JAYESHBHAI THAKOREBHAI PATEL,SURAT vs. INCOME TAX OFFICER, SURAT

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ITA 1097/SRT/2025Status: DisposedITAT Surat26 May 2026AY 2013-149 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the notice under Section 148 was issued after the expiry of the limitation period prescribed under Section 149 of the Act. Consequently, the entire reassessment proceedings were deemed invalid and without jurisdiction.

What were the facts?

The assessee's appeal challenges a reassessment order for AY 2013-14. The primary contention is that the notice for reassessment under Section 148 was issued beyond the prescribed limitation period.

What were the issues?

The key issue was whether the reassessment notice under Section 148 was issued within the time limit, considering the provisions of the Income Tax Act and the TOLA, as interpreted by Supreme Court judgments.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 144,Section 148,Section 148A,Section 149,Section 234A,Section 234B

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, SURAT BENCH, SURAT

Before: Shri T.R. Sentil Kumar & Shri Ratnesh Nandan Sahay

IN THE INCOME TAX APPELLATE TRIBUNAL SURAT BENCH, SURAT (PHYSICAL HEARING) Before: Shri T.R. Sentil Kumar, Judicial Member And Shri Ratnesh Nandan Sahay, Accountant Member

ITA No: 1097/SRT/2025 Assessment Year: 2013-14 Jayeshbhai Thakorbhai Income Tax Officer Patel Surat 228, Gosai Mohallo, Vs Bhesan, Surat Gujarat-395009 (Respondent) PAN: BLKPP3940C (Appellant) Assessee Represented: Mrs. Ranjita Delip Singh Gehlot, CA Revenue Represented: Shri Ajay Uke, Sr. D.R. Date of hearing : 30-04-2026 Date of pronouncement : 26-05-2026 आदेश/ORDER PER : T.R. SENTHIL KUMAR, JUDICIAL MEMBER:-

This appeal is filed by the Assessee as against the appellate order dated 21.08.2025 passed by the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, (in short referred to as “CIT(A)”), arising out of the reassessment order passed under section 143(3) r.w.s.144 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) relating to the Assessment Year 2013-14.

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2.

The Grounds of Appeal raised by the assessee are as follows: 1. That the learned Assessing Officer has erred in law and on facts in issuing the notice under section 148 of the Income-tax Act, 1961, which is barred by limitation and hence void ab initio. 2. That the Assessing Officer failed to appreciate that the limitation for issuing the reassessment notice under section 148 of the 2 Income tax Act, 1961 for A.Y. 2013 14 had already expired on 10.06.2022, and therefore, the notice issued on 24.07.2022, is without jurisdiction and bad in law. 3. That the impugned reassessment notice under section 148 of the new regime, having been issued beyond the time limit surviving under the Income Tax Act read with TOLA, Taxation and Other 3 Laws Relaxation and Amendment of Certain Provisions Act, 2020, is invalid, without jurisdiction and contrary to the ratio laid down by the Honourable Supreme Court in the case of Union of India v. Rajeev Bansal 2024 157 taxmann.com 70 SC. 4. That the learned Assessing Officer erred in law by proceeding with the reassessment on the basis of an invalid notice, thereby vitiating the entire proceedings and making the consequential reassessment order void and liable to be quashed. 5. On the facts and circumstances of the case and in law, the learned Commissioner of Income Tax Appeals has erred in not accepting the appellants submission that the assessment order dated 24/05/2023, passed under section 147 read with section 144 of the Act is invalid and bad in law as the following jurisdictional conditions required to assume jurisdiction under section 147 were not fulfilled by the AO and hence deserves to be quashed: As per the amended provision of sub section 1 of Sec. 149 of the Income Tax Act, 1961, No notice under Sec. 148 shall be issued for the relevant assessment year, If three years, but not more than ten years, have elapsed from the end of the relevant assessment year unless the assessing officer has in his possession books of accounts OR other documents OR evidence which reveal that the income chargeable to tax, represented in the form of assets, which has escaped assessment amounts to OR likely amounts to fifty lakh rupees OR more for that year. 6. Without prejudice to the above grounds of appeal, the Learned CIT(A) has erred in not considering the appellants submission of documentary evidence sale deed placed on record, 6 explicitly expressing the share of each co owners and have failed to allow the deduction of proportionate Indexed cost of acquisition from sale consideration to calculate Long term Capital Gain. 7. Without prejudice to the ground no. 1 to 5, the Learned CIT Appeal has erred in not considering the appellants submission of documentary evidence sale deed placed on record, explicitly expressing the share of each co owners and has erred in confirming the addition of Rs.2,43,26,530 made by the Assessing

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Officer on account of full value of sale consideration instead of proportionate sale consideration to calculate Long term Capital Gain. 8. That on the facts and in the circumstances of the case, and in law, the learned Commissioner of Income Tax Appeal has erred in upholding the action of the Assessing Officer in charging interest u/s 234A/B of the Act. It is submitted that charging of interest is invalid and not justified and same be deleted as the reassessment is on the basis of an invalid notice, and the consequential reassessment order is void and liable to be quashed. 9. The appellant craves leave for reserving the right to amend, 9 modify, alter, add OR forego any grounds of appeal at any time before OR during the hearing of this appeal.

3.

At the outset, the learned A.R. appearing for the assessee has raised a legal and jurisdictional issue that the reassessment was made by the Assessing Officer by way of reopening the assessment under section 147 of the Act. He also submitted before us that pursuant to the judgment of the Hon’ble Supreme Court in the case of Rajiv Bansal, the reassessments in the above case are time barred and produced a chart being the time limit for issuance of notice under section 148 for the assessment year 2013-14 as follows:

Calculation of time limit for issue of notice u/s 148 of IT Act,1961 as per example given by Supreme Court in case of Rajeev Bansal:- Sr.No. Particulars SC- eg,(para-112) Assessee’s case 01 Because of the 01.05.2021 25.06.2021 (Page legal fiction, the no.4 , 2nd para of deemed show CIT(A) order). cause notice will also come into effect from (notice issued u/s148 under old regime – deemed to be SCN under new regime) 02 After accounting 61 days 6 days for the exclusions , the Assessing Officer will have surviving time

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calculated from the date of issue of notice u/s 148 till 30.06.2021 03 Notice u/s 148A(b) 01.06.2022 20.05.2022 (Page issued by no.4 , 2nd para of Assessing Officer CIT(A) order). on 04 Reply filed by 18.06.2022 None Assessee on 05 Time starts ticking 18.06.2022 03.06.2022 for the Assessing Officer after receiving the response of the assesse - which is on (20.05.2022 + 2weeks’ time allowed by AO to file reply) 06 The Assessing 18.08.2022 09.06.2022 Officer will have to issue notice u/s 148 of the Act on or before surviving time limit available as per Sr.no.2 above after receipt of reply from assesse 07 As per fourth 10.06.2022 proviso to section 149 of the new regime, the period of limitation available to the Assessing Officer for passing an order under clause (d) of section 149 is less than seven days, such remaining period shall be extended to seven days and the period of limitation under section 149 shall be extended

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accordingly. 08 Notice u/s 148 of 24.07.2022 the Act is issued on (pg.no.2 –para 3 of assessment order) 09 Issue of notice u/s 44 days 148 is delayed by 10 Status of notice Time barred u/s 148 of the Act 11 Status of Order Time barred u/s 148A(d) of the Act

4.

Learned Sr. D.R. appearing for the Revenue could not dispute the above submission of the Assessee that the reopening notice under section 148 was issued beyond the period of limitation.

5.

We have heard rival submissions and perused the materials available on record. The validity of issuance of 148 notice during the extended time period as per Taxation and Other Laws (Relaxation of Certain Provisions) Ordinance 2020 (hereinafter referred as TOLA). In view of the Apex Court judgment in the case of Union of India Vs. Ashish Agrawal reported in (2022) 444 ITR 1 (SC) wherein the notice issued was to be treated as notice u/s. 148A(b) of the Act which has come into the statute with effect from 01-04-2021

5.1. The Hon’ble Supreme Court in the later judgment in the case of Union of India Vs. Rajeev Bansal reported in (2024) 469 ITR 46 laid down the law to consider such notice as valid notice or invalid notice depending upon the surviving time left date of issuance of the notice u/s. 148 of the Act r.w.s. 3(1) of TOLA up to 30-06-2021 and the issuance of notice u/s.148 pursuant to the direction issued by the Apex Court in the case of Ashish Agarwal.

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5.2. The above Supreme Court Judgments were considered by the Jurisdictional High Court in the case of Dhanraj Govindram Kella Vs. ITO vide judgment dated 08-07-2025 in Civil Application No. 6387 of 2023 and held as follows: "… 65. The alternative contention of the petitioner as to whether notices would be valid notice or invalid notice considering 'surviving time' between the date of the issuance of notices under TOLA and 30th June, 2021 or not is required to be considered and for that each matter has to be considered separately on the basis of the facts of case considering the date of issuance of notices under section 148 under TOLA by the Revenue and thereafter date of supplying information to the assessee and date of passing of order under section 148A(d) and date of issuance of notice under section 148 of the Act so as to consider whether issuance notice under section 148 of the Act is within 'surviving time' as per the direction of Hon'ble Apex Court in case of Rajeev Bansal (supra) or not. 66. So far as Assessment 2013-2014 and 2014-2015 concerned, the period of three years from end of the assessment year would be prior to 20.03.2020 and the period of six years would be over between 20.03.2020 Therefore, and 30.06.2021. Therefore, the notices issued under section 148 of the Act under old regime between 01.04.2021 and 30.06.2021 as per TOLA, will be a valid notice if the notice under section 148 of the Act under new regime is issued within the period of 'surviving time' as per the directions issued by Hon'ble Apex Court in case of Rajeev Bansal (supra). For the Assessment Years 2016- 2017 and 2017-2018 are concerned, the notice issued under section 148 of the Act under old regime between 01.04.2021 and 30.06.2021 under TOLA would be considered to be issued within three years from the end of the relevant assessment year as three years would complete within the period of 20.03.2020 and 30.06.2021. 67. Therefore, in facts of these petitions, following data is required to be considered to find out 'surviving time' to decide as to whether the impugned notices under section 148 of the Act issued under the new regime as per the decision of Hon'ble Apex Court in case of Ashish Agarwal (supra) would be valid notice or not in of view of the decision of the Hon'ble Apex Court in case Rajeev Bansal (supra):

Date of notice No of days of Date of providing SCA No. Asst. Years under section 148 surviving time information under available till u/s. 148A(b) TOLA 30-06-2021

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6387/2023 2013-2014 17.06.2021 13 26.05.2022

5688/2023 2014-2015 09.06.2021 21 23.05.2022

22260/2022 2016-2017 30.06.2021 1 23.05.2022

996/2023 2017-2018 30.06.2021 1 24.05.2022

Date of order Last date for Due date of under section issuance of notice SCA NO. filing reply Date of reply:- 148A(d) and under section 148 notice under as per surviving section 148:- time:

6387/2023 09.06.2022 04.06,2022 29.07.2022 22.06.2022

5688/2023 06.06.2022 - 27.07,2022 27.06.2022

22260/2022 07.06.2022 06.07.2022 30.07.2022 14.06.2022

996/2023 11.06.2022 10.06.2022 19.07.2022 18.06.2022

68.It is apparent from the above details that impugned notice under section 148 of the Act is issued beyond the period of 'surviving time' as per the direction of Hon'ble Apex Court in case Rajeev of Bansal (supra)and therefore, such notices would be invalid notices. 69.The impugned notices issued under section 148 of the Act are accordingly quashed and set aside being invalid having been issued beyond the 'surviving time'. Accordingly, impugned orders passed under section 148A(d) of the Act would also not survive and are accordingly, quashed and set aside. Subsequent proceedings, if any, undertaken by the respondent would not survive and are also quashed and set aside. 70. Rule is made absolute to the aforesaid extent. No order as to costs."

5.3. This judgment is followed by Jurisdictional High Court in the case of Rakesh Rameshchandra Patel Vs. ITO vide judgment dated 09-09- 2025 in Civil Application No. 1591 of 2023 held as follows:

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“…. 7. In the facts of the case, the respondent Assessing Officer has provided information pursuant to the directions issued by the Hon'ble Apex Court in case of Ashish Agarwal (supra) on 01.06.2022 and therefore, considering 15 days' time to file reply by the assessee, the due date would be 15.06.2022. The petitioner filed reply on 20.06.2022. The order under section 148A(d) of the Act as well as notice under section 148 of the Act was issued on 30.08.2022. However, considering the period of limitation from the date of issuance of notice under section 148 read with TOLA upto 30.06.2021, the limitation for issuance of notice under section 148 of the Act applying the decision of Hon'ble Apex Court in case of Ashish Agarwal (supra) as well as Rajeev Bansal (supra), would be 28.08.2022. 8. Learned Senior Standing Counsel Ms. Maithili D. Mehta has verified the above dates and could not controvert the same. 9. In view of above, the impugned notice dated 30.08.2022 issued under section 148 of the Act would be invalid notice as the said notice is issued after 28.08.2022 as per the decision of Hon'ble Apex Court in case of Ashish Agarwal (supra). Therefore, the impugned notice having been issued beyond the 'surviving time' would be invalid notice as held by the Hon'ble Apex Court in case of Rajeev Bansal (supra) in the following paragraph no. 114 (g) and (h) of the judgment: "114. In view of the above discussion, we conclude that: XXX (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 April 1, 2021 and June 30, 2021 till the supply of relevant information and material by the Assessing Officers to the assessees in terms of the directions issued by this court in Union of India v. Ashish Agarwal [(2022) 444 ITR 1 (SC); (2023) 1 SCC 617.], and the period of two weeks allowed to the assessees 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 the Taxation and other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020. All notices issued beyond the surviving period are time barred and liable to be set aside." 10. In view of foregoing reasons, impugned notice dated 30.08.2022 is hereby quashed and set aside and all consequential proceedings are also quashed and set aside.”

6.

It is undisputed fact that the original notice was issued on 25-06- 2021 for the Assessment Year 2013-14. The last date for issuing

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notices as per proviso to Section 149 is 10-06-2022, whereas the 148 notice was issued on 24.07.2022, which are after the expiry of the limitation prescribed u/s. 149 of the Act. Thus, the reopening of notices itself is time barred, consequently the entire reassessment proceedings is invalid in law and is without jurisdiction. Therefore, the entire reassessment is liable to be quashed. Accordingly, we allow the appeal of the assessee on jurisdiction ground and quash the reassessment order passed for the Assessment Year 2013-14.

7.

In the result, the appeal filed by the assessee is hereby allowed.

Order pronounced in the open court on 26-05-2026

Sd/- Sd/- (RATNESH NANDAN SAHAY) (T.R. SENTHIL KUMAR) ACCOUNTANT MEMBER JUDICIAL MEMBER Ahmedabad : Dated 26/05/2026 आदेश क� ��त�ल�प अ�े�षत / Copy of Order Forwarded to:- 1. Assessee 2. Revenue 3. Concerned CIT 4. CIT (A) 5. DR, ITAT, Surat 6. Guard file. By order/आदेश से,

उप/सहायक पंजीकार आयकर अपील�य अ�धकरण, सूरत

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