DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE- 1(1), KOLKATA, KOLKATA vs. NARESH JALAN, KOLKATA

ITA 1724/KOL/2026Status: DisposedITAT Kolkata06 October 2026AY 2019-2055 pages
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What were the facts?

The appeals by the Revenue and cross-objections by the assessee, Naresh Jalan, pertain to Assessment Years (AYs) 2016-17 and 2019-20. The Revenue's appeals challenge the Commissioner of Income Tax (Appeals) orders dated 15.10.2025 and 07.10.2025, which quashed assessments. The assessee's cross-objections raise the issue of the validity of notices issued under Section 148 of the Income Tax Act, 1961, and the consequent reassessment proceedings being barred by limitation. For AY 2016-17, the reassessment was initiated following a search on finance brokers, revealing alleged unaccounted cash loans of ₹39.65 crore to the assessee. The Assessing Officer (AO) added ₹11,85,00,000/- as unaccounted income under Section 69D, along with interest and brokerage. For AY 2019-20, the issue concerns the validity of the approval for issuing the Section 148 notice.

What did the Tribunal hold?

For AY 2016-17, the Tribunal held that the notice under Section 148 was issued on 11.04.2023, while the time available to the AO to issue the notice was until 01.04.2023, as per the sixth proviso to Section 149 of the Act. The AO had only 7 days from the assessee's reply (filed on 24.03.2023) to issue the notice. Since the notice was issued beyond this period, the Tribunal found it to be barred by limitation. Consequently, the reassessment proceedings under Section 147 were quashed. The Tribunal upheld the order of the Ld. CIT(A) on this issue, dismissing the Revenue's appeal on this ground. For AY 2019-20, the Tribunal found that the reassessment proceedings were initiated after three years from the end of the relevant assessment year. The approval for issuing the notice under Section 148 was granted by the Principal Commissioner of Income-tax, Central-1, Kolkata. However, as per Section 149(1)(b)(iii) and the decisions of the Hon'ble Delhi High Court in Bhagwan Sahai Sharma and Principal Commissioner of Income-tax vs. Wudstay Travels (P.) Ltd., the specified authority for such approval should have been the Principal Chief Commissioner or equivalent. Therefore, the sanction granted was invalid, rendering the notice under Section 148 and the consequent assessment void. The cross-objection for AY 2019-20 was allowed, and the assessment was quashed.

What were the issues?

1. Whether the notice issued under Section 148 of the Income Tax Act, 1961, for AY 2016-17, along with the order under Section 148A(d), is barred by limitation as per Section 149 of the Act, rendering the reassessment proceedings under Section 147 void? Assessee's contention: The notice under Section 148 was issued on 11.04.2023, which is beyond the statutory time limit prescribed by the sixth proviso to Section 149 of the Act. The assessee relies on the decision in Union of India vs. Rajeev Bansal. Revenue's contention: The notice issued under Section 148 and the assessment framed are within the time limits provided in Section 149 of the Act. 2. Whether the Principal Commissioner of Income-tax, Central-1, Kolkata, was the specified authority for according approval under Section 151 of the Act to issue the notice under Section 148 for AY 2019-20? Assessee's contention: The approval for issuing the Section 148 notice was granted by the Principal Commissioner of Income-tax, Central-1, Kolkata, who is not the specified authority as per Section 149(1)(b)(iii) of the Act, especially when the notice was issued beyond three years from the end of the relevant assessment year. The assessee relies on Bhagwan Sahai Sharma vs. DCIT and Principal Commissioner of Income-tax vs. Wudstay Travels (P.) Ltd. Revenue's contention: Not recorded in the judgment.

Which sections of the Income-tax Act were involved?

Section 148,Section 148A,Section 149,Section 147,Section 69D,Section 69C,Section 151,Section 132(4),Section 143(1),Section 143(3),Section 142(1)

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Heard together (4 matters)

CO No. 52/KOL/2026
ITA No. 1723/KOL/2026
CO No. 53/KOL/2026
ITA No. 1724/KOL/2026

Read from the judgment's own cause title. This page is filed under one of them.

IN THE INCOME TAX APPELLATE TRIBUNAL “C” BENCH, KOLKATA BEFORE SHRI RAJESH KUMAR, AM AND SHRIPRADIP KUMAR CHOUBEY, JM

ITA Nos.1723& 1724/KOL/2026 (Assessment Year: 2016-17& 2019-20) Dy. Commissioner of Income Tax, Central Circle 1(1), Kolkata Naresh Jalan Office of the Deputy Flat 52, The 42, 42B, Commissioner of Income Tax Chowringhee Road, Middleton Central Circle 1(1), Kolkata, Vs. Row, S.O. Kolkata-700071, R. No. 305, 3rd Floor, West Bengal Aaykar Bhawan Poorva 110 Shanti Pally, Kolkata- 700107, West Bengal (Appellant) (Respondent) PAN No. ACUPJ1252F CO No. 52/KOL/2026 (Arising in ITA No. 1723/KOL/2026 for A.Y. 2016-17) CO No. 53/KOL/2026 (Arising in ITA No. 1724/KOL/2026 for A.Y. 2016-17)

Dy. Commissioner of Income Tax, Central Circle 1(1), Kolkata Naresh Jalan Office of the Deputy Flat 52, The 42, 42B, Commissioner of Income Tax Chowringhee Road, Middleton Central Circle 1(1), Kolkata, Vs. Row, S.O. Kolkata-700071, R. No. 305, 3rd Floor, West Bengal Aaykar Bhawan Poorva 110 Shanti Pally, Kolkata- 700107, West Bengal (Appellant) (Respondent) Assessee by : Shri S.K. Tulsiyan& Ms. Puja Somani, ARs Revenue by : Shri Vikas Singh, DR Date of hearing: 24.08.2026 Date of pronouncem

The order continues below.

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