NARESH JAIPRAKASH SHROFF,MUMBAI V. INCOME TAX OFFICER, MUMBAI

CO 131/MUM/2025

AI Insights

The case involves an appeal by the Income Tax Officer against the order of the CIT(A), which annulled the assessment order for the assessment year 2017-18. The primary contention was the validity of the notice issued under section 148 of the Income Tax Act, 1961. The CIT(A) had quashed the assessment order on the grounds that the notice was invalid, a decision which the revenue appealed against. The assessee also filed cross-objections. The Tribunal, referencing the Supreme Court's decision in Union of India vs. Rajeev Bansal, agreed with the CIT(A) and dismissed both the appeal and the cross-objections.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 711738 (ITAT-MUMBAI)
• Appeal Type: Cross Objection
• Pronouncement Date: 25-07-2025
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Assessment Year: 2017-2018
• Other Referred Cases: Union of India vs. Rajeev Bansal [2024] 469 ITR 46 (SC)
• Laws Referred To: Income Tax Act
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: LEYAQAT ALI AAFAQUI; DR
• Assessee Lawyers: SUBODH RATNAPARKHI; AR
• Keywords: Set aside
• Section: 148

Judgement Text

" | आयकर अपीलीय अिधकरण ा यपीठ, मुंबई | IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH, MUMBAI BEFORE SHRI NARENDRA KUMAR BILLAIYA, HON’BLE ACCOUNTANT MEMBER & SHRI ANIKESH BANERJEE, HON’BLE JUDICIAL MEMBER I.T.A. No. 2793/Mum/2025 Assessment Year: 2017-18 Income Tax Officer Vs Naresh Jaiprakash Shroff Room No. 129, 1st Floor Aayakar Bhavan M.K. Road Mumbai - 400020 [PAN: ABEPS9518C] अपीला थ\u0016/ (Appellant) \u0017\u0018 यथ\u0016/ (Respondent) C.O. No. 131/Mum/2025 Assessment Year: 2017-18 Income Tax Officer Vs Naresh Jaiprakash Shroff Room No. 129, 1st Floor Aayakar Bhavan M.K. Road Mumbai - 400020 [PAN: ABEPS9518C] अपीला थ\u0016/ (Appellant) \u0017\u0018 यथ\u0016/ (Respondent) Assessee by : Shri Subodh Ratnaparkhi, A/R Revenue by : Shri Leyaqat Ali Aafaqui, Sr. D/R सुनवाई की तारीख/Date of Hearing : 23/07/2025 घोषणा की तारीख /Date of Pronouncement: 25/07/2025 आदेश/O R D E R PER NARENDRA KUMAR BILLAIYA, AM: This appeal by the revenue is preferred against the order dated 19/02/2025 by NFAC, Delhi [hereinafter ‘the CIT(A)’] pertaining to AY 2017-18. The assessee has also preferred cross- objections against the very same order of the ld. CIT(A) in C.O. No. 13/Mum/2025. Printed from counselvise.com I.T.A. No. 2793/Mum/2025 C.O. No. 131/Mum/2025 2 2. The grievance of the revenue reads as under:- “A. Whether the Hon’ble CIT(A) erred in reversing the findings of the Assessing Officer for the A.Y. 2017-18?” B. Whether the Hon’ble CIT(A) erred in quashing the Assessment order on account of notice issued u/s 148 of the Income tax Act is invalid without appreciating that notice u/s 148 of the Income tax Act is invalid without appreciating that notice u/s 148 was issued as per instruction no. 1 of 2022 issued by CBDT? C. Whether the Hon’ble CIT(A) erred in deleting the addition of Rs. 2,31,39,000/- made in the Assessment order without merit. D. The appellant craves leave to amend or alter any ground or add new ground which may necessary.” 3. Representatives of both the sides were heard at length. Case records carefully perused and the relevant documentary evidence brought on record duly considered in the light of Rule 18(6) of the ITAT Rules, 1963. 4. The entire quarrel revolves around the notice dated 28/07/2022 issued u/s 148 of the Act which is as under:- ***This space has been left blank intentionally, P.T.O.*** Printed from counselvise.com I.T.A. No. 2793/Mum/2025 C.O. No. 131/Mum/2025 3 Printed from counselvise.com I.T.A. No. 2793/Mum/2025 C.O. No. 131/Mum/2025 4 5. The bone of contention is the approval of the notice by the PCIT(1), Mumbai accorded on 26/07/2022. 6. The issue whether approval has been accorded by the appropriate authority has been elaborately explained by the Hon’ble Supreme Court in the case of Union of India vs. Rajeev Bansal [2024] 469 ITR 46 (SC), wherein the Hon’ble Supreme Court concluded as under:- Printed from counselvise.com I.T.A. No. 2793/Mum/2025 C.O. No. 131/Mum/2025 5 “(a) After 1-4-2021, the Income-tax Act has to be read along with the substituted provisions; (b) TOLA will continue to apply to the Income-tax Act after 1-4-2021 if any action or proceeding specified under the substituted provisions of the Income-tax Act falls for completion between 20-3-2020 and 31-3-2021; (c) Section 3(1) of TOLA overrides section 149 only to the extent of relaxing the time-limit for issuance of a reassessment notice under section 148; (d) TOLA will extend the time-limit for the grant of sanction by the authority specified under section 151. The test to determine whether TOLA will apply to section 151 of the new regime is this: if the time-limit of three years from the end of an assessment year falls between 20-3-2020 and 31-3-2021, then the specified authority under section 151(i) has extended time till 30-6-2021 to grant approval; (e) In the case of section 151 of the old regime, the test is: if the time-limit of four years from the end of an assessment year falls between 20-3-2020 and 31-3-2021, then the specified authority under section 151(2) has extended time till 31-3-2021 to grant approval; (f) The directions in Ashish Agarwal (supra) will extend to all the ninety thousand reassessment notices issued under the old regime during the period 1-4- 2021 and 30-6-2021; (g) The time during which the show cause notices were deemed to be stayed is from the date of issuance of the deemed notice between 1-4-2021 and 30-6-2021 till the supply of relevant information and material by the Assessing Officers to the assessees in terms of the directions issued by this Court in Ashish Agarwal (supra), and the period of two weeks allowed to the assessees to respond to the show cause notices; and (h) The Assessing Officers were required to issue the reassessment notice under section 148 of the new regime within the time-limit surviving under the Income-tax Act read with TOLA. All notices issued beyond the surviving period are time barred and liable to be set aside. [Para 114]” 7. In light of the above findings of the Hon’ble Supreme Court, the since the approval was given by the PCIT, the approval is not as per the provisions of Section 151 of the Act and hence, the notice issued u/s 148 of the Act deserves to be set aside. Printed from counselvise.com I.T.A. No. 2793/Mum/2025 C.O. No. 131/Mum/2025 6 8. We, therefore, do not find any reason to interfere with the findings of the ld. CIT(A). Accordingly, the effective ground/s raised by the revenue are dismissed. 9. Since the assessment order has been annulled, we do not find any merit in the cross-objection of the assessee and the same is also dismissed. 10. In the result, appeal of the revenue and cross-objection by the assessee. Order pronounced in the Court on 25th July, 2025 at Mumbai. Sd/- Sd/- (ANIKESH BANERJEE) (NARENDRA KUMAR BILLAIYA) JUDICIAL MEMBER ACCOUNTANT MEMBER Mumbai, Dated 25/07/2025 *SC SrPs *SC SrPs *SC SrPs *SC SrPs आदेश की \u0014ितिलिप अ\u0019ेिषत/Copy of the Order forwarded to : 1. अपीलाथ\u001b / The Appellant 2. \u0014 थ\u001b / The Respondent 3. संबंिधत आयकर आयु! / Concerned Pr. CIT 4. आयकर आयु! ) अपील ( / The CIT(A)- 5. िवभागीय \u0014ितिनिध ,आयकर अपीलीय अिधकरण, मुंबई /DR,ITAT, Mumbai, 6. गाड% फाई/ Guard file. आदेशानुसार/ BY ORDER TRUE COPY Assistant Registrar आयकर अपीलीय अिधकरण ITAT, Mumbai Printed from counselvise.com "