VANITA ANIL MEHTA,MUMBAI vs. ITO 33(1)(1), MUMBAI

ITA 7836/MUM/2026Status: DisposedITAT Mumbai05 October 2026AY 2018-20199 pages
AI SummaryAllowed

What were the facts?

The assessee, Vanita Anil Mehta, filed an appeal against the order of the CIT(A) NFAC, Delhi, for Assessment Year 2018-19. The appeal arose from an assessment order under Section 147 read with Section 144B of the Income Tax Act, 1961, dated 14/02/2024. The assessee had claimed exemption of Rs. 29,44,000/- under Section 10(38) on account of long-term capital gains from the sale of shares of M/S Aditya Consumer Marketing Ltd. The Assessing Officer (AO) reopened the case under Section 147, based on information regarding bogus long-term capital gains from a searched person, Mr. Naresh Jain. The exemption under Section 10(38) was rejected, and the amount was added under Section 68. The CIT(A) upheld the disallowance and addition.

What did the Tribunal hold?

The Tribunal held that the primary issue was the validity of the notice issued under Section 148. The notice was issued under the new regime for AY 2018-19, with approval from the Pr. CIT under Section 151(i). However, the notice was issued on 20-04-2022, which was after 30.06.2021. According to the Supreme Court judgment in Union of India vs. Rajeev Bansal, for notices issued after 30.06.2021, where the period of three years from the end of the relevant assessment year has expired, the approval should have been obtained from the Pr. CCIT/CCIT under Section 151(ii), not the Pr. CIT under Section 151(i). The jurisdictional High Court in Alag Property Construction (P) Ltd. also held that in the absence of approval from the specified authority under Section 151(ii), the AO lacked jurisdiction. Therefore, the Tribunal quashed the order passed under Section 148A(d) and the consequential notice issued under Section 148, both dated 20-04-2022, as being bad in law. Consequently, the assessment order dated 14-02-2024 was also quashed. As the legal ground regarding the validity of the notice was allowed, other legal grounds and the merits of the case were rendered academic and left undecided. The appeal of the assessee was allowed on this legal ground.

What were the issues?

1. Whether the learned CIT(A) NFAC erred in confirming additions of Rs. 29,44,000/- on account of non-genuine Long Term Capital Gain/Loss claimed under Section 10(38) on the sale of shares of M/S Aditya Consumer Marketing Ltd (ACML), without appreciating the submissions and evidence provided. 2. Whether the learned CIT(A) erred in confirming the exemption claimed under Section 10(38) without considering documentary evidence, and if the CIT(A)'s finding was based on assumptions and presumptions. 3. Whether the learned CIT(A) erred in confirming the addition of Rs. 29,44,000/- as unexplained cash credit under Section 68, taxable at the rate applied under Section 115BBE, when the sale of ACML shares was genuine. 4. Whether the learned CIT(A) failed to discuss the validity of the provision of Section 68, given that the appellant is an individual not maintaining books of accounts. 5. Whether the learned CIT(A) erred in concluding that the appellant introduced her own unaccounted money via share sale proceeds into her bank account without evidence of money passing to Shri Naresh Jain and his associates, and without establishing a cash trail. 6. Whether the AO erred in initiating penalty proceedings under Section 271AAC(1). 7. Whether the AO erred in charging interest under Sections 234B/C/D. 8. Whether the learned CIT(A) erred in confirming that the notice issued under Section 148 is valid, specifically concerning: a) The sanction of notice under Section 151, where approval for notice under Section 149A(d) and Section 148 was obtained from the PCIT instead of the CCIT, as the notice was issued beyond 3 years. b) A violation of Section 149(b) as the income escaped assessment was below Rs. 50 Lakhs (Rs. 29,44,000/-), rendering the notice under Section 148 invalid. Assessee's Contentions: The assessee argued that the notice under Section 148 was issued beyond 3 years, and the approval was obtained from the PCIT instead of the Pr. CCIT/CCIT as required by Section 151(ii) for notices issued beyond 3 years. Reliance was placed on the Bombay High Court judgment in Alag Property Construction Private Limited v. ACIT. The assessee also argued that the CIT(A) confirmed additions based on assumptions and without considering documentary evidence. The assessee contended that the sale of ACML shares was genuine and that there was no evidence of unaccounted money being introduced or a cash trail to Naresh Jain and his associates. Revenue's Contentions: The Revenue's representative (Ld. DR) could not distinguish the High Court judgment but relied on the orders of the Ld. CIT(A) and AO.

Which sections of the Income-tax Act were involved?

Section 10(38),Section 147,Section 144B,Section 68,Section 115BBE,Section 271AAC(1),Section 234B,Section 234C,Section 234D,Section 148,Section 148A,Section 149A,Section 151,Section 151(ii),Section 151(i),Section 149(b)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, MUMBAI BENCH “F”, MUMBAI

Before: SHRI PAWAN SINGH & SHRI RAKESH KUMAR LODHA

For Appellant: Shri Gaurav Sarda, CA
For Respondent: Shri Vikas Chandra, Sr
Hearing: 29.09.2026Pronounced: 05.10.2026

Per : Rakesh Kumar Lodha, Accountant Member:

The present appeal has been preferred by the Assessee against the order dated 20/05/2026, passed by the Learned Commissioner of Income Tax Appeals [Ld.CIT(A)]/National

1 VANITA ANIL MEHTA AY 2018-2019

Faceless Appeal Center (NFAC), Delhi, under Section 250 for the Assessment Year 2018-19, arising out of the assessment order under Section 147 r.w.s. 144B of the Income Tax Act (the Act), 1961, dated 14/02/2024. 2. The Assessee has raised the following grounds of appeal:

1.

On facts and in the circumstances of case and in law the learned CIT (A) NFAC h

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 10(38)

All 3,100 judgments and leading authorities on Section 10(38) →

Recent GST High Court judgments

Search GST case law →