Vardhaman Gem Exports Pvt. Ltd. Vs ITO (ITAT Mumbai)
Mumbai ITAT quashes ₹29.65 crore in additions after applying the surviving limitation period explained in Rajeev Bansal
The amount of alleged escaped income may cross ₹50 lakh, and the Department may have information about bank deposits. Neither fact gives the AO extra time to issue a notice under section 148. That distinction decided the appeals in Vardhaman Gem Exports Pvt. Ltd. v. ITO, ITA Nos. 5397 and 5352/Mum/2026, pronounced by the Mumbai ITAT on 23 September 2026.
The dispute concerned AYs 2013–14 and 2014–15. Following reassessment, the AO made additions under section 68 read with section 115BBE of ₹20,76,17,499 and ₹8,89,55,823, respectively. The assessee challenged the alleged accommodation entries and credits in its Axis Bank account. It also questioned the reopening, the approval obtained for the notices, the absence of a DIN, and the denial of cross-examination.
There had already been one round before the Tribunal. The first appellate orders were set aside in June 2025, and the matters were sent back to the CIT(A) for fresh adjudication after giving the assessee a reasonable hearing. In the second round, the CIT(A) again confirmed the AO’s action. The assessee returned to the Tribunal, where the appeals turned on a narrower question: were the fresh notices under section 148, issued on 29 July 2022, still within time?
