LATE ADIL MOHAMMED KAPADI THROUGH LEGAL HEIR ALMAS ADIL KAPADI,MUMBAI vs. INCOME TAX OFFICER WARD 34(1)(1), MUMBAI, KAUTILYA BHAVAN, MUMBAI

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ITA 3533/MUM/2026Status: DisposedITAT Mumbai05 October 2026AY 2015-1615 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal first addressed the ground challenging the validity of reassessment proceedings due to limitation. The Assessing Officer issued the notice under Section 148 on 19.04.2022 for AY 2015-16. The Tribunal noted that the erstwhile six-year limitation period under Section 149(1)(b) for AY 2015-16 expired on 31.03.2022. The substituted Section 149(1) with its first proviso prohibited issuing a notice under Section 148 after the expiry of the old limitation period, even if the case fell under the new ten-year period for income exceeding ₹50 lakhs. The Tribunal found that no notice under Section 148A(b) was issued before 31.03.2022, and therefore, no exclusion period under the fifth proviso to Section 149(1) could be applied. Relying on Supreme Court and Bombay High Court judgments, the Tribunal held that the notice dated 19.04.2022 was barred by limitation. Consequently, the reassessment proceedings based on this invalid notice were quashed. As the reassessment proceedings were quashed on jurisdictional grounds, the grounds relating to the additions under Section 69A became academic and did not require separate adjudication.

What were the facts?

The assessee, Late Adil Mohammed Kapadi, did not file a return for Assessment Year (AY) 2015-16. The Assessing Officer (AO) reopened the assessment based on information about the purchase of a flat for ₹65,00,000/- during FY 2014-15. The total investment, including stamp duty and registration, was considered ₹68,55,000/-. The assessee claimed the funds were interest-free financial assistance from his mother and brother. The AO taxed the entire amount protectively under Section 69A read with Section 115BBE. The assessee appealed to the CIT(A), where his legal heir pursued the case after his demise. The legal heir argued the funds were a gift (hiba) from the mother, who raised them from selling her property, and the brother paid stamp duty, registration, and TDS. The CIT(A) upheld the additions, finding the explanation regarding loan vs. gift inconsistent and lacking documentary evidence. The assessee then appealed to the ITAT, also raising a ground on the validity of reassessment proceedings.

What were the issues?

1. Whether the Learned CIT(A) erred in confirming the additions made by the Learned Assessing Officer under Section 69A of the Income-tax Act, 1961, without properly appreciating the facts and fulfilling the mandatory conditions for invoking the provision? 2. Whether the Learned Assessing Officer erred in issuing the impugned notice under Section 148 of the Act, dated 19.04.2022, which is barred by limitation for AY 2015-16? Assessee's Contentions: - The additions under Section 69A are bad in law as mandatory conditions were not fulfilled and the source of investment was explained with documentary evidence including bank statements. - The notice under Section 148 was issued beyond the prescribed time limit, which expired on 30/03/2022, making it bad in law and without jurisdiction. Revenue's Contentions: - The judgment records no specific contentions for the revenue on the merits of the additions or the limitation issue.

Which sections of the Income-tax Act were involved?

Section 69A,Section 115BBE,Section 148,Section 149

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, MUMBAI

Before: SHRI OM PRAKASH KANT & SHRI SIDDHARTHA NAUTIYAL

For Respondent: Shri Surendra Mohan ( SR. DR.)

आदेश / ORDER

PER SHRI SIDDHARTHA NAUTIYAL, JUDICIAL MEMBER:

This appeal is filed by the Assessee against the order of Ld. CIT(A) NFAC, DELHI vide DIN: ITBA/NFAC/S/250/2025-26/1085484547(1) dated 20-Mar-2026 for the Assessment Year 2015-16. The Assessee has raised the following grounds of appeal:

1.

On the facts and in the circumstances of the case and in law, the Learned CIT(A) erred in confirming the additions made by the Learned Assessing Officer without properly appreciating the facts of the case. The impugned addition made under Section 69A of the Act is bad in law and liable to be quashed and set aside.

2.

On the facts and in the circumstances of the case and in law, the Learned CIT(A) erred in confirming the addition under Section 69A of the Act without appreciating that the mandatory conditions for invoking the provisions of Section 69A were not fulfilled. Accordingly, the impugned addition of 68,55,000/- made under Section 69A of the Act is bad in law and liable to be deleted.

3.

On the facts and in the circumstances of the case and in law, the Learned CIT(A) erred in dismissing the appeal filed by the Appellant without appreciating that the source of investment in the immovable property was duly explained by the Appellant by way of documentary evidence including bank statements and other supporting material. The impugned addition made by the Learned Assessing Officer is therefore unjustified and liable to be deleted.

Challenge to the validity of reassessment proceedings

4.

On the facts and in the circumstances of the case and in law, the Learned Assessing Officer erred in issuing the impugned notice under Section 148 of the Act, which is barred by limitation. The time limit for issuance of notice under Section 148 of the Act for A.Y. 2015-16 expired on 30/03/2022. However, the impugned notice dated 19/04/2022 has been issued beyond the prescribed time limit and is therefore bad in law, without jurisdiction, and liable to be quashed and set aside.

5.

The Appellant craves leave to add, amend, alter, vary, withdraw or substitute any of the foregoing grounds of appeal at or before the time of hearing, so as to enable the Hon'ble Tribunal to decide the matter in accordance with law.

The brief facts of the case are that the assessee, Late Shri Adil 2. Mohammed Kapadi, represented through his legal heir Mrs. Almas Adil Kapadi, had not filed his return of income for A.Y. 2015-16. The Assessing Officer received information that during F.Y. 2014-15 the assessee, jointly with Shri Faisal M. Kapadi, had purchased a flat at Al-Badar Hamara Ghar Co- operative Housing Society Ltd., Andheri (West), Mumbai, for a consideration of ₹65,00,000/-. On the basis of this information, the Assessing Officer reopened the assessment and issued notice under section 148 of the Income-tax Act, 1961 (“the Act”) on 19.04.2022.

3.

During the assessment proceedings, the Assessing Officer examined the purchase deed and noted that ₹5,00,000/- had been paid by cheque, ₹59,35,000/- by demand draft and ₹65,000/- towards TDS. The Assessing Officer further took into account stamp duty of ₹3,25,000/- and registration charges of ₹30,000/- and accordingly considered the total investment in the property at ₹68,55,000/-. The assessee submitted that his mother and brother had funded the purchase and had made the payments directly to the seller as interest-free financial assistance. The Assessing Officer, however, held that the assessee had not furnished evidence to establish the genuineness of the transactions and the creditworthiness of the persons who had provided the funds. Since the assessee had jointly purchased the property with Shri Faisal M. Kapadi and the Assessing Officer did not have information regarding the assessment, if any, made in the hands of the co-owner, the Assessing Officer taxed the entire amount of ₹68,55,000/- to tax on a protective basis under section 69A read with section 115BBE of the Act in the hands of the assessee. The Assessing Officer also noticed interest income of ₹12,681/- from State Bank of India appearing in Form 26AS and assessed the same under the head “Income from other sources”. The Assessing Officer accordingly computed the total income at ₹68,67,681/-. 4. The assessee carried the matter in appeal before the learned CIT(A). During the appellate proceedings, the assessee expired on 15.06.2024 and his wife, Mrs. Almas Adil Kapadi, pursued the appeal as his legal heir. Before the learned CIT(A), the legal heir submitted that the entire consideration of ₹65,00,000/- had been paid directly by the assessee's mother, Mrs. Khairunissa M. Kapadi, to the seller and the mother had in turn raised the funds from sale of her self-acquired property. She further explained that the stamp duty, registration charges and TDS had been paid by the assessee's brother, Shri Faisal M. Kapadi, through banking channels. The legal heir also clarified that although the assessee had earlier described the amount received from his mother as an interest-free loan, the transaction was actually intended as a gift of the property by way of hiba under Muslim law. 5. The learned CIT(A), however, did not accept the explanation. The learned CIT(A) held that the assessee had not furnished evidence such as PAN, returns of income, confirmations or other material to establish the creditworthiness of the persons who had funded the property and the genuineness of the transactions. The learned CIT(A) also took note of the fact that the assessee had changed his stand from an interest-free loan to a gift and held that the subsequent explanation was not supported by documentary evidence. The learned CIT(A), therefore, upheld the addition of ₹68,55,000/- under section 69A of the Act. The learned CIT(A) also upheld the addition of ₹12,681/- on account of interest income. 6. The assessee is now before the Tribunal. Apart from challenging the additions on merits, the assessee has raised a separate jurisdictional ground challenging the notice issued under section 148 on 19.04.2022 as being barred by limitation. 7. We have heard the rival submissions and examined the material available on record. Since the ground relating to limitation goes to the very root of the jurisdiction assumed by the Assessing Officer under section 147 of the Act, we shall first deal this ground at the outset. 8. We observe from the assessment order that the assessee had not filed the return of income for A.Y. 2015-16 and the Assessing Officer reopened the assessment on the basis of information relating to purchase of an immovable property for ₹65,00,000/-. It is also not in dispute that the Assessing Officer issued the notice under section 148 only on 19.04.2022.

9.

The limitation for issuing a notice under section 148 was governed by section 149 of the Act. Section 149(1), as substituted by the Finance Act, 2021, provided (to the extent relevant) as under:

“149. (1) No notice under section 148 shall be issued for the relevant assessment year,— (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.” 9.1 The first proviso to section 149(1), however, imposed an independent restriction upon reopening earlier assessment years and provided as under:

“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.”

10.

Thus, although section 149(1)(b) under the new regime permits reopening beyond three years and up to ten years where the escaped income in the prescribed form amounts to or is likely to amount to ₹50 lakh or more, the Legislature expressly subjected this enlarged period to the restriction contained in the first proviso to Section 149(1) of the Act.

11.

In the present case, the information available with the Assessing Officer related to acquisition of an immovable property for ₹65,00,000/-. Therefore, if we were to examine only the main provision of section 149(1)(b), the amount exceeded ₹50 lakh and the alleged escapement was by an asset in the form of immovable property. However, the main provision cannot be read in isolation and has necessarily to be read subject to the first proviso. Immediately before the Finance Act, 2021, section 149(1)(b) provided as under:

“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.”

For A.Y. 2015-16, the relevant assessment year ended on 31.03.2016. 12. Therefore, the maximum period of six years available under the erstwhile section 149(1)(b) expired on 31.03.2022. The Assessing Officer issued the impugned notice under section 148 only on 19.04.2022, i.e. after expiry of the six-year period.

13.

At this stage, it is necessary to consider the judgment of the Hon'ble Supreme Court in Union of India & Ors. v. Rajeev Bansal [2024] 167 taxmann.com 70/301 Taxman 238/469 ITR 46 (SC), 2024 SCC OnLine SC 2693. The Hon'ble Supreme Court examined the interaction between the substituted section 149 and the first proviso thereto. The relevant observations, as reproduced by the Co-ordinate Bench in Babu Hasan Shaikh (supra), read as under:

“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.” “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.” “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 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.” “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.” 14. The above exposition makes the statutory position clear. For an assessment year falling before the new regime, the Assessing Officer cannot merely rely upon the new ten-year period. The notice must also survive the restriction contained in the first proviso. If the old six-year period had expired by the date on which the notice under section 148 was issued, the new provision does not revive the Assessing Officer's jurisdiction.

15.

The Hon'ble Supreme Court had also noted the Revenue's concession in Rajeev Bansal that in respect of A.Y. 2015-16, notices issued on or after 01.04.2021 falling outside the permissible period would have to be dropped. More importantly, this position was reiterated by the Revenue before the Hon'ble Supreme Court in a subsequent batch disposed of on 04.05.2026. The Hon'ble Supreme Court held that in cases pertaining to A.Y. 2015-16, the Revenue conceded that reassessment notices would stand barred by time in the light of Rajeev Bansal. The Court further observed that where the matter was found to relate to A.Y. 2015-16, “no further adjudicatory exercise” was required except to declare the notices time-barred.

16.

We next find direct support from the judgment of the Hon'ble jurisdictional Bombay High Court in Hexaware Technologies Ltd. v. Assistant Commissioner of Income-tax [2024] 162 taxmann.com 225/464 ITR 430 (Bom.). The Hon'ble High Court specifically dealt with A.Y. 2015-16 and the first proviso to section 149. The relevant observations read as under:

“25. Section 149(1)(b) of the erstwhile provisions provided a time limit of six years from the end of the relevant assessment year for issuing notice under section 148 of the Act. For the relevant assessment year, being Assessment Year 2015-2016, 6th year expired on 31st March 2022. The notice under section 148 of the Act, in the present case, is issued on 27th August 2022, i.e., clearly beyond the period of limitation prescribed in Section 149 read with the first proviso to the said Section.” “26. The purpose of the first proviso to Section 149 of the Act is consistent with the stated object of the government to make prospective amendments in the Act. Accordingly, the proviso provides that up to Assessment Year 2021-2022 (period before the amendment), the period of limitation as prescribed in the erstwhile provisions of Section 149(1)(b) of the Act would be applicable and only from Assessment Year 2022-2023, the period of ten years as provided in Section 149(1)(b) of the Act, would be applicable. The submission of the Revenue to interpret the first proviso to Section 149 of the Act to be applicable only for Assessment Years 2013- 2014 and 2014-2015, i.e., for assessment years where the period of limitation had already expired on 1st April 2021 is not sustainable. The interpretation canvassed by the Revenue is clearly contrary to the plain language of the proviso. When the language in the statute is clear, it has to be so interpreted and there is no scope for interpreting the provision on any other basis. The taxing statute should be strictly construed.”

17.

The Hon'ble Bombay High Court thereafter explained in paragraph 29 that once an earlier notice was treated as a notice under section 148A(b), the relevant date for applying the first proviso was the date of the fresh notice under section 148. The Hon'ble High Court held:

“Once the notice dated 8th April, 2021, has been treated as having been issued under section 148A(b), the said notice is no longer relevant for the purpose of determining the period of limitation prescribed under section 149 or the restriction as per the first proviso below Section 149. Therefore, for considering the restriction on issue of a notice under section 148 prescribed in the first proviso to section 149, the fresh/presently impugned notice dated 27th August, 2022 issued under section 148 is required to be considered. The said notice is admittedly beyond the erstwhile period of limitation of six years prescribed by the Act prior to its amendment by the Finance Act, 2021. For the assessment year 2015-2016, the erstwhile time limit of six years expired on 31st March, 2022 and, the impugned notice under section 148 has been issued on 27th August, 2022 and, therefore, the impugned notice dated 27th August, 2022 is barred by the restriction of the first proviso to section 149.” 18. The Hon'ble High Court also considered whether the fifth and sixth provisos could extend the restriction contained in the first proviso and held, in substance, that those provisos operate while computing the limitation under the main provision but cannot enlarge the independent outer restriction imposed by the first proviso. The relevant part reads:

“Once, the notice is otherwise within the period of limitation, thereafter one has to see whether the said time limit is within the restriction provided in the first proviso or not. If the notice is beyond the restriction period, the notice is invalid. The fifth and/or the sixth proviso cannot apply at this stage to extend the period of restriction as per the first proviso. Hence, if a notice is not within the time prescribed under the first proviso to section 149(1), then such period cannot be extended by fifth proviso and sixth proviso.” 19. We are conscious that Hexaware Technologies Ltd. has subsequently been shown in the report as “partly set aside” by the Hon'ble Supreme Court in Income Tax Officer v. Tej Partap Singh [2026] 185 taxmann.com 1007 (SC), Civil Appeal No. 4716 of 2026 and connected matters, order dated 10.04.2026. We have therefore carefully examined the effect of the said judgment before placing reliance upon Hexaware.

20.

The Hon'ble Supreme Court in Tej Partap Singh dealt with the controversy arising from notices issued by the Jurisdictional Assessing Officer as against the faceless mechanism under section 151A, in the light of the retrospective insertion of section 147A by the Finance Act, 2026. The Hon'ble Supreme Court set aside the concerned High Court judgments for reconsideration in the light of the newly inserted provision and expressly left open the validity, scope, effect, retrospectively and applicability of section 147A.

21.

The issue is also directly covered by the subsequent judgment of the Hon'ble Bombay High Court in Mitra Biswas v. Income Tax Officer [2026] 183 taxmann.com 161/310 Taxman 44 (Bom.), which also concerned A.Y. 2015-16 and a notice under section 148 issued on 14.04.2022. The Hon'ble Bombay High Court followed Rajeev Bansal and held the reassessment notice and the consequential proceedings to be bad in law. The Court held that the impugned section 148 notice and the consequential orders for A.Y. 2015-16 were “bad in law” and quashed them.

22.

The closest factual precedent, however, is the decision of the Co-ordinate Bench of this Tribunal in Babu Hasan Shaikh v. ITO, Ward-27(1)(1), ITA No. 926/Mum/2025, A.Y. 2015-16, order dated 28.04.2025 (ITAT Mumbai, “B” Bench). In that case also, the assessment year was A.Y. 2015-16. The Assessing Officer issued notice under section 148A(b) on 24.03.2022, passed the order under section 148A(d) on 18.04.2022 and issued the notice under section 148 on 18.04.2022.

23.

After considering section 149 and the judgment of the Hon'ble Supreme Court in Rajeev Bansal, the Co-ordinate Bench observed as under:

“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).” 24. The Co-ordinate Bench thereafter applied the above legal position specifically to A.Y. 2015-16 and gave the following findings:

“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 cannot 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.” 25. The Revenue in Babu Hasan Shaikh specifically argued that the time allowed to the assessee for responding to the notice under section 148A(b) should be excluded while computing limitation under the fifth proviso to section 149(1). The Co-ordinate Bench rejected this contention and held:

“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) ... 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.” 26. The Tribunal thereafter concluded:

“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.” 27. The facts before us stand on an even stronger footing. In Babu Hasan Shaikh, the Assessing Officer had at least issued the notice under section 148A(b) on 24.03.2022, i.e. before expiry of the old six-year period on 31.03.2022, and had granted time to the assessee to respond. Notwithstanding this fact, the Co-ordinate Bench held that the subsequent notice under section 148 dated 18.04.2022 did not survive the restriction contained in the first proviso to section 149(1).

28.

In the present case, on the other hand, the Assessing Officer did not issue any notice under section 148A(b) before 31.03.2022. The Assessing Officer issued the notice under section 148 only on 19.04.2022, after expiry of the erstwhile six-year limitation. Therefore, no period granted under section 148A(b) before expiry of the limitation existed which could even be considered for exclusion.

29.

The exclusion contemplated under the fifth proviso operates in respect of the time or extended time allowed to the assessee pursuant to a show-cause notice issued under section 148A(b), or the period during which proceedings under section 148A remain stayed by an order or injunction of a Court. In the present case, no proceeding under section 148A(b) had commenced before the limitation under the old section 149(1)(b) expired on 31.03.2022. The Assessing Officer, therefore, cannot seek to create an exclusion period where no such statutory proceeding existed during the subsisting limitation period.

30.

Even otherwise, as explained by the Hon'ble Bombay High Court in Hexaware Technologies Ltd. and followed by the Co-ordinate Bench in Babu Hasan Shaikh, the exclusion provisions cannot be employed to enlarge the independent restriction contained in the first proviso after the notice itself fails that restriction.

31.

We thus find that the legal position emerging from Union of India v. Rajeev Bansal [2024] 167 taxmann.com 70/301 Taxman 238/469 ITR 46 (SC), Hexaware Technologies Ltd. v. ACIT [2024] 162 taxmann.com 225/464 ITR 430 (Bom.), to the extent of its surviving 12 section 149 limitation ratio, Mitra Biswas v. ITO [2026] 183 taxmann.com 161/310 Taxman 44 (Bom.), and the Co-ordinate Bench decision in Babu Hasan Shaikh v. ITO, ITA No. 926/Mum/2025, order dated 28.04.2025, leads to one conclusion. For A.Y. 2015-16, the six-year period contemplated under the erstwhile section 149(1)(b) expired on 31.03.2022. Once that period expired, the first proviso to the substituted section 149(1) prohibited the Assessing Officer from invoking the new ten-year period to issue a fresh notice under section 148 thereafter.

32.

Coming to the facts before us, the Assessing Officer issued the notice under section 148 on 19.04.2022, whereas the maximum six-year period under the erstwhile section 149(1)(b) had already expired on 31.03.2022. Therefore, on 19.04.2022, a notice under section 148 for A.Y. 2015-16 could no longer have been issued under the law as it stood immediately before the Finance Act, 2021. The first proviso to section 149(1) consequently prohibited the Assessing Officer from issuing the impugned notice.

33.

We accordingly hold that the notice issued by the Assessing Officer under section 148 on 19.04.2022 for A.Y. 2015-16 was barred by limitation. Since the notice itself was without jurisdiction, the reassessment proceedings upon such notice cannot survive. We therefore quash the notice issued under section 148 dated 19.04.2022 and consequently quash the reassessment order passed pursuant thereto.

34.

Accordingly, the ground challenging the validity of the reassessment proceedings on the ground of limitation is allowed.

35.

Since we have quashed the reassessment proceedings on the jurisdictional ground itself, Ground Nos. 1 to 3, relating to the addition of ₹68,55,000/- under section 69A of the Act, have become academic and therefore do not require separate adjudication.

36.

Ground No. 5 is general in nature and requires no separate adjudication.

37.

In the result, the appeal of the assessee is allowed.

Order pronounced in the open court on 05.10.2026

Sd/- Sd/- OM PRAKASH KANT SIDDHARTHA NAUTIYAL ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai Dated: 05.10.2026 KRK, Sr. PS Copy to: LATE ADIL MOHAMMED KAPADI THROUGH LEGAL HEIR ALMAS ADIL KAPADI, 2ND FLOOR SHAKEEL MANSION, JUHU 1 TARA ROAD, OPP JUSSAWALA, VILE PARLE (W) MUMBAI, MUMBAI-400049, MAHARASHTRA INCOME TAX OFFICER WARD 34(1)(1), MUMBAI, 2 KAUTILYA BHAVAN, MUMBAI BKC, BANDRA EAST MUMBAI, MUMBAI-400051, MAHARASHTRA 3 THE PCIT / CIT, 4 THE D.R., ITAT, MUMBAIBENCH 5 GUARD FILE

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