INCOME TAX OFFICER, SURAT V. ASHOK KUMAR JINDAL, SURAT

ITA 938/SRT/2024

AI Insights

The case involves an appeal by the Income Tax Officer against Ashok Kumar Jindal concerning the reassessment for the Assessment Year 2015-16. The primary contention was the validity of the notice issued under Section 148 of the Income-tax Act, which was challenged by the respondent on the grounds of being time-barred. The Income Tax Appellate Tribunal, Surat Bench, examined the procedural validity of the notice and found it to be issued beyond the permissible time limit as per the amended provisions of the Act, effective from 01.04.2021. The Tribunal relied on the Supreme Court's decision in Union of India v. Rajeev Bansal to conclude that the notice was invalid, leading to the dismissal of the Revenue's appeal without addressing the merits of the case.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 837721 (ITAT-SURAT)
• Duration Of Justice: 1 year(s) 5 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-02-2026
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2015-2016
• Appeal Filed On: 04-09-2024
• Other Referred Cases: Union of India v. Rajeev Bansal [2024] 167 taxmann.com 70 (SC)
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Set aside; Invalid notice; Reassessment proceedings; Deemed dividend; Period of limitation; Time period of passing order
• Section: 147; 148; 2(22)(e)

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL SURAT BENCH, SURAT BEFORE DR. B.R.R. KUMAR, VICE-PRESIDENT MS. SUCHITRA KAMBLE, JUDICIAL MEMBER I.T.A. No. 938/SRT/2024 (Assessment Year: 2015-16) Income Tax Officer, Ward 1(1)(3), Surat Vs. Ashok Kumar Jindal, 561, Adarsh Market, Ring Road, Surat-395003 [PAN : AAKPJ 5190 N] (Appellant) .. (Respondent) Appellant represented by : Shri Ajay Uke, Sr DR Respondent represented by: Shri Sapnesh Sheth, Advocate Date of Hearing 23.01.2026 Date of Pronouncement 17.02.2026 O R D E R PER DR. B.R.R. KUMAR, VICE-PRESIDENT:- This appeal has been filed by the Revenue against the order dated 22.07.2024 passed by the Ld. Commissioner of Income-tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi (hereinafter referred to as the “Ld. CIT(A)” for short), under Section 250 of the Income-tax Act, 1961 (hereinafter referred to as the “Act” for short) for Assessment Year 2015-16. 2. The Revenue has raised following grounds of appeal :- “(i) On the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the addition made by the AO u/s. 2(22)(e) of the Act by treating such unsecured loan of Rs.1,82,50,000/- as the companies by deemed dividend which has been received from partnership firm in which the assessee having more than 10% of shareholding. (ii) On the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the addition made by the AO u/s. 2(22)(e) of the Act and did not appreciate that the Auditor of the firm M/s Gulmohar Knitting has apparently given remark that the transaction made with the companies M/s Gulmohar Embroidery Pvt Ltd and M/s International Creation Pvt Ltd is transaction of loan. (iii) On the basis of the facts and circumstances of the case and in law, the Ld. CIT(A) ought to have upheld the order of the Assessing Officer. Printed from counselvise.com ITA No. 938/SRT/2024 ITO Vs. Ashok Kumar Jindal Asst. Year : 2015-16 - 2– (iv) It is therefore prayed that the order of the Ld. CIT(A) may kindly be set aside and that of the Assessing Officer be restored.” 3. At the outset of the hearing, the Learned Counsel for the assessee raised a preliminary objection challenging the validity of the reassessment proceedings. It was contended that the notice issued under Section 148 of the Act is barred by limitation and, therefore, the Assessing Officer lacked jurisdiction to reopen the assessment. It was submitted that the notice under Section 148 was issued on 23.04.2021, which fact is not in dispute. 4. We have considered the rival submissions and perused the material available on record. It is an admitted position that the notice under Section 148 of the Act for AY 2015-16 was issued on 23.04.2021, i.e., after the substitution of Sections 147 to 151 of the Act by the Finance Act, 2021 with effect from 01.04.2021. The first proviso to Section 149(1), as introduced by the Finance Act, 2021, imposes a statutory bar on issuance of notice under Section 148 beyond the prescribed limitation period. In accordance with the test laid down by the Hon’ble Supreme Court in Union of India v. Rajeev Bansal [2024] 167 taxmann.com 70 (SC) dated 03.10.2024, a notice issued after 01.04.2021 is valid only if a notice for the same AY could have been issued on or before 31.03.2021 under the unamended provisions of Section 149. On a perusal of the material on record, there is no indication by the Revenue that the notice for AY 2015-16 could have been validly issued before 31.03.2021. In the absence of such a fact, the notice issued on 23.04.2021 is barred by limitation. 5. In view of the above facts and circumstances of the case, and respectfully following the decision of the Hon’ble Supreme Court in the case of Union of India v. Rajeev Bansal (supra), we hold that the notice issued under section 148 of the Act on 23.04.2021 is time-barred and, therefore, invalid in the eyes of law. Consequently, the reassessment proceedings initiated on the basis of such invalid notice are void ab initio and liable to be quashed. Printed from counselvise.com ITA No. 938/SRT/2024 ITO Vs. Ashok Kumar Jindal Asst. Year : 2015-16 - 3– 6. Since the reassessment itself is held to be invalid on jurisdictional grounds, we do not deem it necessary to adjudicate the grounds raised by the Revenue on merits. 7. In the result, the appeal of the Revenue is dismissed. The order is pronounced in the open Court on 17.02.2026 Sd/- Sd/- (SUCHITRA KAMBLE) (DR. B.R.R. KUMAR) JUDICIAL MEMBER VICE-PRESIDENT Ahmedabad; Dated 17/02/2026 btk आदेश की \u0007ितिलिप अ ेिषत/Copy of the Order forwarded to : 1. अपीलाथ\u0007 / The Appellant 2. \b थ\u0007 / The Respondent. 3. संबंिधत आयकर आयु\u0015 / Concerned CIT 4. आयकर आयु\u0015 ) अपील ( / The CIT(A)- 5. िवभागीय \bितिनिध , अिधकरण अपीलीय आयकर , /DR,ITAT, Surat, 6. गाड फाईल / Guard file. आदेशानुसार/ BY ORDER, TRUE COPY सहायक पंजीकार (Asstt. Registrar) आयकर अपीलीय अिधकरण ITAT, Surat 1. Date of dictation …..…06.02.2026….….. 2. Date on which the typed draft is placed before the Dictating Member … …06.02.2026………… 3. Other Member……….16.02.2026 4. Date on which the approved draft comes to the Sr.P.S./P.S …. …16.02.2026…………. 5. Date on which the fair order is placed before the Dictating Member for pronouncement ........17..02.2026… 6. Date on which the fair order comes back to the Sr.P.S./P.S ……..17.02.2026…..…………. 7. Date on which the file goes to the Bench Clerk ……17.02.2026.….…. 8. Date on which the file goes to the Head Clerk…………………………………... 9. The date on which the file goes to the Assistant Registrar for signature on the order 10. Date of Dispatch of the Order…………………………………… Printed from counselvise.com "