MANUBHAI KESHAVLAL & CO.,VISNAGAR V. THE ITO, WARD-1, PATAN

ITA 1446/AHD/2025

AI Insights

The case involves an appeal by Manubhai Keshavlal & Co. against the order of the Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre, which sustained an addition of Rs.3,71,367 as business income under section 28(iv) of the Income Tax Act. The primary contention of the appellant was the validity of the notice issued under section 148 and the subsequent reassessment order under section 147, both of which were challenged as being issued beyond the statutory time limit. The tribunal examined the timelines and procedural compliance for issuing such notices and found them to be non-compliant, leading to the allowance of the appeal and nullification of the reassessment.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 780579 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-10-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2016-2017
• Appeal Filed On: 17-07-2025
• Other Referred Cases: UOI v. Ashish Agarwal, UOI v. Rajeev Bansal, Uday Dilipbhai Shah v. ITO
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUDHAKAR VERMA
• Assessee Lawyers: RUSHIN PATEL
• Keywords: Business income
• Section: 147; 148

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH, AHMEDABAD BEFORE DR. B.R.R. KUMAR, VICE-PRESIDENT Ms SUCHITRA KAMBLE, JUDICIAL MEMBER I.T.A. No.1446/Ahd/2025 (Assessment Year: 2016-17) Manubhai Keshavlal &Co., Maya Bazar, Near Post office, Visnagar-384315. Gujarat [PAN :AACFM4839 R] Vs. The Income Tax Officer, Ward-1, Patan. (Appellant) .. (Respondent) Appellant by : Shri Rushin Patel, AR Respondent by: Shri Sudhakar Verma, Sr. DR Date of Hearing 06.10.2025 Date of Pronouncement 08.10.2025 O R D E R PER DR. B.R.R. KUMAR, VICE-PRESIDENT:- The captioned appeal has been filed by the assessee against the order passed by the Ld. Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre, Delhi, vide order dated 04.07.2025 relevant to the Assessment Year 2016-17. 2. The assessee has raised the following grounds of appeal: 1. Notice issued u/s.148 as well as consequential reassessment order passed u/s.147 are bad in law as the notice is issued beyond three years from the end of assessment year without fulfilling requisite conditions. Printed from counselvise.com ITA No. 1446/Ahd/2025 Asst. Year : 2016-17 - 2– 2. The Ld.CIT(A) erred in law and on facts of the case in sustaining the addition of Rs.3,71,367/- on account of benefit of tour package as business income of the assessee firm u/s.28(iv). 3. The appellant craves leave to add, amend alter or delete the grounds of appeal at the time of hearing, if need arise. 3. The assessee submitted a detailed calculation of Surviving Period For Issuance of Notice u/s.148 of the Act, which is reproduced as below: Particulars Reference Date/Days Date of original notice issued u/s 148 A 30.06.2021 Extended time limit to issue notice u/s 148 under TOLA B 30.06.2021 Date of letter supplying information/material to the assessee as per the direction of the Hon'ble Supreme Court in UOI v. Ashish Agarwal C 26.05.2022 Last date to file reply for the assessee as per the above letter D 12.06.2022 Date of filing reply by the assessee E 01.06.2022 Surviving time period for issuing new notice u/s 148 (Third Proviso to section 149(1) provides minimum 7 days) F=(B-A) or 7 days, whichever is higher 7 days Surviving time limit for issuing new notice u/s 148 G=D or E, whichever is later) + G 19.06.2022 Date of new notice issued u/s 148. H 27.07.2022 Printed from counselvise.com ITA No. 1446/Ahd/2025 Asst. Year : 2016-17 - 3– Note: Since the new notice u/s 148 is issued beyond the surviving period as explained by the Hon'ble Supreme Court in the case of UOI v. Rajeev Bansal -(2024) 469 ITR 46 (SC), the notice u/s 148 as well as the consequential reassessment order u/s 147 are bad in law. Reliance is further placed on the judgment of the Hon'ble Gujarat High Court in the case of Uday Dilipbhai Shah v. ITO in SCA No. 24695 of 2022. 4. The Revenue could not controvert the evidence submitted by the assessee. Accordingly, the appeal of the assessee is allowed, and the assessment is held to be void ab initio. 5. In the result, the appeal of the assessee is allowed. The order is pronounced in the open Court on 08.10.2025. Sd/- Sd/- (SUCHITRA KAMBLE) (DR. B.R.R. KUMAR) JUDICIAL MEMBER VICE-PRESIDENT (True Copy) Ahmedabad; Dated 08.10.2025 MV आदेश की Ůितिलिप अŤेिषत/Copy of the Order forwarded to : 1. अपीलाथŎ / The Appellant 2. ŮȑथŎ / The Respondent. 3. संबंिधत आयकर आयुƅ / Concerned CIT 4. आयकर आयुƅ(अपील) / The CIT(A)- 5. िवभागीय Ůितिनिध, आयकर अपीलीय अिधकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाडŊ फाईल / Guard file. आदेशानुसार/ BY ORDER, True Copy सहायक पंजीकार (Dy./Asstt. Registrar) आयकर अपीलीय अिधकरण, अहमदाबाद / ITAT, Ahmedabad Printed from counselvise.com "