DCIT CENTRAL CIRCLE- 7(1), MUMBAI, MUMBAI V. JINALBEN BHAVIKBHAI VORA, GUJRAT

ITA 7588/MUM/2025

AI Insights

The case involves an appeal by the Deputy Commissioner of Income Tax against the order of the Commissioner of Income Tax (Appeals) which had allowed the appeal of the Assessee, Jinalben Bhavikbhai Vora, against the reassessment order for the Assessment Year 2013-2014. The reassessment was initiated under Section 147 of the Income Tax Act, 1961, following a notice under Section 148. The Assessee contested the validity of the reassessment proceedings, arguing that the notice was time-barred and violated procedural requirements. The Tribunal examined the timelines and procedural compliance of the reassessment notice and found it to be issued beyond the permissible period, leading to its quashing.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 839945 (ITAT-MUMBAI)
• Duration Of Justice: 3 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-02-2026
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Assessment Year: 2013-2014
• Appeal Filed On: 21-11-2025
• Other Referred Cases: Union of India vs. Ashish Agarwal, Union of India vs. Rajeev Bansal
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: ASSESSEE
• Keywords: Reassessment proceedings; Period of limitation
• Section: 147; 148

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL “F” BENCH, MUMBAI SHRI RAHUL CHAUDHARY, JUDICIAL MEMBER SHRI BIJAYANANDA PRUSETH, ACCOUNTANT MEMBER ITA No.7588/MUM/2025 (Assessment Year:2013-2014) Deputy Commissioner of Income Tax Central Circle 7(1), Mumbai Room No.653, 6th Floor, Aayakar Bhawan, Maharshi Karve Road, Mumbai - 400020. Maharashtra. …………. Appellant Jinalben Bhavikbhai Vora 3, Ashapura Park, B/H, Vimalnath Society, 80 FT. Road, Surendra Nagar, Station Road, Surendranagar, Gujarat – 363001. [PAN:AFJPV0338H] Vs …………. Respondent Cross Objection No.23/Mum/2026 (In ITA No.7588/Mum/2025) (Assessment Year:2013-2014) Jinalben Bhavikbhai Vora 3, Ashapura Park, B/H, Vimalnath Society, 80 FT. Road, Surendra Nagar, Station Road, Surendranagar, Gujarat – 363001. [PAN:AFJPV0338H] …………. Appellant Deputy Commissioner of Income Tax Central Circle 7(1), Mumbai Room No.653, 6th Floor, Aayakar Bhawan, Maharshi Karve Road, Mumbai - 400020. Maharashtra. Vs …………. Respondent Appearance For the Appellant/Department For the Respondent/Assessee : : Shri Nakul Agrawal Shri Jignesh Shah Date Conclusion of hearing Pronouncement of order : : 17.02.2026 24.02.2026 O R D E R [ Per Rahul Chaudhary, Judicial Member: 1. The present appeal and cross objection pertain to Assessment Year 2013-2014. The Revenue has preferred appeal against the Order, Printed from counselvise.com ITA No.7588/Mum/2025 C.O. No.23/Mum/2026 Assessment Year 2013-2014 2 dated 30/09/2025, passed by the Commissioner of Income Tax (Appeals) – 49, Mumbai [hereinafter referred to as the ‘CIT(A)’], whereby the Ld. CIT(A) had Allowed the appeal of the Assessee against the Assessment Order, dated 31/05/2023, passed under Section 147 of the Income Tax Act, 1961 [hereinafter referred to as ‘the Act’]. The Assessee has filed cross objection. 2. The relevant facts in brief are that notice under Section 148 of the Act (old regime) was issued to the Assessee for the Assessment Year 2013-2014 on 17/06/2021 (i.e., after the expiry of 4 years but before the expiry of 6 years from the end of Assessment Year 2013-2014). Subsequently, in compliance with the judgment of the Hon’ble Supreme Court in the case of Union of India vs. Ashish Agarwal 444 ITR 1 (SC) [04/05/2022], communication, dated 26/05/2022, was sent to the Assessee intimating that the aforesaid notice issued under Section 148 of the Act (under old regime) would be treated as the show-cause notice issued in terms of Section 148A(b) of the Act (under new regime introduced by the Finance Act, 2021 w.e.f. 01/04/2021). The Assessing Officer also shared with the Assessee material/information on the basis of which the Assessing Officer had formed a belief that income had escaped assessment. The Assessee filed reply on 16/06/2022. Thereafter, order under Section 148A(d) of the Act was passed on 29/07/2022. This was followed by issuance of notice on 29/07/2022 under Section 148 of the Act (new regime). The reassessment proceedings culminated into passing of the Assessment Order, dated 31/05/2023, passed under Section 147 of the Act. 3. The appeal preferred by the Assessee against the aforesaid Assessment Order was allowed by the CIT(A) vide Order, dated 30/09/2025. Printed from counselvise.com ITA No.7588/Mum/2025 C.O. No.23/Mum/2026 Assessment Year 2013-2014 3 4. Being aggrieved, the Revenue has preferred the present appeal before the Tribunal challenging the relief granted by the CIT(A), while the Revenue has filed cross-objection challenging the validity of the re-assessment proceedings. Cross Objection No.23/Mum/2026 5. We would first take up cross-objection filed by the Assessee raising jurisdictional issue. The Cross Objections No.1 to 3 raised by the Assessee read as under: “1. In law and on the facts and in the circumstances of the case of appellant. Ld. Assessing officer has grossly erred in passing the assessment order and CIT(A) not adjudicating ground relating to the validity of the reassessment proceeding despite the fact that notice issued u/s 148 of the Act by AO on 29.07.2022 is time- barred as per decision of Hon'ble Supreme in the case of Union of India v/s. Rajeev Bansal [2024] 167 taxmann.com 70 (SC) Judgement dated 3rd October, 2024 and thus deserves to be quashed. 2. In law and in the facts and circumstances of the case, Ld. CIT(A) has grossly erred in not adjudicating the ground relating to the validity of the reassessment proceeding despite the fact that the notice issued u/s 148 by the jurisdictional assessing officer is in violation of Section 151A of the Act and CBCT Notification No. 18/2022 dated 29.03.2022. 3. In law and in the facts and circumstances of the case, Ld. CIT(A) has grossly erred in not adjudicating the ground relating to the validity of the reassessment proceeding despite the fact that the Notice under section 148 of the Act dated 31.08.2022 is void and bad in law as it was issued without DIN.” 6. We have heard both the sides on the above cross objections and have perused the material on record in relation to the issues raised therein. We have also taken into consideration the judicial precedents cited during the course of hearing. 7. There is no dispute as to facts. It is admitted position that the notice issued under Section 148 of the Act (old regime) on 17/06/2021, Printed from counselvise.com ITA No.7588/Mum/2025 C.O. No.23/Mum/2026 Assessment Year 2013-2014 4 was treated as notice issued under Section 148A(b) of the Act by the Assessing Officer. Thereafter, order under Section 148A(d) of the Act, was passed on 24/07/2022, and the same was followed by issuance of notice dated 29/06/2022, under Section 148 of the Act (new regime). Thus, the notice under Section 148 of the Act (new regime) was issued after the expiry of 6 years from the end of the relevant assessment year (but within the extended period covered by TOLA1). 8. The contention raised on behalf of the Assessee is that the Assessing Officer has passed order under Section 148A(d) of the Act and has issued notice under Section 148 of the Act (new regime) after the expiry of surviving period as computed according the judgment of the judgment of the Hon’ble Supreme Court in the case Union of India vs. Rajeev Bansal [2024] 469 ITR 46 (SC)[03/10/2024]. Therefore, both, the order under Section 148A(d) of the Act and the notice under Section 148 of the Act (new regime) are barred by limitation. In this regard the Learned Authorized Representative for the Assessee furnished following details: Sr. No. Event/Action Date/Period 1 Issuance of notice u/s 148 of the Act under old regime 17/06/2021 2 Notice u/s 148A(b) ie. Supply of material as per Hon'ble Supreme Court direction in the case of Ashish Agarwal 26/05/2022 3 Time allowed to the assessee for filing response against notice u/s 148A(b) 09/06/2022 4 Reply filed by the appellant against show cause notice u/s 148A(b) of the Act. (Acknowledgement Copy) 16/06/2022 5 Surviving period left to issue the notice u/s 148 of the Act i.e., under new regime as per Hon'ble Supreme Court Order in the case of Rajeev Bansal (supra) and order of Ld. CIT(A) 13 days (days between 17/06/2021 – 30/06/2021) 6 Time in Sr.5 in view of 4th Proviso to Section 149(1) of the Act. 7 days 7 The date till which a notice u/s.148 of the Act under new regime should have been issued as per Hon’ble Supreme Court Order in the case of Rajeev Bansal (supra) and order of Ld. CIT(A) 29/06/2022 (16/06/2022 + 13 days surviving period) 8 Order passed u/s 148A(d) 29/07/2022 9 Actual date of notice issued u/s.148 of the Act under new regime 29/07/2022 1 The Taxation And Other Laws (Relaxation And Amendment Of Certain Provisions) Act, 2020 Printed from counselvise.com ITA No.7588/Mum/2025 C.O. No.23/Mum/2026 Assessment Year 2013-2014 5 9. Per Contra, the stand taken by the Revenue is that there is no infirmity in the order passed by the CIT(A). 10. We note that in the facts and circumstances of the present case the issue that arises for consideration is whether the Order, dated 29/07/2022, passed under Section 148A(d) of the Act and notice, dated 29/07/2022, issued under Section 148 of the Act (new regime) were passed/issued within the surviving period calculated as per the judgment of the Hon’ble Supreme Court in the case of Union of India vs. Rajeev Bansal [2024] 469 ITR 46 (SC)[03/10/2024]. In the aforesaid judgment, the Hon’ble Supreme Court had made the following observations in relation to the interplay between the judgment of Hon’ble Supreme Court in the case of Ashish Agarwal (supra) and TOLA: “b. Interplay of Ashish Agarwal with TOLA 108.The Income-tax Act read with TOLA extended the time limit for issuing reassessment notices under section 148, which fell for completion from 20 March 2020 to 31 March 2021, till 30 June 2021. All the reassessment notices under challenge in the present appeals were issued from 1 April 2021 to 30 June 2021 under the old regime. Ashish Agarwal (supra) deemed these reassessment notices under the old regime as show cause notices under the new regime with effect from the date of issuance of the reassessment notices. The effect of creating the legal fiction is that this Court has to imagine as real all the consequences and incidents that will inevitably flow from the fiction. East End Dwellings Co. Ltd. v. Finsbury Borough Council [1952] AC 109. [Lord Asquith, in his concurring opinion, observed: \"If you are bidden to treat an imaginary state of affairs as real, you must surely, unless prohibited from doing so, also imagine as real the consequences and incidents which, if the putative state of affairs had in fact existed, must inevitably have flowed from or accompanied it.\"] Therefore, the logical effect of the creation of the legal fiction by Ashish Agarwal (supra) is that the time surviving under the Income- tax Act read with TOLA will be available to the Revenue to complete the remaining proceedings in furtherance of the deemed notices, including issuance of reassessment notices under section 148 of the new regime. The surviving or balance time limit can be calculated by computing the number of days between the date Printed from counselvise.com ITA No.7588/Mum/2025 C.O. No.23/Mum/2026 Assessment Year 2013-2014 6 of issuance of the deemed notice and 30 June 2021. 109. If this Court had not created the legal fiction and the original reassessment notices were validly issued according to the provisions of the new regime, the notices under section 148 of the new regime would have to be issued within the time limits extended by TOLA. As a corollary, the reassessment notices to be issued in pursuance of the deemed notices must also be within the time limit surviving under the Income-tax Act read with TOLA. This construction gives full effect to the legal fiction created in Ashish Agarwal (supra) and enables both the assesses and the Revenue to obtain the benefit of all consequences flowing from the fiction. See State of A P v. A P Pensioners Association [2005] 13 SCC 161. [This Court observed that the \"legal fiction undoubtedly is to be construed in such a manner so as to enable a person, for whose benefit such legal fiction has been created, to obtain all consequences flowing therefrom.\"] 110.The effect of the creation of the legal fiction in Ashish Agarwal (supra) was that it stopped the clock of limitation with effect from the date of issuance of Section 148 notices under the old regime [which is also the date of issuance of the deemed notices].As discussed in the preceding segments of this judgment, the period from the date of the issuance of the deemed notices till the supply of relevant information and material by the assessing officers to the assesses in terms of the directions issued by this Court in Ashish Agarwal (supra) has to be excluded from the computation of the period of limitation.Moreover, the period of two weeks granted to the assesses to reply to the show cause notices must also be excluded in terms of the third proviso to Section 149. 111.The clock started ticking for the Revenue only after it received the response of the assesses to the show causes notices. After the receipt of the reply, the assessing officer had to perform the following responsibilities: (i) consider the reply of the assessee under section 149A(c); (ii) take a decision under section 149A(d) based on the available material and the reply of the assessee; and (iii) issue a notice under section 148 if it was a fit case for reassessment. Once the clock started ticking, the assessing officer was required to complete these procedures within the surviving time limit. The surviving time limit, as prescribed under the Income-tax Act read with TOLA, was available to the assessing officers to issue the reassessment notices under section 148 of the new regime. 112.Let us take the instance of a notice issued on 1 May 2021 under the old regime for a relevant assessment year. Because of the legal Printed from counselvise.com ITA No.7588/Mum/2025 C.O. No.23/Mum/2026 Assessment Year 2013-2014 7 fiction, the deemed show cause notices will also come into effect from 1 May 2021. After accounting for all the exclusions, the assessing officer will have sixty-one days [days between 1 May 2021 and 30 June 2021] to issue a notice under section 148 of the new regime. This time starts ticking for the assessing officer after receiving the response of the assessee. In this instance, if the assessee submits the response on 18 June 2022, the assessing officer will have sixty- one days from 18 June 2022 to issue a reassessment notice under section 148 of the new regime. Thus, in this illustration, the time limit for issuance of a notice under section 148 of the new regime will end on 18 August 2022. 113. In Ashish Agarwal (supra), this Court allowed the assesses to avail all the defences, including the defence of expiry of the time limit specified under section 149(1). In the instant appeals, the reassessment notices pertain to the assessment years 2013-2014, 2014-2015, 2015-2016, 2016-2017, and 2017-2018. To assume jurisdiction to issue notices under section 148 with respect to the relevant assessment years, an assessing officer has to: (i) issue the notices within the period prescribed under section 149(1) of the new regime read with TOLA; and (ii) obtain the previous approval of the authority specified under section 151. A notice issued without complying with the preconditions is invalid as it affects the jurisdiction of the assessing officer. Therefore, the reassessment notices issued under section 148 of the new regime, which are in pursuance of the deemed notices, ought to be issued within the time limit surviving under the Income-tax Act read with TOLA. A reassessment notice issued beyond the surviving time limit will be time-barred. (Emphasis Supplied) 11. On perusal of the above it becomes clear, that the Hon’ble Supreme Court has clarified that the assessing officer was required to complete these procedures within the ‘surviving time limit’ which can be calculated by computing the number of days between the date of issuance of the deemed notice under Section 148A(d) of the Act and 30th June 2021 (i.e. the extended the time limit provided by TOLA for issuing reassessment notices under section 148, which fell for completion from 20 March 2020 to 31 March 2021,). The clock of limitation which has stopped with effect from the date of issuance of Section 148 notices under the old regime [which is also the date of issuance of the deemed notice under Section 148A(b) of the Act], Printed from counselvise.com ITA No.7588/Mum/2025 C.O. No.23/Mum/2026 Assessment Year 2013-2014 8 would start running again when final reply to the notice deemed to have been issued under Section 148A(b) of the Act is received by the Assessing Officer. It was clarified that a reassessment notice issued beyond the surviving time limit would be time-barred. 12. We find in the present case notice under Section 148 of the Act (old regime) was issued on 17/06/2021 and was deemed to be notice issued under Section 148A(b) of the Act (new regime). Thus, the surviving time limit can be calculated by computing the number of days between the date of issuance of the deemed notice (i.e., 07/06/2021) and 30/06/2021, which comes to 13 days. The clock started ticking only after Revenue received the response of the Assesses to the show causes notices on 16/06/2022. Once the clock started ticking, the Assessing officer was required to complete these procedures within the surviving time limit of 13 days which expired on 29/06/2022. Even the extended period of 7 days available to the Assessing Officer as per Proviso to Section 149(1) of the Act expired on 06/07/2022. Since notice under Section 148 of the Act was issued on 29/07/2022 after the expiry of the time available with the Assessing Officer calculated as aforesaid, the said notice issued under Section 148 of the Act is time-barred and therefore, bad in law. Therefore, notice, dated 29/07/2022, issued under Section 148 of the Act (new regime), the consequential reassessment proceedings and the Assessment Order, dated 31/05/2023, passed under Section 147 of the Act are quashed. Thus, Cross-Objection No.1 to 3 raised by the Assessee are allowed, while all the other cross objections are dismissed as having been rendered infructuous. In terms of aforesaid, the Cross Objections raised by the Assessee are partly allowed. ITA No.7588/MUM/2025 13. Since the Assessment Order, dated 31/05/2023, passed under Section 147 of the Act has been quashed, all the grounds raised by Printed from counselvise.com ITA No.7588/Mum/2025 C.O. No.23/Mum/2026 Assessment Year 2013-2014 9 the Revenue in the departmental appeal in relation to the relief granted by the CIT(A) on merits are dismissed as having been rendered infructuous. Therefore, the appeal preferred by the Revenue is dismissed. 14. In result, the Cross-Objection raised by the Assessee is partly allowed and the appeal preferred by the Revenue is dismissed. Order pronounced on 24.02.2026. Sd/- Sd/- (Bijayananda Pruseth) Accountant Member (Rahul Chaudhary) Judicial Member मुंबई Mumbai; िदनांक Dated :24.02.2026 Milan,LDC Printed from counselvise.com ITA No.7588/Mum/2025 C.O. No.23/Mum/2026 Assessment Year 2013-2014 10 आदेश की Ůितिलिप अŤेिषत/Copy of the Order forwarded to : 1. अपीलाथŎ / The Appellant 2. ŮȑथŎ / The Respondent. 3. आयकर आयुƅ/ The CIT 4. Ůधान आयकर आयुƅ / Pr.CIT 5. िवभागीय Ůितिनिध ,आयकर अपीलीय अिधकरण ,मुंबई / DR, ITAT, Mumbai 6. गाडŊ फाईल / Guard file. आदेशानुसार/ BY ORDER, सȑािपत Ůित //True Copy// उप/सहायक पंजीकार /(Dy./Asstt. Registrar) आयकर अपीलीय अिधकरण, मुंबई / ITAT, Mumbai Printed from counselvise.com "