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Facts
The assessee filed an appeal against an order of the Commissioner of Income Tax (NFAC) which upheld a reassessment order. The reassessment proceedings were initiated under section 147 of the Income Tax Act, 1961, alleging escaped assessment of Rs. 2,29,97,026/- for AY 2014-15 based on information from a search in another entity's case.
Held
The Tribunal held that the notice issued under section 148 of the Act was barred by limitation, as it was issued beyond the permissible time limit calculated as per Supreme Court judgments. Consequently, the reassessment proceedings initiated were considered void ab initio.
Key Issues
Whether the reassessment proceedings initiated under Section 147 were barred by limitation due to the delay in issuing the notice under Section 148, and whether the assessment order was valid.
Sections Cited
147, 144, 144B, 250, 148, 132, 148A, 69A, 153C
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, PUNE BENCHES “A” :: PUNE
Before: DR.DIPAK P. RIPOTE & SHRI VINAY BHAMORE
1. This is an Appeal filed by the Assessee against the Order of the Commissioner of Income tax (appeal) (NFAC) under section 250 of the Income Tax Act, 1961 for A.Y.2014-15 dated 18/11/2024 emanating from Assessment Order u/s.147 r.w.s144 r.w.s144B dated 19/05/2023.
2. Assessee has raised following grounds of appeal :
1. On the facts and in the circumstances of the case and in law the learned Assessing Officer erred in initiating the reassessment proceedings u/s 147, as enacted w.e.f. 01/04/2021, as the proceedings are time barred in view of judgement of Hon'ble Supreme Court in the case of Union of India Vs. Rajeev Bansal, 167 Taxmann.com 70 (SC)[2024], therefore consequential order needs to be quashed 2. On the facts and in the circumstances of the case and in law the learned Assessing Officer erred in initiating reassessment proceedings under section 147 by issuing notice under section 148 dated 25/07/2022 without specifying the DIN & Notice No as envisaged in CBDT circular No. 19/2019 dated 14/08/2019 and therefore the relevant notice is invalid and consequently orders also becomes invalid.
3. On the facts in the circumstances of the case and in law the learned Assessing Officer erred in initiating the reassessment proceeding under the new provisions of section 147 as inserted by finance act 2021, on the basis of information gathered during the search conducted on M/s Renukamata Multistate Urban Co-operative Credit Society, therefore the action is illegal as the proceedings ought to have been initiated u/s 153C, therefore consequential order passed is bad in law and deserves to be struck down.
4. On the facts in the circumstances of the case and in law the learned Assessing Officer erred in passing order u/s 144 r.w.s. 147 without appreciating the submissions made by the appellant stating that appellant is a victim of financial scam for which appellant's name was utilized and therefore the entire addition is not justified.
5. Without prejudice to the above grounds, on the facts in the circumstances of the case and in law the learned Assessing Officer erred in making an addition of Rs. 2.29,97,026/- u/s 69A, being, total of entire credit side of the bank account of the appellant, without appreciating the submissions made by appellant in this regard. Your appellant prays for deletion of entire addition Your appellant prays for deletion of entire addition. Your appellant craves for to add, alter amend, modify, delete any or all grounds of appeal before or during the course of hearing in the interest of natural justice.”
Findings and Analysis :
We have heard both the parties and perused the records.
BASIC FACTS : 4. In this case, assessee had filed original return for A.Y. 2014- 15 on 31/03/2016 declaring total income at Rs.3,77,810/-. Copy of the acknowledgement has been filed by ld. AR in the paper book. The Assessing Officer had issued notice u/s.148 on the basis of information obtained during search and seizure action u/s.132 of the Act in the case of Shri Renuka Mata Multi State Urban Cooperative Credit Society Limited. The Assessing Officer had received the said information from ACIT (Central Circle)-4 (4), Mumbai vide letter dated 12/03/2021. It was alleged that assessee had made total cash deposits of Rs.2,29,97,026/-. The assessee had not filed any submission in response to notice u/s.148A(b) of the Act. Therefore, Assessing Officer passed an order u/s.148A(d) on 25/07/2022 stating that the income chargeable to tax of Rs.2,29,97,026/- has escaped assessment for A.Y. 2014-15. Assessee filed return of income in response to the notice u/s.148. The assessee during the re-assessment proceedings filed an elaborate reply on 24/04/2023 which has been partly reproduced in the re-assessment order. The copy of the said letter has been filed by ld. AR at page 44 to 46 of the paper book along with e- Acknowledgement. In the said letter, the assessee has specifically stated that he is into business of scrap and not properly educated. Assessee also pleaded that he do not have any such bank account in Shri Renuka Mata Multi State Urban Cooperative Credit Society Limited. Assessee submitted that his name has been used by someone. Assessee further submitted in the said letter that the cash in that particular account was deposited at various cities like Jalna, 3 Kinwat, Aurangabad etc. where he has never visited during his life time. Assessee further submitted that he has neither deposited any amount in the socalled account nor withdrawn any amount from the socalled account. The gist of said submission of the assessee has been reproduced by the Assessing Officer in the re-assessment order dated 19/05/2023. However, the Assessing Officer in the order wrote that assessee has to bring on record evidence to prove that the impugned account maintained with Shri Renuka Mata Multi State Urban Cooperative Credit Society Limited does not belongs to him. In this context, we fail to understand when assessee has denied ownership of the bank account, how assessee can bring on record documents to prove the same. Rather, the Assessing Officer should have verified the Account opening form and KYC documents and those facts should have been confronted to the assessee. In this case, Assessing Officer has not brought on record the KYC documents to prove that impugned bank account indeed belongs to the assessee. The assessee filed appeal before ld.CIT(A) who merely confirmed the addition. Aggrieved by the said order of ld.CIT(A) assessee filed appeal before this Tribunal.
In this case, at the outset, Ld. AR submitted that the notice u/s.148 dated 25/07/2022 is issued beyond the time limit and hence it is bad in law. Therefore, ld. AR pleaded that consequential proceedings are also bad in law. Ld. AR relied on the order of Hon’ble Supreme Court in the case of Union of India Vs. Rajeev Bansal (2024 167 taxmann.com 70 (SC) and the decision of this Tribunal in the case of DCIT Vs. Kolte Patil Integrated Townships 4 and 2011/PUN/2024 order dated 10/03/2025.
Ld. AR has filed a chart to explain the facts.
Particulars Dates/Period Page no. where copies have been filed Original notice issued u/s.148 08/06/2021 Page 2 of the paper book Time limit as per TOLA 30.06.2021 Time limit to be excluded 22 days Notice issued u/s.148A(b) 23/05/2022 Page 4 of the paper book Reply filed by Assessee NIL Surviving time limit to issue 14/06/2022 fresh notice u/s.148 Actual notice issued u/s.148 25/07/2022 Page 11 and 12 of the paper book 6.1 Thus, it is an admitted fact that initial notice u/s.148 was issued on 08/06/2021. The assessee filed return of income in response to notice u/s.148 dated 08/06/2021 on 19/11/2021. Acknowledgement of the said return is on page 3 of the paper book. Assessee has filed original return of income for A.Y. 2014- 15 on 31/03/2016. As per the directions of Hon’ble Supreme Court, notice u/s.148A(b) was issued, then order u/s.148A(d) was passed on 25/07/2022 and notice u/s.148 was issued on 25/07/2022.
ITAT Pune in the case of DCIT Vs. Kolte Patil Integrated Townships Limited in and 2011/PUN/2024 order dated 10/03/2025 has held as under :
“45. Therefore, in view of the decision of the Hon'ble Supreme Court 5 in the case of Ashish Agarwal (supra), it is clear that the time between the issue of original notice u/s 148 under the old regime and the time upto 30.06.2021 is the time limit available which needs to be added to the date on which the reply of the assessee was received. The Hon'ble Supreme Court has referred to this time limit as the surviving time limit available. Applying the same principle as laid down by Hon'ble Supreme Court in the case of Rajeev Bansal, for A.Y. 2014-15, the Assessing Officer should have issued notice u/s 148 by 13.06.2022 and for A.Y. 2016-17 by 26.06.2022. However, for both the assessment years, the Assessing Officer has issued notice u/s 148 subsequent to those dates i.e. 25.07.2022 and 26.07.2022 respectively. Therefore, the notices issued u/s 148 in the new regime are barred by limitation for both years. We, therefore, hold that the notice issued u/s 148 of the Act being barred by limitation, such re-assessment proceedings are not in accordance with law and have to be quashed.”
7.1 ITAT Pune has relied on the decision of Hon’ble Supreme Court in the case of Ashish Agarwal reported in (2022) 138 taxmann.com 64 (SC) which they have reproduced in para 44 of the order. The Hon’ble Supreme Court in the case of Rajeev Bansal (supra) has also discussed the “Surviving Time” in para 106 to 113 of the order. Accordingly, respectfully following the decision of ITAT Pune and Hon’ble Supreme Court, we hold that the notice u/s.148 issued under the New Regime on 25/07/2022 is barred by limitation. Since the notice u/s.148 dated 25/07/2022 is barred by limitation, the subsequent re-assessment proceedings are void ab-initio. Accordingly, the order u/s.147 r.w.s.144 dated 19/05/2023 is quashed as void ab-initio.
Ld. Departmental Representative has filed a paper book containing written submission and Case Laws. Ld. DR has relied on following case laws :
PCIT Vs. Naveen Kumar Gupta (2024) 168 taxmann.com 574 (Delhi).
Amar Jewellers Ltd. Vs. ACIT (2022) 137 taxmann.com 249 6 (Gujarat)
3. CIT GVs. Anil Kumar Bhatia (2022) 24 taxmann.com 98 (Delhi) 4. Sejal Jewellery & Anr Vs. UOI WP No.3057 of 2019 along with 12 others judgment dated 18.02.2025 8.1 However, all these case laws relied by ld. DR were filed in response to Ground No.3 raised by assessee wherein assessee has pleaded that notice u/s.153C should have been issued. Therefore, these case laws are of no use with reference to Ground No.1 wherein assessee has challenged the validity of notice u/s.148 based on the decision of Hon’ble Court in the case of Rajeev Bansal (supra).
Ground No.1 raised by the assessee is allowed.
Ground No.2 to 5 raised by the assessee are not being adjudicated as they would become academic in nature.
In the result, Appeal filed by the assessee is partly allowed.
Order pronounced in the open Court on 29th August, 2025.