ANIL RAMCHANDRA PAWAR,SOLAPUR vs. ITO WD-2, PANDHARPUR

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ITA 1929/PUN/2025Status: DisposedITAT Pune26 May 2026AY 2015-1610 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the notice issued under Section 148 of the Income Tax Act, 1961, was barred by limitation as it was issued after the period prescribed by law, following Supreme Court and High Court precedents.

What were the facts?

The assessee failed to file an income tax return for AY 2015-16 despite substantial financial transactions. The Assessing Officer reopened the case and completed the assessment ex-parte. The CIT(A) partly allowed the appeal.

What were the issues?

Whether the reassessment proceedings initiated by issuing a notice under Section 148 were valid and within the period of limitation.

Which sections of the Income-tax Act were involved?

Section 147,Section 148,Section 149,Section 144,Section 144B

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “A” BENCH, PUNE

Before: SHRI R.K. PANDA & MS. ASTHA CHANDRA

For Appellant: Shri Pratik Sandbhor
For Respondent: Shri Madhan

आदेश / ORDER PER ASTHA CHANDRA, JM : The appeal filed by the assessee is directed against the order dated 16.07.2025 of the Ld. Commissioner of Income Tax (Appeals)/NFAC, Delhi [“CIT(A)”/“NFAC”] pertaining to Assessment Year (“AY”) 2015-16.

2.

Briefly stated, the facts are that the assessee is an individual. He did not file his return of income for AY 2015-16. As per the information available through Insight Portal of the Income Tax Department, it was found that the assessee had engaged in substantial financial transactions during the relevant financial year, but had failed to file a return of income, which included total cash deposits of Rs. 61,86,500/-in the savings bank account and significant TCS transactions on sale of alcohol, amounting to Rs. 73,20,177/- from various sources, income from Vohra Medical General V. Ayurvedik in the form of remuneration of Rs. 3,14,383/-, interest on capital of Rs. 2,03,587/- and interest income of Rs. 5,580/-. Based on this information, the case of the assessee was reopened u/s 147 of the Income Tax Act, 1961 (the “Act”) and notice u/s 148 of the Act was issued and served upon the assessee on 06.04.2022 after seeking necessary approval of the competent authority. In

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response to the notice u/s 148 of the Act, the assessee failed to file a valid return. Thereafter, various notices u/s 142(1) of the Act were issued by the Ld. Assessing Officer (“AO”) calling for explanations for the above transactions. The assessee, however, failed to respond to the said notice(s) which constrained the Ld.AO to complete the assessment ex-parte on total income of Rs. 17,29,754/- comprising of business income of Rs. 11,41,784/-, house property income of Rs. 70,000/-, remuneration of Rs. 3,14,383/-, interest on capital of Rs. 2,03,587/- and savings bank interest of Rs. 5,580/- with deduction of Rs. 5,580/- u/s. 80TTA of the Act, vide order dt. 23.01.2024 passed u/s. 147 r.w.s. 144 r.w.s. 144B of the Act.

3.

Aggrieved, the assessee filed an appeal before the Ld. CIT(A)/NFAC. The Ld. CIT(A)/NFAC, partly allowed the appeal of the assessee on the limited issue of incorrect assumption regarding TCS collection, but upheld the aforesaid additions made by the Ld. AO.

4.

Dissatisfied, the assessee is in appeal before the Tribunal raising the following grounds of appeal :

1.

On the facts and in the circumstances of the case and in law the Assessment Order is invalid and bad in law 2. On the facts and in the circumstances of the case and in law the Assessment Order is time barred as per the provision of section 149 of the Income Tax Act, 1961 3. On the facts and in the circumstances of the case and in law the assessment is time barred in as much as the assessment has been reopened beyond three years from the ends of relevant assessment year. and the income escaping assessment does not exceed Rs 50 lakhs 4. On the facts and in the circumstances of the case and in law the Assessment Order is invalid and bad in law in as much as the assessment has been reopened on wrong facts and the approval u/s 151 has been granted in a mechanical manner 5. On the facts and in the circumstances of the case and in law and without prejudice to the above grounds of appeal the Assessment Order is invalid and bad in law in as much as the Assessing Officer failed to issue the notice u/s 143(2) of the Income Tax Act, 1961 6. On the facts and in the circumstances of the case and in law and without prejudice to the above grounds of appeal the Assessment Order is invalid and bad in law in as much as the Assessing Officer erred in completing the assessment as per best judgement u/s 144 of the Income Tax Act, 1961 7. On the facts and in the circumstances of the case and in law the Assessing Officer erred in assessing the total income at Rs 17,29,754/-

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8.

On the facts and in the circumstances of the case and in law the Assessing Officer erred in not considering the return of income filed in response to notice u/s 148 9. On the facts and in the circumstances of the case and in law and without prejudice to the above grounds of appeal the Assessing Officer erred in making addition of Rs 3,14,383/- in respect of salary from firm, Rs. 2,03,587/- in respect of interest on capital without taking cognizance of the fact that the said income has already been considered in business income of Rs 11,41,784/- thereby leading to double taxation 10. The appellant craves for leave to add, alter, amend the above grounds of appeal in the interest of natural justice”

5.

The assessee has also raised an additional ground of appeal, reproduced below: “1. On the facts and in the circumstances of the case and in law the Assessment Order is invalid and bad in law in as much as the notice u/s 148 has been issued by the Jurisdictional Assessing Officer in contravention to the CBDT Notification No. 18/2022/F.No. 370142/16/2022/TPL(Part1) dated 29/03/2022” 5.1. The additional ground of appeal raised by the assessee is not pressed by the Ld.AR and hence, dismissed as “not pressed”. 6. The Ld. AR, at the outset, submitted that apart from the quantum addition made by the Ld. AO and sustained by the Ld. CIT(A)/NFAC, the assessee has also challenged the validity of reassessment proceedings before the Tribunal (Ground No. 3) on the ground that the notice issued u/s 148 is barred by limitation and therefore bad in law and deserves to be quashed. He submitted that there are no disputed facts/new facts involved and therefore the legal issue raised by the assessee may be decided by the Tribunal. Relying on the decision of the Hon’ble Supreme Court in the case of Union of India Vs. Rajeev Bansal (2024) 167 taxmann.com 70 (SC), the Ld. AR submitted that as per the said decision the due date of issuing notice u/s 148 of the Act for AY 2015-16 as applicable to the instant case is 31.03.2022, however the notice u/s 148 was issued to the assessee on 06.04.2022 and thus said notice issued by the Ld. AO u/s 148 of the Act on 06.04.2022 after expiry of six years from the end of the relevant assessment year is barred by limitation. He further relied on the following decision(s) in support of his above claim: i. Verjinia Foods Ltd., vs. ITO [2025] 179 taxmann.com 626 (Bombay); ii. Vishnu Subhash Agarwal vs. ITO, in ITA No. 2881/PUN/2024, dt. 25-04-2025

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7.

The Ld. DR, on the other hand, supported the order of the Ld. CIT(A)/NFAC and opposed the above submissions of the Ld. AR. 8. We have heard the rival arguments made by both the sides, perused the paper book filed by the Ld. AR on behalf of the assessee as well as judicial precedents relied upon by the Ld. AR. We find that the Ld. AO completed the reassessment proceedings, determining the total income of the assessee at Rs. 17,29,754/-, thereby making various additions for AY 2015-16 vide his order dated 23.01.2024 passed u/s 147 r.w.s. 144 r.w.s. 144B of the Act. We find that the Ld. CIT(A)/NFAC has partly allowed the appeal of the assessee on merits for the reasons mentioned above. Before us, the assessee has raised a legal ground (Ground No. 3) challenging the validity of reassessment proceedings relying on the decision of Hon’ble Supreme Court in the case of Union of India Vs. Rajeev Bansal (supra) on the ground that the notice issued to the assessee under section 148 of the Act is barred by limitation. On perusal of this legal ground raised by the assessee, we find that it goes to the root of the matter and does not require verification of any additional/ new facts. Further, we find that the impugned issue raised in the said legal ground stands squarely covered in favour of the assessee by the decision of the Hon’ble Apex Court and the Hon’ble jurisdictional Bombay High Court as well as Co- ordinate Bench(es) of the Tribunal including the Pune Tribunal. In the absence of any contrary material brought on record by the Revenue, we deem it fit, in the interest of justice and fair play, to proceed and adjudicate the legal ground at this stage.

9.

The facts of the case are not in dispute. The Ld. AO issued notice u/s 148 of the Act for the relevant AY 2015-16 under consideration on 06.04.2022 (page 58 of the paper book refers). Under the old provisions of section 149, which is applicable for the assessment year under consideration i.e. AY 2015- 16, the notice u/s 148 would not have been issued beyond the period of 6 years from end of the relevant assessment year. The period of 6 years from the AY 2015-16 lapse on 31.03.2022. As stated earlier, in the instant case, notice u/s 148 was issued to the assessee on 06.04.2022 which is clearly beyond the time limit prescribed under the said provisions of the Act. Although, the Ld. DR has vehemently argued against the legal ground raised by the assessee, we find that the Revenue has also conceded before the Hon’ble Supreme Court in the case of Rajeev Bansal (supra) that the provisions of Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 (TOLA) is

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not applicable to the notices issued for AY 2015-16. The relevant para of the judgment is reproduced below : “19. Mr N Venkataraman, learned Additional Solicitor General of India, made the following submissions on behalf of the Revenue:

a. Parliament enacted TOLA as a free-standing legislation to provide relief and relaxation to both the assesses and the Revenue during the time of COVID-19. TOLA seeks to relax actions and proceedings that could not be completed or complied with within the original time limits specified under the Income Tax Act;

b. Section 149 of the new regime provides three crucial benefits to the assesses: (i) the four-year time limit for all situations has been reduced to three years; (ii) the first proviso to Section 149 ensures that re- assessment for previous assessment years cannot be undertaken beyond six years; and (iii) the monetary threshold of Rupees fifty lakhs will apply to the re- assessment for previous assessment years; c. The relaxations provided under Section 3(1) of TOLA apply “notwithstanding anything contained in the specified Act.” Section 3(1), therefore, overrides the time limits for issuing a notice under Section 148 read with Section 149 of the Income Tax Act; d. TOLA does not extend the life of the old regime. It merely provides a relaxation for the completion or compliance of actions following the procedure laid down under the new regime; e. The Finance Act 2021 substituted the old regime for re-assessment with a new regime. The first proviso to Section 149 does not expressly bar the application of TOLA. Section 3 of TOLA applies to the entire Income Tax Act, PART C including Sections 149 and 151 of the new regime. Once the first proviso to Section 149(1)(b) is read with TOLA, then all the notices issued between 1 April 2021 and 30 June 2021 pertaining to assessment years 2013-2014, 2014-2015, 2015- 2016, 2016-2017, and 2017-2018 will be within the period of limitation as explained in the tabulation below: Assessment Within 3 Expiry of Within six Expiry of Year Years Limitation Years Limitation read read with with TOLA for TOLA (or (2) (4) (1) (2) (3) (4) (5) 2013-2014 31-3-2017 TOLA not 31-3-2020 30-6-2021 applicable 2014-2015 31-3-2018 TOLA not 31-3-2021 30-6-2021 applicable 2015-2016 31-3-2019 TOLA not 31-3-2022 TOLA not applicable applicable 2016-2017 31-3-2020 30-6-2021 31-3-2023 TOLA not applicable 2017-2018 31-3-2021 30-6-2021 31-3-2024 TOLA not applicable

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;

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g. Section 2 of TOLA defines “specified Act” to mean and include the Income Tax Act. The new regime, which came into effect on 1 April 2021, is now part of the Income Tax Act. Therefore, TOLA continues to apply to the Income Tax Act even after 1 April 2021; and h. Ashish Agarwal (supra) treated Section 148 notices issued by the Revenue between 1 April 2021 and 30 June 2021 as show-cause notices in terms of Section 148A(b). Thereafter, the Revenue issued notices under Section 148 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).

10.

Similarly, at para 46 of the order the Hon'ble Supreme Court has observed as under:

“46. The ingredients of the proviso could be broken down for analysis as follows: (i) no notice under Section 148 of the new regime can be issued at any time for an assessment year beginning on or before 1 April 2021; (ii) if it is barred at the time when the notice is sought to be issued because of the “time limits specified under the provisions of” 149(1)(b) of the old regime. Thus, a notice could be issued under Section 148 of the new regime for assessment year 2021-2022 and before only if the time limit for issuance of such notice continued to exist under Section 149(1)(b) of the old regime.”

11.

Finally, the Hon'ble Supreme Court at para 114 of the order has observed as under:

“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 2021, 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

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March 2020 and 31 March 2021, then the specified authority under Section 151(2) has extended time till 31 March 2021 to grant approval; 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;”

12.

Recently in the case of Cherian Nallathu Abraham Annamma, order dated 13.10.2025 (supra), the Hon’ble Bombay High Court held as under: “6. We have heard the learned counsel for the parties. It is not in dispute that the present petition relates to A.Y.2015-16. Further, it is also undisputed that the notice under Section 148 has been issued on 5th April 2022 which is at page 52 of the paperbook. Once these are the facts, paragraphs 19 (e) and (f) of the judgment of the Hon'ble Supreme Court in the case of Rajeev Bansal (supra) become relevant. They read as under:- 19. Mr. N Venkataraman, learned Additional Solicitor General of India, made the following submissions on behalf of the Revenue:- ....... e. The Finance Act 2021 substitute the old regime for reassessment with a new regime. The first proviso to Section 149 does not expressly bar the application of TOLA. Section 3 of TOLA applies to the entire Income-tax Act, including Sections 149 and 151 of the new regime. Once the first proviso to Section 149(1)(b) is read with TOLA, then all the notices issued between 1 April 2021 and 30 June 2021 pertaining to assessment years 2013-2014, 2014-2015, 2015-2016, 2016-2017, and 2017-2018 will be within the period of limitation as explained in the tabulation below: Assessment Within 3 Expiry of Within six Expiry of Year Years Limitation Years Limitation read with read with TOLA for (2) TOLA for (4) (1) (2) (3) (4) (5) 2013-2014 31-3-2017 TOLA not 31-3-2020 30-6-2021 applicable 2014-2015 31-3-2018 TOLA not 31-3-2021 30-6-2021 applicable 2015-2016 21-3-2019 TOLA not 31-3-2022 TOLA not applicable applicable 2016-2017 31-3-2020 30-6-2021 31-3-2023 TOLA not applicable 2017-2018 21-3-2021 30-6-2021 31-3-2024 TOLA not applicable 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;" (emphasis supplied)

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7.

From the above it is clear, that the Department has conceded before the Hon'ble Supreme Court that all the notices issued under Section 148 after 1st April 2021 for A.Y.2015-16 have to be dropped. In the present case, the Notice under Section 148 is dated 5th April 2022 and therefore, has to be dropped. 8. The decision in Rajeev Bansal (supra) has been subsequently followed by the Hon'ble Supreme Court in Deepak Steel and Power Limited (supra). Paragraphs 4 and 5 of the said order is reproduced hereunder:- 4. The learned counsel appearing for the revenue with his usual fairness invited the attention of this Court to a three judge bench decision of this Court in Union of India and Ors. v. Rajeev Bansal, reported in 2024 SCC OnLine SC 2693, more particularly, paragraph 19(f) which reads thus:- "19. (f) The Revenue concedes that for the assessment year 2015- 2016, all notices issued on or after April 1, 2021 will have to be dropped as they will not fall for completion during the period prescribed under the Taxation and other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020." 5. As the revenue made a concession in the aforesaid decision that is for the assessment year 2015-2016, 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 Amendment of certain Provisions Act, 2020). Nothing further is required to be adjudicated in this matter as the notices so far as the present litigation is concerned is dated 25.6.2021. (emphasis supplied) 9. Similarly, even in the matter of Nehal Ashit Shah (supra), the Hon'ble Supreme Court, relying upon paragraphs 19 (e) and (f) of the decision in case of Rajeev Bansal (supra), dismissed the SLP filed by the Revenue. Paragraph 5 of the said order is reproduced hereunder:- "5. In this regard, reference could also be made to paragraph 19(e) and (f) in the case of Union of India vs. Rajeev Bansal, Civil Appeal No.8629 of 2024 on 03.10.2024 (2024 SCC ONLINE 754) under which the learned Additional Solicitor General for India has made a concession insofar as the assessment year 2015-16 is concerned." 10. Lastly, this very Bench has on 6th October 2025, in the matter of Spicy Sangria (supra), allowed the petition filed by the Petitioner therein by noting that since, the notice under Section 148 was issued after 1st April 2021, the same was required to be set aside in light of the concession made by the Revenue before the Hon'ble Supreme Court in the case of Rajeev Bansal (supra). 11. In light of the above discussion, we find merit in the submissions as canvassed by the Petitioner. The Revenue has categorically made a concession that for A.Y.2015-16 they would drop all notices issued under Section 148 after 1st April 2021. Once this is position, it is appropriate that the notice under Section 148 dated 5th April 2022, and the consequential assessment order, notice of demand, penalty notices/orders as well as the recovery notices be quashed and set aside. It is accordingly so ordered.”

13.

Similar view has been taken by the Hon’ble Bombay High Court in the case of Verjinia Foods Ltd., order dated 06.10.2025 holding as under : “17. Accordingly, we hold that the Notice under Section 148 for A.Y. 2015-16 issued on 5th April 2022 was barred by limitation and ought to have been dropped pursuant to the decision of Hon'ble Supreme Court in the case of UOI v.

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Rajeev Bansal (supra). We also agree with the submission of both the parties, that the Notice issued on 5th April 2022 under Section 148 is also bad in law in view of the decision of this Court in Hexaware (supra). 18. Since the Notice issued on 5th April 2022[wrongly mentioned as 6th April 2024] under Section 148 was already quashed by order dated 9th May 2024 passed in the above Writ Petition, the consequent order of reassessment dated 3rd March 2025 passed under Section 147 read with Section 144B of the Act, the Notice of Demand dated 3rd March 2025 issued under Section 156 and all the notices proposing to impose penalty under Section 271F, Section 271(1)(b) and Section 271(1)(c) and any order/notice, if any, emanating therefrom are hereby quashed and set aside.”

14.

The case of the assessee also finds support from the various decisions of the Mumbai as well as Pune Tribunals, wherein the Tribunal in turn relying upon the decision of the Hon’ble Supreme Court in the case of Rajeev Bansal (supra) has decided the impugned issue in favour of the assessee.

15.

In view of the factual matrix of the case and legal position set out above and in the absence of any contrary material/judicial precedent brought on record by the Revenue, we hold that the impugned notice issued to the assessee under section 148 of the Act dated 06.04.2022 is bad in law and deserves to be quashed. Since the assessee succeeds on this legal ground, the other grounds raised by the assessee are rendered academic in nature and therefore not adjudicated.

16.

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

Order pronounced in the open court on 26th May, 2026.

Sd Sd Sd Sd/-dSd/- Sd/- Sd/-d/- - (R.K. Panda) (Astha Chandra) VICE PRESIDENT JUDICIAL MEMBER पुणे / Pune; दिन ांक / Dated : 26th May, 2026.

TNMM

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आदेश की प्रधिधलधप अग्रेधर्ि / Copy of the Order forwarded to : अपील र्थी / The Appellant. 1. प्रत्यर्थी / The Respondent. 2. 3. The Pr. CIT concerned. दिभ गीय प्रदिदनदि, आयकर अपीलीय अदिकरण, “A” बेंच, 4. पुणे / DR, ITAT, “A” Bench, Pune. ग र्ड फ़ इल / Guard File. 5. //सत्य दपि प्रदि// True Copy// आिेश नुस र / BY ORDER,

सह यक पांजीक र/ Assistant Registrar आयकर अपीलीय अदिकरण ,पुणे / ITAT, Pune

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