ARUNKUMAR MITHALAL SONI,MUMBAI vs. ITO WARD 23-1-1, MUMBAI

Brief facts of the case are that the assessee is an individual and had not filed his return of income for the year under consideration. Based on the information received from DDIT (Investigation), Unit 8(1), Mumbai that the assessee had deposited cash amounting to Rs. 8,00,000/- in Abhyudaya Cooperative Bank & Rs.10,00,000/- in HDFC Bank and had also sold immovable property for a consideration of Rs. 1,10,69,440/- dated 02.09.2013, the ld. AO reopened the assessee’s case vide notice u/s. 148 dated 25.07.2022, which was issued but not received by the assessee. It is observed that the ld. AO has also issued notice u/s. 142(1) of the Act on several dates which again was not received by the assessee. The assessee did not file the return of income in response to notice u/s. 148 of the Act. The ld. AO also issued notice u/s. 133(6) to the Abhyudaya Cooperative Bank, where it was found that the assessee had deposited Rs. 46,00,000/- in Abhyudaya Cooperative Bank, A/C No. 45659 which was not disclosed as the returns were not filed by the assessee. The ld. AO passed the Arunkumar Mithalal Soni assessment order u/s. 147 r.w.s. 144 r.w.s. 144B of the Act, as best judgement assessment, determining total income at Rs. 1,74,59,840/-, after making addition of Rs. 61,00,000/- towards unexplained cash credits u/s. 69A r.w.s. 115BBE of the Act and undisclosed capital gains u/s. 48 of the Act amounting to Rs. 1,10.69,440/-. 4. Aggrieved the assessee was in appeal before the first appellate authority, who had then set aside the assessment order to the ld. AO for de novo assessment, for the reason that the ld. AO passed an ex parte order and the assessee is said to have filed application for admission of additional evidence under Rule 46A before the appellate authority in terms of Proviso to Section 251(1)(a) of the Act inserted w.e.f. 01.04.2024, where the ld. CIT(A) can set aside the assessment to the ld. AO in case of assessment made u/s. 144 of the Act. 5. The assessee is in appeal before us, challenging the order of the ld. CIT(A). 6. The learned Authorised Representative ('ld. AR' for short) for the assessee contended that the assessee has raised the legal ground challenging the validity of the notice issued u/s. 148, dated 25.07.2022 by the JAO on various ground, where the ld. AR argued extensively on ground no.2 stating that the impugned notice is time barred by 46 days as per the decision of the Hon'ble Apex Court in the case of Union of India & Ors. vs. Rajeev Bansal (Civil Application No. 8629 of 2024), dated 03.10.2024. The ld. AR contended that the time limit for issuance of notice u/s. 148 was only till 30.06.2021, where the date of first notice was issued u/s. 148 of the Act which was deemed to be notice issued u/s. 148A(b) of the Act as per the decision of the Hon'ble Apex Court in the case of Ashish Agarwal (Civil Appeal No.3005/2022 dated 04.05.2022), which was Arunkumar Mithalal Soni on 28.06.2021. Further, the remaining days left to issue final notice u/s. 148 after the receipt of reply of 148A(b)(C) of the Act was 2 days and the date of supply of information by the ld. AO as per the direction of the Hon'ble Supreme Court in Ashish Agarwal (supra) was 24.05.2022 and the 2 weeks due date to submit reply as per above information letter dated 24.05.2022 was on 07.06.2022. After excluding the period for calculation of surviving time limit, the last date of passing of the order u/s. 148A(d) of the Act, then the issue of final notice u/s. 148 and the date of passing of the order u/s. 148A(d) of the Act and subsequently the final notice u/s. 148 of the Act was reckoned to be 48 days, thereby making reassessment notice dated 30.07.2022 time barred by 46 days. The ld. AR relied on the decision of the Hon'ble Apex Court in the case of Rajeev Bansal (supra) and prayed that the impugned notice be quashed in terms of the proposition laid down by the Hon'ble Apex Court in the case of Rajeev Bansal (supra). 7. The learned Departmental Representative ('ld. DR' for short) for the revenue on the other hand controverted the same and stated that the assessee has failed to raise the grounds before the first appellate authority and objected to the admission of the said ground. The ld. DR relied on the order of the lower authorities. 8. We have heard the rival submissions and perused the materials available on record. We hereby proceed to dispose off ground no. 2 raised by the assessee on the legal issue challenging the impugned notice as being barred by limitation in terms of the decision of the Hon'ble Apex Court in the case of Rajeev Bansal (supra). It is observed that the first notice u/s. 148 was issued on 28.06.2021 by the ld. AO and subsequent notice u/s. 148A(b) of the Act, dated 24.05.2022 was issued pursuant to the direction of the Arunkumar Mithalal Soni

From the above, it is observed that the ld. AO has issued the first notice u/s. 148 on 28.06.2021 along with order passed u/s. 148A(b) of the Act which is deemed to be the show cause notice which is 2 days prior to the expiry of limitation period extended by the TOLA (The Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020) which implies that for issuance of notice u/s. 148 after receiving the reply from the assessee, the ld. AO had 2 days time to issue notice u/s. 148 which was less than 7 days as per the 4th proviso to Section 149(1) of the Act i.e., 7 days to pass order u/s. 148A(d), While computing the surviving time limit as per the decision of the Hon'ble Apex Court in the case of Rajeev Bansal (supra), the final notice u/s. 148 of the Act was issued on 25.07.20225 was 46 days after the surviving time period which according to the decision of the Hon'ble Supreme Court in Rajeev Bansal (supra) was barred by limitation. We therefore are of the considered view that the impugned notice u/s. 148 of the Act is time barred and hence, liable to be quashed and the resultant assessment order is held to be bad in law. We therefore allow ground no. 2 raised by the assessee. As we have already held the assessment order to be null and void, the other ground of appeal raised by the assessee requires no further adjudication and is rendered academic in nature. Arunkumar Mithalal Soni

In the result, the appeal filed by the assessee is hereby allowed. Order pronounced in the open court on 05.08.2025 (OM PRAKASH KANT) JUDICIAL MEMBER

The Appellant 2. The Respondent 3. CIT- concerned 4. DR, ITAT, Mumbai 5. Guard File BY ORDER,