BOMBAY VYAPAR PRATISTHAN,MUMBAI vs. ITO 41(3)(1), MUMBAI

IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH MUMBAI BEFORE SHRI SAKTIJIT DEY, VICE PRESIDENT & SHRI MAKARAND VASANT MAHADEOKAR, ACCOUNTANT MEMBER ITA No. 1560/Mum/2026 (Assessment Year: 2015-16) Bombay Vyapar National Faceless Pratisthan Appeal Centre/ITO 7/5, Malad CHS Ltd. Vs. 41(3)(1) Poddar Road, Malad Room no. 847, Kautilya East, Mumbai-400097 Bhavan, Bandra Kurla Complex, Mumbai- 500 051 PAN/GIR No. AALFB3341A (Applicant) (Respondent) Assessee by Shri Vimal Punmiya, Ld. AR Revenue by Shree Kumar C., Ld. DR Date of Hearing 22.06.2026 Date of Pronouncement 24.06.2026 आदेश / ORDER PER MAKARAND VASANT MAHADEOKAR, AM: This appeal is directed against the order dated 31.12.2025 passed by the learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi [hereinafter referred to as "CIT(A)"], for Assessment Year 2015-16 arising from the assessment order dated 25.05.2023 passed by the Assessing Officer under section 147 read with section 144B of the Income Tax Act, 1961[hereinafter referred to as "the Act"].

2 ITA No. 1590/Mum/2026 Bombay Vyapar Pratisthan 2. Briefly stated, the assessee is a trust. The assessment was reopened pursuant to information received by the Department alleging that the assessee had claimed non-genuine loss in Future and Options transactions. After initiating reassessment proceedings under section 147 of the Act, the Assessing Officer completed the assessment under section 147 read with section 144B of the Act and made an addition of Rs.65,17,930/- by treating the loss claimed by the assessee as non-genuine. Aggrieved by the assessment order, the assessee preferred an appeal before the learned CIT(A), who upheld the action of the Assessing Officer. The assessee is therefore in further appeal before us.

3 ITA No. 1590/Mum/2026 Bombay Vyapar Pratisthan transactions were supported by documentary evidence (contract notes, Demat statements, bank entries). 3. The CIT(A) failed to appreciate that the Assessing Officer (AO) relied solely on General Investigations by the Directorate of Investigation without specific evidence linking the Appellant to any manipulation. Statements of third parties without allowing cross-examination violate principles of natural justice. 4. Appellant craves leave to add, amend or delete any ground of appeal on or before hearing of appeal. 4. At the time of hearing, the learned Authorised Representative (AR) invited our attention to Ground No.1 and submitted that the reassessment proceedings themselves are void ab initio. It was submitted that the notice under section 148 of the Act was issued on 28.07.2022 for Assessment Year 2015-16. According to the learned AR, the six-year limitation prescribed under the erstwhile provisions of section 149 expired on 31.03.2022 and therefore the jurisdictional notice issued on 28.07.2022 is ex facie barred by limitation. It was further submitted that the benefit of TOLA is not available for Assessment Year 2015-16 and consequently the reassessment proceedings deserve to be quashed.

4 ITA No. 1590/Mum/2026 Bombay Vyapar Pratisthan 6. Per contra, the learned Departmental Representative relied upon the orders of the Assessing Officer and the learned CIT(A). 7. We have heard the rival submissions and perused the material available on record. The controversy before us is whether the notice issued under section 148 dated 28.07.2022 for Assessment Year 2015-16 is within limitation and whether the consequential reassessment proceedings can be sustained in law. The reassessment scheme substituted by the Finance Act, 2021 with effect from 01.04.2021 introduced section 148A as a mandatory pre-condition before issuance of notice under section 148. However, jurisdiction to reopen an assessment is assumed only upon issuance of notice under section 148. Therefore, for determining limitation, the relevant date is the date of issuance of notice under section 148. 8. The legal position governing limitation under the substituted reassessment provisions now stands authoritatively settled by the judgment of the Hon'ble Supreme Court in Union of India vs. Rajeev Bansal (2024) 167 taxmann.com 70 (SC). The Hon'ble Supreme Court examined the effect of the Finance Act, 2021, the provisions of TOLA and its earlier decision in Union of India vs. Ashish Agarwal (444 ITR 1). 9. The Hon'ble Supreme Court specifically recorded the Revenue's own tabulation showing the assessment years to which TOLA would apply and those to which TOLA would not apply. In the said tabulation, Assessment Year 2015-16 was shown as an

5 ITA No. 1590/Mum/2026 Bombay Vyapar Pratisthan assessment year where the six-year limitation expired on 31.03.2022 and TOLA was not applicable. 10. The Hon'ble Supreme Court further recorded the Revenue's concession that for Assessment Year 2015-16, notices issued after the expiry of the prescribed limitation would not be saved by TOLA. 11. The Hon'ble Supreme Court thereafter held that section 3(1) of TOLA overrides section 149 only to the limited extent of relaxing the time limit for issuance of reassessment notices which fell for completion during the period specified in TOLA and that TOLA cannot be invoked to extend the six-year limitation prescribed under the erstwhile section 149. The Hon'ble Supreme Court ultimately held that reassessment notices issued beyond the surviving period of limitation are time barred and liable to be set aside. 12. Applying the aforesaid principles to the facts of the present case, we find that the assessment year involved is Assessment Year 2015-16. The notice under section 148 was admittedly issued on 28.07.2022. The six-year limitation period expired on 31.03.2022. Consequently, on the date on which the jurisdictional notice under section 148 was issued, the limitation period prescribed under law had already expired. 13. In our considered view, the Revenue cannot derive any assistance from TOLA in respect of Assessment Year 2015-16 in view of the law declared by the Hon'ble Supreme Court in Rajeev

6 ITA No. 1590/Mum/2026 Bombay Vyapar Pratisthan Bansal (supra). Once the jurisdictional notice itself is found to be barred by limitation, the very assumption of jurisdiction under section 147 fails. 14. Respectfully following the judgment of the Hon'ble Supreme Court in Union of India vs. Rajeev Bansal (supra), we hold that the notice issued under section 148 dated 28.07.2022 is barred by limitation and consequently the reassessment proceedings initiated pursuant thereto are void ab initio. 15. Accordingly, the notice issued under section 148, the consequential reassessment proceedings and the assessment order dated 25.05.2023 passed under section 147 read with section 144B of the Act are quashed. Ground No.1 raised by the assessee is allowed. 16. Since we have quashed the reassessment proceedings on the preliminary jurisdictional issue itself, Ground Nos. 2 and 3 relating to the addition of Rs.65,17,930/- on merits do not survive for adjudication and are rendered academic. We therefore refrain from expressing any opinion on the merits of the addition. The said grounds are left open. 17. In the result, the appeal of the assessee is allowed. Order pronounced in the open court on 24.06.2026.

Sd/- Sd/- (SAKTIJIT DEY) (MAKARAND VASANT MAHADEOKAR) VICE PRESIDENT ACCOUNTANT MEMBER

7 ITA No. 1590/Mum/2026 Bombay Vyapar Pratisthan Mumbai, Dated 24/06/2026 Dhananjay, Sr.PS आदेश की प्रतितिति अग्रेतिि/Copy of the Order forwarded to : अपीलाथी / The Appellant 1. प्रत्यथी / The Respondent. 2. 3. संबंधधत आयकर आयुक्त / The CIT(A) 4. आयकर आयुक्त(अपील) / Concerned CIT धिभागीय प्रधतधनधध, आयकर अपीलीय अधधकरण, मुम्बई / DR, ITAT, Mumbai 5. गार्ड फाईल / Guard file. 6. आदेशानुसार/ BY ORDER, सत्याधपत प्रधत //True Copy// 1. उि/सहायक िंजीकार ( Asst. Registrar) आयकर अिीिीय अतिकरण, मुम्बई / ITAT, Mumbai