UMIYA BHUVAN CO OPERATIVE HOUSING SOCIETY LIMITED,MUMBAI vs. ITO, WARD 41(2)(4), MUMBAI, MUMBAI

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ITA 5442/MUM/2026Status: DisposedITAT Mumbai22 September 2026AY 2015-1612 pages

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

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the notice issued under section 148 of the Income-tax Act, 1961, dated 14/04/2022, was bad in law and invalid. The Tribunal noted that the issue of validity of notice under section 148, particularly in light of the concession made by the Revenue before the Hon'ble Supreme Court in the case of Union of India vs. Rajeev Bansal, goes to the root of the reassessment jurisdiction. Since the ground could be decided on the material already on record, the Tribunal proceeded to adjudicate it. The Tribunal found that the notice was issued beyond the period of limitation prescribed under the Act, especially in view of the pronouncements of the Hon'ble Supreme Court and various High Courts concerning the applicability of the proviso to section 147 and the consequences of the concession made by the Revenue. Therefore, the reassessment proceedings initiated by the impugned notice were quashed. The Tribunal did not decide on the merits of the income determination as the jurisdictional issue was decided against the Revenue.

What were the facts?

The assessee, Umiya Bhuvan Co-Operative Housing Society Limited, is appealing an order dated 24.03.2026 passed by the CIT(A), NFAC, Delhi, concerning Assessment Year 2015-16. The appeal arises from an assessment order dated 29.01.2024, passed under section 147 read with sections 144 and 144B of the Income-tax Act, 1961, which determined the assessee's total income at Rs. 5,32,65,500/-. The assessee, a tenant co-operative housing society, owned a property in Mulund West, Mumbai. Due to the building's dilapidated condition, a redevelopment agreement was executed on 09.12.2014 with M/s. Ishaan Developers. Under this agreement, the developer was to demolish the old building and construct a new one, allotting flats and commercial premises to existing members free of cost, and also pay rent/compensation for alternate accommodation. The assessee contended it received no consideration. The stamp valuation authority valued the development agreement at Rs. 5,32,65,500/- for stamp duty purposes. The assessee did not file a return of income for AY 2015-16, believing no taxable income arose.

What were the issues?

1. Whether the notice issued under section 148 of the Income-tax Act, 1961, dated 14/04/2022, is bad in law and invalid, considering the concession made by the Revenue before the Hon'ble Supreme Court in the case of Union of India vs. Rajeev Bansal [2024] 167 taxmann.com 70? Assessee's Contention: The assessee argued that the notice under section 148 is invalid due to limitation, relying on the concession made by the Revenue in the aforementioned Supreme Court case. The assessee stated that the redevelopment agreement did not result in any consideration for the society, and therefore, it had no substantial income, leading to the non-filing of a return. Revenue's Contention: The judgment does not record any specific contentions made by the Revenue regarding the validity of the notice under section 148 or its reliance on the case of Union of India vs. Rajeev Bansal.

Which sections of the Income-tax Act were involved?

Section 148,Section 250,Section 147,Section 144,Section 144B

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, MUMBAI BENCHES, MUMBAI

Before: SHRI AMIT SHUKLA & SHRI MAKARAND VASANT MAHADEOKAR

For Appellant: Shri Bhardesh Doshi, Ld. A.R. (Virtually)
For Respondent: Shri Dhiraj Kumar, Ld. Sr. D.R
Hearing: 21.09.2026Pronounced: 22.09.2026

आदेश / ORDER

PER: MAKARAND VASANT MAHADEOKAR, AM This appeal by the assessee is directed against the order dated 24.03.2026 passed by the Commissioner of Income-tax (Appeals), National Faceless Appeal Centre, Delhi, under section 250 of the Income-tax Act, 1961 (the Act) for A.Y. 2015-16. The impugned appellate order arose from the assessment order dated 29.01.2024 passed under section 147 read with sections 144 and 144B of the

2 ITA No.5442/M/2026 Umiya Bhuvan Co-Operative Housing Society Limited Act, determining the total income of the assessee at Rs.5,32,65,500/-. 2. The assessee has raised the following ground of appeal before us: 1. On the facts and circumstances of the case and in law, the CIT (A) has erred in not considering the notice under section 148 of the Act dated 14/04/2022 as bad in law and invalid in view of the concession made by the Revenue before the Hon'ble Supreme Court in the case of Union of India vs. Rajeev Bansal [2024] 167 taxmann.com 70. The Appellant craves leave to add, alter, amend, vary and / or withdraw any or all the above grounds of appeal.

3.

The sole substantive ground challenges the validity of the notice issued under section 148 on the ground of limitation. Since the ground goes to the root of the reassessment jurisdiction and can be decided on the material already on record, we proceed to adjudicate it at the outset.

4.

The assessee is a co-operative housing society registered under the Maharashtra Co-operative Societies Act, 1960 as a tenant co-operative housing society. It owned a plot of land bearing CTS No.911, Survey No.1000, Entry No.263, forming part of Plot No.1002, situated at Dr. Rajendra Prasad Road, Mulund West, Mumbai 400080. The building standing thereon, known as Umiya Bhavan, was occupied by the members of the society.

5.

According to the statement of facts filed before the first appellate authority, the existing building had become old and dilapidated. The society and its members therefore decided to undertake redevelopment. A development agreement dated 09.12.2014 was executed with M/s. Ishaan Developers. Under the

3 ITA No.5442/M/2026 Umiya Bhuvan Co-Operative Housing Society Limited agreement, the developer was to demolish the existing building and construct a new building at its own cost. Twenty residential flats and one commercial premises in the new building were to be allotted, free of cost, to the existing members in lieu of their respective premises in the old building. The developer was also to pay rent or compensation for alternate accommodation and hardship compensation to the existing members. The case of the assessee was that the society itself was not entitled to receive any consideration under the development agreement.

6.

The assessee further stated that, for the purpose of registration, the stamp valuation authority valued the development agreement at Rs.5,32,65,500/- and charged stamp duty with reference to that value. Since the assessee considered that the agreement did not give rise to taxable income in its hands and it had no other substantial income, it did not file a return of income for the year under consideration.

7.

The assessment record states that information was received through the Annual Information Return filed by the Sub-Registrar, Kurla-2, to the effect that the assessee had entered into a transaction concerning immovable property during F.Y. 2014-15 for a stated consideration of Rs.5,32,65,500/-. Since no return of income had been filed, the Assessing Officer formed a prima facie view that capital gains arising from the transaction had escaped assessment.

8.

A notice under section 148A(b) was issued on 30.03.2022. The assessee did not respond. An order under section 148A(d) was thereafter passed on 14.04.2022, holding that it was a fit case for issuance of notice under section 148. On the same date, namely

4 ITA No.5442/M/2026 Umiya Bhuvan Co-Operative Housing Society Limited 14.04.2022, the Assessing Officer issued the notice under section 148. The assessment order records that the assessee neither filed a return in response to that notice nor complied with the subsequent statutory communications.

9.

During the reassessment proceedings, notices under section 142(1) were issued on 18.07.2023 and 18.08.2023. A no-response letter dated 12.09.2023 and a centralised no-response communication dated 18.09.2023 were also issued. Show-cause notices dated 05.10.2023 under section 144B(1)(ix) and dated 18.10.2023 proposing the variation were stated to have remained unanswered. The assessment was consequently completed ex parte under section 147 read with sections 144 and 144B on 29.01.2024.

10.

The Assessing Officer observed that the assessee had furnished neither a computation of capital gains nor the cost of acquisition. He accordingly treated the entire amount of Rs.5,32,65,500/- as short-term capital gains and assessed the total income at the same figure. The assessment order also recorded initiation of penalty proceedings under sections 271(1)(c) and 271F of the Act.

11.

The assessee filed its first appeal on 06.07.2024 against the assessment order received on 29.01.2024. There was a delay of 129 days. The assessee explained that it was unaware of the assessment proceedings and came to know of the assessment order only when the consequential penalty show-cause notice was served by affixture. The CIT(A), after considering the explanation, condoned the delay.

5 ITA No.5442/M/2026 Umiya Bhuvan Co-Operative Housing Society Limited 12. Before the CIT(A), the assessee challenged the validity of the notice under section 148, inter alia, on the ground that it was issued on 14.04.2022 beyond the period prescribed under section 149. The assessee also challenged the jurisdiction of the officer under section 151A and contested the addition on merits. It explained that the old building, including the registered office of the society, had already been demolished by the developer and that the e-mail address appearing on the portal belonged to an old consultant who was no longer in contact with the society. On this basis, it sought to explain the non-compliance during assessment.

13.

On the jurisdictional issue, the assessee relied upon Union of India v. Rajeev Bansal [2024] 167 taxmann.com 70 (SC), Deepak Steel and Power Ltd. v. CBDT [2025] 174 taxmann.com 144 (SC), ACIT v. Nehal Ashit Shah, SLP (Civil) Diary No.57209 of 2024, order dated 04.04.2025, and Cherian Nallathu Abraham Annamma v. ITO [2025] 179 taxmann.com 433 (Bom.)/[2025] 307 Taxman 367 (Bom.). The assessee contended that, for A.Y. 2015-16, a notice under section 148 issued after the prescribed date was required to be dropped.

14.

The CIT(A) rejected the jurisdictional ground. He observed that, under the erstwhile provisions, the six-year period for A.Y. 2015-16 expired on 31.03.2022. According to him, the Assessing Officer had initiated proceedings by issuing the notice under section 148A(b) on 30.03.2022, within that period, and the subsequent notice under section 148 dated 14.04.2022 was within the time permitted under the statutory framework. The CIT(A) distinguished Rajeev Bansal on the footing that, in the present case, the

6 ITA No.5442/M/2026 Umiya Bhuvan Co-Operative Housing Society Limited proceedings under section 148A(b) had commenced before the original limitation expired.

15.

On merits, however, the CIT(A) accepted that the assessment had been completed ex parte without the assessee effectively availing itself of the opportunities provided. Exercising the power stated to be available under the proviso to section 251(1)(a), the CIT(A) set aside the assessment for fresh examination of the capital- gains issue after affording adequate opportunity to the assessee. The appeal was treated as allowed for statistical purposes. The assessee is nevertheless aggrieved by the rejection of its jurisdictional challenge and is in appeal before us.

16.

Before us, the learned Authorised Representative (AR) submitted that the assessment year involved is A.Y. 2015-16 and that the impugned notice under section 148 was issued on 14.04.2022. He contended that the six-year period reckoned from the end of the relevant assessment year expired on 31.03.2022 and that the notice issued thereafter was barred by limitation and incapable of conferring jurisdiction upon the Assessing Officer.

17.

The learned AR relied principally upon the judgment of the Hon'ble jurisdictional High Court in Cherian Nallathu Abraham Annamma (supra). It was submitted that the said judgment concerned A.Y. 2015-16 and a notice under section 148 issued on 05.04.2022, and that the Hon'ble High Court, following the position recorded by the Hon'ble Supreme Court in Rajeev Bansal, quashed the notice and all consequential proceedings. The learned AR also relied upon the order of the co-ordinate Bench in Swami Vivekanand College v. ITO, ITA No.6628/Mum/2025, dated

7 ITA No.5442/M/2026 Umiya Bhuvan Co-Operative Housing Society Limited 05.01.2026, wherein a notice under section 148 issued on 13.04.2022 for A.Y. 2015-16 was held to be barred by limitation.

18.

The learned AR further submitted that the earlier issuance of a show-cause notice under section 148A(b) on 30.03.2022 did not answer the specific jurisdictional objection concerning the notice issued under section 148 on 14.04.2022. According to him, the notice under section 148A(b) is only a pre-notice opportunity, whereas jurisdiction to reopen is assumed through the notice under section 148. He therefore prayed that the notice under section 148, the reassessment proceedings and the consequential assessment order be quashed.

19.

The learned Departmental Representative supported the impugned appellate order. He submitted that the notice under section 148A(b) had been issued on 30.03.2022, before the expiry of the limitation period on 31.03.2022. According to him, the proceedings had thus commenced within time and the subsequent notice under section 148, issued after completion of the procedure under section 148A, was valid. He accordingly submitted that the jurisdictional ground deserved to be dismissed.

20.

We have considered the rival submissions and carefully perused the assessment order, the impugned appellate order, the ground of appeal and the judicial authorities placed before us. The narrow question is whether the notice issued under section 148 on 14.04.2022 for A.Y. 2015-16 is barred by limitation, notwithstanding that the preceding notice under section 148A(b) was issued on 30.03.2022.

8 ITA No.5442/M/2026 Umiya Bhuvan Co-Operative Housing Society Limited 21. The relevant assessment year is not in dispute. It is also not in dispute that the notice which invoked the reassessment jurisdiction under section 148 was issued on 14.04.2022. The first proviso to the substituted section 149 protects the bar of limitation that had already arisen under the provisions as they stood immediately before 01.04.2021. For A.Y. 2015-16, the six-year period under the erstwhile statutory regime expired on 31.03.2022. The Revenue's position concerning this assessment year was expressly recorded by the Hon'ble Supreme Court in Union of India v. Rajeev Bansal (supra). Paragraph 19(f), as reproduced by the Hon'ble Bombay High Court in Cherian Nallathu Abraham Annamma (supra), reads as under: "f. The Revenue concedes that for the assessment year 2015-16, all notices issued on or after 1 April 2021 will have to be dropped as they will not fall for completion during the period prescribed under TOLA;" 22. The aforesaid position was thereafter applied by the Hon'ble Supreme Court in Deepak Steel and Power Ltd. (supra). The relevant portion reproduced in paragraph 8 of Cherian Nallathu Abraham Annamma reads as under: "4. The learned counsel appearing for the revenue with his usual fairness invited the attention of this Court to a three judge bench decision of this Court in Union of India and Ors. v. Rajeev Bansal, reported in 2024 SCC OnLine SC 2693, more particularly, paragraph 19(f) which reads thus:- "19. (f) The Revenue concedes that for the assessment year 2015- 2016, all notices issued on or after April 1, 2021 will have to be dropped as they will not fall for completion during the period prescribed under the Taxation and other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020." 5. As the revenue made a concession in the aforesaid decision that is for the assessment year 2015-2016, all notices issued on or after 1st April, 2021 will have to be dropped as they would not fall for completion during the period prescribed under the taxation and other laws (Relaxation and Amendment of certain Provisions Act,

9 ITA No.5442/M/2026 Umiya Bhuvan Co-Operative Housing Society Limited 2020). Nothing further is required to be adjudicated in this matter as the notices so far as the present litigation is concerned is dated 25.6.2021." 23. The Hon'ble Supreme Court also dismissed the Revenue's special leave petition in ACIT v. Nehal Ashit Shah (supra). Paragraph 5 of that order, reproduced in paragraph 9 of Cherian Nallathu Abraham Annamma, reads as follows: "5. In this regard, reference could also be made to paragraph 19(e) and (f) in the case of Union of India v. Rajeev Bansal, Civil Appeal No. 8629 of 2024 on 03.10.2024 (2024 SCC ONLINE 754) under which the learned Additional Solicitor General for India has made a concession insofar as the assessment year 2015-16 is concerned." 24. The controversy is directly answered by the judgment of the Hon'ble jurisdictional High Court in Cherian Nallathu Abraham Annamma (supra). In that case, the assessment year was A.Y. 2015-16 and the order under section 148A(d) and notice under section 148 were both dated 05.04.2022. The relevant findings in paragraphs 6, 7 and 11 are reproduced verbatim below: "6. We have heard the learned counsel for the parties. It is not in dispute that the present petition relates to A.Y.2015-16. Further, it is also undisputed that the notice under Section 148 has been issued on 5th April 2022 which is at page 52 of the paperbook. Once these are the facts, paragraphs 19 (e) and (f) of the judgment of the Hon'ble Supreme Court in the case of Rajeev Bansal (supra) become relevant." "7. From the above it is clear, that the Department has conceded before the Hon'ble Supreme Court that all the notices issued under Section 148 after 1st April 2021 for A.Y.2015-16 have to be dropped. In the present case, the Notice under Section 148 is dated 5th April 2022 and therefore, has to be dropped." "11. In light of the above discussion, we find merit in the submissions as canvassed by the Petitioner. The Revenue has categorically made a concession that for A.Y.2015-16 they would drop all notices issued under Section 148 after 1st April 2021. Once this is the position, it is appropriate that the notice under Section 148 dated 5th April 2022, and the consequential assessment order, notice of demand, penalty notices/orders as well as the recovery notices be quashed and set aside. It is accordingly so ordered."

10 ITA No.5442/M/2026 Umiya Bhuvan Co-Operative Housing Society Limited 25. The same principle has been followed by the co-ordinate Bench in Swami Vivekanand College (supra). In that case, the notice under section 148 for A.Y. 2015-16 was issued on 13.04.2022. The relevant findings in paragraphs 7 and 8 read as under: "7. We have considered rival submissions and perused the materials available on record. The issue arising for consideration lies within a narrow compass. In the facts of the present appeal, admittedly, the assessment year involved is A.Y. 2015-16. The A.O. passed the order u/s. 148A(d) and issued notice u/s. 148 of the Act on 13.04.2022, which is beyond the period of six years from the end of the assessment year under dispute. The issue which arises for consideration is, whether the time limit prescribed under the old regime could have been extended by Taxation and Other Laws [Relaxation and Amendment of Certain Provisions] (TOLA). While deciding identical nature of dispute, in case of Union of India v. Rajeev Bansal (supra) Hon'ble Supreme Court, taking note of the concession made by ld. Additional Solicitor General had held that the provisions of TOLA would not be applicable upto A.Y. 2015-16. Hence, the limitation to issue notice u/s. 148 of the Act expires on 31.03.2022. Following the ratio laid down by Hon'ble Supreme Court as aforesaid, the Hon'ble Jurisdictional High Court in case of Cherian Nallathu Abraham Annamma vs. ITO (supra) has held that notice issued u/s. 148 of the Act after 31.03.2022 in respect of A.Y. 2015-16 is barred by limitation. The other decisions cited by ld. AR lay down the same principle. 8. In view of the aforesaid, we hold that the notice issued u/s. 148 of the Act in the present case is barred by limitation, hence, void-ab-initio. As a natural corollary, the consequential proceedings based on such notice including the impugned assessment order are equally void-ab-initio. Accordingly, we quash it. The appeal is allowed on this limited issue. The other grounds having been rendered academic are kept open." 26. The contention of the learned DR, and the reasoning adopted by the CIT(A), rest upon the circumstance that the notice under section 148A(b) had been issued on 30.03.2022. We are unable to accept that circumstance as sufficient to sustain the impugned notice under section 148. The proceeding under section 148A(b) is a pre-notice opportunity to the assessee. The jurisdictional notice challenged in the present appeal is the notice under section 148

11 ITA No.5442/M/2026 Umiya Bhuvan Co-Operative Housing Society Limited dated 14.04.2022. More importantly, the Hon'ble jurisdictional High Court has categorically held, in the context of A.Y. 2015-16 and a notice under section 148 issued in April 2022, that such notice has to be dropped. The judgment does not carve out the distinction adopted by the CIT(A) merely because a preceding notice under section 148A(b) was issued before 31.03.2022.

27.

The decision in Cherian Nallathu Abraham Annamma was specifically cited by the assessee before the CIT(A), as is evident from paragraph 1.6 of the written submissions reproduced in the impugned order. Nevertheless, while deciding the jurisdictional ground, the CIT(A) dealt with Rajeev Bansal but did not adjudicate the binding effect of the later judgment of the Hon'ble jurisdictional High Court directly covering a section 148 notice issued in April 2022 for the same assessment year. The impugned conclusion therefore cannot be sustained.

28.

We accordingly hold that the notice issued under section 148 on 14.04.2022 for A.Y. 2015-16 is barred by limitation and is void ab initio. As a necessary consequence, the reassessment proceedings founded upon that notice and the assessment order dated 29.01.2024 passed under section 147 read with sections 144 and 144B are also without jurisdiction and are hereby quashed. The direction of the CIT(A) setting aside the assessment for a fresh examination on merits cannot survive once the foundational notice itself is held invalid.

29.

On merits, the Assessing Officer had treated the entire stamp- duty value of Rs.5,32,65,500/- as short-term capital gains arising from the development agreement. Since the reassessment has been quashed on the jurisdictional ground, it is neither necessary nor

12 ITA No.5442/M/2026 Umiya Bhuvan Co-Operative Housing Society Limited appropriate to express any opinion on the correctness of that addition. The merits are rendered academic and are left open.

30.

The ground raised by the assessee is allowed.

31.

In the result, the appeal of the assessee is allowed.

Order pronounced in the open court on 22.09.2026. Sd/- Sd/- (AMIT SHUKLA) (MAKARAND VASANT MAHADEOKAR) JUDICIAL MEMBER ACCOUNTANT MEMBER

Mumbai, Dated 22.09.2026 Tarun Kushwaha Sr. P.S.

आदेश की �ितिलिप अ�ेिषत/Copy of the Order forwarded to : अपीलाथ� / The Appellant 1. ��थ� / The Respondent. 2. 3. संबंिधत आयकर आयु� / The CIT(A) 4. आयकर आयु�(अपील) / Concerned CIT िवभागीय �ितिनिध, आयकर अपीलीय अिधकरण, मु�ई/ DR, ITAT, 5. Mumbai गाड� फाईल / Guard file. 6.

आदेशानुसार/BY ORDER, स�ािपत �ित //True Copy// 1. उप/सहायक पंजीकार ( Asst. Registrar) आयकर अपीलीय अिधकरण, मु�ई / ITAT, Mumbai

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