DINESHBHAI RAVJIBHAI NAKRANI,AHMEDABAD vs. ITO, WARD-4(2)(1), AHMEDABAD, AHMEDABAD

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ITA 2986/AHD/2026Status: DisposedITAT Ahmedabad28 October 2026AY 2015-166 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal allowed the assessee's appeal, quashing the reassessment proceedings. The primary ground for allowing the appeal was the invalidity of the reassessment notice due to being barred by limitation. The Tribunal noted that the original notice under Section 148 was issued on 24.06.2021. After the information was supplied on 27.05.2022, and considering the statutory two-week period for reply and the remaining six days under the Taxation and other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 (TOLA), the limitation for issuing a fresh notice under Section 148 expired on 21.06.2022. However, the Assessing Officer issued the order under Section 148A(d) and the fresh notice under Section 148 on 28.07.2022, which was beyond the surviving period of limitation. The Tribunal relied on the Supreme Court's decision in Union of India v. Rajeev Bansal and the jurisdictional Gujarat High Court's decision in Vinodkumar Rughnathbhai Koringa, which held that reassessment notices issued beyond the surviving period of limitation are invalid. Consequently, the reassessment order was quashed, and all consequential proceedings were also set aside. The remaining grounds challenging the additions on merits were rendered academic and not adjudicated.

What were the facts?

The assessee, Dineshbhai Ravjibhai Nakrani, an individual engaged in dentistry, is in appeal before the Income Tax Appellate Tribunal (ITAT) against the order of the Commissioner of Income-tax (Appeals) - National Faceless Appeal Centre (NFAC), Delhi. The Assessment Year (AY) in question is 2015-16. The Assessing Officer (AO) reopened the assessment based on information regarding alleged on-money payment for property and unexplained investments. A notice under Section 148 was initially issued on 24.06.2021. Following the Supreme Court's decision in Union of India v. Ashish Agarwal, this notice was treated as a show-cause notice under Section 148A(b). An order under Section 148A(d) was passed, and a fresh notice under Section 148 was issued on 28.07.2022. The assessment was completed on 31.05.2023, with additions of Rs.1,01,03,185/- and Rs.11,00,000/- under Section 69. The CIT(A) confirmed these additions. The assessee's appeal to the ITAT challenges the validity of the reassessment proceedings and the additions.

What were the issues?

1. Whether the reopening of assessment under Section 148 of the Income-tax Act, 1961, is bad in law and liable to be quashed, specifically concerning the limitation period for issuing the notice under Section 148. 2. Whether the reassessment proceedings should have been initiated under Section 153C of the Act instead of Section 148, given that the information relied upon was found pursuant to search proceedings. 3. Whether the additions of Rs.1,01,03,185/- and Rs.11,00,000/- under Section 69 as unexplained investment are valid, considering the assessee's submissions. Assessee's Contentions: - The reassessment proceedings are barred by limitation as the fresh notice under Section 148 was issued beyond the surviving period. Reliance was placed on the Gujarat High Court's decision in Vinodkumar Rughnathbhai Koringa v. ITO. - The reopening was initiated on borrowed satisfaction without tangible material and beyond the surviving period of limitation. - Proceedings under Section 153C ought to have been initiated instead of Section 148, as the information was found during search proceedings. - The additions under Section 69 were made ignoring the assessee's submissions. Revenue's Contentions: - The revenue relied upon the orders of the lower authorities.

Which sections of the Income-tax Act were involved?

Section 148,Section 148A,Section 148A(b),Section 148A(d),Section 149,Section 153C,Section 69,Section 250

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “A” BENCH, AHMEDABAD

For Appellant: Shri Parin Shah, AR
For Respondent: Shri Amit Pratap Singh, Sr DR
Hearing: 13.10.2026Pronounced: 28.10.2026

IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH, AHMEDABAD BEFORE DR. B.R.R. KUMAR, VICE-PRESIDENT SHRI TAPAS RAM MISRA, JUDICIAL MEMBER ITA No. 2986/Ahd/2026 (Assessment Year : 2015-16) Dineshbhai Ravjibhai Nakrani, Income Tax Officer, Vs. 1st Floor, Jalaram Complex, Ward 4(2)(1), Nr. Navdeep Medical, India Ahmedabad Colony Road, Bapunagar, Ahmedabad-380024 [PAN: ABSPN 1953 A] (Appellant) .. (Respondent) Assessee represented by : Shri Parin Shah, AR Department represented by: Shri Amit Pratap Singh, Sr DR Date of Hearing 13.10.2026 Date of Pronouncement 28.10.2026 O R D E R PER DR. B.R.R. KUMAR, VICE-PRESIDENT:- This appeal has been filed by the assessee against the order passed by the Ld. Commissioner of Income-tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi (hereinafter referred to as "CIT(A)" for short), dated 26.06.2026 passed under Section 250 of the Income-tax Act, 1961 [hereinafter referred to as "the Act" for short], for Assessment Year (AY) 2015-16.

2.

The assessee has raised following grounds of appeal:- “1. The order passed by AO and confirmed by NFAC is invalid, bad in law and required to be quashed. 2. The reopening of assessment u/s 148 of the Act is bad in law and required to be quashed. 3. The reopening of assessment has been initiated on borrowed satisfaction without any tangible material and accordingly, required to be quashed. 4. The reopening of assessment is required to be quashed as notice u/s 148 of the Act has been issued beyond surviving period available to AO.

ITA No. 2986/Ahd/2026 Dineshbhai Ravjibhai Nakrani Vs. ITO Asst.Year : 2015-16 - 2– 5. Both lower authorities ought to have considered fact that the information relied on for reopening of assessment found pursuant to search proceedings and accordingly, proceedings u/s 153C of the Act ought to be initiated instead of reopening of assessment u/s 148 of the Act. 6. Ld. NFAC erred in law and on facts in confirming addition of Rs.1,01,03,185/- u/s 69 as unexplained investment ignoring submission of the appellant. 7. Ld. NFAC erred in law and on facts in confirming addition of Rs. 11,00,000/- u/s 69 as unexplained investment ignoring submission of the appellant.” 3. The assessee has raised seven grounds of appeal challenging the validity of reassessment proceedings under section 148 of the Act and the additions of Rs.1,01,03,185/- and Rs.11,00,000/- made under section 69 of the Act. 4. The brief facts of the case are that the assessee is an individual engaged in the profession of dentistry. On the basis of information regarding alleged on-money payment towards purchase of immovable property and unexplained investments, the Assessing Officer reopened the assessment by issuing notice under section 148 of the Act on 24.06.2021. Pursuant to the judgment of the Hon'ble Supreme Court in Union of India v. Ashish Agarwal (2022) 444 ITR 1 (SC), the said notice was treated as a show-cause notice under section 148A(b) of the Act. Thereafter, the Assessing Officer passed an order under section 148A(d) and issued a fresh notice under section 148 on 28.07.2022. The assessment was completed on 31.05.2023, making additions aggregating to Rs.1,12,03,185/- under section 69 of the Act.

5.

Aggrieved by the order of the Assessing Officer, the assessee preferred an appeal before the Ld. CIT(A) who confirmed the additions.

ITA No. 2986/Ahd/2026 Dineshbhai Ravjibhai Nakrani Vs. ITO Asst.Year : 2015-16 - 3– 6. Aggrieved by the order of the Ld. CIT(A), the assessee is now in appeal before the Tribunal.

7.

Before us, the Ld. AR for the assessee primarily challenged the validity of the reassessment proceedings on the ground of limitation. It was submitted that the original notice dated 24.06.2021 was issued under TOLA and only seven days of the limitation period remained available. After excluding the permissible period for furnishing replies, the last date for issuing notice under section 148 was 25.07.2022, whereas the notice was issued on 28.07.2022. The Ld. AR, therefore, submitted that the reassessment proceedings were barred by limitation. Reliance was placed on the judgment of the Hon'ble Gujarat High Court in Vinodkumar Rughnathbhai Koringa v. ITO, R/SCA No. 89 of 2023, dated 23.12.2025.

8.

The Ld. DR, on the other hand, relied upon the orders of the lower authorities.

9.

We have heard the rival submissions and perused the material available on record. The Hon’ble Supreme Court in Union of India v. Rajeev Bansal (2024) 469 ITR 46 (SC) has held that reassessment notices issued pursuant to the decision in Union of India v. Ashish Agarwal (supra) must satisfy the limitation prescribed under section 149 of the Act read with TOLA. It has further been held that the Assessing Officer was required to issue the fresh notice under section 148 within the surviving period of limitation, after excluding the period permissible under the aforesaid decisions. Any notice issued beyond such surviving period is barred by limitation and liable to be set aside. The Hon’ble jurisdictional Gujarat High Court in Vinodkumar Rughnathbhai Koringa (supra), applying the aforesaid principles, has also held that a reassessment notice issued

ITA No. 2986/Ahd/2026 Dineshbhai Ravjibhai Nakrani Vs. ITO Asst.Year : 2015-16 - 4– beyond the surviving period of limitation is invalid. The relevant observations of the Hon’ble jurisdictional High Court in this regard are as follows:- “7. In the facts of the case, the respondent Assessing Officer has provided information pursuant to the directions issued by the Hon’ble Apex Court in case of Ashish Agarwal (supra) on 19.05.2022 and therefore, considering 15 days’ time to file reply by the assessee, the due date would be 20.06.2022. The petitioner filed reply on 01.06.2022. The order under section 148A(d) of the Act as well as notice under section 148 of the Act was issued on 31.07.2022. However, considering the period of limitation from the date of issuance of notice under section 148 read with TOLA upto 30.06.2021, the limitation for issuance of notice under section 148 of the Act applying the decision of Hon’ble Apex Court in case of Ashish Agarwal (supra) as well as Rajeev Bansal (supra), would be 16.06.2022. 8. Learned Senior Standing Counsel Mr. Maunil Yajnik has verified the above dates and could not controvert the same. 9. In view of above, the impugned notice dated 31.07.2022 issued under section 148 of the Act would be invalid notice as the said notice is issued after 20.06.2022 as per the decision of Hon’ble Apex Court in case of Ashish Agarwal (supra). Therefore, the impugned notice having been issued beyond the ‘surviving time’ would be invalid notice as held by the Hon’ble Apex Court in case of Rajeev Bansal (supra) in the following paragraph no. 114 (g) and (h) of the judgment: “114. In view of the above discussion, we conclude that: xxx (g) The time during which the show-cause notices were deemed to be stayed is from the date of issuance of the deemed notice between April 1, 2021 and June 30, 2021 till the supply of relevant information and material by the Assessing Officers to the assessees in terms of the directions issued by this court in Union of India v. Ashish Agarwal [(2022) 444 ITR 1 (SC); (2023) 1 SCC 617.] , and the period of two weeks allowed to the assessees to respond to the show-cause notices; and (h) The Assessing Officers were required to issue the reassessment notice under section 148 of the new regime

ITA No. 2986/Ahd/2026 Dineshbhai Ravjibhai Nakrani Vs. ITO Asst.Year : 2015-16 - 5– within the time limit surviving under the Income-tax Act read with the Taxation and other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020. All notices issued beyond the surviving period are time barred and liable to be set aside.” 10. In view of foregoing reasons, impugned notice dated 31.07.2022 is hereby quashed and set aside and all consequential proceedings are also quashed and set aside.”

10.

In the present case, the original notice under section 148 was issued on 24.06.2021 for A.Y. 2015-16. The relevant information pursuant to the decision in Ashish Agarwal (supra) was supplied to the assessee on 27.05.2022. After considering the statutory period of two weeks available for filing the reply and the balance period of six days surviving under TOLA, the limitation for issuance of the fresh notice under section 148 expired on 21.06.2022. However, the Assessing Officer passed the order under section 148A(d) and issued the fresh notice under section 148 only on 28.07.2022, which was clearly beyond the surviving period of limitation. For the sake of clarity, the date-wise calculation in the case on hand is as under:- Particulars Date / period Sr. No. Assessment year 2015–16 1 Original notice under section 148 24.06.2021 2 3 Last date under the TOLA extension 30.06.2021 4 Surviving period after the date of 6 days notice (25.06.2021 to 30.06.2021) 5 Relevant information supplied 27.05.2022 pursuant to Ashish Agarwal - information u/s 148A(b) of the Act 6 Two-week period for reply Up to 10.06.2022 7 Reply submitted by assessee 14.06.2022 8 Further reply submitted 05.07.2022 Order under section 148A(d) and 9 28.07.2022 fresh notice under section 148

ITA No. 2986/Ahd/2026 Dineshbhai Ravjibhai Nakrani Vs. ITO Asst.Year : 2015-16 - 6–

Based on the above timelines, the notice issued under section 148 on 28.07.2022 is held to be barred by limitation and, therefore, invalid in law. Consequently, the reassessment order passed pursuant thereto is quashed. The jurisdictional grounds raised by the assessee are accordingly allowed.

12.

Since the reassessment itself has been quashed, the remaining grounds, including those challenging the additions on merits, are rendered academic and do not require separate adjudication.

13.

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

Order pronounced in the open Court on 28.10.2026

Sd/- Sd/-

(TAPAS RAM MISRA) (DR. B.R.R. KUMAR) JUDICIAL MEMBER VICE-PRESIDENT Ahmedabad; Dated 28.10.2026 **btk आदेश की �ितिलिप अ�ेिषत / Copy of the Order forwarded to : अपीलाथ�/ The Appellant 1. ��थ�/ The Respondent. 2. संबंिधतआयकरआयु�/ Concerned CIT 3. 4. आयकरआयु�(अपील) /The CIT(A)- 5. िवभागीय�ितिनिध, आयकरअपीलीयअिधकरण, अहमदाबाद/ DR, ITAT, Ahmedabad 6. गाड�फाईल /Guard file. Digitally signed by JEETENDRA JEETENDRA DEVENDRABHAI UPADHYAY DN: c=IN, o=PERSONAL, title=6087, DEVENDRA 2.5.4.20=7e5568a89b633f174b28 a80f5e63c638da40b7313fb47eba efda841cf59d1703, आदेशानुसार/ BY ORDER, BHAI postalCode=380059, st=Gujarat, serialNumber=816dc56e896211a 1a21ccc4abc94ddc94458f4a1b37 UPADHYAY be8e1854e9399295106d4, cn=JEETENDRA DEVENDRABHAI UPADHYAY True Copy Date: 2026.10.30 10:08:36 +05'30' सहायकपंजीकार (Dy./Asstt. Registrar) आयकरअपीलीयअिधकरण, , अहमदाबाद / ITAT, Ahmedabad , ,

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