Panaji ITAT: Section 148 Notices Beyond Surviving Limitation Quashed Under Rajeev Bansal

By CA Vijayakumar Shetty Income Tax Judiciary August 10, 2026

TaxGuru Citation: 2026 taxguru.in 10449
Case Name: Karimulla Habibulla Sayed Vs ITO (ITAT Panaji)
Appeal Number: Only available for paid members
Date of Judgement/Order: Only available for paid members
Related Assessment Year: 2016-17
Courts: All ITAT, ITAT Panaji

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Karimulla Habibulla Sayed Vs ITO (ITAT Panaji)

Panaji ITAT Quashes Reassessments for AYs 2016-17 & 2017-18: Section 148 Notices Issued Beyond “Surviving Limitation” Under Rajeev Bansal Are Void Ab Initio

The Panaji ITAT in Karimulla Habibulla Sayed v. ITO quashed reassessment proceedings for AYs 2016-17 and 2017-18 on the ground that the notices issued under section 148 on 27 July 2022 were barred by limitation under section 149, applying the Supreme Court ruling in Union of India v. Rajeev Bansal.

For AY 2016-17, the reassessment arose from Investigation Wing information that M/s N.I. Associates had allegedly sold raw materials worth ₹32.32 lakh to the assessee which were not reflected as purchases. The original section 148 notice was issued on 30 June 2021. Pursuant to Ashish Agarwal, a fresh section 148A(b) notice was issued on 24 May 2022, followed by the section 148A(d) order and fresh section 148 notice on 27 July 2022. The AO ultimately made an addition of ₹32.32 lakh under section 69C.

ITAT: Entire Section 148A Process Must Fit Within Section 149 Limitation

The Tribunal applied the principle laid down in Rajeev Bansal that the Revenue gets only the “surviving” or balance limitation period available between issuance of the deemed notice and 30 June 2021. Once the exclusions permitted by Ashish Agarwal and Rajeev Bansal are accounted for, the Revenue must complete the section 148A process and issue the fresh section 148 notice within that surviving period.

Importantly, the ITAT rejected the proposition that the independent time available for passing an order under section 148A(d) can extend the outer limitation prescribed by section 149. The entire procedure under section 148A(a) to (d), culminating in the section 148 notice, has to be completed within the overall limitation available under section 149.

Following the Bombay High Court judgment in Gurpreet Singh v. DCIT, the Tribunal held that the notice dated 27 July 2022 was beyond the permissible surviving limitation and consequently declared it “void ab initio and bad in law.” The notice, entire reassessment proceedings and assessment order were therefore quashed. The substantive challenge to the ₹32.32 lakh section 69C addition became academic and was not adjudicated.

For AY 2017-18, the ITAT admitted an additional limitation ground even at the appellate stage. Since the facts were identical and the section 148 notice dated 27 July 2022 had been issued after the applicable cut-off date of 16 June 2022, the Tribunal applied its decision for AY 2016-17 mutatis mutandis and quashed that reassessment as well.

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