PRANAV PRAKASHCHANDRA KANSARA,AHMEDABAD vs. ITO WARD 5 3 2 AHMEDABAD, AAYAKAR BHAVAN VEJALPUR

ITA 911/AHD/2026Status: DisposedITAT Chandigarh24 September 2026AY 2013-146 pages
AI SummaryAllowed

What were the facts?

The assessee, Pranav Prakashchandra Kansara, filed his return for AY 2013-14 declaring Rs. 3,38,388. The Assessing Officer (AO) received information that the assessee was a director in M/s. Aanal Aluminium Pvt Ltd. and had received a loan of Rs. 30,80,796 from the company, which was liable to be treated as deemed dividend under Section 2(22)(e). The AO reopened the assessment under Section 147 by issuing a notice under Section 148 on 31.03.2021. The assessment was completed on 27.03.2022 under Section 147 r.w.s. 144B, making an addition of Rs. 30,80,796. The CIT(A) dismissed the assessee's appeal. The assessee is now in appeal before the ITAT.

What did the Tribunal hold?

The Tribunal held that the notice under Section 148 of the Act, though dated 31.03.2021, was actually issued on 01.04.2021. While this date was within the extended time limit under TOLA, the Supreme Court in Union of India Vs. Ashish Agarwal had ruled that notices issued under Section 148 between 01.04.2021 and 30.06.2021 were deemed to be notices under Section 148A(b). The AO was required to supply materials, obtain the assessee's reply, pass an order under Section 148A(d), and then issue a fresh notice under Section 148 within the surviving period. In this case, the AO had a surviving period of 89 days from 01.04.2021 but failed to take these mandatory steps. Therefore, the notice under Section 148 was invalid, and the consequent assessment order passed under Section 147 r.w.s. 144B was quashed. The first ground taken by the assessee was allowed, and all other grounds became infructuous.

What were the issues?

1. Whether the AO erred in law by proceeding to complete the assessment without proper service of notice under Section 148, considering the limitation period and the actual date of issuance. - Assessee's contention: The notice under Section 148, dated 31.03.2021, was actually issued on 01.04.2021, making it beyond the six-year limitation period. The AO failed to follow the procedure laid down in Union of India Vs. Ashish Agarwal, specifically by not issuing a subsequent notice under Section 148A(b) or passing an order under Section 148A(d) within the surviving period. - Revenue's contention: The notice under Section 148 was issued on 31.03.2021 and was within the extended time limit as per the Taxation and Other Law Ordinance (TOLA), 2020. 2. Whether the CIT(A) erred in law and on facts by confirming the addition of Rs. 30,80,796 made by the AO under Section 2(22)(e) of the Income Tax Act. - Assessee's contention: (Not explicitly detailed for this specific ground, but implied by the overall appeal against the addition). - Revenue's contention: (Not explicitly detailed for this specific ground, but implied by the AO's action and CIT(A)'s order).

Which sections of the Income-tax Act were involved?

Section 147,Section 144B,Section 148,Section 148A(b),Section 148A(d),Section 2(22)(e),Section 143(1),Section 143(2)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “SMC” BENCH, AHMEDABAD

Before: SHRI SANJAY GARG & SHRI NARENDRA PRASAD SINHA

For Appellant: Shri Satish Solanki, AR
For Respondent: Shri Ashish K Pandey, SR-DR
Hearing: 28.07.2026Pronounced: 24.09.2026

PER NARENDRA PRASAD SINHA, ACCOUNTANT MEMBER:

This appeal is filed by the Assessee against the order of National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as “CIT(A)”] dated 05.01.2026 for the Assessment Year (A.Y.) 2013-14 in the proceeding u/s 147 r.w.s. 144B of the Income Tax Act [hereinafter referred as “the Act”].

2.

The brief facts of the case are that the assessee had filed his return of income for A.Y. 2013-14 on 28.01.2014 declaring total income of Rs.3,38,388/-, which was processed u/s. 143(1) of the Act. Subsequently, the AO had received an information that the assessee is a Director in M/s. Pranav Prakashchandra Kansara Vs. ITO, A

The order continues below.

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