Mumbai ITAT Quashes AY 2015-16 Reassessment as Time-Barred – Revenue’s Own Concession in Rajeev Bansal Proves Fatal

Vinod Shyamsunder Pasari Vs DCIT (ITAT Mumbai)

The Mumbai ITAT quashed reassessment proceedings for AY 2015-16 holding that the notice issued u/s 148 on 31.07.2022 was barred by limitation under section 149. The Tribunal noted that though the original notice dated 21.06.2021 was treated as a deemed notice u/s 148A(b) pursuant to the Supreme Court ruling in Ashish Agrawal, the fresh notice issued on 31.07.2022 could not survive since for AY 2015-16 the limitation had already expired on 31.03.2022.

The Tribunal heavily relied upon the Revenue’s own concession recorded by the Supreme Court in Union of India v. Rajeev Bansal that for AY 2015-16, all notices issued on or after 01.04.2021 were liable to be dropped as TOLA extension was not applicable. Relying on Delhi High Court rulings in Pratishtha Garg and IBIBO Group Pvt. Ltd., along with earlier Mumbai Tribunal decisions, the ITAT held that the reassessment notice itself was invalid and consequently quashed the entire assessment framed u/s 147 r.w.s. 144B.

The Tribunal also noted that the Supreme Court in Nehal Ashit Shah and Deepak Steel and Power Ltd. had approved similar quashing of AY 2015-16 reassessment proceedings. Since the reassessment itself was annulled on jurisdictional grounds, the merits of the additions were treated as academic and the Revenue’s appeal became infructuous.

FULL TEXT OF THE ORDER OF ITAT MUMBAI

The present cross-appeals have been filed by the assessee and the Revenue against the impugned order dated 11/09/2025, passed under section 250 of the Income Tax Act, 1961 (“the Act”) by the learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, [“learned CIT(A)”], for the assessment year 2015-16.

2. In its appeal, the assessee has raised the ground, inter alia, challenging the initiation of reassessment proceedings under section 147 of the Act. Since this is a jurisdictional issue, which goes to the root of the matter, we are considering the same at the outset. During the hearing, the learned Authorised Representative (“learned AR”) submitted that the notice issued under section 148 of the Act in the present case is beyond the limitation period specified under section 149(1) of the Act, and thus, the assessment order passed under section 147 read with section 144B of the Act is void ab initio.

3. The brief facts of the case pertaining to this issue, as emanating from the record, are: The assessee is an individual and for the year under consideration, filed his return of income on 30/10/2015, declaring an income of Rs. 28,32,250. During the survey proceedings in the case of M/s Dayal Tours and Travels (I) Pvt. Ltd., it was found that the assessee was involved in providing cash loans to various parties through one Shri Gauri Shankar Chaudhary. Accordingly, on the basis of the said information, proceedings under section 147 of the Act were initiated in the case of the assessee and a notice under section 148 of the Act was issued on 21/06/2021.

4. Thereafter, in view of the decision of the Hon’ble Supreme Court in Union of India vs. Ashish Agrawal, reported in [2022] 444 ITR 1 (SC), the original notice issued under section 148 on 21/06/2021 was deemed to be issued under section 148A(b) of the Act. Vide show cause notice dated 25/05/2022, the information and material relied upon by the Revenue was provided to the assessee and time was granted to the assessee to respond within two weeks in terms of the provisions of section 148A(b) of the Act.

5. After rejecting the objections filed by the assessee, an order under section 148A(d) of the Act was passed on 31/07/2022, declaring that it is a fit case for the issuance of a notice under section 148 of the Act. On the very same date, i.e. on 31/07/2022, a notice under section 148 of the Act was issued by the Jurisdictional Assessing Officer. Vide order dated 24/05/2023 passed under section 147 read with section 144B of the Act, the Assessing Officer (“AO”) made an addition of Rs. 7.50 crore under section 69A of the Act in the hands of the assessee. The learned CIT(A), vide impugned order, upheld the validity of the notice issued under section 148 of the Act. On merits, the learned CIT(A) granted partial relief to the assessee and restricted the addition to Rs. 4.20 crore. Being aggrieved, both the assessee and the Revenue are in appeal before us.

6. During the hearing, the learned AR submitted that the year under consideration is the assessment year 2015-16, and therefore, the limitation period available with the Assessing Officer under section 149 of the Act for issuance of notice under section 148 of the Act was till 31/03/2022, and therefore, the notice issued under section 148 of the Act on 31/07/2022 is barred by limitation. Hence, it was submitted that the entire re-assessment proceedings culminating in the order passed under section 147 read with section 144B of the Act are void ab initio. The learned AR by placing reliance upon various judicial pronouncements, submitted that a similar challenge in respect of the assessment year 2015-16 has been considered by the Hon’ble Delhi High Court and the Co-ordinate Bench of the Tribunal, and the issue was decided in favour of the taxpayer, inter alia, by considering the submission of the Revenue before the Hon’ble Supreme Court in Union of India vs. Rajeev Bansal, reported in (2024) 469 ITR 46 (SC).

7. On the other hand, the learned Departmental Representative (“learned DR”) vehemently relied upon the order passed by the lower authorities.

8. We have considered the submissions of both sides and perused the material available on record. We, at the outset, find that similar issue pertaining to the challenge against notices issued under section 148 of the Act for the assessment year 2015-16 on the basis that same are beyond the limitation period prescribed under section 149 of the Act has been decided in favour of the taxpayers after noting the submission of the Revenue before the Hon’ble Supreme Court in Rajeev Bansal (supra), wherein it was conceded by the Revenue that for the assessment year 2015-16, all notices issued on or after 1^stApril, 2021 will have to be dropped as they will not fall for completion during the period prescribed under the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 (“the TOLA”). We find that the Hon’ble Delhi High Court in Pratishtha Garg vs. ACIT, reported in (2015) 171 taxmann.com 264 (Delhi), allowed the writ petition filed by the taxpayer and set aside the notice issued under section 148 of the Act for the assessment year 2015-16, by observing as follows: –

“2. Learned counsel for the Revenue fairly states that the prayers made by the petitioner are required to be allowed as the same are covered by the concession made by the Revenue before the Supreme Court in Union of India and Others v. Rajeev Bansal: 2024 SCC OnLine SC 2693, 2024 INSC 754, as recorded in paragraph 19 (f) of the said decision. He also submits that the Coordinate Bench of this Court had, after not ing the aforesaid concession, allowed a similar petition – Ibibo Group Pvt. Ltd. v. Assistant Commissioner of Income Tax Circle: W.P.(C) 17639/2022 by order dated 13.12.2024.

3. It is relevant to note paragraph 19 (e) and (f) of the decision of the Supreme Court in Union of India and Others v. Rajeev Bansal; 2024 SCC OnLine SC 2693. The same are set out as under:

“(e) The Finance Act, 2021 (2021) ((2021) 432 ITR (Stat) 52) substituted the fold regime for reassessment with a new regime.

The first proviso to section 149 does not expressly bar the application of Taxation and other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020, Section 3 of the Taxation and other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 applies to the entire Income-tax Act, including sections 149 and 151 of the new regime. Once the first proviso to section 149(1)(b) is read with Taxation and other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020, then all the notices issued between April 1, 2021 and June 30, 2021 pertaining to the assessment years 2013-2014, 2014-2015, 2015-2016, 2016-2017, and 2017-2018 will be within the period of limitation as explained in the tabulation below:

(f) The Revenue concedes that for the assessment year 20152016, all notices issued on or after April 1, 2021 will have to be dropped as they will not fall for completion during the period prescribed under the Taxation and other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020.”

4. In view of the aforesaid, the impugned order dated 19.07.2022 issued under Section 148(A)(d) of the Income Tax Act,1961 (hereafter the Act) as well as the notice dated 19.07.2022 issued under Section 148 of the Act in respect of AY 2015-16 are liable to be set aside. It is so directed.”

9. We further find that similar findings were rendered by the Hon’ble Delhi High Court in IBIBO Group Pvt. Ltd. vs. ACIT, in W.P.(C) No.17639 of 2022, vide order dated 13/12/2024. We find that in the following decisions of the Co-ordinate Bench of the Tribunal, on similar lines, re-assessment notices issued under section 148 of the Act for the assessment year 2015-16 were quashed: –

• ACIT vs. Manish Financials, ITA No.5050 and 5055/Mum/2024 order dated 02/12/2024.
• ITO vs. Pushpak Realities Pvt. Ltd., ITA No.4812/mum/2024, order dated 07/09/2024.

10. We further find that vide order dated 04/04/2025, the Hon’ble Supreme Court in ACIT vs. Nehal Ashit Shah, in SLP (C) Diary No.57209 of 2024, upheld the quashing of the re-assessment proceedings initiated for the assessment year 2015-16 considering the submissions of the Revenue as recorded in paragraph 19(e) and 19(f) of the decision in Rajeev Bansal (supra). Similar findings were rendered by the Hon’ble Supreme Court in Deepak Steel and Power Ltd vs. CBDT, reported in [2025] 174 com144 (SC).

11. Therefore, it is evident that the Hon’ble Courts, consistently considering the submissions made by the Revenue before the Hon’ble Supreme Court in Rajeev Bansal (supra), have held that the reassessment notice issued under section 148 of the Act for the assessment year 2015-16 is barred by limitation. Thus, on this limited basis alone, the notice dated 31/07/2022, issued under section 148 of the Act in the present case, is liable to be quashed, as time-barred under the provisions of the Act. We order accordingly. Consequently, the entire reassessment proceedings and assessment order passed under section 147 read with section 144B of the Act are also quashed.

12. Since the relief has been granted to the assessee on the afore-noted jurisdictional aspect, the other grounds raised by the assessee in its appeal are rendered academic and, therefore, are kept open.

13. In view of our findings rendered in the assessee’s appeal, the grounds raised in the Revenue’s appeal are rendered infructuous and are dismissed.

14. In the result, the appeal by the assessee is allowed, while the appeal by the Revenue is dismissed.

Order pronounced in the open Court on 18/05/2026