PIYUSH MAHESHWARI,KOTA, RAJASTHAN vs. ASSESSMENT UNIT, INCOME TAX DEPARTMENT, KOTA, RAJASTHAN

ITA 1529/JPR/2025Status: DisposedITAT Jaipur08 October 2026AY 2019-209 pages
AI SummaryAllowed

What were the facts?

The assessee, Piyush Maheshwari, filed his return for AY 2019-20 on 29.07.2019, declaring income of Rs 63,47,300 after claiming a deduction of Rs 2,50,000 under section 80GGC for a contribution to Rashtriya Samajwadi Party (Secular) (RSP(S)). A search on 07.09.2022 on a group of political parties, including RSP(S), led to information flagged on the Insight Portal on 27.03.2023. The Assessing Officer (AO) issued a show cause notice under section 148A(b) on 30.03.2023, followed by an order under section 148A(d) and a notice under section 148 on 12.04.2023. The AO disallowed the Rs 2,50,000 deduction, holding the donation to be bogus, and determined total income at Rs 65,97,300. The CIT(A) upheld the reopening and disallowance. The assessee appealed to the ITAT.

What did the Tribunal hold?

The Tribunal held that the plea of limitation goes to the root of the AO's jurisdiction and arises from undisputed facts on record, thus admitting it for the first time. The reassessment notice under section 148 dated 12.04.2023 was issued after the expiry of the limitation period under section 149(1) of the Act. The source of information was a search under section 132 on a third party (RSP(S)) after 01.04.2021, which falls under clause (c) of the first proviso to section 148A. In such cases, the section 148A procedure is not contemplated, and therefore, the time allowed for the show cause notice cannot be excluded for computing limitation. Following Amit Pahuja (supra), the Tribunal quashed the notice under section 148 and the consequential reassessment order dated 23.01.2025 as being without jurisdiction. Grounds no. 2, 3, and 4 were allowed. Consequently, grounds relating to the merits of the disallowance (grounds 5 and 6) and other legal contentions (ground 8) became academic and were left open. The ratio decidendi is that a procedure excluded by statute cannot be used to extend limitation, and participation in such proceedings does not confer jurisdiction.

What were the issues?

1. Whether the reassessment proceedings initiated under section 147 read with section 148A and 148 of the Income Tax Act, 1961, for AY 2019-20 are barred by limitation, considering the notice under section 148 was issued on 12.04.2023. Assessee's contentions: The reassessment is barred by limitation as the three-year period under section 149(1)(a) expired on 31.03.2023, and the extended period under section 149(1)(b) is not applicable for an escaped income of Rs 2,50,000. The information originated from a third-party search, which is excluded from the section 148A procedure by its first proviso. Using the section 148A procedure to extend the limitation period is impermissible. Reliance was placed on Amit Pahuja v. DCIT. Without prejudice, the approval under section 151 was by the wrong authority, and notice was not issued as per section 151A. On merits, no specific material against the assessee was produced. Revenue's contentions: The plea of limitation is raised for the first time before the Tribunal. The information was flagged under the Risk Management Strategy, constituting information under Explanation 1 to section 148. The first proviso to section 148A only relieves the AO from following the procedure, not from jurisdiction if the procedure is followed. The assessee participated in 148A proceedings and filed a return under section 148 without objection, suffering no prejudice. Reliance was placed on Pavan Anil Bakeri v. DCIT, Rajen Jayantilal Merchant v. Assessment Unit, and Mahesh Upendra Majithia v. DCIT.

Which sections of the Income-tax Act were involved?

Section 147,Section 144B,Section 148,Section 148A,Section 149,Section 151,Section 151A,Section 80GGC,Section 132,Section 234B,Section 234C

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘B’ BENCH, JAIPUR

Before: Shri T.R. Senthil Kumar & Shri Prakash

PER : PRAKASH, ACCOUNTANT MEMBER:-

1.

This appeal by the Assessee is directed against the order of the learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi [hereinafter referred to as “the learned CIT(A)”] dated 31.08.2025 arising out of the assessment order dated 23.01.2025 passed by the Assessing Officer (hereinafter referred to as “the AO”) under section 147 read with section 144B of the Income Tax Act, 1961 (hereinafter referred to as “the Act”) for the assessment year 2019-20. ITA No. 1529-JPR-2025 Piyush Maheshwari

2.

The grounds of appeal raised by the Assessee before us in the memorandum of appeal i

The order continues below.

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