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

ITA 1724/KOL/2026Status: DisposedITAT Hyderabad06 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 orders of the CIT(A) which quashed assessments on legal and merit grounds. The assessee's cross-objections primarily raise the legal issue of whether the notices issued under Section 148 of the Income Tax Act, 1961, and consequent reassessment proceedings were 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, after the assessee filed a return declaring ₹1,46,19,380/-. For AY 2019-20, the issue concerns the validity of the approval granted 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, considering the assessee's reply on 24.03.2023, was until 31.03.2023, with a further 7 days to pass the order under Section 148A(d) by 01.04.2023 as per the sixth proviso to Section 149. Since the notice was issued beyond this period, the Tribunal found it to be barred by limitation. The assessee's cross-objection on this ground was allowed, and the reassessment proceedings were quashed. For AY 2019-20, the Tribunal found that the reassessment proceedings were initiated after three years from the end of the relevant assessment year, requiring approval from a specified authority under Section 151. The approval was granted by the Principal Commissioner of Income-tax, Central-1, Kolkata, which the Tribunal held was not the specified authority as per Section 149(1)(b)(iii) of the Act. Citing decisions of the Delhi High Court, the Tribunal concluded that the sanction was invalid, and consequently, the notice under Section 148 and the assessment framed were quashed. The assessee's cross-objection was allowed.

What were the issues?

1. Whether, for AY 2016-17, the notice issued under Section 148 of the Income Tax Act, 1961, on 11.04.2023, and the consequent reassessment proceedings under Section 147, are barred by limitation as per Section 149 of the Act and its provisos? Assessee's contention: The notice under Section 148 was issued beyond the statutory time limit provided in Section 149 of the Act and its proviso, rendering the notice and assessment invalid. Reliance was placed on the Supreme Court decision in Union of India vs. Rajeev Bansal. Revenue's contention: The notice under Section 148 and the assessment framed were within the time limit provided in Section 149 of the Act. 2. Whether, for AY 2019-20, 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 of the Act? Assessee's contention: The approval for issuing the notice under Section 148 was granted by an authority not specified under Section 151 of the Act, making the notice and subsequent assessment invalid. Reliance was placed on decisions of the Delhi High Court in 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,Section 132(4),Section 143(1),Section 143(2),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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