GOPAL KRISHAN BANSAL, MANDI GOBINDGARH,PUNJAB vs. ITO WARD -1, MANDI GOBINDGARH, SIRHIND
Facts
The assessee's assessment for AY 2013-14 was reopened under Section 148 based on information about alleged bogus purchases of Rs. 2.63 Cr. The Assessing Officer made a 100% addition under Section 69A, which the CIT(A) restricted to 12.5%. The assessee filed an appeal, raising an additional legal ground challenging the validity and timeliness of the Section 148 notice, citing the Supreme Court's judgment in Union of India vs. Rajeev Bansal.
Held
The Tribunal admitted the additional legal ground and found that the Section 148 notice, issued on 29.07.2022, was beyond the permissible last date of 28.06.2022 as per the fourth proviso to Section 149 and binding Apex Court judgments. The issuance of the notice was deemed without jurisdiction and time-barred, rendering the reassessment void-ab-initio. Consequently, the assessee's appeal was allowed, and the Revenue's cross-appeal was dismissed as infructuous.
Key Issues
The key legal issue was the validity and timeliness of the notice issued under Section 148 of the Income Tax Act, 1961, for reopening the assessment.
Sections Cited
Section 148, Section 149, Section 148A(b), Section 148A(d), Section 143(3), Section 145(3), Section 69A, Section 149(1)
AI-generated summary — verify with the full judgment below
आयकर अपीलीय अिधकरण,च�ीगढ़ �ायपीठ “ए” , च�ीगढ़ IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BENCH “A”, CHANDIGARH HEARING THROUGH: PHYSICAL MODE �ी लिलत कुमार, �ाियक सद� एवं �ी कृणव� सहाय, लेखा सद� BEFORE: SHRI. LALIET KUMAR, JM & SHRI. KRINWANT SAHAY, AM आयकर अपील सं./ ITA No. 614 /Chd/ 2025 िनधा�रण वष� / Assessment Year : 2013-14 Gopal Krishan Bansal, बनाम The ITO Aggarwal Steel Tubes, Amloh Road Ward-1, Mandi Gobindgarh Near Shiv Mandir, Mandi Gobindgarh-147301, Punjab �ायी लेखा सं./PAN NO: AFMPB3588H अपीलाथ�/Appellant ��थ�/Respondent आयकर अपील सं./ ITA No. 478 /Chd/ 2025 िनधा�रण वष� / Assessment Year : 2013-14 The ITO बनाम Gopal Krishan Bansal, Ward-1, Mandi Gobindgarh Aggarwal Steel Tubes, Amloh Road Near Shiv Mandir, Mandi Gobindgarh-147301, Punjab �ायी लेखा सं./PAN NO: AFMPB3588H अपीलाथ�/Appellant ��थ�/Respondent िनधा�रती की ओर से/Assessee by : Shri Sudhir Sehgal, Advocate राज� की ओर से/ Revenue by : Shri Vivek Vardhan, Addl. CIT, Sr. DR सुनवाई की तारीख/Date of Hearing : 21/01/2026 उदघोषणा की तारीख/Date of Pronouncement : 11/02/2026 आदेश/Order PER KRINWANT SAHAY, A.M: The present appeal filed by the Assessee and cross appeal filed by the Revenue are against the order of the Ld. CIT(A)/ NFAC Delhi dt. 05/03/2025 pertaining to Assessment Year 2013-14.
First, we proceed to adjudicate the appeal filed by the assessee in ITA No. 614/Chd/2025 for the Assessment Year 2013-14, raising the following grounds of appeal:
"1. That the Ld. CIT(A) has erred in treating the purchases made from two parties as allegedly bogus as under: i. M/s Shiv Bhole Kripa 0.69 crore ii. M/s Kanak Overseas 1.01 crore iii). M/s Gitansh International 0.93 crore 2. That the Ld. CIT(A) has erred in re-opening the case u/s 148 as there were no proper reason to believe that the income of the assessee has escaped assessment and only relied upon the information received from the investigation wing. 3. That the Ld. CIT(A) has erred in making disallowance in respect of the purchases made from above said parties to the extent of 12.05% of the total purchases of Rs.2,63,00,000/- as made from the above said parties and sustaining an addition of Rs. 56,26,047/-. 4. That the Ld. CIT(A) has erred while confirming the part addition has failed to appreciate that the sales against such purchases have been made and there were no case of inflation in the purchases as made from the above said parties. 5. That the Ld. CIT(A) has failed to appreciate that the said disallowance of 12.5% is not justified, since books of accounts which are duly audited have not been rejected 145(3) of the Income Tax Act, 1961. 6. That the appellant craves leave to add or amend the grounds of appeal before the appeal is finally heard or disposed off."
By way of letter, dated 12 January 2026 filed before us an additional ground of appeal has been taken. The assessee contended that this is a legal ground of appeal and, as such, the permission was sought to admit this ground of appeal in the light of the Judgment of National Tharmal Plant, 229 ITR 383 and the additional grounds of appeal reads as under:-
"That the Ld. Assessing Officer erred in issuing notice u/s 148 of the Act dated 28.07.2022 without complying to the provisions of section 149 of the Income Tax Act, 1961 and so the notice issued u/s 148 of the Act is not valid as per above judgments of Supreme Court."
Since the additional ground of appeal relates only to legal issue challenging the validity of notice issued u/s 148 dated 29.07.2022 and all the facts are borne out from the order of the Assessing Officer and Ld. CIT(A), therefore, the same is admitted for adjudication.
The facts, in brief, are that the assessee is Prop. of M/s Aggarwal Steel Tubes and the original return of Income had been filed on 04.10.2013. The assessment was framed u/s 143(3) on 26.11.2015 by making an addition of Rs. 50,000/- on account of low profit and, thus, the income was assessed at Rs.3,47,370/- against the returned income of Rs. 2,97,370/-.
5.1 The case of the assessee was a subject to reopening u/s 148 on account of certain information received from Investigation Wing that the assessee had made purchases from the following three parties, which were bogus. In fact, the bogus purchases have been booked from the parties as under :-
S.No. Name of the Party Amount in Rs. 1. M/s Shiv Bhole Kripa 0.69 Cr. 2. M/s Kanak Overseas 1.01 Cr. 3. M/s Gitansh International 0.93 Cr. Total 2.63 Cr.
5.2. During the course of assessment proceedings, the show cause notice was issued to the assessee and the assessee contented that it was a case of only borrowed satisfaction and submitted the invoices of the parties alongwith copies of account of the said parties and also stated that all the payments in respect of purchases have been made through banking channel. Even the Vehicle Number of transporter in respect of each party have been submitted. It was further contended that VAT assessment had taken place and such purchases have not been doubted. Books of accounts of the assessee have not been rejected and the sales also have been accepted and, thus, no addition could be made in respect of alleged bogus purchases.
5.3 The Assessing Officer, however, did not agree with such submissions and made an addition of Rs. 2,63,00,000/- as unexplained income u/s 69A.
The assessee filed an appeal before the Ld. CIT(A) and argued that there was documentary evidence in respect of purchases made from the parties and relied upon on the documentary evidences as furnished during the course of assessment proceedings. The Ld. CIT(A), however, directed the Assessing Officer to restrict the addition to the extent of 12.5% of the bogus purchases, instead of disallowing 100% of the purchases as per the assessment order and partly allowed the appeal of the assessee.
Against the order of the CIT(A) the assessee preferred an appeal before the Tribunal.
Before us since the additional ground of appeal goes to the root of the assumption of jurisdiction by the Assessing Officer u/s 148, for which, the Ld. Counsel of the assessee has filed the Brief Synopsis. Regarding the jurisdiction of the assessing officer to issue notice u/s 148 the counsel argued that it is in violation of the judgment of Hon'ble Apex Court in the case of Union of India Vs Rajeev Bansal reported in 340 CTR 862 (SC). He filed the separate paper books related to thiş additional ground appeal filed before us alongwith the Brief Synopsis as filed by the assessee on this legal issue, which are being reproduced as under:-
"1. Firstly we are submitting herewith our submission in respect of additional legal ground of appeal challenging the validity of notice uls 148 dated 29.07.2022 which is void as per judgment of the Apex court in the case of UOI vs. Rajeev Bansal 340 CTR 862(SC). Our synopsis At the outset, it is submitted that, the reopening in the case of the assessee is bad in law and deserve to be quashed since the impugned assessment u/s 148 r.w.s
147 was void-ab-initio in the violation of law settled in UOI vs. Rajeev Bansal 340 CTR 862(SC). The validity of notice issued uls 148 in the case of the assessee is bad in law as per facts as below which is similar facts, based on which notice issued u/s 148 treated as void-ab-initio in the case of Sh. Harish Chander Sharma by the Chandigarh Bench: Sequence of notices in the case of the assessee Sr. Particulars of Date of Union Vs. In the case Hitesh Ramniklal Shah Vs. No. Notices notice / Rajeev of Harish Asst. CIT(2025) 180 no of Bansal (as Chander taxmann.com642 (Bombay) survival per para Sharma (ITAT Orderdt. 11.11.2025 days 112 at page Chandigarh) 35 of the order dt. judgment) 19.05.2025 order dt. 03/10/2024 1. Actual date of 24.06.2021 01.05.2021 30.06.2021 17.06.2021 for A.Y. 2013-14 notice issue under 09.06.2021 for A.Y. 2014-15 section 148 as per 30.06.2021 for A.Y. 2016-17 TOLA 30.06.2021 for A.Y. 2017-18 2. No. of days of 6 Days 61 Days Zero Days 13 Days for A.Y. 2013-14 surviving time 21 Days for A.Y. 2014-15 available till 1 Day for A.Y. 2016-17 30.06.2021 1 Day for A.Y. 2017-18 (Actual date of notice less last date of issuance of notice 30.06.2020 as per TOLA) 3. Date of providing 31.05.2022 30.06.2022 30.05.2022 26.05.2022 for A.Y. 2013-14 information under (judgement 23.05.2022 for A.Y. 2014-15 section 148A(b) as based) 23.05.2022 for A.Y. 2016-17 per Ashish 24.05.2022 for A.Y. 2017-18 Aggarwal 4. Due date of filing 14.06.2022 - 13.06.2022 09.06.2022 for A.Y. 2013-14 reply (i.e 14 Days 06.06.2022 for A.Y. 2014-15 from date of SCN 07.06.2022 for A.Y. 2016-17 u/s 148A(b)) 11.06.2022 for A.Y. 2017-18 5. Date of which - 18.06.2022 10.06.2022 04.06.2022 for A.Y. 2013-14 actual response No response for A.Y. 2014-15 filed by the 06.07.2022 for A.Y. 2016-17 assessee 10.06.2022 for A.Y. 2017-18 6. Last date for 21.06.2022 30.06.2022 13.06.2022 22.06.2022 for A.Y. 2013-14 issuance of notice 27.06.2022 for A.Y. 2014-15 under section 148 14.06.2022 for A.Y. 2016-17 as per surviving 18.06.2022 for A.Y. 2017-18 time 7. Last date for 28.06.2022 30.06.2022 20.06.2022 Not discussed in original issuance of notice Judgement, still for your
under section 148 goodself’s ready as per fourth reference:- provision of Section 149 i.e. 7 days time 29.06.2022 for A.Y. 2013-14 03.07.2022 for A.Y. 2014-15 (Since surviving 21.06.2022 for A.Y. 2016-17 period is less than 7 25.06.2022 for A.Y. 2017-18 days by virtue of the fourth provisio to Section 149(1) it stands extended to 7 days) 8. Original of order 29.07.2022 18.08.2022 28.07.2022 29.07.2022 for A.Y. 2013-14 u/s 148A(d) and 27.07.2022 for A.Y. 2014-15 notice u/s 148 30.07.2022 for A.Y. 2016-17 19.07.2022 for A.Y. 2017-18 9. Barred by Time Yes Yes, if after Yes Yes (AY 2013-14) limitation 18.06.2022 Yes (AY 2014-15) Otherwise Yes (AY 2016-17) No Yes (AY 2017-18)
Continuation further case laws: Sr.No. Particular of Notices Communist Party Dy. CIT Vs. Sainik Co-operative of India (Marxist) Larsen & Tourbo House Building Society Vs. ITD CIT Ltd. (2025) 173 Ltd. Vs. ITO (2025) 178 Exmpt(2025) 174 taxmann.com taxmann.com 216 taxmann.com 582(Mumbai- (Amritsar-Trib) Order dt. 925 (Delhi) Order Trib) Order dt. 08.09.2025 dt. 28.04.2025 07.04.2025 1 Actual date of notice 28.06.2021 30.06.2021 07.06.2021 issued under section 148 as per TOLA 2 No. of days of surviving 2 Days Zero 24 Days time available till 30.06.2021 (Actual date of notice less last date of issuance of notice 30.06.2020 as per TOLA 3 Date of providing 30.05.2022 26.05.2022 20.05.2022 information under section 148A(b) as per Ashish Aggarwal 4 Due date of Filing reply (i.e 13.06.2022 09.06.2022 02.06.2022 14 Days from date of SCN u/s 148A(b)) 5 Date of which actual - 28.06.2022 - response filed by the assessee 6 Last date for issuance of 08.06.2022 28.06.2022 26.06.2022
notice under section 148 as per surviving time 7 Last date for issuance of 16.06.2022 01.07.2022 26.06.2022 notice under section 148 as per fourth provision to Section 149 i.e. 7 days time (Since surviving period is less than 7 days by virtue of the fourth proviso to Section 149(1) it stands extended to 7 days) 8 Original of order 29.07.2022 28.07.2022 25.07.2022 9 Yes Yes Yes
8.1 From perusal of latest judgments above, it is submitted that, in the present case, the original notice under section 148 of Income Tax Act, 1961 for the Assessment Year 2013-14 was issued on 24.06.2021 (placedat page no. 1 of the PB cum JS), which was the last permissible date for issuance of such notice under the extended limitation period. Thus, the issuance of notice after 24.06.2021 in the case of the assessee is void-ab-initio as per binding judgments above, where in bench mark judgment of Hon'ble Apex court have been followed reported in Union of India vs. Rajeev Bansal [2024] 167 taxmann.com 70 (SC)/[2024] 301 Taxman 238 (SC)/[2024] 469 ITR 46 (SC) [03-10-2024], considering the legal view appreciated by various courts, the whole assessment in the case of the assessee needs to be treated as void-ab-initio."
8.2 The Ld. Counsel for the Assessee has also supported the above sequence of notices served upon the assessee, alongwith copies of judgements as cited supra, the relevant extract of paper book cum judgment set filed by assessee on 22.01.2026 is reproduced as under:
PAPER BOOK CUM JUDGEMENT SET w.r.t Additional Grounds of Appeal filed on 12.01.2026 Sl.No. Particulars Pages 1 Copy of notice issued u/s 148 of the Act dt. 1
24.06.2021 as per old Regime 2. Copy of Show Cause Notice issued u/s 148A(b) of 2-3 the Act dated 31.05.2022 3. Copy of order passed u/s 148A(d) of the Act dated 4-7 29.07.2022 during the course of proceedings vide section 148A of the Act. 4. Copy of notice issued u/s 148 of the Act dt. 8-9 29.07.2022 as per New Regime JUDGMENT RELIED UPON 5. Judgment in the case of Hitesh Ramniklal Shah Vs. 10-19 Assistant Commissioner of Income-tax as reported in (2025) 180 taxmann.com 642(Bombay) vide order dt. 11.11.2025 6. Judgment in the case of Communist Party of India 20-29 (Marxist) Vs. ITD CIT Exmpt as reported in (2025) 174 taxmann.com 925(Delhi) vide order dt. 28.04.2025 7. Judgment in the case of Dy. CIT Vs. Larsen & Toubro 30-46 Ltd. as reported in (2025) 173 taxmann.com 582 (Mumbai-Trib) vide order dt. 07.04.2025 8. Judgment in the case of Sainik Co-operative House 47-56 Building Society Ltd. Vs ITO as reported in (2025) taxmann.com 216 (Amritsar-Trib) vide order dt. 08.09.2025 9. Judgment of the ITAT Chandigarh Bench in the case 57-69 of Harish Chander Sharma as reported in vide order dt. 19.05.2025
Per contra, the Ld. DR was asked to rebut such detailed arguments of the Ld. Counsel on the basis of binding judgment of Hon'ble Apex Court in the case of Sh.Rajeev Bansal, in response to which the Ld. DR relied upon the order of Assessing Officer and Ld. CIT(A).
We have carefully considered the sequences of notices filed by the assessee counsel in shape of separate paper book filed dated 22.01.2026, and order of the Assessing Officer and the arguments and written submission on the legal issue made by the Ld. Counsel and as per sequence of dates mentioned in notices issued u/s 148 as per old regime dated 28.06.2021, and SCN u/s 148A(b) dated 30.05.2022 as per new regime in accordance with the Judgement of Apex court dated 04.05.2022 in the case of Union of India vs. Ashish Agarwal in CIVIL APPEAL NO. 3005/2022, and the order passed u/s 148A(d). Notice was issued u/s 148 dated 29.07.2022 as per new regime. On the
basis of judgment in the case of Sh. Rajeev Bansal, which have been followed by the Hon'ble High Court of BOMBAY in the case of Hitesh Ramniklal shah vs. ACIT reported in 180 taxmann.com 642 vide order dated 11.11.2025 as cited supra in the table tabulated above, the Hon'ble court has passed a combined order for AY 2013-14, 2014-15, 2016-17 and 2017-18 and the Chandigarh Bench of the ITAT in the case of Harish Chander Sharma in ITA No. 1220/Chd/2024 decided on 19.05.2025 after considering the written submissions filed by the assessee. The finding has been recorded in that judgment in para 10. It was held by following the judgment of Delhi High Court in the case of Kanwaljit Kaur reported in 171 taxmann 174, that the notice u/s 148, was held to be without jurisdiction and bad in law and reassessment proceedings initiated in pursuance to that was quashed.
10.1 In the present case, the chart as reproduced in the 'Brief Synopsis of the assessee as above' is very much in order and the last date for issue of notice u/s 148, after calculating the survival period of issuance of notice u/s 148 the last date of issuance of notice as pert the fourth proviso of section 149 comes out 'on or before' 28.06.2022 whereas in the case of assessee notice u/s 148 was issued on 29.07.2022. Thus, the very issuance of notice u/s 148 is without jurisdiction and barred by time and, thus, the assessment as framed by the Assessing Officer deserves to be quashed.
We now take up the appeal of the Revenue, in ITA No. 478/Chd/2025 for the Assessment Year 2013-14, raising the following grounds of appeal
Whether on the facts and in the circumstances of the case, the CIT(A)/NFAC was right in law in deleting the addition of Rs. 2,63,00,000/-j under bogus purchase under section 69A made by the AO and directed to restrict the addition to the extent of 12.5% of non genuine / suspicious/bogus purchases instead of disallowing 100% of the purchases in the assessment order. 2. The appellant craves leave to add, amend or delete any of the grounds of appeal during the appellate proceedings.
Since the appeal of the assessee has been allowed on legal grounds, the cross-appeal filed by the Revenue has become infructuous and is accordingly dismissed.
In the result, appeal of the Assessee is allowed and cross appeal filed by the Revenue is dismissed.
Order pronounced in the open Court on 11/02/2026
Sd/- Sd/- लिलत कुमार कृणव� सहाय (LALIET KUMAR) (KRINWANT SAHAY) �ाियक सद� /JUDICIAL MEMBER लेखा सद�/ ACCOUNTANT MEMBER AG आदेश की �ितिलिप अ�ेिषत/ Copy of the order forwarded to : 1. अपीलाथ�/ The Appellant 2. ��थ�/ The Respondent 3. आयकर आयु�/ CIT 4. आयकर आयु� (अपील)/ The CIT(A) 5. िवभागीय �ितिनिध, आयकर अपीलीय आिधकरण, च�ीगढ़/ DR, ITAT, CHANDIGARH 6. गाड� फाईल/ Guard File आदेशानुसार/ By order, सहायक पंजीकार/ Assistant Registrar
