YUDHISHTHIR,HISAR V. ITO WARD -1 , HISSAR

ITA 6287/DEL/2025

AI Insights

The case involves Yudhishthir, the appellant, who contested the reassessment order passed by the Income Tax Officer, Ward-1, Hissar, Haryana, for the assessment year 2014-15. The reassessment was based on unexplained bank deposits amounting to Rs. 51,20,000, which the assessee failed to explain during the assessment proceedings. The primary legal contention raised by the assessee was the invalidity of the notice issued under section 148 of the Income Tax Act, 1961, due to it being barred by limitation as per the amended provisions of section 149(1)(b). The Tribunal, after considering the legal precedents and the facts of the case, ruled in favor of the assessee, leading to the quashing of the reassessment order.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 838242 (ITAT-DELHI)
• Duration Of Justice: 4 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-02-2026
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2015-2016
• Appeal Filed On: 06-10-2025
• Other Referred Cases: Manjeet Kumar Duggal vs. ITO, Manju Somani vs. ITO, Hexaware Technologies Ltd. vs. ACIT, Godrej Industries Ltd. vs. ACIT
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: ANKIT KUMAR
• Keywords: Set aside; Opportunity of being heard; Additional evidence; Invalid notice; Reasonable cause; Period of limitation; Earning of tax free income; Tangible material; Bogus
• Section: 147; 148; 144; 153A; 234B

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘A’: NEW DELHI BEFORE SHRI ANUBHAV SHARMA, JUDICIAL MEMBER AND SHRI MANISH AGARWAL, ACCOUNTANT MEMBER ITA No.6287/Del/2025 (ASSESSMENT YEAR 2015-16) Yudhishthir, 101/13, Multan Nagar, Tehsil-Hanshi, Hisar-125033, Haryana. PAN-ADOPU4853A Vs. Income Tax Officer, Ward-1, Hissar, Haryana. (Appellant) (Respondent) Assessee by Shri Ankit Kumar, Adv. Department by Shri Akhilesh Yadav, Sr. DR Date of Hearing 11.02.2026 Date of Pronouncement 18.02.2026 O R D E R PER MANISH AGARWAL, AM: This appeal is filed by the Assessee against the order of the Ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi [‘ld. CIT(A)’ in short], in Appeal No. NFAC/2013-14/10277980 dated 03.09.2025 passed u/s 250 of the Income Tax Act, 1961 (‘the Act’ in short) for Asst. Year 2014-15. 2. Brief facts of the case are that assessee is an individual and the case of the assessee was reopened on the basis of information that he has made deposits in the bank accounts which remained unexplained. Accordingly, the order u/s 148A(d) of the Act was passed on 04.04.2022 and notice u/s 148 was issued on 05.04.2022. Thereafter, the assessee was provided various opportunities, however, assessee has failed to make compliance before the AO and, thus, the AO had proceeded to pass Printed from counselvise.com 2 ITA No.6287/Del/2025 Yudhishthir vs. ITO the re-assessment order u/s 144 of the Act by making addition of rs.51,20,000/- being unexplained money u/s 69A of the Act by holding the bank deposits as unexplained. 3. Against such order, the assessee preferred the appeal before the Ld. CIT(A) wherein the assessee has placed certain additional evidences, however, the Ld. CIT(A) has not admitted the additional evidences and dismissed the appeal of the assessee. 4 Aggrieved by the said order, the assessee is appeal before the Tribunal by taking the following grounds of appeal: “1. That the learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi has erred both in law and, on facts in upholding the determination of income made by the learned Assessment Unit, Income Tax Department of the appellant at Rs. 51,20,000/- in u/s 147 read with section 144/144B of the Act. an order of assessment dated 1.3.2024 2. That the learned Commissioner of Income Tax (Appeals) has erred both in law and on facts in disposing off the appeal ex-parte without granting any fair opportunity of being heard to the appellant. 2.1 That the finding that notices remained un-complied during the appellate proceedings is not based on correct appreciation of facts and circumstances of the case of the appellant and hence could not have been made a ground to deny an effective opportunity of being heard to the appellant. 2.2 That the learned Commissioner of Income Tax (Appeals) has failed to appreciate that there was reasonable cause for the appellant for not causing appearance on the dates fixed for hearing and as such disposal of the appeal without granting fair, meaningful and proper opportunity 3. That the learned Commissioner of Income Tax (Appeals) has failed to appreciate that assessment framed u/s 147/144/144B of the Act is barred by limitation and therefore, deserve to be quashes as such. 4 That the learned Commissioner of Income Tax (Appeals) has erred both in law and on facts in upholding the initiation of proceedings under section 147 of the Act and, completion of assessment under section 147/144/144B of the Act without appreciating that the same were without jurisdiction and hence deserved to be quashed as such. Printed from counselvise.com 3 ITA No.6287/Del/2025 Yudhishthir vs. ITO 4.1 That the learned Commissioner of Income Tax (Appeals) has failed to appreciate that notice u/s 148A(b) of the Act and order u/s 148A(d) of the Act were contrary to section 151A of the Act; and therefore the assumption of jurisdiction was not in accordance with law. 4.2 That the learned Commissioner of Income Tax (Appeals) has failed to appreciate that the notice issued u's 148A(b) of the Act, under section 148 of the Act order u/s 148A(d) of the Act were also illegal, invalid and without jurisdiction and deserve to be quashed as such 4.3 That the learned Commissioner of Income Tax (Appeals) has failed to appreciate that there was no tangible material on record in the form of specified information to suggest that income of the appellant had escaped assessment and in view thereof the proceedings initiated were illegal, untenable and therefore unsustainable. 4.4 That the learned Commissioner of Income Tax (Appeals) has failed to appreciate that non supply of information in accordance with clause (1) of Explanation 1 to section 148 of the Act even otherwise vitiated the notice u/s 148A(b) of the Act and order u/s 148A(d) of the Act. 4.5 That the learned Commissioner of Income Tax (Appeals) has failed to appreciate that initiation of proceedings was mechanical and without any application of mind much less independent application of mind, therefore the notices issued u/s 148A(b) of the Act; and u/s 148 of the Act were invalid notice; and also order u/s 148A(d) of the Act was an invalid order and thus assumption u/s 147 of the Act was without jurisdiction. 4.6 That the learned Commissioner of Income Tax (Appeals) has failed to appreciate that notice issued u/s 148 of the Act after three years have elapsed from the end of the relevant assessment year in absence of possession of books of account or other documents or evidence which reveal that the income chargeable to tax represent in the form of 'asset', which has escaped assessment amounting to or is likely to amount to fifty lakh rupees or more for that year in view of provisions of section 149(1)(b) of the Act. 4.7 That notice u/s 148A(b) of the Act was issued based on factually incorrect assumptions and presumptions and therefore such a notice being highly cryptic vague could not legally and logically be made a basis for assumption of jurisdiction and therefore deserves to be quashed as such. 4.8 That the learned Commissioner of Income Tax (Appeals) has failed to appreciate that notice u/s 148A(b) of the Act and, notice dated 30.7.2022 u/s 148 of the Act issued without validly complying section 151 of the Act were also without jurisdiction. Printed from counselvise.com 4 ITA No.6287/Del/2025 Yudhishthir vs. ITO 5. That the learned Commissioner of Income Tax (Appeals) has erred both in law and on facts in upholding an addition of Rs. 6,20,000/- representing alleged unexplained cash deposits in bank account of the appellant maintained with Punjab National Bank and erroneously held as unexplained money u/s 69A of the Act. 6. That the learned Commissioner of Income Tax (Appeals) has further erred both in law and on facts in upholding an addition of 45,00,000/-representing payments on account of time deposits in bank account of the appellant maintained with Punjab National Bank and erroneously held as unexplained money u/s 69A of the Act. 7. That while upholding he above additions, the learned Commissioner of Income Tax (Appeals) has failed to appreciate the factual substratum of the case, statutory provisions of law and as such, addition so upheld is highly misconceived, totally arbitrary, wholly unjustified and therefore, unsustainable. 6 That the learned Commissioner of Income Tax (Appeals) has also erred both in law and on facts in upholding the levy of interest of Rs.1708560/- u/s 234A of the Act and, interest of Rs. 1423800-u/s 234B of the Act which are not leviable on the facts of the instant case. Prayed It is therefore prayed that, it be held that order disposing of the appeal expartee by the learned Commissioner of Income Tax (Appeals) be set-aside. It is further prayed that, assessment made by the learned Assessing Officer and sustained by the learned Commissioner of Income Tax (Appeals) deserves to be quashed as such. It is also prayed that, additions made and sustained may kindly be deleted and, appeal of the appellant be allowed. 5. Grounds of appeal No.1 is general in nature. 6. In respect of ground of appeal No.3, the Ld. AR of the assessee submits that notice u/s 148 for the impugned year was issued on 05.04.2022 and in terms of the limitation provided u/s 149(1)(b) of the Act, it is barred by limitation as the first proviso to section 149(1)(b) of the Act has provided that notice u/s 148 could not have been issued if the same is barred by limitation in terms of clause-b of sub section (1) of this section prior to commencement of the Finance Act, 2021. He thus requested that the notice so issued u/s 148 the Act being barred by limitation and, therefore, deserves to be held invalid and consequent reassessment order passed deserves to be quashed. The Ld. AR placed reliance on the judgment of the Hon’ble Printed from counselvise.com 5 ITA No.6287/Del/2025 Yudhishthir vs. ITO Delhi High Court in the case of Manjeet Kumar Duggal vs. ITO in W.P. (C) No.3405/2023 dated 29.05.2025 reported in 305 Taxman 305(Delhi HC). The 6.1 Ld.AR further submits that initially assessee has deposited a sum of Rs.22,45,861/- as enhanced land compensation and further Rs.4,20,000/- out of his savings and made FDR of Rs.25,00,000/- out of sum so deposited on 02.09.2014 and remade the FDRs of Rs.10,00,000/- out of the maturity of FDR of 25.00 lacs and thus the source of FDR of Rs.25,00,000/- as well as other two FDRs of Rs.10,00,000/- each is duly backed by enhanced land compensation, therefore, the gross amount of income escaped is not more than Rs.50 lacs as provided in section 148 for reopening the case. 7. On the other hand, the Ld. Sr. DR supports the order of the lower authorities and requested for the confirmation of the orders so passed. 8. Heard both the parties and perused the material available on record. In the present case, the notice u/s 148 was issued on 05.04.2022 i.e. after the expiry of a period of six years from the end of the relevant assessment year. First proviso to section 149(1)(b) provided the limitation for reopening the assessment beginning on or before 01.04.2021, which reads as under: \"Provided that no notice under section 148 shall be issued at any time in a case for the relevant assessment year beginning on or before 1st day of April, 2021, if a notice under section 148 or section 153A or section 153C could not have been issued at that time on account of being beyond the time limit specified under the provisions of clause (b) of sub-section (1) of this section or section 153A or section 153C, as the case may be, as they stood immediately before the commencement of the Finance Act, 2021.\" 9. From the perusal of above mentioned proviso to section 149(1)(b) of the Act, it is evident that no notice can be validly issued at any time in a case for the relevant assessment year beginning on or before 1st day of April, 2021, if no notice u/s 148 could have been issued at that time on account of limitations provided under clause Printed from counselvise.com 6 ITA No.6287/Del/2025 Yudhishthir vs. ITO (b) of sub-section 1 of section 149 as existed immediately before the commencement of Finance Act, 2021. In terms of the provisions of clause (b) of sub-section 149 (1) as stood prior to amendment no notice u/s 148 could be issued after expiry of six years and as per the old provision, for the assessment year before us, such limitation expired on 31.03.2022, however, the impugned notice u/s 148 was issued on 05.04.2022, thus, it is barred by limitation. The Hon’ble Delhi High Court in the case of Manju Somani vs. ITO reported in 466 ITR 758 (Del.) under identical circumstances has held the notice issued after the expiry of six years from the end of the relevant assessment years as provided under the old provisions, as barred by limitation. The relevant observations of the Hon’ble Court are as under: \"12. As is manifest from the above, the Proviso to Section 149 clearly bids us to go back in point of time and examine whether a proposed reassessment pertaining to a period prior to 01 April 2021 would sustain based on the time frames as they existed prior to the promulgation of Finance Act, 2021. The Proviso embodies a negative command restraining the respondents from issuing a notice under section 148 in respect of an AY prior to 01 April 2021, if the period within which such a notice could have been issued in accordance with the provisions as they existed prior thereto had elapsed. This is manifest from the provision using the expression \"no notice under section 148 shall be issued\" if the time limit specified in the relevant provisions \".....as they stood immediately prior to the commencement of the Finance Act, 2021\" had expired. A reassessment which is sought to be commenced post 01 April 2021 would thus have to abide by the time limits prescribed by Sections 149 (1)(b), 153A or 153B as may be applicable. 13. Undisputedly, Section 149(1)(b) as it stood prior to the introduction of the amendments by way of Finance Act, 2021 prescribed that no notice under section 148 shall be issued if four years \"but not more than six years\" have elapsed from the end of the relevant assessment year. Thus, the period of six years stood erected as the terminal point which when crossed would have rendered the initiation of reassessment impermissible in law. 14. Viewed in light of the above, the impugned notice when tested on the anvil of the pre-amendment Section 149(1)(b) in order to be sustained would have to meet the prescription of six years. Undisputedly that period in respect of AY 2016-17 came to an end on 31 March 2023. We thus findourselves unable to sustain the impugned action of reassessment and which was commenced pursuant to the notice dated 29 April 2024. Printed from counselvise.com 7 ITA No.6287/Del/2025 Yudhishthir vs. ITO 15. It would be important to note that the respondents also do not attempt to sustain the initiation of action on any other statutory provisions, and which could be read as extending the time limit that applied. We also find ourselves unable to read Twylight Infrastructure as empowering them to reopen assessments contrary to the negative covenant which forms part of Section 149 of the Act.\" 10. Similarly, the Hon’ble Delhi High Court in the case of Manjeet Kumar Duggal (supra) has made following observations: “11. It is apparent from the above that the petitioner had computed the exempt income –LTCG on the sale of shares in the previous year relevant to AY 2013-14 as Rs.42,97,299/-. The petitioner had not claimed exemption regarding any other income. The information provided by the AO related to taxing the income claimed as exempt and not that any payment made by the petitioner in the prior year (previous year relevant to AY 2012-13y was required to be taxed as income escaping assessment. 12. It is the Revenue's case that the said transaction of purchase and sale of shares of Gemstone and PMPL is a sham transaction for the purpose of booking LTCG, which was exempted under Section 10(38) of the Act. The stand of the Revenue also draws support from the report by the investigation conducted by the Stock Exchange Board of India [SEBI] in the trading of shares of Gemstone and PMPL. 13. It is not apposite for this Court to examine the merits of the allegations of purchase and sale as bogus transaction and therefore, income which has escaped the assessment pursuant to the said transaction is required to be assessed and the proceedings for assessment of the said information is required to be initiated. 14. The only question, which needs to be considered is whether the information available with the AO and as furnished to the petitioner, suggested that income of the petitioner has escaped or likely to be escaped assessment exceeds Rs. 50.00 Lacs. 15. According to the petitioner, the only net income, which is claimed as exempted would be considered as income that has escaped assessment on the basis of transaction of sale and purchase of stock of Gemstone and PMPL as disclosed by the petitioner. However, according to the Revenue, it is not only the income which was claimed as exempt under Section 10(38) of the Act as also the purchase consideration of the said shares, which is likely to be included in the income that has escaped assessment. 16. Mr. Panda, learned counsel for the Revenue referred to the counter affidavit filed on behalf of the Revenue contended that consideration paid by the petitioner through banking channel would have received back by the petitioner in cash by way of separate transaction. According to the AO, this assumption Printed from counselvise.com 8 ITA No.6287/Del/2025 Yudhishthir vs. ITO would flow from the finding that the transaction of sale and purchase of sales in Gemstone and PMPL were bogus transaction to book LTCG. 17. In our view, the contentions advanced by the Revenue are ex facie erroneous. We say so for the following reasons. There is no dispute that the payments were made through banking channel, which were reflected as purchase consideration, aggregating Rs. 9,08,887/-. Mr Panda submits that the particulars of only Rs.9,00,000/- has been reflected in the bank statement furnished by the petitioner. However, there is no dispute that the purchase consideration was reflected as paid in the prior period. We note that it is the AO's assumption that the money had been paid through banking channel has been received back in cash. Therefore, there appears to be no cavil that the consideration of shares of Gemstone and PMPL was paid by the petitioner. Second that these payments had been made and reflected during the Financial Year [FY] 2011-12 relating to AY 2012-13. 18. Even if it is accepted which we do not that no purchase consideration in fact had been paid and the money was received back in cash. There is no material to indicate that said transaction was conducted in the FY 2012-13 [relating to AY 2013-14]. 19. It is also necessary to bear in mind that any purchase consideration reflected by the petitioner in the books of accounts would necessarily be from the disclosed sources. Thus, the only income that could possibly escape assessment in transaction of sale and purchase of shares to book exempt income would be the difference between the purchase consideration and the sale consideration. 20. The transaction of making payment in cheque and receiving the money in cash is a separate transaction. There was no such allegation in the notice issued to the petitioner that there was information as to any such separate transaction. There is also no material on record which would suggests that the amount of purchase consideration paid in cash for acquiring the shares have been received back by the petitioner in cash through another transaction. And, in any event the said transaction is not in the previous year relevant to AY 2013-14 as the purchase consideration paid for the shares in question was paid in the previous year. The only transaction in the previous year relevant to AY 2013-14 is the sale of shares of Gemstone and PMPL. Thus, there is no material with the AO to indicate that the gross sale consideration had escaped assessment in AY 2013- 14. 21. Thus, if the information as available with the AO was verified to be correct, the income which the petitioner had claimed as exempt under Section 10(38) of the Act would be the income that was chargeable to tax under the Act and had escaped assessment. 22. Concededly, this amount of Rs. 42,97,299/- is below the threshold limit of Rs.50.00 Lacs for attracting the provision of Section 149(1)(b) of the Act. Printed from counselvise.com 9 ITA No.6287/Del/2025 Yudhishthir vs. ITO 23. In view of the above, we find merit in the contentions of the petitioner that the impugned notice has been issued beyond the period of limitation as prescribed under Section 149(1)(a) of the Act and the conditions as specified so as to attract the provisions of Section 149(1)(b) of the Act are not satisfied. 24. The petition is, accordingly, allowed. The impugned order and impugned notice are set aside. Consequently, any order passed pursuant to the impugned notice or impugned order is also set aside as well.\" 11. This issue further supported by the order of the Hon’ble Bombay High Court in the case of Hexaware Technologies Ltd. vs. ACIT reported in 464 ITR 430 (Bom.) and in the case of Godrej Industries Ltd. vs. ACIT reported in 160 taxmann.com13 (Bom.). 12. In the light of above discussion and by respectfully following the judgements of Hon’ble Jurisdictional High Court and of Hon’ble Bombay High Court referred herein above, we are of the considered opinion that the notice issued u/s 148 of the Act is barred by limitation in terms of first proviso to section 149(1)(b) of the Act and, therefore, the said notice is hereby held as invalid and consequent reassessment order passed based on such invalid notice is hereby quashed. Accordingly, the ground of appeal No.3 of assessee is allowed. 13. Since, we have already allowed assessee’s legal ground on limitation, the other grounds of appeal taken become academic in nature and not adjudicated upon. 14. In the result, the appeal of the assessee is allowed. Order is pronounced in the Open Court 18.02. 2026 Sd/- Sd/- (ANUBHAV SHARMA) (MANISH AGARWAL) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated: 18.02.2026 *PK, Sr. Ps* Printed from counselvise.com 10 ITA No.6287/Del/2025 Yudhishthir vs. ITO Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI Printed from counselvise.com "