Nacchattar Singh Dalbir Singh Padda vs. Income Tax Officer Ward 2(2), Kalyan AND ORS

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WP/10541/2026HC BombayHCBM01036299202629 August 20267 pages
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What did the High Court hold?

The High Court held that the petitioner's submission had merit. It was undisputed that the notice under Section 148 was issued on July 13, 2022, for Assessment Year 2015-16. The Court referred to paragraphs 19(e) and (f) of the Supreme Court's judgment in UOI v. Rajeev Bansal, which recorded the Revenue's concession 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 TOLA. This concession was subsequently followed by the Supreme Court in Deepak Steel and Power Ltd. and was relied upon by the Supreme Court in dismissing the SLP in Asstt. CIT v. Nehal Ashit Shah. The High Court also noted its own decision in Verjinia Foods Limited, which followed the same principle. Therefore, the Court found that the Section 148 notice dated July 13, 2022, and all consequential orders, including the assessment order, notice of demand, penalty notices/orders, and recovery notices, were liable to be quashed and set aside. The Court explicitly stated that it had not expressed any opinion on other grounds raised in the petition.

What were the facts?

The petitioner, Nacchattar Singh Dalbir Singh, filed a writ petition before the Bombay High Court challenging orders and notices issued under Sections 148A(d), 148, 147, 144, 144B, and 156 of the Income Tax Act, 1961, for Assessment Year 2015-16. The challenge also extended to consequential penalty orders. The primary contention was that the notice under Section 148, dated July 13, 2022, was barred by limitation. The petitioner relied on concessions made by the Income Tax Department before the Supreme Court in the case of UOI v. Rajeev Bansal and subsequent decisions, including Deepak Steel and Power Ltd. and Asstt. CIT v. Nehal Ashit Shah, as well as a High Court decision in Verjinia Foods Limited. The Revenue did not dispute the factual position.

What were the issues?

1. Whether the notice issued under Section 148 of the Income Tax Act, 1961, dated July 13, 2022, for Assessment Year 2015-16 is barred by limitation, considering the provisions of the Finance Act, 2021, and the Taxation and other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 (TOLA)? Assessee's Contentions: - The notice under Section 148, issued after April 1, 2021, for AY 2015-16, is without jurisdiction and barred by limitation. - Reliance is placed on the concession made by the Revenue before the Supreme Court in UOI v. Rajeev Bansal, wherein it was agreed that for AY 2015-16, all notices issued on or after April 1, 2021, would be dropped. - Further reliance is placed on the Supreme Court's decisions in Deepak Steel and Power Ltd. and Asstt. CIT v. Nehal Ashit Shah, which followed the concession in Rajeev Bansal. - The High Court's decision in Verjinia Foods Limited, which set aside a Section 148 notice issued after April 1, 2021, for AY 2015-16, is also cited. - If the Section 148 notice is bad in law, all consequential orders and notices would also not survive. Revenue's Contentions: - The Revenue did not dispute the factual position regarding the date of the notice and the assessment year.

Which sections of the Income-tax Act were involved?

Section 148A,Section 148,Section 147,Section 144,Section 144B,Section 156,Section 149

AI-generated summary — verify with the full judgment below

2.wp.10541.2026.doc

IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURISDICTION WRIT PETITION NO.10541 OF 2026 Nacchattar Singh Dalbir Singh .. Petitioner Versus Income Tax Officer, Ward- 2(2), Kalyan & Ors. .. Respondents Mr. Devendra Jain a/w Priya Jain i/b Shashank Mehta, Advocates for the Petitioner. Mr. Akhileshwar Sharma (through V.C.), Advocate for the Respondents.

CORAM: B. P. COLABAWALLA &

FARHAN P. DUBASH, JJ. DATE: AUGUST 29, 2026 P. C. 1. Rule. Respondents waive service. With the consent of parties, Rule made returnable forthwith and heard finally. 2. The present Petition has been filed primarily with a prayer to quash and set aside (i) the order passed under Section 148A(d), and the Notice issued under Section 148, both dated 12th July 2022 and 13th July 2022 (Exhibit C1 and C2); (ii) the reassessment order dated 9th May Page 1 of 7 AUGUST 29, 2026 Utkarsh UTKARSH KAKASAHEB BHALERAO Digitally signed by UTKARSH KAKASAHEB BHALERAO Date: 2026.08.31 16:08:16 +0530

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2023 passed under Section 147 read with Section 144 read with Section 144B of the Income Tax Act, 1961 (the Act); (iii) the Notice of demand of even date under Section 156 of the Act (Exhibit D1 and D2); (iv) as well as the consequential penalty orders. The Assessment Year in question is A.Y.2015-16. 3. It is contended by Mr. Devendra Jain, the learned Counsel for Petitioner that though several grounds have been raised in the Petition, the Petition can be disposed on the solitary ground of the Notice under Section 148 being barred by limitation. It is contended by the Petitioner that the Notice issued under Section 148 for A.Y.2015-16 is dated 13th July 2022. Since it is issued after 1st April 2021, it is without jurisdiction and has to be withdrawn in light of the concession made by the Income Tax Department before the Hon'ble Supreme Court in the case of UOI v. Rajeev Bansal [2024] 167 taxmann.com 70. Further, reliance is placed on the order dated 2nd April 2025 passed by the Hon'ble Supreme Court in case of Deepak Steel and Power Ltd. v. Central Board of Direct Taxes [2025] 174 taxmann.com 144 and an order dated 4th April 2025 passed in the case of Asstt. CIT v. Nehal Ashit Shah [SLP (CIVIL) Diary No (s) 57209 of 2024]. Further, our attention is also drawn to the decision of this Court in Page 2 of 7 AUGUST 29, 2026 Utkarsh

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Verjinia Foods Limited v. The Income Tax Officer, Ward-1(1), Kalyan [W.P.No. 1428 of 2023, decided on 6-10-2025]. Once the Notice under Section 148 is bad in law, all the consequential orders/notices would also not survive, is the submission. 4. The learned counsel for the Respondent does not dispute the above factual position. 5. We have heard the learned counsel for the parties. It is not in dispute that the present Petition relates to A.Y.2015-16. Further, it is also undisputed that the Notice under Section 148 has been issued on 13th July 2022 which is at page 74 of the paper book. Once these are the facts, paragraphs 19 (e) and (f) of the judgment of the Hon'ble Supreme Court in the case of Rajeev Bansal (supra) become relevant. They read as under:- "19. Mr. N Venkataraman, learned Additional Solicitor General of India, made the following submissions on behalf of the Revenue:- a. …. e. The Finance Act 2021 substituted the old regime for reassessment 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, 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 Page 3 of 7 AUGUST 29, 2026 Utkarsh

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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: Assessment Year (1) Within 3 Years (2) Expiry of Limitation read with TOLA for (2) (3) Within six Years (4) Expiry of Limitation read with TOLA for (4) (5) 2013-2014 31-3-2017 TOLA not applicable 31-3-2020 30-6-2021 2014-2015 31-3-2018 TOLA not applicable 31-3-2021 30-6-2021 2015-2016 31-3-2019 TOLA not applicable 31-3-2022 TOLA not applicable 2016-2017 31-3-2020 30-6-2021 31-3-2023 TOLA not applicable 2017-2018 31-3-2021 30-6-2021 31-3-2024 TOLA not applicable 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;"

(emphasis supplied) 6. From the above it is clear that the Department has conceded before the Hon'ble Supreme Court that all the Notices issued under Section 148 on/or after 1st April 2021 for A.Y.2015-16 have to be dropped. In the present case, the Assessment Year is A.Y. 2015-2016, and the Notice under Section 148 is dated 13th July 2022. Therefore, the said Notice would have to be dropped as per the concession recorded by the Hon'ble Supreme Court in Rajeev Bansal (supra). Page 4 of 7 AUGUST 29, 2026 Utkarsh

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7.

The decision in Rajeev Bansal (supra) has been subsequently followed by the Hon'ble Supreme Court in Deepak Steel and Power Ltd. (supra). Paragraphs 4 and 5 of the said order is reproduced hereunder:- "4. The learned counsel appearing for the revenue with his usual fairness invited the attention of this Court to a three judge bench decision of this Court in Union of India and Ors. v. Rajeev Bansal, reported in 2024 SCC OnLine SC 2693, more particularly, paragraph 19(f) which reads thus:- "19.(f) The Revenue concedes that for the assessment year 2015-2016, all notices issued on or after April 1, 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." 5. As the revenue made a concession in the aforesaid decision that is for the assessment year 2015-2016, all notices issued on or after 1st April, 2021 will 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). Nothing further is required to be adjudicated in this matter as the notices so far as the present litigation is concerned is dated 25.6.2021.” (emphasis supplied) 8. Similarly, even in the matter of Nehal Ashit Shah (supra), the Hon'ble Supreme Court, relying upon paragraphs 19 (e) and (f) of Page 5 of 7 AUGUST 29, 2026 Utkarsh

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the decision in case of Rajeev Bansal (supra), dismissed the SLP filed by the Revenue. Paragraph 5 of the said order is reproduced hereunder:- "5. In this regard, reference could also be made to paragraph 19(e) and (f) in the case of Union of India v. Rajeev Bansal, Civil Appeal No. 8629 of 2024 on 03.10.2024 (2024 SCC ONLINE 754) under which the Learned Additional Solicitor General for India has made a concession insofar as the Assessment Year 2015-16 is concerned." 9. Lastly, this very Court, on 6th October 2025, in the matter of Verjinia Foods Limited (supra), has allowed the Petition filed by the Petitioner therein by noting that since the Notice under Section 148 was issued after 1st April 2021, the same was required to be set aside in light of the concession made by the Revenue before the Hon'ble Supreme Court in the case of Rajeev Bansal (supra). 10. In light of the above discussion, we find merit in the submissions as canvassed by the Petitioner. The Revenue has categorically made a concession that for A.Y.2015-16 they would drop all notices issued under Section 148 on or after 1st April 2021. Once this is the position, it is appropriate that the Notice under Section 148 dated 13th July 2022, and the consequential Assessment Order, Notice of Page 6 of 7 AUGUST 29, 2026 Utkarsh

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demand, penalty notices/orders as well as the recovery notices be quashed and set aside. It is accordingly so ordered. 11. Rule is made absolute in the above terms and the Writ Petition is also disposed of in terms thereof. However, there shall be no order as to costs. We also make it clear that we have not expressed any opinion on the other grounds raised in the Petition. 12. This order will be digitally signed by the Private Secretary/ Personal Assistant of this Court. All concerned will act on production by fax or email of a digitally signed copy of this order. [FARHAN P. DUBASH, J.] [B. P. COLABAWALLA, J.] Page 7 of 7 AUGUST 29, 2026 Utkarsh

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