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Facts
The assessee filed an appeal against the order of the CIT(A) for AY 2015-16. The primary issue was an addition of Rs. 58,62,000/- made by the AO on account of alleged 'on money', based on data from a third party's search operation. The assessee contended that no corroborative evidence or cash trail was provided by the AO and that the reopening itself was barred by limitation.
Held
The Tribunal held that the reopening of assessment for AY 2015-16 was bad in law and barred by limitation, citing the Supreme Court's decision in Union of India vs. Rajeev Bansal and the concession made by the Revenue. Consequently, the assessment order was quashed.
Key Issues
Whether the reopening of assessment for AY 2015-16 under the extended period provided by TOLA is barred by limitation, in light of the Supreme Court's pronouncements and the Revenue's concession.
Sections Cited
147, 148, 250
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Income Tax Appellate Tribunal, “C” BENCH, AHMEDABAD
Before: SHRI SANJAY GARG & SMT. ANNAPURNA GUPTA
O R D E R
PER ANNAPURNA GUPTA, AM:
The present appeal has been filed by the assessee against the order of the Ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (hereinafter referred to as “NFAC”), Delhi (hereinafter referred to as “CIT(A)”) dated 11.02.2025 passed under Section 250 of the Income Tax Act, 1961 (hereinafter referred to as the “Act”) and relates to Assessment Year (A.Y.) 2015-16.
2. The grounds of appeal raised by the assessee read as under:
“1. The Ld. AO has erred in law and on facts in making addition of Rs.58,62,000/-on the alleged ground of "On Money" paid by the Kandarpkumar Parikh vs. DCIT] A.Y. 2015-16 - 2 – appellant. The Ld. AO has added the said sum to the income of the appellant merely on the basis of data from the excel sheet found during the search operation carried out on the third party i.e. "Navratna Organizers and Developers Pvt. Ltd. (NODPL)". The Ld. AO has also disclosed the fact that the party on which the search operation was carried out i.e. "Navratna Organizers and Developers Pvt. Ltd. (NODPL)" has admitted the receipt of alleged "On-Money" before the Hon'ble ITSC. It is submitted that such disclosure is "general" and the Ld. AO has not provided anything to establish that the alleged amount of addition (regarded as "On money") has actually been paid by the appellant. Thus, it is evident that the Ld. AO has "solely" relied upon the information received during the search operation on the third party and added such sum under the presumption that "On-money might have been paid by the appellant".
2. The Ld. AO has added such sum of Rs. 58,62,000/- to the income of the appellant without providing any corroborative evidence. The Ld. AO has not made any independent inquiry so establish that the alleged "On-money" is actually paid by the appellant. It is pertinent to mention that that during the assessment proceeding the appellant requested for the copy of reasons for reopening and opportunity of cross examination of the concerned person of the Navratna Organizers and Developers Pvt. Ltd. (NODPL), however neither of the mentioned opportunities were provided to the appellant. The Ld. AO is also unable to prove any cash trail of the alleged "On-money", rather the Ld. AO has shifted the burden on the appellant to prove that any cash has been paid by the appellant. It is pertinent to mention that it is the allegation of the Ld. AO that "On-money" has been paid by the appellant where as the appellant has denied any such cash transaction undertaken by her. Thus, under this circumstances it is for the Ld. AO to prove his allegation by corroborative evidence to establish the cash trail.
3. Further, it is submitted that the entire addition of the alleged "On- money" as unexplained investment u/s 69 of the IT Act, is based on the excel sheet seized during the search operation carried out at the premises of the third party. It is pertinent to mention that such data based on which the Ld. AO has made addition in the income of the appellant, was prepared by some third party and not by the appellant and lacks any evidentiary value. The Ld. AO has also not established any Cash trail from the data seized from the third party. Hence, the addition has been made "solely" on the basis of "entries" or "materials" seized from the third party without any corroborative evidence. The case of the appellant is mainly covered by the judgment given by the Hon'ble Income Tax Appellate Tribunal, Ahmedabad in the order against appeal no IT(S)A No.152/Ahd/2023 for AY 2012-13 dated 16.07.2024, in case of Madhodas Nehchaldas Ramchandani Vs. Income Tax Officer, Ward 1(2)(3), where in the Hon'ble ITAT held that "the AO has not taken cognisance of the disclosure made by H N Safal group before the Income Tax Settlement commission wherein no statement of that entity that the asseessee had paid alleged on-money. The contention of the Ld. AR appears to be genuine as no enquiry was Kandarpkumar Parikh vs. DCIT] A.Y. 2015-16 - 3 – independently conducted by the Assessing officer during the assessement proceedings. And the additions are only based on estimation and surmises and thus this addition does not sustain." Hence, the addition of Rs.58,62,000/- required to be deleted.
4. The Ld. AO has erred in law and on facts by initiating penalty proceeding u/s 271(1)(c) read with section 274 of the IT Act and ignored the fact that the appellant neither concealed her income nor furnished any inaccurate particulars to the Ld. AO during the assessment proceeding. Hence, penalty proceedings against the appellant should not be initiated.
5. The Appellant craves to add, amend and/or alter the ground or grounds of appeal
either before or at the time of hearing of the appeal.”
3. At the outset itself, Ld. Counsel for the assessee stated that the assessment framed in the case of the assessee is barred by limitation, covered by the judgment of the ITAT in in case of DCIT vs. Hindva Builders, dated 01.01.2026. Ld. Counsel for the assessee contended that the impugned assessment year was A.Y. 2015-16 and originally, notice for reopening of the case of the assessee was issued u/s.148 of the Act on 09.06.2021, within the extended time period as per Taxation and Other laws (Relaxation of certain provisions) Ordinance, 2020 (in short, “TOLA”). That pursuant to the judgment of the Hon’ble Supreme Court in the case of Union of India and Ors. Vs. Ashish Agrawal, [2022] 444 ITR 01 (SC), the notice issued u/s.148 of the Act was deemed to be notice u/s.148A(b) of the Act as per the amended provisions (new regime) relating to the reopening of assessment which had come into operation w.e.f. 01.04.2021. That, thereafter, in accordance with the directions issued by the Hon’ble Supreme Court in the case of Ashish Agrawal (supra), the notice u/s.148 of the Act in this case was issued on 31.08.2022. Ld. Counsel for the assessee pointed out that in the case of Hindva Builders (supra), the ITAT noted that Hon’ble Supreme Court in the case of Union of India vs. Rajeev Bansal, [2024] 469 ITR Kandarpkumar Parikh vs. DCIT] A.Y. 2015-16 - 4 – (SC) had noted that the Revenue had conceded before the Hon’ble Apex Court to the effect that so far as the A.Y. 2015-16 is concerned, the Revenue could not have issued the notices u/s.3(1) of TOLA considering the time period as prescribed u/s.149 of the Act w.e.f. 01.04.2021. He pointed out that in the said case, i.e Hindva (supra) the DR had conceded that as per the said judgment of the Hon’ble Apex Court in the case of Rajeev Bansal (supra), the reopening of assessment for A.Y. 2015-16 in the extended time period by TOLA between 01.04.2021 to 30.06.2021 was bad in law and barred by limitation. Our attention was drawn to the findings of the ITAT in this regard at para 3 to para 4 of the order as under:
“3. At the outset, the Ld. Counsel for the assessee has raised the legal/jurisdictional issue that the impugned addition was made by the Assessing Officer (AO) by way of reopening of the assessment u/s.147/148 of the Act. That pursuant to the judgement of Hon’ble Supreme Court in the case of “Union of India and Ors. vs. had Ashish Agrawal (2022) 444 ITR 01 (SC)” notice issued u/s.148 between 01/04/2021 to 30/06/2021 for AY 2015- 16 was deemed to be notice u/s.148A(b) of the Act as per the amended provisions (new regime) relating to the reopening of assessment which has come into operation w.e.f. 01/04/2021. That, thereafter, as per directions issued by the Hon’ble Supreme Court in the case of “Ashish Agrawal (supra)”, the notice u/s.148 of the Act, in this case, was issued on 30/08/2022. The Ld. Counsel has further submitted that this issue was also dealt with by the Hon’ble Supreme Court in the case of “Union of India vs. Rajeev Bansal (2024) 469 ITR 46 (SC)” and the Revenue therein, had conceded to the effect that so far as AY 2015-16 is concerned, the Revenue could not have issued the notices u/s.3(1) of “Taxation and other laws” (Relaxation of certain provisions) Ordinance, 2020 (in short, “TOLA”) as considering the time period as prescribed u/s.149 of the Act, with effect from 01.04.2021, three years would be over on 31/03/2019, which is prior to coming into force of “TOLA” and six years would be completed on 31/03/2022 which is after operation of “TOLA”. In such circumstances, notices for AY 2015-16 were held to be invalid by the Hon’ble Supreme Court in the case of “Rajeev Bansal (supra)”. The Ld. Counsel has, therefore, submitted the reassessment notice issued u/s.148 of the Act for AY 2015-16, as per concession given by the Revenue before the Hon’ble Supreme Court, was invalid and, therefore, the notice issued u/s 148 of the Act for the assessment for AY 2015-16 after coming into operation of the provisions of section 147 of the Act under new regime, w.e.f. 01/04/2021, was invalid and, therefore, the very reopening of the assessment was bad in law. 3.1. The Ld. DR has also fairly conceded that as per the judgement of the Hon’ble Supreme Court in the case of “Union of India vs. Rajeev Agrawal (supra)”, the reopening of the assessment for AY 2015-16 was bad in law being barred by limitation. 3.2. The Ld. Counsel, in this respect, has relied upon the decision of Hon’ble Gujarat High Court dated 14/07/2025 with the lead case in R/Special Civil Application Kandarpkumar Parikh vs. DCIT] A.Y. 2015-16 - 5 – No.17443/2022 along with various other petitions, wherein, the Hon’ble Jurisdictional High Court on identical issue has made the following observation: “11. During the course of hearing before the Hon'ble Apex Court, Revenue conceded to the effect that so far as Assessment Year 2015-2016 is concerned, Revenue could not have issued the notices under section 3(1) of TOLA as considering the time period as prescribed under section 149 of the Act with effect from 01.04.2021, three years would be over on 31.03.2019 which is prior to coming into force of TOLA and six years would be completed on 31.03.2022 which is after operation of TOLA. In such circumstances, notices for Assessment Year 2015-2016 are held to be invalid by Hon'ble Apex Court in case of Rajeev Bansal (supra).
The Hon'ble Apex Court followed the decision of Rajeev Bansal (supra) in case of Deepak Steel and Power Ltd vs. Central Board of Direct Taxes reported in [2025] 174 taxmann.com 144 (SC) and after recording the concession of the learned advocate for the department and in view of the concession given before the Apex Court by learned advocate appearing for the Revenue as recorded in para 19(f) of the judgment in case of Rajeev Bansal (supra), has quashed and set aside the notice issued after 31.03.2021 under TOLA for Α.Υ. 2015-16 as under: "1. Leave granted.
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 Department for Revenue on behalf of Opposite Parties is taken on record.
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 Mettalicks Pvt. 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 in grounds urged 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."
We heard Mr. Saswat Kumar Acharya, the learned counsel appearing 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:-
Kandarpkumar Parikh vs. DCIT] A.Y. 2015-16 - 6 – "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."
As the revenue made a concession in the aforesaid decision that is for the assessment year 2015-2016, all notices issued on or after 1st April, 2021 will have to be dropped as they would not fall completion during the prescribed under the taxation and other period 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 25.6.2021. 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 of 2023 and 2544 of 2023 respectively filed before the High Court of Orissa at Cuttack stands allowed.
The impugned notice therein stands quashed and set aside.” ………. ……… ……… “19. In view of above, for the foregoing reasons, these petitions are also allowed. The impugned notices issued under section 148 of the Act for the Assessment Year 2015-16 are held to be invalid as same were issued during the extended period from 01/04/2021 to 30/06/2021 under TOLA.”
4. In view of the above stated legal position, since notice issued u/s.148 of the Act for AY 2015-16 has been held to be not valid being barred by limitation, therefore, the very reopening of the assessment in the year under consideration is also bad in law and the same is hereby quashed. Accordingly, the impugned assessment order is not legally sustainable and hence, the same is quashed. Therefore, without going into the merits of the case, the appeal of the revenue (ITA No.1450/Ahd/2024 for AY 2015-16) is hereby dismissed on this legal ground itself.”
Ld. DR fairly agreed with the above. He was unable to point out any distinguishing facts before us.
5. In view of the above, the reopening of the assessment in the present case, relating to A.Y 2015-16, is therefore held to be bad in law, being barred by limitation and the order passed accordingly u/s 147 of the Act is hereby quashed.
Appeal of the assessee is therefore, allowed in above terms.
7. Since we have quashed the assessment order passed, the additions made to the income of the assessee and confirmed by the Kandarpkumar Parikh vs. DCIT] A.Y. 2015-16 - 7 – Ld.CIT(A) do not survive and the remaining grounds raised on the merits of the addition made, therefore, require no adjudication.
In the result, the appeal of the asessee is allowed in above terms. This Order pronounced on 23/02/2026 Sd/- Sd/- (SANJAY GARG) (ANNAPURNA GUPTA) JUDICIAL MEMBER ACCOUNTANT MEMBER Ahmedabad; Dated 23/02/2026 S. K. SINHA TRUE COPY आदेश की �ितिलिप अ�ेिषत/Copy of the Order forwarded to : 1. अपीलाथ� / The Appellant 2. ��थ� / The Respondent. 3. संबंिधत आयकर आयु� / Concerned CIT 4. आयकर आयु�(अपील) / The CIT(A)- 5. िवभागीय �ितिनिध, आयकर अपीलीय अिधकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाड� फाईल / Guard file. आदेशानुसार/ BY ORDER,
उप/सहायक पंजीकार (Dy./Asstt. Registrar) आयकर अपीलीय अिधकरण, अहमदाबाद / ITAT, Ahmedabad 1.Date of dictation on Direct on Desktop 2.Date on which the typed draft is placed before the Dictating Member 12.02.2026 3.Date on which the approved draft comes to the Sr.P.S./P.S. 4.Date on which the fair order is placed before the Dictating Member for Pronouncement 5.Date on which the fair order comes back to the Sr.P.S./P.S 23.02.2026 6.Date on which the file goes to the Bench Clerk 23.02.2026 7.Date on which the file goes to the Head Clerk…………. 8.The date on which the file goes to the Asstt. Registrar for signature on the order…………………… 9.Date of Dispatch of the Order………Date on which the typed draft is placed before the Dictating Member 19.12.2019Other Member…………………Date on which the approved draft comes to Date on which the approved draft comes to