DEVANG KANUBHAI VORA,MUMBAI V. ACIT, CIRCLE 32(1), MUMBAI

ITA 8912/MUM/2025

AI Insights

The case involves an appeal by Devang Kanubhai Vora against the order of the National Faceless Appeal Centre (NFAC), which had dismissed his appeal against the reassessment order passed by the Assistant Commissioner of Income Tax. The reassessment was based on information from the Investigation Wing, Pune, suggesting that Vora was involved in bogus purchase accommodation entries. The Tribunal's decision focused on the procedural validity of the notice issued under Section 148, particularly its compliance with the statutory time limits for reopening assessments.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 840309 (ITAT-MUMBAI)
• Duration Of Justice: 2 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-02-2026
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: J
• Assessment Year: 2013-2014
• Appeal Filed On: 22-12-2025
• Other Referred Cases: Godrej Industries Ltd. vs. Assistant Commissioner of Income-tax [2024] 160 taxmann.com 13 (Bombay)
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: ASSESSEE
• Keywords: Reassessment proceedings; Bogus purchase; Principle of natural justice; Search and seizure; Accommodation entries; Bogus
• Section: 147; 148; 143(3); 132; 153A; 68

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL \"J(SMC)\" BENCH, MUMBAI SHRI RAHUL CHAUDHARY, JUDICIAL MEMBER BIJAYANANDA PRUSETH, ACCOUNTANT MEMBER ITA No.8912/MUM/2025 (Assessment Year: 2013-2014) Devang Kanubhai Vora 501, B Wing, Vinayak CHS Ltd., Baji Prabhu Deshpande Marg, Vile Parle West, Mumbai - 400049. Maharashtra [PAN:AAAPV3107D] …………. Appellant Assistant Commissioner of Income Tax Circle 32(1) Mumbai 702, 7th Floor, Kautilya Bhavan, C-41 to C-43, G Block, Bandra Kurla Complex, Bandra (East), Mumbai – 400051. Maharashtra. Vs …………. Respondent Appearance For the Appellant/Assessee For the Respondent/Department : : Shri Rahul Hakani Shri Aditya Rai Date Conclusion of hearing Pronouncement of order : : 25.02.2026 27.02.2026 O R D E R Per Rahul Chaudhary, Judicial Member: 1. The present appeal preferred appeal against the order, dated 23/10/2025, passed by the National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as the ‘CIT(A)’], whereby the Ld. CIT(A) had dismissed the appeal of the Assessee against the Assessment Order, dated 22/03/2025, passed under Section 147 read with Section 143(3) of the Income Tax Act, 1961 [hereinafter referred to as ‘the Act’], for the Assessment Year 2013-2014. 2. The Assessee has raised following grounds of appeal in ITA No.8912/Mum/2025: Printed from counselvise.com ITA No. 8912/Mum/2025 Assessment Year 2013-2014 2 “1. The Learned CIT(A) erred in confirming the reopening done by the Assessing Officer without appreciating that notice u/s 148 was issued by the Jurisdictional Assessing officer instead of the Faceless Assessing Officer and thus notice u/s 148 was issued in contravention of Section 151A and hence notice u/s 148 is bad in law. 2. The Learned CIT(A) erred in confirming the reopening done by the Assessing Officer without appreciating that Explanation 2(iv) of Section 148 did not apply to the facts of the case and thus issuance of notice u/s 148 without complying with the procedure u/s 148A is bad in law and hence notice u/s 148 is bad in law. 3. The Learned CIT(A) erred in confirming the reopening done by the Assessing Officer without appreciating that notice u/s 148 is barred by limitation MERITS-Addition of sales u/s 68 Rs 46,82,679/- 4. The Learned CIT(A) erred in confirming addition made by the Assessing Officer of Rs 46,82,679/ u/s 68 being sales to Rohan Builders (India) Pvt Ltd at Pune by treating same as an accommodation entry without appreciating that the sales were genuine and supported by E-way bills. delivery challans, quantity tally and said sale was confirmed by the buyer and also accepted as purchases in the hands of the buyer by the income tax department and the books of accounts are not rejected and hence the addition of Rs 46,82,679/- may be deleted. 5. The Learned CIT(A) erred in confirming the addition of Rs 46,82,679/-made by the assessing officer under section 68 without appreciating that AO had not provided to the Assessee the statement of third party and third party evidences and also did not provide opportunity of cross- examination to the Assessee and thus the addition has been made in violation of principles of natural justice and hence addition u/s 68 of Rs 46.82,679/- may be deleted. 6. The Learned CIT(A) erred in confirming addition made by the Assessing Officer of Rs 46,82,679/- u/s 68 being sales to Rohan Builders (India) Pvt Ltd at Pune by treating same as an accommodation entry without appreciating that the action of Assessing Officer tantamounts to double addition Printed from counselvise.com ITA No. 8912/Mum/2025 Assessment Year 2013-2014 3 and hence the addition of Rs 46,82,679/- may be deleted.” 3. The relevant facts in brief are that the Assessee, a resident individual, filed return of income for the Assessment Year 2013- 2014 on 27/09/2013. The case of the Assessee was selected for regular scrutiny and assessment under Section 143(3) of the Act was framed vide Assessment Order dated 23/03/2016. Subsequently, on the basis of information received from the Investigation Wing, Pune to the effect that in search and seizure action carried out under Section 132 of the Act in the case of Rohan Builders & Developers Private Limited and its associated entities on 23/11/2023 incriminating material was found which showed that Assessee was beneficiary of bogus purchase accommodation entries and therefore, notice under Section 148 read with Clause (iv) of Explanation 2 to Section 148 of the Act was issued on 29/03/2024 after taking approval under Section 151 of the Act. The reassessment proceedings culminating into Assessment Order, dated 22/03/2025, passed under Section 147 read with Section 143(3) of the Act. The Assessing Officer made an addition of INR.46,82,679/- in the hand of the Assessee in respect of the alleged bogus purchases. 4. Being aggrieved, the Assessee preferred the appeal before the Learned CIT(A) challenging the validity of reassessment proceedings as well as the additions made on merits. The Learned CIT(A) dismissed the appeal vide Order, dated 23/10/2025, and confirmed the order passed by the Assessing Officer. 5. Being aggrieved, the Assessee has preferred the appeal before the Tribunal on the ground reproduced at Paragraph 2 above. 6. When the appeal was taken up for the hearing the Learned Printed from counselvise.com ITA No. 8912/Mum/2025 Assessment Year 2013-2014 4 Authorized Representative pressed into service Ground No.3 raised in the present appeal and submitted that the notice issued under Section 148 of the Act was barred by limitation. In support the Assessee filed the following fact sheet/submission: Date Event 23/11/2023 PY 2023-2024 AY 2024-2025 Search u/s 132 carried out in the case of Rohan Builders & Developers Pvt Ltd i.e. Rohan group, Pune wherein alleged incriminating material was found against the Assessee. 29/03/2024 PY 2023-2024 AY 2024-2025 Satisfaction recorded by AO of assessee under clause iv of Explanation 2 to Section 148 upon receiving information about search from the investigation wing 30/3/2024 PY 2023-2024 AY 2024-2025 Notice issued u/s 148 issued for AY 2013-2014 (i) As per first proviso to Section 149 as applicable from 1/4/2023, no notice under section 148 shall be issued at any time in a case for the relevant assessment year beginning on or before 1st day of April, 2021, if a notice under section 148 or section 153A or section 153C could not have been issued at that time on account of being beyond the time limit specified under the provisions of clause (b) of sub- section (1) of this section or section 153A or section 153C, as the case may be, as they stood immediately before the commencement of the Finance Act, 2021. (ii) In the present case, reopening is done on the basis of information received from the Investigation wing. Hence, prior to 1/4/2021 a notice u/s 148 could have been issued for taxing income escaping assessment (iii) As per Ist Proviso to Section 149. AY 2013-2014 could not be reopened as under the law prevailing prior to 1-4-2021, notice u/s 148 could have been issued only for six assessment years from the end of the relevant assessment year. Thus, for AY 2013-2014, notice u/s 148 could have been issued only upto AY 2019-2020/AY 2020-2021. The present notice is issued on 30/3/2024 and is thus bad in law. (iv) Without prejudice to above, as per Explanation 1 to Section 153A(1) rw 153C no Assessment or Reassessment can be made for an assessment year falling later than ten assessment years from the end of the assessment year relevant to the previous year in which search is conducted (153A) material is handed over (153C). Printed from counselvise.com ITA No. 8912/Mum/2025 Assessment Year 2013-2014 5 2024-2025 (v) Hence, for calculation of ten Assessment years, first assessment year will be AY 3023-2024 when the Search is conducted as well AO has recorded satisfaction upon receiving the information. The tenth Assessment year will be AY 2014-2015. Assessment Year 2024-2025 1 Assessment Year 2023-2024 2 Assessment Year 2022-2023 3 Assessment Year 2021-2022 4 Assessment Year 2020-2021 5 Assessment Year 2019-2020 6 Assessment Year 2018-2019 7 Assessment Year 2017-2018 8 Assessment Year 2016-2017 9 Assessment Year 2015-2016 10 Assessment Year 2014-2015 11 Assessment Year 2013-2014 12 In light of the above submissions ap1peal of the Assessee may be allowed.” 7. Per contra Learned Departmental Representative supported the Assessment Order by submitting that the assessment proceedings were initiated after following due procedure prescribed under Section 148 of the Act and after obtaining proper sanction under Section 151 of the Act. He submitted that incriminating material was found during the course of search conducted on 23/11/2023 which showed that the Assessee was beneficiary of bogus purchases accommodation entries. The Assessing Officer had recorded proper satisfaction under Clause (iv) of Explanation 2 to Section 148 of the Act had obtained proper approval before initiating reassessment proceedings. Therefore, Ground No.3 raised by the Assessee does not merit consideration. Printed from counselvise.com ITA No. 8912/Mum/2025 Assessment Year 2013-2014 6 8. We have given thoughtful considerations to the rival submissions and have perused the material on record. We note that the present appeal pertains to Assessment Year 2013-2014. 9. The First Proviso to Section 149 of the Act read as under: “Provided that no notice under section 148 shall be issued at any time in a case for the relevant assessment year beginning on or before I day of April, 2021 [if a notice u/s 148 or section 153A or section 153C could not have been issued at that time on account being beyond the time limit specified under the provisions of clause (b) of sub-section (1) of the section or section 153A or Section 153C, as the case may be), as they stood immediately before the commencement of the Finance Act, 2021.” 10. Section 149 of the Act prescribes the outer time limits for issuing notice under Section 148 of the Act. The First Proviso to Section 149 clarifies that no notice under Section 148 can be issued for any assessment year prior to April 1, 2021, if the time limit for issuing such notice under the old law [as applicable immediately before the commencement of the Finance Act, 2021] had already expired before that date. 11. In the case of Godrej Industries Ltd. vs. Assistant Commissioner of Income-tax [2024] 160 taxmann.com 13 (Bombay)[28-02-2024] the Hon’ble Bombay High Court had quashed the assessment order for the Assessment Year 2014- 2015 holding that no notice under Section 148 of the Act [as applicable after the Finance Act, 2021 came into effect] for Assessment Year 2014-15 could have been be issued on or after 01/04/2021, based upon the First Proviso to Section 149 of the Act for the reason that as per the law prevailing immediately prior to enactment of Finance Act, 2021, no notice could have been issued after the expiry of six years from the end of relevant assessment year. For the Assessment Year 2014-2015, the aforesaid period of six years expired on 31/03/2021. Therefore, Printed from counselvise.com ITA No. 8912/Mum/2025 Assessment Year 2013-2014 7 the reopening notice issued under Section 148 of the Act on 31/07/2022 for the Assessment Year 2014-15 was held by the Hon’ble Bombay High Court to be barred by limitation. 12. In the present case the period of six years from the end of Assessment Years 2013-2014, expired on 31/03/2020. Even the extended period granted by Taxation and Other Laws (Relaxation and Amendment of Certain Provisions), Act, 2020 (for short TOLA) expired on 30/06/2022. Therefore, the notice under Section 148 of the Act was issued on 29/03/2024 is clearly barred by limitation in view of First Proviso to Section 149 of the Act. 13. In view of the above, we also hold that in the present case the reassessment proceedings initiated under Section 148 of the Act for the Assessment Year 2013-2014 are barred by limitation in terms of Section 149 of the Act reads with First Proviso thereto. Accordingly, Ground No.3 is raised by the Assessee is allowed while all the other Grounds raised by the Assessee are dismissed having been rendered infructuous. 14. In terms of the paragraph 13 above, appeal preferred by the Assessee is partly allowed. Order pronounced on 27.02.2026. Sd/- Sd/- (Bijayananda Pruseth) Accountant Member (Rahul Chaudhary) Judicial Member मुंबई Mumbai; िदनांकDated : 27.02.2026 Milan, LDC Printed from counselvise.com ITA No. 8912/Mum/2025 Assessment Year 2013-2014 8 आदेशकीŮितिलिपअŤेिषत/Copy of the Order forwarded to : 1. अपीलाथŎ/ The Appellant 2. ŮȑथŎ/ The Respondent. 3. आयकरआयुƅ/ The CIT 4. Ůधान आयकर आयुƅ/ Pr.CIT 5. िवभागीयŮितिनिध, आयकरअपीलीयअिधकरण, मुंबई/ DR, ITAT, Mumbai 6. गाडŊफाईल / Guard file. आदेशानुसार/ BY ORDER, सȑािपतŮित //True Copy// उप/सहायकपंजीकार /(Dy./Asstt. Registrar) आयकरअपीलीयअिधकरण, मुंबई / ITAT, Mumbai Printed from counselvise.com "