PAVANKUMAR BHURCHAND JAIN,NAVI MUMBAI V. INCOME TAX OFFICER - WARD 28(2)(1), NAVI MUMBAI

ITA 6323/MUM/2025

AI Insights

The case involves four appeals filed by the assessee, Pavankumar Bhurchand Jain, against the orders of the Learned Commissioner of Income Tax (Appeals)-National Faceless Appeal Centre, Delhi, pertaining to the Assessment Year 2016-17. The primary issue was the validity of the reassessment notice issued under section 148A of the Income Tax Act, 1961, following the assessee's non-compliance in filing returns for income derived from the sale of immovable property. The Assessing Officer had initially assessed the income at Rs. 60 lakhs as Short Term Capital Gain, which was later contested and partially allowed by the CIT(A), reducing the assessed income to Rs. 25,45,973 after considering the indexed cost of acquisition and exemptions under section 54F. The tribunal examined the procedural validity of the notices issued and the substantive correctness of the reassessment.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 848121 (ITAT-MUMBAI)
• Duration Of Justice: 5 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-03-2026
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: Mumbai
• Assessment Year: 2016-2017
• Appeal Filed On: 06-10-2025
• Other Referred Cases: Bhavesh Maganlal Dharod vs. ITO, Sanath Kumar Murali vs. ITO, ITO vs. Sanath Kumar Murali, Sevensea Vincom (P.) Ltd. vs. PCIT
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: V. S. MAHAJAN
• Assessee Lawyers: PARTH PATANI AW
• Keywords: Set aside; Opportunity of being heard; Reasonable cause; Cost of acquisition; Period of limitation; Reopening of assessment; Capital Gains; TDS; Audit objection; Competent authority; Time period of passing order
• Section: 147; 148; 142(1); 271(1)(c); 132; 54F; 90; 139

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI “C” BENCH : MUMBAI BEFORE SHRI VIKRAM SINGH YADAV, ACCOUNTANT MEMBER AND SHRI SANDEEP SINGH KARHAIL, JUDICIAL MEMBER ITA No. A.Y. Appellant Respondent 6323/Mum/2025 2016-17 Pavankumar Bhurchand Jain, Flat No.1, Soma Apartment, Section 9, Airoli, Navi Mumbai [PAN: ADDPJ8360J] Income Tax Officer, Ward-28(2)(1), Income Tax Office, Vashi Railway Station Building, Vashi, Navi Mumbai 6324/Mum/2025 6325/Mum/2025 6326/Mum/2025 For Assessee : Shri Parth Patani a/w. Shri Chirag Wadhva For Revenue : Shri V.S.Mahajan, Sr.DR Date of Hearing : 26-02-2026 Date of Pronouncement : 27-03-2026 O R D E R PER VIKRAM SINGH YADAV, A.M : These are four appeals filed by the assessee against the respective order(s) of the Learned Commissioner of Income Tax (Appeals)-National Faceless Appeal Centre (NFAC), Delhi [„Ld.CIT(A)‟], pertaining to Assessment Year (AY) 2016-17. All these appeals were heard together and are being disposed-off by this consolidated order. 2. At the outset, it is noted that there is a delay in filing these appeals as pointed out by the Registry. After hearing both the parties and perusing the facts placed on record, we find that there was reasonable cause for the Printed from counselvise.com 2 Pavankumar Bhurchand Jain (Batch appeals) delay in filing the present appeals and hence, the delay is hereby condoned and appeals are admitted for adjudication. 3. Firstly, we take up appeal of the assessee in ITA No. 6323/Mum/2025 wherein, briefly stated, facts of the case are that the assessee, an individual did not file any original return of income u/s. 139 of the Income Tax Act, 1961 („the Act‟). Subsequently, based on information that the assessee has sold certain immoveable property, a show cause u/s. 148A of the Act was issued on 15-02-2023. In response to show cause, there was no compliance on the part of the assessee and thereafter, the AO passed the order u/s. 148A(d) of the Act dt. 19-03-2023, after seeking approval u/s. 151 of the Act, dt. 17-03-2023 from the Competent authority and simultaneously, notice u/s. 148 of the Act was issued on 19-03-2023. Thereafter, notices and show cause were issued, however, there was again no compliance on the part of the assessee and basis information that the assessee has sold immoveable property for a consideration of Rs. 60 lakhs and in absence of any information/details submitted by the assessee, the said amount was brought to tax by the AO as Short Term Capital Gain and assessed income was determined at Rs. 60 lakhs vide order passed u/s. 147 r.w.s. 144 r.w.s. 144B of the Act, dt. 12-02-2024. 4. The assessee thereafter carried the matter in appeal before the Ld.CIT(A) and the Ld.CIT(A), after considering the facts and circumstances of the case, directed the AO to allow indexed cost of acquisition and exemption u/s. 54F of the Act and the AO was directed to compute the net Long Term Capital Gain at Rs. 25,45,973/- and the appeal of the assessee was partly allowed and against the said order, the assessee is in appeal before us. Printed from counselvise.com 3 Pavankumar Bhurchand Jain (Batch appeals) 5. During the course of hearing, the Ld.AR submitted that for seeking approval u/s. 151 of the Act from PCCIT, the quantum of income which has escaped assessment was reported at Rs. 1,20,00,000/- as against the amount of sale proceeds of Rs. 60 lakhs and accordingly, the approval was obtained by stating wrong facts. It was further submitted that post receipt of approval, the AO proposed re-assessment for consideration of Rs. 60 lakhs as income on sale of immoveable property which has escaped assessment and cost of acquisition, cost of improvement, transfer expenses, interest cost of loan taken, exemption on account of reinvestment etc. were not considered and the entire sale proceeds were considered as income escaping assessment. It was submitted that the assessee, thereafter, carried the matter in appeal before the Ld.CIT(A) who has granted the benefit of cost of acquisition as well as deduction on account of re-investment u/s. 54F of the Act and thereafter as per the order giving effect, the AO has since passed an order dt. 08-12-2025, by computing the revised total income at Rs. 25,45,973/- as against the earlier disputed amount of Rs. 60 lakhs. 6. In the aforesaid factual matrix, the ld AR has contended that the show cause u/s 148A issued on 15-02-2023 is time barred. It was submitted that as per the provisions of Section 149 of the Act as in existence during the relevant period, the re-assessment show cause can be sent after three years, but before the 10 years from the end of the relevant assessment year where any asset or income which has escaped assessment amounts to Rs. 50 lakhs or more and it was submitted that in the instant case, since the disputed income after giving effect to the order of the Ld.CIT(A) does not exceed Rs. 50 lakhs, the time period of three years should be applicable and accordingly submitted that the show cause u/s 148A Printed from counselvise.com 4 Pavankumar Bhurchand Jain (Batch appeals) issued on 15-02-2023 is time barred and therefore, the same along with subsequent proceedings should be quashed and set-aside. 7. In support, reliance was placed on the decision of the Hon‟ble Bombay High Court in the case of Bhavesh Maganlal Dharod vs. ITO (W.P. No. 2774 of 2023, dt. 29-09-2023). It was submitted that in the said decision, the Hon‟ble jurisdictional High Court has held that re-opening proceedings are bad in law where the show cause notice for re-assessment was issued after three years from the end of the previous year, where the income escaped assessment is less than Rs. 50 lakhs. Further, reliance was placed on the decision of the Hon‟ble Karnataka High Court in the case of Sanath Kumar Murali vs. ITO [2023] 152 taxmann.com 231 (Karnataka), wherein under identical facts, the Hon‟ble Karnataka High Court quashed the proceedings and held that section 48 have to be followed and cost of acquisition/improvement has to be reduced from sale consideration to determine the income escaping assessment. It was submitted that the said decision was subsequently approved by the Division Bench of the Hon‟ble Karnataka High Court in the case of ITO vs. Sanath Kumar Murali [2025] 172 taxmann.com 290 (Karnataka). Further reliance was placed on the decision of the Hon‟ble High Court of Jharkhand in the case of Sevensea Vincom (P.) Ltd. vs. PCIT [2024] 159 taxmann.com 500 (Jharkhand), wherein similar proposition has been laid down. 8. Per contra, the Ld. DR is heard, who has relied on the orders passed by the AO as well as by the Ld.CIT(A) and our reference was drawn to the findings of the Ld.CIT(A), wherein he has held that at the time of issuance of notice u/s. 148 of the Act what needs to be considered is the income of value which can be quantifiable with reasonable certainty. In this case, the sale consideration of Rs. 60 lakhs is found undisputed by assessee himself Printed from counselvise.com 5 Pavankumar Bhurchand Jain (Batch appeals) as far as purchase of new asset and the cost of acquisition are not such values/instruments which are in public domain. Neither these are proved by assessee to be in possession of AO or declared in prior financial declarations in response to the show cause issued by the AO u/s. 148A(b) of the Act. Therefore, the tangible information of Rs. 60 lakhs realization by assessee is the quantifiable value upon which AO can form belief with reasonable certainty and hence, the income of Rs 60 lakhs has certainly escaped assessment and the same is clearly exceeding the prescribed threshold of Rs. 50 lakhs and, therefore, notice u/s. 148 of the Act is within the prescribed limitation provided u/s. 149(1)(b) of the Act. 9. It was further submitted that there is no dispute that the AO while giving effect to the order and findings of the ld CIT(A) has determined the income at Rs 25,45,973/-, however, the said determination of income is pursuant to the order of the ld CIT(A) which is clearly subsequent to the issuance of not just the show-cause notice u/s 148A but passing of the order u/s 148A(d) and the issuance of notice u/s 148 dated. 19-03-2023. It was submitted that subsequent determination of income post findings of the Ld.CIT(A) can no doubt determine the quantum of income which is to be finally brought to tax, however, as far as reopening of the assessment proceedings is concerned, the subsequent determination of income cannot form the basis for quashing the initial notice u/s 148 so issued by the AO as barred by limitation. It was accordingly submitted that there is no infirmity in the action of the AO and the notice u/s. 148 of the Act has been properly issued within the prescribed limitation provided u/s. 149(1)(b) of the Act. 10. We have heard the rival contentions and perused the material available on record. Firstly, we refer to the provisions of the Act, which are Printed from counselvise.com 6 Pavankumar Bhurchand Jain (Batch appeals) relevant for the adjudication of the issue at hand. Section 148 of the Act, during the relevant period, i.e. prior to its substitution by the Finance (No. 2) Act, 2024, w.e.f. 01-09-2024, reads as follows: “148. Issue of notice where income has escaped assessment. Before making the assessment, reassessment or recomputation under section 147, and subject to the provisions of section 148A, the Assessing Officer shall serve on the assessee a notice, along with a copy of the order passed, if required, under clause (d) of section 148A, requiring him to furnish within a period of three months from the end of the month in which such notice be allowed by the Assessing Officer of an application made in this regard by the assessee, a return of his income or the income of any other person in respect of which he is assessable under this Act during the previous year corresponding to the relevant assessment year, in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed and the provisions of this Act shall, so far as may be, apply accordingly as if such return were a return required to be furnished under section 139: Provided that no notice under this section shall be issued unless there is information with the Assessing Officer which suggests that the income chargeable to tax has escaped assessment in the case of the assessee for the relevant assessment year and the Assessing Officer has obtained prior approval of the specified authority to issue such notice Provided further that no such approval shall be required where the Assessing Officer, with the prior approval of the specified authority, has passed an order under clause (d) of section 148A to the effect that it is a fit case to issue a notice under this section: Provided also that any return of income, required to be furnished by an assessee under this section and furnished beyond the period allowed shall not be deemed to be a return under section 139. Explanation 1.—For the purposes of this section and section 148A, the information with the Assessing Officer which suggests that the income chargeable to tax has escaped assessment means,—(i)any information in the case of the assessee for the relevant assessment year in accordance with the risk management strategy formulated by the Board from time to time;[(ii) any audit objection to the effect that the assessment in the case of the assessee for the relevant assessment year has not been made in accordance with the provisions of this Act; or(iii)any information received under an agreement referred to in section 90 or section 90A of the Act; or(iv)any information made available to the Assessing Officer under the scheme notified under section 135A; or(v)any information which requires action in consequence of the order of a Tribunal or a Court.” Printed from counselvise.com 7 Pavankumar Bhurchand Jain (Batch appeals) 11. From the plain reading of the provisions of section 148 of the Act, it is evident that the statue requires that the Assessing officer, before making the assessment, reassessment or recomputation u/s 147, is required to serve a notice on the assessee requiring him to file a return of income for the relevant assessment year. The notice shall be accompanied by order passed u/s 148A(d) of the Act. The issue of such a notice is subject to provisions of section 148A and satisfaction of condition that there is information with the Assessing officer which suggests that the income chargeable to tax has escaped assessment for the relevant assessment year. The phrase “information” has been interalia defined in explanation 1 to section 148 to mean any information with the Assessing officer which suggests that the income chargeable to tax has escaped assessment for the relevant assessment year in accordance with the risk management strategy formulated by the Board from time to time. 12. Further, we refer to provisions of Section 148A of the Act which read as under: \"Conducting inquiry, providing opportunity before issue of notice under section 148. 148A. The Assessing Officer shall, before issuing any notice under section 148,— (a) conduct any enquiry, if required, with the prior approval of specified authority, with respect to the information which suggests that the income chargeable to tax has escaped assessment; (b) provide an opportunity of being heard to the assessee, by serving upon him a notice to show cause within such time, as may be specified in the notice, being not less than seven days and but not exceeding thirty days from the date on which such notice is issued, or such time, as may be extended by him on the basis of an application in this behalf, as to why a notice under section 148 should not be issued on the basis of information which suggests that income chargeable to tax has escaped assessment in his case for the relevant assessment year and results of enquiry conducted, if any, as per clause (a); Printed from counselvise.com 8 Pavankumar Bhurchand Jain (Batch appeals) (c) consider the reply of assessee furnished, if any, in response to the show cause notice referred to in clause (b); (d) decide, on the basis of material available on record including reply of the assessee, whether or not it is a fit case to issue a notice under section 148, by passing an order, with the prior approval of specified authority, within one month from the end of the month in which the reply referred to in clause (c) is received by him, or where no such reply is furnished, within one month from the end of the month in which time or extended time allowed to furnish a reply as per clause (b) expires: Provided that the provisions of this section shall not apply in a case where,— (a) a search is initiated under section 132 or books of account, other documents or any assets are requisitioned under section 132A in the case of the assessee on or after the 1st day of April, 2021; or (b) the Assessing Officer is satisfied, with the prior approval of the Principal Commissioner or Commissioner that any money, bullion, jewellery or other valuable article or thing, seized in a search under section 132 or requisitioned under section 132A, in the case of any other person on or after the 1st day of April, 2021, belongs to the assessee; or (c) the Assessing Officer is satisfied, with the prior approval of the Principal Commissioner or Commissioner that any books of account or documents, seized in a search under section 132 or requisitioned under section 132A, in case of any other person on or after the 1st day of April, 2021, pertains or pertain to, or any information contained therein, relate to, the assessee; or (d) the Assessing Officer has received any information under the scheme notified under section 135A pertaining to income chargeable to tax escaping assessment for any assessment year in the case of the assessee.] Explanation.—For the purposes of this section, specified authority means the specified authority referred to in section 151.\" 13. From the plain reading of the provisions of section 148A of the Act, it is evident that the statue requires the Assessing officer to conduct the enquiry, where required, with respect to the information in his possession which suggests that the income chargeable to tax has escaped assessment; provide an opportunity of being heard to the assessee, by serving upon him a notice to show cause as to why a notice under section 148 should not be issued on the basis of information which suggests that income Printed from counselvise.com 9 Pavankumar Bhurchand Jain (Batch appeals) chargeable to tax has escaped assessment in his case for the relevant assessment year and results of enquiry conducted, if any; consider the reply of assessee furnished, if any, in response to the show cause notice and thereafter, decide, on the basis of material available on record including reply of the assessee, whether or not it is a fit case to issue a notice under section 148, by passing an order, with the prior approval of specified authority, within one month from the end of the month in which the reply referred to in clause (c) is received by him, or where no such reply is furnished, within one month from the end of the month in which time or extended time allowed to furnish a reply as per clause (b) expires. 14. Further, section 149 of the Act, provides time limit for issuance of notice under section 148 of the Act, which reads as follows: - \"Time limit for notice. 149. (1) No notice under section 148 shall be issued for the relevant assessment year— (a) if three years have elapsed from the end of the relevant assessment year, unless the case falls under clause (b); (b) if three years, but not more than ten years, have elapsed from the end of the relevant assessment year unless the Assessing Officer has in his possession books of account or other documents or evidence which reveal that the income chargeable to tax, represented in the form of— (i) an asset; (ii) expenditure in respect of a transaction or in relation to an event or occasion; or (iii) an entry or entries in the books of account, which has escaped assessment amounts to or is likely to amount to fifty lakh rupees or more: Printed from counselvise.com 10 Pavankumar Bhurchand Jain (Batch appeals) 15. A reading of the aforesaid provisions i.e, clause (a) of section 149(1) of the Act provides that no notice under section 148 shall be issued after the expiry of 3 years from the end of the relevant assessment year except in cases where the matter falls under clause (b). The clause (b) of section 149(1) of the Act provides that notice under section 148 of the Act can be issued after 3 years, but not after 10 years, from the end of the relevant assessment year, where the income chargeable to tax, represented in form of an asset, expenditure in respect of a transaction or in relation to an event or occasion or an entry or entries in the books of accounts, which has escaped assessment amounts to or is likely to amount to Rs.50 lakh or more. It has been further provided by way of 3rd proviso to section 149 that for the purposes of computing the period of limitation as per this section, the time or extended time allowed to the assessee as per show cause notice issued under clause (b) of section 148A or the period during which the proceedings u/s. 148A is stayed by an order or injection of any court shall be excluded. By way of 4th proviso to section 149, it has been further provided that where immediately after exclusion of the period referred to in the immediately preceding proviso, the period of limitation available to the AO for passing an order under clause (d) of section 148A is less than seven days such remaining period shall be extended to seven days and period of limitation in sub-section (1) to section 149 shall be deemed to be extended accordingly. 16. As evident from the aforesaid reading of the provisions as amended, all the provisions have been inter-linked and therefore have to be read harmoniously to arrive at any conclusion as to whether there is breach or a violation of the said provisions and there is any action on the part of the Assessing officer which defeat the provisions so laid down in the statute. Printed from counselvise.com 11 Pavankumar Bhurchand Jain (Batch appeals) 17. The undisputed facts in the instant case are that basis specific information in respect of the assessee flagged as per Risk Management Strategy through the ITBA software that the assessee has carried out certain transactions in the nature of sale of immoveable property amounting to Rs. 1,20,00,000/- and the fact that the assessee did not file any original return of income, proceedings u/s. 148A were initiated by the AO basis information in his possession that deposits in bank account on sale of immoveable property has escaped taxation. An opportunity of being heard as per the provisions of section 148A(b) of the Act was thereafter, provided to the assessee with the prior approval from Competent authority vide notice dt. 15-02-2023, wherein the assessee was asked to show cause as to why notice u/s. 148 shall not be issued and to furnish necessary explanation along with certain documentation on or before 24-4-2023. There is no dispute that the said show cause notice u/s 148A(b) was issued and served on the assessee on email ID provided by him and through Speed Post at the last known address of the assessee. In response to the said show cause dated 15-02-2023, there was no response which was furnished by the assessee, a fact which is also not in dispute. Thereafter, the AO, basis information available on record, recorded his satisfaction that it is a fit case for issuance of notice u/s. 148 of the Act and thereafter, an order u/s. 148A(d) of the Act was passed on 19-03-2023 and relevant findings of the AO read as under: “5.4. As per Explanation 1 to Section 148 of the I.T. Act, the information flagged in the case of the assessee in accordance with RMS formulated by the Board is deemed to be information with the Assessing Officer which suggests that the income chargeable to tax represented has escaped assessment. In the above case, on the basis of material available on record, it is clear that all the above conditions are satisfied. The information relating to the assessee for the above Assessment Year has been flagged in accordance with RMS formulated by the CBDT. The underlying transaction in the information flagged under RMS in the case of the assessee has been undertaken by the assessee in the above Assessment Year as per the Printed from counselvise.com 12 Pavankumar Bhurchand Jain (Batch appeals) information flagged which has not been rebutted. Therefore, the restriction on issue of notice as per the proviso to section 148 is not applicable. Moreover, the information/ material in the possession of the undersigned based on the details/material with the department confronted to the assessee in Show Cause Notice reveal that the escaped income chargeable to tax is represented in the form of asset being deposit in Bank account on account of sale of immovable property not offered for taxation which amounts to Rs fifty lakh or more. Therefore, the conditions u/s 149(1)(b) are also satisfied. 6. As the assessee failed to furnish any explanation or reply within the time permitted regarding the transaction valued at Rs fifty lakh or more as referred supra, it is clear that the assessee does not have any explanation as to why a Notice u/s. 148 should not be issued. As the assessee has not even filed any Return of Income for the above Assessment Year and the undersigned is in possession of information which suggest that the income of the assessee has escaped assessment, hence, it is necessary to make assessment of his income. 7. In light of the above facts and on the basis of material available on record, 1 am satisfied that this is a fit case for issuance of Notice u/s 148 of the Act for A.Y 2016-17. A prior approval was sought to pass order u/s 148A(d) of the IT Act. 1861 from the specified authority u/s 151 of the IT Act, i.e. the Principal Chief Commissioner of Income Tax, Mumbai and after receiving the prior approval from the specified authority, an order u/s 148A(d) of the act is passed.” 18. The said order u/s. 148A(d) of the Act was passed after seeking prior approval of the Ld. PCCIT Mumbai, u/s 151 dt. 17-03-2023. Along with the order u/s 148A(d), notice u/s. 148 was also issued on 19-03-2023. 19. Now coming to the contentions advanced by the Ld.AR, it has been contended that the show cause issued u/s. 148A of the Act is barred by limitation as the same has been issued on 15-02-2023, after three years from the end of the relevant assessment year 2016-17 and disputed income after giving effect to the order of the Ld.CIT(A) does not exceeds Rs. 50 lakhs. In this regard we find that the Ld.AR has relied on the provisions of sub-section (2) of Section 149 which provides for time limit for issuance of show cause u/s. 148A of the Act. The said provisions were Printed from counselvise.com 13 Pavankumar Bhurchand Jain (Batch appeals) introduced for the first time by the Finance No.2 Act of 2024 w.e.f. 01-09- 2024. In the instant case, the show cause was issued on 15-02-2023, therefore, the relevant provisions as applicable for the impugned assessment year have to be considered prior to the substitution by the Finance No.2 Act of 2024, which we have taken note of in para 9 above. Under the un-amended provisions of section 149 of the Act, the statute has provided time limit for issuance of notice u/s. 148 of the Act and no time limit has been prescribed for issuance of show cause u/s. 148A of the Act. The decision of the Hon‟ble Bombay High Court in the case of Bhavesh Maganlal Dharod vs. ITO (supra) was also rendered in the context of the amended provisions prescribing time limit for issuance of show- cause u/s 148A of the Act. Therefore, the same stand distinguishable and does not support the case of the assessee. Therefore, in the instant case, given that at the relevant point in time when the notice u/s. 148A(b) of the Act was issued, there was no time limit prescribed by the statute for issuance of such a show cause, the contention so advanced by the Ld.AR cannot be accepted. 20. Having said that, we find that it would be relevant to examine the said contention in the context of notice u/s. 148 of the Act so issued by the AO as to whether the same has been issued within the prescribed limitation so provided u/s. 149 of the Act and whether it satisfy all the requisite statutory mandates for issuance of such notice. 21. What is essential is that there should be information in the possession of the AO which suggests that the income chargeable to tax has escaped assessment for the relevant assessment year. In the instant case, the AO was ceased of the information that the assessee has carried out certain transactions by way of sale of immoveable property and the said Printed from counselvise.com 14 Pavankumar Bhurchand Jain (Batch appeals) information was flagged as per the risk management strategy wherein in terms of information received from JT, SRO, Thane-9, the assessee has sold immoveable property valued at Rs. 30 lakhs or more for Rs. 60 lakhs and in terms of another information received from Lata Diwakar Moolya by way of TDS statement, the sales consideration on sale of immoveable property (within section 194-1A) paid or credited to the assessee amounting to Rs. 60 lakhs. Therefore, the AO was ceased of these two pieces of information regarding sale of immoveable property wherein the combined value of transactions stood at Rs. 1,20,00,000/- and the fact that the assessee has not filed any return of income for the impugned assessment year. Basis that information, the AO has issued a show cause to the assessee. Admittedly, there has been no compliance and no response from the assessee in response to the show cause. Thereafter, the AO, basis information so available on record, recorded his satisfaction stating that income chargeable to tax represented in the form of assets being amount received/deposited in the bank account on account of sale of immoveable property amounting to Rs. 50 lakhs or more, being not offered for taxation, has escaped assessment and accordingly, the order u/s. 148A(d) of the Act, along with notice u/s 148, was issued after seeking approval u/s 151 from Ld. Pr.CCIT, Mumbai. Therefore, at the relevant point in time i.e., at the time of issuance of notice u/s. 148 of the Act, what is relevant to examine is the information in the possession of the AO which in the instant case clearly suggests that the income chargeable to tax has escaped assessment in respect of sale of immoveable property and corresponding deposits in the bank account to the tune of Rs. 1,20,00,000/-. The said information has not been rebutted by the assessee at any time right from the issue and receipt of the show cause u/s. 148A(b) of the Act and finally issuance of notice u/s 148 of the Act. Therefore, when the notice u/s. 148 of the Act was issued on 19-03-2023, Printed from counselvise.com 15 Pavankumar Bhurchand Jain (Batch appeals) the only relevant and tangible piece of information available with the AO was that the assessee has carried out certain transactions by way of sale of immoveable property and value thereof exceeds to Rs. 1,20,00,000/-. Basis the said information and meeting the prescribed threshold of Rs 50,00,000/- or more of income escaping assessment, notice u/s. 148 of the Act has been issued after the expiry of three years from the end of the relevant assessment year i.e., AY. 2016-17 and rightly so, in compliance with Section 149(1)(b) of the Act. 22. What is equally relevant to note is that Section 149(1)(b) provides that the Assessing Officer has in his possession books of account or other documents or evidence related to any asset or expenditure or transaction or entries which show that the income chargeable to tax, which has escaped assessment, amounts to or is likely to amount to fifty lakh rupees or more. By using the phrase “likely to” while defining the threshold of Rs. 50 lakhs, we find that the Legislature has anticipated that it may not be feasible in all situations/circumstances to exactly quantify the amount at the time of issuance of notice u/s. 148 of the Act. However, basis the information in the possession of the AO, where it can be reasonably estimated that the escaped income would likely to exceed Rs. 50 lakhs or more, even those situations, have been anticipated and have been provided for the purposes of the extended period of limitation in terms of section 149(1)(b) of the Act. 23. In the instant case, the assessee has not disputed the factum of executing the transaction by way of sale of the immoveable property and the sources of information in possession of the AO whereby the said information has been communicated to the Revenue and in possession of Printed from counselvise.com 16 Pavankumar Bhurchand Jain (Batch appeals) the AO. The limited grievance of the assessee is that the transaction value so undertaken by the assessee is not Rs 1,20,00,000/- and it is only Rs 60,00,000/- and the same figure has been considered twice while seeking the approval u/s 151 of the Act and the approval was obtained by stating wrong facts and thus, the subsequent notice deserve to be set-aside. We find that the AO while seeking the approval u/s 151 of the Act of the Competent authority has submitted a Form referring to the particulars of the assessee, the quantum of income which has escaped assessment and reason for the belief that the income has escaped assessment and have also enclosed the draft order u/s 148A(d). The entire information and documentation so submitted by the AO have then been considered and the Competent authority has accordingly granted its approval stating that he has purused the draft order u/s 148A(d) submitted by the AO and based on material available on record and careful consideration of the same, he is satisfied that it is a fit case for issuance of notice u/s 148 and the contents of the draft order were approved. The draft order u/s 148A(d) refers to two independent and separate sources of information received by the AO and the reasoning adopted by the AO to hold that income escaping assessment exceeds Rs 50 lacs and more. We therefore do not find any submission of wrong facts by the AO and lack of application of mind on the part of the Competent authority as the Competent authority has rightly appreciated the fact that the income escaping assessment is clearly exceeding the prescribed threshold of Rs 50 lacs or more and thus, the approval has been rightly accorded u/s 151 of the Act. Mere mention of figure of Rs 1,20,00,000/- instead of Rs 60,00,000/- in the Form seeking approval on a standalone basis without considering the underlying draft order cannot be held fatal enough to set-aside the approval so sought and granted by the Competent authority. The same appears to be basis honest belief by the AO basis two independent sources of information in his Printed from counselvise.com 17 Pavankumar Bhurchand Jain (Batch appeals) possession that transaction value exceeds the prescribed threshold. In any case, even if we were to consider the figure of Rs 60,00,000/-, the same will continue to exceed the prescribed threshold of Rs 50,00,000/- so provided u/s 149(1)(b) of the Act. The AO after seeking the approval and basis information available on record at the relevant point in time, was thus well within his rights and jurisdiction to hold that the transaction value exceeds Rs 50,00,000/- which has escaped assessment and the notice has thereafter been issued u/s 148 of the Act. 24. Coming to the contentions of the Ld.AR that the disputed income after giving effect to the order of the Ld.CIT(A) where he has allowed cost of acquisition and deduction u/s 54F, does not exceed Rs. 50 lakhs, and the notice so issued is thus time barred. We are again unable to accede to the said contention. As we have discussed earlier, at the time of issuance of notice u/s. 148 of the Act, the AO was in possession of the information which clearly suggests that the income chargeable to tax has escaped assessment in respect of sale of immoveable property and corresponding deposits in the bank account exceeding the prescribed threshold of Rs 50 and more. The said information has not been rebutted by the assessee at any time right from the issue and receipt of the show cause u/s. 148A(b) of the Act and finally issuance of notice u/s 148 of the Act. Therefore, when the notice u/s. 148 of the Act was issued on 19-03-2023, the only relevant and tangible piece of information available with the AO was that the assessee has carried out certain transactions by way of sale of immoveable property and basis the said information and meeting the prescribed threshold of Rs 50,00,000/- or more of income escaping assessment, notice u/s. 148 of the Act has been issued in compliance with Section 149(1)(b) of the Act. We thus find force in the submissions of the Ld.DR that the said quantification and determination is clearly subsequent to Printed from counselvise.com 18 Pavankumar Bhurchand Jain (Batch appeals) issue of notice u/s. 148 of the Act and such subsequent determination no doubt represent the quantum of income which can be final assessed to tax, however, as far as the reopening of assessment proceedings is concerned, the subsequent determination and quantification of income cannot form the basis for quashing initial notice u/s. 148 of the Act specially going by the language provided in the statute wherein the Legislature has specifically used the term “income which has escaped assessment or likely to escape assessment” exceeding Rs.50 lakhs or more. 25. In respect of decision of the Hon‟ble Karnataka High Court in the case of Sanath Kumar Murali vs. ITO (supra), we find that in the said case, the assessee has responded to the show-cause issued u/s 148A(b) of the Act and has submitted the details of the cost of acquisition and where such details were considered, the capital gains so computed would have been less than the prescribed threshold of Rs 50 lacs and in the context of said facts, the Hon‟ble High Court has held that said response should have been taken note of prior to issuance of notice under section 148 and has negated the contention of the Revenue that entirety of sale consideration be considered for the purposes of determining income that has escaped assessment. We therefore find that the Hon‟ble High Court has again emphasized on the information in possession of the AO and the response submitted by the assessee at the relevant point in time in response to the show-cause and prior to issuance of notice u/s 148 of the Act. As we have noted supra, in the instant case, the assessee has failed to response to the show-cause and at the time of issuance of notice u/s 148, basis information in possession of the AO which clearly demonstrate the income escaping assessment of Rs 50 lacs and more, the notice has been duly issued in terms of timelines prescribed u/s 149(1)(b) of the Act. Thus, the said decision doesn‟t support the case of the assessee. Printed from counselvise.com 19 Pavankumar Bhurchand Jain (Batch appeals) 26. In light of the aforesaid discussion, we do not find any merit in the contention advanced by the Ld.AR that firstly, the show cause u/s. 148A of the Act has been issued beyond the limitation period as there was no limitation period provided in the statute at the relevant point in time and secondly, applying the said contentions in the context of notice u/s. 148 where the statute provides the limitation, we again does not find any merit in the contentions so advanced and are of the considered opinion that the notice so issued u/s 148 has been issued in due compliance with the prescribed threshold of income escaping assessment and within the extended limitation as provided u/s 149(1)(b) of the Act. In the result, the contentions so advanced by the Ld.AR are dismissed. 27. Now, coming to the another contention raised by the Ld.AR that the assessee has also taken a loan on the property of Rs. 20 lakhs and the proceeds thereof have been used to repay the debt and which has not been considered while computing the capital gains and that the assessee has incurred certain cost of improvement and transfer expenses which have not been allowed. It has been submitted that where necessary opportunity is provided to the assessee, the assessee will provide the necessary documentation to substantiate the same and, therefore, one last opportunity may be provided to the assessee. 28. The Ld.DR has been heard, who has submitted that no documentation in support of the loan transaction as well as cost of improvement and transfer expenses have been submitted. However, where the Bench so decide, the matter may be remanded to the file of the AO for necessary examination/verification. Printed from counselvise.com 20 Pavankumar Bhurchand Jain (Batch appeals) 29. After hearing both the parties and considering the fact that similar contention has been raised before the ld CIT(A) and there is no finding thereon, we deem it appropriate that the assessee be allowed one more opportunity and the matter is accordingly set-aside to the file of the AO for the limited purposes of examining the aforesaid contention as per law after providing reasonable opportunity to the assessee. 30. In the result, the appeal of the assessee is partly allowed for statistical purposes. ITA No. 6325/Mum/2025 31. In this appeal, the assessee challenged the sustenance of levy of penalty u/s. 271(1)(c) of the Act by the Ld.CIT(A). 32. During the course of hearing, the only contention raised by the Ld.AR was that since the issuance of notice u/s. 148A of the Act is barred by limitation, consequential assessment and penalty proceedings also therefore deserve to be set aside. As we have held above, the said contention has not been accepted by us while disposing off the assessee‟s quantum appeal. 33. Further, on perusal of the order passed by the AO u/s. 271(1)(c) of the Act, dt. 27-08-2024, it is noted that during the course of assessment proceedings, the AO has recorded his satisfaction regarding concealment of income on account of Short Term Capital Gain to the tune of Rs. 60 lakhs and penalty proceedings were initiated by issuance of show cause u/s. 274 r.w.s. 271(1)(c) of the Act, dt. 12-02-2024. In response, the assessee filed its submissions, stating that it is in the process of filing the Printed from counselvise.com 21 Pavankumar Bhurchand Jain (Batch appeals) appeal before the Ld.CIT(A). However, the AO proceeded and levied the penalty stating that there is no evidence on record that the assessee has filed any appeal before the Ld.CIT(A). Further, the assessee has been elusive and reluctant to the notices during the course of assessment proceedings, which has resulted in passing of the order u/s. 147 r.w.s. 144 r.w.s. 144B of the Act and AO accordingly recorded his satisfaction stating that the assessee has concealed particulars of income to the extent of Rs. 60 lakhs and penalty equivalent to 100% of tax sought to be evaded was levied amounting to Rs. 16,73,750/- u/s. 271(1)(c) of the Act. 34. The assessee thereafter carried the matter in appeal before the Ld.CIT(A), who has confirmed the levy of penalty on account of Long Term Capital Gain stating that the assessee has failed to report the capital gain in his return of income and however, given that in the quantum proceedings, the additions have been restricted to the extent of Rs. 25,43,973/-, the AO was directed to compute the penalty equal to the tax sought to be evaded on Long Term Capital Gain of Rs. 25,45,973/-. 35. We, therefore, find that it is a case where the assessee has failed to report capital gains on sale of the immoveable property in his return of income, a fact which has remain undisputed before us and therefore, satisfies the necessary charge of concealment of particulars of income u/s 271(1)(c) of the Act. As far as quantum proceedings are concerned, the Ld.CIT(A) has reduced the quantum of addition and the penalty has been sustained by the Ld.CIT(A) on the reduced quantum. We, therefore, do not find any infirmity in the order of the Ld.CIT(A) and the same is hereby confirmed. The same is however subject to our directions as contained in para 29 supra where we have directed the AO to verify the assessee‟s contention regarding loan, cost of improvement and transfer expenses. Printed from counselvise.com 22 Pavankumar Bhurchand Jain (Batch appeals) Where on examination, the AO determines a reduced quantum of income, there would be consequent reduction in the quantum of penalty and the AO is directed accordingly to re-compute the quantum of penalty. In the result, this appeal of the assessee is partly allowed for statistical purposes. ITA No. 6324/Mum/2025 36. In this appeal, the assessee has challenged the sustenance of levy of penalty u/s. 271(1)(b) of the Act amounting to Rs. 10,000/-. During the course of hearing, the only contention raised by the Ld.AR was that since the issuance of notice u/s. 148A of the Act is barred by limitation, consequential assessment and penalty proceedings also therefore deserve to be set aside. As we have held above, the said contention has not been accepted by us. 37. Further on perusal of the order passed by the AO u/s. 271(1)(b) of the Act, vide order dt. 27-08-2024, we find that the penalty has been levied for non-compliance to the notice u/s. 142(1) of the Act issued by the AO on 16-08-2023. During the course of penalty proceedings, the AO has held that the notice was issued to the assessee to make necessary enquiries relating to the transaction of the immoveable property. However, the assessee has failed to furnish any reasonable cause with corroborative details and documents which prevented him from doing so and in view of the same, he has levied penalty amounting Rs. 10,000/- for non- compliance to the notice issued u/s. 142(1) of the Act. Further on appeal, the Ld.CIT(A) has confirmed the said findings of the AO stating that he finds no reason to interfere with the action of the AO and the penalty is squarely attracted for the fault in compliance to the notice issued u/s. 142(1) of the Act. We, therefore, do not find any legal infirmity in the Printed from counselvise.com 23 Pavankumar Bhurchand Jain (Batch appeals) findings of both the lower authorities and find that the assessee has failed to demonstrate any reasonable cause for non-compliance to the notice issued u/s. 142(1) of the Act and in absence thereof, the AO has rightly levied the penalty which has been confirmed by the Ld.CIT(A). Hence, levy of penalty is hereby confirmed. In the result, the appeal of the assessee is dismissed. ITA No. 6326/Mum/2025 38. In this appeal, the assessee challenged the sustenance of levy of penalty of Rs. 5,000/- u/s. 271F of the Act for non-filing of return of income. During the course of hearing, the Ld.AR reiterated the contention that since the issuance of notice u/s. 148A of the Act is barred by limitation, consequential assessment and penalty proceedings also therefore deserve to be set aside. As we have held above, the said contention has not been accepted by us. 39. Further, on perusal of the penalty order passed by the AO u/s. 271F of the Act vide order dt. 27-08-2024, we find that the penalty has been initiated by issuance of show cause notice dt. 12-02-2024 for the reason that the assessee has failed to file return of income u/s. 139(1) of the Act. In the order so passed, the AO has stated that the assessee has neither filed return of income u/s. 139(1) of the Act nor has filed any belated return. Further, the assessee has failed to give any reasonable cause for non-filing of return of income. Hence, the AO has levied penalty u/s. 271F of the Act. On appeal, the Ld.CIT(A) has referred to the provisions of section 139(1) and 271F of the Act and has stated that the assessee‟s income was well above the maximum amount, which was not chargeable Printed from counselvise.com 24 Pavankumar Bhurchand Jain (Batch appeals) to tax and the return of income has not been filed within the prescribed due date and he has confirmed the action of the AO. We do not find any infirmity in the orders of the lower authorities, given the undisputed fact that the assessee‟s income from Long Term Capital Gain even after providing the necessary benefit of indexation cost of acquisition and deduction u/s. 54F of the Act exceeds the maximum amount which is not chargeable to income tax and, therefore, the assessee was required to file his return of income and given that he has failed to file the return of income, the penalty u/s. 271F of the Act has rightly been levied by the AO and confirmed by the Ld.CIT(A). In the result, the appeal of the assessee is dismissed. 40. In the result, the appeals of the assessee in ITA No. 6323/Mum/2025 and 6324/Mum/2025 are partly allowed for statistical purposes and the appeals in ITA No. 6325/Mum/2025 and 6326/Mum/2025 are dismissed. Order pronounced in the open court on 27-03-2026 Sd/- Sd/- [SANDEEP SINGH KARHAIL] [VIKRAM SINGH YADAV] JUDICIAL MEMBER ACCOUNTANT MEMBER Mumbai, Dated: 27-03-2026 TNMM Printed from counselvise.com 25 Pavankumar Bhurchand Jain (Batch appeals) Copy to : 1) The Appellant 2) The Respondent 3) The CIT concerned 4) The D.R, ITAT, Mumbai 5) Guard file By Order Dy./Asst. Registrar I.T.A.T, Mumbai Printed from counselvise.com "