FOSSILS TRADELINK PRIVATE LIMITED,KOLKATA vs. DCIT, CENTRAL CIRCLE 6(4), MUMBAI

ITA 7725/MUM/2026Status: DisposedITAT Mumbai29 September 2026AY 2014-1510 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the notice under section 148 dated 27.07.2022 was issued after the expiry of the time available under section 149 of the Act. Applying the principles laid down by the Supreme Court in Union of India v. Rajeev Bansal, the Tribunal found that the notice deemed to have been issued under section 148A(b) preserved only the time that remained between its original issuance and 30.06.2021. The period until the supply of relevant material and the time allowed for the assessee's reply were excluded. Even after considering the statutory minimum period of seven days under the fourth proviso to section 149(1) and giving the Revenue the benefit of doubt regarding the exact dates of material supply and reply, the notice dated 27.07.2022 was found to be beyond the permissible time limit. The Tribunal reasoned that the communication dated 06.07.2022, mentioned in the assessment order as a further supply of material, could not be treated as commencing a fresh period of limitation as it followed the initial supply and the assessee's reply. Consequently, the Assessing Officer could not validly assume jurisdiction. The ratio decidendi is that notices issued beyond the surviving period, as calculated according to the Supreme Court's guidance in Rajeev Bansal, are time-barred and liable to be set aside. The order under section 148A(d), the notice under section 148, the reassessment order, and the CIT(A)'s order sustaining the reassessment were set aside. Adjudication of the remaining grounds concerning the disallowance of derivative loss was deemed unnecessary. The Tribunal expressed no finding on the merits of the derivative loss.

What were the facts?

The assessee, Fossils Tradelink Private Limited, filed an appeal against the order dated 05.12.2024 passed by the CIT(A)-54, Mumbai, which upheld the reassessment order dated 29.03.2023 passed under section 143(3) read with section 147 of the Income-tax Act, 1961. The reassessment concerned a derivative loss of Rs.1,27,44,550/- identified through 'Project Falcon' information regarding trading in illiquid stock options. The Assessing Officer issued a notice under section 148 on 28.06.2021, which was treated as a show-cause notice under section 148A(b) following the Ashish Agarwal decision. An order under section 148A(d) was passed on 27.07.2022, followed by a notice under section 148 on the same date. The assessee's appeal to the ITAT Mumbai was filed after a delay of 487 days, which was condoned by the Tribunal.

What were the issues?

The primary issue before the Tribunal was whether the notice under section 148 dated 27.07.2022 was issued within the time limit prescribed under section 149 of the Act, considering the provisions of the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020, and the judicial pronouncements in Union of India v. Ashish Agarwal and Union of India v. Rajeev Bansal. The assessee contended that the notice under section 148 dated 27.07.2022 was time-barred, as the surviving period for issuing such a notice, after considering the original notice dated 28.06.2021 and the subsequent procedural steps including the assessee's reply, had expired. The assessee relied on the Supreme Court's decision in Union of India v. Rajeev Bansal, which held that notices issued beyond the surviving period are liable to be set aside. The assessee also argued that the CIT(A) violated principles of natural justice by not providing a proper opportunity to be heard and that the reassessment was based on generalized information without specific evidence. The Revenue did not raise any objection to the condonation of delay. The judgment does not record specific arguments from the Revenue regarding the limitation issue or the merits of the disallowance.

Which sections of the Income-tax Act were involved?

Section 250,Section 143(3),Section 147,Section 148,Section 148A(b),Section 148A(d),Section 149,Section 149(1)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, MUMBAI BENCHES, MUMBAI

For Appellant: Shri Yash Baid, Ld. A.R. (Virtually)
For Respondent: Shri Dhiraj Kumar, Ld. Sr. D.R
Hearing: 24.09.2026Pronounced: 29.09.2026

PER: MAKARAND VASANT MAHADEOKAR, AM

This appeal by the assessee is directed against the order dated 05.12.2024 passed by the learned Commissioner of Income Tax (Appeals)-54, Mumbai [hereinafter referred to as “CIT(A)”], under section 250 of the Income-tax Act, 1961 [hereinafter referred to as “the ACt”], for the assessment year 2014-15. The impugned appellate order confirms the reassessment order dated 29.03.2023 passed under section 143(3) read with section 147 of the Act.

2 Fossils Tradelink Private Limited

2.

The registry noted a delay of 487 days in filing appeal before us. In supp

The order continues below.

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