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Facts
The assessee filed her return for AY 2016-17. She purchased a BMW car and made a cash payment for it, which was not properly justified in her return. The case was reopened, and an addition was made by the AO under section 69A, which was confirmed by the CIT(A). The assessee appealed the CIT(A)'s order.
Held
The Tribunal held that the notice u/s 148 was issued beyond the limitation period prescribed by Section 149 of the Act, rendering the reassessment proceedings and the consequent order invalid and without jurisdiction. Therefore, the Tribunal quashed the AO's order.
Key Issues
Whether the notice issued under section 148 for reassessment was within the prescribed limitation period, and if not, whether the reassessment proceedings are invalid.
Sections Cited
69A, 147, 144, 148, 148A, 149
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Before: MS. SUCHITRA RAGHUNATH KAMBLE & SHRI BIJAYANANDA PRUSETH
आदेश / O R D E R
PER BIJAYANANDA PRUSETH, AM:
This appeal by the assessee emanates from the order passed under section 250 of the Income-tax Act, 1961 (in short, ‘the Act’), dated 20.03.2025 by the National Faceless Appeal Centre, Delhi/ Commissioner of Income-tax (Appeals) [in short, ‘CIT(A)’] for the assessment year (AY) 2016-17, which in turn arises out of assessment order passed by Assessing Officer (in short, ‘AO’) u/s 147 r.w.s. 144 r.w.s. 144B of the Act dated 25.05.2023.
Grounds of appeal
raised by the assessee are as under: “1. The Ld. CIT(A), NFAC has erred and was not just and proper on the facts of the case and in law in confirming the addition of 25,31,835/- u/s 69A of the Income-tax Act.
2. As Additional Ground:
A.Y 16-17 Urmilaben P Patel The Ld. Jurisdictional Assessing Officer has erred and was not just and proper on the facts of the case and in law in issuing notice u/s 148 with approval from Pr. Commissioner of Income Tax-1 instead of Pr.Chief Commissioner of Income Tax in terms of the decision of Rajeev Bansal by Hon’ble SC.
3. Prayer. 3.1 The addition made by Ld. Assessing Officer and confirmed by the Ld. CIT(A)-NFAC may be kindly deleted. 3.2 The notice issued u/s 148 being without proper sanction may be kindly quashed. 3.3 Personal hearing may be granted. 3.4 Any other relief that your honours may deem fit may be granted.
The appellant craves leave to add, amend, alter or delete any or all of the above grounds of appeals.”
Facts of the case in brief are that assessee filed her return of income for AY 2016-17 on 23.03.2017 declaring total income of Rs.3,25,060/-. The assessee had purchased a BMW car for Rs.25,31,835/- and paid Rs.10,31,835/- in cash. However, her return of income did not justify the cash payment of Rs,10,31,835/- for purchasing luxury car on 31.03.2016. Thereafter, the case was reopened by issuing notice u/s 148 of the Act on 29.07.2022. The assessee did not comply with the notices issued by the AO and hence, addition of Rs.25,31,835/- was made to the total income u/s 69A of the Act in the order passed u/s 147 r.w.s. 144 of the Act. Aggrieved by the addition made by AO, assessee filed appeal before CIT(A), who has dismissed the appeal of the assessee.
A.Y 16-17 Urmilaben P Patel 4. Aggrieved by the order of CIT(A), assessee has filed present appeal before the Tribunal. The Ld. AR of the assessee filed a paper book containing copies of various notices issued by the AO and relied on the decision of Hon’ble jurisdictional High Court in case of Dhanraj Govindram Kella vs. ITO in Civil Application No.6387 of 2023 dated 08.07.2025. The Ld. AR submitted that the notice issued by the AO u/s 148 is not valid because it was issued with the approval of Pr.CIT instead of the Pr.CCIT in terms of the decision of Hon’ble Supreme Court in case of Union of India vs. Rajeev Bansal 167 taxmann.com 70 (SC). He also submitted that the AO was not right in law in assuming jurisdiction u/s 148 by passing order u/s 148A(d) of the Act on 29.07.2022. The primary grievance of the Ld. AR is that notice issued u/s 148 dated 29.07.2022 is barred by limitation and hence, the entire assessment framed pursuant to such notice is without jurisdiction. The Ld. AR relied on the decision of Rajeev Bansal (supra) and decision of Hon’ble jurisdictional High Court in case of Dhanraj Govindram Kella (supra) and submitted that the notice u/s 148 of the Act was issued beyond the surviving period after excluding the period granted by the AO and hence the notice u/s 148 of the Act is invalid. The Ld. AR submitted that the facts in case of Dhanraj Govindram Kella (supra) are similar because in the said case, notice u/s 148 under TOLA was issued on 30.06.2021 and the order u/s 148A(d) and notice u/s 148 were issued on 30.07.2022. The Hon’ble jurisdictional High Court held that the last date for issuance of notice
On the other hand, Ld. Sr-DR for the revenue supported the order of the lower authorities and submitted that Bench may decide the matter as it thinks fit.
We have heard both the parties and perused the materials available on record. We have also deliberated the decisions relied upon by the Ld. AR of the appellant. We have also gone through the relevant provisions of the Act in respect of the jurisdictional issue raised before us. The facts relevant for adjudication of the legal grounds are as under:
Sr. No. Particulars Date 1 Issuance of notice u/s 148 under old regime 30.06.2021 2 Last date to issue notice u/s 148 as per TOLA 30.06.2021 3 Surviving period [(2)-(1)] 1 4 Issuance of notice u/s 148A(b) 23.05.2022 5 Reply filed in response to notice u/s 148A(b) 07.06.2022 6 Last date to file reply in response to notice u/s 148A(b) 07.06.2022 7. Limitation period to pass order u/s 148A(d) and issue 14.07.2022 notice u/s 148 as per 3rd proviso to section 149 [(6)+(3)] 8. Passing of order u/s 148A(d) and issuance of notice u/s 30.07.2022 148 6.1 It is clear from the facts mentioned in the above table that the fresh notice u/s 148 was issued on 29.07.2022 whereas the last date to issue such notice was 14.07.2022. Therefore, the notice u/s 148 of the Act was issued after expiry of limitation period prescribed u/s 149 of the Act. Once the notice itself is time barred, the consequential re-assessment proceedings u/s 147 r.w.s 144 of the Act is without jurisdiction and invalid. Consequently, the re- A.Y 16-17 Urmilaben P Patel assessment order made by the AO is liable to be quashed. Useful reference may be made to the decisions in cases of Rajeev Bansal (supra), Dhanraj Govindram Kella (supra), Saroj Predhiman Kaw vs. DCIT (2025) 176 taxmann.com 76 (Guj) and Mayurkumar Babubhai Patel vs. ACIT 176 taxmann.com 25 (Guj). Accordingly, the jurisdictional grounds raised by the appellant are allowed and the order of AO is quashed.
Since we have allowed the appeal on jurisdictional issue, we are not adjudicating other grounds raised on merits.
In the result, appeal of the assessee is allowed.