ALKA AJIT SHAH ,MUMBAI vs. INCOME TAX OFFICER WARD 20(1)(1), MUMBAI

ITA 1915/MUM/2026Status: DisposedITAT Mumbai01 October 2026AY 2011-1211 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the notice under Section 148 and the consequent assessment order were without jurisdiction and quashed them. The Tribunal reasoned that the alleged escapement of income was founded on information and statements emanating from the search of the Rajesh Lifespaces Group. The jurisdictional High Court's decision in Sejal Jewellary & Anr. v. Union of India & Ors. was applied, which held that provisions of sections 153A and 153C apply when the foundation is incriminating material from a search, carving out an exception to normal action under Section 147. The Tribunal found no independent material forming a different foundation for the Section 148 notice. Therefore, the Assessing Officer could not bypass the procedure prescribed for persons other than the searched person by issuing a Section 148 notice. Consequently, grounds concerning cross-examination, Section 69B, and the merits of the addition did not require adjudication.

What were the facts?

The assessee, Alka Ajit Shah, is appealing an order dated 12.12.2025 by the Additional/Joint Commissioner of Income Tax (Appeals)-3, Bengaluru, which upheld an assessment order dated 24.12.2018 passed by the Assessing Officer under sections 143(3) and 147 of the Income-tax Act, 1961, for assessment year 2011-12. The dispute concerns an addition of Rs.16,20,000/-. The assessee jointly purchased a flat for Rs.98,55,000/-. Following a search on Rajesh Lifespaces Group on 10.03.2016, the Assessing Officer received information about alleged cash receipts on flat sales, including a Rs.16,20,000/- cash component for the assessee's flat. This led to a notice under section 148 dated 31.03.2018. The assessee's objections were rejected, and reassessment resulted in the addition.

What were the issues?

1. Whether the notice issued under Section 148 of the Act is bad in law due to non-fulfillment of mandatory conditions of Section 147, which are jurisdictional requirements? The assessee argued that the notice is bad in law as the basis emanates from search proceedings on a third party, suggesting Section 153C would be appropriate. The assessee also contended the notice is based on suspicion and lacks a "reason to believe." Furthermore, the assessee argued the addition is based on a third-party statement without tangible material, independent corroboration, or an opportunity for cross-examination, and that Section 69B was wrongly invoked. The revenue contended that information received following the search and flat-wise details provided a nexus for the Assessing Officer's belief regarding escapement of income, and since the return was processed under section 143(1), a change of opinion objection was not applicable. The revenue also relied on the builder group's statements and Settlement Commission proceedings.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 147,Section 148,Section 153C,Section 69B,Section 143(1),Section 153A

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, MUMBAI BENCHES, MUMBAI

Before: SHRI NARENDER KUMAR CHOUDHRY & SHRI MAKARAND VASANT MAHADEOKAR

For Appellant: Shri Tanzil Padvekar, Ld. A.R
For Respondent: Ms. Jayshree Thakur, Ld. Sr. D.R
Hearing: 22.07.2026Pronounced: 01.10.2026

PER: MAKARAND VASANT MAHADEOKAR, AM This appeal by the assessee is directed against the order dated 12.12.2025 passed by the Additional/Joint Commissioner of Income Tax (Appeals)-3, Bengaluru [hereinafter referred to as "the CIT(A)"] , under section 250 of the Income-tax Act, 1961 [hereinafter referred to as "the Act"]. The first appeal arose from the assessment order dated 24.12.2018 passed under section 143(3) read with section 147 of the Act for assessment year 2011-12. The assessee challenges the validity of the reassessment and the addition of Rs.16,20,000/- sustained by the learned CIT(A).

2.

The grounds

The order continues below.

Read the full judgment

A free account opens 10 full judgments a month. Re-reading one you have already opened does not count again.

Create a free accountSign in

See plans and prices

The summary, the parties, the sections and the citations above are open to everyone and always will be. Only the text of the order and the PDF are metered.

More judgments on Section 147

All 49,210 judgments and leading authorities on Section 147 →

Recent GST High Court judgments

Search GST case law →