VALJIBHAI HARJIBHAI VAGHASIYA,SURAT vs. DCIT, CIRCLE 1(3), SURAT

ITA 1468/SRT/2025Status: DisposedITAT Surat29 September 2026AY 2015-167 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the issue regarding the validity of notices issued for AY 2015-16 after 01.04.2021 is no longer res integra. The Hon'ble Supreme Court in Union of India Vs. Rajeev Bansal (supra) recorded the Revenue's concession that all notices issued on or after 01.04.2021 for AY 2015-16 are liable to be dropped. Furthermore, the Hon'ble Gujarat High Court in Mayurkumar Babubhai Patel (supra) and Sorathia Mahesh Veljibhai HUF (supra), following the Supreme Court's decision in Rajeev Bansal and Deepak Steel & Power Ltd., has held that notices issued after 01.04.2021 for AY 2015-16 are barred by limitation. In the present case, the original notice u/s 148 was issued on 25.06.2021, and the consequential notice after the decision in Ashish Agarwal was issued on 27.07.2022. Respectfully following these binding precedents, the Tribunal held that the impugned reassessment proceedings are barred by limitation and without jurisdiction. Consequently, the reassessment order passed by the AO was held to be bad in law and quashed. The Tribunal noted that since the reassessment order itself was quashed, there was no necessity to adjudicate the remaining grounds concerning the merit of the additions made by the AO, and these were kept open undecided. Ground No. 1, relating to condonation of delay, was allowed as a consequence of quashing the reassessment proceedings.

What were the facts?

The assessee, Valjibhai Harjibhai Vaghasiya, is appealing against an order dated 19.11.2025 passed by the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi, for Assessment Year 2015-16. The Assessing Officer (AO) initiated reassessment proceedings under Section 147, alleging that the assessee had claimed exemption on Long Term Capital Gains (LTCG) of Rs. 4,92,39,060/- from trading in penny stocks, specifically Appu Marketing & Manufacturing Ltd. / Ejecta Marketing Ltd., with a trade value of Rs. 5,02,40,543/-. The AO treated these as accommodation entries. The assessee did not respond to notices, leading to an ex-parte assessment order under Section 144, with an addition of Rs. 5,09,41,713/-. The CIT(A) dismissed the assessee's appeal.

What were the issues?

1. Whether the Ld. CIT(A) erred in not condoning the delay in filing the appeal before him? (Question of fact and law) 2. Whether the notice u/s. 148 issued on 25.06.2021, after taking prior approval of Jt. CIT, Range 1(3), was validly issued as a show cause notice u/s. 148A(b), or if it required prior approval of Pr. CCIT or PDGIT? (Question of law) 3. Whether the notice u/s. 148 issued on 27.07.2022 was barred by limitation as per Section 149, having been issued after the expiry of 6 years? (Question of law) 4. Whether the AO erred in re-opening the assessment u/s. 147 by issuing notice u/s. 148 on 27.07.2022 when there was no escapement of income, or alternatively, after 3 years without establishing that the escapement of income was represented by an asset exceeding Rs. 50 lakhs? (Question of mixed law and fact) 5. Whether the AO erred in issuing notice u/s. 148A(b) when it should have been issued by the Assessment Unit (NFAC)? (Question of law) 6. Whether the AO erred in making an addition of Rs. 5,02,40,543/- by disallowing the exemption claimed on account of LTCG? (Question of fact and law) Assessee's Contentions: The assessee argued that the reassessment proceedings initiated under Section 148 are illegal. They relied on the Supreme Court's decision in Union of India Vs. Rajeev Bansal (2024) 469 ITR 46 (SC), which conceded that for AY 2015-16, all notices issued on or after 01.04.2021 must be dropped as they fall outside the completion period prescribed under the Taxation and other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 ("TOLA"). The assessee also cited Gujarat High Court decisions in Mayur Kumar Babubhai Patel and Sorathia Mahesh Veljibhai HUF, which followed Rajeev Bansal and quashed similar notices. The initial notice was dated 25.06.2021, and a subsequent notice u/s. 148A(b) was issued on 26.05.2022, with an order u/s. 148A(d) and notice u/s. 148 on 27.07.2022. Revenue's Contentions: The Ld. Departmental Representative relied upon the assessment order and the order of the Ld. CIT(A).

Which sections of the Income-tax Act were involved?

Section 148,Section 148A(b),Section 147,Section 149,Section 144,Section 142(1)

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: 29.09.2026

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 19.11.2025 for the Assessment Year (in short “AY”) 2015-16. 2. The assessee has raised the following grounds of appeal:

“1. On the basis of facts and circumstances of the case, as well as the law on subject, the Ld. CIT(A) has erred in not condoning the delay in filing of appeal before learned CIT(A).

2.

On th

The order continues below.

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