SHIVRAM S SHETTY,MUMBAI V. INCOME TAX OFFICER WARD 2(1), THANE

ITA 5653/MUM/2024

AI Insights

The case involves Shri Shivram S. Shetty, the appellant, who challenged the reassessment notices and subsequent assessment orders for the Assessment Years 2014-15 and 2015-16. The primary legal contention was regarding the validity of the notices issued under Section 148 of the Income Tax Act, 1961, which were claimed to be time-barred and issued without the proper authority as mandated by Section 151 of the Act. The Tribunal considered various precedents and legal provisions, ultimately deciding in favor of the appellant based on the procedural lapses in issuing the notices.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 833475 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 3 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-02-2026
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: H
• Assessment Year: 2015-2016
• Appeal Filed On: 28-10-2024
• Other Referred Cases: National Thermal Power Corporation Vs. CIT, Union of India & Ors. vs. Rajeev Bansal, J. M. Financials and Investment Consultancy Services Private Limited vs. Assistant Commissioner of Income Tax, DCIT vs. Lakhotia Transport Co. Private Limited, Nilanjana Arvinder Singh vs. DCIT, Chetan Gopaldas Cholera Vs. ACIT, Aquatic Remedies (P.) Ltd. vs. CIT, Virendra Ship Recyclers LLP vs. Asstt. CIT, Income-tax Officer vs. Ashish Acharatlal Varaiya, Assistant Commissioner of Income-tax vs. Sanman Trade Impex Ltd., Ashish Acharatlal Varaiya vs. ITO, Keenara Industries (P.) Ltd. vs. Income-tax Officer, New India Assurance Company Ltd. vs. Asstt. CIT, Godrej Industries Ltd. vs. Asstt. CIT, Ram Balram Buildhome (P.) Ltd. vs. ITO, Raminder Singh vs. Asstt. CIT, Hexaware Technologies Ltd. vs. CIT, Pr. CIT vs. Hexaware Technologies Ltd.
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PRAVIN SALUNKHE
• Assessee Lawyers: KUMAR KALE
• Keywords: Set aside; Business income; Reassessment proceedings; Period of limitation; Reopening of assessment; Competent authority; Time period of passing order
• Section: 147; 148; 144; 142(1); 271(1)(c); 11; 133(6); 44AD; 139; 12; 10; 2; 15

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL “H(SMC)” BENCH, MUMBAI BEFORE MS. KAVITHA RAJAGOPAL, JM AND SHRI PRABHASH SHANKAR, AM ITA Nos.5652 & 5653/Mum/2024 (Assessment Years: 2014-15 & 2015-16) Shri Shivram S. Shetty Gala No. 36, Rajashree Shopping Centre, Mira Road (E), Dist. Thane – 401107 Vs. Income Tax Officer, Ward - 2(1), Room No.25, B Wing, 6th Floor, Ashar IT Park, Road No.16Z, Wagle Ind. Estate, Thane – 400 604 PAN No.AKYPS7065D (Appellant) : (Respondent) Assessee by : Shri Kumar Kale, Adv. Respondent by : Shri Pravin Salunkhe, SR. DR Date of Hearing : 14.11.2025 Date of Pronouncement : 04.02.2026 O R D E R Per Kavitha Rajagopal, J M: The captioned appeals have been filed by the assessee, challenging the order of the learned Commissioner of Income Tax (Appeals) Delhi (‘ld. CIT(A)’ for short), National Faceless Appeal Centre (‘NFAC’ for short) passed u/s. 250 of the Income Tax Act, 1961 (‘the Act'), pertaining to the Assessment Year (‘A.Y.’ for short) 2014-15 and 2015-16. 2. As the facts are identical, we hereby pass a consolidated order by taking ITA No.5653/Mum/2024 for A.Y. 2015-16 as the lead case. Printed from counselvise.com ITA Nos. 5652 & 5653/Mum/2024 Shri Shivram S. Shetty 2 ITA No. 5653/Mum/2024 for A.Y. 2015-16 3. The assessee has raised the following grounds of appeal along with additional ground of appeal: ““Being aggrieved by the order dated 03.09.2024 passed by the Id. Commissioner of Income Tax (Appeals), Income Tax Department, National Faceless Appeal Centre, Delhi (\"Ld. CIT(A)\" u/s. 250 of the Income-tax Act, 1961 (\"Act\"), your appellant prefers this appeal, among others, on the following grounds of appeal, each of which is without prejudice to, and independent of, the other: 1. On the facts and in the circumstances of the case, and in law, the notice u/s. 148 dated 31.03.2021 is bad-in-law and ab initio void in as much as the said notice was issued with prior approval of the Pr. CIT instead of Jt. CIT as per mandate of section 151 of the Act. The appellant, therefore, prays that the impugned assessment order be quashed. 2. On the facts and in the circumstances of the case, and in law, the assessment order u/s.147 read with Section 144 read with Section 1448 of the Income-tax Act, dated 01.03.2022, passed by the Faceless Assessing Officer (FAO) of National Faceless Assessment Centre, is bad in law for lack of jurisdiction u/s 144B(1) for passing assessment order u/s.147 prior to 29.03.2022, when notification u/s.151A was issued by the Central Government. The appellant, therefore, prays that the impugned assessment order be quashed. 3. On the facts and in the circumstances of the case, and in law, the Ld. CIT(A) erred in confirming the addition of Rs.34,93,714/- made by the Ld. AO being business income of appellant estimated @ 8% of total deposits in the appellant's bank account. The appellant, therefore, prays that the aforesaid addition be deleted. Your appellant craves leave to alter, modify, amend or delete any of the above grounds of appeal, or to add one or more new ground(s), as may be necessary.” 4. It is observed that the assessee has raised ground No.1 for the first time before the Tribunal which was not the ground of appeal before the Ld. CIT(A) and hence the assessee had filed an application dated 06.08.2025 to treat ground No.1 as additional ground of appeal. Additional ground of appeal (for A.Y. 2015-16): “1. On the facts and in the circumstances of the case, and in law, the notice u/s. 148 dated 31.03.2021 is bad-in-law and ab initio void in as much as the said notice was issued with Printed from counselvise.com ITA Nos. 5652 & 5653/Mum/2024 Shri Shivram S. Shetty 3 prior approval of the Pr. CIT instead of Jt. CIT as per mandate of section 151 of the Act. The appellant, therefore, prays that the impugned assessment order be quashed.” 5. As the additional ground of appeal raised by the assessee goes to the root of the case, we hereby admit the same for adjudication in terms of the proposition laid down by the Hon’ble Apex Court in the case of National Thermal Power Corporation Vs. CIT (229 ITR 383 (SC) and hence proceed to decide the said issue before getting into the merits of the case. 6. Brief facts of the case are that the assessee is an individual and proprietor of M/s. Delta Wines dealing in liquor business and M/s. Godavari Inns, which is providing short term accommodation. The assessee has not filed his return of income for the year under consideration and pursuant to the information from directorate of systems on Insight Portal that the assessee has deposited cash in J & K Bank Ltd. amounting to Rs.1,98,16,300/-, the assessee’s case was reopened u/s. 147 vide notice u/s. 148 dated 31.03.2021. As the assessee did not file his return of income in response to notice u/s. 148 of the Act and also there was no response to notice u/s. 142(1) of the Act, the ld. Assessing Officer (“Ld. AO” for short) passed the draft assessment order dated 17.01.2022, subsequent to which the assessee filed documents such as bank statements, P & L account, 26AS, ITR-4 draft copy and computation of income. Notice u/s. 133(6) of the Act seeking for information was issued to J & K Bank Ltd. and Bharat Co- operative Bank, where the assessee is said to have deposited to an extent of Rs.4,25,76,636/-. The ld. AO proposed an addition of Rs. 34,93,714/- as net profit computed on estimate basis as per Section 44AD of the Act at 8% of turnover amounting to Rs.4,36,71,430/- as per the P & L account filed by the assessee. After Printed from counselvise.com ITA Nos. 5652 & 5653/Mum/2024 Shri Shivram S. Shetty 4 duly considering the submission of the assessee, the ld. AO made an addition of the impugned amount to the total income of the assessee. 7. Aggrieved, the assessee was in appeal before the first appellate authority, who vide order dated 03.09.2024 upheld the addition made by the ld. AO on the ground that the assessee has failed to get the books audited and has also failed to submit the auditor report and has neither filed return of income u/s. 139 of the Act nor in response to notice u/s 148 of the Act, thereby holding that the assessee has failed to substantiate his claim. 8. The assessee is in appeal before us, challenging the order of the ld. CIT(A). 9. The learned Authorised Representative ('ld. AR' for short) for the assessee argued on the additional ground of appeal, where the notice u/s. 148 of the Act dated 31.03.2021 was challenged as bad in law and void-ab-initio for the reason that it was issued with prior approval of Principal Commissioner of Income Tax instead of Joint/Additional Commissioner of Income Tax as required u/s. 151 of the Act. The ld. AR extensively relied on the decision of the Hon'ble Apex Court in the case of Union of India & Ors. vs. Rajeev Bansal [2024] 167 taxmann.com 70 (SC) where the decision of the Hon'ble Jurisdictional High Court in the case of J. M. Financials and Investment Consultancy Services Private Limited vs. Assistant Commissioner of Income Tax, Circle 3(2)(1) & Ors., Writ Petition No. 1050 of 2022, order dated 04.04.2022 on identical issue was set aside/reversed by Hon'ble Apex Court thereby reacting finally on the said issue in the case of Rajeev Bansal (supra). Further, the ld. AR also placed reliance on the decision of the coordinate bench in the case of DCIT vs. Lakhotia Transport Co. Private Limited, ITA No. 1698 & 1699/Kol/2024 and in the case of Nilanjana Arvinder Singh vs. DCIT, Circle – 16(3), ITA No. 6140/Mum/2024 and 6167/Mum/2024, order Printed from counselvise.com ITA Nos. 5652 & 5653/Mum/2024 Shri Shivram S. Shetty 5 dated 13.03.2025, in support of his contentions. The Ld. AR also relied on the decision of the Hon’ble Jurisdictional High Court in the case of Chetan Gopaldas Cholera Vs. ACIT in Writ Petition No.3474 of 2022 order dated October 06, 2025. 10. The learned Departmental Representative ('ld. DR' for short) for the revenue on the other hand controverted the said fact and stated that the facts are distinguishable in the present case in hand, where it is a case where limitation would be applicable for Assessment Year which is more than 4 years and less than 6 years which would fall under the old regime, where TOLA would not be applicable. The ld. DR further contended that the decision of the Hon'ble Apex Court in the case of Rajeev Bansal (supra) did not deal with the issue pertaining to the present case in hand and further the reversal of Bombay High Court decision in the case of J. M. Financials and Investment Consultancy Services Private Limited (supra), was only to that extent pertaining to the period of limitation and not with regard to the approval of the specified authority. The ld. DR prayed that this ground of appeal raised by the assessee be dismissed as the same would not be covered by the decision of the Hon'ble Apex Court in the case of Rajeev Bansal (supra). 11. We have heard the rival submissions and perused the materials available on record. 12. It is observed that in the present case the period of four years from the end of the relevant assessment years expires on 31.03.2020 as per section 151 of the Act for A.Y. 2015-16 and the period of four years for grant of approval u/s. 151 of the Act stands extended upto 31.03.2021 as per section 3(1) of Taxation and other Laws (Relaxation and Amendment of certain provisions) Act, 2020 (in short “TOLA”). The assessee contends that according to the same the specified authority u/s. 151(2) of the Act was Printed from counselvise.com ITA Nos. 5652 & 5653/Mum/2024 Shri Shivram S. Shetty 6 Joint/Additional Commissioner of Income Tax who is the competent authority to grant approval u/s. 151 of the Act for issuance of notice u/s 148 of the Act and not the Pr. Commissioner of Income Tax. Further, the Ld. AR relied on various decisions in support of the assessee’s contention wherein it was held that in case of AY 2015-16 the period of four years from the end of assessment year expires on 31.03.2020 which would fall between 20.03.2020 and 31.03.2021 and the specified authority to grant approval would be the authority mentioned in section 151(2) of the Act which is the Joint/Additional Commissioner of Income Tax and not the Pr. Commissioner of Income Tax. The Ld. AR relied on the decision of the Hon’ble Jurisdictional High Court in the case of Chetan Gopaldas Cholera (supra) and the relevant extract of the said decision is cited herein under for ease of reference: “3. At the outset, we must mention that the impugned notice dated 30.03.2021 is issued within a period of four years from the end of the A.Y. 2015-16 after taking into consideration the provisions of the Taxation And Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 (for short \"TOLA\"). It is not in dispute that this has been so held by the Hon'ble Apex Court in the case of Union of India Vs. Rajeev Bansal [(2024) 469 ITR 46 (SC). 4. Section 151 (as it stood then) stipulated that no notice shall be issued under Section 148 by an Assessing Officer after the period of four years from the end of the relevant assessment year, unless the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner is satisfied, on the reasons recorded by the Assessing Officer, that it is a fit case for issuance of such notice [Section 151 (1)]. Section 151 (2) stipulates that in any case not falling under Sub-Section (1), no notice shall be issued under Section 148 by an Assessing Officer, who is below the rank of Jt. Commissioner, unless the Jt. Commissioner is satisfied, on the reasons recorded by such Assessing Officer, that it is the fit case for issuance of such notice. For the sake of convenience, Section 151 is re-produced hereunder: \"151 (1) No notice shall be issued under Section 148 by an Assessing Officer, after the expiry of a period of four years from the end of the relevant assessment year, unless the Principal Chief Commissioner or Chief Printed from counselvise.com ITA Nos. 5652 & 5653/Mum/2024 Shri Shivram S. Shetty 7 Commissioner or Principal Commissioner or Commissioner is satisfied, on the reasons recorded by the Assessing Officer, that it is a fit case for the issue of such notice. (2) In a case other than a case falling under sub-section (1), no notice shall be issued under section 148 by an Assessing Officer, who is below the rank of Joint Commissioner, unless the Joint Commissioner is satisfied, on the reasons recorded by such Assessing Officer, that it is a fit case for the issue of such notice. (3) For the purposes of sub-section (1) and sub-section (2), the Principal Chief Commissioner or the Chief Commissioner or the Principal Commissioner or the Commissioner or the Joint Commissioner, as the case may be, being satisfied on the reasons recorded by the Assessing Officer about fitness of a case for the issue of notice under section 148, need not issue such notice himself.\" 5. In light of these provisions, in the facts of the present case, it is clear that the approval/sanction had to be issued by the authority as mentioned under Section 151 (2) of the I.T. Act. We say this because even though the impugned notice is beyond the period of four years from A.Y. 2015-16, by virtue of the provisions of Section 3 (1) of TOLA, it is deemed to be issued within a period of four years. This in fact, has been held by the Hon'ble Supreme Court in the case of Union of India Vs. Rajeev Bansal (supra). 6. It is not in dispute before us even by the Revenue that in the facts of the present case, the authority to grant the approval would be the authority mentioned under Section 151 (2), namely, the Jt. Commissioner. However, it is the contention of the Revenue that in the facts of the present case the sanction was in fact correctly obtained from the Jt. Commissioner since he had recorded that in his view this was a fit case for reopening of the assessment. According to the Revenue, this would suffice and meet the requirements of Section 151 of the Act. It is submitted on behalf of the Revenue that this apart, mere obtaining the approval from a Higher Authority also, namely, the Principal Commissioner (Respondent No.2), could not be treated as if the Jt. Commissioner has not found the present case fit for reopening. It is on this basis that the Revenue contends that the notice issued under Section 148 cannot be quashed and set aside on the basis that the requirements of Section 151 have not been complied with. 7. Having heard Mr. Pardiwalla, the learned Senior Counsel appearing on behalf of the Petitioners, as well as Mr. Sharma, the learned Counsel appearing on behalf of the Revenue, we are of the opinion that the arguments canvassed by the Revenue, Printed from counselvise.com ITA Nos. 5652 & 5653/Mum/2024 Shri Shivram S. Shetty 8 though at first blush may look attractive, do not carry any substance. First and foremost, the impugned reopening notice dated 30.03.2021 very categorically states that \"This notice is being issued after obtaining the necessary satisfaction of the PCIT, Mumbai Therefore, having expressly stated that the \"necessary satisfaction\" has been obtained of the PCIT (Respondent No.2), the 1\" Respondent now cannot resile from this position and argue to the contrary that the \"necessary satisfaction\" of the \"Jt. Commissioner\" has been taken. 27\". 8. This apart, the fact that the approval as contemplated under Section 151 is not of the Jt. Commissioner, but of the Principal Commissioner, is also clear from the approval provided by Respondent No.1 as part of their Additional Affidavit in Reply dated 16.06.2025. On perusing the approval it is clear that the Jt. Commissioner/Additional Commissioner has, in fact, not granted the approval, but has only the placed the papers before the PCIT for his approval. In fact in the recommendation remarks, the Jt. Commissioner/Additional Commissioner states that \"in view of the comments of the AO, this appears a fit case for reopening of assessment. Approval for issue of notice u/s. 148 is recommended.\" It is only on this recommendation that the PCIT, by his approval dated 30.03.2021 has given his approval/sanction for issuance of the notice under Section 148. It appears that the approval of the PCIT (Respondent No.2) was sought because the Revenue was of the impression that in the facts of this case more than four years have lapsed from the end of the assessment year under consideration, and hence, the approval/sanction to issue the notice under Section 148 is required to be obtained separately from the Principal Commissioner of Income Tax Act 27, as per the provisions of Section 151 of the Income Tax Act, 1961. It appears that it is on this basis that the approval of the PCIT was sought under Section 151 (1) of the IT Act. As mentioned earlier, the present case falls under Section 151 (2) because the notice issued on 30.03.2021 is deemed to be within a period of four years from the end of the assessment year in question [A.Y. 2015-16], by virtue of the provisions of Section 3(1) of TOLA. It is therefore clear that the PCIT could never be the authority that could accord sanction/approval for issuing the notice dated 30.03.2021 under Section 148 of the IT Act. 9. As far as the Revenue's contention that because the Jt. Commissioner has recorded that this is a fit case for reopening the assessment, the same would suffice with the mandatory requirements of Section 151, we find that the said issue is squarely covered by a decision of this Court in the case of CIT Vs. Aquatic Remedies (P.) Ltd. (2018) 406 ITR 545 (Bom.). In the facts of Aquatic Remedies (supra), the Court was considering whether the Tribunal was correct in quashing the order made under Section 143 (3) read with Section 147 holding that the same is without jurisdiction, failing to appreciate the fact that the sanction of the CIT, was based on the satisfaction/report of the Additional CIT, and as such, the requirement of Printed from counselvise.com ITA Nos. 5652 & 5653/Mum/2024 Shri Shivram S. Shetty 9 Section 151 (2) was duly fulfilled. Answering this question, the Court in Aquatic Remedies (P.) Ltd. (supra) opined as under: \"6. Before considering the rival submissions, it is necessary to reproduce the relevant extracts from 'FORM FOR RECORDING REASONS FOR INITIATING PROCEEDINGS U/S. 148 OF THE ACT, AND FOR OBTAINING APPROVAL OF THE COMMISSIONER OF INCOME TAX, CENTRAL - V, MUMBAI tendered across the Bar. The Form itself indicates that the Assessing Office had submitted the proposal to obtain approval of the Commissioner of Income Tax before issuing the notice dated 25th March, 2011. The remark by Additional Commissioner of Income Tax on the form, is as under:- \"12. Remark of the Addl. CIT: Yes. I am satisfied. It is a fit case to re-open the case u/s. 147 of the Act. The notice u/s. 148 may be issued subject to CIT approval. Sd/- (VIRENDRA ОЈНА) Addl. Commissioner of Income Tax, Central Range 10, Mumbai” It, thereafter, was examined by the Commissioner of Income Tax who expressed his approval in the following form: \"13. Remark of the CIT Yes, I am satisfied that in view of facts,... as indicated in the Annexure, it is a fit case for issue notice u/s. 148 of the I.T. Act. Sd/- (H.C.JAIN) Commissioner of Income Tax, Central IV, Mumbai.\" 7. Further, the learned Counsel for the parties also produce before us a letter dated 24th March, 2011 addressed by the Additional Commissioner of Income Tax to the Commissioner of Income Tax and letter dated 25th March, 2011 from the office of the Commissioner of Income Tax to the Additional Commissioner of Income Tax. The letter dated 24th March, 2011 records the view of Additional Commissioner of Income Tax that he agrees with the reasons given by the Assessing Officer to issue the re-opening notice and seeks permission of the Commissioner of Income Tax to enable the Assessing Printed from counselvise.com ITA Nos. 5652 & 5653/Mum/2024 Shri Shivram S. Shetty 10 Officer to issue the re-opening notice for Assessment Year 2004-05. While, letter dated 25th March, 2011 from the office of the Commissioner of Income Tax, addressed to the Additional Commissioner of Income Tax states that he has granted approval to the Assessing Officer to issue a notice under Section 148 of the Act. All the three communications, referred to herein above in paragraphs 6 and in this paragraph, are taken on record and marked A, B & C for identification. 8. Mr. Tejveer Singh, learned Counsel appearing for the Revenue submits that the Additional Commissioner of Income Tax is the jurisdictional Officer to grant sanction under Section 151 (2) of the Act. This, Officer he, submits has recorded his satisfaction with the reasons recorded by the Assessing Officer to issue the re-opening notice. Thus, the requirement of Section 151 (2) of the Act is satisfied inasmuch as the Additional Commissioner of Income Tax has found it to be a fit case for issuing of notice. It is further submitted that even though, the approval was obtained from the Commissioner of Income Tax for issuance of the notice, it does not take away the fact that the Additional Commissioner of Income Tax was satisfied with reasons recorded by the Assessing Officer. Therefore, it is submitted that the notice dated 25th March, 2011, cannot be said to be without jurisdiction. 9. It is undisputed position before us that in terms of Section 151(2) of the Act, the sanctioning/permission to issue notice under Section 148 of the Act has to be issued by the Additional Commissioner of Income Tax. We find that the Assessing Officer had not sought the approval of the Designated Officer but of the Commissioner of Income Tax. This is clear from the Form used to obtain the sanction. In any case, the approval/satisfaction recorded in the form submitted for sanction of the Commissioner of Income Tax by the Assessing Officer reproduced herein above, it is clear that the Additional Commissioner of Income Tax had not granted permission to initiate re- opening proceedings against the Respondent-Assessee. The view of the Additional Commissioner of Income Tax was subject to the approval of his superior the Commissioner of Income Tax. Thus, there was no final sanction granted by the Additional Commissioner of Income Tax for issuing the notice dated 25th March, 2011 to re-open the Assessment. Further, it is the Commissioner of Income Tax who directed the issuance of the notice under Section 148 of the Act to the Assessing Officer. Thus, it is very clear that the final sanction/approval was that of the Commissioner of Income Tax as indicated in the Form and also in the two letters dated 24th March, 2011 and 25th March, 2011.\" (emphasis supplied) Printed from counselvise.com ITA Nos. 5652 & 5653/Mum/2024 Shri Shivram S. Shetty 11 10. In fact, the decision of Aquatic Remedies (supra) was challenged by the Revenue before the Hon'ble Supreme Court, and which SLP was also dismissed on 29.11.2019 [See [2020] 269 taxman 195 (SC)]. 11. Further, recently, in almost identical facts and circumstances as in the present case, this Court in the case of Prabhakar Nerulkar Vs. PCIT, Panaji, Goa (Writ Petition No.443 of 2024 - Goa Bench decided on 21.07.2025), held that the reopening notice dated 31.03.2021 issued under Section 148 for A.Y. 2015-16 is bad in law if sanction of the Jt. Commissioner/Assistant Commissioner has not in obtained. Paragraphs 30 to 32 of this decision are relevant and read thus: “30. The case before us clearly falls within the aforesaid time line as the AY 2015-16 and the period of four years from the end of the assessment year clearly fell between 20.03.2020 and 31.03.2021 and therefore, the case is governed by the old regime as the new regime came into effect from 01.04.2021. Hence, the case of the Petitioner is governed by clause (2), where it is the Joint Commissioner, who should be satisfied with the reasons recorded by the Assessing Officer that it is a fit case for issuance of notice, and it is not a case governed by clause (1) of Section 151. However, the notice under Section 148 records that it is being issued after obtaining the satisfaction of the PCIT, Panaji, who is not the competent Authority. 31. The observations in the case of Ghanshyam K. Khabrani (supra) clearly come into play where it was observed thus: \"There is merit in the contention raised on behalf of the assessee that the requirement of section 151(2) could have only been fulfilled by the satisfaction of the Joint Commissioner that this is a fit case for the issuance of a notice under section 148. Section 151(2) mandates that the satisfaction has to be of the Joint Commissioner. That expression has a distinct meaning by virtue of the definition in section 2(28C). The Commissioner of Income-tax is not a Joint Commissioner within the meaning of section 2(28C). In the present case, the Additional Commissioner of Income-tax forwarded the proposal submitted by the Assessing Officer to the Commissioner of Income-tax. The approval which has been granted is not by the Additional Commissioner of Income-tax but by the Commissioner of Income-tax. There is no statutory provision here under which a power to be exercised by an officer can be exercised by a superior officer. When Printed from counselvise.com ITA Nos. 5652 & 5653/Mum/2024 Shri Shivram S. Shetty 12 the statute mandates the satisfaction of a particular functionary for the exercise of a power, the satisfaction must be of that authority. Where a statute requires something to be done in a particular manner, it has to be done in that manner. In a similar situation the Delhi High Court in CIT. SPL's Siddhartha Ltd. (ITA No 836 of 2011 decided on September 14, 2011)-since reported in (2012) 345 ITR 223 (Delhi) held that powers which are conferred upon a particular authority have to be exercised by that authority and the satisfaction which the statute mandates of a distinct authority cannot be substituted by the satisfaction of another. We are in respectful agreement with the judgment of the Delhi High Court.\" 32. In the wake of the above, since we are of the view that the Authority at whose satisfaction must have issued the notice under Section 148 was not the PCIT, Panaji, but the Joint Commissioner as contemplated under sub-section (2) of Section 151, the notice issued under Section 148 on 31.03.2021 at Annexure D-1, is liable to be quashed and set aside as a consequence, the assessment order passed under Section 147 dated 21.03.2022 as well as the order dated 14.11.2023 under Section 264 of the Income Tax also cannot be sustained and are liable to be quashed and set aside.\" (emphasis supplied) 12. In light of the law laid down by this Court and referred to by us earlier, we find no merit in the argument of the Revenue that in the facts of the present case, because the Jt. Commissioner/Additional Commissioner was satisfied that this was a fit case for reopening the assessment, without actually granting the approval, would comply with the provisions of Section 151 (2) of the IT Act. 13. In view of the foregoing discussion, we are clearly of the view that sanction/approval of the authority as contemplated under Section 151 (2) (as at stood then) of the Act was not obtained before issuance of the notice under Section 148 of the Act. Once this is the case, the 1\" Respondent lacked jurisdiction to issue the impugned notice. On this short ground the above petition succeeds and is accordingly made absolute in terms of prayer clause(a) which reads thus: (a) that this Hon'ble Court may be pleased to issue a Writ of Certiorari or a Writ in the nature of Certiorari or any other appropriate Writ, Order or direction, calling for the records of the Petitioner's case and after going into the legality and propriety thereof, to quash and set aside: Printed from counselvise.com ITA Nos. 5652 & 5653/Mum/2024 Shri Shivram S. Shetty 13 i. the notice dated 30th March 2021 issued by Respondent No. 1 under section 148 of the Act to reopen the proceedings for assessment year 2015-16; ii. the order dated 3rd March 2022 passed by Respondent No.3 disposing of the Petitioner's objections against the said reassessment; iii. the final assessment order dated 30th March 2022 passed by Respondent No. 3 for AY 2015-16; iv. the notice of demand dated 30th March 2022 issued under section 156 of the Act for AY 2015-16, and; v. The penalty notice dated 30th March, 2022 issued under section 274 read with 271(1)(c) of the Act for AY 2015-16.” 13. From the above observation, it is evident that though the Joint/Additional Commissioner of Income Tax has recommended for reopening of the assessment to the Ld. PCIT for his approval, the Hon’ble High Court held that it is not proper approval in accordance with section 151(2) of the Act where only the Joint/Additional Commissioner of Income Tax has to grant the approval in terms of the provision of section 151(2) of the Act. In the present case in hand, there is no iota of doubt that the approval was granted by the Pr. Commissioner of Income Tax though higher in authority cannot be considered as a competent authority in terms of section 151(2) of the Act. On the above finding, we deem it fit to hold that the impugned notice was issued without approval from the competent authority and therefore quash and set aside the same. The assessment order passed in consequence of the same is also hereby quashed. We therefore allow the additional ground raised by the assessee and the other grounds of appeal raised by the assessee requires no separate adjudication and are hereby dismissed as infructuous. Printed from counselvise.com ITA Nos. 5652 & 5653/Mum/2024 Shri Shivram S. Shetty 14 14. In the result, the appeal filed by the assessee is hereby allowed. ITA No. 5652/Mum/2024 for A.Y. 2014-15 15. The assessee has raised the following grounds of appeal along with additional ground of appeal: “1. On the facts and in the circumstances of the case, and in law, the notice u/s. 148 dated 22.07.2022 is bad-in-law and ab initio void in as much as - (i) the mandate of section 149(1)(b) and first proviso thereto is not satisfied; (ii) the said notice ought to have been issued by the Assessment Unit, National Faceless Assessment Centre, Delhi (FAO) instead of Income Tax Officer, Ward 2(1), Thane ('JAO), (iii) no Document Identification No. ('DIN) is mentioned in the said notice as per mandate of CBDT's Circular No. 19 of 2019. The appellant, therefore, prays that the impugned assessment order be quashed. 2. On the facts and in the circumstances of the case, and in law, the Ld. CIT(A) erred in confirming the addition of Rs.22,77,757/ made by the Ld. AO by estimating appellant's income from liquor business at Rs.29,28,918/-instead of Rs.6,51,161/- as offered to tax by the appellant. The appellant, therefore, prays that the aforesaid addition be deleted.” Additional ground of appeal (for A.Y. 2014-15): “1. On the facts and in the circumstances of the case, and in law, the notice u/s. 148 dated 22.07.2022 is bad-in-law and ab initio void in as much as - (i) the mandate of section 149(1)(b) and first proviso thereto is not satisfied; (ii) the said notice ought to have been issued by the Assessment Unit, National Faceless Assessment Centre, Delhi (FAO) instead of Income Tax Officer, Ward 2(1), Thane ('JAO), (iii) no Document Identification No. ('DIN) is mentioned in the said notice as per mandate of CBDT's Circular No. 19 of 2019. The appellant, therefore, prays that the impugned assessment order be quashed” Printed from counselvise.com ITA Nos. 5652 & 5653/Mum/2024 Shri Shivram S. Shetty 15 16. As the additional ground of appeal raised by the assessee goes to the root of the case, we hereby admit the same for adjudication in terms of the proposition laid down by the Hon’ble Apex Court in the case of National Thermal Power Corporation Vs. CIT (229 ITR 383 (SC) and hence proceed to decide the said issue before getting into the merits of the case. 17. As per additional ground No.1(i), the assessee has challenged the notice u/s. 148 of the Act dated 22.07.2022 as bad in law and void-ab-initio for the reason that Section 149(1)(b) of the Act and the proviso to the same was not complied with. 18. The ld. AR gave a statement at the bar that the other grounds of appeal raised by the assessee will not be pressed and therefore requires no adjudication. The ld. AR contended that notice u/s 148 of the Act dated 22.07.2022 was barred by limitation as per section 149 of the Act in terms of the proposition laid down by the Hon’ble Apex Court in the case Union of India Vs. Rajeev Bansal (2024) 167 taxmann.com 70 (SC). The relevant sequence of events are cited herein under for ease o reference: Sr. No. Par culars Date of Event 1. Date of expiry of limita on period of 6 years as per proviso to sec on 149(1) of the amended law 31.03.2021 2. Extension of the limita on at Sr. No.1 as per TOLA 30.06.2021 3. No ce issued u/s.148 of the pre-amended law 14.06.2021 4. Surviving limita on period available as on 30.06.2021 [14.06.2021 to 30.06.20211 16 days 5. Issue of the Le2er u/s.!48A(b) of the amended law, providing informa on to the appellant 25.05.2022 6. Time limit allowed to the Pe oner to respond to the no ce u/s.!48A(b) [15 days from issue from above le2er] 09.06.2022 7. Time limit available to the Assessing Officer to issue no ce u/s. 148 [16 days from 09.06.2022] 25.06.2022 8. No ce issued u/s. 148 under the amended law 22.07.2022 Printed from counselvise.com ITA Nos. 5652 & 5653/Mum/2024 Shri Shivram S. Shetty 16 19. In the present case, the surviving limitation period available as on 30.06.2021 is reckoned from 14.06.2021 to 30.06.2021 which is 16 days according to which the time limit available to the ld. AO to issue notice u/s. 148 of the Act which is to be computed from 09.06.2022 was upto 25.06.2022, whereas the notice issued u/s. 148 of the Act was on 22.07.2022. The ld. AR’s contention was that the said notice was barred by limitation on the above facts. Further, it is observed that notice u/s. 148 of the pre- amended law was issued on 14.06.2021 which according to the ld. AO was for the expiry of limitation period of 6 years as per proviso to Section 149(1) of the amended law was on 31.03.2021 and the extension of limitation as per TOLA was up till 30.06.2021. Further, the issue of letter u/s. 148A(b) of the amended law for providing information to the assessee on 25.05.2022 for which the time limit allowed to the assessee to respond to the said notice i.e. 15 days from the issue of the above letter was till 09.06.2022. In the present case, the surviving limitation period available as on 30.06.2021 is reckoned from 14.06.2021 to 30.06.2021 which is 16 days according to which the time limit available to the ld. AO to issue notice u/s. 148 which is to be computed from 09.06.2022 was upto 25.06.2022, whereas the notice issued u/s. 148 of the Act was on 22.07.2022. The ld. AR’s contention was that the said notice was barred by limitation on the above facts. 20. The Ld. AR relied on the decision of the Hon’ble Jurisdictional High Court in the case of Gurpreet Singh Vs. Dy. CIT (2025) 176 txamann.com 673 (Goa) where on identical facts Hon’ble Jurisdictional High Court held that the impugned notice u/s 148 of the Act was time barred in view of the ratio of the decisions of the Hon’ble Apex Court in the case of Union of India v. Ashish Agarwal [2022] 138 taxmann.com 64/286 Taxman Printed from counselvise.com ITA Nos. 5652 & 5653/Mum/2024 Shri Shivram S. Shetty 17 183/444 ITR 1 (SC) and Rajiv Bansal (supra) relevant extract of the said decision is cited herein under for ease of reference: “6. Although multiple grounds as mentioned above have been raised in the writ petition, the learned Advocate for Petitioner has limited his challenge to the point that the order under Section 148A(d) and the notice under Section 148 dated 29/07/2022 was time barred in view of the first proviso to substituted Section 149 as interpreted by the Hon'ble Supreme Court in Ashish Agarwal and Rajeev Bansal (supra). Reliance is also placed on the Delhi High Court judgement in Ram Balram Buildhome (P.) Ltd. v. ITO [2025] 171 taxmann.com 99 (Delhi)/2025 SCC OnLine Del 481 to contend that on identical facts and consistent with the interpretation of the Petitioner in the instant case, order under Section 148A(d) and notice under Section 148 were quashed. It is urged that the remainder period as per the ratio of the decision in Rajeev Bansal (supra) was only 2 days and that the period of 2 days expired on 23/07/2022. This conclusion could be drawn after considering all the exclusions contemplated under 3rd proviso to substituted Section 149 and the exclusions directed by the Hon'ble Supreme Court in the case of Ashish Agarwal (supra) as interpreted in case of Rajeev Bansal (supra). The notice dated 29/07/2022 was thus liable to be quashed. 7. The respondents have canvassed oral arguments and have filed a synopsis of arguments based on the petitioner's submissions. According to the Respondents and as indicated in the written synopsis : (i) The assessment re-opened is valid within the meaning of the provisions of Section 147 of the IT Act. Hence, the further proceedings are valid as the same are initiated within the time limitation as notified under the TOLA extending the time limit till 30/06/2021 for re-opening the assessment vide Notification No.38/2021/ F.No.370142/35/2020-TPL. (ii) That the Government of India notified the TOLA on 29/09/2020. That in view of the TOLA, any notices and orders or compliances for which the due date falls until 31/12/2020 were extended to 31/03/2021, and further thereafter again the same was extended till 30.6.2021. (iii) That the Central Board of Direct Taxes - CBDT Notification under the TOLA dated 31/12/2020 extended the time limit from 31/12/2020 to 31/03/2021. The CBDT's Notification dated 31/03/2021 extended the date from 31/03/2021 to 30/04/2021. Subsequently, again, CBDT's Notification dated 27/4/2021 extended the time barred period from 30/04/2021 to 30/06/2021. (iv) That the time limit to re-open the proceedings in the present case within the meaning of Section 147 had been extended to 30/06/2021 and that the first notice under Section 148 of the IT Act dated 29/06/2021 was issued within the extended statutory time limit. The notice under Section 148A(b) of the IT Act was issued to the petitioner on 20/05/2022, the objections raised by the petitioner were also Printed from counselvise.com ITA Nos. 5652 & 5653/Mum/2024 Shri Shivram S. Shetty 18 disposed of by passing the order under Section 148A(d) of the IT Act on 29/07/2022 which was within the permissible time limit. (v) That accordingly, the notice under Section 148 of the IT Act was issued after getting prior approval from the Competent Authority. There was no violation of any legal or fundamental rights of the petitioner. Reassessment proceedings were well within the statutory time limit and were not time-barred in view of the first proviso to Section 149(1) of the IT Act, which was made applicable from 01/04/2021. (vi) That the time limit to re-open the proceedings in the present case within the meaning of Section 147 had been extended to 30/06/2021. The first notice under Section 148 of the IT Act was dated 29/06/2021and that the assessment order passed under Section 147 read with 144B of the IT Act was passed under the e- Assessment of Income Escaping Assessment Scheme, 2022 where the assessment was done on automated allocation. Hence, the aspect of absence of jurisdiction was without substance. (vii) The order dated 29/07/2022 was passed within the time stipulated under Section 148A(d) in as much as the first reply was uploaded on 03/06/2022 and the additional reply was uploaded on 28/06/2022. Going by the mandate of Section 148A(d) which contemplates that an order under Section 148A(d) was to be passed within one month from date of compliance from notice under Section 148A(b), the limitation would be till 31/07/2022. It is contended that the end of the month for compliance in respect of notice under Section 148A(b) of the IT Act would be 30/06/2022 as the replies were dated 03/06/2022 and 28/06/2022. The period of one month had to be counted from 30/06/2022, which would fall on 30/07/2022. (viii) The Learned counsel for the Respondents has referred to judgments in :- (a) Ashish Agarwal (supra); (b) Rajeev Bansal v. Union of India [2023] 147 taxmann.com 549/453 ITR 153 (Allahabad); (c) Virendra Ship Recyclers LLP v. Asstt. CIT [2025] 170 taxmann.com 588 (Bombay); (d) Income-tax Officer v. Ashish Acharatlal Varaiya [2024] 168 taxmann.com 588/[2025] 302 Taxman 183 (SC); (e) Assistant Commissioner of Income-tax v. Sanman Trade Impex Ltd. [2025] 170 taxmann.com 589/303 Taxman 333 (SC); (f) Ashish Acharatlal Varaiya v. ITO [2023] 152 taxmann.com 656 (Gujarat); (g) Keenara Industries (P.) Ltd. v. Income-tax Officer [2023] 147 taxmann.com 585/453 ITR 51 (Gujarat); Printed from counselvise.com ITA Nos. 5652 & 5653/Mum/2024 Shri Shivram S. Shetty 19 (h) New India Assurance Company Ltd. v. Asstt. CIT [2024] 158 taxmann.com 367 (Bombay); (i) Godrej Industries Ltd. v. Asstt. CIT [2024] 160 taxmann.com 13 (Bombay). 8. At the outset, it needs to be clarified that although reference is made to the above judgments at para 17 of the written synopsis, the following is stated: i. The Hon'ble Supreme Court in the case of Rajeev Bansal (supra) has set aside the decision of the Allahabad High Court which had quashed the re-opening notices for the AYs 2013-14 and other years as time barred under the Amended provisions of the IT Act (as amended from 1-4-2021). ii. The decision of this Court in New India Assurance Company Ltd (supra) for AY 2013- 14 which was followed in Virendra Ship Recyclers and Sanman Impex Ltd. (supra) were set aside by the Hon'ble Supreme Court based on Rajeev Bansal (supra). iii. The decision of the Gujarat High Court in Ashish Acharatlal Varaiya (supra) for AY 2013-14 was also set aside by the Hon'ble Supreme Court based on Rajeev Bansal's (supra). iv. The decision of this Court in New India Assurance Co. Ltd. (supra) which was followed in Hexaware Technologies (supra) for the same AYs 2013-14 by this Court quashing the re-opening notices on this and other grounds were now subject matter of challenge before the Hon'ble Supreme Court in Pr. CIT v. Hexaware Technologies Ltd. [SLP (C) No. 21188 of 2024]. 9. In view of the controversy involved, it is necessary to refer to the decisions in Ashish Agarwal and Rajeev Bansal (supra). Since the decision in Ashish Agarwal (supra) has been considered in Rajeev Bansal (supra), it would be advantageous to refer to its observations in this regard in paragraphs 106 and 107. It held as under :- \"106............. To summarize, the combined effect of the legal fiction and the directions issued by this Court in Union of India v. Ashish Agarwal, (2023) 1 SCC 617 is that the showcause notices that were deemed to have been issued during the period between April 1, 2021 and June 30, 2021 were stayed till the date of supply of the relevant information and material by the Assessing Officer to the assessee. After the supply of the relevant material and information to the assessee, time begins to run for the assessees to respond to the show-cause notices. 107. The third proviso to Section 149 allows the exclusion of time allowed for the assessees to respond to the show-cause notice under Section 149A(b) to compute the period of limitation. The third proviso excludes \"the time or extended time allowed to the assessee\". Resultantly, the entire time allowed to the assessee to respond to the show-cause notice has to be excluded for computing the period of limitation. In Union of India v. Ashish Agarwal, this Court provided two weeks to the assessees to reply to the show-cause notices. This period of two weeks is also liable to be excluded from the computation of limitation given the third proviso to Printed from counselvise.com ITA Nos. 5652 & 5653/Mum/2024 Shri Shivram S. Shetty 20 Section 149. Hence, the total time that is excluded for computation of limitation for the deemed notices is : (i) the time during which the show-cause notices were effectively stayed, that is, from the date of issuance of the deemed notice between April 1, 2021 and June 30, 2021 till the supply of relevant information or material by the Assessing Offices to the assessees in terms of the directions in Union of India v. Ashish Agarwal ; and (ii) two weeks allowed to the assessees to respond to the show-cause notices. \" 10. It further held in paragraphs 108, 111 and 113 as under :- \"108........... Therefore, the logical effect of the creation of the legal fiction by Union of India v. Ashish Agarwal is that the time surviving under the Income-tax Act read with Taxation and other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 will be available to the Revenue to complete the remaining proceedings in furtherance of the deemed notices, including issuance of reassessment notices under Section 148 of the new regime. The surviving or balance time limit can be calculated by computing the number of days between the date of issuance of the deemed notice and June 30, 2021. 111. The clock started ticking for the Revenue only after it received the response of the assessees to the show-causes notices. After the receipt of the reply, the Assessing Officer had to perform the following responsibilities : (i) consider the reply of the assessee under Section 149A(c); (ii) take a decision under Section 149A(d) based on the available material and the reply of the assessee; and (iii) issue a notice under Section 148 if it was a fit case for reassessment. Once the clock started ticking, the Assessing Officer was required to complete these procedures within the surviving time limit. The surviving time limt, as prescribed under the Income-tax Act read with Taxation and other Laws (Relaxation and Amendmnet of Certain Provisions) Act, 2020, was available to the Assessing Officers to issue the reassessment notices under Section 148 of the new regime. 113...........Therefore, the reassessment notices issued under Section 148 of the new regime, which are in pursuance of the deemed notices, ought to be issued within the time limit surviving under the Income-tax Act read with Taxation and other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020. A reassessment notice issued beyond the surviving time limit will be time-barred. '\" 11. Thus, the effect of the judgment in Ashish Agarwal (supra) was that whilst upholding the contention of the assesses that from 01/04/2021, the new regime applied and the issuance of notices under the old regime were contrary to law, the Hon'ble Supreme Court in exercise of powers under Article 142 of the Constitution of India directed that notices issued under Section 148 of the old regime be construed as notices under Section 148A(b) of the new regime and the enquiry contemplated under Section 148A(a) was done away with as a one-time measure. The Assessing Officers were directed to provide the information and material relied upon by the Revenue to the assesses within a period of thirty days to enable the assesses to respond to the notice within a period of two weeks after which Assessing Officer had to pass an order under Section 148A (d) of the IT Act. The Hon'ble Supreme Court expressly observed that all defences available under Section Printed from counselvise.com ITA Nos. 5652 & 5653/Mum/2024 Shri Shivram S. Shetty 21 149(a) of the IT Act would continue to be available to all the assessees. However, in the said judgment, the Hon'ble Supreme Court did not delve into the aspect whether reassessment notices were within the time stipulated under the IT Act read with TOLA and the Notifications issued thereunder. 12. The decision in Ashish Agarwal (supra) was extensively considered by the Supreme Court in Rajeev Bansal (supra). The ratio laid down in the said judgment is pivotal to the issues involved in the present case and both parties have been extensively heard on the implications of the said judgment on the case in hand. In fact, the Petitioner has conceded his case stands or falls on the basis of the interpretation on the issue whether the reassessment notices issued are time barred under the applicable provisions of the IT Act. 13. The Hon'ble Supreme Court in the case of Rajeev Bansal (supra) concluded as under : a. After 01/04/2021, the IT Act has to be read along with substituted provisions, b. TOLA would continue to apply to the IT Act after 01/04/2021 if any action or proceeding specified under the substituted provisions of the IT Act falls for completion between 20/03/2020 and 31/03/2021; c. Section 3(1) of the TOLA overrides Section 149 of the IT Act only to the extent of relaxing the time limit for issuance of a reassessment notice under Section 148; d. The TOLA would extend the time limit for the grant of sanction by the authority specified under Section 151. The test to determine whether the TOLA would apply to Section 151 of the new regime is that: if the time limit of three years from the end of an assessment year falls between 20/3/2020 and 31/03/2021, then the specified authority under Section 151(1) has extended time till 30/06/2021 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 20/03/2020 and 31/03/2021, then the specified authority under Section 151(2) has extended time till 31/03/2021 to grant approval; f. The directions in Ashish Agarwal (supra) would extend to all the reassessment notices issued under the old regime during the period 1/4/2021 and 30/06/2021; g. The time during which the show-cause notices were deemed to be stayed would be from the date of issuance of the deemed notice between 01/04/2021 and 30/06/2021 till the supply of relevant information and material by the Assessing Officers to the assessees in terms of the directions issued 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 Officer was required to issue the reassessment notice under Section 148 of the new regime within the time limit surviving under the IT Act read with Printed from counselvise.com ITA Nos. 5652 & 5653/Mum/2024 Shri Shivram S. Shetty 22 TOLA. All notices issued beyond the surviving period would be time barred and liable to be set aside. 14. As stated earlier, the instant case is premised on ratio laid down in the case of Rajeev Bansal (supra) and the applicability of the principles laid down to the facts of the present case. The sequence of events in the case in hand is as under : Sr.No. Date Event 1 29/06/2021 Notice under erstwhile Section 148 (deemed to be under new Section 148(b)) 2 04/05/2022 Judgment of the Hon'ble Supreme Court in Ashish Agarwal (supra) 3 20/05/2022 Notice conveying reasons for reopening and relied-upon material 4 03/06/2022 Reply filed by Petitioner to notice under Section 148A(b) 5 04/06/2022 Two weeks elapsed from issuance of Notice under Section 148A(b) 6 28/06/2022 Second reply filed by Petitioner to Notice under Section 148A(b) 7 14/07/2022 Notice of change of incumbent and grant of additional one week time to file reply 8 21/07/2022 Additional one-week time elapsed 9 29/07/2022 Order passed under Section 148A(d) 10 29/07/2022 Notice issued under Section 148 11 07/05/2023 SCN Notice under Section 147 12 29/05/2023 Order under Section 147 15. In terms of the decisions in Ashish Agrawal and Rajeev Bansal (supra), the following position emerges in the context of the present case :- (i) The period for subject reassessment in terms of Section 149 of the old regime is deemed to be extended till 30/06/2021 under the TOLA. (ii) The notice dated 29/06/2021 would be deemed to be notice under Section 148A(b). (iii) The surviving period by excluding the date of re-issuance of notice on 29/06/2021 would be the remainder days in the month of June 2021 (30/06/2021 - 28/06/2021), namely, two days. (iv) On 30/06/2021, the extension in terms of the TOLA would come to an end. (v) The period that stands excluded is : (a) The period up to 30/06/2021, which is covered by the provisions of the IT Act read with the TOLA. Printed from counselvise.com ITA Nos. 5652 & 5653/Mum/2024 Shri Shivram S. Shetty 23 (b) The period from 01/07/2021 to 03/05/2022 being the period before the decision of the Hon'ble Supreme Court in Ashish Agarwal (supra). (c) The Period from 04/05/2022 till 20/05/2022, which is the date when the material was furnished and the reasons for reopening were given to the Petitioner. (d) The period of two weeks time for reply to be filed by the Petitioner, which ended on 04/06/2022 and the extended time to file reply (additional reply was filed by the Petitioner on 28/06/2022). Further extension was given to the Petitioner in pursuance to notice dated 14/07/2021 giving additional time of one week in view of change in the incumbent to the Office, which period ended on 21/07/2022. 16. By considering all the exclusions, the remainder days for conclusion of the procedure for passing of an order in terms of Section 148A(d) and issuance of notice under Section 148 would be two days from 21/07/2022 and the same would expire of 23/07/2022. Applying the ratio of the decisions in Ashish Agarwal and Rajeev Bansal (supra) in the context of the 1st proviso to Section 149 we are therefore of the opinion that the notice under Section 148 dated 29/07/2022 is time barred. The order under Section 148A(d) as well as the notice issued under Section 148 are dated 29/07/2022 which is much after the surviving period which expired on 21/07/2022. 17. In light of the above, the contentions raised by the Revenue lack foundation in terms of law. Although the Revenue has contended that the order dated 29/07/2022 passed under Section 148A(d) and the notice issued under Section 148 were within the timelines contemplated by the decisions in Ashish Agarwal and Rajeev Bansal (supra), the same lacks substance. In the written synopsis, an attempt was made to justify the timelines by contending that in terms of Section 148A(d), the period mandated for passing of the order was within one month from the end of the month in which the reply referred to is received or where no such reply is furnished within one month from the end of the time by which the extended time allowed to furnish reply as per clause (b) expired. Relying on the said provision it was contended that the replies are dated 03/06/2022 and 28/06/2022 and going by the same, the end of the month would be 30/06/2022. Hence the expiry of time would be on 31/07/2022. It is therefore contended that the order is passed within the one month time contemplated under Section 148A(d). 18. The said contention is fundamentally misconceived. A notice under Section 148 of the IT Act accompanied by an order under Section 148A(d) is required to be issued within the time stipulated under Section 149 of the IT Act. Section 148A(d) does not govern the computation of time as contemplated in terms of Section 149 of the IT Act. The entire process under Section 148A(a) to (d) and the issuance of notice under Section 148 has to be completed within the total time available in terms of Section 149(1) of the IT Act for issuance of notice under Section 148. A notice issued under Section 148 of the IT Act which is beyond the time line stipulated under Section 149(1) is non-complaint and invalid. The timeline under Section 148A(d) is for the Assessing Officer to comply with the stipulations and the streamlining contemplated under Section 148A. This is primarily to bring in transparency and accountability into the system and is intended for the benefit of Printed from counselvise.com ITA Nos. 5652 & 5653/Mum/2024 Shri Shivram S. Shetty 24 the assessees. However to suggest that Section 148A(d) extends the time limit under Section 149(1) and/or has a bearing on the time under Section 149(1) is a submission which is misconceived and lacks legal sanctity. 19. It was urged by the Revenue that the decision of this Court in Hexaware Technologies Limited (supra) was under challenge before the Hon'ble Supreme Court and hence the Court could consider awaiting its outcome. The decision in Hexaware Technologies Limited has not been stayed. Since we have proceeded on the basis of the law laid down in Ashish Agarwal and Rejeev Bansal (supra), this contention cannot be accepted. Reference to various decisions has been made. In fact, the decisions referred to are inconsistent with the case set up by the Respondents. Except for the decision in Ashish Acharatlal Varaiya (supra), other judgments are rendered prior to the decision in Rajeev Bansal (supra) and /or do not consider the said decision. Hence the said judgments do not in any manner assist us in deciding the controversy in issue especially in the context to the limited issue that is raised by the Petitioner herein. 20. At this point we deem it appropriate to note that the Delhi High Court in the case of Ram Balram Buildhome (P.) Ltd. v. ITO [2025] 171 taxmann.com 99 (Delhi)/2025 SCC OnLine Del 481 dealt with an identical issue. It considered the principles laid down in Ashish Agarwal and Rajeev Bansal (supra) and concluded that the notice issued under Section 148 under the IT Act was time barred. In the facts of that case as well, the AY was 2013-2014 and the notice under Section 148 issued to the assessee was dated 01/06/2021. The date of furnishing material to the Petitioner in that case was 30/05/2022. The said Petitioner furnished its response to the notice under Section 148A(b) of the IT Act on 13/06/2022. In this factual backdrop, the Delhi High Court applying the ratio of the decisions in Ashish Agarwal and Rajeev Bansal (supra) came to the conclusion that the remainder period with the Assessment Officer was twenty-nine days from 01/06/2021 when the reassessment proceedings commenced for issuing notice under Section 148 of the IT Act. The limitation for passing of the order under Section 148A(d) expired on 12/07/2022. Accordingly, the notice under Section 148A of the IT Act issued on 30/07/2022 was held to be beyond limitation and the same was quashed. The Delhi High Court also relied on the observations made in the case of Raminder Singh v. Asstt. CIT [2023] 156 taxmann.com 148/[2024] 461 ITR 368 (Delhi)/2023 DHC 6672-DB wherein it was held that one month from the end of the month in which the time available to the assessee to respond to the notice under clause (b) of Section 148A expires is available to the Assessment Officer to pass an order under Section 148A(d) of the IT Act. It was further held that notice under Section 148 of the IT Act that is not accompanied by an order under Section 148A(d) of the Act would be non- compliant with the IT Act and no such notice could be issued beyond the period as specified under Section 149(1) of the IT Act. This decision of the Delhi High Court is consistent with our view based on the interpretation of the decisions in Ashish Agarwal and Rajeev Bansal (supra). 21. For all these reasons, we hold that the notice dated 29/07/2022, issued by Respondent no.1 under Section 148 of the IT Act is beyond the time period specified under Section 149(1) of the IT Act. It is therefore quashed. Consequently, the impugned assessment order dated 29/05/2023 passed on the basis of the impugned notice also stands quashed and set aside. Rule is made absolute in aforesaid terms with no order as to costs.” Printed from counselvise.com ITA Nos. 5652 & 5653/Mum/2024 Shri Shivram S. Shetty 25 21. By respectfully following the above decision, we deem it fit to hold that the impugned notice u/s 148 of the Act dated 22.07.2022 is beyond the limitation period as per the provisions of section 149(1) of the Act and hence we are of the considered view that the said notice is liable to be quashed and the consequential assessment order also stands quashed and set aside. Additional ground No.1(i) raised by the assessee is hereby allowed and the other grounds of appeal raised by the assessee requires no separate adjudication and are hereby dismissed as infructuous. 22. In the result, the appeals filed by the assessee are hereby allowed. Order pronounced in the open court on 04.02.2026 S Sd/-d/- S Sd/- (PRABHASH SHANKAR) (KAVITHA RAJAGOPAL) ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai; Dated: 04.02.2026 *Kishore, Sr. PS Copy of the Order forwarded to: 1. The Appellant 2. The Respondent 3. CIT- concerned 4. DR, ITAT, Mumbai 5. Guard File BY ORDER, (Dy./Asstt.Registrar) ITAT, Mumbai Printed from counselvise.com "