ITO-23.1.6, MUMBAI, MUMBAI vs. GHEVARCHAND JETHMALJI JAIN, MUMBAI

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ITA 3859/MUM/2025Status: DisposedITAT Mumbai12 August 2025AY 2015-16Bench: JUSTICE (RETD.) C.V. BHADANG (President), MS. PADMAVATHY S. (Accountant Member)5 pages

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

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that the reassessment notice issued after 01.04.2021 for AY 2015-16 is invalid, following the Supreme Court's decision in Rajeev Bansal. The provisions of TOLA do not extend the old regime beyond 01.04.2021 for such cases.

What were the facts?

The Revenue challenged the CIT(A)'s order deleting an addition made under Section 68 for AY 2015-16. The addition was made during reassessment proceedings initiated by a notice under Section 148 on 28.06.2021, which was later than 01.04.2021.

What were the issues?

Whether reassessment proceedings initiated by a notice under Section 148 issued after 01.04.2021 for AY 2015-16 are valid in light of the Supreme Court's decision in Rajeev Bansal and the applicability of TOLA.

Which sections of the Income-tax Act were involved?

Section 68,Section 147,Section 148,Section 148A,Section 149,Section 253A

AI-generated summary — verify with the full judgment below

Cases cited in this judgment(2)Show list

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Income Tax Appellate Tribunal, MUMBAI BENCH “G”, MUMBAI

Before: JUSTICE (RETD.) C.V. BHADANG & MS. PADMAVATHY S.

For Appellant: Shri Swapnil Choudhary
For Respondent: Shri Harsh Kapadia &, Shri Ajay Nagpal
Hearing: 12/08/2025Pronounced: 12/08/2025

PER JUSTICE (RETD.) C.V. BHADANG, PRESIDENT :

1.

By this appeal, Revenue is challenging the order dated 11.03.2025 passed by National Faceless Appeal Centre, Delhi (NFAC) (‘CIT(A)’ for short). The appeal relates to assessment year 2015-16. The Revenue is aggrieved by the deletion of addition of Rs.3,06,77,824/- made by the Assessing Officer (‘AO’ for short) under Section 68 of the Income Tax Act, 1961 (‘Act’ for short) as unexplained cash credit. The addition was made by the AO vide order dated 16.05.2023 under Section 147 r.w.s. 144 of the Act in reassessment proceedings.

2.

The respondent-assessee is in the business of cheque discounting on commission basis. The assessee filed Return of Income (RoI) for the relevant assessment year on 31.08.2015 declaring an income of Rs.2,54,760/-. The return was processed and an intimation was issued on 19.09.2015. Subsequently, the AO sought Ghevarchand Jethmalji Jain to reopen the assessment by issuance of notice under Section 148 of the Act on 28.06.2021, which was followed by a show cause notice under Section 148A(b) of the Act dated 24.05.2022. Finally, the impugned addition was made by the AO vide order dated 23.07.2022 under Section 148A(d) of the Act.

3. In appeal, the learned CIT(A) placing reliance on the decision of Supreme Court in Union of India vs Rajeev Bansal, 469 ITR 46 (SC) has found that the notice seeking reopening having been issued after 01.04.2021 was bad in law. In that view of the matter, the appeal came to be allowed. Feeling aggrieved, Revenue is in appeal.

4.

We have heard parties. Perused record.

5. The Revenue has raised the following grounds :-

“1. “Whether, in the facts and circumstances of the case, the learned CIT(A) erred in not remanding the matter to the AO for further clarification on the applicability of TOLA (Taxation and Other Laws Act) in consonance with the existing time limitation under section 149 and provisos thereto, to check the validity of the notice is 148 of the Income Tax Act, 1961, when assessment order passed u/s 147. r.w.s. 144 of the Act?"

2. "Whether on the facts and circumstances of the case and in law, the CIT(A) has erred in quashing notice u/s 148 of the Act by stating that the notice was issued beyond the limitation time provided and directed by the Hon'ble Supreme Court in the case of Union of India vs Ashish Agrawal (supra) and Rajeev Bansal (supra), without considering the fact that AO issued notice w/s 148 of the Act after considering the time limitation provided under section 149 and provisos thereto, in pursuance of the directions issued by the Hon'ble Supreme Court in the case of Union of India vs Ashish Agrawal (supra) and Rajeev Bansal (Supra)?"

3.

"Whether on the facts and circumstances of the case and in law, the CIT(A) not appreciated that the Hon'ble Delhi High Court in the case of Salil Gulati Vs ACIT, Circle -49(1), Delhi and Ors. (supra) has upheld the Revenue's stand that the decision of the Supreme Court in Union of India Vs. Ashish Agarwal (supra) read with the time extension provided by Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 (for short TOLA) allows extended reassessment notices to travel back in time to their original date when such notices were to be issued and then new section 149 of the Act is to be applied at that point. ?"

4. “Whether on the facts, in the circumstances of the case and in Law, the Hon'ble CITIA) has erred in not considering the provision of 148A of the Act which provides for passing order u/s 148A(d) of the Act within one month from the end of the month in which the reply referred to in clause (c) is received by him, or where no such reply is furnished, within one month from the end of the month in which time or extended time allowed to furnish a reply as per clause (b) expires, and therefore, in the facts of the case, the order u/s 148A(d) & consequent notice u/s 148 were passed well in time?"

5.

“The appeal u/s 253A of the I.Tax Act, is filed, as the tax effect involved in this case is Rs. 1,03,40,800/-, which is above the prescribed limit mentioned in the CBDT's Circular F.No.279/Misc.142/2007-ITJ(Pt) amended vide No. 09/2024 dated. 17.09.2024.”

6.

It is submitted by the learned DR that the CIT(A) was not justified in quashing the reopening as the notice under Section 148 of the Act was issued within the limitation provided under Section 149 of the Act and the proviso thereto in pursuance of the direction issued by the Supreme Court in the case of Union of India vs Ashish Agarwal, 444 ITR 1 (SC) and Rajeev Bansal (supra). On behalf of the Revenue, reliance is placed on the decision of Delhi High Court in Salil Gulati vs ACIT (W.P.(C) 12541/2022 dated 31.08.2022). It is submitted that the CIT(A) has failed to consider the provisions of Section 148A of the Act which provides for passing of order under Section 148A(d) of the Act within one month from the end of the month in which the reply referred to in clause (c) is received by him or where no such reply is furnished, within one month from the end of the month in which time or extended time allowed to furnish the reply as per clause (b) expires. It is submitted that the order under Section 148A(d) of the Act was passed within time.

7.

The learned AR has submitted that the issue is squarely covered by the decision of Supreme Court in case of Rajeev Bansal (supra). It is submitted that so far as the assessment year 2015-16 is concerned, any notice seeking reopening issued after 01.04.2021 would be invalid.

Ghevarchand Jethmalji Jain 8. We have considered the submissions made. We find that the issue is covered by the decision of Supreme Court in Rajeev Bansal (supra). The decision involved interplay of Income Tax Act, 1961, Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 (‘TOLA’ for short) and Finance Act, 2021. The Supreme Court has, inter alia, held that the provisions of TOLA do not have an effect of extending the old regime after 01.04.2021. TOLA only extends the period for issuance of notice, making compliances and passing orders which fell for such compliance or otherwise during the period from 20.03.2020 to 31.03.2021, which stands extended to 30.06.2021. The Supreme Court after recording the concession on behalf of the Revenue has held that for assessment year 2015-16, with which we are presently concerned, TOLA is not applicable. The Supreme Court has found that all reassessment notices issued on or after 01.04.2021 in respect of assessment year 2015- 16 will have to be dropped as they do not fall within the period from 20.03.2020 to 31.03.2021 and thus there would not be any extension.

9.

The decision of Delhi High Court in Salil Gulati (supra) came on 31.08.2022, i.e. prior to the decision in the case of Rajeev Bansal (supra) with which we are now governed. Once we find that the very issuance of notice was beyond the period of limitation, any subsequent proceedings would be invalid. We have gone through the impugned order passed by the learned CIT(A) and we do not find any reason to interfere with the same. The appeal is without any merit and is accordingly dismissed.

Order pronounced in the open court on 12/08/2025.

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