SUBHADRA RAJENDRA PRASHAD TYAGI,MUMBAI vs. INCOME TAX OFFICER, MUMBAI

IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH MUMBAI BEFORE SHRI SAKTIJIT DEY, VICE PRESIDENT & SHRI MAKARAND VASANT MAHADEOKAR, ACCOUNTANT MEMBER ITA No. 4393/Mum/2026 (Assessment Year: 2015-16) Subhadra Rajendra ITO Prashad Tyagi Kautilya Bhavan, BKC 1802 Odyssey Building Vs. Bandra East, Mumbai Raheja Reflection – 400 051 Kandivali East, Mumbai-400 101 PAN/GIR No. ACDPT2766P (Applicant) (Respondent) Assessee by Ms. Neha Paranjpe 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 has been preferred by the assessee against the order dated 06.03.2026 passed by the learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi [hereinafter referred to as "CIT(A)"], under section 250 of the Income Tax Act, 1961 [hereinafter referred to as "the Act"], for

2 ITA No. 4393/Mum/2026 Subhadra Rajendra Prashad Assessment Year 2015-16, arising out of the assessment order dated 15.05.2023 passed under section 147 read with section 144 and section 144B of the Income Tax Act, 1961 by the National Faceless Assessment Centre[hereinafter referred to as "Assessing Officer"] Facts of the Case 2. The assessee is an individual. The Assessing Officer noted that no return of income had been filed for Assessment Year 2015-16. Information available on the AIMS module reflected financial transactions aggregating to Rs. 2,65,05,939/-, comprising purchase of immovable property amounting to Rs.2,04,80,000/- and time deposits of Rs.60,25,939/-. The Assessing Officer observed that the source of the aforesaid transactions remained unexplained and unverified. Consequently, proceedings under section 147 were initiated. Initially, notice under section 148 was issued on 29.06.2021. Thereafter, pursuant to the decision of the Hon'ble Supreme Court in Union of India v. Ashish Agarwal, proceedings under section 148A were undertaken and an order under section 148A(d) was passed on 19.07.2022. Notice under section 148 was thereafter issued on 19.07.2022. 3. The Assessing Officer recorded that despite issuance of notices under sections 142(1), 133(6), show cause notices and opportunities provided during faceless assessment proceedings, no compliance was made by the assessee. Consequently, the assessment was completed ex parte under section 144 read with

3 ITA No. 4393/Mum/2026 Subhadra Rajendra Prashad section 147 and section 144B. The Assessing Officer treated the aforesaid transactions aggregating to Rs.2,65,05,939/- as unexplained investments under section 69 and added the same to the total income of the assessee. 4. Aggrieved, the assessee preferred an appeal before the learned CIT(A). The appeal was filed on 19.11.2023 against the assessment order dated 15.05.2023 and was thus delayed by 157 days. The assessee explained the delay by stating that her husband had undergone kidney transplantation and that serious medical circumstances prevented timely filing of the appeal. The learned CIT(A), however, observed that despite repeated opportunities, no supporting medical evidence was furnished. Holding that sufficient cause had not been established, the learned CIT(A) declined to condone the delay of 157 days and dismissed the appeal in limine without adjudicating any of the grounds on merits. 5. During the course of hearing, the learned Authorised Representative (AR) sought admission of legal grounds challenging the validity of reassessment proceedings, limitation, service of notice and compliance with section 144B. It was submitted that these grounds arise from facts already available on record and do not require fresh investigation into facts. Additional grounds raised by the assessee are – 1. The notice dated 19.07.2022 issued under section 148 of the Act for the Assessment Year: 2015-16 is barred by limitation in view of the 1st proviso to section 149 of the Act. The period of six years from the end of the relevant assessment year expired on 31.03.2022. Thus, the notice

4 ITA No. 4393/Mum/2026 Subhadra Rajendra Prashad issued under section 148 of the Act, dated 19.07.2022 is beyond the period of limitation and without jurisdiction. In view of the same, the reopening notice is bad in law and the same may be quashed and set aside. 2. The notice dated 19.07.2022 issued by the Jurisdictional Assessing Officer under section 148 of the Act is in contravention of the provisions of section 151A of the Act. Hence, the same is illegal and bad in law. 3. The Appellant craves leave to add, alter or amend any of the above grounds of appeal. 6. The learned AR, inviting our attention to the additional grounds of appeal, submitted that the very assumption of jurisdiction under section 147 of the Act is invalid and consequently the reassessment order deserves to be quashed.

5 ITA No. 4393/Mum/2026 Subhadra Rajendra Prashad 9. We have heard the rival submissions and perused the material available on record. We have also carefully considered the additional grounds raised by the assessee challenging the validity of the reassessment proceedings. 10. At the outset, we find that the additional grounds challenge the very assumption of jurisdiction under section 147 of the Act and raise pure questions of law arising from facts already available on record. Since no fresh investigation of facts is required for admission of these grounds, the same are admitted for adjudication. 11. We have carefully considered the rival submissions and perused the material available on record. The controversy before us is whether issuance of the original notice under section 148 on 29.06.2021 and the consequent proceedings under section 148A would save the reassessment proceedings when the jurisdictional notice under section 148 ultimately came to be issued on 19.07.2022. 12. The reassessment scheme substituted by the Finance Act, 2021 with effect from 01.04.2021 introduced section 148A as a mandatory pre-condition for issuance of notice under section 148. A notice issued under section 148A(b) is merely a show cause notice affording an opportunity to the assessee before reopening the assessment. The actual assumption of jurisdiction takes place only upon issuance of notice under section 148 after completion of the procedure contemplated under section 148A. Therefore, for determining whether the reassessment proceedings

6 ITA No. 4393/Mum/2026 Subhadra Rajendra Prashad are within limitation, the relevant date is the date of issuance of notice under section 148 and not the date of issuance of notice under section 148A(b) or any other intermediate proceeding. 13. The legal position governing limitation under the substituted reassessment regime 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, after examining the effect of the Finance Act, 2021, the provisions of the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 ("TOLA"), and the earlier decision in Union of India vs. Ashish Agarwal [(2022) 444 ITR 1 (SC)], held that the Assessing Officer is required to issue the reassessment notice under section 148 within the period of limitation surviving under the Income Tax Act read with TOLA and that notices issued beyond such surviving period are time barred and liable to be set aside. 14. At the outset, it would be relevant to note that while dealing with the interaction between TOLA and the substituted reassessment provisions, the Hon'ble Supreme Court specifically recorded the submissions advanced on behalf of the Revenue. In paragraph 19(e) of the judgment, the Revenue itself furnished a tabulation showing the assessment years to which TOLA would apply and those to which TOLA would not apply. In the said tabulation, the Revenue specifically stated that in respect of Assessment Year 2015-16, the six-year limitation period expired on 31.03.2022 and that TOLA was not applicable.

7 ITA No. 4393/Mum/2026 Subhadra Rajendra Prashad 15. Immediately thereafter, the Hon'ble Supreme Court recorded the following concession made by the Revenue in paragraph 19(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." 16. The Hon'ble Supreme Court thereafter examined the scope of section 3(1) of TOLA and categorically held that TOLA extends limitation only in respect of actions falling for completion during the period from 20.03.2020 to 31.03.2021 and cannot be invoked to extend the statutory period of six years prescribed under the erstwhile section 149. In paragraph 72 of the judgment, the Hon'ble Supreme Court observed that section 3(1) of TOLA overrides section 149 only to the limited extent of relaxing the time limit for issuance of reassessment notices falling for completion between 20.03.2020 and 31.03.2021 and that it does not operate to extend the six-year limitation period prescribed under section 149(1)(b) of the old regime. 17. The conclusions were thereafter summarised by the Hon'ble Supreme Court in paragraph 114 of the judgment, wherein it was specifically held that section 3(1) of TOLA overrides section 149 only to the extent of relaxing the time limit for issuance of reassessment notices and that reassessment notices issued beyond the surviving period of limitation are time barred and liable to be set aside. 18. Applying the aforesaid principles to the facts of the present case, we find that the assessment year involved before us is

8 ITA No. 4393/Mum/2026 Subhadra Rajendra Prashad Assessment Year 2015-16. The assessment records show that the original notice under section 148 was issued on 29.06.2021. Pursuant to the judgment of the Hon'ble Supreme Court in Ashish Agarwal (supra), the said notice was treated as a deemed notice under section 148A(b). Thereafter, an order under section 148A(d) was passed and the jurisdictional notice under section 148 came to be issued on 19.07.2022. 19. The contention of the Revenue that the original notice dated 29.06.2021 or the deemed notice under section 148A(b) saves the reassessment proceedings cannot be accepted. As noticed hereinabove, a notice under section 148A(b) is merely a show cause notice issued as part of the preliminary procedure contemplated by section 148A. Such notice does not confer jurisdiction upon the Assessing Officer to reopen an assessment. Jurisdiction is assumed only upon issuance of notice under section 148 after completion of the procedure prescribed under section 148A. 20. Therefore, for the purpose of examining limitation, the relevant date is the date of issuance of the jurisdictional notice under section 148, namely 19.07.2022. 21. In the present case, the notice under section 148 was admittedly issued on 19.07.2022. As noted above, the Hon'ble Supreme Court in Rajeev Bansal (supra), while specifically dealing with Assessment Year 2015-16, recorded that the six-year limitation period expired on 31.03.2022 and that TOLA was not applicable to Assessment Year 2015-16. The Revenue itself

9 ITA No. 4393/Mum/2026 Subhadra Rajendra Prashad conceded before the Hon'ble Supreme Court that reassessment notices pertaining to Assessment Year 2015-16 would not be entitled to the benefit of TOLA. 22. Consequently, once the jurisdictional notice under section 148 came to be issued only on 19.07.2022, i.e., after expiry of the limitation period on 31.03.2022, the assumption of jurisdiction under section 147 read with section 148 becomes unsustainable in law. 23. Respectfully following the law laid down by the Hon'ble Supreme Court in Union of India vs. Rajeev Bansal (supra), we hold that the notice issued under section 148 dated 19.07.2022 is barred by limitation. Consequently, the order passed under section 148A(d), the notice issued under section 148 and the consequential assessment order passed under section 147 read with sections 144 and 144B of the Act are liable to be quashed and are accordingly quashed. Additional Ground Nos. 1 and 2 are therefore allowed. 24. Since we have quashed the reassessment proceedings on the preliminary jurisdictional issue itself, the additions made by the Assessing Officer aggregating to Rs. 2,65,05,939/- comprising alleged unexplained investment in immovable property and time deposits, as well as the other grounds raised on merits, do not survive for adjudication. Adjudication thereof would be purely academic. We, therefore, refrain from expressing any opinion on the merits of the additions. The remaining grounds are left open.

10 ITA No. 4393/Mum/2026 Subhadra Rajendra Prashad 25. 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 Mumbai, Dated 24/06/2026 Dhananjay, Sr.PS आदेश की प्रतितिति अग्रेतिि/Copy of the Order forwarded to : 1. अपीलाथी / The Appellant 2. प्रत्यथी / The Respondent. संबंधधत आयकर आयुक्त / The CIT(A) 3. आयकर आयुक्त(अपील) / Concerned CIT 4. 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