DAVALBEN BALUBHAI MAKWANA,SURAT vs. THE INCOME TAX OFFICER, WARD 2(3)(1), SURAT

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ITA 1173/SRT/2025Status: DisposedITAT Surat02 April 2026AY 2017-183 pages
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What did the Tribunal hold?

The Tribunal noted that the notice issued under section 148 was beyond the surviving time limit by approximately 43 days. Consequently, the notice was held to be bad in law, rendering the assessment order void ab initio.

What were the facts?

The assessee filed an appeal against the NFAC's order which confirmed the AO's reassessment order. The primary contention was that the reassessment notice was issued beyond the surviving time limit. The assessee also challenged the addition of Rs. 12,16,500/- under section 69A for deposits made during demonetization and the applicability of amended section 115BBE.

What were the issues?

Whether the reassessment notice was barred by limitation, and if so, whether the subsequent assessment order is void. Also, the validity of additions made under section 69A and the applicability of section 115BBE were in question.

Which sections of the Income-tax Act were involved?

Section 69A,Section 44AD,Section 115BBE,Section 234A,Section 234B,Section 148

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Income Tax Appellate Tribunal, SURAT “SMC” BENCH, SURAT

Before: Dr. BRR Kumar, Hon’ble & Ms. Suchitra Kamble

For Appellant: Shri Ashish Modi, A.R
For Respondent: Shri Ashish Kumar, Sr. D.R

आदेश/ORDER Per Suchitra Kamble, Judicial Member:

1.

This is an appeal filed against the order dated 10-10- 2025 passed by National Faceless Appeal Centre(NFAC), Delhi for assessment year 2017-118.

2.

The grounds of appeal

are as under:- “1. That having regard to the facts and circumstances of the case, Ld NFAC has erred in law and on facts in confirming the action of AO in passing the impugned reassessment order which is barred by limitation as the same was issued after the Surviving Time limit."

2. Without prejudice to the above ground of appeal, on the facts and circumstances of the case as well as law on the subject, the Ld. NFAC has erred in confirming addition of Rs. 12,16,500/- u/s 69A of the Income Tax Act, 1961 as Income from Other Source of amount deposited during demonetization period. The addition was made in spite of the fact that appellant declaring its return of income under section 44AD of the Act by providing reasons of not providing records of expenses and books of accounts.

3. That the Ld. NFAC has erred in confirming law in levying tax on above addition at the rate of 60 percent plus surcharge as per the amended provision of Sec. 115BBE of the Act, whereas the amendment in Sec 115BBE is not retrospective but is prospective and applicable w.e.f. 01/04/2017 and thus, not applicable to the period under appeal..

4. That the Ld. NFAC has erred in confirming interest charged u/s 234A/234B of the Act.

5. That the Ld. NFAC has erred in validating the non-grant of opportunity of being heard via Video Conference of the Ld. AO.

6.

That the appellant craves leave to add or amend the grounds of appeal before the appeal is heard and disposed off.”

3.

At the time of hearing, the ld. A.R. submitted that the assessee’s case is covered by the decision of Hon’ble Apex Court in cases of UOI v. Ashish Agarwal, (2022) 444 ITR 1 (SC) and UOI v. Rajeev Bansal, 2024 INSC 754 (SC). At the time of hearing, the assessee submitted the following chart:-

From the perusal of the said chart, it appears that to issue the notice u/s. 148 was uptil 16-06-2022 and thus the Davalben Balubhai Makwana, A.Y. 2017-18 notice is time barred by approximately 43 days. Thus, the notice itself is bad in law and therefore the assessment order becomes void ab initio.

4.

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

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