2021] to issue a notice under Section 148 of the new regime. This time starts ticking for the assessing officer after receiving the response of the assessee. In this instance, if the assessee submits the response on 18 June 2022, the assessing officer will have sixty-one days from 18 June 2022 to issue a reassessment notice under Section 148 of the new regime. Thus, in this illustration, the time limit for issuance of a notice under Section 148 of the new regime will end on 18 August 2022. 113. In Ashish Agarwal (supra), this Court allowed the assesses to avail all the defences, including the defence of expiry of the time limit specified under Section 149(1). In the instant appeals, the reassessment notices pertain to the assessment years 2013-2014, 2014-2015, 2015-2016, 2016-2017, and 2017-2018. To assume jurisdiction to issue notices under Section 148 with respect to the relevant assessment years, an assessing officer has to: (i) issue the notices within the period prescribed under Section 149(1) of the new regime read with TOLA; and (ii) obtain the previous approval of the authority. PART G specified under Section 151. A notice issued without complying with the preconditions is invalid as it affects the jurisdiction of the assessing officer. Therefore, the reassessment notices issued under Section 148 of the new regime, which are in pursuance of the deemed notices, ought to be issued within the time limit surviving under the Income Tax Act read with TOLA. A reassessment notice issued beyond the surviving time limit will be time- barred. G. Conclusions 114. In view of the above discussion, we conclude that: 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, then the specified authority under Section 151(i) has extended time till 30 June 2021 to grant approval; e. In the case of Section 151 of the old regime, the test is: if the time limit of four years from the end of an assessment year falls between 20 March 2020 and 31 March 2021, then the specified authority under Section 151(2) has extended time till 31 March 2021 to grant approval;

ITA No. 2304/Mum/2026 Shilpa Rakesh Patil

f. The directions in Ashish Agarwal (supra) will extend to all the ninety thousand reassessment notices issued under the old regime during the period 1 April 2021 and 30 June 2021; g. The time during which the show cause notices were deemed to be stayed is from the date of issuance of the deemed notice between 1 April 2021 and 30 June 2021 till the supply of relevant information and material by the assessing officers to the assesses in terms of the directions issued by this Court in Ashish Agarwal (supra), and the period of two weeks allowed to the assesses to respond to the show cause notices; and h. The assessing officers were required to issue the reassessment notice under Section 148 of the new regime within the time limit surviving under the Income Tax Act read with TOLA. All notices issued beyond the surviving period are time barred and liable to be set aside;PART C 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).

Sr. Date of Particulars Surviving days No. Notice

Due date for issuance of notice under old regime 2. 30.06.2021 29 [Surviving period as per - Para 110 to 114 of Rajeev Bansal (supra)]

Notice issued by Ld. A.O. in compliance of the decision of Hon'ble Supreme 3. Court in the case of UOI v. Ashish Agarwal (supra) supplying the 01.06.2022 information.

Date by which order u/s 148A(d) and notice u/s 148 of the Act was required 10.06.2022 + 5. 09.07.2022 to be issued (para no 110 to 114 of the decision in Rajeev Bansal (supra)) 29 days

ITA No. 2304/Mum/2026 Shilpa Rakesh Patil 9. In terms of aforesaid dates of events, we find that the order u/s 148A(d) and the notice u/s 148 were to be issued on or before 09.07.2022. However, in the present case, the notice u/s 148 was issued on 28.07.2022, which is beyond the prescribed timelines as stipulated by the Hon’ble Apex Court in the case of Rajeeb Bansal (supra). Therefore, the impugned notice u/s 148 dated 28.07.2022 is barred by limitation and consequently the entire re-assessment proceedings as well as the impugned order are rendered as non est and bad in law. 10. We thus, in terms of our aforesaid observations on this legal premise itself, quash the impugned assessment u/s 147 dated 20.04.2023. 11. Since, we have set aside the notice u/s 148 on the ground of limitation and accordingly, the re-assessment proceedings are also quashed, the other grounds raised by the assessee challenging the legality or on merits become academic and need not be adjudicated. 12. In result, the appeal of assessee stands allowed in above terms. Order pronounced in the open court on 27-05-2026.

Sd/- Sd/- (ARUN KHODPIA) (BEENA PILLAI) JUDICIAL MEMBER ACCOUNTANT MEMBER Mumbai, Dated : 27-05-2026. Ankit K., Sr. PS

ITA No. 2304/Mum/2026 Shilpa Rakesh Patil Copy of the Order forwarded to : 1. The Appellant 2. The Respondent 3. DR, ITAT, Mumbai 4. Guard File 5. CIT

BY ORDER,

(Dy./Asstt. Registrar) ITAT, Mumbai