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

ITA 1468/SRT/2025Status: DisposedITAT Rajkot29 September 2026AY 2015-167 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the issue is no longer res integra. Following the Supreme Court's decision in Rajeev Bansal, which recorded the Revenue's concession that all notices issued on or after April 1, 2021, for AY 2015-16 are liable to be dropped, and the Gujarat High Court's decisions in Mayurkumar Babubhai Patel and Sorathia Mahesh Veljibhai HUF, which followed the Supreme Court's ruling and held that notices issued after April 1, 2021, for AY 2015-16 are barred by limitation, the Tribunal found that the present case involved a notice u/s 148 dated 25.06.2021 and a consequential notice dated 27.07.2022. Therefore, the Tribunal held that the impugned reassessment proceedings are barred by limitation and without jurisdiction. The reassessment order was quashed as bad in law. Consequently, Ground No. 1, relating to the condonation of delay, was allowed. As the reassessment order was quashed, the other grounds concerning the merits of the addition were not adjudicated and were kept open. The operative direction was to quash the reassessment order.

What were the facts?

The assessee, Valjibhai Harjibhai Vaghasiya, is appealing against an order of the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi, for Assessment Year (AY) 2015-16. The Assessing Officer (AO) initiated reassessment proceedings, alleging the assessee had traded in penny stocks and claimed Long Term Capital Gains (LTCG) exemption of Rs. 4,92,39,060/- on a trade value of Rs. 5,02,40,543/-. The AO treated this as accommodation entries for converting unexplained cash. 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 AO erred in treating the notice u/s. 148 issued on 25.06.2021 as a show cause notice u/s. 148A(b) without obtaining prior approval from the Pr. CCIT or PDGIT, as required by the Act? (Question of law) 3. Whether the AO erred in issuing notice u/s. 148 on 27.07.2022 after the expiry of 6 years, thus being beyond the limitation period prescribed by Section 149 of the Act? (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 law) 5. Whether the AO erred in issuing notice u/s. 148A(b) when it was required to be 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) and Gujarat High Court decisions in Mayur Kumar Babubhai Patel and Sorathia Mahesh Veljibhai HUF, which held that notices issued on or after April 1, 2021, for AY 2015-16 are invalid as they fall outside the period prescribed under the Taxation and other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020, and are barred by limitation. The initial notice was dated 25.06.2021, and the subsequent notice was dated 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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