ITO 23 1 1 MUMBAI, MUMBAI vs. CORAL MARGARET REBEIRO, MUMBAI

INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCHES, MUMBAI BENCH: C BEFORE SHRI SAKTIJIT DEY, VICE PRESIDENT AND SHRI GIRISH AGRAWAL, ACCOUNTANT MEMBER ITA 8134/MUM/2025 (िनधा�रण वष�/Assessment Year: 2014-15) ITO- 23 1 1 Mumbai Coral Margaret Rebeiro through 508 Piramal Chambers, Legal heir Marilyn Rebeiro Laal Baug Parel, Mumbai-400012, Maharashtra Planet Godrej Apts., Vs. 3301 3401 Tower 1 30, K K Marg Mahalaxmi Mumbai-400011, Maharashtra अपीलाथ� Appellant ��थ� Respondent

Permanent Account Number of Assessee: ARGPR3008L

अपीलाथ� �ारा/Appellant represented by: Shri Ajay Soneji, Sr. DR ��थ� �ारा/Respondent represented by: Shri Mehul Shah, CA

सुनवाई की तारीख / Date of conclusion of hearing: 09.07.2026 घोषणा की तारीख / Date of pronouncement: 07.10.2026 O R D E R PER GIRISH AGRAWAL, ACCOUNTANT MEMBER: This appeal filed by Revenue is against the order of the ld. CIT (A), National Faceless Appeal Centre (NFAC), Delhi, Order No. ITBA/NFAC/S/250/2025-26/1081177587(1) dated 25.09.2025 passed against the assessmeny order by MUM-W-(199)(1), u/s. 147 r.w.s.144B of the Income-tax Act, 1961 (‘the Act’) dated 30.05.2023, for Assessment Year 2014-2015.

ITA No. 8134/Mum/2025 Coral Margaret Rebeiro (through legal heir, Marilyn Rebeiro) Assessment Year 2014-15 1) Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in allowing the assessees appeal in toto and in annulling the reassessment as well as deleting additions aggregating to Rs. 21,40,78,023/ made by the Assessing Officer on account of (i) loss of 69,94,453 and (ii) unexplained investment/unexplained money of Rs.70,83,570/. 2) Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in holding that the reassessment was time barred under the amended section 149(1)(b) on the footing that the alleged escapement was below Rs.50 lakh, completely ignoring that the AO, on the basis of specific Investigation wing material, had recorded satisfaction of escapement of Rs.1,40,78,023, well above the statutory threshold. 3) Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) exceeded appellate jurisdiction in effectively recomputing the alleged quantum of escapement at about Rs.46.20 lakh on the basis of the assessees ex post facto reconciliation and, on that basis, retrospectively invalidating the AOs jurisdiction, although section 149(1)(b) only requires credible information that the escaped income amounts to OR is likely to amount to Rs. 50 lakh OR more at the time of formation of belief. 4) Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in branding the order passed under section 148A(d) as nonspeaking and procedurally defective, ignoring that the show cause notice under section 148A(b) read with the 148A(d) order together clearly set out the Investigation wing findings, client code modification (CCM) data, trade wise particulars and the proposed additions, which constitute sufficient compliance with the statutory requirement at the prenotice stage. 5) Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) failed to appreciate that the case concerns a non filer who had not filed any return under section 139 for A.Y. 2014 15 and who put forward a loss claim only in a return filed in response to notice under section 148, and therefore erred in treating the reassessment as if it were a mere reopening of a concluded scrutiny rather than applying the special regime and deeming provisions governing non filers under section 147. 6) Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in deleting the addition of 69,94,453 by treating the loss on NSEL/commodity trades routed through M/s Anand Rathi Commodities Ltd, as genuine, despite clear material showing that trades originally entered in the ghost client code of another entity were systematically shifted at the end of the day to the assessees code through CCM after crystallization of results, and despite the assessees

ITA No. 8134/Mum/2025 Coral Margaret Rebeiro (through legal heir, Marilyn Rebeiro) Assessment Year 2014-15 failure to produce primary evidence such as contract notes, warehouse receipts, margin/settlement statements and complete banking trail. 7) Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) misdirected himself in law by treating the above CCM linked loss as a normal NSEL business loss OR bad debt and by relying on generic broker confirmations and caselaw relating to NSEL defaults and TRF Ltd., without first recording any finding that the underlying trades in the assessees case were genuine on the touchstone of human probability and settled jurisprudence that accommodation entry / CCM generated losses cannot be allowed merely on the strength of self serving broker documentation. 8) Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) further erred in placing undue reliance on acceptance of the assessees claims in earlier assessment years and on earlier confirmations from the broker, and in using such past acceptance to dilute the findings for the year under appeal, overlooking that there is no res judicata in income-tax proceedings and that A.Y. 201415 stands on a different footing in view of specific Investigation wing inputs and substantially higher CCM exposure detected in this year. 9) Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in deleting the addition of Rs.70,83,570 made on account of unexplained investment/unexplained money by merely accepting the assessees plea that the AO had allegedly relied upon the wrong ledger and that the peak was explained by opening balances, without insisting on contemporaneous bank statements, capital/loan confirmations OR other cogent evidence of source and without undertaking any independent. verification OR calling for a remand report. 10) Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in characterising the AOs action as resting on mere suspicion and in faulting the AO for alleged lack of independent inquiry, although the AO had confronted the assessee with specific CCM and Investigation wing data through detailed notices under sections 142(1) and 148A(b), granted adequate opportunity, and drew adverse inference only after the assessee failed to discharge the primary burden of proof in respect of the alleged loss and trading exposure. 11) Without prejudice to the above, the Ld. CIT(A) ought, at the very least, to have sustained the additions on merits OR restored the matter for further verification instead of granting blanket relief both on jurisdiction and merits on an incomplete, one-sided record, the impugned order is therefore perverse, contrary to the evidence on record and unsustainable in law, and the assessment order deserves to be upheld.

ITA No. 8134/Mum/2025 Coral Margaret Rebeiro (through legal heir, Marilyn Rebeiro) Assessment Year 2014-15 3. At the outset, it is noted that assessee, Coral Margaret Rebeiro, passed away in 2015 and the present appeal is represented through her legal heir, Marilyn Rebeiro. Assessee has duly submitted revised Form 36 placing it on record with the updated details of the legal heir.

4.1. Aggregate additions made by Ld. Assessing Officer stood at ₹1,40,78,023/-. On appeal before ld. CIT(A), relief was allowed in toto to the assessee, holding reassessment as time-barred under section 149(1)(b) and deleting additions on merits as well. Aggrieved, Revenue is in appeal before the Tribunal.

ITA No. 8134/Mum/2025 Coral Margaret Rebeiro (through legal heir, Marilyn Rebeiro) Assessment Year 2014-15 consideration in the present reassessment, that is, amount of ₹37,68,300, ₹3,06,900, and ₹5,44,890, aggregating to ₹46,20,390, which is less than the threshold of ₹50 lakhs. All the other figures which are stated in the notice issued by the ld. AO were duplicate transactions. It is observed from the record that the transactions for amount of ₹3,06,090 and ₹5,44,890 are repeated multiple times bearing the same source PAN. Thus, the figure of ₹69,59,175 noted in the reasons to believe recorded by the ld. AO is superfluous. Assessee has evidently demonstrated that only three unique CCM transactions aggregating to Rs. 46.20 lakh were involved and that the Investigation Wing data inflated the figure by duplicating “buy” entries while ignoring corresponding “sale” legs. On reconciliation by the assessee, the quantum of transactions is below Rs. 50 lakhs. Ld. AO has simply relied on the Investigation Wing’s figure of Rs. 1.90 crore without reconciliation, ignoring the reconciliation request by the assessee and the broker confirmation. Ld. AO’s failure to deal with the assessee’s reconciliation renders the very foundation of jurisdiction infirm as it does not meet the threshold criteria of income escaping assessment Rs. 50 lakhs or more.

6.1. Notice under section 148 was issued on 29.04.2021, which falls beyond the normal three-year limitation period specified in section 149(1)(a) for AY 2014-15, i.e. the year under consideration before us in appeal. Under section 149(1)(b), extended period beyond three years can be invoked only if income chargeable to tax which has escaped assessment amounts to or is likely to amount to ₹50 lakh or more. Since actual alleged escapement of income after removing duplicate entries is ₹46,20,390/- which is less than ₹50,00,000/-, mandatory jurisdictional condition under section 149(1)(b) is not met. Consequently,

ITA No. 8134/Mum/2025 Coral Margaret Rebeiro (through legal heir, Marilyn Rebeiro) Assessment Year 2014-15 reassessment proceedings initiated beyond three years are vitiated as barred by limitation and void ab initio.

6.2. We are in agreement with ld. CIT(A) who placed reliance on the decision of Hon’ble Delhi High Court in the case of Ganesh Dass Khanna vs. ITO in Writ Petition (C) No. 11527/2022 & CM Application No. 34097/2022, dated 10.11.2023 which decided identical issue in favour of the assessee by considering amongst others, decisions of Hon’ble Supreme Court including the case of Union of India and Ors. vs. Ashish Agarwal, dated 04.05.2022. Relevant extract of the said decision of Hon’ble Delhi High Court reproduced below for ease of reference: “27. A careful perusal of Clause (b) of Section 149 would show that one of the conditions for triggering the extended period, which goes up to ten (10) years in cases where three (03) years have elapsed, is that income chargeable to tax which has escaped assessment amounts to, or is likely to amount to Rs. 50 lakhs or more for the AY in issue. 28. Therefore, after the coming into force of FA 2021, in cases where, for the relevant AY, the alleged escaped income was less than Rs.50 lakhs, notice under Section 148 could only be issued for commencement of reassessment proceedings within the limitation period provided in Clause (a) of Section 149(1) of the amended 1961 Act.”

6.3. Considering the above stated facts and circumstances of the case, as discussed above, as well as the relevant provisions of the Act and judicial precedent, we do not find any reason to interfere with the meritorious finding arrived at by the ld. CIT(A) on the jurisdictional issue. We thus, uphold the finding of the ld. CIT(A) that the impugned reassessment proceedings and the reassessment order passed thereupon are barred by limitation and hence void ab initio. In terms of these findings on the jurisdictional issue, the grounds raised on the merits of the case, as dealt with by the Learned CIT(A) which he held in

ITA No. 8134/Mum/2025 Coral Margaret Rebeiro (through legal heir, Marilyn Rebeiro) Assessment Year 2014-15 favour of the assessee, are rendered academic and hence not adjudicated upon.

Order is pronounced in the open court on 07 October, 2026

Sd/- Sd/- (Saktijit Dey) (Girish Agrawal) Vice President Accountant Member Dated: 07 October, 2026 MP, Sr.P.S. Copy to : 1 The Appellant 2 The Respondent 3 DR, ITAT, Mumbai 4 Guard File 5 CIT BY ORDER, ABHINAV ANANT Digitally signed by ABHINAV ANANT GAVANDE GAVANDE Date: 2026.10.15 15:37:31 +05'30' (Dy./Asstt.Registrar) ITAT, Mumbai