JIGNESH MAHESH GOHEL,MUMBAI V. DCIT, CIRCLE 41(2)(1), MUMBAI

ITA 2708/MUM/2025

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The case involves Jignesh Mahesh Gohel, the appellant, who contested the order of the Principal Commissioner of Income Tax (PCIT), Mumbai, which revised an earlier assessment order under section 263 of the Income-tax Act, 1961. The revision was based on the alleged failure to address the payment of 'On Money' amounting to Rs. 81,12,000 to M/s. Runwal Group for a property purchase. The appellant argued that the revision was invalid as the initial notice under section 148 was not covered by the provisions of the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020, and was time-barred. The Tribunal agreed with the appellant, noting that the issue had been previously addressed and the revision under section 263 was not warranted.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 777075 (ITAT-MUMBAI)
• Duration Of Justice: 4 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-09-2025
• Order Result: Allowed
• Bench Allotted: F
• Assessment Year: 2015-2016
• Appeal Filed On: 21-04-2025
• Other Referred Cases: UOI vs. Rajeev Bansal [2024] 167 taxmann.com 70 (SC), Westlife Development Vs PCIT-5 Mumbai
• Laws Referred To: Income-tax Act, 1961
• Court: TRIBUNAL
• Department Lawyers: VIVEK PERAMPURNA
• Assessee Lawyers: ADITYA RAMCHANDRAN
• Keywords: Set aside; Reassessment proceedings; Revision of order
• Section: 147; 148; 263

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL “F” BENCH MUMBAI BEFORE MS. KAVITHA RAJAGOPAL, JUDICIAL MEMBER AND SMT. RENU JAUHRI, ACCOUNTANT MEMBER ITA No. 2708/MUM/2025 (Assessment Year: 2015-16) Jignesh Mahesh Gohel Shop No.4, Surya Prakash Building, Ganesh Gavde Road, Mulund (W), Mumbai 400080 Vs. DCIT, Circle 41(2)(1), Mumbai Room No. 831, Kautilya Bhavan, BKC, Mumbai 400051 स्थायी लेखा सं./जीआइआर सं./PAN/GIR No: AARPG3795P (Appellant) (Respondent) निर्ााररती की ओर से / Assessee by: Shri. Aditya Ramchandran /Revenue by: Shri Vivek Perampurna CIT-DR Date of Hearing 14.08.2025 Date of Pronouncement 18.09.2025 आदेश/O R D E R PER RENU JAUHRI [A.M]: This appeal is filed by the assessee against the order of the Pr. C.I.T., Mumbai -41 (hereinafter referred to as \"PCIT\"] dated 26.03.2025 passed u/s. 263 of the Income-tax Act, 1961 [hereinafter referred to as \"Act\"] for Assessment Year [A.Y.] 2015-16. 2. The assessee has raised the following grounds of appeal: “1. On the facts and circumstances of the case and in law, the learned Pr. CIT -41. Mumbai erred in invoking jurisdiction under section 263 of the Act and sought to revise the order passed under section 147 r.w.s. 144B of the Act which was bad in law. 2. On the facts and circumstances of the case and in law, the order passed under section 263 of the Act by the Ld. Pr. CIT-41, Mumbai is bad in law and without jurisdiction in as far as a. the notice issued under section 148 of the Act dated 26-06-2021 was not covered by the provisions of Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 as held by the Hon'ble Supreme Printed from counselvise.com P a g e | 2 ITA No 2708/Mum/2025 AY 2015-16 Jignesh Mahesh Gohel Court in the case of UOI vs. Rajeev Bansal [2024] 167 taxmann.com 70 (SC) and; b. consequently, the order passed under section 147 r.w.s. 144B of the Act is bad in law and without jurisdiction. 3. On the facts and circumstances of the case and in law, the order passed under section 263 of the Act by the Ld. Pr. CIT-41, Mumbai is bad in law and without jurisdiction in as far as the order under section 147 r.w.s 144B of the Act which has been revised under section 263 of the Act is bad in law as the notice under section 148 dated 28-07-2022 is time barred since it has been issued beyond the 'surviving time limit under the Income-tax Act read with TOLA as it is being interpreted by the Supreme Court in the case of UOI vs. Rajeev Bansal [2024] 167 taxmann.com 70 (SC) The Appellant craves leave to add, alter, amend, vary and/or withdraw any or all the above grounds of appeal.” 3. Brief facts of the case are that the assessee had filed return declaring income of Rs. 5,01,250/- for AY 2015-16 on 30.03.2016. Subsequently, on receipt of information from the Investigation wing regarding payment of ‘On Money’ of Rs. 81,12,000/- to M/s. Runwal Group, Ld. AO reopened the case by issuing notice u/s. 148 of the Act. Thereafter, the AO passed the assessment order u/s. 147 r.w.s. 144B of the Act on 30.03.2023 accepting the returned income. Subsequently, Ld. PCIT noticed that the documents on record revealed that the assessee had paid ‘On Money’ in cash of Rs. 81,12,000/- to the builder, M/s. Runwal Group for purchase of Shop No. G-44. Since there was no mention of this issue in the assessment order, Ld. PCIT invoked the provisions of Explanation 2 to Section 263 and set aside the impugned assessment order dated 30.03.2023 holding it to be erroneous and thereby prejudicial to the revenue vide order dated 26.03.2025, further a directed the Ld. AO to carry out due verification on the issue relating the payment of ‘On Money’ and thereafter pass a fresh assessment order. Aggrieved with the order of the Ld. PCIT, the assessee has preferred an appeal before the Tribunal. Printed from counselvise.com P a g e | 3 ITA No 2708/Mum/2025 AY 2015-16 Jignesh Mahesh Gohel 4. Before us, Ld. AR has submitted that the order u/s. 147 r.w.s. 144B was itself bad in law as a notice dated 26.06.2021 u/s. 148 of the Act was not covered by the provisions of the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 (TOLA). For challenging the validity of notice u/s. 47 during the proceedings related to Section 263, Ld. AR has placed reliance on a decision of the co-ordinate bench in ITA No. 688/Mum/2016 in the case of Westlife Development Vs PCIT-5 Mumbai, wherein the co-ordinate bench has held that the assessee is permitted to challenge the validity of order passed u/s. 263 on the ground that the impugned assessment order was non-est, and hence Ld. CIT(A) could not have assumed jurisdiction to make revision of a non-est order. 4.1. On the issue of limitation, Ld. AR placed reliance on the decision of the Hon'ble Supreme Court in the case of UOI vs. Rajiv Bansal [2024] 167 taxxman.com 70 (SC). He further argued that even on merits, the order passed u/s. 263 is bad in law as the issue on which u/s. 263 has been passed was the same for which the case was reopened u/s. 147 of the Act. The assessment order u/s. 147 r.w.s. 144B was passed by the Ld. AO after due examination of the issue and, therefore, the same could not be held to be erroneous and prejudicial to the revenue. 5. Ld. DR on the other hand, relied on the order of Ld. PCIT and pointed out that the order u/s. 147 r.w.s. 144B dated 30.03.2023 does not mention anything on the issue of payment of ‘On Money’. As the issue in question has not been Printed from counselvise.com P a g e | 4 ITA No 2708/Mum/2025 AY 2015-16 Jignesh Mahesh Gohel examined by the Ld. Assessing Officer, this case is squarely covered by the Explanation 2 to section 263 of the Act, which specifies that if an order is passed without making enquiries or verification which should have been made, then the order passed by the AO shall be deemed to be erroneous in so far as it is prejudicial to the interest of the revenue. 6. We have heard the rival submissions and perused the material placed on record. We note that as per the amended provisions of reopening applicable in this case, the notice issued u/s. 148 on 28.07.2022 was time barred as per the decision of the Hon'ble Apex Court in the case of Rajeev Bansal (Supra). The relevant dates are as per the table below: Printed from counselvise.com P a g e | 5 ITA No 2708/Mum/2025 AY 2015-16 Jignesh Mahesh Gohel As the initial notice was issued on 26.06.2021, the Ld. AO had 5 days of surviving time period available to issue the notice u/s. 148. Since the notice has been issued on 28.07.2022 the same was clearly time barred and hence the reopening was bad in law. 7. Even otherwise, on merits also, as the Ld. AO has issued notice u/s. 148 on the same issue which is the subject matter of revision u/s 263 by the PCIT. In this regard, a copy of the order u/s. 148A(d) dated 23.05.2022 has been placed on record from which it is clear that the case was reopened for examination of the issue related to payment of ‘On Money’ of Rs. 81,12,000/- by the assessee to M/s. Runwal Group of Companies for purchase of Shop No. G- 44 in the project Runwal Green. Since the issue had already been examined during the reassessment proceedings, mere non mentioning of the facts in the assessment order passed u/s. 147 r.w.s. 144B does not imply that there was any failure on the part of Ld. Assessing Officer. Accordingly, Ld. PCIT was not justified in invoking Explanation 2 to section 263 of the Act in the facts and circumstances of this case. Hence on merits also the order u/s. 263 is not sustainable. 8. Thus, on the legal issue as well as on merits, the appeal is decided in favour of the assessee and the order u/s. 263 is hereby set aside. Printed from counselvise.com P a g e | 6 ITA No 2708/Mum/2025 AY 2015-16 Jignesh Mahesh Gohel 9. In the result, appeal of the assessee is allowed. Order is pronounced in the open court on 18.09.2025 Sd/- Sd/- KAVITHA RAJAGOPAL RENU JAUHRI (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) Place: Mumbai Dated: 18.09.2025 Divya R. Nandgaonkar Stenographer आदेश की प्रनतनलनि अग्रेनित/Copy of the Order forwarded to: 1. अिीलाथी / The Appellant 2. प्रत्यथी / The Respondent. 3. आयकर आयुक्त / CIT 4. निभागीय प्रनतनिनर्, आयकर अिीलीय अनर्करण DR, ITAT, Mumbai 5. गार्ा फाईल / Guard file. सत्यानित प्रनत //True Copy// आदेशािुसार / BY ORDER, सहायक िंजीकार (Asstt. Registrar) आयकर अिीलीय अनर्करण / ITAT, Bench, Mumbai Printed from counselvise.com "