CHARUSHILA UMESH KUNTE ,MUMBAI vs. INCOME TAX OFFICER, WARD 1(1), THANE, THANE

The notice under section 148 was issued for Assessment Year 2015–16 after 1 April 2021 and beyond the six-year period ending on 31 March 2022. The issue is whether the notice could nevertheless be sustained by recourse to the extension contemplated under the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 (“TOLA”). In Union of India v. Rajeev Bansal (2024) 469 ITR 46 (SC), the Revenue expressly conceded, as recorded in paragraph 19(f), that for Assessment Year 2015–16, all notices issued on or after 1 April 2021 would have to be dropped as they would not fall within the period prescribed under TOLA. This position has been applied by the Hon’ble Bombay High Court in Verjinia Foods Ltd. v. Income-tax Officer (2025) 179 taxmann.com 626 (Bom.) and Cherian Nallathu Abraham Annamma v. Income-tax Officer (2025) 179 taxmann.com 433 (Bom.). In Cherian Nallathu Abraham Annamma, the notice under section 148 was dated 5 April

The notice in the present case, dated 4 April 2022, falls squarely within the position stated above. TOLA cannot be invoked to extend the time so as to validate a notice issued for Assessment Year 2015–16 after 1 April 2021. The circumstance that the alleged escaped income was attributed to investment in immovable property does not alter the limitation position applied by the Hon’ble Supreme Court and the Hon’ble Bombay High Court in the decisions cited. We accordingly hold that the notice under section 148 was barred by limitation and that the Assessing Officer lacked jurisdiction to make the reassessment. The reassessment order dated 15 February 2024 is, therefore, liable to be quashed.

Since the assessee has also challenged the addition on its merits, we consider that issue independently and without prejudice to our conclusion on limitation. The property consisted of two flats, Nos. 2805 and 2806, in Wing A, White City, Kandivali, purchased under separate agreements dated 28 July 2014 for an aggregate consideration of ₹2,65,13,400, or ₹1,32,56,700 for each flat. The assessee and her husband were named as purchasers. The Assessing Officer treated

The agreements record the payment arrangement under which the flats were acquired. Clause 11 refers to the promoters’ agreement with ICICI Bank Ltd. for the 25:75 subvention scheme. Under that scheme, the purchasers were required to pay the initial 25% of the consideration to the promoters, while the remaining 75% was to be paid by ICICI Bank as the loan facility availed by the purchasers, subject to the Bank’s assessment of their repayment capacity. The interest on the aforesaid payments until the flats were handed over for fit-outs was to be borne by the promoters. The assessee explained before the Assessing Officer that the initial 25% was paid by her husband from his salary-account savings and that the remaining 75% was financed by the Bank under the scheme. The payment details furnished during assessment identified ICICI Bank disbursements of ₹57,00,381 in respect of each flat, while the bank statement of the husband’s account showed payments to the builder aggregating ₹82,60,260. The material before the Assessing Officer thus called for an examination of the actual sources

Joint ownership establishes the assessee’s interest in the flats; it does not, by itself, establish that she contributed one- half of the purchase consideration from unexplained funds. Likewise, the appearance of her name as first holder in one agreement and the corresponding deduction of tax at source evidence the transaction and her interest in the property, but do not establish the source from which the consideration was paid. Section 69 concerns an investment made by the assessee whose source is not satisfactorily explained. On the material available, the initial 25% payment was explained as having been made by the assessee’s husband from his salary- account savings, while the balance was structured to be financed through ICICI Bank under the 25:75 scheme recorded in the agreements. The assessment order does not identify independent material showing that the assessee contributed ₹1,32,56,700, or any part of that amount, from

In the result, the reassessment proceedings and the order dated 15 February 2024 passed under section 147 read with section 144B are quashed. Independently and without prejudice to that conclusion, the addition of ₹1,32,56,700 under section 69 is deleted on merits. The appeal is allowed.