YOGESHKUMAR KASTURJI PRAPAPATI ,AHMEDABAD vs. INCOME TAX OFFICER WARD 4(2)(3) AHMEDABAD , AHMEDABAD

ITA 1407/AHD/2026Status: DisposedITAT Ahmedabad30 September 2026AY 2017-185 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the notice issued under section 148 of the Income Tax Act, 1961, on 28-07-2022, is barred by limitation. The Tribunal noted that the original notice under section 148 was issued on 29-06-2021. Following the Supreme Court's decision in Union of India vs. Ashish Agarwal, this notice was to be treated as a notice under section 148A(b). Information was provided to the assessee on 26-05-2022, and the assessee replied on 10-06-2022. The Tribunal, relying on Union of India vs. Rajeev Bansal, stated that the AO is entitled only to the period of limitation that survived on the date of the original notice. In this case, the balance period available was less than 7 days from 29-06-2021. Even granting the minimum 7 days, proceedings should have been completed and notice issued by 17-06-2022. However, approval was obtained on 26-07-2022, the order under section 148A(d) was passed on 28-07-2022, and the consequential notice under section 148 was also issued on 28-07-2022, which is beyond the surviving limitation period. The Tribunal concluded that the assumption of jurisdiction under section 147 was invalid, and the reassessment order could not be sustained. Consequently, the grounds relating to the addition on merits were rendered academic and did not require adjudication. The appeal was allowed.

What were the facts?

The assessee, Yogeshkumar Kasturji Prapapati, filed an appeal against the order dated 26-02-2026 passed by the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi. The assessment year in question is 2017-18. The assessee had not filed an original return of income for AY 2017-18. In response to a notice under section 148 of the Income Tax Act, 1961, the assessee filed a return declaring income of Rs. 2,87,588/-. The Assessing Officer (AO) passed a reassessment order on 28-05-2023, making an addition of Rs. 5,90,000/- as unexplained money under section 69A. The CIT(A) dismissed the assessee's appeal. The assessee is now appealing to the ITAT.

What were the issues?

1. Whether the notice issued under section 148 of the Income Tax Act, 1961, on 28-07-2022, is barred by limitation, considering the provisions of section 149(1)(a) and the alleged escapement of income being below Rs. 5,90,000/-? (Question of law and fact, concerning Section 148 and 149). - Assessee's contention: The notice under section 148 was issued beyond the prescribed limitation period. The reassessment order is illegal and without jurisdiction. - Revenue's contention: Not recorded in the judgment. 2. Whether the addition of Rs. 5,90,000/- under section 69A of the Income Tax Act, 1961, is valid when there is no legally acceptable evidence of cash payment? (Question of law and fact, concerning Section 69A). - Assessee's contention: The addition was wrongly made by invoking section 69A without evidence of cash payment. No addition can be made based on a 'dumb document' or third-party records not in the assessee's handwriting. Principles of natural justice were violated, and cross-examination was denied. - Revenue's contention: Not recorded in the judgment.

Which sections of the Income-tax Act were involved?

Section 148,Section 149,Section 69A,Section 147,Section 148A,Section 151

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, AHMEDABAD “SMC” BENCH

Before: Shri Sanjay Garg & Shri R. Govindarajan

For Appellant: Shri Divyakant Parikh, A.R
For Respondent: Ms. Madhulika Satpute, Sr. D.R

PER R. GOVINDARAJAN, ACCOUNTANT MEMBER:

The assessee has filed the appeal against the order dated 26-02- 2026 passed by Commissioner of Income Tax (Appeals), National Faceless Appeal Centre NFAC, Delhi (in short, referred to as the CIT(A)) u/s. 250 of the Income Tax Act, 1961 (herein referred to as “the Act”) relating to Assessment Year 2017-18. 2. The assessee raised the following grounds of appeal:- “1. The learned NATIONAL FACELESS APPEAL CENTRE [NFAC] has grievously erred both in law and on facts in dismissing the grounds of appeal of the appellant challenging the Yogeshkumar Kasturji Prapapati, A.Y. 2017-18 legality which is illegal and with

The order continues below.

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