SHRIDHAR MURLIDHAR DWIVEDI,KALYAN - DOMBIVALI vs. WARD 3(2), KALYAN, KALYAN - DOMBIVALI

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ITA 4045/MUM/2026Status: DisposedITAT Mumbai07 October 2026AY 2015-169 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the notice issued under Section 148 on 07.04.2022 for AY 2015-16 is barred by limitation. The Tribunal agreed with the assessee's contention that the first proviso to Section 149(1) is applicable. For AY 2015-16, the time limit under the erstwhile law (Section 149(1)(b)) for issuing a notice was six years from the end of the relevant assessment year, which expired on 31.03.2022. Since the notice was issued on 07.04.2022, it was beyond this time limit. The Tribunal further reasoned that the fifth proviso to Section 149(1), which deals with exclusion periods, is only applicable if the notice itself survives the test of being issued within the prescribed time limits under Section 149(1)(a) or 149(1)(b) of the new regime. As the notice in this case was found to be barred by limitation under the first proviso, the question of applying the exclusion period did not arise. Consequently, the reassessment proceedings based on the invalid notice were set aside, and the additions made by the AO were liable to be deleted. The appeal filed by the assessee was allowed.

What were the facts?

The assessee, Shridhar Murlidhar Dwivedi, filed an appeal against the order of the CIT(A) for Assessment Year (AY) 2015-16. The Assessing Officer (AO) issued a notice under Section 148 on 07.04.2022, alleging escapement of income amounting to Rs. 74,24,159/-. This followed a show cause notice under Section 148A(b) issued on 22.03.2022, to which the assessee did not respond. The AO passed an order under Section 148A(d) on 06.04.2022. The assessee subsequently filed a return declaring Rs. 9,77,140/-. The AO made additions under Sections 69A and 69C, determining the assessed income at Rs. 29,64,570/-. The CIT(A) dismissed the assessee's appeal, upholding the AO's findings. The assessee is now before the ITAT.

What were the issues?

1. Whether the notice of reopening issued by the AO under Section 148 on 07.04.2022 for AY 2015-16 is barred by limitation, considering the first proviso to Section 149(1) of the Income Tax Act, 1961, as it was issued beyond 31.03.2022? Assessee's Contention: The assessee argued that the notice under Section 148, dated 07.04.2022, for AY 2015-16 is barred by limitation. It was submitted that the first proviso to Section 149(1) stipulates that for assessment years beginning on or before 01.04.2021, a notice under Section 148 could not have been issued if it was beyond the time limit specified under Section 153A(1)(c) as they stood before the Finance Act 2021. Under the erstwhile provisions of Section 149, the six-year period from the end of the assessment year expired on 31.03.2022, making the notice issued on 07.04.2022 time-barred. Reliance was placed on the judgment of the Hon'ble Supreme Court in Union of India v. Rajeev Bansal and coordinate bench decisions in Babu Hasan Shaikh vs. ITO, Integrated Code Strategies Asia PT Limited vs. DCIT, and Oveen Naveen Lewis vs. ITO. Revenue's Contention: The Revenue relied on the order passed by the Assessing Officer. The learned DR argued that the time allowed to the assessee to respond to the notice under Section 148A(b) (from 24.03.2022 to 08.03.2022) should be excluded as per the fifth proviso to Section 149(1).

Which sections of the Income-tax Act were involved?

Section 148,Section 148A,Section 149(1),Section 149(1)(b),Section 69A,Section 69C

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “E” BENCH; MUMBAI

Before: SMT. BEENA PILLAI & SHRI VIKRAM SINGH YADAVShridhar Murlidhar Dwivedi

Hearing: 14.07.2026Pronounced: 07.10.2026

IN THE INCOME TAX APPELLATE TRIBUNAL “E” BENCH; MUMBAI BEFORE SMT. BEENA PILLAI, JUDICIAL MEMBER AND SHRI VIKRAM SINGH YADAV, ACCOUNTANT MEMBER ITA No. 4045/Mum/2026 (Assessment Year: 2015-16)

Shridhar Murlidhar Dwivedi ITO WARD 3(2), Kalyan C-9 Jayparas CHS., Dindayal 2nd Floor, Rani Mansion, Cross Road, Thakurwadi, Nr. vs. Murbad Road, Kalyan West, Gokul Hospital, Dombivli West, Kalyan-Dombivali, Kalyan-Dombivali, Maharashtra, 421301 Maharashtra, 421202

PAN: AHQPD2127E (Appellant) (Respondent) For Assessee : Shri Suchek Anchaliya For Revenue : Shri Dheeraj Singh Baghel, Sr.DR Date of Hearing : 14.07.2026 Date of Pronouncement : 07.10.2026 O R D E R PER VIKRAM SINGH YADAV, A.M :

This is an appeal filed by the Assessee against the order of the Learned Commissioner of Income Tax (Appeals)-National Faceless Appeal Centre (NFAC), Delhi [‘Ld.CIT(A)’], dated 25.02.2026, pertaining to Assessment Year (AY) 2015-16, wherein the Assessee has taken the following grounds of appeal:

“1. On the facts and circumstances of the case and in law, the Ld. CIT(A), erred in confirming the order of the Ld. AO, without appreciating the fact that the notice of reopening issued by the Ld. AO u/s 148 of the Act, dated 07.04.2022 for the year under consideration i.e. AY 2015-16 was issued beyond the prescribed limitation period of six years from the end of the relevant assessment year, i.e., after 31.03.2022 and therefore, it is barred by limitation in view of first proviso to section 149(1) of the Act.

ITA No. 4045/Mum/2026; A.Y. 2015-16 Shridhar Murlidhar Dwivedi

2.

Without prejudice to ground no.01, on the facts and circumstances of the case and in law, the Ld. AO erred in issuing notice under 148 of the dated 07.04.2022, without appreciating the fact that the notice of reopening issued by the Ld. AO u/s 148 of the Act, dated 07.04.2022 for the year under consideration i.e. AY 2015-16 is barred by limitation, in view of Para 49 of the judgment of the Hon’ble Supreme Court in the case of Union of India v. Rajeev Bansal [2024] 167 taxmann.com 70 (SC).” 2. Briefly, the facts of the case are that basis information that the assessee has purchased certain immovable property, has made certain investments, and there is sale of equity shares, besides the receipt of salary income, the Assessing officer observed that there is escapement of income to the tune of Rs. 74,24,159/- and a show cause under section 148A(b) was issued on 22.03.2022, wherein the assessee was asked to show cause as to why notice under section 148 should not be issued and the assessee was required to furnish response on or before 29.03.2022. However, there was no response from the assessee and thereafter, the order under section 148A(d) dated 06.04.2022 was passed with prior approval of the competent authority and notice under section 148 was issued on 07.04.2022.

3.

In response, the assessee filed his return of income declaring total income of Rs. 9,77,140/- on 13.09.2023. Thereafter, notices under section 143(2) and 142(1) were issued and taking into consideration the information/documentation submitted by the assessee, the assessment proceedings were completed, wherein the Assessing Officer brought to tax unexplained money under section 69A amounting to Rs. 3,30,000/-, unexplained investment under section 69A amounting to Rs. 13,33,500/- and unexplained expenditure disallowed under section 69C amounting to Rs. 3,23,930/- and assessed income was determined at Rs. 29,64,570/-.

4.

The assessee thereafter carried the matter in appeal before the ld. CIT(A), wherein the appeal of the assessee was dismissed and findings of

ITA No. 4045/Mum/2026; A.Y. 2015-16 Shridhar Murlidhar Dwivedi the Assessing Officer were sustained and against the said order, the assessee is in appeal before us.

5.

During the course of hearing, the ld. AR submitted that the assessee in its grounds of appeal has challenged the notice under section 148 dated 07.04.2022 issued for the impugned A.Y. 2015-16 as being barred by limitation. In this regard, our reference was drawn to the first proviso to section 149 of the Act and it was submitted that it has been provided therein that no notice under section 148 shall be issued at any time in a case for the relevant assessment year beginning on or before the 01.04.2021 if a notice under section 148 could not have been issued at that time on account of being beyond the time limit specified under provisions of 153A(1)(c) as they stood immediately before the commencement of the Finance Act 2021. It was submitted that under the erstwhile provisions of section 149, the 6 years period from the end of the assessment year expired on 31.03.2022 and therefore, the matter is clearly covered by the first proviso to section 149(1) of the Act and in view of that, the notice so issued is barred by limitation.

6.

The ld. AR has also taken us through the findings of the Coordinate Bench, wherein similar matter has been considered by the Coordinate Benches in case of Babu Hasan Shaikh vs. ITO, ITA No. 926/Mum/2025, dated 28.04.2025, wherein in para 6 to 11, the Coordinate Bench has held as under:

“6. We heard the parties and perused the material on record. In order to examine the whether in assessee's case the notice under section 148 is time barred or not, we need to first look at the relevant provisions of the Act and the legal position as per judicial precedence. Section 149(1) of the Act contain the provisions with regard to the time limit for issue of notice under section 148 of the Act and the same reads as under –

149 - Time limit for notice. (1) No notice under section 148 shall be issued for the relevant assessment year,— 3

ITA No. 4045/Mum/2026; A.Y. 2015-16 Shridhar Murlidhar Dwivedi (a) if three years have elapsed from the end of the relevant assessment year, unless the case falls under clause (b); (b) if three years, but not more than ten years, have elapsed from the end of the relevant assessment year unless the Assessing Officer has in his possession books of account or other documents or evidence which reveal that the income chargeable to tax, represented in the form of— (i) an asset; (ii) expenditure in respect of a transaction or in relation to an event or occasion; or (iii) an entry or entries in the books of account, which has escaped assessment amounts to or is likely to amount to fifty lakh rupees or more: Provided that no notice under section 148 shall be issued at any time in a case for the relevant assessment year beginning on or before 1st day of April, 2021, if a notice under section 148 or section 153A or section 153C could not have been issued at that time on account of being beyond the time limit specified under the provisions of clause (b) of sub-section (1) of this section or section 153A or section 153C, as the case may be], as they stood immediately before the commencement of the Finance Act, 2021 Provided further that the provisions of this sub-section shall not apply in a case, where a notice under section 153A, or section 153C read with section 153A, is required to be issued in relation to a search initiated under section 132 or books of account, other documents or any assets requisitioned under section 132A, on or before the 31st day of March, 2021: Provided also that for cases referred to in clauses (i), (iii) and (iv) of Explanation 2 to section 148, where,— (a) a search is initiated under section 132; or (b) a search under section 132 for which the last of authorisations is executed; or (c) requisition is made under section 132A, after the 15th day of March of any financial year and the period for issue of notice under section 148 expires on the 31st day of March of such financial year, a period of fifteen days shall be excluded for the purpose of computing the period of limitation as per this section and the notice issued under section 148 in such case shall be deemed to have been issued on the 31st day of March of such financial year: Provided also that where the information as referred to in Explanation 1 to section 148 emanates from a statement recorded or documents impounded

ITA No. 4045/Mum/2026; A.Y. 2015-16 Shridhar Murlidhar Dwivedi under section 131 or section 133A, as the case may be, on or before the 31st day of March of a financial year, in consequence of,— (a) a search under section 132 which is initiated; or (b) a search under section 132 for which the last of authorisations is executed; or (c) a requisition made under section 132A, after the 15th day of March of such financial year, a period of fifteen days shall be excluded for the purpose of computing the period of limitation as per this section and the notice issued under clause (b) of section 148A in such case shall be deemed to have been issued on the 31st day of March of such financial year Provided also that for the purposes of computing the period of limitation as per this section, the time or extended time allowed to the assessee, as per show-cause notice issued under clause (b) of section 148A or the period during which the proceeding under section 148A is stayed by an order or injunction of any court, shall be excluded: Provided also that where immediately after the exclusion of the period referred to in the immediately preceding proviso, the period of limitation available to the Assessing Officer for passing an order under clause (d) of section 148A 30[does not exceed seven days], such remaining period shall be extended to seven days and the period of limitation under this sub-section shall be deemed to be extended accordingly. Explanation.—For the purposes of clause (b) of this sub-section, "asset" shall include immovable property, being land or building or both, shares and securities, loans and advances, deposits in bank account. (1A) & (2) *****

7.

The time limits for issue of notice under section 148 of the Act were amended as above w.e.f. 01.04.2021. Prior to the amendment the relevant provisions of section 149(1) of the Act read as under – 149 - Time limit for notice. (1) No notice under section 148 shall be issued for the relevant assessment year,— (a) if four years have elapsed from the end of the relevant assessment year, unless the case falls under clause (b) or clause (c); (b) if four years, but not more than six years, have elapsed from the end of the relevant assessment year unless the income chargeable to tax which has escaped assessment amounts to or is likely to amount to one lakh rupees or more for that year;

ITA No. 4045/Mum/2026; A.Y. 2015-16 Shridhar Murlidhar Dwivedi (c) **** Explanation.—In determining income chargeable to tax which has escaped assessment for the purposes of this sub-section, the provisions of Explanation 2 of section 147 shall apply as they apply for the purposes of that section.

(2) & (3) ****

8.

The time limit for issue of notice under section 148 of the Act was revised with effect from 01.04.2021 and the legislature in order to make the amendment prospective introduced the first proviso to section 149(1). The intent of the first proviso is that the revenue does not get the extended time of ten years where the notices were not issued within a period of six years for AYs prior to 2021-22. The said legislative intent has been clearly explained by the Hon'ble Supreme Court in the case of UOI vs Rajiv Bansal [2024] 167 taxmann.com 70 (SC). The relevant of observations of the Apex Court is extracted below – 46. The ingredients of the proviso could be broken down for analysis as follows: (i) no notice under section 148 of the new regime can be issued at any time for an assessment year beginning on or before 1 April 2021; (ii) if it is barred at the time when the notice is sought to be issued because of the "time limits specified under the provisions of" 149(1)(b) of the old regime. Thus, a notice could be issued under section 148 of the new regime for assessment year 2021-2022 and before only if the time limit for issuance of such notice continued to exist under section 149(1)(b) of the old regime. 47. **** 48. Notices have to be judged according to the law existing on the date the notice is issued. Section 149 of the old regime primarily provided two time limits: (i) four years for all situations and (ii) beyond four years and within six years if the income chargeable to tax which escaped assessment amounted to Rupees one lakh or more. After 1 April 2021, the time limits prescribed under the new regime came into force. The ordinary time limit of four years was reduced to three years. Therefore, in all situations, reassessment notices could be issued under the new regime if not more than three years have elapsed from the end of the relevant assessment year. For example, for assessment year 2018-2019, the four year period would have expired on 31 March 2023 under the old regime. However, if the notice is issued after 1 April 2021, the three year time limit prescribed under the new regime will be applicable. The three year time limit will expire on 31 March 2022. 49. The first proviso to Section 149(1)(b) requires the determination of whether the time limit prescribed under section 149(1)(b) of the old regime continues to exist for the assessment year 2021-2022 and before. Resultantly, a notice under Section 148 of the new regime cannot be issued if the period of six years from the end of the relevant assessment 6

ITA No. 4045/Mum/2026; A.Y. 2015-16 Shridhar Murlidhar Dwivedi year has expired at the time of issuance of the notice. This also ensures that the new time limit of ten years prescribed under section 149(1)(b) of the new regime applies prospectively. For example, for the assessment year 2012-2013, the ten year period would have expired on 31 March 2023, while the six year period expired on 31 March 2019. Without the proviso to Section 149(1)(b) of the new regime, the Revenue could have had the power to reopen assessments for the year 2012-2013 if the escaped assessment amounted to Rupees fifty lakhs or more. The proviso limits the retrospective operation of Section 149(1)(b) to protect the interests of the assesses. 50. to 52. *** 53. The position of law which can be derived based on the above discussion may be summarized thus: (i) Section 149(1) of the new regime is not prospective. It also applies to past assessment years; (ii) The time limit of four years is now reduced to three years for all situations. The Revenue can issue notices under section 148 of the new regime only if three years or less have elapsed from the end of the relevant assessment year; (iii) the proviso to Section 149(1)(b) of the new regime stipulates that the Revenue can issue reassessment notices for past assessment years only if the time limit survives according to Section 149(1)(b) of the old regime, that is, six years from the end of the relevant assessment year; and (iv) all notices issued invoking the time limit under section 149(1)(b) of the old regime will have to be dropped if the income chargeable to tax which has escaped assessment is less than Rupees fifty lakhs. 9. From the perusal of the legislative intent of the first proviso to section 149(1) as laid down by the Hon'ble Supreme Court it is clear that Revenue can not issue notice under section 148 for assessment years prior to AY 2021-22 if six years from the end of the relevant assessment year has expired on the date of issue of such notice. In the light of the above legal position we will now examine the facts in assessee's case. The year under consideration here is AY 2015-16 and therefore the time limit as per the first proviso is applicable. Therefore the time limit as per the old regime, for issue of notice for AY 2015-16 under section 148 of the Act six years from the end of the relevant assessment year i.e. 31.03.2022. Accordingly the notice dated 18.04.2022 issued in assessee's case beyond the time limit and not valid. 10. The argument of the ld DR is that the time allowed to the assessee to respond to the notice issued under section 148A(b) i.e. from 24.03.2022 to 08.03.2022 should be excluded as per the fifth proviso to section 149(1). We are of the considered view, for the purpose applying the exclusion period, the notice should first survive the test of being issued either under section 149(1)(a) or 149(1)(b) under the new regime. In the given case the notice under section 148 of the Act for AY 2015-16 does not survive the test by virtue of the first proviso and therefore the question of applying the fifth proviso for calculating the time limit does not arise.

ITA No. 4045/Mum/2026; A.Y. 2015-16 Shridhar Murlidhar Dwivedi 11. In view of these discussions and considering the provisions of the Act r.w. the ratio laid down by the Hon'ble Supreme Court we hold that the notice issued under section 148 of the Act dated 18.04.2022 is barred by limitation. Accordingly the reassessment proceedings based on the invalid notice does not survive and the additions made therein are liable to be deleted.”

7.

Further, reliance was placed on the decision of Coordinate Benches in case of Integrated Code Strategies Asia PT Limited vs. DCIT, ITA No. 2608/Mum/2024, dated 14.01.2025, and Oveen Naveen Lewis vs. ITO, ITA No. 775/Mum/2025, dated 31.07.2025 wherein similar proposition has been laid down.

8.

The ld. DR has been heard, who has relied on the order passed by the Assessing Officer.

9.

We have heard the rival contentions and perused the relevant material available on record. In the instant case, the assessment year under consideration is assessment year 2015-16 and the notice under section 148 was issued on 07.04.2022, under the amended law effective from 01-04-2021, basis reasons that the income to the tune of Rs. 74,24,159/- has escaped assessment. In terms of first proviso to section 149(1), the time limit of six years from the end of the relevant assessment year 2017-18 under the erstwhile law (section 149)(1)(b)) needs to be seen given the escaped income exceeding Rs 1,00,000/- and which expires on 31.03.2022 and therefore, as on the date of issuance of notice on 07.04.2022, the said time limit under the erstwhile law had expired and the notice so issued by the Assessing officer is therefore barred in terms of first proviso to section 149(1) of the Act.

10.

We therefore agree with the contentions advanced by the ld AR that the notice so issued u/s 148 is barred by limitation and the decisions relied supra also supports the case of the assessee. The notice so issued u/s 148 and consequent reassessment order so passed by the AO is therefore set-aside.

ITA No. 4045/Mum/2026; A.Y. 2015-16 Shridhar Murlidhar Dwivedi

11.

In the result, the appeal filed by the assessee is allowed.

Order pronounced in the Open Court on 07.10.2026

Sd/- Sd/- BEENA PILLAI VIKRAM SINGH YADAV (JUDICIAL MEMBER) (ACCOUNTANT MEMBER)

Mumbai, Dated: 07.10.2026 Karishma J. Pawar, SR. PS

Copy to : 1) The Appellant 2) The Respondent 3) The CIT concerned 4) The D.R, ITAT, Mumbai 5) Guard file

By Order ABHINAV ANANT Digitally signed by ABHINAV ANANT GAVANDE GAVANDE Date: 2026.10.15 18:21:06 +05'30' Dy./Asst. Registrar I.T.A.T, Mumbai

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