DEPUTY COMMISSIONER OF INCOME TAX CIRCLE 1 2 1 MUMBAI, MUMBAI vs. EKANSH CONCEPTS LIMITED, MUMBAI

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ITA 1114/MUM/2026Status: DisposedITAT Mumbai17 June 2026AY 2016-178 pages

In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that the notice issued under Section 148 was barred by limitation. The first proviso to Section 149 restricts reopening for AYs up to 2021-22 if the notice would have been time-barred under the old law.

What were the facts?

The Department appealed the CIT(A)'s order quashing a notice issued under Section 148 for AY 2016-17. The notice was issued on March 31, 2024, based on information from a search conducted on Manikaran Power Ltd. and its associates.

What were the issues?

Whether a notice issued under Section 148 for AY 2016-17, beyond the erstwhile 6-year limitation period, is valid under the new 10-year period introduced by the Finance Act, 2021, considering the first proviso to Section 149.

Which sections of the Income-tax Act were involved?

Section 148,Section 149,Section 153C

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, MUMBAI BENCHES, MUMBAI

Before: HON’BLE SHRI SANDEEP GOSAIN & HON’BLE SHRI GIRISH AGRAWAL

For Respondent: Shri Ritesh Misra, CIT DR
Pronounced: 17.06.2026

INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCHES, MUMBAI BENCH: E BEFORE HON’BLE SHRI SANDEEP GOSAIN, JUDICIAL MEMBER AND HON’BLE SHRI GIRISH AGRAWAL, ACCOUNTANT MEMBER ITA 1114/MUM/2026 िनधा�रण वष�/Assmt. Year: 2016-17 EKANSH CONCEPTS LIMITED DEPUTY COMMISSIONER OF INCOME TAX CIRCLE 1 2 1 A 8 NARAYAN PLAZA 26/A MUMBAI CHANDIVALI RD Vs. NARIMAN POINT, MUMBAI- ,SAKINAKA 400020, MAHARASHTRA MUMBAI-400072, MAHARASHTRA (��थ� Respondent) (अपीलाथ� Appellant) Permanent Account Number of AAACP4764D Assessee: िनधा�रती �ारा/Assessee Shri Neelkanth Khandelwal, represented by: CA राज� व �ारा/Revenue represented by: Shri Ritesh Misra, CIT DR

सुनवाई की तारीख / Date of conclusion of hearing: 22-Apr-2026 घोषणा की तारीख / Date of pronouncement: 17.06.2026 आदेश / ORDER PER GIRISH AGRAWAL, ACCOUNTANT MEMBER: This appeal is filed by the Department against the order of Ld. CIT(APPEAL) vide DIN: ITBA/NFAC/S/250/2025-26/1082295998(1) dated 04.11.2025 for the Assessment Year 2016-17.

2.

Department has raised the following grounds of appeal:

1) Ground 4.The Appellant craves leave to amend OR alter any ground OR to submit additional new ground, which may be necessary. 2) Ground 2. Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) erred in quashing the notice u/s 148 dated 31.03.2024 on the ground that the same is barred by limitation ignoring the fact the notice u/s 148 was validly issued within the prescribed time limits after obtaining prior approval of the specified authority 3) Ground 3.Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) erred in not deciding the additions made by the AO on merits 4) Ground 1. Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) erred in quashing the notice u/s 148 dated 31.03.2024 on the ground that the same is barred by limitation ignoring the fact that impugned case is covered under first proviso to section 149 which enables search assessments to be reopened upto period of 10 years as per section 153C

3.

In the present appeal, grounds raised by the Revenue relates to jurisdictional issue on the limitation aspect of notice issued u/s. 148, dated 31.03.2024, contending that it is covered by the first proviso to section 149.

4.

Brief facts of the case are that assessee filed its return of income on 29.09.2016, reporting total income at Rs.56,16,050/-. Ld. Assessing Officer received information from DDIT(INV)-1, Ranchi suggesting income chargeable to tax in the case assessee has escaped assessment which in turn is based on information that a search and seizure action u/s. 132 was conducted on 26.04.2023 at the premise of Manikaran Power Ltd. and its associate companies. Based on this information, ld. Assessing Officer observed that assessee, earlier known as Choice Infra Ventures Ltd, received Rs.42,84,75,000/- from Manikaran Power Ltd. Case of the assessee was reopened when assessee wrote off the advance of Rs.42,84,75,000/- received from Manikaran Power Ltd. by making payment to some alleged sub- contractors who allegedly made payments to certain sister concerns of Manikaran Power Ltd.

5.

Assessee strongly contended on the jurisdictional aspect of notice issued u/s. 148 contending that section 149(1)(a) states that no notice shall be issued if three years have elapsed from the end of the relevant assessment year. Further, section 149(1)(b) states that a notice may be issued beyond three years but not beyond ten years, only if the Assessing Officer possesses books of account, documents or evidence revealing escapement of income of Rs.50 lakh or more, represented in the form of prescribed assets/expenses, etc. The first proviso to Section 149(1) categorically provides that no notice under Section 148 shall be issued for any assessment year up to A.Y. 2021- 22 if such notice was already barred under the erstwhile limitation (i.e., 6 years under the old law/regime of reassessment). Assessee has further contended that the newly extended 10-year limit cannot be invoked retrospectively to revive cases already barred under the old law. Under the erstwhile Section 149(1)(b) (prior to Finance Act, 2021), the maximum permissible time to reopen assessments was 6 years from the end of the relevant assessment year. Consequently, for AY 2016-17, once it became time-barred on 31.03.2023 under the old law, Department is barred from reopening it by virtue of the proviso to Section 149(1). However, ld. Assessing Officer issued notice under section 148 of the Act on 31.03.2024. Accordingly, the notice issued under section 148 is bad in law and void ab-initio, being barred by limitation as prescribed under section 149.

5.1. Assessee has relied on number of judgements in this regard, viz., Union of India vs. Rajeev Bansal [2024] 167 taxmann.com 70 (SC), Manju Somani vs. Income-tax Officer [2024] 165 taxmann.com 675 (Delhi), BPTP Ltd. vs. CCIT Central-2, New Delh [2025] 177 taxmann.com 655 (Delhi), Bhoomi Viral Shah vs. Income-tax Officer [2024] 165 taxmann.com 682 (Bom).

6.

There is no dispute regarding the contention of the assessee that under the erstwhile Section 149 (prior to Finance Act, 2021), the permissible time to reopen assessments was 6 years from the end of the relevant assessment year and thus, consequently, for AY 2016- 17, such date would have been 31.03.2023. However, the issue arises that whether the newly introduced time limit of 10 years as provided by Section 149 as substituted/introduced by Finance Act 2021 is applicable to the A.Y. 2016-17 in the present facts and circumstances of the case. Along with the new time limit of ten years, the following proviso has been provided in the said section:-

“Provided that no notice under section 148 shall be issued at any time in a case for the relevant assessment year beginning on or before 1st day of April, 2021, if such notice could not have been issued at that time on account of being beyond the time limit specified under the provisions of clause (b) of sub-section (1) of this section, as they stood immediately before the commencement of the Finance Act, 2021”

6.1. The issue in the present case is whether the above referred proviso restricts the period of reopening for the Assessment Year 2016-17 to the same time limit which was in the Act before the commencement of the Finance Act, 2021.

6.2. Ld. CIT(A) after considering the long list of judicial precedents, most of them being by the Hon’ble jurisdictional High Court of Bombay, arrived at a conclusion that in view of the first proviso to section 149(1)(b), a notice under Section 148 of the Act (new regime) cannot be issued for AY 2021-22 and earlier AYs, if the period of six years from the end of the relevant assessment year has expired at the time of issuance of the notice. This is to ensure as per judgements that the new time limit of ten years prescribed under Section 149(1)(b) (new regime) applies prospectively. The first proviso to Section 149 provides that no notice under Section 148 shall be issued at any point of time in a case for a relevant assessment year beginning on or before the 1st day of April 2021, if a notice under Section 148 could not have been issued at that time on account of being beyond the time limit specified under the provision of clause (b) of sub-section (1) of this Section, as it stood immediately before the commencement of the Finance Act, 2021. The term 'at that time' in the first proviso refers to the date on which notice under Section 148 is to be issued by the Assessing Officer. As also observed in above referred judgements, the term 'at that time' has to refer to the term 'at any time' used earlier in the said proviso. The reference to 'at any time' is to the date of the notice to be issued by the Assessing Officer and, therefore, the term 'at that time' would also refer to the said date. On the said date, if a notice could not have been issued under the erstwhile provision of Section 149(1)(b), for any assessment year beginning on or before the 1st day of April 2021, the notice cannot be issued even under the new provisions.

6.3. Section 149(1)(b) of the erstwhile provisions provided a time limit of six years from the end of the relevant assessment year for issuing notice under Section 148 of the Act. For the relevant assessment year, being Assessment Year 2016-17, 6th year expired on 31st March 2023. The notice under Section 148, in the present case, is issued on 31st March 2024. As also observed in above referred judgements, the purpose of the first proviso to Section 149 is consistent with the stated object of the government to make prospective amendments in the Act.

6.4. Accordingly, the proviso provides that up to Assessment Year 2021-2022 (period before the amendment), the period of limitation as prescribed in the erstwhile provisions of Section 149(1)(b) would be applicable and only from Assessment Year 2022-2023, the period of ten years as provided in Section 149(1)(b) would be applicable. The said proviso limits the retrospective operation of Section 149(1)(b) to protect the interests of the assessee. As observed in the judgements as referred above, the test for checking the validity of notices issued under section 148 under new regime for AYs 2021-22 or prior years is whether the period of six years has expired at the time of issue of such notice and in that case the notice under section 148 becomes invalid.

7.

In assessee's case, when the above referred test is applied for AY 2016-17, the time limit of period of six years from the end of assessment year, as provided under the erstwhile law, has expired on 31.03.2023. Thus the notice under Section 148 of the Act, in the present case, as issued on 31.03.2024, is clearly beyond the period of limitation prescribed in Section 149 read with the first proviso to the said section. Therefore, the notice dated 31.03.2024 under section 148 of the Act for AY 2016-17 is invalid since it is barred by limitation.

8.

On similar fact pattern, Hon’ble High Court of Delhi in the case of E-Homes Infrastructure Pvt. Ltd. vs. DCIT [2024] 185 taxmann.com 299 (Delhi) held that since the impugned notice is beyond six years from the end of the relevant Assessment Year (Assessment Year 2016- 17), we find merit in the contention that the said impugned notice “since barred by limitation in terms of first proviso to section 149(1)”. Contention of the Revenue on the above findings of the Hon’ble Court were that the time period for which a notice could be issued would require to be ascertained by reference to the provisions of Section 153C as the proceedings for reassessment have been initiated on the basis of information that was found during the course of search conducted on 20.07.2022 in the case of SMC Group and others.

8.1. In this case also, a search was conducted in the case of SMC Group alleging that group entities had obtained accommodation entries and that the assessee had availed a loan from a suspected shell entity. Thus, Hon’ble Court concluded that impugned notice issued u/s. 148 beyond six years from the end of the relevant Assessment Year is time barred u/s. 149.

9.

We have considered the factual matrix, relevant provisions of the Act including section 148 and 149 as well as given thoughtful consideration to the decision in the case of E-Homes Infrastructure Pvt. Ltd. (supra). We have also gone through the detailed analysis and deliberation made by ld. CIT(A) on the issue in hand which is well founded and well-reasoned, after taking into consideration long line of judicial precedents for which relevant extracts are reproduced in the first appellate order. Having considered everything in entirety, we do not find any reason to interfere with the findings arrived at by ld. CIT(A) to hold that the notice issued u/s. 148, dated 31.03.2024 is barred by limitation in terms of proviso to section 149. Accordingly, grounds raised by the Revenue in this regard are dismissed.

10.

In the result, appeal of the Revenue is dismissed.

Order is pronounced in the open court on 17 June, 2026

Sd/- Sd/- (Sandeep Gosain) (Girish Agrawal) Judicial Member Accountant Member Dated: 17 June, 2026 MP, Sr.P.S. Copy to: 1 The Appellant 2 The Respondent 3 DR, ITAT, Mumbai 4 Guard File 5 CIT BY ORDER,

(Dy./Asstt.Registrar) ITAT, Mumbai

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