BHIKHAMCHAND BHAVARJI PRAJAPATI,SURAT vs. INCOME TAX OFFICER, WARD-2(3)(1), SURAT

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ITA 331/SRT/2026Status: DisposedITAT Surat26 May 2026AY 2017-188 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the notice for reopening the assessment was issued beyond the 'surviving time' as per Supreme Court judgments, making it invalid. Consequently, the entire reassessment proceedings were quashed.

What were the facts?

The assessee's appeal challenges a reassessment order for AY 2017-18. The primary contention is that the notice for reopening the assessment under Section 147 was issued beyond the prescribed period of limitation.

What were the issues?

The key issue was the validity of the reassessment notice issued beyond the statutory limitation period, considering the relaxation provisions and subsequent Supreme Court rulings.

Which sections of the Income-tax Act were involved?

Section 147,Section 148,Section 148A,Section 149,Section 68,Section 115BBE,Section 271AAC

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: 331/SRT/2026 Assessment Year: 2017-18

Bhikhamchand Bhavarji Assessment Unit Prajapati Income Tax Plot No. 40-41, Vs Department Block No. 144, Jurisdictional AO Kuber Nagar, Godadara, Income Tax Officer Surat-394520 Ward-2(3)(1), Surat PAN: AFLPP1516Q (Appellant) (Respondent) Assessee Represented: Shri P. M. Jagasheth, C.A. Revenue Represented: Ms. Neerja Sharma, Sr. D.R. Date of hearing : 08-05-2026 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 13.12.2024 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 147 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) relating to the Assessment Year 2017-18.

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2.

The Grounds of Appeal raised by the assessee are as follows: 1. On the facts and in the circumstances of the case as well as the law on the subject, the learned Commissioner of the Income Tax (Appeals) has erred in confirming the action of the Assessing Officer in passing an order with receiving the reply of IHDFC bank with respect to notice issued u/s 133(6) of the Income Tax Act, which is absolutely incorrect, erroneous, illegal and bad in law requiring outright annulment. 2. On the facts and in the circumstances of the case as well as the law on the subject, the learned Commissioner of the Income Tax (Appeals) has erred in confirming the action of the Assessing Officer in passing an order with considering the request to issue notice u/s 133(6) of the Income Tax Act so that the claim of the assessee may prove. 3. On the facts and in the circumstances of the case as well as the law on the subject, the learned Commissioner of the Income Tax (Appeals) has erred in confirming the action of the Assessing Officer has not considered the audited cash book, bank book, & other relevant details, which is absolutely incorrect, erroneous, illegal and bad-in-law requiring outright annulment. 4. On the facts and in the circumstances of the case as well as the law on the subject, the Learned Assessing Officer has erred in making an addition of Rs.42,70,000/- on account of cash deposits made during the demonetization period, treating the same as unexplained cash credit under Section 68 of the Income-tax Act, 1961 and taxed as per the provisions U/s. 115BBE of the Act. 5. On the facts and in the circumstances of the case as well as the law on the subject, the learned Commissioner of the Income Tax (Appeals) has erred in confirming the action of the Assessing Officer in making addition of Rs.42,70,000/- in the hands of the appellant u/s 68 of the Act, as the assessee failed to provide the correct figure of SBN, which is absolutely incorrect, erroneous, illegal and bad-in-law requiring outright annulment. 6. On the facts and in the circumstances of the case as well as the law on the subject, the learned Commissioner of the Income Tax (Appeals) has erred in confirming the action of the Assessing Officer in initiating penalty proceedings u/s 271AAC of the of the Income Tax Act, 1961. 7. It is therefore prayed that the above penalty may please be deleted as learned members of the tribunal may deem it proper. 8. Appellant craves leave to add, alter or delete any ground(s) either before or in the course of the hearing of the 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

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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 2017-18 as follows:

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

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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.

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

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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 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.

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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: “…. 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

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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 28-06- 2021 for the Assessment Year 2017-18. The last date for issuing notices as per proviso to Section 149 is 15-06-2022, whereas the 148 notice was issued on 29.07.2022, 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 2017-18.

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 Surat: Dated 26/05/2026 आदेश क� ��त�ल�प अ�े�षत / Copy of Order Forwarded to:- 1. Assessee

I.T.A No. 331//SRT/2026 A.Y. 2017-18 Page No 8 Bhikhamchand Bhavarji Prajapati vs. ITO

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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