BHAVARLAL MANGILAL JAT,SURAT vs. ITO, WARD 2(3)(1), SURAT, SURAT

ITA 809/SRT/2026Status: DisposedITAT Surat08 October 2026AY 2017-1811 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the issue of the validity of the notice under Section 148 being issued beyond the 'surviving time' was squarely covered by the Supreme Court's decision in Union of India Vs. Rajeev Bansal (supra). The Tribunal noted that the AO issued the notice under Section 148A(b) on 25.05.2022, giving the assessee time to reply until 08.06.2022. Thereafter, the AO had a 'surviving time' of 8 days to issue the new notice under Section 148, which would have expired on 16.06.2022. However, the AO issued the impugned notice dated 28.07.2022, which was beyond this period and therefore invalid. The Tribunal followed a co-ordinate bench's decision in ITA 479 & 480/SRT/2025, Kanchan Devi Agarwal Vs. ITO, which dealt with identical facts and reached the same conclusion. Consequently, the reassessment proceedings initiated under Section 147 and the assessment order dated 25.05.2023 were quashed and set aside as time-barred. The legal ground raised by the assessee was allowed. Since the assessment order was quashed, the grounds relating to the merits of the addition were rendered infructuous and kept open undecided. The appeal was allowed.

What were the facts?

The assessee, Bhavarlal Mangilal Jat, filed an appeal before the Income Tax Appellate Tribunal (ITAT), Surat Bench, challenging an order dated 09.04.2026 passed by the Commissioner of Income-Tax (Appeals)-National Faceless Appeal Centre, Delhi. This order upheld the assessment order dated 25.05.2023 passed by the Assessment Unit of the Income-tax Department under Section 147 read with Section 144B of the Income-tax Act, 1961, for Assessment Year 2017-18. The original return declared an income of Rs. 5,61,910/-. The Assessing Officer (AO) reopened the case under Section 147 based on information about cash deposits during demonetization. After issuing a fresh notice dated 28.07.2022 under Section 148 following directions from the Supreme Court in Ashish Agarwal, the AO made an addition of Rs. 1,20,70,000/- under Section 68, re-assessing the total income at Rs. 1,26,31,390/-. The CIT(A) granted no relief, leading to the present appeal.

What were the issues?

1. Whether the notice issued under Section 148 for reassessment under Section 147 was beyond the surviving period, rendering it invalid, as per the decision in Union of India Vs. Rajeev Bansal (2024) 469 ITR 46 (SC)? (Question of law) 2. Whether the addition of Rs. 1,20,70,000/- made under Section 68 on account of cash deposits during the demonetization period was justified? (Question of mixed law and fact) Assessee's Contentions: - For Issue 1: The initial notice under Section 148 was issued on 22.06.2021. Following the Supreme Court's decision in Ashish Agarwal, a fresh notice under Section 148 was required to be issued within the 'surviving time' available up to 30.06.2021. Given the timeline, the AO had only 8 days from the assessee's reply deadline (08.06.2022) to issue the new notice, which should have been by 16.06.2022. However, the AO issued the new notice on 28.07.2022, which is time-barred and invalid. Reliance was placed on Union of India Vs. Rajeev Bansal (supra). The assessment order is therefore invalid. (Relied on: Ashish Agarwal (supra), Rajeev Bansal (supra)) - For Issue 2: This ground was not pressed as the primary legal ground was allowed. Revenue's Contentions: - For Issue 1: Supported the AO's action and requested to uphold the order. Alternatively, requested a remand to the AO for examination/verification. - For Issue 2: Not recorded as the primary legal ground was allowed.

Which sections of the Income-tax Act were involved?

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

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, SURAT BENCH, SURAT

For Appellant: Shri Suresh K. Kabra, CA
For Respondent: Shri Shramdeep Sinha, CIT (DR)
Hearing: 01.10.2026Pronounced: 08.10.2026

Per B.M. Biyani, AM:

Feeling aggrieved by order of first appeal dated 09.04.2026 passed by learned Commissioner of Income-Tax (Appeals)-National Faceless Appeal Centre, Delhi [“CIT(A)”], which in turn arises out of assessment-order dated 25.05.2023 passed by learned Assessment Unit of Income-tax Department [“AO”] u/s 147 r.w.s. 144B of Income-tax Act, 1961 [“the Act”] for Assessment- Year [“AY”] 2017-18, the assessee has filed this appeal. Bhavarlal Mangilal Jat

2.

The background facts leading to present appeal are as under:

(i) The assessee-individual filed his return of income of AY 2017-18 declaring a total income of Rs

The order continues below.

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