Hasumatiben Harkishanbhai Parmar Vs ITO (ITAT Surat)
₹2.68 Crore Property Addition Falls as Reopening Runs Out of Time
Limitation Decides the Appeal Before the Property Dispute
The Surat Bench of the Income Tax Appellate Tribunal quashed a reassessment involving an addition of ₹2,68,16,278 under section 69, holding that the reopening for AY 2015–16 was barred by limitation and without jurisdiction.
The original notice under section 148 had been issued on 30 June 2021, followed by a consequential notice on 23 July 2022 after the Supreme Court’s decision in Ashish Agarwal.
Applying Union of India v. Rajeev Bansal (2024) 469 ITR 46 (SC) and the Gujarat High Court decisions following it, the Tribunal held that these transitional reassessment proceedings could not survive.
The appeal succeeded on jurisdiction. The correctness of the property valuation and the addition under section 69 remained open and undecided.
A Substantial Difference Between Two Documents
Information received through the Insight Portal indicated that the assessee had purchased immovable property under a registered document dated 26 November 2014, showing consideration of ₹8,56,500.
However, the value mentioned in the Satakhat, or agreement to sell, was stated to be ₹2,68,16,278. The difference between the two figures was therefore ₹2,59,59,778.
The AO initially observed that section 56(2)(vii) was applicable. He also noted that the assessee had not filed a return for the relevant year and considered the source of investment unexplained.
Following reassessment proceedings, the AO ultimately made an addition of the entire ₹2,68,16,278 under section 69, rather than merely the difference between the two document values.
The Tribunal did not examine the evidentiary basis or statutory correctness of that treatment because the limitation objection disposed of the appeal.
Reassessment and First Appellate Proceedings
The AO issued the fresh section 148 notice on 23 July 2022. The assessee did not file a return in response.
A notice under section 142(1) followed on 20 January 2023, to which the assessee submitted a reply. The AO did not accept her explanation and proceeded with the addition.
The assessee challenged the assessment before the CIT(A), but the appeal was dismissed by an order dated 18 March 2025.
Before the Tribunal, she contested both the validity of the reopening and the addition for unexplained investment. There was also a 212-day delay in filing the Tribunal appeal.
The Tribunal examined the condonation application and supporting affidavit, found the explanation genuine and condoned the delay before addressing the jurisdictional ground.
The Notice Dates Were Crucial
The assessee’s representative placed the reopening chronology before the Tribunal.
The original section 148 notice was dated 30 June 2021. A subsequent show-cause notice under section 148A(b) was issued on 25 May 2022. The section 148A(d) order and consequential section 148 notice were both dated 23 July 2022.
The assessee relied on the Revenue’s concession recorded in paragraph 19(f) of Rajeev Bansal, concerning AY 2015–16 notices issued on or after 1 April 2021 in the TOLA transition.
Her contention was that the original notice did not qualify for the extension relied upon and that the later procedural steps could not cure that jurisdictional defect.
Binding Precedents Supported the Challenge
The Tribunal followed Mayurkumar Babubhai Patel v. ACIT, [2025] 176 taxmann.com 25 (Gujarat) and Sorathia Mahesh Veljibhai HUF v. ITO, [2025] 179 taxmann.com 54 (Gujarat).
The reproduced Gujarat High Court discussion explained that, for AY 2015–16, the three-year period ended on 31 March 2019, before the relevant TOLA window, while the six-year period ended on 31 March 2022, after that window.
It also discussed Deepak Steel and Power Ltd. v. CBDT, [2025] 476 ITR 369 (SC), where the Supreme Court applied the concession recorded in Rajeev Bansal and quashed the disputed notices.
The Revenue relied on the assessment and appellate orders. The Tribunal nevertheless found the jurisdictional issue settled by the binding authorities and quashed the reassessment.
Author’s Comments
The decision illustrates why the notice chronology deserves examination at the outset, even where the assessment involves a large alleged investment and a striking difference between document values.
The magnitude of an addition does not answer whether the AO validly assumed reassessment jurisdiction. Here, the limitation defect prevented the assessment from surviving, irrespective of the unresolved property dispute.
At the same time, the ruling must be cited accurately. It does not establish that the registered consideration was correct, that the Satakhat figure was unreliable, or that the source of investment had been explained. Nor did it decide whether section 69 or section 56(2)(vii) was the appropriate provision.
Its application concerns the AY 2015–16 reopening initiated during the old-regime/TOLA transition and the consequential fresh notice. It should not be expanded into a blanket statement covering every possible reopening for that year.
The reproduced authorities also refer to Siddaiah Gurappaji v. ACIT, Karnataka High Court, W.P. No. 20292 of 2023, dated 17 April 2025, as a similar decision—a useful research lead for Karnataka practitioners.
The assessee won because the reassessment lacked valid jurisdiction; the merits of the investment remained untouched.
Cases Discussed:
- Union of India v. Rajeev Bansal (2024) 469 ITR 46 (SC)
- Mayurkumar Babubhai Patel v. ACIT [2025] 176 taxmann.com 25 (Gujarat)
- Sorathia Mahesh Veljibhai HUF v. ITO [2025] 179 taxmann.com 54 (Gujarat)
- Deepak Steel and Power Ltd. v. CBDT [2025] 476 ITR 369 (SC)
- Siddaiah Gurappaji v. ACIT, W.P. No. 20292 of 2023, dated 17.04.2025 (Karnataka High Court)
FULL TEXT OF THE ORDER OF ITAT SURAT
The appeal filed by the assessee is against the order passed by the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi [in short “CIT(A)”] dated 18.03.2025 for the Assessment Year (in short “AY”) 2015-16.
2. The assessee has raised the following grounds of appeal:
“1. On the facts and circumstances of the case as well as law on the subject, the assessing officer has erred in issuing notice u/s. 148 after limitation period. The ground is covered by the decision of Supreme Court in the case of Union of India v. Rajeev Bansal 167 taxmann.com 70 (SC).
2. On the facts and circumstances of the case as well as law on the subject, the learned CIT(A) has erred in confirming the action of Assessing Officer in making the addition of Rs. 2,68,16,278/- u/s. 69 of the Act on account of unexplained investment in property.
3. It is therefore prayed that the above addition made by the Assessing Officer and confirmed by learned CIT(A) may please be deleted.
4. Appellant craves leave to add, alter or delete any ground(s) either before or in the course of hearing of the appeal.”
3. An information was received from the Insight-Portal that the assessee had purchased an immovable property for a consideration of Rs.8,56,500/- as per registered document dated 26.11.2014. The said property value was mentioned Rs.2,68,16,278/- in Satakhat. Hence, there was difference of Rs.2,59,59,778/- as per sale value shown in sale deed and value mentioned in Satakhat. Therefore, the Assessing Officer (in short “the AO”) observed that provisions of Section 56(2)(vii) of the Income Tax Act, 1961 (in short “the Act”) are applicable in the hands of assessee. As per records, assessee did not file return of income for the year under consideration. Thus, the source of investment in the said property remains unexplained for the year under consideration as per the AO. The case was reopened and notice u/s 148 of the Act was issued on 23.07.2022. In response to notice u/s 148 of the Act, the assessee did not file return of income. Notice u/s 142(1) of the Act was issued on 20.01.2023. In response to said notice, the assessee filed reply. The reply of the assessee was not accepted by the AO. After taking cognizance of submissions of the assessee to subsequent show cause notice dated 01.05.2022, the AO made addition of Rs.2,68,16,278/- u/s 69 of the Act.
4. Being aggrieved by the assessment order the assessee filed appeal before the CIT(A). The CIT(A) dismissed the appeal of the assessee.
5. The Ld. Authorised Representative (in short “Ld. AR”) for the assessee submitted that the assessee challenging the legality of re-assessment framed by the AO u/s 148 of the Act. The AO issued initial notice dated 30.06.2021 and subsequent notice dated 23.07.2022 for making reassessment u/s 147 for AY 2015-16 under consideration. Subsequently, show cause notice u/s 148A(b) was issued on 25.05.2022. Order u/s 148A(d) was passed on 23.07.2022 along with notice u/s 148 was issued on 23.07.2022. But the Income-tax Department has already conceded in subsequent decision in Union of India Vs. Rajeev Bansal (2024) 469 ITR 46 (SC) that the notices issued on or after 01.04.2021 for AY 2015-16 shall have to be dropped as they will not fall for completion during the period prescribed under “TOLA”. The relevant para 19(f) of Rajeev Bansal is re-produced below for an immediate reference:
“19. (f) The Revenue concedes that for the assessment year 2015-2016, 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.”
6. Ld. AR for assessee submitted that following the above decision of Hon’ble Supreme Court in Rajeev Bansal, the Hon’ble Gujrat High Court has also quashed the notices issued by assessing authorities u/s 148 in (i) Mayur Kumar Babubhai Patel Vs. Assistant Commissioner of Income-tax (2025) 176 taxmann.com 25 (Gujrat) and (ii) Sorathia Mahesh Veljibhai HUF Vs. Income-tax Officer (2025) 179 taxmann.com 54 (Gujrat). The relevant paras of Sorathia Mahesh Veljibhai are re-produced below:
“8. The matter was carried to Hon’ble Supreme Court. Hon’ble Supreme Court in case of Union of India v. Rajeev Bansal [2024] 167 taxmann.com 70/301 Taxman 238/469 ITR 46 (SC) decided the issues raised with regard to delay as per the provisions of section 149 of the Act which has come into operation after 01.04.2021 as well as validity of sanction granted under section 155 of the Act.
9. During the course of hearing before the Hon’ble Apex Court, Revenue conceded to the effect that so far as Assessment Year 2015-2016 is concerned, Revenue could not have issued the notices under section 3(1) of TOLA as considering the time period as prescribed under section 149 of the Act with effect from 01.04.2021, three years would be over on 31.03.2019 which is prior to coming into force of TOLA and six years would be completed on 31.03.2022 which is after operation of TOLA. In such circumstances, notices for Assessment Year 2015-2016 are held to be invalid by Hon’ble Apex Court in case of Rajeev Bansal (supra).
10. The Hon’ble Apex Court followed the decision of Rajeev Bansal(supra) in case of Deepak Steel and Power Ltd v. Central Board of Direct Taxes [2025] 174 taxmann.com 144/305 Taxman 169/476 ITR 369 (SC) and after recording the concession of the learned advocate for the department and in view of the concession given before the Apex Court by learned advocate appearing for the Revenue as recorded in para 19(f) of the judgment in case of Rajeev Bansal (supra), has quashed and set aside the notice issued after 31.03.2021 under TOLA for A.Y. 2015-16 as under:
“1. Leave granted.
2. These appeals arise from the order passed by the High Court of Orissa at Cuttack in Writ Petition (C) Nos. 2446 of 2023, 2543 of 2023 dated 1.2.2023 and 2544 of 2023 dated 10.02.2023 respectively by which the High Court disposed of the original writ petitions in the following terms:-
“1. The memo of appearance filed by Mr. S. S. Mohapatra, learned Senior Standing Counsel for Revenue Department on behalf of Opposite Parties is taken on record.
2. In view of the order passed by this Court on 1st December, 2022 in a batch of writ petitions of which W.P.(C) No.9191 of 2022 (Kailash Kedia v. Income Tax Officer) was a lead matter and the subsequent order dated 10th January, 2023 passed in W.P.(C) No.36314 of 2022 (Shiv Mettalicks Pvt. Ltd., Rourkela v. Principal Commissioner of Income Tax, Sambalpur), the Court declines to entertain the present writ petition, but leaves it open to the Petitioner to raise all grounds available to the Petitioner in accordance with law including the grounds urged in the present petition at the appropriate stage as explained by the Court in those orders.
3. The writ petition is disposed of in the above terms.”
3. We heard Mr. Saswat Kumar Acharya, the learned counsel appearing for the appellants(assessee) and Mr. Chandrashekhar, the learned counsel appearing for the revenue.
4. The learned counsel appearing for the revenue with his usual fairness invited the attention of this Court to a three judge bench decision of this Court in Union of India and Ors. v. Rajeev Bansal, reported in 2024 SCC OnLine SC 2693, more particularly, paragraph 19(f) which reads thus:-
“19. (f) The Revenue concedes that for the assessment year 2015- 2016, 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.”
5. As the revenue made a concession in the aforesaid decision that is for the assessment year 2015-2016, all notices issued on or after 1st April, 2021 will have to be dropped as they would not fall for completion during the period prescribed under the taxation and other laws (Relaxation and Amendment of certain Provisions Act, 2020). Nothing further is required to be adjudicated in this matter as the notices so far as the present litigation is concerned is dated 25.6.2021.
6. In view of the aforesaid, in such circumstances referred to above the original writ petition nos.2446 of 2023, 2543 of 2023 and 2544 of 2023 respectively filed before the High Court of Orissa at Cuttack stands allowed.
7. The impugned notice therein stands quashed and set aside.
8. The relief in terms of prayer (a) is granted.
9. The appeals stand disposed of in the above terms.
10. Pending application(s), if any, stand disposed of.”
11. Similar orders are also passed by the Apex Court in the following cases:
1) Asstt. CIT v. Nehal Ashit Shah [Special Leave Petition (Civil) Diary No. 57209 OF 2024, dated 4-4-2025];
2) ITO v. R.K.Build Creations (P.) Limited [SLP (Civil) Diary No. 59625 OF 2024, DATED 17-1-2025].
12. The Delhi High Court has also passed the similar order in following cases:
1) Bhagwan Sahai Sharma v. Dy. CIT [2025] 174 taxmann.com 14 (Delhi)
2) Lalit Gulati v. Asstt. CIT [2025] 174 taxmann.com 273/305 Taxman 11 (Delhi);
13. The Punjab and Haryana High Court has taken similar decision in case of Jay Jay Agro Industries v. ITO [CWP No. 7405 of 2025, dated 19-3-2025]
14. Rajasthan High Court has also taken similar decision in case of Shreyansh Mehta v. ITO [Civil Writ Petition No. 3299 of 2023, dated 12-2-2025].
15. Karnataka High Court has also taken similar decision in case of Siddaiah Gurappaji v. Asstt. CIT [Writ Petition No. 20292 of 2023, dated 17-4-2025].
16. This Court also in case of Mayurkumar Babubhai Patel v. Asstt. CIT [2025] 176 taxmann.com 25 (Gujarat)/Special Civil Application No.3154 of 2022 and allied matters) has held as under:
“15. Considering the facts of the case, it is not in dispute that the respondent-Assessing Officer has issued the notice under section 148A(b) of the Act after the period of six years were over on 31.03.2022. As observed by the Hon’ble Apex Court in case of Deepak Steel and Power Ltd(supra) and in view of the concession made by the Revenue before the Apex Court for the Assessment Year 2015-16, all the notices issued on or after 01.04.2021 will have to be dropped as they would not fall for completion during the period prescribed under the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 and therefore, nothing further is required to be adjudicated in the matters as the notice so far as the present petitions are concerned, though dated 31.03.2021, admittedly have been issued after 01.04.2021.
16. It is also not in dispute that the notices under section 148A(b) have been issued pursuant to the decision of the Hon’ble Apex Court in Ashish Agarwal (supra) dated 04.05.2022 admittedly after 31.03.2022. Therefore, on both counts, the notices issued under section 148 of the Act dated 27/28/29.07.2022 would be time barred.”
17. In view of above, for the foregoing reasons, the petition is allowed. The impugned notice issued under section 148 of the Act for Assessment Year 2015-2016 is held to be invalid as same was issued during the extended period from 01.04.2021 to 30.06.2021 under TOLA.
18. Petition is accordingly disposed off.”
7. The Ld. Departmental Representative (in short “Ld. DR”) relied upon the assessment order and the order of the Ld. CIT(A).
8. We have heard both the parties and perused all the relevant materials available on record. There is a delay of 212 days in filing present appeal for which the assessee has filed condonation of delay application alongwith affidavit explaining the reason for delay. The delay appears genuine, hence condoned. We find that the issue is no longer res integra. The Hon’ble Supreme Court in Rajeev Bansal (supra) has recorded the Revenue’s concession in para 19(f) that all notices issued on or after 01.04.2021 for AY 2015-16 are liable to be dropped. Further, the Hon’ble Gujarat High Court in Mayurkumar Babubhai Patel (supra) and Sorathia Mahesh Veljibhai HUF (supra), following Rajeev Bansal and Deepak Steel & Power Ltd., has held that notices issued after 01.04.2021 for AY 2015-16 are barred by limitation. Admittedly, in the present case, the original notice u/s 148 was issued on 30.06.2021 and the consequential notice after the decision in Ashish Agarwal was issued on 23.07.2022. Therefore, respectfully following the aforesaid binding precedents, we hold that the impugned re-assessment proceedings are barred by limitation and without jurisdiction. Hence, the impugned re-assessment order passed by the AO in present case is hereby held to be bad in law and quashed. Ground No. 1 raised by assessee is thus allowed.
9. As we have quashed the order of re-assessment itself, there is no necessity of adjudicating the rest of the grounds dealing with the merit of the addition made by AO; the same is kept open undecided.
10. In result, the appeal of the assessee is allowed.
Order pronounced in the open court on 30.09.2026
