Iqbal Issa Patel Vs ITO (ITAT Mumbai)
The Income Tax Appellate Tribunal (ITAT), Mumbai Bench, in Iqbal Issa Patel Vs ITO, allowed the assessee’s jurisdictional challenge to reassessment proceedings for Assessment Year 2017-18, holding that a notice issued under Section 148 beyond three years from the end of the relevant assessment year was barred by limitation where the alleged income escaping assessment was less than ₹50 lakh. The assessee challenged the appellate order dated 11 March 2025 passed by the National Faceless Appeal Centre (NFAC)/CIT(A). Before the Tribunal, the assessee sought permission to raise an additional legal ground concerning limitation under Section 149(1)(a) and approval under Section 151(ii). The Tribunal admitted the additional ground because it involved a pure question of law going to the root of the reassessment proceedings and required no fresh factual verification, relying on the Supreme Court’s decision in NTPC Vs CIT (1998) 229 ITR 383 (SC).
The Tribunal found that the alleged escaped income was ₹36,03,504, below the ₹50 lakh threshold for reopening beyond three years, and that the reassessment notice dated 23 July 2022 for Assessment Year 2017-18 was consequently time-barred under Section 149. It relied on the jurisdictional Bombay High Court decision in Ramesh Bachulal Mehta Vs ITO, Writ Petition No. 271 of 2023, and quashed the notice and the consequential reassessment order. Other grounds, including the objection concerning approval under Section 151(ii), were left open without adjudication. The assessee’s appeal was partly allowed with no order as to costs. The order was pronounced on 23 September 2025.
Cases Discussed
- NTPC Vs CIT — (1998) 229 ITR 383 (SC); admission of additional legal ground. Linked page discusses the precedent.
- Ramesh Bachulal Mehta Vs ITO — Writ Petition No. 271 of 2023 (Bombay High Court); relied on for invalidity of reopening. Linked page covers the judgment.
FULL TEXT OF THE ORDER OF ITAT MUMBAI
The present appeal has been filed by the assessee challenging the impugned order dt. 11.03.2025 passed under section 250 of the Income Tax Act, 1961 (‘the Act’), by the National Faceless Appeal Centre (NFAC) / CIT(A) for the assessment year 2017-18.
2. Ld. AR has filed an application for seeking permission to raise additional ground of appeal.
3. From the contents of the application I noticed that assessee has raised legal ground thereby challenging the ground of validity of the noticed issued for reopening of the assessment as the same has been issued beyond the period of limitation prescribed u/s 149(1)(a) of the Act and the approval has not been sought from the appropriate authority specified u/s 151(ii) of the Act. Since this ground now raised by the assessee is legal in question and goes to the roots of the case and no separate documents or verification is required at this stage to adjudicate the said ground. Therefore, while relying upon the decision of the Hon’ble Supreme Court in the case of NTPC V/s. CIT(1998) 229 ITR 383 (SC). I allow the application for raising additional ground and consequently the said ground is admitted to be heard on merits.
4. Since the assessee has raised legal ground thereby challenging the validity of notice in question therefore I have decided to take this issue firstly as it goes to the roots of the case.
5. At the very outset it is an admitted fact that the alleged income in the present case is of Rs. 36,03,504/- i.e less than Rs. 50 lakhs therefore as per provisions of Sec. 149(1)(a) of the Act no notice for reopening be issued after the lapse of three years from the end of the assessment year if the income escapement is less than Rs. 50 lakhs. In the present case the facts are not disputed or controverter. Thus on the very first day the notice issued by the revenue dated 23.07.2022 is barred by limitation. Therefore taking in to consideration the decision referred before me of Jurisdictional High Court of Bombay in the case of Ramesh Bachulal Mehta Vs. ITO in Writ Petition No. 271 of 2023 and considering the facts of the case, I quash the notice dated 23.07.2022 as the same is barred by limitation, thus allow this ground of appeal.
6. Since I have allowed Ground No. 1 raised by the assessee and quashed the notice therefore consequential assessment order passed in the present case also stands quashed. Other grounds raised by the assessee are kept open.
7. In the result the appeal filed by the assessee stands partly allowed with no orders as to cost.
Order pronounced in the open court on 23/09/2025
