PRAMILA SATYANARAYAN BHANDARI,SURAT vs. DCIT, CIRCLE-1(3), SURAT

ITA 21/SRT/2026Status: DisposedITAT Surat06 October 2026AY 2013-1411 pages
AI SummaryAllowed

What were the facts?

The assessee, Pramila Satyanarayan Bhandari, filed returns for Assessment Years (AYs) 2013-14 and 2014-15. The Assessing Officer (AO) re-opened the assessments under Section 147 read with Section 144B of the Income-tax Act, 1961, based on information regarding accommodation entries from a shell company. The AO issued notices under Section 148 dated March 31, 2021, but these were sent via email on April 1, 2021. The original assessments were processed under Section 143(1). The AO subsequently passed assessment orders dated March 25, 2022, determining total incomes of Rs. 40,28,590/- for AY 2013-14 and Rs. 13,63,544/- for AY 2014-15. The Commissioner of Income-tax (Appeals) upheld these orders. The assessee appealed to the Income Tax Appellate Tribunal (ITAT).

What did the Tribunal hold?

The Tribunal held that the reassessment proceedings are governed by the new provisions of Section 147/148A, which were substituted by the Finance Act, 2021, and became effective from April 1, 2021. The notices under Section 148, though dated March 31, 2021, were admittedly served on the assessee via email on April 1, 2021. As per the Supreme Court's decision in Union of India and others Vs. Shri Ashish Agrawal and others (444 ITR 1)(SC) and the jurisdictional High Court's decision in Saumil Avinash Baheti Vs. ITO, a notice issued on March 31, 2021, but served on April 1, 2021, should be treated as a notice under Section 148A(b) of the Act. Following this, the AO was required to pass an order under Section 148A(d) and then issue a fresh notice under Section 148. In the present case, the AO did not follow the procedure under Section 148A, nor did he pass an order under Section 148A(d). Therefore, the notice under Section 148 was neither within the time limit of the old provisions nor in accordance with the amended provisions. Consequently, the notice under Section 148 was quashed, and the assessment orders passed in pursuance thereof were set aside. Since the appeals were decided on a legal ground in favour of the assessee, other grounds were left undecided.

What were the issues?

1. Whether the reassessment proceedings initiated by issuing notices under Section 148 of the Income-tax Act, 1961, are valid, considering the notices dated March 31, 2021, were served via email on April 1, 2021, and the substituted provisions of Section 147/148A were in effect from April 1, 2021. Assessee's contentions: - The notices under Section 148, though dated March 31, 2021, were actually sent by email on April 1, 2021, after the substituted provisions of Section 147/148A came into force. - The mandatory procedure under Section 148A, including issuing a notice under Section 148A(b), considering the assessee's response, and passing an order under Section 148A(d), was not followed. - The reassessment is void ab initio as the AO failed to comply with the new scheme of assessment. - Relied on the decision in Ketan Natvarlal Shah Vs. Income-tax Officer and the Gujarat High Court's decision in Saumil Abhinash Baheti Vs. ITO. Revenue's contentions: - The notices bore the DIN and date of March 31, 2021, indicating they were generated and uploaded/delivered to the Income-tax Portal on that date.

Which sections of the Income-tax Act were involved?

Section 147,Section 144B,Section 148,Section 149,Section 148A,Section 148A(b),Section 148A(d),Section 68,Section 139,Section 143(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

For Appellant: Shri Rasesh Shah, CA
For Respondent: Shri Ashish Kumar, Sr. DR
Hearing: 13.07.2026Pronounced: 06.10.2026

Per B.M. Biyani, A.M.: The captioned two (2) appeals filed by assessee challenge two separate orders of first-appeal dated 18.11.2025 & 11.11.2025 passed by learned Commissioner of Income-tax (Appeals), National Faceless Appeal Centre, Delhi [“Ld. CIT(A)”], which in turn arise out of respective assessment-orders dated 25.03.2022 passed by learned National Faceless Assessment Centre, Delhi [“Ld. AO”] u/s 147 r.w.s. 144B of the Income-tax Act, 1961 [“the Act”] for Assessment-Years [“AYs”] 2013-14 & 2014-15. ITA Nos.21 & 22/SRT/2026 Pramila Satyanarayan Bhandari

2.

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