SANTOSH LAXMAN MALUSARE,PUNE V. ITO, WARD-5(2), PUNE, PUNE

ITA 3075/PUN/2025

AI Insights

The case involves an appeal by Santosh Laxman Malusare against the reassessment order passed by the Income Tax Department for the assessment year 2015-16. The reassessment was initiated under Section 147 read with Section 144B of the Income Tax Act, 1961, following a notice under Section 148. The primary contention was the legality of the notice issued under Section 148, which the assessee argued was beyond the permissible time limit and thus invalid. The Tribunal examined the procedural adherence to the statutory time limits for issuing such notices and considered precedents set by the Supreme Court and various High Courts, which led to the conclusion that the notice was indeed time-barred.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 838902 (ITAT-PUNE)
• Duration Of Justice: 2 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-02-2026
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2015-2016
• Appeal Filed On: 12-12-2025
• Other Referred Cases: Deepak Steel & Power Ltd. Vs. CBDT, Mayurekumar Babubhai Patel Vs. ACIT, Cherian Nallathu Abraham Annamma Vs. ITO(IT) Mumbai, Bhargav Ram Munagapati Vs. ITO, Vishnu Subhash Agarwal Vs. ITO
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AJITESH KUMAR MEENA
• Assessee Lawyers: RUSHAB SHAH
• Keywords: Set aside; Corroborative evidences; Unexplained investment; Tax effect; Period of limitation; Time period of passing order
• Section: 147; 148

Judgement Text

" आयकर अपीलीय अधिकरण ”एस एम सी” न्यायपीठ पुणेमें। IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCHES “SMC” :: PUNE BEFORE DR.DIPAK P. RIPOTE, ACCOUNTANT MEMBER AND SHRI VINAY BHAMORE, JUDICIAL MEMBER आयकर अपऩल सं. / ITA No.3075/PUN/2025 निर्धारण वषा / Assessment Year: 2015-16 Santosh Laxman Malusare, Lahagaon, Moze Ali Haveli, Pune – 411047. Vs Ward-5(2), Pune. PAN: AWZPM1600M Appellant/ Assessee Respondent /Revenue Assessee by Shri Rushab Shah Revenue by Shri Ajitesh Kumar Meena – Addl.CIT Date of hearing 27/01/2026 Date of pronouncement 16/02/2026 आदेश/ ORDER PER DR. DIPAK P. RIPOTE, AM: This is an appeal filed by the Assessee against the order of Ld.Commissioner of Income Tax(Appeal)[NFAC], passed under section 250 of the Income Tax Act, 1961 for the A.Y.2015-16 dated 14.10.2025 emanating from the Assessment Order passed under section 147 read with section 144B of the I.T.Act, 1961 dated 24.11.2023. The Assessee has raised following grounds of appeal : “1. On the facts and circumstances prevailing in the case, and as per the provisions and scheme of the Act, it be held that re-opening of the Printed from counselvise.com ITA No.3075/PUN/2025 [A] 2 assessment under Section 148A and Section 148 of the Act in the case of the appellant is out of jurisdiction, improper, and contrary to the provisions of the Act. It be held that the proceedings initiated by the Assessing Officer are beyond the powers as per the provisions and scheme of the Act, as the notice under Section 148 has been issued much beyond the three-year limitation period specified under Section 149 of the Act and the addition alleged to have escaped assessment does not exceed the threshold of INR 50 Lakhs. Tax Effect: INR 10,15,673 2. On the facts and circumstances of the case, and as per the provisions and scheme of the Income-tax Act, 1961, it be held that the re-opening of the assessment under Section 148 and the subsequent order passed under Section 147 is in direct violation of CBDT Instruction No. 1/2022 dated 11.05.2022 and Hon'ble Supreme Court's judgements. The said instruction and judgements categorically mandates that for Assessment Years 2013-14, 2014-15, and 2015-16, notices under Section 148 can only be issued if the alleged escaped income exceeds ₹50 Lakhs, as per clause (b) of sub-section (1) of Section 149. It be held that the issuance of notice and the subsequent reassessment order are ultra vires the provisions of the Act, contrary to CBDT's binding instructions and Hon'ble Supreme Court's decisions and violative of established jurisprudence. Accordingly, the re-opening of the assessment deserves to be quashed. Tax Effect: INR 10,15,673. 3. Without prejudice to the above grounds, even assuming without admitting that the alleged escaped income were to exceed INR 50 Lakhs, the notice issued under Section 148 of the Act is nevertheless invalid and liable to be quashed, as it has been issued beyond the statutory limitation period prescribed under the Act, as conclusively settled by the Hon'ble Supreme Court in Union of India vs. Rajeev Printed from counselvise.com ITA No.3075/PUN/2025 [A] 3 Bansal (supra). Accordingly, the impugned notice under Section 148, being time-barred and without jurisdiction, is bad in law and deserves to be quashed Tax Effect: INR 10,15,673 4. Without prejudice to all the foregoing grounds, it is submitted that the addition of cash deposits of INR 32,74,500 as unexplained investment under section 698 of the Act is invalid, unsustainable and bad in law. The impugned addition has been made without proper appreciation of facts, without considering the explanations and supporting evidence furnished by the appellant and without establishing that the cash deposits represent unexplained income. Therefore, the addition of INR 32,74.500 deserves to be deleted in entirety. Tax Effect: INR 10,15,673 5. That on the Facts and in the Circumstances of the Case and in Law, the Ld. Assessing officer has erred by computing interest under section 234A & 2348 while computing total demand. As such the said interest may please be deleted. 6. That the appellant craves, leave to add, alter, amend or vary and/or withdraw any or all of the aforesaid grounds of appeal at the time of hearing of the above appeal. Findings & Analysis : 2. We have heard both the parties and perused the records. In this case, ld.AR for the Assessee filed a paper book. Ld.AR invited our attention to page no.15 of the paper book which was notice u/s.148 of the Act, for A.Y.2015-16 dated 02.04.2022. Ld.AR Printed from counselvise.com ITA No.3075/PUN/2025 [A] 4 submitted that said notice is time barred, hence, the assessment order is bad in law. Ld.AR relied on the case laws filed in the paper book. 3. Ld.Departmental Representative(on rotation duty) for the Revenue relied on the order of Assessing Officer and ld.CIT(A). 4. In this case, admittedly notice u/s.148 was issued on 02.04.2022. This issue is covered in favour of assessee. 5. The Hon’ble Supreme Court in the case of Deepak Steel & Power Ltd. Vs. CBDT [2025] 476 ITR 369 (SC)[02-04-2025] held as under : Quote, “ 4. The learned counsel appearing for the revenue with his usual fairness invited the attention of this Court to at hree judge bench decision of this Court in Union of India v. Rajeev Bansal 2024 SCC OnLine SC2693/[2024] 167 taxmann.com 70/301 Taxman 238/469 ITR 46 (SC), 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 April1, 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 Printed from counselvise.com ITA No.3075/PUN/2025 [A] 5 (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 of2023, 2543 of 2023 and 2544 of 2023 respectively filed before the High Court of Orissa at cuttack stands allowed. 7. The impugned notice therein stands quashed and set aside.” Unqote. 5.1 The above referred decision of Hon’ble Supreme Court was respectfully followed by Hon’ble Gujarat High Court in the case of Mayurekumar Babubhai Patel Vs. ACIT [2025] 176 taxmann.com 25 (Gujarat). The Hon’ble Gujarat High Court held as under : Quote, “15. Considering the facts of the case, it is not in dispute that the respondent Assessing Officer has issued the notice under section 148A(b) of the Act after the period of six years were over on 31.03.2022. As observed by the Hon'ble Apex Court in case of Deepak Steel and Power Ltd (supra) and in view of the concession made by the Revenue before the Apex Court for the Assessment Year 201516, all the notices issued on or after01.04.2021 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 and therefore, nothing further is required to be adjudicated in the matters as the notice so far as the present petitions are concerned, though dated 31.03.2021, admittedly have been issued after 01.04.2021. Printed from counselvise.com ITA No.3075/PUN/2025 [A] 6 16. It is also not in dispute that the notices under section 148A(b) have been issued pursuant to the decision of the Hon'ble Apex Court in Ashish Agarwal (supra) dated 04.05.2022 admittedly after 31.03.2022. Therefore, on both counts, the notices issued under section 148 of the Act dated 27/28/29.07.2022 would be time barred.”Unqote. 5.2 Similarly, Hon’ble Bombay High Court in the decision of Cherian Nallathu Abraham Annamma Vs. ITO(IT) Mumbai held as under : Quote.“11. In light of the above discussion, we find merit in the submissions as canvassed by the Petitioner. The Revenue has categorically made a concession that for A.Y.2015-16 they would drop all notices issued under Section 148 after 1st April 2021. Once this is the position, it is appropriate that the notice under Section 148dated 5th April 2022, and the consequential assessment order, notice of demand, penalty notices/orders as well as the recovery notices be quashed and set aside. It is accordingly so ordered.” Unquote. 5.3 ITAT Visakahapatnam in the case of Bhargav Ram Munagapati Vs. ITO in ITA No.510/VIZ/2025 vide order dated 21.11.2025 has held as under : Quote, “13. Respectfully following the decision of the Hon’ble Supreme Court in Deepak Steel and Power Ltd., v. Central Board of Direct Taxes (supra) and consistently following the view taken in ITA No. 251/VIZ/2025, we are of the view that re-assessment proceedings initiated for the A.Y. 2015-16 in the instant case are without jurisdiction and hence assessment completed u/s. 147 of the Act consequent to the notice issued u/s. 148 of the Act dated 03.04.2022 cannot be sustained Printed from counselvise.com ITA No.3075/PUN/2025 [A] 7 and liable to be quashed. Since the legal grounds are adjudicated in favour of the assessee by quashing the re-assessment order the other grounds raised by the assessee on merits are not adjudicated. 14. In the result, appeal of the assessee is allowed.” Unquote. 5.4 Similar view has taken by ITAT Pune Bench in the case of Vishnu Subhash Agarwal Vs. ITO in ITA No.2881/PUN/2024 wherein, notice u/s.148 dated 18.07.2022 was quashed by ITAT. 6. Respectfully following judicial precedence, we hold that notice u/s.148 was barred by limitation, hence the reassessment order is bad in law, accordingly, legal ground no.1 raised by the Assessee is allowed. 6.1 Since we have decided the legal ground no.1 in favour of assessee, remaining grounds becomes academic, hence, dismissed as unadjudicated. 7. In the result, appeal of the assessee is allowed. Order pronounced in the open Court on 16 February, 2026. Sd/- Sd/- VINAY BHAMORE Dr.DIPAK P. RIPOTE JUDICIAL MEMBER ACCOUNTANT MEMBER पपणे / Pune; ददिधंक / Dated : 16 Feb, 2026/ SGR Printed from counselvise.com ITA No.3075/PUN/2025 [A] 8 आदेशकीप्रनिनलनपअग्रेनषि / Copy of the Order forwarded to : 1. अपऩलधर्थी / The Appellant. 2. प्रत्यर्थी / The Respondent. 3. The CIT(A), concerned. 4. The Pr. CIT, concerned. 5. नवभधगऩयप्रनिनिनर्, आयकर अपऩलऩय अनर्करण, “एस एम सऩ” बेंच, पपणे / DR, ITAT, “SMC” Bench, Pune. 6. गधर्ाफ़धइल / Guard File. आदेशधिपसधर / BY ORDER, / / TRUE COPY / / सहधयक रनिस्ट्रधर /Assistant Registrar आयकर अपऩलऩय अनर्करण, पपणे/ITAT, Pune. Printed from counselvise.com "