Neepa Vipul Parekh Vs ITO (ITAT Mumbai)
Summary: The Mumbai ITAT allowed the assessee’s appeal for A.Y. 2019-20 and quashed the reassessment proceedings arising from a notice dated 19.04.2023 issued under Section 148 of the Income-tax Act, 1961. The reopening was based more or less on information arising from a search and seizure operation dated 07.09.2022 conducted in the case of the RUPPs Group of Ahmedabad, involving registered un-recognised political parties, intermediary entities and exit providers, and the Assessing Officer ultimately made an addition of Rs.6,00,000/- representing the donation claimed under Section 80GGC. The Tribunal admitted the assessee’s legal grounds, relying upon National Thermal Power Co. Ltd. vs. CIT, (1998) 229 ITR 383 (SC), and held that the alleged escaped income of Rs.6,00,000/- was below the Rs.50,00,000/- threshold under Section 149(1)(b), while the Section 148 notice dated 19.04.2023 had been issued after expiry of three years from the end of A.Y. 2019-20. The Tribunal further held that the benefit of exclusion of the period contemplated by the proviso to Section 149 was unavailable because the information forming the basis of reopening emanated from the search conducted under Section 132 on 07.09.2022, after 01.04.2021, and therefore, in view of the first proviso to Section 148A, the procedure under Section 148A was not applicable. Consequently, the period from issuance of notice under Section 148A(b) until passing of the order under Section 148A(d) could not be excluded for extending the limitation period for issuance of the Section 148 notice. Following Amit Pahuja vs. DCIT, ITA No.868/Mum/2026, order dated 23.06.2026, and Nimish Maheshkumar Bhavsar vs. ACIT, ITA No.32/Ahd/2026, order dated 27.03.2026, the Tribunal held that the notice dated 19.04.2023 was barred by limitation and void ab initio and consequently quashed the assessment order dated 10.02.2025 passed under Section 147 read with Section 144B, without examining the donation claim on merits.
₹6 Lakh Political Donation Reassessment Beyond Three Years Time-Barred: Mumbai ITAT Quashes Section 148 Notice
The Mumbai ITAT quashed the reassessment proceedings initiated against the assessee concerning a ₹6 lakh deduction claimed under Section 80GGC towards a political donation, holding that the notice issued under Section 148 was barred by limitation.
The reopening for AY 2019-20 was based on information obtained during a search conducted on 7 September 2022 in the case of the RUPPs Group, Ahmedabad, involving certain registered unrecognised political parties, intermediary entities and alleged exit providers. Based on this information, the AO issued a Section 148 notice on 19 April 2023 and subsequently disallowed the donation of ₹6 lakh. The CIT(A) confirmed the addition.
The Tribunal observed that the alleged escaped income was only ₹6 lakh, which was below the statutory threshold of ₹50 lakh prescribed under Section 149(1)(b). Since the notice was issued after the expiry of three years from the end of AY 2019-20, the reassessment could not be sustained.
The Tribunal further held that the Revenue could not claim exclusion of the period between the issuance of notice under Section 148A(b) and the passing of the order under Section 148A(d). Since the information originated from a search conducted after 1 April 2021, the first proviso to Section 148A made the Section 148A procedure itself inapplicable. Where that procedure was not legally applicable, the time spent undertaking it could not be excluded to extend the limitation period.
Following the decisions in Amit Pahuja v. DCIT and Nimish Maheshkumar Bhavsar v. ACIT, the Tribunal held that the Section 148 notice dated 19 April 2023 was time-barred and void ab initio. Consequently, the reassessment order passed under Sections 147 read with 144B was quashed without examining the donation claim on merits.
FULL TEXT OF THE ORDER OF ITAT MUMBAI
This appeal has been preferred by the Assessee against the order dated 19.11.2025, impugned herein, passed by the National Faceless Appeal Centre (NFAC)/Ld. Commissioner of Income Tax (Appeals) (in short, “Ld. Commissioner”) u/s 250 of the Income Tax Act, 1961 (in short, “the Act”) for the A.Y. 2019-20.
2. Brief facts relevant for adjudication of the instant appeal are that the case of the Assessee was reopened u/s 147 of the Act, more or less on the basis of a search and seizure operation dated 07.09.2022 conducted in the case of RUPPs Group of Ahmedabad, wherein a total of 23 registered un- recognized political parties, more than 25 bogus intermediary entities and three major exit providers were covered, collectively referred to as “RUPPs Group of Ahmedabad”. Consequently, a notice dated 19.04.2023 was issued to the Assessee, in response to which she filed her ITR on 17.05.2023. Thereafter, various statutory notices were issued to the Assessee, in response to which the Assessee, from time to time, filed submissions/replies and relevant documents before the Assessing Officer (AO) during the assessment proceedings. The AO ultimately, vide assessment order dated 10.02.2025 passed u/s 147 r.w.s. 144B of the Act, made an addition of Rs.6,00,000/- being the amount of donation paid. Thus, the Assessee being aggrieved, preferred a first appeal before the Ld. Commissioner, who, vide the impugned order, affirmed the aforesaid addition. Therefore, the Assessee, being aggrieved, has preferred the instant appeal.
3. The Ld. Counsel for the Assessee emphasized that vide ground no.1 originally raised and additional ground nos.1 and 2, the Assessee has raised certain legal grounds before the Tribunal and, therefore, relying upon the judgment of the Hon’ble Apex Court in the case of National Thermal Power Co. Ltd. vs. Commissioner of Income-tax, (1998) 229 ITR 383 (SC), submitted that the same deserve to be admitted and adjudicated. The grounds originally raised and the additional grounds raised by the Assessee read as under:
“Grounds of Appeal
Being aggrieved by the order of the Commissioner of Income Tax (Appeals), Income Tax Department, National Faceless Appeal Centre (NFAC), Delhi, the appeal petition is submitted on the following grounds, which it is prayed may be considered independently without prejudice to one another.
1. On the facts and circumstances of the case and in law, the notice issued u/s 148 by the Jurisdictional Assessing Officer is invalid and bad in law as the same is not in accordance with section 151A of the Income Tax Act, 1961. As the notice u/s 148 is invalid, entire order passed u/s 147 is without jurisdiction and needs to be quashed.
2. On the facts and circumstances of the case and in law, the learned CIT(A), NFAC erred in confirming the total income at Rs.14,77,540/- as against returned income of Rs.8,77,540/-. Withdrawal of deduction claimed of donation of Rs.6,00,000/- u/s 80GGC is bad in law and needs to be deleted and returned income needs to be accepted.
3. The appellant craves leave to add, amend, alter/delete and/or modify the above grounds of appeal on or before the final hearing.”
Additional Grounds of Appeal
1. The Ld. CIT(A) has erred in law and in facts in not appreciating that the reopening of assessment u/s 148 of the Act and passing the reassessment order u/s 147 of the Act is invalid and bad in the eyes of law.
2. The Ld. CIT(A) has erred in law and in facts in not appreciating that the approval taken u/s 151 of the Act for the purpose of passing the order u/s 148A(d) of the Act is invalid and bad in the eyes of law.
3. The Ld. CIT(A) has erred in law and in facts in not appreciating that the notice issued u/s 143(2) of the Act is invalid and bad in the eyes of law.
4. The Ld. CIT(A) has erred in law and in facts in not appreciating that the order passed is in violation of principles of natural justice and hence the same is invalid and bad in the eyes of law.
4. On the contrary, the Ld. DR refuted the claim of the Assessee by submitting that the provisions of sections 147 and 148 of the Act have rightly been invoked and applied by the AO and, therefore, the aforesaid grounds raised by the Assessee are devoid of merit and do not warrant interference.
5. We have given thoughtful consideration to the peculiar facts and circumstances of the case qua the aforesaid grounds, by way of which the Assessee has challenged the legality of the proceedings initiated u/s 147 of the Act by issuance of notice u/s 148 of the Act, being without jurisdiction, bad in law and invalid. As the aforesaid grounds are purely legal in nature and emanate from the material available on record, therefore, respectfully following the judgment of the Hon’ble Apex Court in the case of National Thermal Power Co. Ltd. vs. CIT, (1998) 229 ITR 383 (SC), we deem it appropriate to admit the same for adjudication.
6. Coming to the merits qua the aforesaid grounds, admittedly, in the instant case, the alleged escaped income was Rs.6,00,000/-, i.e., less than Rs.50,00,000/-, and the notice u/s 148 of the Act dated 19.04.2023 was issued after expiry of three years from the end of the relevant A.Y. 2019-20. Therefore, in view of the provisions of section 149(1)(b) of the Act, the notice issued u/s 148 of the Act and the consequential proceedings, including the assessment order dated 10.02.2025 passed u/s 147 r.w.s. 144B of the Act, are liable to be quashed being barred by limitation and void ab initio.
7. Further, the benefit of exclusion of the period prescribed in the proviso to section 149 of the Act would not be available in the peculiar facts of the instant case as the reason being that the information forming the basis of reopening emanated from the search and seizure operation conducted u/s 132 of the Act on 07.09.2022, i.e., after 01.04.2021. Consequently, in view of the first proviso to section 148A of the Act, the procedure contemplated u/s 148A was not applicable to the case in hand.
8. Thus, when the procedure u/s 148A itself was not applicable, the period commencing from issuance of notice u/s 148A(b) till passing of the order u/s 148A(d) could not be excluded for the purpose of extending the limitation available for issuance of notice u/s 148 of the Act. Consequently, the notice dated 19.04.2023 issued for A.Y. 2019-20, the alleged escaped income being only Rs.6,00,000/- and below the statutory threshold of Rs.50,00,000/-, is barred by limitation.
9. We further observe that the Co-ordinate Bench of the Tribunal in Amit Pahuja vs. DCIT, Circle-1, Thane, ITA No.868/Mum/2026, order dated 23.06.2026, involving A.Y. 2019-20 and reassessment arising from the search conducted on 07.09.2022 in respect of political donations claimed u/s 80GGC, has dealt with an identical issue and quashed the reassessment proceedings on jurisdictional and limitation grounds.
10. Similarly, in Nimish Maheshkumar Bhavsar vs. ACIT, ITA No.32/Ahd/2026, order dated 27.03.2026, the Ahmedabad Bench of the Tribunal, for A.Y. 2019-20, held that where the escaped income was Rs.5,00,000/- and the notice u/s 148 was issued beyond the period prescribed u/s 149(1)(b), the notice was invalid and the proceedings were void ab initio.
11. Thus, considering the peculiar facts and circumstances of the instant case and respectfully following the aforesaid decisions, we hold that the notice dated 19.04.2023 issued u/s 148 of the Act is barred by limitation and void ab initio. Consequently, the assessment order dated 10.02.2025 passed u/s 147 r.w.s. 144B of the Act in pursuance thereof cannot survive and is, accordingly, quashed.
12. In the result, the Assessee’s appeal is allowed.
Order pronounced in the open court on 24.08.2026.
