DCIT CIRCLE 19(1) MUMBAI, MUMBAI vs. DEEPAK KANWARLAL JAIN , MUMBAI

IN THE INCOME TAX APPELLATE TRIBUNAL “D” BENCH, MUMBAI BEFORE SHRI VIKRAM SINGH YADAV, ACCOUNTANT MEMBER AND SHRI SIDDHARTHA NAUTIYAL, JUDICIAL MEMBER ITA Nos. 3306 and 3307/Mum/2026 (Assessment Year: 2014-15)

DCIT Circle 19(1) Mumbai Vs. Deepak Kanwarlal Jain Piramal Chambers Lal Baug, 1101 1101 A/B/E 11th Floor, Mumbai, Maharashtra, the Legend Apartment, Plot No. 400012. 220,Walkeshwar Road, Mumbai, Maharashtra, 400006.

PAN:AACPJ2057Q (Appellant) (Respondent) For Assessee : Shri Suchel Anchaliya For Revenue : Shri Nakul Agrawal, Sr.DR (Virtually appear) Date of Hearing : 18.06.2026 Date of Pronouncement : 24.06.2026 O R D E R PER VIKRAM SINGH YADAV, A.M :

These are two appeals filed by the Revenue against the order of the Learned Commissioner of Income Tax (Appeals)-National Faceless Appeal Centre (NFAC), Delhi [‘Ld.CIT(A)’], dated 13.01.2026, pertaining to Assessment Year (AY) 2014-15, wherein in ITA No. 3306/Mumbai/2026, the Revenue has taken the following grounds of appeal: "1. Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in quashing the reassessment proceedings- initiated u/s 147 and thereby annulling the assessment order, and failed to appreciate that the reassessment proceedings were initiated based on credible information received from the Investigation Wing under Project Falcon, revealing non-genuine profits generated through illiquid derivatives/expiry trades."

ITA No. 3306 and 3307/Mum/2026; A.Y. 2014-15 Deepak Kanwarlal Jain 2. "Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in holding the reassessment invalid without properly appreciating the legal position governing notices issued during the transitional period pursuant to the Hon'ble Supreme Court judgment in Union of India vs. Ashish Agarwal and CBDT Instructions issued in this regard." 3. "Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) failed to appreciate that the notice issued u/s 148 pursuant to the Supreme Court directions was valid and deemed to have been issued in compliance with the provisions of Section 148A, and quashing the reassessment on technical grounds without examining the merits of the addition made by the Assessing Officer." 4. "Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) failed to appreciate that the assessee had generated artificial profits through structured and synchronised trades in illiquid derivatives lacking commercial substance and not adjudicating the addition of Rs. 7,36,88,000/- treated as unexplained income u/s 68 despite the presence of incriminating material and trade data evidencing accommodation entry operations." 5. "Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) failed to appreciate that the assessment order was passed after detailed examination of trade data, broker information, and investigation findings establishing that the transactions were pre-arranged and non-genuine and erred in granting relief to the assessee without considering the serious revenue implications arising from organised tax evasion through manipulative derivative transactions." 6. "The appellant craves leave to add, amend, alter or withdraw any ground of appeal at the time of hearing." 2. Briefly, the facts of the case are that the assessee filed his return of income on 30.09.2014, declaring a loss of Rs. 4,53,63,774/-. Subsequently, basis information received from the Investigation Wing, Mumbai that the assessee has allegedly earned non-genuine profits of Rs. 7,36,88,000/- from trading in illiquid derivatives through ARJ Securities, the matter was reopened u/s. 147 of the Act by issuing notice u/s. 148 of the Act on 27.07.2022. In response, the assessee filed its return of income and thereafter, notices u/s. 143(2) and 142(1) were issued and after calling for necessary information/documentation and in the absence of any satisfactory explanation submitted by the assessee, the Assessing Officer completed the reassessment by the

ITA No. 3306 and 3307/Mum/2026; A.Y. 2014-15 Deepak Kanwarlal Jain order passed u/s. 147 r.w.s. 144B, dated 30.05.2023 and made an addition of Rs.7,36,88,000/- u/s. 68 on account of non-genuine profit from trading in illiquid derivatives. The assessee thereafter carried the matter in appeal before the ld. CIT(A) and as part its grounds of appeal challenged the assumption of jurisdiction by the Jurisdictional Assessing Officer u/s. 148 of the Act instead of the Faceless Assessing Officer. The ld. CIT(A), following the decision of the Hon'ble Madras High Court in case of TVS Credit Services Ltd. v DCIT[(2025) 481 ITR 574 (Mad HC) / W.P. No. 22402 of 2024, quashed the notice u/s. 148 dated 27.07.2022 by the Jurisdictional Assessing Officer i.e,, ACIT, Circle 19(1), Mumbai subject to the final decision of the Hon'ble Supreme Court and accordingly, the ground of appeal so raised by the assessee was allowed and the remaining grounds were held to be infructuous and the appeal of the assessee was partly allowed.

ITA No. 3306 and 3307/Mum/2026; A.Y. 2014-15 Deepak Kanwarlal Jain matter may be remitted to the file of the ld. CIT(A) to decide the same afresh on merits.

Order pronounced in the open court on 24.06.2026

Sd/- Sd/- SIDDHARTHA NAUTIYAL VIKRAM SINGH YADAV (JUDICIAL MEMBER) (ACCOUNTANT MEMBER)

Mumbai, Dated: 24.06.2026 Karishma J. Pawar, SR. PS

ITA No. 3306 and 3307/Mum/2026; A.Y. 2014-15 Deepak Kanwarlal Jain Copy to : 1) The Appellant 2) The Respondent 3) The CIT concerned 4) The D.R, ITAT, Mumbai 5) Guard file

By Order

Dy./Asst. Registrar I.T.A.T, Mumbai