INCOME TAX OFFICER, WARD-19(2)(2), , MUMBAI vs. MORADIYA GEMS LLP, MUMBAI

IN THE INCOME TAX APPELLATE TRIBUNAL
“D” BENCH MUMBAI

BEFORE HON’BLE SHRI SANDEEP GOSAIN, JUDICIAL MEMBER &
SHRI GIRISH AGRAWAL, ACCOUNTANT MEMBER
ITO, Ward – 19(2)(2)
503,
5th
Floor,
Piramal
Chamber,
Lalbaug
–
400012. Vs.
Moradia Gems LLP
Unit No. 2, The Jewel
Mama
Parmanand
Marg,
Opera
House,
Mumbai – 400004
PAN/GIR No. AAWFM5039P
(Applicant)
(Respondent)

Assessee by Shri Meet Jumudiya
Revenue by Shri Annavaram Kosuri, Sr. AR

Date of Hearing
15.07.2025
Date of Pronouncement
04.08.2025

आदेश / ORDER

PER SANDEEP GOSAIN, JM:

The present appeal has been filed by the revenue challenging the impugned order dt. 17.10.2024 passed under section 250 of the Income Tax Act, 1961 (‘the Act’), by the National Faceless Appeal Centre (NFAC) / CIT(A) for the assessment year 2014-15. 2. All the grounds raised by the revenue are interrelated and interconnected and relates to challenging the order of Ld.
CIT(A) in deleting the entire addition of Rs.

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Moradiay Gems LLP., Mumbai.

4,35,00,000/- made by AO u/s 69A of the Act. Therefore, we have decided to adjudicate these grounds through the present consolidated order.
3. In this regard DR while relying upon the order of AO submitted that Ld.
CIT(A) had wrongly deleted the additions made u/s 69A of the Act, it was submitted that information was received from DDIT(Inv), Kolkata stating that the assessee is ultimate beneficiary and has brought back his unaccounted money through M/s Shreehari
Vinimay Pvt Ltd, and various shell companies such as Startree Dealcom Pvt Ltd totaling to Rs. 4,35,00,000/-. It was submitted that the routing of the funds by the above companies having nature of shell companies with no actual business operations and were only involved in providing accommodation entries in the form of share capital liquidation via sale of shares/unsecured loans etc., to the beneficiary concerns and the assessee is one of the beneficiaries who has received the money from these shell companies. It was also submitted that in this regard a detailed investigation was carried out by the Investigation
Wing, Kolkata and it was found that these companies have no credit worthiness and no actual business and were only involved in providing accommodation entries. Even the assessee could not prove on record, the bonafide of the share application money received from these shell companies, more particularly when the money was routed

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Moradiay Gems LLP., Mumbai.

through multiple layering of accounts to the accounts of assessee subscribing to the share capital. It was further submitted that assessee failed to discharge the onus cast upon him, and moreover the genuineness, creditworthiness and bonafides of the transactions could not be substantiated or proved to the satisfaction of the assessing officer.
4. Whereas on the contrary, Ld. AR reiterated the same arguments as were raised by him before Ld. CIT(A) and also relied upon the written submissions filed before Ld. CIT(A).
The same are reproduced herein below:
With reference to above and, in continuation to our earlier various assessment submissions, we have to state & submit as under: First and foremost, it is submitted as follows:- a) Non applicability of Re-assessment Proceedings for AY
2013-14 and 2014-15 by virtue of First Proviso to the section 149(1) of the Act, 1961. The first proviso to sec. 149(1) is reproduced hereunder.
"Provided that no notice under section 148 shall be issued at any time in a case for the relevant assessment year beginning on or before 1st day of April, 2021, if (a notice under section 148 or section 153A or section 153C could not have been issuedat that time on account of being beyond the time limit specified under theprovisions of clause (b) of sub- section (1) of this section or section 153A or section 153C, as the case may be), as they stood immediately before the commencement ofthe
Finance Act, 2021".
A perusal of the said proviso clearly demonstrates that notice u/s. 148 for AY 2021-22 and earlier years could not be validly

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issued if they are issued beyond the time limit as specified in the provisions prior to the amendment by Finance Act, 2021. As per the un amended provisions, no notice u/s. 148 could have been issued after 31-03- 2021 for the A.Y. 2014-15. M/s. Arati Marketing Pvt. Ltd. Vs UOI and Ors,
In a recent decision decided by Hon'ble Calcutta High Court on 09-02-2024, it has been held that notices issued on or after
01-04-2021 u/s. 148 for A.Y. 2013-14 and 2014-15 are barred by limitation u/s. 149(1). It has further been held on page 22
of the Order as under:
"I am inclined to hold that all the impugned notices issued under newly inserted Section 148A(b) of the Income Tax Act,
1961 by Finance Act, 2021, relating to assessment years
2013-14 and 2014-15, which have been issued on or after 1st
April, 2021 by extending the time of limitation by the CBDT for issuance of notice under Section 148 of the old Act in exercise of power under Section 3 of TOLA is un authorized in law and all such impugned notices are barred by limitation and that all subsequent proceedings on the basis of the aforesaid impugned notices are not sustainable in law and accordingly the sameare quashed".
455 ITR 216 (Guj.) Sumit JagdishchandraAgrawalV y.CIT In this case Hon'ble Gujarat High Court held as under.
"Reassessment Notice Limitation Law applicable Effect of amendments by Finance Act, 2021- Notice barred by limitation under unamended provisions Notice issued on 30-7-2022 to reopen assessments for 2013-14 and 2014-15-Not valid
Income Tax Act, 1961".
453 ITR 153 (All) Rajeev BansalVs UOI &Ors. In this case
Hon'ble Allahabad High Court held as under:
"Reassessment-Notice-Law applicable Effect of amendment to sections 147 to 151 by Finance Act, 2021 and taxation and other laws (relaxation and amendment of certain provisions)

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act, 2020 CBDT instruction no. 1 of 2022 has no binding force-
Income Tax Act, 1961".
Subsequently, the Juri ictional Assessing Officer not only ignored the request of the assessee LLP to provide balance information, passed an Order u/s. 148A(d) Dated 25.07.2022
making it Fit case for assessment and Notice u/s 148 was also issued on the said date, ignoring all norms of principles of natural justice and directions laid down by CBDT on 11/05/2022 after the Supreme Court order in the case of Ashish Agarwal on 04/05/2022. Finally a notice u/s. 148 dated 27-05-2022 was received and it is submitted that the said notice is also barred by limitation both as per the first proviso to Sec. 149as also the decision of the Hon'ble Supreme Court in the case of AshishAgarwal wherein the Hon'ble Supreme Court has specifically mentioned in the order to this effect.
However, thereafter, the assessee LLP filed Return of Income u/s. 148 for total income of NIL.
Since the Hon'ble Supreme Court has passed order Dt. 4th
May,
2022
in thecase of Union of India
&Ors.
Vs.
AshishAgarwal (Supra) wherein the Hon'bleSupreme Court has held that the notices issued u/s. 148 between the period 01-
04-2021 to 30-06-2021 be deemed as notices issued u/s 148A(b).
Further the Hon'ble Apex Court vide Para 8(iv) (Pg 29 of the order) has specifically held as under "All the defences which may be available to the assessee u/s.
149 and/or which maybe available under the Finance Act,
2021 and in law and whatever rights are available to the assessing officer under the Finance Act, 2021 are kept open and/orshall continue to be available."
Further the Hon'ble Apex Court vide Para 10(iv) (Pg 33 of the order) has again specifically held as under.-

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Moradiay Gems LLP., Mumbai.

"All defences which may be available to the assessees including those availableu/s. 149 of the IT Act and all rights and contentions which may be availableto the concerned assessees and Revenue under the Finance Act, 2021 and in law shall continue to be available."
Hon'ble Supreme Court has held that the new law shall operate and all the defences available to assessees under section 149 of the new law and whatever rights are available to the Assessing Officer under the new law shall continue to be available.
Sub-section (1) of new section 149 of the Act as amended by the Finance Act, 2021 reads as under-
*149 (1) No notice under section 148 shall be issued for the relevant assessment year,-
(a) If three years have elapsed from the end of the relevant assessment year, unless the case falls under clause (b):
(b) if three years, but not more than ten years, have elapsed from the end of the relevant assessment year unless the Assessing Officer has in his possession books of account or other documents or evidence which reveal that the income chargeable totax, represented in the form of asset, which has escaped assessment amounts to or is likely to amount to fifty lakh rupees or more for that year.
Provided that no notice under section 148 shall be issued at any time in a casefor the relevant assessment year beginning on or before 1st day of April, 2021, if such notice could not have been issued at that time on account of being beyond the time limit specified under the provisions of clause (b) of sub- section (1) of this section, asthey stood immediately before the commencement of the Finance Act, 2021. A perusal of the First proviso to section 149(1)(b) clearly states that if a notice u/s. 148 was time barred as per the provisions prior to amendment vide finance Act, 2021 i.e. If a notice is time barred as on 01-04-2021 (as per the old provisions), the same cannot be issued under the new provisions also.

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Moradiay Gems LLP., Mumbai.

Thus it is submitted that under the old provisions, notice could be issued for a maximum period of 6 years from the end of the relevant assessment year i.e. notice for AY 2014-15 could be issued upto 31-03-2021 and not beyond that day.
Thus, even for AY under the new law, i.e. amended provisions of section 149, notice 2014-15 cannot be issued on or after 31-
03-2021. Thus we submit that the impugned notice dated 28-07-2022 as issued u/s.148 iscontrary to provisions of first proviso to section 149(1)(b), and clear cutverdict and directions of Hon'ble
Supreme Court in its decision Dt. 4th May2022. In view facts, circumstances and judicial decisions as stated above the proceedings initiated u/s. 147 r.w.s. 148 are illegal and ab into void.
There are various judicial order passed by several courts thereafter and are relied upon for the same.
With this legal submission in mind, the assessee submits the following submissions:-
1. In the present case, it is submitted that the 1" notice u/s 148 (old) was issued on 24.04.2021, (which is beyond
31.03.2021), by Income tax officer, Ward 19(2)(2), Mumbai. The said notice issued after 31.03.2021 is not valid and therefore the assessment proceedings based on the said notice is also not valid and therefore there should not be any reassessment based on the said 1 notice.
2. It is to be noted that the approval to the said proceedings u/s 151is itself dated 24 April 2021. 3. The assessee firm, without prejudice, filed the return of income under section 148 on 24 May 2021 and then also filed a letter dated 25 May 2021 Seeking reasons for reopening.
4. The ITO. 19 (2)(2), Mumbai provided Reasons for Re-opening vide letter dated 1-9-2021. The said reasons are related to information received from DDIT(Inv), Unit 4 (1), Kolkata

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through
Insight
Portal about assessee being ultimate beneficiary for alleged black money amounting to Rs.
4,35,00,000/- brough back from M/s ShreehariVinimay Private
Limited during financial year 2013-14 relevant for the assessment year 2014-15. 5. The assessee firm also filed letter dated 15 November 2021
objecting to (a) the reassessment proceedings under section 148 and (b) reasons for reopening provided vide letter dated 1
September 2021. 6. Then, subsequent to the Supreme Court decision in the case of AshishAgarwal, a fresh notice under section 148A(b) was issued on 27th May 2022 with the subject as: "Subsequent proceedings with reference tosection 148A(b) in consequence to Hon'ble SC order dated 04.05.2022",
7. The assessee firm replied to the same vide letter dated 10th
June 2022 and requested to furnish complete details and documents as prescribed inSupreme Court order and also CBDT instr instructions issued thereafter.
8. Income tax Officer, Ward 19 (2) (2). Mumbai replied with the letter with subject Subsequent proceedings with reference to section 140 8A (B) in consequence to Honorable Supreme Court order dated 4 May 2022 letter, and provided (a) 4 page word document titled as Interim
VerificationReport
M/s
StartreeDealcom
Private
Limited, and (b)
2
page word document titled as Investigation Report M/s Innocent Deal
Trade Pvt Limited.
9. It is submitted that, (without prejudice), then ideally, these are the only two documents on which the entire assessment is based on or should be based on, strictly speaking on interpretation of the Supreme Court order of AshishAgarwal, if at all the assessment can take place.
10. It is submitted that the first word file (titled as Interim
Verification Report - M/s StartreeDealcom Private Limited), does not contain any details or information about what is wrongdoing on the part of the assessee firm, IT does not even

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contain name of assessee firm except on the last page wherein a sum of Rs. 25,00,000 has been simply stated in front of the name of the assessee firm in a table as follows:-
There table is followed by a small para as "Therefore, the information may be shared with the Juri ictional Aos of the beneficiaries and M/s StartreeDealcomPvt Ltd, to initiate such actions as deemed fit in the interest of revenue as per Income
Tax Act, 1961." In other words, this is only and only sharing of information and nothing beyond that. As a result, it is submitted that the assessing officer should have verified the same and done its own homework rather than turning this suspicion into confirmation without even an iota of work or evidence in that regard. It is respectfully submitted that it is not the case here and the assessing officer has not done anything atall in this matter.
11. Similarly. It is submitted that second word file also has the same status of that of the first word file which has the name of the assessee firm only in one last line against the amount
3,80,00,000. The information has been in the following format in the table in the word file titled as Investigation Report M/s
Innocent Deal Trade Pvt Limited.
Here the table as well as the word file ends. There is nothing beyond this table as regards the assessee firm. There is nothing against Source /Intermediary concern, Source Bank,
Source A/c No. with the officer, not it is provided to the assessee firm.
But, one thing is certain, that the assessee firm has not received any money from anyone except its partner and source of source is not relevant as regards the capital introduction by a partner into a firm especially the first year capital introduction by the partner into a firm.
12.It is submitted that not only there is not even an iota of evidence or any investigation (forget conclusive in-depth investigation) as regards the assessee's involvement in any of these, if any. ITO, Ward 19 (2)(2), Mumbai, has simply not even followed the decision of the Supreme Court in the case of 10
Moradiay Gems LLP., Mumbai.

Ashish Agarwal, based on which the reassessment is sought to be done in regards to what has been stated to be followed along with instruction of The Central Board of Direct Taxes.
13.ITO, Ward 19 (2)(2), Mumbai then passed the order under section 148 A (d) on 25th July 2022 making this a fit case u/s 148
for escaping assessment for income of rupees
4,35,00,000. 14. Then the said case was shifted to faceless assessment scheme. Notices under section 142 (1) and 143(2) were received and they were replied to.
15. Coming to the FAO, as well, the law is not followed at all.
There is complete lack lustre approach towards assessee as no details are except a same two word file and nothing more.
Even though it is stated that an xls file is stated to have been attached to the said notice, it was not attached to the notice.
The said fact was brought to the notice of the FAO, however no attention was given to the said observation. It seems that it had not reached the ears of the assessing officer as there was not action on it.
16. There were several other observations and objections raised and pointed out to the assessing officer on those two word documents. However there was no consideration to the same.
17. A show cause notice was issued dated 1st May 2023. It was nothing but Copy paste from the order under section 148
Α.
18. Detailed reply Was submitted on 8th May 2023. 19. However, nothing was Considered and addition of Rs
4,35,00,000 was made under section 69A.
20. It is furthermore submitted that the entire reassessment proceedings are subject to the validity of the said notice as challenged by the assessee. It is submitted that since the reassessment proceedings are time barred, there cannot be any assessment and if any assessment being carried out is 11
Moradiay Gems LLP., Mumbai.

invalid ab-initio and hence the entire assessment proceedings are time barred and invalid. Subject to the above legal submissions, the assessee LLP herewith submit the following submissions for your kind consideration.
21.Letter dated 27th May 2022 (DIN: ITBA/COM/F/17/2022-
23/1043208973(1)) was issued by Income Tax Officer, Ward
19(2)(2), Mumbai with subject as "subsequent proceedings with reference to section 148A(b) in consequence to Hon'ble
Supreme Court order dated 4th May 2022. The said letter was received with the following 3 attachments.
(a) Case Related Information Detail from Insight Portal with Source PAN Name as StartreeDealcom Private Limited for information value of 25,00,000/-. It has mentioned two other documents as general documents, viz. (i) interim verification report.pdf and (ii) fund trail
StartreeDealcom
Private limited.xlsx. It is stated that none of the above 2 documents listed above were provided to the assessee.
(b) Verification Details from Insight Portal with the Result
Value 3,80,00,000/- with Result Type unexplained credit. It only says that it is suspicious transaction. The Description Of The Document as per the Verification Details from Insight
Portal itself says it is Verification Report and Information
Description states it as Suspicious Transaction. In other words, it is naturally not confirmed a dubious transaction as projected by the assessing officer as well as NFAC. Ithas also listed a document named Investigationinnocent96B docx but it has not been provided to the assessee for its cross examination.
(c) Approval u/s 151 dated 23rd April 2021 with the annexure
(totaling to 7
pages) which stated income escaping assessment4,35,00,000/-
22. In other words, there is absolutely no 3rd party evidence which can be easily relied upon but the only material which has been relied are reports made by one officer for some other purposes forwarded to another officer. TheANNEXURE which is the part of approval u/s 151 itself states in para 2.that 12
Moradiay Gems LLP., Mumbai.

information has been received from DGIT (INV), unit 4 (1)
Kolkata tolnsight Portal
23.In para 2 of the said annexure, it is stated that as per information the assesseeMoradiya Gems LLP being ultimate beneficiaries had brought back their unaccounted money amounting to 3,80,00,000/- from M/s ShreehariVinimayPvt Ltd during the financial year 2013-14 relevant to the assessment year under consideration. After this one occurrence, there is no reference or name taken of M/s Shreehari VinimayPvt Ltd at all during the entire annexure.
24. The said annexure talks about so many other companies but, M/s Shreehari VinimayPvt Ltd, who being partner in the said LLP has introduced its capital, does not talk about the company which is partner in the said LLP who has introduced capital into the firm at all.
25. It is stated that information detail talks about information value of 25,00,000/- and verification details talks about result
Value of 3,80,00,000/-, mathematical total of whichcomes to 4,15,00,000. However, the approval u/s 151
is for 4,35,00,000/- as income escaping assessment.
26. It is stated that even the said annexure has given 3
breakups, being (a) 3,80,00,000/-, (b) 30 lakhs, and (c) 25
lakhs.
27. Para 2.1 of annexure forming part of approval u/s 151, it is stated M/s Innocent Deal Trade Private Limited has current account No. 1129505500098 in the name of with ICICI
Kolkata. M/s Shreehari VinimayPvt Ltd has used this account and other shell companies for a layering of transfer of funds to the real beneficiaries. The very vague and generalized statement with no particular details of even names and therefore it cannot be relied upon. There is no other detailed available for submission of the assessee as it is not provided to the assessee LLP. In the absence of any particular details, the same cannot be relied upon as it does not become part of information and details which the Department is relying upon 13
Moradiay Gems LLP., Mumbai.

as held by Supreme Court of India in the case of Union of India v/s Ashish Agarwal on 4th May 2022. 28. Para 3 of Annexure forming part of approval u/s 151, it is stated M/s Timelink Sales Private Limited has current account
No. 129605500052 in the name of with ICICI Kolkata. M/s
Shreehari Vinimay Pvt Ltd has used this account and other shell companies for a layering of transfer of funds amounting to 30 lakhs to the real beneficiaries. The very vague and generalized statement with no particular details of even names and therefore it cannot be relied upon. There is no other detailed available for submission of the assessee as it is not provided to the assessee LLP. In the absence of any particular details, the same cannot be relied upon as it does not become part of information and details which the Department is relying upon as held by Supreme Court of India in the case of Union of India v/s Ashish Agarwal on 4th May 2022. 29. Para 4 of Annexure forming part of approval u/s 151, it is stated M/s Startree Dealcom Private Limited has current account No. 1295055001127 in the name of with ICICI
Kolkata. M/s Shreehari VinimaPvt Ltd has used this account and other shell companies for a layering of transfer of funds amounting to 25 lakhs to the real beneficiaries. The very vague and generalized statement with no particular details of even names and therefore it cannot be relied upon. There is no other detailed available for submission of the assessee as it is not provided to the assessee LLP. In the absence of any particular details, the same cannot be relied upon as it does not become part of information and details which the Department is relying upon as held by Supreme Court of India in the case of Union of India v/s Ashish Agarwal on 4th May 2022. 30. It is submitted that even though the said Annexure is running into 7 pages. there is no creditable information other than a reference of information received from DGIT (INV), unit 1
(1), Kolkata. It is merely an information and nothing more than that. The said information in the nature of mole has been turned into a monster by the assessing officer and has presumed income escapement of 4,35,00,000/-.

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Moradiay Gems LLP., Mumbai.

On perusal of the said letter, we find that the investigation wing had only mentioned that the learned assessing officer's advice to consider and examine all other relevant details and carry out his own independent enquiry and take necessary action as per law in respect of sale of shares of Gemstone
Investments
Limited made by the assessee.
The said information nowhere gives any mandate/authority to the learned assessing officer to enable him to form a belief that income of the assessee had indeed escaped assessment. It is not in dispute that other than the said letter dated 6 March
2019 received from investigation wing and SEBI order, the learned assessing officer did not have any information or material which would enable him to form a belief that income of the assessee had escaped Assesmentwaranting reopening.
Hence d'is made fishing case where opening has been made by the leamer AO to make fishing and roving enquiries which in our considered opinion is not permissible in law. Our view is further fortified by the decision of Honorable juri ictional
High Court in the case of PCIT V/s Rajesh D Nandu (HUF) reported in 261 taxman110 (BOM)(HN).."
35 It is submitted that the assessing officer, Ward 19(2)(2),
Mumbai by not providing the required information and material not only violated the above stated Supreme Court decisions but also violated by not following Instruction No. 01/1022 dated
11th May 2022 issued by the Central Board Of Direct Taxes
(Annex-D). It is stated because the said instruction in their para 7 and 8 has laid down the procedure to be followed by the assessing officer in the reassessment proceedings and has clearly stated that within 30 days, i.e. by 2nd June 2022 the assessing officer shall provide to the assessee is the information and material relied upon for issuance of extended reassessment notices.
36. It is submitted that all is our clear-cut contempt of court, that too Supreme Court and the regulatory authority which is again against Article 141 of the Indian Constitution 1949. (Annex-E)
37. The assessing officer vide letter dated 28th June 2022,
(DIN: ITBA/COM/F/17/2022- 23/1043644473(1)), gave copies

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of (a) a document titled Interim Verification Report, M/s
StartreeDealcom Private Limited (4 pages) and (b) Investigation
Report M/S Innocent Deal Trade Private Limited (2 pages).
38. Document titled Interim Verification Report, apart from having some unrelated information which is not concerning assessee LLP and/or any way related to partner who has introduced capital into the assessee LLP which is just being
Incorporated. The said report itself that with the 1" client whichis, "a credible information was received by this office.....
And whatever has been stated in the next 4 paragraphs are nothing but unrelated stuff to the assessee LLP. It describes what M/s Star Tree Dealcom Private Limited and some other
13 accounts has done without even taking the name of ShreehariVinimay Private Limited.
39. It also states that the funds are transferred through RTGS, and what is wrong in account being credited through RTGS is not known as it is a permitted instrument for faster and effective fund management introduced by reserve bank of India. It also says that there are many companies with which M/s Star Tree Dealcom Private Limited has dealt with or strike off or database company. What is meant by database company is a matter of imagination as the same word has never been heard before.
40. It is stated that strike off only means that some particular forms an annual returns prescribed by