GARJE RUDRAPPA JAYANNA ,MANDYA vs. INCOME TAX OFFICER, WARD-1 & TPS, MANDYA

Per Laxmi Prasad Sahu, Accountant Member : These 2 appeals are filed by the assessee against the Orders passed by the CIT(A) vide DIN and notice Nos.ITBA/NFAC/S/250/2024- 25/1075117180(1) and ITBA/NFAC/S/250/2024-25/1075116795(1) respectively, both Orders dated 27.03.2025, on the following grounds of appeal :

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2. Assessee has filed addition ground which is as under:
3. At the outset of hearing, learned Counsel submitted that notice issued by the AO under section 148 of the Act dated 29.04.2022 for both the AYs are barred by limitation as per judgment of Hon’ble Apex Court in the case of UoI v. Rajeev Bansal [Civil Appeal No. 8629 of 2024, vide its order dated 03-10-

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2024]. Therefore, the reassessment Order passed by the AO for the impugned
Assessment Year is null and void.
4. On the other hand, learned DR relied on the Order of lower authorities and submitted that assessee had income which had escaped income in the eyes of law and huge cash was deposited in his bank account in spite of that assessee did not file return of income. Even during the course of reassessment proceedings, various opportunities were given to the assessee. The AO has initiated penalty proceedings under section 271F of the Act for not filing income tax return. Therefore, addition made by the AO under section 147 r.w.s. 144B of the Act is correct and the period of 6 years will apply in this case because escapement of income is more than prescribed limit of Rs.50lakhs at the time of issue of notice as per section 149(1b) of the Act.
5. Considering the rival submissions and on perusal of the entire material available on record and Orders of authorities below, from the Paper Book filed by the assessee and case law relied on by the learned Counsel, I noted that notice under section 148A(b) of the Act was issued to the assessee on 15.03.2022 and copy of Order passed under section 148A(b) of the Act on 19.04.2022. Immediately on the same day the AO has issued notice under section 148 of the Act dated 29.04.2022 noted supra. The Hon’ble Apex Court has put to rest for the Assessment Year 2015-16 for issuance of notice under section 148 of the Act in the case of UOI v. Rajeev Bansal (supra) and the Co-ordinate Bench of the ITAT, Bangalore, in similar issue in the case of Tuffwud India Pvt. Ltd., Vs.
DCIT in ITA No.571/Bang/2025 referring to the judgment of Hon’ble Apex
Cort in the case of UOIvs Rajeev Bansal noted supra, Order dated 20.08.2025, held as under:
“9. We have heard the rival submissions and perused the materials available on record. In the instant case, the appeal of the assessee was ITA Nos.1078, 1079/Bang/2025
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dismissed by Ld. CIT(A) against which the Assessee vide an appeal, however, since, the legal issue is raised with regard to the limitation of procedure initiated u/s 147 of the Act filed by assessee, therefore, we proceed to decide the legal issue raised by assesse first.
10. It is an admitted fact that earlier, the notice u/s 148 in the case of assessee was issued on 29/06/2021 which was dropped and proceedings u/s 148A of the Act were initiated in terms of order of Hon'ble Supreme
Court in the case of Ashish Agarwal (supra) and finally the notice u/s 148
was issued on 29/07/2022. The Ld. Additional Solicitor General of India in the case of Rajiv Bansal (supra) has made categorical statement at Bar before the Hon'ble Supreme Court that all the notices issued for Asst. Year
2015-16 on or after 1st April 2021 will be dropped, however, in the instant case, no such action was taken and re-assessment order was framed in the case of the assessee on the basis of the notice issued u/s 148 of the Act on 29/07/2022. The relevant extract of the assertion made by the Ld.
Additional Solicitor General of India before the Hon'ble Supreme Court as contained in para 19(f) of the said order are reproduced as under:
"19. Mr. N. Venkataraman, learned Additional Solicitor General of India, made the following submissions on behalf of the Revenue:
a. Parliament enacted TOLA as a free-standing legislation to provide relief and relaxation to both the assesses and the Revenue during the time of COVID-19. TOLA seeks to relax actions and proceedings that could not be completed or complied with within the original time limits specified under the Income Tax Act; b. Section 149 of the new regime provides three crucial benefits to the assesses: (i) the four-year time limit for all situations has been reduced to three years; (ii) the first proviso to Section 149 ensures that re-assessment for previous assessment years cannot be undertaken beyond six years; and (iii) the monetary threshold of Rupees fifty lakhs will apply to the re- assessment for previous assessment years; c. The relaxations provided under Section 3(1) of TOLA apply
"notwithstanding anything contained in the specified Act." Section 3(1), therefore, overrides the time limits for issuing a notice under Section 148
read with Section 149 of the Income Tax Act;

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d. TOLA does not extend the life of the old regime. It merely provides a relaxation for the completion or compliance of actions following the procedure laid down under the new regime; e. The Finance Act 2021 substituted the old regime for re-assessment with a new regime. The first proviso to Section 149 does not expressly bar the application of TOLA. Section 3 of TOLA applies to the entire Income Tax
Act, Including Sections 149 and 151 of the new regime. Once the first proviso to Section 149(1)(b) is read with TOLA, then all the notices issued between 1 April 2021 and 30 June 2021 pertaining to assessment years
20132014, 2014 2015, 2015-2016, 2016-2017, and 2017-2018 will be within the period of limitation as explained in the tabulation below:
Assessment year (1)
Within
3
Years (2)
Expiry of Limitation read with TOLA for (2) (3)
Within six
Years
(4)
Expiry of Limitation read with TOLA for (4)
(5)
2013-2014
31.03.2017
TOLA not applicable
31.03.2020
30.06.2021
2014-2015
31.03.2018
TOLA not applicable
31.03.2021
30.06.2021
2015-2016
31.03.2019
TOLA not applicable
31.03.2022
TOLA not applicable
2016-2017
31.03.2020
30.06.2021
31.03.2023
TOLA not applicable
2017-2018
31.03.2021
30.06.2021
31.03.2024
TOLA not applicable f. The Revenue concedes that for the assessment year 2015-16, all notices issued on or after 1 April 2021 will have to be dropped as they will not fall for completion during the period prescribed under TOLA; g. Section 2 of TOLA defines "specified Act" to mean and include the Income Tax Act. The new regime, which came into effect on 1 April 2021, is now part of the Income Tax Act. Therefore, TOLA continues to apply to the Income Tax Act even after 1 April 2021; and ITA Nos.1078, 1079/Bang/2025
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h. Ashish Agarwal (supra) treated Section 148 notices issued by the Revenue between 1 April 2021 and 30 June 2021 as show-cause notices in terms of Section 148A(b). Thereafter, the Revenue issued notices under Section 148 of the new regime between July and August 2022. Invalidation of the Section 148 notices issued under the new regime on the ground that they were issued beyond the time limit specified under the Income Tax Act read with TOLA will completely frustrate the judicial exercise undertaken by this Court in Ashish Agarwal (supra).
11. Looking to the facts and considering the assessment year involved is 2015 16, notice issued in the case of originally on 29/06/2021
and later on 29/07/2022 which both the dates have fallen on or after 1st
April, 2021, therefore, both the notice deserves to be dropped in view of the admission made by the Revenue before the Hon'ble Supreme Court.
Further, for Assessment Year 2015-16, no notice u/s 148 of the Act could be issued after the expiring of six years from the end of the relevant assessment year which limitation expired on 31st March, 2022. Further, the Hon'ble Supreme Court in the case of Rajiv Bansal (supra) has observed that TOLA is not applicable for Asst. Year 2015-16, therefore, even otherwise under the old provisions of section 149 of the Act, the notice issued u/s 148 of the Act for Asst. Year 2015-16 on 29/07/2022 is barred by limitation.
12. This view is supported by the order of Hon'ble Delhi High Court in the case of Ibibo Group Pvt. Ltd. v. Asstt. CIT [W.P.(C) No. 17639 of 2022, dated 13-12-2024] wherein vide order dated 13.12.2024, the Hon'ble Juri ictional High Court after relying upon the decision of Hon'ble Supreme Court in the case of Rajiv Bansal (supra) has quashed the notice issued u/s 148 of the Act. Further, the Hon'ble Delhi High Court in the case of Pratishtha Garg v. Asstt. CIT [2025] 171 taxmann.com 264
(Delhi)/W.P.(C)-16878/2024 vide order dated 19/12/2024 has expressed the same view. Further, the Hon'ble DElhi High Court in the case of Makemytrip India Pvt. Ltd. v. Dy. CIT [2025] 173 taxmann.com 497
(Delhi)/W.P.(C) 2557/2023 vide order dated 24.03.2025 has also expressed the same view.
13. It is also relevant to mention that the Hon'ble Supreme Court in Deepak Steel & Power Ltd. v. CBDT [2025] 174 taxmann.com 144/476
ITR 369 (SC)/Civil Appeal No. 5177/2025 vide its order dated 2nd April,
2025 in the case of Deepak Steel & Power Ltd. (supra) in identical fact

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has allowed by SLP field by the Revenue and disposed of the appeal by making following observations:
"2. These appeals arise from the order passed by the High Court of Orissa at Cuttack in Writ Petition (C) Nos. 2446 of 2023, 2543 of 2023 dated
1.2.2023 and 2544 of 2023 dated 10.02.2023 respectively by which the High Court disposed of the original writ petitions in the following terms:-
"1. The memo of appearance filed by Mr. S. S. Mohapatra, learned Senior
Standing Counsel for Revenue Department on behalf of Opposite Parties is taken on record.
2. In view of the order passed by this Court on 1st December, 2022 in a batch of writ petitions of which W.P. (C) No.9191 of 2022 (Kailash Kedia v. Income Tax Officer) was a lead matter and the subsequent order dated
10th January, 2023 passed in W.P. (C) No.36314 of 2022 (Shiv
MettalicksPvt. Ltd., Rourkela v. Principal Commissioner of Income Tax,
Sambalpur), the Court declines to entertain the present writ petition, but leaves it open to the Petitioner to raise all grounds available to the Petitioner in accordance with law including the grounds urged in the present petition at the appropriate stage as explained by the Court in those orders.
3. The writ petition is disposed of in the above terms."
3. We heard Mr. Saswat Kumar Acharya, the learned counsel appearing for the appellants (assessee) and Mr. Chandrashekhar, the learned counsel appearing for the revenue.
4. The learned counsel appearing for the revenue with his usual fairness invited the attention of this Court to a three judge bench decision of this Court in Union of India and ors. v. Rajeev Bansal, reported in 2024 SCC
OnLine SC 2693, more particularly, paragraph 19(f) which reads thus:-
"19. (f) The Revenue concedes that for the assessment year 2015-2016, all notices issued on or after April 1, 2021 will have to be dropped as they will not fall for completion during the period prescribed under the Taxation and other Laws (Relaxation and Amendment of Certain
Provisions) Act, 2020."

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5. As the revenue made a concession in the aforesaid decision that is for the assessment year 2015-2016, all notices issued on or after 1" April,
2021 will have to be dropped as they would not fall for completion during the period prescribed under the taxation and other laws (Relaxation and Amendment of certain Provisions Act, 2020). Nothing further is required to be adjudicated in this matter as the notices so far as the present litigation is concerned is dated 25.6.2021. 6. In view of the aforesaid, in such circumstances referred to above the original writ petition nos. 2446 of 2023, 2543 of 2023 and 2544 of 2023
respectively filed before the High Court of Orissa at Cuttack stands allowed."
Further, the Hon'ble Supreme Court has dismissed the SLP filed by the Revenue in Asstt.CIT v. Nehal Ashit Shah [SLP (CIVIL) Diary No (s)
57209 of 2024, dated 4-4-2025] has dismissed the application filed by the Revenue by relying upon the paragraph 19E and 19F of Hon'ble Supreme
Court in the case of Rajiv Bansal (supra).
Further, the Hon’ble Juri ictional high Court of Karnataka quashed the notice issued u/s 148 on 01.04.2022 in the case of Mohammed Yasen vs
ITO in Writ Petition No. 26080 of 2024 (T-IT) reported in (2025) 175
taxmann.com (Karnataka) in this case it was held that In the instant case, it is an undisputed fact that the impugned proceedings is relating to the assessment year 2015-16, while the impugned notice under section 148
dated 1-4-2022 was issued beyond/after 1-4-2021 which is impermissible in law and barred by limitation and consequently, the impugned orders/notices etc., deserve to be quashed.
14. In view of the above facts and by respectfully following the judgments of the Hon'ble Supreme Court in the case of Rajiv Bansal (supra) and in the case of Deepak Steel & Power Limited (supra), and Nehal Ashit Shah
(supra), (SC, 2025), we hold that the notice issued u/s 148 on 29.07.2022
is barred by limitation and, therefore, the same is quashed.
15. Since the additional ground filed by the assessee is allowed in above terms , we further consider that no need to decide other legal grounds raised and on the merits of the additions .
16. In the result, the appeal of the filed by is allowed in above terms”

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6. Respectfully following the above judgment, we hold that the notice issued by the AO under section 148 of the Act dated 29.04.2022 for the AY
2015-16 is barred by limitation. Therefore, the AO has no juri iction to pass the Order under section 147 r.w.s. 144B of the Act. Accordingly, I quash the Assessment Order.
7. In the result, appeal in ITA No.1078/Bang/2025 is allowed.
8. In this appeal, assessee has raised additional ground as noted supra. On going through the above additional ground, I noted that the issue raised is legal in nature. Therefore, relying on the judgment in the case of NTPC Ltd., the additional ground raised by the assessee is accepted.
9. Briefly stated the facts of the case are that income tax department had information that assessee has deposited huge cash of Rs.1,12,95,185/- in his bank account. In spite of that assessee had not filed return of income.
Accordingly, notice under section 148A(b) of the Act dated 29.03.2022 vide
DIN No.ITBA/AST/7/148A(SCN)/2021-22/10411110175(1) was issued.
Assessee furnished reply after following the due procedure. In response to the above notice assessee filed reply on 06.04.2022 wherein he has stated that he is rendering online tender services to several contractors. The deposits made are the amounts collected from the contractors which needs to be transferred to the government account in lieu of tender deposit on behalf of contracts. For this service, assessee is getting fee, the quantum of which assessee has not furnished.
Accordingly, the explanation offered by the assessee was not accepted and notice under section 148 of the Act dated 25.04.2022 was issued to the assessee.
Thereafter, other statutory notices were issued to the assessee. Assessee

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furnished reply dated 18.04.203, 18.07.2023 and 04.10.2023 and submitted that assessee is engaged as daily wages based employee working in Cauvery
Neeravai Nigama Ltd., a Karnataka State Government Undertaking, had received salary of Rs.2,44,332/-, during the year, assessee offered the same for taxation. In compliance to the above notice under section 148 of the Act, assessee filed return of income on 21.06.2022 vide acknowledgment
No.689453810210622. In addition to employment as part time business, he assists several contractors in online filing of tender application for various government contracts and for that assessee charges fees which is around Rs.500
per application. He has shown income from this activity as Rs.5,78,433/- which is also offered for taxation under section 44AD of the Act of Rs.86,765/-.
Assessee filed copy of bank statement of account No.4472000100010401 in which it was noted that majority of cash deposits have been reported during the Financial Year 2014-15. However, in some urgent requirements he had made tender payments from his other 2 accounts maintained with Karnataka Bank account
No.447250010064001
and State
Bank of India account
No.0064034088210. The stated cash deposits of Rs.1,12,95,185/- represents amount received in cash from contractors and deposited into his bank account to make payment of tender application fees and earnest money deposit on behalf of contractors. After considering the entire submissions, the AO noted that there is failure on part of the assessee to discharge primary onus of satisfactory explanation. The commission and other receipts were not explained properly.
Accordingly, the AO treated 10% of total cash deposits of Rs.1,12,95,185/- as undeclared commission income.
10. Aggrieved from the above Order, assessee filed appeal before the learned
CIT(A). Assessee filed detailed written submissions and assessee also raised legal issue that notice under section 148 of the Act is barred by limitation raising issue that as per section 149(1)(b) of the Act, income of the assessee is less than 50 lakhs as assessed by the AO in the reassessment proceedings under section ITA Nos.1078, 1079/Bang/2025
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147 r.w.s. 144B of the Act. Therefore, the period of more than thre years is not applicable. This issue has rightly been deleted by the learned CIT(A) in his
Order which is as under:
11. Learned CIT(A) after considering the entire submissions and issu raised by the assessee before him, dismissed the appeal of the assessee.
12. Aggrieved from the above Order, assessee filed appeal before the Tribunal. The learned Counsel reiterated the submissions made before the lower authorities and the learned Counsel strongly contested that notice issued

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under section 148 of the Act for the Assessment Year 2018-19 is beyond the period of 3 years as per section 1491(b) of the Act. In this case, escapement of income is less than 50 lakhs. Therefore, the period of more than three years will not apply in this case and learned Counsel strongly relied on the judgments noted below :
13. Further, the learned Counsel raised issue by way of additional grounds as noted supra that the AO has not issued notice under section 143(2) of the Act after filing of return of income by the assessee. Therefore, AO had no juri iction to make reassessment under section 147 of the Act and relied on the following judgments:
14. Further, assessee submitted that on merits of the case that the assessee filed return under section 44AD of the Act after taking into account the gross commission received from the contractors of Rs.5,78,433/- in which assessee has declared income of Rs.86,765/- which is more than quantum prescribed under section 44AD of the Act filed on 21.06.2022. During the course of reassessment proceedings, the entire details were produced of 56 contractors from whom assessee has received gross commission of Rs.5,78,433/- and in this ITA Nos.1078, 1079/Bang/2025
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regard no further questions were asked by the AO. Therefore, income reported by the assessee must be considered.
15. On the other hand, learned DR relied on the Order of lower authorities and submitted that notice issued under section 148 of the Act dated 25.04.2022
is correct. At the time of issue of notice, the AO is not required to quantify for considering the period if prima facie it appears that assessee has escapement of income which is more than Rs.50 lakhs then the period of more than three years are very much available to the AO for issue of notice and he further submitted that before the issue of notice under section 148 of the Act, assessee furnished reply which was incomplete. He did not submit complete confirmation to whom the services have been rendered and how much of fee received from the concerned contractors. Even before 148A(b) of the Act proceeding the details of the contractors, their address, PAN, contract number, etc., were not given to the AO. Therefore, at the time of disposing off of the objection of the assessee, the AO had no credible information about the contractors so that he could conclude that the actual commission received is correct or not. The case laws relied on by the learned Counsel are not applicable to the present facts of the case. He further submitted that the assessee did not file return of income within the due time as time allowed under section 148 of the Act to the assessee. The AO had given 30 days time to file return of income. However, assessee did not file return of income within the due date. Therefore, the return filed by the assessee is nonest(defective), the notice cannot be issued on such return filed by the assessee. This issue is also not sustainable in the eyes of law. It was further submitted that in respect of merits of the issue, The provision of section 44AD is not applicable to the assessee and he relied on the Order of lower authorities are correct and therefore Order should not be disturbed.
16. In the rejoinder, the learned Counsel submitted on merits of the case that income should be considered under section 44AD of the Act and the assessee

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has offered 15% of the total commission received amounting to Rs.86,765/- which has been declared by the assessee in his return of income. Profit shown in the return of income should be considered as true profit from the business carried out by the assessee.
17. Considering the rival submissions and on perusal of entire material available on record and Orders of authorities below, we noted that first contention raised by the assessee is that notice issued under section 148 of the Act is barred by limitation. I am in agreement with the arguments of the learned
DR that the notice was validly issued beyond the period of 3 years. Before issue of notice under section 148 of the Act, during the course of proceedings under section 148A(b)/148A(d) of the Act against which the reply submitted by the assessee is not complete to satisfaction of the AO. Therefore, at the time of issue of notice, prima facie opinion of the AO was that amount escaped is Rs.1,12,95,185/-. In fact assessee is facilitating the contractors but for want of details the AO has rightly issued notice under section 148 of the Act which is within limitation period of more than six years years because the escapement of income is more than Rs.50 lakhs. The notice issued is within the prescribed time as per provision of section 149(1)(b) of the Act. The notice issued under section 148 of the Act is within the time prescribed under section 149b of the Act. Therefore I reject the arguments of the learned Counsel on this point. Even during the course of proceedings u/s 148A9b) of the Act the objection filed by the assessee could not correlate the transaction with the concerned contractors and no other documents were produced by the assessee except bank statement and self-serving documents prepared by him. Therefore, at the stage of issue of notice, the escapement of income was more than Rs.50 lakhs. Therefore, the period of 6 years will apply for issue of notice under section 148 of the Act.
Therefore, this issue raised by the assessee and the case laws relied on by the learned Counsel are not applicable to the present facts of the case and the case law relied on by the learned Counsel has been rightly distinguished by the ITA Nos.1078, 1079/Bang/2025
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learned DR. Further, in case of additional grounds raised by the assessee in respect of notice issued under section 143(2) of the Act for taking juri iction by the AO, in this regard I noted that from the statement of facts submitted by the assessee before the ld. CIT(A) which is placed at appeal set page No. 36 at point No. 8 in which himself stated that the notice u/s 143(2) was issued on 28.06.2023 Therefore, this legal ground rised by the assessee is dismissed.
18. In the result, this ground is also rejected.
19. Further, in the case on merits of the case, assessee is facilitating to contractors and charging fee for the services rendered to the contractors. As per the computation made by the assessee, the total fee charged is Rs.5,78,433/- on which assessee has offered taxation under section 44AD of the Act of Rs.86,765/- which is also not correct. The AO has considered 10% of income on adhoc basis on total cash deposits. However, he has also noted that the assessee is providing/ facilities to his contractors for payment of contract fee, MD, etc. Therefore, 10% income offered by the AO on the total receipt is also not justified. Therefore, I consider that the gross income shown by the assessee of Rs.5,78,433/- is considered as gross receipt from the business carried out by the assessee. Since from the provision of section 44AD of the Act, assessee is not covered under the eligible business and eligible assessee.
Therefore, computation made by the assessee is also not correct. During the course of assessment proceedings as well as appellate proceedings before the learned CIT(A), assessee could not furnish any detail of the expenditures incurred. No doubt that in every business for earning income some expenditures are required to be incurred by the entrepreneur (assessee), The assessee was providing service to the contractor himself . therefore, considering the facts of the case, from the total receipts of Rs.5,78,433/- Rs. 1,00,000/- is allowed for the expenditures and the rest amount of Rs.4,78,433/- is confirmed. I further clarify that from the above confirmed amount of Rs.4,78,433/-, the AO is ITA Nos.1078, 1079/Bang/2025
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directed to give credit of whatever income is offered by the assessee in his return of income of Rs.86,765/-. Accordingly, a sum of Rs.3,91,668/- is confirmed
(Rs.5,78,433 – Rs.1,00,000 – Rs.86,765).
20. In the result, appeals filed by the assessee are partly allowed.
21. To sumup the ITA No. 1078/Bang/2025 is allowed and ITA No.
1079/Bang/2025 is partly allowed.
22. A common Order passed shall be kept in respective case files.
Pronounced in the court on the date mentioned on the caption page. (SOUNDARARAJAN K)
Accountant Member
Bangalore,
Dated : 03.10.2025. /NS/*
Copy to:
1. Appellant 2. Respondent 3. Pr.CIT4.CIT(A)
5. DR, ITAT, Bangalore.
By order