LATE DEEPAK LACCHMANDAS NAGPAL,PUNE vs. THE ITO WARD 14(3), PUNE

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ITA 1768/PUN/2026Status: DisposedITAT Pune15 October 2026AY 2015-167 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal allowed Ground No. 1, holding that the notice issued under Section 148 of the Act dated 26.07.2022 for AY 2015-16 is bad in law and deserves to be quashed. This decision was based on the concession made by the Revenue before the Hon'ble Supreme Court in the case of Union of India vs. Rajeev Bansal, wherein it was stated that for AY 2015-16, all notices issued on or after April 1, 2021, would have to be dropped as they would not fall for completion during the period prescribed under the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 (TOLA). The Tribunal also relied on decisions of the Hon'ble Bombay High Court in Cherian Nallathu Abraham Annamma and other coordinate benches of the ITAT. Consequently, the reassessment order was deemed void-ab-initio. Since the appeal was allowed on this legal ground, the other grounds (Ground No. 2 and Ground No. 3) were dismissed as un-adjudicated and academic in nature. The operative direction was to quash the notice and the consequential reassessment order.

What were the facts?

The assessee, Late Deepak Lacchmandas Nagpal, filed an appeal against the order of the Commissioner of Income Tax (Appeals), NFAC, Delhi, for Assessment Year (AY) 2015-16. This order upheld the Assessing Officer's (AO) reassessment order passed under Section 147 read with Section 144B of the Income Tax Act, 1961. The AO had issued a notice under Section 148 of the Act. The assessee's grounds of appeal challenged the validity of the notice under Section 148 as time-barred, the disallowance of a claim under Section 54, and requested a fresh appeal order in the name of the deceased appellant's legal heir. The Revenue was represented by the Additional CIT.

What were the issues?

1. Whether the notice issued under Section 148 of the Income Tax Act, 1961, for AY 2015-16, is time-barred and thus outside the ambit of law, considering the provisions of Sections 147 & 148 (prior to 01/04/2021) and Sections 148, 148A, and 149 (after 01/04/2021), especially when the case was previously assessed under Section 143(3)? - Assessee's contention: The notice is time-barred and reassessment is outside the legal provisions. - Revenue's contention: Not recorded in the judgment. 2. Whether the disallowance of 50% of the claim for one residential house property under Section 54 of the Income Tax Act, 1961, amounting to Rs. 31,54,680/-, is bad in law? - Assessee's contention: The disallowance is bad in law. - Revenue's contention: Not recorded in the judgment. 3. Whether the appeal order passed by the CIT(A) should be set aside and a fresh order passed in the name of the deceased appellant's legal heir, Mrs. Jyoti Deepak Nagpal, as the appellant had deceased before the order was passed? - Assessee's contention: A fresh appeal order should be passed in the name of the legal heir. - Revenue's contention: Not recorded in the judgment.

Which sections of the Income-tax Act were involved?

Section 147,Section 148,Section 148A,Section 149,Section 143(3),Section 54,Section 250,Section 144B

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, PUNE BENCH “SMC”, PUNE

Before: SHRI Dr. DIPAK P. RIPOTE & SHRI VINAY BHAMORE

For Respondent: Smt. Sonal L Sonkavde, Addl. CIT

PER Dr. DIPAK P. RIPOTE, A.M : This is an appeal filed by the assessee against the order of the Learned Commissioner of Income Tax (Appeals), NFAC, Delhi [Ld.CIT(A)], passed u/s. 250 of the Income Tax Act, 1961 („the Act‟) for AY 2015-16 on 11.02.2026, emanating from the Assessment Order u/s 147 r.w.s.144B of the Act, dated 11.05.2023.

2.

The assessee has raised the following grounds of appeal : “1) On the facts and circumstances of the case and in law the Honourable CIT (Appeals), NFAC has erred in upholding the decision of the Learned Assessing Officer and not considering the fact that the notice issued u/s 148 is time barred and thus outside the ambit of law as per provisions of Section 147 & 148 of The Income Tax Act, 1961 prior to 01/04/2021 and Sections 148, 148A and 149 of The Income Tax Act, 1961 after 01/04/2021 and reassessing the case when it was time barred

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even though it was assessed u/s 143(3) as per Assessment Order dated 15/06/2017. 2) On the facts and circumstances of the case and in law the Honourable CIT (Appeals), NFAC erred in upholding the decision of the Learned Assessing Officer in disallowing 50% of one residential house property claimed u/s 54 of the Income Tax Act, 1961 amounting to Rs.31,54,680/- though it is bad in law. 3) On the facts and circumstances of the case and in law, the appellant had deceased before the appeal was passed by the Honourable CIT (Appeals), NFAC and thus the impugned Appeal Order be kept aside and a fresh Appeal Order be passed in the name of wife of the deceased appellant Mrs. Jyoti Deepak Nagpal (Legal Heir). 4) The appellant hereby reserves the right to add, amend, delete, withdraw, any ground/s of appeal.”

Findings and Analysis:

3.

We have heard Ld. DR and perused the records. In this case, the Assessing Officer (AO) has issued notice u/s 148 of the Act for AY 2015-16 on 29.06.2021 and 26.07.2022 and the order u/s 148A(d) of the Act for AY 2015-16 has issued on 26.07.2022.

4.

The Hon‟ble Bombay High Court in the case of Cherian Nallathu Abraham Annamma vs ITO International tax, [2025] 307 Taxman 367 (Bombay)[13-10-2025] has held as under : Quote, “11. In light of the above discussion, we find merit in the submissions as canvassed by the Petitioner. TheRevenue has categorically made a concession that for A.Y.2015-16 they would drop all notices issued underSection 148 after 1st April 2021. Once this is the position, it is appropriate that the notice under Section 148dated 5th April 2022, and the consequential assessment order, notice of demand, penalty notices/orders as wellas the recovery notices be quashed and set aside. It is accordingly so ordered.” Unquote.

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5.

The Co-ordinate Bench of ITAT Pune in the case of Motiwala Auto Private Limited vs ITO ITA 486/PUN/2025 vide order dated 9/12/25 held as under : Quote, “ 8. The facts of the case are not in dispute. The assessee received the notice u/s 148 of the Act for the relevant AY 2015-16 under consideration on 25.07.2022 from the Ld. AO/JAO (page 6 of the paper book refers). Under the old provisions of section 149, which will be applicable for the assessment year under consideration i.e. AY 2015-16, the notice u/s 148 would not have been issued beyond the period of 6 years from end of the relevant assessment year. The period of 6 years from the AY 2015-16 laps on 31.03.2022. As stated earlier notice u/s 148 was issued to the assessee on 25.07.2022 which is clearly beyond the time limit prescribed under the said provisions of the Act. We find that the Revenue has also conceded before the Hon’ble Supreme Court in the case of Rajeev Bansal (supra) that the provisions of Taxation and OtherLaws (Relaxation and Amendment of Certain Provisions) Act, 2020 (TOLA) is not applicable to the notices issued for AY 2015-16. The relevant para of the judgment is reproduced below : “19. Mr N Venkataraman, learned Additional Solicitor General of India, made the following submissions on behalf of the Revenue: a. Parliament enacted TOLA as a free-standing legislation to provide relief and relaxation to both the assesses and the Revenue during the time of COVID-19. TOLA seeks to relax actions and proceedings that could not be completed or complied with within the original time limits specified under the Income Tax Act; b. Section 149 of the new regime provides three crucial benefits to the assesses: (i) the four-year time limit for all situations has been reduced to three years; (ii) the first proviso to Section 149 ensures that reassessment for previous assessment years cannot be undertaken beyond six years; and (iii) the monetary threshold of Rupees fifty lakhs will apply to the re- assessment for previous assessment years; c. The relaxations provided under Section 3(1) of TOLA apply “notwithstanding anything contained in the specified Act.” Section 3(1), therefore, overrides the time limits for issuing a notice under Section 148 read with Section 149 of the Income Tax Act; d. TOLA does not extend the life of the old regime. It merely provides a relaxation for the completion or compliance of actions following the procedure laid down under the new regime; e. The Finance Act 2021 substituted the old regime for re- assessment with a new regime. The first proviso to Section 149 does not expressly bar the application of TOLA. Section 3 of TOLA applies to the entire Income Tax Act, PART C including Sections 149 and 151 of the new regime. Once the first proviso to Section 149(1)(b) is read with TOLA, then all the notices issued between 1 April 2021 and 30 June 2021 pertaining to assessment years 2013-2014, 2014-2015, 2015- 2016, 2016-2017, and 2017-2018 will be within the period of limitation as explained in the tabulation below: ……………. f. The Revenue concedes that for the assessment year 2015-16, all notices issued on or after 1 April 2021 will have to be dropped as they will not fall for completion during the period prescribed under TOLA;…………….

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11.

In the case of Spicy Sangria Hotels Pvt. Ltd. (supra), the Hon’ble Bombay High Court held as under: “2. The above Writ Petition is filed to quash and set aside the Notice dated 28th July 2022 issued under Section 148 of the Income Tax Act, 1961. The assessment year in question is A.Y.2015-16. As far as this assessment C) year is concerned, the Hon'ble Supreme Court in the case of Union of India Vs. Rajeev Bansal [2024] 469 ITR 46 (SC) in paragraph 19(f) has recorded the concession made by the learned ASG that for the A.Y.2015-16, all notices issued on or after 1st April 2021 will have to be dropped as they will not fall for completion during the period prescribed under the Taxation And Other Laws (Relaxation And Amendment of Certain Provisions) Act, 2020. 3. Admittedly in the facts of the present case, the Notice issued under Section 148 is after 1st April 2021 (namely, on 28th July 2022). This being the case, we find that in the facts of the present case, the Notice issued under Section 148 dated 28th July 2022 would have to be dropped and cannot be proceeded with further. 4. We accordingly quash and set aside the said notice dated 28th July 2022 issued under Section 148 of the IT Act.” 12. We also find the Pune Tribunal in the case of Vishnu Subhash Agarwal (supra) in turn relying on the decision of Hon’ble Supreme Court in the case of Rajeev Bansal (supra) has taken a similar view on the impugned issue in favour of the assessee by observing as under: “13. We find since the notice u/s 148 of the Act has been issued after the statutory due date as per the decision of the Hon'ble Supreme Court in the case of Union of India vs. Rajeev Bansal (supra), therefore, such notice for reopening being barred by limitation has to be quashed. We accordingly, quash the reassessment notice issued by the Assessing Officer. Since the assessee succeeds on this legal ground i.e. validity of re-assessment proceedings, therefore, the grounds challenging the addition on merit are not being adjudicated being academic in nature. The grounds raised by the assessee are accordingly allowed.” 13. In view of the factual matrix of the case and legal position set out above and in the absence of any contrary material / judicial precedent brought on record by the Revenue, we hold that the impugned notice issued to the assessee under section 148 of the Act dated 25.07.2022 is bad in law and deserves to be quashed. Ground no. 1 (along with its sub-grounds 1.1 to 1.5) is accordingly allowed.” Unquote

6.

The Co-ordinate Bench of ITAT Mumbai in the case of ITD Cementation India Ltd vs DCIT Central [2025] 173 taxmann.com 492 (Mumbai - Trib.)[17-03-2025]held as under : Quote, “3.3. Thus, it can be seen that, one very important fact which has been stated by the Revenue before the Hon'ble Supreme Court in para 19 (f) wherein the Revenue concedes that for the A.Y.2015-16, all notices issued on or after 1 April 2021 will have to be dropped as they will not fall for completion during the period prescribed under TOLA. 3.4. This issue had come up before Hon'ble Delhi High Court in the case of IBIBO Group Pvt. Ltd. v. ACIT, WP(C) 17639 of 2022, dated 13.12.2024

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wherein re-assessment action for Assessment Year 201516 was held to be not sustainable. Hon'ble Court quashed the notice issued u/s.148 as well as order passed u/s. 148A(d), dated 23.07.2022 for Assessment Year 2015-16 by following the decision in the case of Rajeev Bansal (supra). 3.5. In the assessee's case, since the notice issued u/s.148 is dated 25.07.2022, a period of six years expired on 31.03.2022 and is thus barred by limitation. Accordingly, the notice so issued and assessment completed thereafter u/s. 147 is liable to be quashed, in view of the decision of Hon'ble Supreme Court in the case of Rajeev Bansal (supra) which was followed by Hon'ble Delhi High Court in the case of IBIBO (supra). These observations and findings apply mutatis mutandis to the appeal in the case of ITD ITDCem Joint Venture for Assessment Year 2015-16 in ITA No. 4620/Mum/2024 and 5232/Mum/2024.” Unquote.

7.

The Co-ordinate Bench of ITAT Pune in the case of Anil Ramchandra Pawar vs ITO, ITA No.1929/PUN/2025held as under : Quote, “15. In view of the factual matrix of the case and legal position set out above and in the absence of any contrary material/judicial precedent brought on record by the Revenue, we hold that the impugned notice issued to the assessee under section 148 of the Act dated 06.04.2022 is bad in law and deserves to be quashed. Since the assessee succeeds on this legal ground, the other grounds raised by the assessee are rendered academic in nature and therefore not adjudicated. ”Unquote.

8.

Hon‟ble Jurisdictional High Court in the case of Bhavik Bhupendra Shah vs ACIT [2026] 187 taxmann.com 884 (Bombay)[15-06-2026] held as under : Quote. “ In the light of the fact that the impugned Notice is issued on or after 1st April 2021 and pertains to Assessment Year 2015-16, we hold that the same is clearly time barred as conceded by the Learned Additional Solicitor General before the Hon'ble Supreme Court in the case of Rajiv Bansal (supra). Accordingly, the Writ Petition succeeds and the impugned Notice issued under Section 148 is set aside.” Unquote.

9.

The Hon‟ble Bombay High Court in the case of Selvakumar Vethamonickam Nadar vs The Income Tax Officer Ward 34(3)(2) vide order dated 24 December 2025 in WRIT PETITION (L) NO. 41554OF 2025held as under: Quote, “11. In light of the above discussion, we find merit in the submissions as canvassed by the Petitioner. The Revenue has categorically made a

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concession that for A.Y.2015-16 they would drop all notices issued under Section 148 after 1st April 2021. Once this is the position, it is appropriate that the notice under Section 148 dated 23 rd April 2022, and the consequential assessment order, notice of demand, penalty notices/orders as well as the recovery notices be quashed and set aside. It is accordingly so ordered” Unquote

10.

Hon‟ble Delhi High Court in the case of Pratiksha Garg vs ACIT Central Circle W.P.(C) 16878/2024 CM APPL. 71476/2024 held as under : Quote, “1. The petitioner has filed the present petition, inter alia, praying as “A. Issue a writ in the nature of Certiorari to quash the impugned notice dated 22.06.2021 issued under section 148 of the Act; and the consequential notice 25.05.2022 issued under section 148A(b) of the Act; the impugned order dated 19.07.2022 passed under section 148A(d) of the Act and the impugned notice dated 19.07.2022 issued under section 148 of the Act in the case of the petitioner for AY 2015-16”; ……………………….. 4. In view of the aforesaid, the impugned order dated 19.07.2022 issued under Section 148(A)(d) of the Income Tax Act,1961 (hereafter the Act) as well as the notice dated 19.07.2022 issued under Section 148 of the Act in respect of AY 2015-16 are liable to be set aside. It is so directed. 5. 6. The petition is allowed in the aforesaid terms.” Unquote.

11.

The facts in the above mentioned cases and assessee are identical. In the case of Cherian Nallathu Abraham Annamma (supra) the notice u/s 148 was issued on 05.04.2022 whereas in the case of assessee, notice u/s 148 of the Act for AY 2015- 16 was issued on 26.07.2022 and the order u/s 148A(d) of the Act for AY 2015-16 was issued on 26.07.2022. Respectfully following the Hon‟ble Bombay High Court, ITAT, Pune, we hold that notice u/s 148 dated 26.07.2022 for AY 2015-16 is bad in law. Accordingly, the reassessment order is void-ab-initio. Accordingly, ground No. 1 is allowed.

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12.

Since, we have allowed appeal of the assessee on legal ground, all other grounds are dismissed as un-adjudicated being academic in nature.

13.

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

Order pronounced in the open Court on 15th October, 2026

Sd/- Sd/- (VINAY BHAMORE) (Dr. DIPAK P. RIPOTE) JUDICIAL MEMBER ACCOUNTANT MEMBER पुणे/Pune; दिन ांक/Dated : 15-10-2026 Ravi Kumar आदेशकीप्रतितितिअग्रेतिि/Copy of the Order is forwarded to: 1. अपील र्थी/ The Appellant 2. प्रत्यर्थी/ The Respondent 3. The concerned Pr.CIT, Pune 4. DR, ITAT, „SMC‟ Bench, Pune 5. ग र्डफ ईल / Guard file. आदेशानुसार/ BY ORDER, Sunil Kumar More Digitally signed by Sunil Kumar More // True Copy // Date: 2026.10.25 10:05:58 +05'30' Assistant Registrar आयकरअपीलीयअदिकरण, पुणे / ITAT, Pune

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