ARVIND VELJI GADA,MUMBAI V. ITO WARD 41(1)(1), MUMBAI

ITA 1582/MUM/2024

AI Insights

This case involves cross appeals by the assessee, Arvind Velji Gada, and the Revenue against the order passed by the Commissioner of Income-tax (Appeals) for the assessment year 2016-17. The primary contention revolves around the addition of long-term capital gains (LTCG) amounting to Rs. 1,01,85,745, which the assessee argued was genuine and supported by substantial evidence including bank statements, broker ledgers, and contract notes. The Revenue, however, treated these gains as non-genuine based on general information and without specific material evidence against the assessee. The reassessment was challenged on procedural grounds, particularly the failure to adhere to the correct legal framework for issuing notices under the amended provisions of the Act post-1/04/2021.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 471416 (ITAT-MUMBAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-03-2025
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2016-2017
• Other Referred Cases: Union of India & Ors v. Ashish Agarwal, NTPC Ltd. v. CIT, Rajeev Bansal v. CIT, Manish Jagdish Joshi v. CIT, Surya Ferrous Alloys Pvt. Ltd. v. CIT
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: RAM KRISHN KEDIA
• Assessee Lawyers: AJAY R SINGH
• Keywords: Reassessment proceedings; Unexplained cash credit; Reopening of assessment; Principle of natural justice; Penny stocks; Bogus
• Section: 148; 142(1); 143(1); 68; 22; 69C; 13

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “A” MUMBAI BEFORE SHRI OM PRAKASH KANT (ACCOUNTANT MEMBER) AND MS. KAVITHA RAJAGOPAL (JUDICIAL MEMBER) ITA No. 1582/MUM/2024 Assessment Year: 2016-17 Arvind Velji Gada, 1704 12th floor, Bellezza Tower, 420, Bhavani Shankar Road, Dadar (West) Mumbai-400028. Vs. ITO Ward 41(1)(1), Kautilya Bhavan, Avenue 3, Near Videsh Bhavan, G Block BKC, Bandra Kurla Complex, Bandra East, Mumbai-400051. PAN NO. AESPG 4212 Q Appellant Respondent ITA No. 2026/MUM/2024 Assessment Year: 2016-17 ITO Ward 41(1)(1), Kautilya Bhavan, Avenue 3, Near Videsh Bhavan, G Block BKC, Bandra Kurla Complex, Bandra East, Mumbai-400051. Vs. Arvind Velji Gada, 1704 12th floor, Bellezza Tower, 420, Bhavani Shankar Road, Dadar (West) Mumbai-400028. PAN NO. AESPG 4212 Q Appellant Respondent Assessee by : Mr. Ajay R Singh/ Mr. Akshay Pawar Revenue by : Mr. Ram Krishn Kedia, Sr. DR Date of Hearing : 11/03/2025 Date of pronouncement : 27/03/2025 PER OM PRAKASH KANT, AM These cross appeals by the assessee and Revenue are directed against order dated 09.02.2024 passed by the Ld. Commissioner of Income-tax (Appeals) short ‘the Ld. CIT(A)’] for assessment year 2016 2. The grounds raised by the assessee are reproduced as under: I. Addition of Rs. 1,01,85,745/ 1. The learned CIT(A) erred in upholding the assessment order by restricting the disallowance of LTCG of Rs. 1,01,85,745/ (Rs.1,11,85,745/-, minus Rs 10,00,000/ genuine and taxing the sale consideration of Rs. 1,01,85,745/ the Act, without appreciating that the shares were dealt on stock exchange platform and consideration for purchase and sales were through banking channel, al bank statement of relevant period, ledger of broker, Sale contract note from HDFC Securities Ltd along with Ledger, provided further there is no adverse against the assessee or his broker said transaction. 2. The learned CIT(A) erred in upholding the Assessment order the LTCG as non genuine on basis of general information on record any material/ alleged transaction of is regular investor which is revealed from his portfolio. 3. The learned CIT(A) has relied on judgments totally inapplicable to facts of assessee and has also based his addition on mere surmises which are contrary to material available on record and as such, the addition so made needs to be deleted. 4. The learned CIT(A) has erred in law and on facts in restricting the addition to Rs. 1,01,85,745/ any fair and proper opportunity of cross examining the parties on whose ITA No. 1582 ORDER PER OM PRAKASH KANT, AM These cross appeals by the assessee and Revenue are directed against order dated 09.02.2024 passed by the Ld. Commissioner of tax (Appeals) – National Faceless Appeal Centre, Delhi [in short ‘the Ld. CIT(A)’] for assessment year 2016-17. unds raised by the assessee are reproduced as under: I. Addition of Rs. 1,01,85,745/-: 1. The learned CIT(A) erred in upholding the assessment order by restricting the disallowance of LTCG of Rs. 1,01,85,745/ , minus Rs 10,00,000/-) and treating the same as non genuine and taxing the sale consideration of Rs. 1,01,85,745/ the Act, without appreciating that the shares were dealt on stock exchange platform and consideration for purchase and sales were through banking channel, all the primary evidence like contract notes, bank statement of relevant period, ledger of broker, Sale contract note from HDFC Securities Ltd along with Ledger, D-mat statement, etc were provided further there is no adverse report or action taken by SEBI ainst the assessee or his broker HDFC Securities Ltd in regards to the 2. The learned CIT(A) erred in upholding the Assessment order the LTCG as non genuine on basis of general information without bringing on record any material/ evidence showing assessee involvement in the alleged transaction of accommodation entry, more so when the Assessee is regular investor which is revealed from his portfolio. 3. The learned CIT(A) has relied on judgments totally inapplicable to assessee and has also based his addition on mere suspicion and surmises which are contrary to material available on record and as such, the addition so made needs to be deleted. 4. The learned CIT(A) has erred in law and on facts in restricting the on to Rs. 1,01,85,745/- in the hands of assessee without giving any fair and proper opportunity of cross examining the parties on whose Arvind Velji Gada 2 ITA No. 1582 & 2026/MUM/2024 These cross appeals by the assessee and Revenue are directed against order dated 09.02.2024 passed by the Ld. Commissioner of National Faceless Appeal Centre, Delhi [in unds raised by the assessee are reproduced as under: 1. The learned CIT(A) erred in upholding the assessment order by restricting the disallowance of LTCG of Rs. 1,01,85,745/- treating the same as non genuine and taxing the sale consideration of Rs. 1,01,85,745/- u/s. 68 of the Act, without appreciating that the shares were dealt on stock exchange platform and consideration for purchase and sales were l the primary evidence like contract notes, bank statement of relevant period, ledger of broker, Sale contract note mat statement, etc were report or action taken by SEBI HDFC Securities Ltd in regards to the 2. The learned CIT(A) erred in upholding the Assessment order treating without bringing assessee involvement in the entry, more so when the Assessee 3. The learned CIT(A) has relied on judgments totally inapplicable to the suspicion and surmises which are contrary to material available on record and as such, 4. The learned CIT(A) has erred in law and on facts in restricting the in the hands of assessee without giving any fair and proper opportunity of cross examining the parties on whose statement/investigation reports the assessing violating the principles of natural justice. 5. The Ld CIT(A) erred in up holding the addition of Rs. 3,35,572/ 69C of the Act being alleged expenditure incurred in nature of charges @3% of Rs. 1,11,85,745/ II. Reopening of Assessment 6. The learned CIT (A) failed to appreciate that jurisdiction to issue show cause notice u/s 148A(b) dated 28/05/2022, notice u/s 148 dated 31/07/2022 and pass order u/s 148A(d) dated 30/07/2022 as after 29/03/2022 same can be done in a faceless manner, therefore the reassessment proceed 7. The learned CIT (A) failed to appreciate that the AO issued reopening notice beyond period of three years, approval was required to be taken as per provisions of amended section 15lof the Act from Principal Chief Commissioner or Prin Director General however approval is from PCIT 8. The CIT(A) erred in upholding the levy of tax rates provided u/s. 115BBE of the Act. 2.1 The grounds raised by the Revenue are reproduced as under: 1. Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A)has erred in deleting the addition of Rs. 10,00,000/ by the AO on account of claim of Bogus LTCG in penny stock without giving any cogent findings for deleting the addit 2. \"Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A)was justified in allowing partial relief of Rs. 10,00,000/ the assessee, ignoring the fact that the CIT(A) has himself confirmed the order of AO by holding tha such a steep rise of the price of the penny stock company and that the transaction was pre- 3. \" Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A)was justified in allowing partial relief of Rs. 10,00,000/ the assessee when the entire addition, except of Rs.10,00,000/ been confirmed by ITA No. 1582 statement/investigation reports the assessing officer had relied, thereby, violating the principles of natural justice. The Ld CIT(A) erred in up holding the addition of Rs. 3,35,572/ 69C of the Act being alleged expenditure incurred in nature of charges @3% of Rs. 1,11,85,745/-. II. Reopening of Assessment The learned CIT (A) failed to appreciate that the JAO have no jurisdiction to issue show cause notice u/s 148A(b) dated 28/05/2022, notice u/s 148 dated 31/07/2022 and pass order u/s 148A(d) dated 30/07/2022 as after 29/03/2022 same can be done in a faceless manner, therefore the reassessment proceedings is bad in law. 7. The learned CIT (A) failed to appreciate that the AO issued reopening notice beyond period of three years, approval was required to be taken as per provisions of amended section 15lof the Act from Principal Chief Commissioner or Principal Director General or Chief Commissioner or Director General however approval is from PCIT-1. 8. The CIT(A) erred in upholding the levy of tax rates provided u/s. Act. The grounds raised by the Revenue are reproduced as under: her on the facts and in the circumstances of the case and in law, the Ld. CIT(A)has erred in deleting the addition of Rs. 10,00,000/ by the AO on account of claim of Bogus LTCG in penny stock without giving any cogent findings for deleting the addition? 2. \"Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A)was justified in allowing partial relief of Rs. 10,00,000/ the assessee, ignoring the fact that the CIT(A) has himself confirmed the order of AO by holding that the assessee could not conclusively justify such a steep rise of the price of the penny stock company and that the -arranged one and make believe transaction? 3. \" Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A)was justified in allowing partial relief of Rs. 10,00,000/ the assessee when the entire addition, except of Rs.10,00,000/ CIT(A)?\" Arvind Velji Gada 3 ITA No. 1582 & 2026/MUM/2024 officer had relied, thereby, The Ld CIT(A) erred in up holding the addition of Rs. 3,35,572/-u/s. 69C of the Act being alleged expenditure incurred in nature of commission the JAO have no jurisdiction to issue show cause notice u/s 148A(b) dated 28/05/2022, notice u/s 148 dated 31/07/2022 and pass order u/s 148A(d) dated 30/07/2022 as after 29/03/2022 same can be done in a faceless ings is bad in law. 7. The learned CIT (A) failed to appreciate that the AO issued reopening notice beyond period of three years, approval was required to be taken as per provisions of amended section 15lof the Act from Principal Chief cipal Director General or Chief Commissioner or 8. The CIT(A) erred in upholding the levy of tax rates provided u/s. The grounds raised by the Revenue are reproduced as under: her on the facts and in the circumstances of the case and in law, the Ld. CIT(A)has erred in deleting the addition of Rs. 10,00,000/-, made by the AO on account of claim of Bogus LTCG in penny stock without 2. \"Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A)was justified in allowing partial relief of Rs. 10,00,000/- to the assessee, ignoring the fact that the CIT(A) has himself confirmed the t the assessee could not conclusively justify such a steep rise of the price of the penny stock company and that the arranged one and make believe transaction? 3. \" Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A)was justified in allowing partial relief of Rs. 10,00,000/- to the assessee when the entire addition, except of Rs.10,00,000/- has 3. Before us, the Ld. counsel for the assessee has also filed additional grounds dul relevant additional grounds are reproduced as under: I. Reopening is bad in law: 1. The learned CIT (A) failed to appreciate that the JAO have no jurisdiction to issue show cause notice u/s 148A(b) dated 28/05/20 notice u/s 148 dated 31/07/2022 and pass order u/s 148A(d) dated 30/07/2022 as after 29/03/2022 same can be done in a faceless manner, therefore the reassessment proceedings is bad in law. 2. The learned CIT (A) failed to appreciate that the AO issued notice beyond period of three years, approval was required to be taken as per provisions of amended section 151of the Act from Principal Chief Commissioner or Principal Director General or Chief Commissioner or Director General however approval 3.1 The additional ground not requiring investigation of fresh facts, after hearing the parties on the issue in dispute, we admitted adjudication in view of the decision of the case of NTPC Ltd. 229 ITR 283 (SC) 4. Briefly stated, facts of the case are that the assessee file return of income for the year under consideration on 27.06.2016 by declaring total income by the assessee was processed u/s 143(1) of the Income 1961 (in short ‘the Act’). Subsequently, in view of information received that assessee of purchase and sale of penny stock Re-construction Company Ltd ITA No. 1582 Before us, the Ld. counsel for the assessee has also filed duly signed and verified by the assessee. The relevant additional grounds are reproduced as under: Reopening is bad in law: 1. The learned CIT (A) failed to appreciate that the JAO have no jurisdiction to issue show cause notice u/s 148A(b) dated 28/05/20 notice u/s 148 dated 31/07/2022 and pass order u/s 148A(d) dated 30/07/2022 as after 29/03/2022 same can be done in a faceless manner, therefore the reassessment proceedings is bad in law. The learned CIT (A) failed to appreciate that the AO issued notice beyond period of three years, approval was required to be taken as per provisions of amended section 151of the Act from Principal Chief Commissioner or Principal Director General or Chief Commissioner or Director General however approval is from PCIT-1. The additional grounds raised being purely legal not requiring investigation of fresh facts, after hearing the parties e issue in dispute, we admitted the additional ground adjudication in view of the decision of the Hon’ble Supreme Court in NTPC Ltd. 229 ITR 283 (SC). Briefly stated, facts of the case are that the assessee file return of income for the year under consideration on 27.06.2016 by declaring total income at Rs.3,93,480/-. The return of income filed by the assessee was processed u/s 143(1) of the Income 1961 (in short ‘the Act’). Subsequently, in view of information received that assessee availed ‘bogus long term capital gain sale of penny stocks of scrip namely construction Company Ltd’., the Assessing Officer recorded Arvind Velji Gada 4 ITA No. 1582 & 2026/MUM/2024 Before us, the Ld. counsel for the assessee has also filed the assessee. The relevant additional grounds are reproduced as under: 1. The learned CIT (A) failed to appreciate that the JAO have no jurisdiction to issue show cause notice u/s 148A(b) dated 28/05/2022, notice u/s 148 dated 31/07/2022 and pass order u/s 148A(d) dated 30/07/2022 as after 29/03/2022 same can be done in a faceless manner, therefore the reassessment proceedings is bad in law. The learned CIT (A) failed to appreciate that the AO issued reopening notice beyond period of three years, approval was required to be taken as per provisions of amended section 151of the Act from Principal Chief Commissioner or Principal Director General or Chief Commissioner or raised being purely legal in nature and not requiring investigation of fresh facts, after hearing the parties the additional grounds for the Hon’ble Supreme Court in Briefly stated, facts of the case are that the assessee filed return of income for the year under consideration on 27.06.2016 by . The return of income filed by the assessee was processed u/s 143(1) of the Income-tax Act, 1961 (in short ‘the Act’). Subsequently, in view of information bogus long term capital gain’ by way scrip namely ‘Ojas Asset he Assessing Officer recorded reasons to believe that income escaped assessment and accordingly, issued notice u/s 148 of the Act on 19.05.2021. The assessee objected to above Subsequently, due to Hon’ble Supreme Court judgment in the case of Union of India & Ors v. Ashish Agarwal taxmann.com 64(SC) upon was supplied on the above notice on 10.06.2022 the objections of the assessee and passed order u/s 148A(d) of the Act on 30.07.2022 and a fresh notice on 30.07.2020. Thereafter, were issued and after considering subm assessee, the Assessing Officer completed the assessment on 23.05.2023 thereby treating the alleged long term capital gain of Rs.1,11,85,745/- as unexplai of the Act which was taxed On further appeal, the Ld. CIT(A) allowed part relief and therefore, aggrieved both the assessee and the Revenue are in appeal before the Tribunal by way of raising grounds as reproduced above. 5. Before us, the assessee filed a Paper Book containing pages 1 to 1 to 311. 6. Addressing the additional ground No. 2, the Ld. counsel for the assessee submitted that in the case, the Assessing Officer issued reopening notice beyond period of the three years and ITA No. 1582 reasons to believe that income escaped assessment and issued notice u/s 148 of the Act on 19.05.2021. The assessee objected to above reassessment proceedings Subsequently, due to Hon’ble Supreme Court judgment in the case Union of India & Ors v. Ashish Agarwal reported in (2022) 138 taxmann.com 64(SC), a fresh notice was issued/ material relied on 28.05.2022. The assessee filed objection t the above notice on 10.06.2022. The Assessing Officer addressed all the objections of the assessee and passed order u/s 148A(d) of the Act on 30.07.2022 and a fresh notice u/s 148 of the Act on 30.07.2020. Thereafter, statutory notices u/s 142(1) of the Act were issued and after considering submission/response of the Assessing Officer completed the assessment on 23.05.2023 thereby treating the alleged long term capital gain of as unexplained cash credit in terms of section 68 of the Act which was taxed at special rate u/s 115JBE of the Act. On further appeal, the Ld. CIT(A) allowed part relief and therefore, aggrieved both the assessee and the Revenue are in appeal before ay of raising grounds as reproduced above. Before us, the assessee filed a Paper Book containing pages 1 Addressing the additional ground No. 2, the Ld. counsel for the assessee submitted that in the case, the Assessing Officer issued reopening notice beyond period of the three years and Arvind Velji Gada 5 ITA No. 1582 & 2026/MUM/2024 reasons to believe that income escaped assessment and issued notice u/s 148 of the Act on 19.05.2021. The reassessment proceedings. Subsequently, due to Hon’ble Supreme Court judgment in the case reported in (2022) 138 / material relied assessee filed objection to . The Assessing Officer addressed all the objections of the assessee and passed order u/s 148A(d) of the 148 of the Act was issued statutory notices u/s 142(1) of the Act ission/response of the Assessing Officer completed the assessment on 23.05.2023 thereby treating the alleged long term capital gain of ned cash credit in terms of section 68 special rate u/s 115JBE of the Act. On further appeal, the Ld. CIT(A) allowed part relief and therefore, aggrieved both the assessee and the Revenue are in appeal before ay of raising grounds as reproduced above. Before us, the assessee filed a Paper Book containing pages 1 Addressing the additional ground No. 2, the Ld. counsel for the assessee submitted that in the case, the Assessing Officer issued reopening notice beyond period of the three years and therefore, approval/sanction for issue of notice was taken from the Principal Principal Director General or Chief Commissioner or Director General of Income-tax under the amended provisions of section 151 of the Act, whereas the approval has been obtained from the Principal Commissioner of Income the assessee referred to page 41 of the Paper Book which is a copy of the notice u/s 148 of the Act the said notice it is mentioned that notice has been issued afte obtaining prior approval of the P Further, the Ld. counsel also referred to the order u/s 148A(d) of the Act, which is available on paper book page 31 been also been issued his letter dated 28.07.2022. The Ld. counsel referred to section 151 of the Act and submitted that even after excluding the time period provided under proviso to section 151 of the Act, t issuing notice u/s 148 years from the end of the relevant assessment year and therefore, the approval for the issue of the notice u/s 148 of the Act was to be obtained from PCCIT or CCIT for computing the period of the three years period referred to in of Rajeev Bansal ( 2024) 167 taxmann.com 70 (SC) reproduced as under: ITA No. 1582 /sanction for issue of notice was incipal Chief Commissioner of Income Director General or Chief Commissioner or Director tax under the amended provisions of section 151 whereas the approval has been obtained from the Commissioner of Income-tax (PCIT). The Ld. counsel for the assessee referred to page 41 of the Paper Book which is a copy of the notice u/s 148 of the Act and submitted that on para No. 3 of the said notice it is mentioned that notice has been issued afte ining prior approval of the PCIT, Mumbai dated 28.07.2022. Further, the Ld. counsel also referred to the order u/s 148A(d) of , which is available on paper book page 31- issued with prior approval of the PCIT, Mumb his letter dated 28.07.2022. The Ld. counsel referred to section 151 of the Act and submitted that even after excluding the time period viso to section 151 of the Act, the time period issuing notice u/s 148 in the case of the assessee exceeded three years from the end of the relevant assessment year and therefore, the approval for the issue of the notice u/s 148 of the Act was to be PCCIT or CCIT only. The assessee has filed a chart g the period of the three years based on the survival to in decision of Hon’ble Supreme Court in the case ( 2024) 167 taxmann.com 70 (SC) reproduced as under: Arvind Velji Gada 6 ITA No. 1582 & 2026/MUM/2024 /sanction for issue of notice was required to be Chief Commissioner of Income (PCCIT)or Director General or Chief Commissioner or Director tax under the amended provisions of section 151 whereas the approval has been obtained from the . The Ld. counsel for the assessee referred to page 41 of the Paper Book which is a copy on para No. 3 of the said notice it is mentioned that notice has been issued after CIT, Mumbai dated 28.07.2022. Further, the Ld. counsel also referred to the order u/s 148A(d) of -39, which has CIT, Mumbai vide his letter dated 28.07.2022. The Ld. counsel referred to section 151 of the Act and submitted that even after excluding the time period he time period in in the case of the assessee exceeded three years from the end of the relevant assessment year and therefore, the approval for the issue of the notice u/s 148 of the Act was to be only. The assessee has filed a chart based on the survival decision of Hon’ble Supreme Court in the case ( 2024) 167 taxmann.com 70 (SC), which is Sr. No. As per SC Decision in case of Rajiv Bansal Par 1. The deemed show cause notice issued on 01/05/2021 under the old regime. Assessing Officer will have sixty [days between 1 May 2021 and 30 2021] to issued notice u/s regime. 2. The time starts ticking for the Assessing Officer after Assessee. In this instance, if the assessee submits the response on 18 June 2022. Assessing officer will have Sixty from 18 June notice u/s 148 of the new regime 3. Thus, in this issuance of a notice u/s 148 of the new regime will end on 18 August 2022. 4. JAO has to issue notice under surviving time limit. pa 6.1 In the case notice u/s 148 of the Act was issued on 19/05/2021 invoking old 147 provisions on the premise that limit under old provisions got extended due to Hon’ble High Court in writs held that in view of provisions of 147 amended w.e.f. 1/04/2021, the benefit of extension of time limit under Taxation and Other Laws ( Relaxation and Amendment of Certain Provisions ) Act,m2020 ( in short ‘ available to old provisions and in the case of Ashish Agrwal the Hon’ble Supreme Court held that TOLA will apply ITA No. 1582 As per SC Decision in case of Rajiv Bansal Para 112 As per Assessee Case The deemed show cause notice issued on 01/05/2021 under the old regime. The Assessing Officer will have sixty-one days [days between 1 May 2021 and 30 June 2021] to issued notice u/s 148 of the new The deemed show cause notice issued on 19/05/2021 under the old regime. [pg 6] The Assessing have Forty between 19 June 2021] to issued notice u/s 148 of the new regime. The time starts ticking for the Assessing after receiving the response of the In this instance, if the assessee submits the response on 18 June 2022. The Assessing officer will have Sixty-one day June 2022 to issue a reassessment notice u/s 148 of the new regime Pursuant to Ashish Agarwal decision the AO issued 148A(b) notice on 28/5/2022. The Assessee submits its response on [pg 22] will have 10 June 2022 to issue a reassessment notice u/s of the new regime Thus, in this illustration, the time limit for issuance of a notice u/s 148 of the new regime will end on 18 August 2022. The time limit for issuance of a notice u/s 148 of the new regime will end on 22 July 2022. JAO has to issue notice under surviving time limit. para 114 clause (h) The Assessing Officer issued notice u/s 148 of the Act on 30 July 2022 which is beyond the period of 3 years. Therefore Sanction was required from PCCIT and not notice u/s 148 of the Act was issued on 1 invoking old 147 provisions on the premise that old provisions got extended due to TOLA, Hon’ble High Court in writs held that in view of provisions of 147 amended w.e.f. 1/04/2021, the benefit of extension of time limit Taxation and Other Laws ( Relaxation and Amendment of Certain Provisions ) Act,m2020 ( in short ‘TOLA’) to old provisions and in the case of Ashish Agrwal Hon’ble Supreme Court held that TOLA will apply Arvind Velji Gada 7 ITA No. 1582 & 2026/MUM/2024 As per Assessee Case The deemed show cause notice issued on 19/05/2021 under the old regime. [pg 6] The Assessing Officer will Forty-two days [days between 19 May 2021 and 30 June 2021] to issued notice u/s 148 of the new regime. Pursuant to Ashish Agarwal ecision the AO issued 148A(b) notice on 28/5/2022. The Assessee submits its response on 10 June 2022. The Assessing officer will have Forty-two day from 10 June 2022 to issue a reassessment notice u/s 148 of the new regime The time limit for issuance of a notice u/s 148 of the new regime will end on 22 July The Assessing Officer issued notice u/s 148 of the Act on July 2022 which is beyond the period of 3 years. Therefore Sanction was required from PCCIT from PCIT. notice u/s 148 of the Act was issued on 1 invoking old 147 provisions on the premise that time TOLA, but, various Hon’ble High Court in writs held that in view of provisions of 147 amended w.e.f. 1/04/2021, the benefit of extension of time limit Taxation and Other Laws ( Relaxation and Amendment of ’) would not be to old provisions and in the case of Ashish Agrwal (supra), Hon’ble Supreme Court held that TOLA will apply on amended provisions of section 147 Ashish Agrawal (supra) gave life to such the Act under old provisions during the 30/06/2021 and held to treat the same as notice new procedure u/s 148A and commence the further proceedings of 147 u subject to amended provisions. The Hon’ble Supreme Court provided two weeks time to the assessee for responding after supply of relevant material or enquiry report in pursuance to 148A proceedings. The Hon’ble Supreme Court bansal (supara) treated the period from date of issue of notice to under old provisions to the date of provisions in compliance in Ashish Agrawal (supra) period which would be available to the AO would be the period , which would have been available from issue of notice under old provisos upto 30/06/2021 extended under TOLA. 6.2 In the case notice u/s 148 under old provisions was issued on 19/05/2021 , so the survival period of 42 days was AO upto 30/06/2021 and same period would be available after excluding the period of stay upto the date of filing response by t assessee. which has been filed on 10/06/22. supply of material/ issue of notice u/s 148A(b) of the Act on ITA No. 1582 provisions of section 147. The Hon’ble Supreme Court in the case of Ashish Agrawal (supra) gave life to such notices issued u/s 148 of under old provisions during the period form 1/04/21 to and held to treat the same as notice u/s 148A(b) of the Act amended from 1/04/2021 and commence the further proceedings of 147 under new provisions subject to amended provisions. The Hon’ble Supreme Court provided two weeks time to the assessee for responding after supply of relevant material or enquiry report in pursuance to 148A The Hon’ble Supreme Court in the ca bansal (supara) treated the period from date of issue of notice to under old provisions to the date of responding to the AO under new compliance to the Direction of Hon’ble Supreme Court (supra) as deemed stay period and thus time period which would be available to the AO would be the period , which would have been available from issue of notice under old provisos upto 30/06/2021 i.e. the time period under new provisions under TOLA. In the case notice u/s 148 under old provisions was issued on 19/05/2021 , so the survival period of 42 days was AO upto 30/06/2021 and same period would be available after excluding the period of stay upto the date of filing response by t which has been filed on 10/06/22. Pursuant to the supply of material/ issue of notice u/s 148A(b) of the Act on Arvind Velji Gada 8 ITA No. 1582 & 2026/MUM/2024 The Hon’ble Supreme Court in the case of notices issued u/s 148 of form 1/04/21 to and held to treat the same as notices issued under the Act amended from 1/04/2021 nder new provisions subject to amended provisions. The Hon’ble Supreme Court provided two weeks time to the assessee for responding after supply of relevant material or enquiry report in pursuance to 148A in the case of Rajeev bansal (supara) treated the period from date of issue of notice to to the AO under new of Hon’ble Supreme Court period and thus time period which would be available to the AO would be the period , which would have been available from issue of notice under old i.e. the time period under new provisions In the case notice u/s 148 under old provisions was issued on 19/05/2021 , so the survival period of 42 days was available to the AO upto 30/06/2021 and same period would be available after excluding the period of stay upto the date of filing response by the Pursuant to the supply of material/ issue of notice u/s 148A(b) of the Act on 28.05.2022, the assessee filed its response on 10.06.2022 therefore, the Assessing Officer got 42 days from 10.06.2022 for issue of reassessment notice u/s 148 of the Act of under the amended regime of reassessment. 22.07.2022, whereas the Assessing Officer in the instant case has issued notice u/s 148 of the Act on 30.07.2022, beyond the period of three years assessment year. 6.3 Therefore, sanction of the Pr. Chief Commissioner tax (PCCIT/CCIT) was required 1/04/2021 , whereas Commissioner of Income u/s 148 issued on 30/07/2022 40-41. Since sanction has not been obtained from the appropriate authority prescribed under the law reassessment proceedings are invalid and accordingly quashed. 6.4 In support of the Ld. counsel for the assessee relied on the decision of the Co-ordinate Bench of the Tribunal in the case of Manish Jagdish Joshi in ITA No. 1617 para of the same is reproduced as under: “19. Thus, in the present case, it is discernible that the notice under section 148 of the Act was issued not only in contravention of the provisions of section 151 as the sanction of the Specified Authority was not obtained, but the same is also time ITA No. 1582 , the assessee filed its response on 10.06.2022 therefore, the Assessing Officer got 42 days from 10.06.2022 for issue of reassessment notice u/s 148 of the Act of under the amended regime of reassessment. Thus, survival period of 42 days whereas the Assessing Officer in the instant case has tice u/s 148 of the Act on 30.07.2022, which is beyond the period of three years from the end of relevant herefore, sanction of the Pr. Chief Commissioner as required under the amended provisions w.e.f whereas sanction has been obtained Commissioner of Income-tax, Mumbai (PCIT) as evident form notice 30/07/2022 , a copy of which is available on PB sanction has not been obtained from the appropriate prescribed under the law, therefor reassessment proceedings are invalid and accordingly In support of the Ld. counsel for the assessee relied on the ordinate Bench of the Tribunal in the case of Manish Jagdish Joshi in ITA No. 1617/Mum/2024. The relevant para of the same is reproduced as under: Thus, in the present case, it is discernible that the notice under section 148 of the Act was issued not only in contravention of the provisions of section 151 as the sanction of the Specified Authority was not obtained, but the same is also time Arvind Velji Gada 9 ITA No. 1582 & 2026/MUM/2024 , the assessee filed its response on 10.06.2022 therefore, the Assessing Officer got 42 days from 10.06.2022 for issue of reassessment notice u/s 148 of the Act of under the amended 42 days ended on whereas the Assessing Officer in the instant case has which is otherwise from the end of relevant herefore, sanction of the Pr. Chief Commissioner of income- under the amended provisions w.e.f sanction has been obtained from Principla as evident form notice copy of which is available on PB sanction has not been obtained from the appropriate , therefore, the entire reassessment proceedings are invalid and accordingly liable to be In support of the Ld. counsel for the assessee relied on the ordinate Bench of the Tribunal in the case of /Mum/2024. The relevant Thus, in the present case, it is discernible that the notice under section 148 of the Act was issued not only in contravention of the provisions of section 151 as the sanction of the concerned Specified Authority was not obtained, but the same is also time- barred as per the provisions of section 149 of the Act as the same was issued after three years and the amount alleged to have escaped assessment is only Rs.43,32,000, i.e. less than lakh. Accordingly, we are of the considered view that the notice issued under section 148 of the Act is void ab initio and bad in law and therefore is quashed. Consequently, the entire reopening proceedings and impugned final assessment order passed section 147 r/w section 144C(13) of the Act is also quashed. 6.5 The Ld. counsel also relied on the decision of the Co Bench of in the case of Surya Ferrous Alloys Pvt. Ltd. in ITA No. 1406/Mum/2024 for assessment year 2017 Tribunal quashed the reassessment in absence of sanction from the specified authority. The relevant finding of the Tribunal is reproduced as under: “8.1. From the above, we note that in para 73, in the table last two rows relate to provisions of Secti regime prescribing the time limit as well as the specified authority. In para 75, it is very categorically mentioned by the Hon'ble Court that after 01.04.2021, in terms of Ashish Agrawal (supra) the prior approval must be obtained authorities specified u/s.151 of the new regime. This abundantly brings clarity on the aspect of obtaining approval for issue of notice u/s.148 which are fall out of the decision in Ashish Agrawal (supra). In para 77, objective of sec mentioned which is to relax the time limit for compliance with actions that fall for completion from 20.03.2020 to 31.03.2021. Thus, the objective is specific for providing temporal flexibility. In para 78, the same has been explained Assessment Year 2017 that the authority specified u/s.151(i) of the new regime can grant sanction till 30.06.2021. Thus, while concluding in para 81 on the issue obtaining approval, Hon'ble Cour stated that the Assessing Officer is required to obtain prior approval of the specified authority according to section 151 of the new regime before passing an order u/s.148A(d) or issuing a notice u/s.148. According to the Hon'ble Court, waived off the requirement obtaining prior approval u/s.148A(a) and Section 148Ab, it did not waive the requirement for section 148A(d) and Section 148. ITA No. 1582 barred as per the provisions of section 149 of the Act as the same was issued after three years and the amount alleged to have escaped assessment is only Rs.43,32,000, i.e. less than lakh. Accordingly, we are of the considered view that the notice issued under section 148 of the Act is void ab initio and bad in law and therefore is quashed. Consequently, the entire reopening proceedings and impugned final assessment order passed section 147 r/w section 144C(13) of the Act is also quashed. The Ld. counsel also relied on the decision of the Co Bench of in the case of Surya Ferrous Alloys Pvt. Ltd. in ITA No. 1406/Mum/2024 for assessment year 2017-18 wherein also Tribunal quashed the reassessment in absence of sanction from the specified authority. The relevant finding of the Tribunal is reproduced as under: 8.1. From the above, we note that in para 73, in the table last two rows relate to provisions of Section 151(i)(ii) of the new regime prescribing the time limit as well as the specified authority. In para 75, it is very categorically mentioned by the Hon'ble Court that after 01.04.2021, in terms of Ashish Agrawal (supra) the prior approval must be obtained from the appropriate authorities specified u/s.151 of the new regime. This abundantly brings clarity on the aspect of obtaining approval for issue of notice u/s.148 which are fall out of the decision in Ashish Agrawal (supra). In para 77, objective of section 3(1) of TOLA is mentioned which is to relax the time limit for compliance with actions that fall for completion from 20.03.2020 to 31.03.2021. Thus, the objective is specific for providing temporal flexibility. In para 78, the same has been explained by an example taking Assessment Year 2017-18 which also in specific terms mentions that the authority specified u/s.151(i) of the new regime can grant sanction till 30.06.2021. Thus, while concluding in para 81 on the issue obtaining approval, Hon'ble Court has specifically stated that the Assessing Officer is required to obtain prior approval of the specified authority according to section 151 of the new regime before passing an order u/s.148A(d) or issuing a notice u/s.148. According to the Hon'ble Court, though it had waived off the requirement obtaining prior approval u/s.148A(a) and Section 148Ab, it did not waive the requirement for section 148A(d) and Section 148. Arvind Velji Gada 10 ITA No. 1582 & 2026/MUM/2024 barred as per the provisions of section 149 of the Act as the same was issued after three years and the amount alleged to have escaped assessment is only Rs.43,32,000, i.e. less than Rs.50 lakh. Accordingly, we are of the considered view that the notice issued under section 148 of the Act is void ab initio and bad in law and therefore is quashed. Consequently, the entire reopening proceedings and impugned final assessment order passed under section 147 r/w section 144C(13) of the Act is also quashed.” The Ld. counsel also relied on the decision of the Co-ordinate Bench of in the case of Surya Ferrous Alloys Pvt. Ltd. in ITA No. 18 wherein also the Tribunal quashed the reassessment in absence of sanction from the specified authority. The relevant finding of the Tribunal is 8.1. From the above, we note that in para 73, in the table last on 151(i)(ii) of the new regime prescribing the time limit as well as the specified authority. In para 75, it is very categorically mentioned by the Hon'ble Court that after 01.04.2021, in terms of Ashish Agrawal from the appropriate authorities specified u/s.151 of the new regime. This abundantly brings clarity on the aspect of obtaining approval for issue of notice u/s.148 which are fall out of the decision in Ashish tion 3(1) of TOLA is mentioned which is to relax the time limit for compliance with actions that fall for completion from 20.03.2020 to 31.03.2021. Thus, the objective is specific for providing temporal flexibility. In by an example taking 18 which also in specific terms mentions that the authority specified u/s.151(i) of the new regime can grant sanction till 30.06.2021. Thus, while concluding in para 81 t has specifically stated that the Assessing Officer is required to obtain prior approval of the specified authority according to section 151 of the new regime before passing an order u/s.148A(d) or issuing a though it had waived off the requirement obtaining prior approval u/s.148A(a) and Section 148Ab, it did not waive the requirement for section 8.2. Taking into consideration the submissions made by the ld. Sr. DR and keeping the sa observations and findings of the Hon'ble Court, we note that the issue we are presently addressing raised before us is not on the aspect of \"when\" for the procedural compliance for issuance of notice u/s.148 but on the as been issued. Ld. Sr. DR has contended that there is hierarchical escalation vis In this respect, Hon'ble Court has very categorically held in para 75 that the prior app authorities specified u/s.151 of the new regime for the notices issued in terms of Ashish Agrawal (supra) after 01.04.2021. Reference by ld. Sr. DR to Section 149(1)(a) deals with time limit for issuing notice u/ is no hierarchical escalation for obtaining prior approval for issuing notice u/s.148 is not in coherence with the guidelines mandated by the Hon'ble Apex Court as enunciated above. Repeatedly, Hon'ble Court h illustration that TOLA extends time line from the old regime which survives making the notice validly issued subject to the approval requirements of Section 151 under the new regime. Accordingly, the prior approval requirement 151 of new regime. 8.3. In the present case, the relevant Assessment Year is 2017 18 and the time limit of three years lapsed on 31.03.2021 which falls between 20.03.2020 and 31.03.2021 during which provisions of Taxation and Amendment of Certain Provisions) Act, 2020 (TOLA) would apply. Accordingly, the amended provisions under the Act read with TOLA extended the time limit for granting of approval till 30.06.2021 by the specified authority. Thus, o facts and law, in the present case, three years had lapsed from the end of the Assessment Year when the order u/s.148A(d) and notice u/s.148 was issued on 30.07.2022. In the present case, since the notice u/s. 148 and order u/s. 148A(b) issued beyond the period of three years from the end of the relevant Assessment Year, case of the assessee falls within the provisions of section 151(ii) of the amended law whereby the specified authority for grant of approval is specified as Pri Chief Commissioner or Principal Director General or Chief Commissioner or Director General. Contrary to this requirement, the approval obtained is by Principal Commissioner of Income Tax-17, Mumbai. Accordingly, since a proper sanction by the specified authority had not been obtained for issue of notice u/s.148 under the applicable provisions of law, said notice is invalid and bad in law. ITA No. 1582 8.2. Taking into consideration the submissions made by the ld. Sr. DR and keeping the same in juxtaposition with the above observations and findings of the Hon'ble Court, we note that the issue we are presently addressing raised before us is not on the aspect of \"when\" for the procedural compliance for issuance of notice u/s.148 but on the aspect of \"by whom\" it ought to have been issued. Ld. Sr. DR has contended that there is hierarchical escalation vis-a-vis obtaining approval for issuing notice u/s.148. In this respect, Hon'ble Court has very categorically held in para 75 that the prior approval must be obtained from the appropriate authorities specified u/s.151 of the new regime for the notices issued in terms of Ashish Agrawal (supra) after 01.04.2021. Reference by ld. Sr. DR to Section 149(1)(a) deals with time limit for issuing notice u/s.148. Contention of the ld. Sr. DR that there is no hierarchical escalation for obtaining prior approval for issuing notice u/s.148 is not in coherence with the guidelines mandated by the Hon'ble Apex Court as enunciated above. Repeatedly, Hon'ble Court has stated including by way of illustration that TOLA extends time line from the old regime which survives making the notice validly issued subject to the approval requirements of Section 151 under the new regime. Accordingly, the prior approval requirement is mandated under the section 151 of new regime. 8.3. In the present case, the relevant Assessment Year is 2017 18 and the time limit of three years lapsed on 31.03.2021 which falls between 20.03.2020 and 31.03.2021 during which provisions of Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 (TOLA) would apply. Accordingly, the amended provisions under the Act read with TOLA extended the time limit for granting of approval till 30.06.2021 by the specified authority. Thus, on the above stated facts and law, in the present case, three years had lapsed from the end of the Assessment Year when the order u/s.148A(d) and notice u/s.148 was issued on 30.07.2022. In the present case, since the notice u/s. 148 and order u/s. 148A(b) issued beyond the period of three years from the end of the relevant Assessment Year, case of the assessee falls within the provisions of section 151(ii) of the amended law whereby the specified authority for grant of approval is specified as Pri Chief Commissioner or Principal Director General or Chief Commissioner or Director General. Contrary to this requirement, the approval obtained is by Principal Commissioner of Income 17, Mumbai. Accordingly, since a proper sanction by the ied authority had not been obtained for issue of notice u/s.148 under the applicable provisions of law, said notice is invalid and bad in law. Arvind Velji Gada 11 ITA No. 1582 & 2026/MUM/2024 8.2. Taking into consideration the submissions made by the ld. me in juxtaposition with the above observations and findings of the Hon'ble Court, we note that the issue we are presently addressing raised before us is not on the aspect of \"when\" for the procedural compliance for issuance of pect of \"by whom\" it ought to have been issued. Ld. Sr. DR has contended that there is hierarchical vis obtaining approval for issuing notice u/s.148. In this respect, Hon'ble Court has very categorically held in para roval must be obtained from the appropriate authorities specified u/s.151 of the new regime for the notices issued in terms of Ashish Agrawal (supra) after 01.04.2021. Reference by ld. Sr. DR to Section 149(1)(a) deals with time limit s.148. Contention of the ld. Sr. DR that there is no hierarchical escalation for obtaining prior approval for issuing notice u/s.148 is not in coherence with the guidelines mandated by the Hon'ble Apex Court as enunciated above. as stated including by way of illustration that TOLA extends time line from the old regime which survives making the notice validly issued subject to the approval requirements of Section 151 under the new regime. Accordingly, is mandated under the section 8.3. In the present case, the relevant Assessment Year is 2017- 18 and the time limit of three years lapsed on 31.03.2021 which falls between 20.03.2020 and 31.03.2021 during which Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 (TOLA) would apply. Accordingly, the amended provisions under the Act read with TOLA extended the time limit for granting of approval till n the above stated facts and law, in the present case, three years had lapsed from the end of the Assessment Year when the order u/s.148A(d) and notice u/s.148 was issued on 30.07.2022. In the present case, since the notice u/s. 148 and order u/s. 148A(b) have been issued beyond the period of three years from the end of the relevant Assessment Year, case of the assessee falls within the provisions of section 151(ii) of the amended law whereby the specified authority for grant of approval is specified as Principal Chief Commissioner or Principal Director General or Chief Commissioner or Director General. Contrary to this requirement, the approval obtained is by Principal Commissioner of Income 17, Mumbai. Accordingly, since a proper sanction by the ied authority had not been obtained for issue of notice u/s.148 under the applicable provisions of law, said notice is 8.4. Keeping in juxtaposition the undisputed and the uncontroverted facts as stated above and the judicial preced of the Hon'ble Supreme Court in the case of Ashish Agarwal and Rajiv Bansal (supra), we hold that sanction by specified authority has not been obtained by the ld. Assessing Officer in accordance with the provisions contained in section 151 of the Act u new regime, since notice u/s.148 has been issued beyond three years from the end of the relevant Assessment Year. Accordingly, the said notice issued is invalid and thus quashed. Resultantly, the impugned re impugned re quashed.” 6.6 In view of the above discussion, the reassessment proceedings in the case of the assessee are quashed. As the reassessment proceedings have been quashed the Revenue are rendered infructuous. Accordingly, same are dismissed. 7. In the result, both the appeals of the assessee and Revenue are dismissed. Order pronounced in the open Court on Sd/ (KAVITHA RAJAGOPAL JUDICIAL MEMBER Mumbai; Dated: 27/03/2025 Rahul Sharma, Sr. P.S. ITA No. 1582 8.4. Keeping in juxtaposition the undisputed and the uncontroverted facts as stated above and the judicial preced of the Hon'ble Supreme Court in the case of Ashish Agarwal and Rajiv Bansal (supra), we hold that sanction by specified authority has not been obtained by the ld. Assessing Officer in accordance with the provisions contained in section 151 of the Act u new regime, since notice u/s.148 has been issued beyond three years from the end of the relevant Assessment Year. Accordingly, the said notice issued is invalid and thus quashed. Resultantly, the impugned re-opening proceedings so initiated and th impugned re-assessment order passed thereafter are also In view of the above discussion, the reassessment proceedings in the case of the assessee are quashed. As the reassessment been quashed, these appeals by the assessee the Revenue are rendered infructuous. Accordingly, same are In the result, both the appeals of the assessee and Revenue nounced in the open Court on 27/03/2025. Sd/- Sd/ (KAVITHA RAJAGOPAL) (OM PRAKASH KANT MEMBER ACCOUNTANT MEMBER Arvind Velji Gada 12 ITA No. 1582 & 2026/MUM/2024 8.4. Keeping in juxtaposition the undisputed and the uncontroverted facts as stated above and the judicial precedent of the Hon'ble Supreme Court in the case of Ashish Agarwal and Rajiv Bansal (supra), we hold that sanction by specified authority has not been obtained by the ld. Assessing Officer in accordance with the provisions contained in section 151 of the Act under the new regime, since notice u/s.148 has been issued beyond three years from the end of the relevant Assessment Year. Accordingly, the said notice issued is invalid and thus quashed. Resultantly, opening proceedings so initiated and the assessment order passed thereafter are also In view of the above discussion, the reassessment proceedings in the case of the assessee are quashed. As the reassessment these appeals by the assessee and the Revenue are rendered infructuous. Accordingly, same are In the result, both the appeals of the assessee and Revenue /03/2025. Sd/- OM PRAKASH KANT) ACCOUNTANT MEMBER Copy of the Order forwarded to 1. The Appellant 2. The Respondent. 3. CIT 4. DR, ITAT, Mumbai 5. Guard file. //True Copy// ITA No. 1582 Copy of the Order forwarded to : BY ORDER, (Assistant Registrar) ITAT, Mumbai Arvind Velji Gada 13 ITA No. 1582 & 2026/MUM/2024 BY ORDER, Registrar) ITAT, Mumbai "