RAVI DHARAMPAL KHANNA ,MUMBAI V. INCOME TAX OFFICER WARD 2(1), THANE

ITA 1431/MUM/2025

AI Insights

The case involves an appeal by Ravi Dharampal Khanna against the order of the National Faceless Appeal Centre (NFAC), Delhi, which pertained to the assessment year 2015-16. The primary contention was regarding the computation of total income by the assessing officer, which included disallowed transactions such as the sale of immovable property, credit card payments, sales of shares, and interest income. The assessee argued that these transactions were either already accounted for or incorrectly disallowed. Additionally, the assessee challenged the re-opening of the assessment under sections 148 and 148A of the Income Tax Act as being bad in law and void ab initio. The tribunal admitted the additional ground of appeal concerning the legality of the notice issued under section 148, which was central to the case.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 314584 (ITAT-MUMBAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-05-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2015-2016
• Other Referred Cases: Union of India v. Rajeev Bansal, Deepak Steel and Power Limited vs. CBDT, ACIT vs. Nehal Ashit Shah
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ASHOK KUMAR AMBASTHA; DR
• Assessee Lawyers: SHAILESH M. BANDHI; AR
• Keywords: Question of law; Period of limitation
• Section: 148

Judgement Text

"| आयकर अपीलीय अिधकरण ा यपीठ, मुंबई | IN THE INCOME TAX APPELLATE TRIBUNAL “D” BENCH, MUMBAI BEFORE SHRI SAKTIJIT DEY, HON’BLE VICE PRESIDENT & SHRI NARENDRA KUMAR BILLAIYA, HON’BLE ACCOUNTANT MEMBER I.T.A. No. 1431/Mum/2025 Assessment Year: 2015-16 Ravi Dharampal Khanna B-7/504, Eden Rose CHSL Opp. Cinemax Mira Road East Thane - 401107 [PAN: ARCPK8223G] Vs Income Tax Officer, Ward-2(1), Thane अपीला थ\u0016/ (Appellant) \u0017\u0018 यथ\u0016/ (Respondent) Assessee by : Shri Shailesh M. Bandhi, A/R Revenue by : Shri Ashok Kumar Ambastha, Sr. D/R सुनवाई की तारीख/Date of Hearing : 01/05/2025 घोषणा की तारीख /Date of Pronouncement: 06/05/2025 आदेश/O R D E R PER NARENDRA KUMAR BILLAIYA, AM: This appeal by the assessee is preferred against the order dated 20/12/2024 by NFAC, Delhi [hereinafter “the ld. CIT(A)”] pertaining to AY 2015-16. 2. The grievance of the assessee reads as under:- “1. We are not agreeing with the computation of total income made by assessing officer. 2. Income Tax Department has disallowed following transactions, Sr.no Nature of Transactions Amount Grounds of Appeal 1 Sold of immovable property 65,00,000/- Already shown in profit and loss account under the head sale. As assesse is builder. I.T.A. No. 1431/Mum/2025 2 2 Payments through credit card 10,88,110/- Credit card statement submitted to the department and assesse has not claim expenses through credit card 1 under profit and loss account. 3 Sales of Shares 14,97,411/- Assesse has incurred 1 loss form sale of shares during the । year and assesse has 1 submitted shares profit and loss statement to department. 4 Interest income 95,033/- Interest income already shown under the head other sources of computation of total income. Total 91,80,554/- 3. Demand calculated by assessing officer is prejudicial to me and, if appeal is not allowed proceeded it amounting to against the law. 4. I am genuine in the eye of law and followed valid procedure for computation of total income. 5. Assesse has try to filed income tax return against notice but return was not filed due to technical error so assesse has submitted computation of total income and Balance sheet also request us to give chance to file income tax return.” 3. The assessee raised the following additional ground of appeal:- “On the facts and Circumstances of the case and in law, the re-opening of the Assessment u/s 148 r.w.s 148A of the I.T. Act is Bad-in-Law and thus Void-ab-initio.\" 4. Since the additional ground goes to the root of the matter and since it raises an issue which is a pure question of law and does not need any investigation into facts, the same is admitted for adjudication. 5. Briefly stated the facts are that the assessee did not file his return of income and as per the information available with the Department, it is found that during the year under consideration, the assessee has made the following transactions:- I.T.A. No. 1431/Mum/2025 3 S. No. Nature of transactions Amount in Rs. 1 Sold of immovable property Rs.65,00,000 2 Payments through credit card Rs.10,88,110 3 Sale of shares Rs.14,97,411 4 Interest Income Rs.95,033 Total Rs.91,80,554/- 6. On the basis of the aforementioned information, proceedings u/s 148 of the Act were initiated and the showcause notice u/s 148A(b) was issued to the assessee. Subsequently, the order u/s 148A(d) of the Act was passed treating the case of the assessee as a fit case for issue of notice u/s 148 of the Act. Accordingly, notice u/s 148 of the Act was issued, which reads as under:- I.T.A. No. 1431/Mum/2025 4 7. The entire quarrel revolves around the aforementioned notice. 8. At the outset, we find that this issue has been settled in the case of Union of India v. Rajeev Bansal [2024] 167 taxmann.com 70 (SC) wherein reference is made to the submissions made on behalf of the Revenue vide para 19 which is relevant and the same is reproduced hereunder:- \"19. Mr N Venkataraman, learned Additional Solicitor General of India, made the following submissions on behalf of the Revenue: a. Parliament enacted TOLA as a free-standing legislation to provide relief and relaxation to both the assessees and the Revenue during the time of COVID- 19. TOLA seeks to relax actions and proceedings that could not be completed or complied with within the original time limits specified under the Income Tax Act, b. Section 149 of the new regime provides three crucial benefits to the assesses: (i) the four-year time limit for all situations has been reduced to three years, (ii) the first proviso to Section 149 ensures that re-assessment for previous assessment years cannot be undertaken beyond six years, and (iii) the monetary threshold of Rupees fifty lakhs will apply to the re- assessment for previous assessment years, c. The relaxations provided under Section 3(1) of TOLA apply \"notwithstanding anything contained in the specified Act.\" Section 3(1), therefore, overrides the time limits for issuing a notice under Section 148 read with Section 149 of the Income Tax Act; d. TOLA does not extend the life of the old regime. It merely provides a relaxation for the completion or compliance of actions following the procedure laid down under the new regime; e. The Finance Act 2021 substituted the old regime for re-assessment with a new regime. The first proviso to Section 149 does not expressly bar the application of TOLA. Section 3 of TOLA applies to the entire Income Tax Act including Sections 149 and 151 of the new regime. Once the first proviso to Section 149(1)(b) is read with TOLA, then all the notices issued between 1 April 2021 and 30 June 2021 pertaining to assessment years 2013-2014, 2014-2015, 2015-2016, 2016-2017 and 2017-2018 will be within the period of limitation as explained in the tabulation below: I.T.A. No. 1431/Mum/2025 5 Assessment Year (1) Within 3 Years (2) Expiry of Limitation read with TOLAfor(2)(3) Within six Years (4) Expiry of Limitation read with TOLA for (4) (5) 2013- 2014 31.03.2017 TOLA not applicable 31.03.2020 30.06.2021 2014-2015 31.03.2018 TOLA not applicable 31.03.2021 30.06.2021 2015-2016 3103.2019 TOLA not applicable 31.03.2022 TOLA not applicable 2016-2017 31.03.2020 30.06.2021 31.03.2023 TOLA not applicable 2017-2018 31.03.2021 30.06.2021 31.03.2024 TOLA not applicable f. The Revenue concedes that for the assessment year 2015-16, all notices issued on or after 1 April 2021 will have to be dropped as they will not fall for completion during the period prescribed under TOLA; g. Section 2 of TOLA defines \"specified Act\" to mean and include the Income Tax Act. The new regime, which came into effect on 1 April 2021, is now part of the Income Tax Act. Therefore, TOLA continues to apply to the Income Tax Act even after 1 April 2021; and h. Ashish Agarwal (supra) treated Section 148 notices issued by the Revenue between 1 April 2021 and 30 June 2021 as show-cause notices in terms of Section 148A(b). Thereafter, the Revenue issued notices under Section 148 of the new regime between July and August 2022. Invalidation of the Section 148 notices issued under the new regime on the ground that they were issued beyond the time limit specified under the Income Tax Act read with TOLA will completely frustrate the judicial exercise undertaken by this Court in Ashish Agarwal (supra).” 8.1. Thus, it can be seen that Revenue conceded before the Hon'ble Supreme Court in para 19(f) for dropping all the notices issued on or after 01.04.2021 for A.Y. 2015-16 as they will not fall for completion during the period prescribed under TOLA. 9. Again the Hon’ble Supreme Court in the case of Deepak Steel and Power Limited vs. CBDT in Civil Appeal Nos. 5177 of 2025, 5178 of 2025 & I.T.A. No. 1431/Mum/2025 6 5179 of 2025, had the occasion to consider an identical grievance and held as under:- “The learned counsel appearing for the revenue with his usual fairness invited the attention of this Court to a three judge bench decision of this Court in Union of India and Ors. v. Rajeev Bansal, reported in 2024 SCC OnLine SC 2693, more particularly, paragraph 19(f) which reads thus: - \"19. (f) The Revenue concedes that for the assessment year 2015- 2016, all notices issued on or after April 1, 2021 will have to be dropped as they will not fall for completion during the period prescribed under the Taxation and other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020.\" 5. As the revenue made a concession in the aforesaid decision that is for the assessment year 2015-2016, all notices issued on or after 1st April, 2021 will have to be dropped as they would not fall for completion during the period prescribed under the taxation and other laws (Relaxation and Amendment of certain Provisions Act, 2020). Nothing further is required to be adjudicated in this matter as the notices so far as the present litigation is concerned is dated 25.6.2021. 6. In view of the aforesaid, in such circumstances referred to above the original writ petition nos.2446 of 2023, 2543 of 2023 and 2544 of 2023 respectively filed before the High Court of Orissa at cuttack stands allowed.” 10. Once again, the Hon’ble Supreme Court had the occasion to decide a similar issue in the case of ACIT vs. Nehal Ashit Shah in IA No. 66386/2025 & IA No. 66387/2025 by order dated 04/04/2025. The relevant findings read as under :- “It has been submitted at the bar that this Special Leave Petition could be disposed of by following the order dated 17.01.2025 passed in the case of the Income Tax officer Ward 1(2) Jaipur vs. R.K.Build Creations Private Limited (Special Leave Petition (Civil) Diary No(s) .59625 of 2024). For ease of reference the aforesaid order reads as under: \"Delay condoned. Having regard to the concession made by the petitioner-Department in the case of Union of India vs. Rajeev Bansal, Civil Appeal No. 8629 of 2024 on 03.10.2024 (2024 SCC ONLINE 754), this Special Leave Petition would not survive for further consideration. Hence, the Special Leave Petition is dismissed. Pending applications), if any, shall stand disposed of.\" 4. Consequently, following the aforesaid order, this Special Leave Petition is dismissed as it does not survive for further consideration. I.T.A. No. 1431/Mum/2025 7 5. In this regard, reference could also be made to paragraph 19(e) and (f) in the case of Union of India vs. Rajeev Bansal, Civil Appeal No.8629 of 2024 on 03.10.2024 under which the learned Additional Solicitor General for India has made a concession insofar as the assessment year 2015-16 is concerned. Pending application(s), if any, shall stand disposed of.” 11. In light of the aforementioned decisions of the Hon’ble Supreme Court, the impugned notice mentioned hereinabove is set-aside and the resultant order is quashed. Since we have quashed the assessment order, we do not find it necessary to delve into the merits of the case. The additional grounds raised by the assessee is allowed. 12. In the result, appeal of the assessee is allowed. Order pronounced in the Court on 6th May, 2025 at Mumbai. Sd/- Sd/- (SAKTIJIT DEY) (NARENDRA KUMAR BILLAIYA) VICE-PRESIDENT ACCOUNTANT MEMBER Mumbai, Dated 06/05/2025 *SC SrPs *SC SrPs *SC SrPs *SC SrPs आदेश की \u0017ितिलिप अ ेिषत/Copy of the Order forwarded to : 1. अपीलाथ\u0016 / The Appellant 2. \u0017 थ\u0016 / The Respondent 3. संबंिधत आयकर आयु! / Concerned Pr. CIT 4. आयकर आयु! ) अपील ( / The CIT(A)- 5. िवभागीय \u0017ितिनिध ,आयकर अपीलीय अिधकरण, मुंबई /DR,ITAT, Mumbai, 6. गाड' फाई/ Guard file. आदेशानुसार/ BY ORDER TRUE COPY Assistant Registrar आयकर अपीलीय अिधकरण ITAT, Mumbai "