ISHVARBHAI BHAGABHAI PATEL,SURAT vs. THE ACIT, CIRCLE-2(1)(1), SURAT

ITA 6/SRT/2026Status: DisposedITAT Surat01 October 2026AY 2015-167 pages
AI SummaryAllowed

What were the facts?

The assessee, Ishvarbhai Bhagabhai Patel, filed an appeal against the order of the Commissioner of Income Tax (Appeals) [CIT(A)] for Assessment Year (AY) 2015-16. The assessee's original return declared a total income of Rs. 2,35,850. The Assessing Officer (AO) reopened the assessment under Section 147 of the Income Tax Act, 1961, based on information that the assessee, along with co-owners, had jointly sold immovable property for Rs. 2,60,00,000. The AO estimated the assessee's share of capital gain at Rs. 55,21,720, which was not offered by the assessee. After issuing notices under Section 148A and Section 148, and receiving no compliance from the assessee, the AO completed the assessment under Section 147 read with Sections 144 and 144B, making an addition of Rs. 55,21,720 as undisclosed short-term capital gain. The CIT(A) dismissed the assessee's appeal.

What did the Tribunal hold?

The Tribunal admitted the additional ground raised by the assessee challenging the validity of the notice issued under Section 148. The Tribunal noted that the issue was no longer res integra, referencing the Supreme Court's decision in Union of India Vs. Rajeev Bansal. In that case, the Revenue conceded that for AY 2015-16, all notices issued on or after April 1, 2021, are liable to be dropped as they fall outside the completion period prescribed under the Taxation and other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020. The Tribunal also referred to the Gujarat High Court's decisions in Mayurkumar Babubhai Patel and Sorathia Mahesh Veljibhai HUF, which followed the Supreme Court's precedent and held that notices issued after April 1, 2021, for AY 2015-16 are barred by limitation. Since the original notice under Section 148 was issued on June 28, 2021, and a subsequent notice was issued on July 24, 2022, the Tribunal held that the reassessment proceedings are barred by limitation and without jurisdiction. Consequently, the impugned reassessment order passed by the AO was quashed. As the reassessment order itself was quashed, the other grounds related to the merits of the addition were left undecided.

What were the issues?

1. Whether the reassessment proceedings initiated under Section 147 read with Section 148 of the Income Tax Act, 1961, are liable to be quashed as being barred by limitation, considering the notices were issued after April 1, 2021, for AY 2015-16? Assessee's Contention: The assessee argued that the reassessment proceedings are invalid. The initial notice under Section 148 was issued on June 28, 2021, and a subsequent notice was issued on July 24, 2022. The assessee relied on the Supreme Court's decision in Union of India Vs. Rajeev Bansal, which held that for AY 2015-16, all notices issued on or after April 1, 2021, must be dropped as they do not fall within the completion period prescribed under the Taxation and other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020. The assessee also cited Gujarat High Court decisions in Mayur Kumar Babubhai Patel and Sorathia Mahesh Veljibhai HUF, which followed Rajeev Bansal. Revenue's Contention: The Revenue relied on the assessment order and the order of the CIT(A).

Which sections of the Income-tax Act were involved?

Section 147,Section 144,Section 144B,Section 148,Section 148A,Section 142(1),Section 149,Section 2(14)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, SURAT BENCH, SURAT

Before: MS. SUCHITRA KAMBLE & SHRI B.M. BIYANI

Pronounced: 01.10.2026

PER : SUCHITRA KAMBLE, J M:

The appeal filed by the assessee is against the order passed by the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi [in short “CIT(A)”] dated 25.11.2025 for the Assessment Year (in short “AY”) 2015-16. 2. The assessee has raised the following grounds of appeal: “1) On the facts and circumstances of the case, as well as law on the subject, the learned Commissioner of Income Tax (Appeals) erred in dismissi

The order continues below.

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