MANDEEP KISHANLAL BAJAJ (HUF),SURAT vs. INCOME TAX OFFICER, WARD 1(3)(1), SURAT

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ITA 1322/SRT/2025Status: DisposedITAT Surat29 October 2026AY 2016-175 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 held that the notice under Section 148 of the Income Tax Act, 1961, issued on 31.03.2021, was invalid because it was served on the assessee via email on 01.04.2021. This date of service falls after the expiry of the limitation period under the old provisions. Furthermore, even if considered under the amended provisions effective from 01.04.2021, the notice was required to be treated as a notice under Section 148A(b), followed by an order under Section 148A(d), which did not happen. The Tribunal relied on the Gujarat High Court's decision in Saumil Abhinash Baheti, which held that a notice under Section 148 served via email on 01.04.2021 is invalid. Consequently, the assessment order made in pursuance of this invalid notice was set aside. The appeal of the assessee was allowed.

What were the facts?

The assessee, Mandeep Kishanlal Bajaj (HUF), filed an appeal against the order of the CIT(A) dated 01.09.2025 for AY 2016-17. The assessee had declared total income of Rs. 4,90,130, including LTCG of Rs. 51,44,653, claimed as exempt under Section 10(38). The assessment was reopened under Section 147, with a notice under Section 148 issued on 31.03.2021. The assessee filed a return on 10.04.2021. After objections and notices under Sections 143(2) and 142(1), the Assessing Officer (AO) made additions of Rs. 52,82,653 under Section 69A for unexplained money and Rs. 1,58,480 under Section 69C for commission. The CIT(A) dismissed the assessee's appeal.

What were the issues?

1. Whether the notice issued under Section 148 of the Income Tax Act, 1961, for reopening the assessment for AY 2016-17 was valid and served within the prescribed time limits, considering it was issued on 31.03.2021 and allegedly served via email on 01.04.2021. Assessee's contention: The notice under Section 148 was not served within the time limit and was beyond the four-year period for reopening, relying on the decision in Shri Ketan Natvarlal Shah vs. ITO. Revenue's contention: The revenue relied on the assessment order and the CIT(A)'s order.

Which sections of the Income-tax Act were involved?

Section 10(38),Section 147,Section 148,Section 143(3),Section 144B,Section 69A,Section 69C,Section 139,Section 143(2),Section 142(1),Section 148A

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, SURAT BENCH, SURAT

Before: MS. SUCHITRA KAMBLE & SHRI B.M. BIYANI

Pronounced: 29.10.2026

IN THE INCOME TAX APPELLATE TRIBUNAL SURAT BENCH, SURAT BEFORE MS. SUCHITRA KAMBLE, JUDICIAL MEMBER AND SHRI B.M. BIYANI, ACCOUNTANT MEMBER ITA No.1322/SRT/2025 (िनधा�रण वष�/Assessment Year: 2016-17) MANDEEP KISHANLAL BAJAJ INCOME TAX OFFICER, (HUF) WARD 1(3)(1) 54 SANTA TUKARAM SOCIETY, ITO, WARD 1(3)(1),AYAKAR NEAR JAMNAGAR BUS STAND Vs. BHAVAN,MAJURA GATE BHATAR ROAD, SURAT-395001, GUJARAT SURAT-395007, GUJARAT अपीलाथ� Appellant ��थ� Respondent

Permanent Account Number of Assessee: AAJHM9817N

अपीलाथ� �ारा/Appellant represented by: Shri Rasesh Shah, CA ��थ� �ारा/Respondent represented by: Shri Ashish Kumar, Sr. DR सुनवाई की तारीख / Date of conclusion of hearing: 19.08.2026 घोषणा की तारीख / Date of pronouncement: 29.10.2026

O R D E R PER : SUCHITRA KAMBLE, J M:

The appeal filed by the assessee is against the order passed by the Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi [in short “CIT(A)”] dated 01.09.2025 for the Assessment Year (in short “AY”) 2016-17.

2.

The assessee has raised the following grounds of appeal: “1. On the facts and circumstances of the case as well as law on the subject, the learned CIT(A) has erred in confirming the action of assessing officer in re-opening assessment u/s. 147 by issuing the notice u/s. 148 of the I.T. Act, 1961.

2.

On the facts and circumstances of the case as well as law on the subject, the learned CIT(A) has erred in confirming the action of assessing officer making addition of Rs. 52,82,653/- u/s. 69A on account of alleged unexplained money. 3. On the facts and circumstances of the case as well as law on the subject, the learned CIT(A) has erred in confirming the action of assessing officer making addition of Rs. 1,58,480/- u/s. 69C on account of alleged commission payment. 4. It is therefore prayed that assessment framed u/s 143(3) r.w.s.147 r.w.s 144B of the Act may kindly be quashed. 5. Appellant craves leave to add, alter or delete any ground(s) either before or in the course of hearing of the appeal.” 3. The assessee during the A.Y. 2016-17 earned profits & gains from business and income and from other source. The assessee filed return of income for A.Y. 2016-17 on 18.01.2017 declaring total income at Rs.4,90,130/-. The assessee sold 1,38,000 shares of M/s. Sunstar Realty Development Limited and earned Long Term Capital Gains (in short “LTCG”) of Rs.51,44,653/- and claimed exemption u/s 10(38) of the Income Tax Act, 1961 (in short “the Act”). The case of the assessee was reopened u/s 147 of the Act and notice u/s 148 of the Act was issued on 31.03.2021. In response to the notice u/s 148, the assessee filed return of income on 10.04.2021 declaring total income of Rs.4,91,130/-. Notice u/s 143(2) of the Act was issued on 27.10.2021 providing the reasons to which the assessee complied by filing objections dated 10.11.2021. The Assessing Officer (in short “the AO”) disposed the objections vide order dated 09.12.2021. Notice u/s 142(1) of the Act dated 09.03.2022 was issued to the assessee which was responded by the assessee on 14.03.2022 and 23.03.2022 along with details such as computation of return of income along with financials, bank statement, share purchase bill and statement of equity, contract notes. Show cause notice along with draft assessment order dated 24.03.2022 was issued to the assessee. The assessee filed the details but were not considered by the AO and the AO made addition of Rs.52,82,653/- as income from unexplained money on account of LTCG u/s 69A of the Act and added Rs.1,58,480/- as commission @ 3% u/s 69C of the Act.

4.

Being aggrieved by the assessment order the assessee filed appeal before the CIT(A). The CIT(A) dismissed the appeal of the assessee.

5.

The Ld. Authoritised Representative (in short “the Ld. AR”) submitted that the notice issued u/s 148 of the Act was not within time and in fact the same was not served upon the assessee. The assessee has filed return of income on 18.01.2017 u/s 139 of the Act but the notice u/s 148 of the Act was issued on 31.03.2021 which was beyond the four years period for which the AO should have given the details of service of the said notice. The Ld. AR relied upon the decision of Tribunal in case of Shri Ketan Natvarlal Shah vs. ITO (ITA No.894/SRT/2023).

6.

The Ld. Departmental Representative (in short “Ld. DR”) relied upon the assessment order and the order of the CIT(A).

7.

We have heard both the parties and perused all the relevant materials available on record. It is pertinent to note that the report filed by the AO before us though mentioned that the notice was issued u/s 148 of the Act on 31.03.2021 the same was not mentioned when the said email was delivered to the assessee. In fact, the report also submits that the assessment folder is not available on record. Despite giving several opportunities the details were not submitted fully by the AO before us. The assessee has brought on record the details of his Gmail which categorically mentions that the notice u/s 148 of the Act was received by the assessee on 01.04.2021 at 4:03:10 AM. Thus, the notice was issued rather received by the assessee after the expiry of limitation period. The decision of the Tribunal in case of Shri Ketan Natvarlal Shah (supra) is categorically identical. The extract of para 8 of the said decision is as follows:

“8. The provision for issue of notice u/s 148 of the Act was amended with effect from 01.04.2021. Under the old provision there was no requirement to take action as provided u/s 148A of the Act. The AO did not initiate action u/s 148A of the Act, for the reason that he had issued the notice u/s 148 of the Act on 31.03.2021 under the old provision. Hon'ble Gujarat High Court had held in the case of Saumil Abhinash Baheti in Civil Application No. 3804 of 2022 dated 17.06.2025 that where the notice u/s 148 of the Act dated 31.03.2021 was served through e-mail on 01.04.2021, the notice would be an invalid notice. In the present case the notice u/s 148 of the Act sent through email on 1st April, 2021, was not barred by limitation. Nevertheless, considering the fact that the notice was issued on 01.04.2021, the said notice was required to be treated as notice u/s 148A(b) of the Act as per the direction of Hon'ble Supreme Court in the case of Union of India and others Vs. Shri Ashish Agrawal and others (444 ITR 1) (SC). Thereafter, the AO was required to pass order u/s 148A(d) of the Act and issue a fresh notice u/s 148 of the Act. Further, these actions were required to be completed within the surviving period. In the present case neither the notice u/s 148 issued on 01.04.2021 was treated as notice u/s 148A(b) of the Act under the new provisions nor any order u/s 148A(d) was passed by the AO. Thus the notice u/s 148 of the Act issued by the AO was neither within time limit of the old provision nor in accordance with the procedure laid down under the amended provision with effect from 01.04.2021. Therefore, the notice u/s 148 of the Act issued by the AO on 31.03.2021 which was served on the assessee on 01.04.2021 is quashed and the assessment order made u/s 147 r.w.s 144 of the Act dated 17.05.2022 in pursuance thereof, is set aside.”

8.

Thus, the present assessee’s case is also identical and as held by the Hon’ble Gujarat High Court in case of Saumil Abhinash Baheti in Civil Application No. 3804 of 2022 dated 17.06.2025 the notice served through email on 01.04.2021 cannot be held as valid notice. Hence, the assessment itself becomes invalid/void ab-initio.

9.

In result appeal of the assessee is allowed.

Order pronounced in the open court on 29.10.2026

Sd/- Sd/- (B.M. BIYANI) (SUCHITRA KAMBLE) ACCOUNTANT MEMBER JUDICIAL MEMBER Surat; Dated: 29.10.2026 * Kishore, Sr. P.S. //True Copy// Copy of the Order forwarded to: 1. The Appellant 2. The Respondent HEMA Digitally signed by HEMA KISHORE 3. CIT- concerned KISHORE JAKKA 4. DR, ITAT, Surat Date: 2026.10.29 JAKKA 5. Guard File 17:46:34 +05'30' By order,

Assistant Registrar/Sr.PS/PS ITAT, Surat Bench

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