DEEPAK DHANRAJ MURPANA ,MUMBAI vs. ACIT, CIRCLE 23(1), MUMBAI

On the facts and circumstances of the case and in law, the Ld. CIT(A) / NFAC erred in confirming the addition as well as the reopening of assessment vide the ex-parte order dated 07.08.2025, without affording an opportunity of hearing to the appellant.

On the facts and circumstances of the case and in law, the Ld. CIT(A) / NFAC as well as the Ld. AO erred in not appreciating the fact that for the AY 2015- 16, по reopening notices u/s 148 of the Act could have been issued after 31 March, 2021 as per the decision of the Hon‟ble Supreme Court in the case of Deepak Steel And Power Limited vs Central Board Of Direct Taxes [(2025) 476 ITR 369 (SC)]. As such, the impugned reopening notice u/s 148 as well the consequential order dated 29.05.2023 is liable to be quashed and set aside.

On the facts and circumstances of the case and in law, the Ld. CIT(A) / NFAC erred in confirming assessment u/s 147 of the Act without appreciating the fact that assessment for the current assessment year has been completed under section 143(3) of the Act.

On the facts and circumstances of the case and in law, the Ld. CIT(A)/NFAC in confirming assessment u/s 147 as the same has been done based on borrowed satisfaction based on information received from Investigation wing and without application of mind.

On the facts and circumstances of the case and in law, the Ld. CIT(A)/NFAC erred in confirming assessment u/s 147 as according to section 149(1)(b) of the Act the time limit for issuance of notice for AY 2015-16 expired on P a g e | 3 A.Y. 2015-16 Deepak Dhanraj Murpana 31.03.2022 but the notice u/s 148 was issued on 26.07.2022 and therefore the notice issued is time barred.

Without prejudice, on the facts and circumstances of the case and in law, the notice issued under section 148 of the Act dated 26.07.2022 has no Document Identification Number (DIN). As per Circular dated 14.08.2019, all communications including notices, orders, letters, summons or any other correspondence, etc. have mandatorily to be issued electronically with DIN, failing which, notice issued shall be deemed to be non-est in law as mentioned in para 4 of said circular. Therefore, the notice issued under section 148 of the Act dated 26.07.2022 is Void-ab-initio.

On the facts and circumstances of the case and in law, the learned CIT(A) /NFAC erred in making addition of Rs. 79,47,258/- on the ground of „non- genuine profits/losses on illiquid derivatives. The appellant prays that the said disallowance is bad in law and may kindly be deleted. a. The Ld. AO erred in making the addition without appreciating that the Appellant had already furnished all necessary documents and discharged its onus to prove the genuineness of the transaction. b. The Ld. AO erred in making the addition based on assumptions and surmises and in absence of any evidences against the Appellant. c. The Ld. AO erred in making the addition on the basis of basis of general investigation of investigation wing to unearth the modus operandi of coordinated and premeditated trading in illiquid stock options and applied the ratio in the case of assessee. 8) On the facts and circumstances of the case and in law, the learned CIT(A) /NFAC erred in making addition of Rs. 79,47,258/- without appreciating the fact that this profit has already been offered to tax in the return of income. Therefore,no addition is warranted.

The assessee, an individual engaged in the business of trading and manufacturing jewelry and derivatives, filed his return of income for AY

Before us, the ld.AR has raised a preliminary ground no.2 claiming that the impugned notice under section 148 dated 26.07.2022 is time barred. In this connection, it is submitted that in the case of Union of India Vs. Rajeev Bansal [2024] 301 Taxman 238 (SC),the Revenue Department made a concession that for the Assessment Year 2015-16, all notices issued on or after 1st April 2021, will have to be dropped as they would not fall for completion during the period prescribed under the taxation and other laws (Relaxation and P a g e | 5 A.Y. 2015-16 Deepak Dhanraj Murpana Amendment of certain Provisions Act, 2020) [TOLA]. The relevant extract of the decision is reproduced here-in-below:- “19.(f) The Revenue concedes that for the assessment year 2015-16, all notices issued on or after 1 April 2021 will have to be dropped as they will not fall for completion during the period prescribed under TOLA;” 4.1 It is further contended that the aforesaid view was also taken by the Hon’ble Supreme Court in the case of Deepak Steel and Power Ltd. vs. Central Board of Direct Taxes [2025] 305 Taxman 169 (SC) wherein the notice u/s 148 of the Act was issued on 25.06.2021 and therefore the same was quashed and set aside taking into consideration the concession made by the Department Revenue in the case of Rajeev Bansal (supra) with respect to re-assessment notices for assessment year 2015-16 issued after 1 April 2021. This principle has also been followed by the Hon’ble Bombay High Court judgments. Reliance can be placed on the case of Cherian Nallathu vs. Income-tax Officer, International Tax, Ward-1(1)(1), Mumbai [2025] 307 Taxman 367 (Bombay),wherein the notice under section 148 of the Act for AY 2015-16 was issued on 05.04.2022. Reliance is also be placed on the recent ruling passed by the Hon’ble Bombay High Court in the case of Mitra Biswas vs. Income Tax Officer, Ward-26(2)(1), Mumbai & Ors. [Writ Petition (L) No. 3068 of 2026 dated 03.02.2026] wherein the notice under section 148 was P a g e | 6 A.Y. 2015-16 Deepak Dhanraj Murpana issued 14.04.2022. In the light of such facts, it is pleaded to quash the notice u/s 148 of the Act as also the consequential reassessment order being void ab initio. The ld.DR did not controvert the contentions of the assessee.

We have carefully considered all the relevant facts of the case. It is undisputed that the original notice u/s 148 of the Act was issued on 15.04.2021 and the subsequent notice was issued on 26.07.2022 in compliance to hon’ble Supreme Court decision in Union of India Vs. Ashish Agarwal (supra).In view of the judgment of the Hon’ble Supreme Court in Union of India v. Rajiv Bansal (supra), the reassessment proceedings initiated under the old or un-amended provisions of section 148, read with the extensions granted under the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 (“TOLA”), are without authority of law as for AY 2015-16, the limitation for issuance of notice under the amended provisions of section 148, as saved by the first proviso to section 149, expired on 31.03.2022. Therefore, the Assessing Officer could not have resorted to the old provisions by invoking TOLA. Admittedly, in the present case, the notice under section 148 pursuant to section 148A(d) was issued on P a g e | 7 A.Y. 2015-16 Deepak Dhanraj Murpana 26.07.2022, well beyond the permissible limitation. The Hon’ble Supreme Court in Union of India v. Rajiv Bansal (supra) has conclusively interpreted the interplay between the amended provisions of sections 148 and 149, the old regime, and TOLA. Significantly, the Revenue itself conceded before the Hon’ble Supreme Court that for A.Y. 2015-16, all notices issued on or after 01.04.2021 are liable to be dropped, as they would not fall for completion within the period prescribed under TOLA.

1 The Hon’ble Supreme Court further held that the extended ten year limitation under section 149(1)(b), as amended, operates prospectively, and for earlier assessment years, the test is whether the six-year period under the old regime was still alive on the date of issuance of notice. Applying the aforesaid test to the facts of the present case, it is undisputed that the six-year limitation for A.Y. 2015-16 expired on 31.03.2022. The notice under section 148 having been issued on 26.07.2022, the same is clearly barred by limitation.

2 The issue stands squarely covered by the subsequent decisions of hon’ble Apex Court in Deepak Steel and Power Limited [SLP(Civil) Appeal No. 5177/ 2025 dated 2 April 2025 (SC)], Nehal Ashit

Accordingly, we hold that the notice u/s 148 of the Act was barred by time limitation and therefore it is ab initio void as also the consequential assessment order, both of which are hereby quashed, thus allowing the ground of appeal.

Since we have already quashed the order under section 147 of the Act based on the legal contention of notice being time barred, the other grounds became academic, not warranting any adjudication.

In the result, the appeal of the assessee is allowed.