SANJAY VIJAYRAJ PARMAR,MUMBAI vs. ASST. COMMISSIONER OF INCOME TAX, CIRCLE-8(1)(1), MUMBAI

ITA 2093/MUM/2026Status: DisposedITAT Mumbai09 October 2026AY 2015-166 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the reassessment order dated 27.12.2019 passed under Section 143(3) read with Section 147 is legally unsustainable and liable to be quashed due to the non-issuance of the mandatory notice under Section 143(2). The Tribunal relied on Supreme Court and jurisdictional High Court judgments, stating that Section 292BB cures defects in service of an existing notice, not its complete non-issuance. The Revenue's failure to produce evidence of the Section 143(2) notice was noted. Independently on merits, the Tribunal deleted the addition of Rs. 2,10,30,300/- made under Section 68. The Assessee had discharged the initial onus by providing documentary evidence for share acquisition, holding, and sale through recognized platforms with consideration received via banking channels. The Revenue failed to demonstrate any infirmity in these documents or establish a specific nexus between the Assessee and alleged manipulation. The addition was considered unsustainable, being founded on suspicion and uncorroborated allegations. The grounds challenging reopening under Section 147/148 and sanction under Section 151 were rendered academic.

What were the facts?

The Assessee, Sanjay Vijayraj Parmar, filed a return for AY 2015-16 declaring income of Rs. 32,56,930/-, including LTCG of Rs. 1,74,90,745/- from selling shares of M/s Tilak Ventures Ltd. The Assessing Officer (AO) reopened the assessment under Section 147 based on information from the Investigation Wing regarding alleged share manipulation. The Assessee filed a return in response to the Section 148 notice. The AO treated the sale consideration of Rs. 2,10,30,300/- as an unexplained cash credit under Section 68 and assessed total income at Rs. 2,42,87,230/-. The Commissioner (Appeals) upheld both the reassessment proceedings and the addition. The Assessee appealed to the ITAT.

What were the issues?

1. Whether the reassessment order passed under Section 143(3) read with Section 147 of the Income Tax Act, 1961, is legally sustainable in the absence of a mandatory notice under Section 143(2), despite the Assessee's participation in reassessment proceedings and the Revenue's failure to produce evidence of issuance of such notice. Assessee's contention: The reassessment is invalid due to the non-issuance of the mandatory Section 143(2) notice, and Section 292BB does not cure a complete non-issuance. Revenue's contention: The Ld. DR supported the impugned order. 2. Whether the addition of Rs. 2,10,30,300/- as an unexplained cash credit under Section 68 is justified, considering the Assessee's documentary evidence for share acquisition, holding, and sale, and the Revenue's failure to establish a nexus with alleged manipulation or operators. Assessee's contention: The Assessee discharged the onus by providing evidence of genuine transactions, and the Revenue failed to prove otherwise or provide cross-examination of third parties. Revenue's contention: The Ld. DR supported the impugned order.

Which sections of the Income-tax Act were involved?

Section 10(38),Section 143(2),Section 143(3),Section 147,Section 148,Section 151,Section 250,Section 292BB,Section 68,Section 133(6)

AI-generated summary — verify with the full judgment below

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

Before: SHRI NARENDER KUMAR CHOUDHRY & SHRI PRABHASH SHANKAR

For Appellant: CA Ld. AR, Shri Rajgopal K Parthasarthy, SR
Pronounced: 09.10.2026

Per : Narender Kumar Choudhry, Judicial Member

This appeal has been preferred by the Assessee against the order dated 20.02.2026, impugned herein, passed by the Ld. Commissioner of Income Tax (Appeals)-51, Mumbai (in short 'Ld. Commissioner') u/s 250 of the Income Tax Act, 1961 (in short 'the Act') for the A.Y. 2015-16. 2. In the instant case, the Assessee filed his return of income on 31.08.2015, declaring total income of Rs.32,56,930/- and claiming exemption u/s 10(38)

The order continues below.

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