MOHAMMAD IDREES,ETAWAH vs. WARD 2(2)(5), ETAWAH, ETAWAH

IN THE INCOME TAX APPELLATE TRIBUNAL, AGRA(SMC) BENCH, AGRA BEFORE: SHRI M BALAGANESH, ACCOUNTANTMEMBER AND SHRI SUNIL KUMAR SINGH, JUDICIALMEMBER ITA No.55/Agr/2026 Assessment Year: 2016-17 Mohammad Idrees Vs. ITO Ward 2(2)(5), Etawah-206001 95A, Sabitganj Paschimi, Etawah-206001 PAN :ABOPI6929F (Appellant) (Respondent) Assessee by Shri Rajesh Malhotra, CA Department by Shri Shailendra Srivastava, Sr DR Date of hearing 18.03.2026 Date of pronouncement 19.05.2026 ORDER

PER: SUNIL KUMAR SINGH, JM. This appeal has been preferred against the impugned order dated 19.11.2025 passed in Appeal no. NFAC/2015-16/10117631 by the Ld. Commissioner of Income tax, (Appeals)/ NFAC Delhi,[hereinafter referred to as the “CIT(A)”] u/s. 250 of the Income tax Act, 1961 [hereinafter referred to as "Act"] for the Assessment year A.Y. 2016-17, wherein learned CIT(A) has dismissed assessee’s appeal. 2. The brief facts of the case are that the assessee filed return of income on 12.07.2016, declaring total income of Rs. 3,50,650/- on presumptive basis of gross receipts of Rs. 62,58,060/-. Department received an information from investigation wing that assessee incurred

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expenditure of Rs. 2,13,000/- on education of daughter. Further that the assessee had credits of Rs. 2,70,12,301/- in his bank accounts. Assessing officer, after recording reasons to believe and after obtaining sanction from the competent authority, issued notice u/s. 148 of the Act on 31.03.2021. Assessee filed belated return on 28.01.2022 in response to notice u/.s 148 of the Act, which was treated as non-est and the notice u/s. 143(2) was not issued accordingly. Assessee’s objections against the notices u/s. 148 of the Act, were rejected by the assessing officer and completed the assessment u/s. 147/144 of the Act, making an addition of Rs. 15,97,348/- as undisclosed profits vide, assessment order dated 30.03.2022. 3. Assessee preferred an appeal before ld CIT(A), who sustained the additions made vide, aforesaid assessment order. 4. Assessee has raised the following grounds under this second appeal: “1. Because, on the facts and circumstances of the case, the Ld. CIT(A) has erred in law in conforming the validity of issuance of Notice under Section 148 of the Act, ignoring the admitted fact that Notice under Section 148 of the Act was issued via Email on 01.04.2021 at 6:32am. The Notice under section 148 issued beyond the limitation given in substituted section 149 of the amended Act is void- ab-initio. 2. Because, on the facts and circumstances of the case, the Ld. CIT(A) has erred in law in conforming the validity of issuance of Notice 148 of the Act, disregarding and ignoring the important aspect that the scheme of reassessment under Section 147 to 151 was substantially changed by the Finance Act, 2021, with effect from 01.04.2021. the consequent proceedings done by the Ld. AO is illegal and void-ab-initio, in view of judgement of Hon'ble Supreme Court in case of Union of India vs. Ashish Agarwal. 3. Because, the Notice under section 148 was issued under old regime on 01.04.2021, when entire reassessment under section 147 to 151 has been substituted and substantial change have been brought by the new regime had

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vitiated the entire proceedings and consequently the reassessment is liable to be quashed. 4. Because, on the facts and circumstances of the case the Ld. CIT(A) has erred in law and on facts in confirming the order passed by the Ld. AO, despite the admitted failure on the part of the Ld. AO to issue mandatory statutory Notice under section 143(2) of the Act. Non issuance of such notice renders the assessment proceedings void-ab-initio and without jurisdiction, and therefore liable to be set aside. 5. Because, upon the facts and in overall circumstance of the case the Ld. CIT(A) was wrong and unjust in confirming the order passed by the Ld. Assessing officer ignoring the submission made by the Appellant during the course of appellate proceedings. 6. Because, upon the facts and in overall circumstances of the case, the reassessment proceedings initiated by issue of notice under section 148 of the Act is bad in law as the case of appellant does not fall under section 147 of the Act. There was no income chargeable to tax escaped assessment, therefore the very initiation of reassessment proceeding is illegal, wrong jurisdiction has been assumed. 7. Because, upon the facts and in overall circumstances of the case, the notice under section 148 was issued based on the information received from DDIT (Inv) Unit, Agra without application of mind by the Ld. JAO. Because, the proceedings initiated by issue of Notice under section 148 of the Act is bad in law as mechanical approval was given by specified authority, thus making violation of provisions of section 151 of the Act. 8. Because, upon the facts and in overall circumstances of the case the Notice issued under section 148 dated 01.04.2021 by Income Tax Officer, Ward 2(2)(5), Etawah are invalid and bad in law and are in gross violation of provisions of section 151A of the Income Tax Act and Faceless Assessment Scheme, 2019 issued vide Notification Number S.O. 3264(E) dated 12.09.2019 as amended by E Assessment of Income Escaping Assessment Scheme, 2022 dated 29th March, 2022 by the Central Government in exercise of the powers conferred by sub section (1) and (2) of section 151A of the Income Tax. 9. Because, upon the facts and circumstances of the case, the Ld. AO erred in facts and in law in estimating business profit at the rate 8 percent on credit in bank account ignoring the important fact that the appellant is kachha Arhatiya having maximum income of 1 percent on sale arranged by him on behalf of fishermen. 10. Because, upon the facts and circumstances of the case, the Ld. AO failed to take the cognizance of authority letter issued by the Etawah Sahkari Matsyajeevi Samiti Ltd., which authorise and appoint the appellant as commission agent kachha arhatiya to arrange sale of fishes of fishermen, who are the members of

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the society. The amount of commission is maximum upto 1 percent of the sale value. 11. Because, upon the facts and in overall circumstances of the case, wrong interest has been charged under section 234A and 234B of the Act which is illegal, bad in law and is liable to be deleted. The Appellant craves to alter, modify, add or delete any of the ground during the course of hearing.” 5. Perused the records. Heard ld representative for the assessee and ld Sr DR for the respondent revenue. 6. At the very outset ld representative for the appellant assessee has pressed ground No 1, 2 & 3 raised hereinbefore, stating that the notice u/.s 148 of the Act was issued on 01.04.2021 which was received by the assessee at 6:32 A.M. beyond the limitation period. The scheme of reassessment u/.s 147 to 151 was substantially changed by Finance Act, 2021 with effect from 01.04.2021. The consequential procedure has not been followed by the assessing officer as held by the Apex Court in Union of India & others v. Shri Ashish Agrawal and others (SC):(2022) 105 TLC 020, 444 ITR 1) (SC), the assessment is void ab initio. Ld AR referred Ketan Natvarlal Shah v. ITO, (2026) 150 TLC 092 (Surat-Trib) (order dated 03.02.2026) and DESU Enterprises v. ITO, (2026) 149 TLC 191 (Hyd-Trib) (order dated 07.01.2026). Ld AR, thus, prayed to allow the appeal. 7. Ld Sr DR submits that the notice u/s. 148 of the Act was dispatched and issued on 31.03.2021 only, which is at page 2 of the assessee’s paper book. The A.O. was not required to follow the new scheme which was

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effective from 01.04.2021 only. Ld Sr DR, thus, supports the impugned order. 8. At the very outset, it is pertinent to mention that the scheme of reassessment u/s. 147 to 151 underwent a drastic change vide Finance Act, 2021 with effect from 01.04.2021. According to the dictum of Apex Court in Union of India & Ors v. Shri Ashish Agrawal & Ors., the assessing officer’s were to follow the new procedure if the notice u/s. 148 was issued on or after 01.04.2021. In the instant case, according to the ld AR, notice u/s. 148 of the Act was actually issued by A.O. and dispatched on 01.04.2021. The copy of notice received on assessee’s ITBA portal through e-mail is at page 3 of assessee’s paper book. The date and time printed on this e-mail is April 01, 2021 at 6:32 A.M. If this notice is treated to have been issued on 01.04.2021, the assessing officer was required to pass order u/s. 148A(d) of the Act and thereafter a fresh notice u/s. 148 of the Act was required to be issued in accordance with the mandated provisions of the Act. 9. The Surat bench of this tribunal in Ketan Natvarlal Shah (supra), has held as under: “5. The first ground taken by the assessee is against reopening of the assessment and issue of notice u/s 148 of the Act. Shri P M Jagasheth, the Id. A.R. of the assessee explained that though the notice u/s 148 of the Act issued by the AO is dated 31.03.2021, the said notice was actually issued and sent on 01.04.2021. In support of this contention the assessee has filed a copy of the "e-proceedings" with detail of all actions taken 5 | P a g e

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by the Department in the case of the assessee. The Id. AR further submitted that since the notice u/s 148 was issued by the Systems on 01.04.2021, the AO was required to pass order u/s. 148A(d) of the Act and thereafter a fresh notice u/s 148 of the Act was required to be issued, in accordance with the amended provisions of the Act. According to the Ld. AR, since no order u/s. 148A(d) of the Act was passed in the case of the assessee, the notice issued u/s 148 of the Act earlier was ab initio void. 6. Per contra, Shri Ajay Uke, the Id. Sr. DR, supported the order of the AO. 7. We have considered the rival submissions. The AO has mentioned in the assessment order that notice u/s 148 of the Act for AY 2013-14 was issued on 31.03.2021. However, from the evidence brought on record in the form of copy of "Notices for e-Proceedings" it is found that the said notice u/s 148 of the Act was issued by the Systems on 01.04.2021 and not on 31.03.2021. This fact has not been disputed by the Revenue. In fact we had also fixed the matter for clarification in order to ascertain whether the procedure u/s. 148A(b) and section 148A(d) was followed by the AO in event of notice being issued on 01.04.2021 by the Systems. It was clarified that the notice u/s 148 was issued by the AO on 31.03.2021 under the old provisions of the Act. 8. The provision for issue of notice u/s 148 of the Act was amended with effect from 01.04.2021. Under the old provision there was no requirement to take action as provided u/s. 148A of the Act. The AO did not initiate action u/s. 148A of the Act, for the reason that he had issued the notice u/s 148 of the Act on 31.03.2021 under the old provision. Hon'ble Gujarat High Court had held in the case of Saumil Abhinash Baheti in (GUJ-HC): (2025) 142 TLC 365, Civil Application No. 3804 of 2022 dated 17.06.2025 that where the notice u/s 148 of the Act dated 31.03.2021 was served through email on 01.04.2021, the notice would be an invalid notice. In the present case the notice u/s 148 of the Act sent through email on 1st April, 2021, was not barred by limitation. Nevertheless, considering the fact that the notice was issued on 01.04.2021. the said notice was required to be treated as notice u/s. 148A(b) of the Act as per the direction of Hon'ble Supreme Court in the case of Union of India and others Vs. Shri Ashish Agrawal and others (SC): (2022) 105 TLC 020, 444 ITR 1)(SC). Thereafter, the AO was required to pass order u/s.148A(d) of the Act and issue a fresh notice u/s 148 of the Act. Further, these actions were required to be completed within the surviving period. In the present case neither the notice u/s 148 issued on 01.04.2021 was treated as notice u/s. 148A(b) of the Act under the new provisions nor any order u/s.148A(d) was passed by the AO. Thus the notice u/s 148 of the Act issued by the AO was neither within time limit of the old provision nor in accordance with the procedure laid down under the amended provision with effect from 01.04.2021. Therefore, the notice u/s 148 of the Act issued by the AO on 31.03.2021 which was served on the assessee on 01.04.2021 is quashed and the assessment order made u/s 147 r.w.s. 144 of the Act dated 17.05.2022 in pursuance thereof, is set aside.”

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section 148 of the Act was issued prior to 01.04.2021. Accordingly, we hold that the date of issue of notice under section 148 of the Act in the present case is 01.04.2021. 25. There is also no dispute about the fact that in the present case, the Ld. A.O. has not followed the mandatory procedure prescribed under section 148A of the Act before issuance of the notice under section 148 of the Act. Once it is held that the notice under section 148 of the Act was issued on 01.04.2021, our findings and observations rendered in ITA No. 589/Hyd/2024 squarely apply to the present appeal. Accordingly, we hold that the notice issued under section 148 of the Act on 01.04.2021, without complying with the mandatory procedure prescribed under section 148A of the Act, is invalid in law, and the assessment order passed by the Ld. A.O. on the basis of such invalid notice is liable to be quashed.” 11. Respectfully following the aforesaid decision of the coordinate benches of this tribunal in Ketan Natvarlal Shah (supra) and DESU Enterprises (supra), we hold that the date and time mentioned in the e-mail communication by which notice is communicated to the assessee i.e. 01.04.2021 shall be treated as the date of issuance of notice for the purpose of section 148 of the Act. Admittedly, the assessing officer has not followed the mandatory procedure prescribed under section 148A of the Act for issuance of the notice u/s. 148 of the Act. Therefore, the notice u/s. 148 of the Act dated 31.03.2021, which was served on the assessee on 01.04.2021 is quashed and the assessment order made in pursuance thereof, is set aside. Since this legal ground raised by the assessee has been allowed and the assessment order has been set aside, all the other grounds raised by the assessee become mere academic in nature, hence are not being adjudicated and are left open.

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Sd/- Sd/- (M BALAGANESH) (SUNIL KUMAR SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER

Dated: 19.05.2026 Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR Asst. Registrar, ITAT, Agra

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