IMPRESSIVE TRADING PVT. LTD.,MUMBAI vs. INCOME TAX OFFICER 10(1)(1), MUMBAI

On the facts and under the circumstances of the case and in law the Ld. Commissioner of Income Tax (Appeals) has erred in confirming addition of Rs. 1,39,86,758/- as undisclosed commission (being estimation at the rate 3 percentage of credit entries amounting to Rs. 46,62,25,272/- in the bank account) made by the Ld. A.O. merely on conjectures & surmises. ITA N0.7299/MUM/2025

On the facts and under the circumstances of the case and in law the Ld. Commissioner of Income Tax (Appeals) has erred in confirming issuing notice u/s 148 which is barred by limitation and hence the impugned reassessment order is also bad in law & void ab initio& needs to be quashed & annulled.

On the facts and under the circumstances of the case and in law the Ld. Commissioner of Income Tax (Appeals) has erred in confirming in reopening the assessment merely on the basis of vague information received from the Investigation Wing and no independent inquiry was made by him. Therefore impugned re-assessment order is bad in law and void abinitio.

On the facts and under the circumstances of the case and in law the Ld. Commissioner of Income Tax (Appeals) has erred in confirming in coming to conclusion that income chargeable to tax has escaped assessment without appreciating the reply submitted in response to show cause notice during assessment proceedings.

On the facts and under the circumstances of the case and in law the Ld. Commissioner of Income Tax (Appeals) has erred in confirming the assessment order passed u/s 147 by the Juri ictional Assessing Officer which is invalid as the same is contrary to the provisions contained in the section 151A of the Act read with notification issued on 29.03.2022 regarding e-Assessment of Income Escaping Assessment Scheme, 2022. 6. On the facts and under the circumstances of the case and in law the Ld. Commissioner of Income Tax (Appeals) has erred in confirming the addition of Rs. 114,16,52,457/- (new issue) for total sales shown in books of account during the year ignoring the fact that no addition was made for the amount of Rs. 3,42,79,573/- (being 3 percentage of Rs. 114,16,52,457/-) as undisclosed commission which was the reason for reopening the assessment. When no addition is made for the original issue then no other addition can be made in law in reassessment. आयकर अपीलीय अधिकरण INCOME TAX APPELLATE TRIBUNA Page 4 ITA No. 7298, 7299& 7300/Mum/2025 A.Y. 2013-14, 2014-15 & 2015-16 Impressive Trading Pvt Ltd., Mumbai

On the facts and under the circumstances of the case and in law the Ld. Commissioner of Income Tax (Appeals) has erred in confirming the addition of Rs.3,42,49,574/- at the rate 3 percent of credit entries in bank account as commission income.

On the facts and under the circumstances of the case and in law the Ld. Commissioner of Income Tax (Appeals) has erred in confirming the deemed total income determined u/s 115JB of the Act at Rs. 12,17,459/- in tax calculation sheet whereas the income as per return of income is loss of Rs. 31,86,531/u/s 115JB of the Act.

On the facts and under the circumstances of the case and in law the Ld. Commissioner of Income Tax (Appeals) has erred in confirming the addition of Rs. 1,16,22,479/- as undisclosed commission.

On the facts and under the circumstances of the case and in law. the Ld. Commissioner of Income Tax (Appeals) has erred in confirming the order passed u/s 148A(d) and notice issued u/s 148 after 29.03.2022 by the Ld. Juri ictional A.O. which is invalid as the same is contrary to the provisions contained in the section 151A of the Act read with notification issued on 29.03.2022 regarding e-Assessment of Income Escaping Assessment Scheme, 2022. 6. On the facts and under the circumstances of the case and in law the Ld. Commissioner of Income Tax (Appeals) has erred in confirming the addition made of Rs. 1,16,22,479/- (being 36 percentage of credit entries in the appellants bank account amounting to Rs. 38,74,15,992/-)in view of the fact that no addition has been made on the issue of reopening of the assessment.

On the facts and under the circumstances of the case and in law the Ld. Commissioner of Income Tax (Appeals) has erred in confirming the आयकर अपीलीय अधिकरण INCOME TAX APPELLATE TRIBUNA Page 5 ITA No. 7298, 7299& 7300/Mum/2025 A.Y. 2013-14, 2014-15 & 2015-16 Impressive Trading Pvt Ltd., Mumbai

Since the grounds of appeal in all the above assessment years are identical, we are adjudicating them vide this composite order for the sake of brevity. It is noticed that in all the impugned assessment years, the assessments were reopened on the basis of certain information received from theInvestigation Wing of the Department that the assessee was engaged in bogus accommodation entry activity to facilitate bogus sale and purchases without any actual movement of goods. Further,perusal of the current bank account statement of the assessee company maintained with Kotak Mahindra Bank Ltd. revealed circular movement of funds without having any actual trade as no supporting documents had been submitted in support of this transaction. Most of the related party transactions were between the 18 parties which were controlled by one Sharon Bio Medicine Limited(SBML) and assessee was one of such parties with whom this company had transacted with. Thus, the assessee was found to be one of the related parties used by SBML to inflate its sales and purchases through circular transactions of funds without actual movement of goods. The transactions were routed through the assessee's bank आयकर अपीलीय अधिकरण INCOME TAX APPELLATE TRIBUNA Page 6 ITA No. 7298, 7299& 7300/Mum/2025 A.Y. 2013-14, 2014-15 & 2015-16 Impressive Trading Pvt Ltd., Mumbai account maintained with Kotak Mahindra Bank. The assessee company was engaged in circular trading. Accordingly, certain part of the credit entries in bank account was determined as assessee's undisclosed commission on percentage basis in all the assessment years, based on the report of the Wing. The additions made were upheld by the ld.CIT(A).

At the very outset, the ld.AR has drawn attention of the Bench to the legal grounds relating to validity of the notices issued u/s 148 of the Act and the consequential assessment orders in all the above

1 It is submitted by the ld.AR that in all the assessment years under consideration,the AO was left with surviving period of only one day. Accordingly, the notices issued subsequently were apparently invalid and non est. He has furnished year wise chart alongwith factual आयकर अपीलीय अधिकरण INCOME TAX APPELLATE TRIBUNA Page 7 ITA No. 7298, 7299& 7300/Mum/2025 A.Y. 2013-14, 2014-15 & 2015-16 Impressive Trading Pvt Ltd., Mumbai Paper Book, giving datewise chronology of notices and response of the assessee, in support of this contention which is reproduced as below:

2 In view of the above dates, it is submitted that all the notices u/s 148 of the Act in above stated exhaustively dealt with quashing the notices u/s 148 of the Act by following the ratio of the judgment of hon'ble Apex Court in Rajeev आयकर अपीलीय अधिकरण INCOME TAX APPELLATE TRIBUNA Page 9 ITA No. 7298, 7299& 7300/Mum/2025 A.Y. 2013-14, 2014-15 & 2015-16 Impressive Trading Pvt Ltd., Mumbai Bansal(supra).Relevant parts of the order are extracted as under for the sake of brevity:

In the decision in Rajeev Bansal (supra), the Hon'ble Supreme Court categorically held that the 148 Notices were to be issued within the surviving period. The Hon'ble Supreme Court accepted the contention that had found favour with this Court in Godrej Industries (supra) that to test the validity of the notice under Section 148 issued after 1st April 2021, the law in force on that date would have to be applied. The Supreme Court also held that applying this principle to test whether a notice under Section 148 is issued within the period of limitation one would have to give effect to the terms of the first proviso to Section 149(1)(b). The first proviso to Section 149(1)(b) enacts that a notice issued after 1st April 2021 has to be issued within such time as was permissible under the unamended Section 149(1)(b). Thus, for Assessment Year 2014-15, the notice under Section 148 under the unamended provisions, could have been issued in terms of Section 149(1)(b) by 31st March 2021. The Supreme Court thereafter held that in order to construe whether the notice was issued within the period of limitation, one would have to give effect to the provisions of TOLA as well as the judgment of the Hon'ble Supreme Court in Ashish Agarwal and the requirements of the provisos to Section 149. The Supreme Court held that during the period from the date of issuance of the deemed notice under Section 148A(b) and the date of the judgment in Ashish Agarwal (supra) [i.e. from 29th June 2021 to 4th May 2022] the Assessing Officers were deemed to have been prohibited from passing a reassessment order, and thus, the show cause notices were deemed to have been stayed by an order of the Supreme Court from the date of the issuance of the notice till 4th May 2022. The Supreme Court further extended this limitation and stated that the show cause notices were deemed to have been stayed not only upto 4th May 2022 but till the date when the Assessing Officer आयकर अपीलीय अधिकरण INCOME TAX APPELLATE TRIBUNA ITA No. 7298, 7299& 7300/Mum/2025 A.Y. 2013-14, 2014-15 & 2015-16 Impressive Trading Pvt Ltd., Mumbai provided the relevant information and material to the Assessee in terms of the directions issued in Ashish Agarwal (supra). The Supreme Court noted that the provisos to Section 149 allows the exclusion of time allowed to an Assessee to respond to the show cause notice under Section 148A(b) to compute the period of limitation. The Hon'ble Supreme Court therefore summarized that the total time that is excluded for computation of the period of limitation within which the notice is to be issued as encompassing the time during which the show cause notices were effectively stayed, that is, from the date of the original notice issued under Section 148 till the supply of the relevant information or material by the Assessing Officers to the Assessee in terms of the directions in Ashish Agarwal. A further period of two weeks to allow the Assessee to respond to the show cause notice was also excluded for the purposes of limitation. The effect of this conclusion of the Supreme Court was that the time surviving under the Act read with TOLA that will be available to the revenue to issue the reassessment notice under Section 148 of the new regime will have to be calculated by computing the number of days between the date of issuance of the deemed notice, till 30 th June 2021, and accordingly the reassessment notices would have to be issued within the time limit surviving. To understand how the law laid down by the Hon'ble Supreme Court in Rajeev Bansal would apply to the present case, it would be apposite to set out in the following table the notices etc issued in the present case. 1. 30-06-2021 Notice under the erstwhile Section 148 [deemed to be a notice under new Section 148A(b)] 2. 04-05-2022 Judgment of the Hon'ble Supreme Court in Ashish Agarwal 3. 25-05-2022 Notice conveying reasons for reopening provided to the Petitioner pursuant to the judgment in Ashish Agarwal and providing a period of two weeks to the Petitioner to respond

No reply filed by the Petitioner 5. 08-06-2022 Two weeks' time granted elapsed. 6. 25-07-2022 Order passed under section 148A(d) 7. 25-07-2022 Notice issued under section 148 8. 08-10-2025 Notice under section 142(1) 9. 17-10-2025 Reply filed by the Petitioner 10. 17-10-2025 Impugned assessment order passed

From the table set out above and applying the law laid down by the Hon'ble Supreme Court in Rajeev Bansal the remaining days for आयकर अपीलीय अधिकरण INCOME TAX APPELLATE TRIBUNA ITA No. 7298, 7299& 7300/Mum/2025 A.Y. 2013-14, 2014-15 & 2015-16 Impressive Trading Pvt Ltd., Mumbai

The view that we have taken is not only supported by a decision of this Court in the case of Hitesh Ramniklal Shah V/S Assistant Commissioner of Income Tax & Ors. [Writ Petition No.4164 of 2025 decided on 11th November 2025] and Gurpreet Singh V/S DCIT [176 taxmann.com 673 (Bom)], but also that of the Delhi High Court in Ram Balram Buildhome (P.) Ltd V/S ITO [477 ITR 133 (Del)], the Gujarat High Court in Dhanraj Govindram Kella V/S ITO [177 taxmann.com 194 (Guj)], and the Madras High Court in Mrs. Thulasidass Prabavathi V/S ITO [174 taxmann.com 508 (Mad)]. In fact, the judgments in the case of Gurpreet Singh (supra), Ram Balram Buildhome (P.) Ltd (supra), Dhanraj Govindram Kella (supra) and Mrs.Thulasidass Prabhavathi (supra) have been extensively dealt with by this Court in its judgment passed in Hitesh Ramniklal Shah (supra). It is for this reason that we are not burdening this judgment by once again reproducing the aforesaid decisions. Suffice it to state that we concur with the judgment of the co-ordinate Bench of this Court in Hitesh Ramniklal Shah (supra) as well as Gurpreet Singh (supra) and also with the decisions of the Delhi High Court in Ram Balram Buildhome (P.) Ltd (supra), Gujarat High Court in Dhanraj Govindram Kella (supra) and the Madras High Court in Mrs.Thulasidass Prabhavathi (supra).

Before closing this matter, it would only be fair to deal with the contention of the Revenue that since no reply is filed to the notice dated 25th May 2022 issued by the Revenue, the concept of the "surviving period" does not apply as set out in Rajeev Bansal (supra). We find that this argument cannot be accepted for the simple reason that there is no such finding in the decision in the case of Rajeev Bansal (supra). In Rajeev Bansal, the Hon'ble Supreme Court has categorically held that the period from the date of the deemed notice under Section 148A(b) to a period of 4 weeks to provide material to the Assessee as directed in Ashish Agarwal, and a further period of 2 weeks to be provided to the Assessee to reply to the said material, were to be excluded. It is therefore difficult to accept that if no reply was filed by the Assessee, then there would be no time limit applicable at all. This is not what has been laid down by the Hon'ble Supreme Court in the case of Rajeev Bansal. Where no reply is filed to answer the material and/or information supplied by the Assessing Officer, then as per the decision of the Hon'ble Supreme Court in Rajeev Bansal the surviving period would start running from the last day to file the said reply, namely, from 8th June 2022. We, therefore, find this argument canvassed on behalf of the Revenue to be without merit.

In view of the foregoing discussion, the above Writ Petition is allowed." आयकर अपीलीय अधिकरण INCOME TAX APPELLATE TRIBUNA ITA No. 7298, 7299& 7300/Mum/2025 A.Y. 2013-14, 2014-15 & 2015-16 Impressive Trading Pvt Ltd., Mumbai

As the facts of the case are identical in all the impugned years, we hold that the notices issued u/s 148 of the Act and the consequential assessment orders are null and void, thus allowing the legal grounds of appeal.

Since the assessment orders are quashed on legal ground, we do not find any reason to adjudicate the grounds involving merits of the case which are accordingly, left open.

In the result, all the above appeals in ITA Nos. 7298/7299 and 7300/Mum/2025 of the assessee stand allowed. Order pronounced in the open court on 11/02/2026. NARENDRA KUMAR CHOUDHRY (न्यायिक सदस्य /JUDICIAL MEMBER) Place: मुंबई/Mumbai दिनांक / Date 11.02.2026 Lubhna Shaikh / Steno PRABHASH SHANKAR (लेखाकार सदस्य/ACCOUNTANT MEMBER) आदेश की प्रतिलिपि अग्रेषित/Copy of the Order forwarded to : 1. अपीलार्थी / The Appellant 2. प्रत्यर्थी / The Respondent. 3. आयकर आयुक्त / CIT 4. विभागीय प्रतिनिधि, आयकर अपीलीय अधिकरण DR, ITAT, Mumbai 5. गार्ड फाईल / Guard file. आयकर अपीलीय अधिकरण INCOME TAX APPELLATE TRIBUNA ITA No. 7298, 7299& 7300/Mum/2025 A.Y. 2013-14, 2014-15 & 2015-16 Impressive Trading Pvt Ltd., Mumbai सत्यापित प्रति //// आदेशानुसार/ BY ORDER, उप/सहायक पंजीकार (Dy./Asstt.