Mohamedali Shabanali Badami v. ITO

Case snapshot

Sections / provisions: 147; 148; 148A(b); 149

Questions before the Court / Tribunal

• Reassessment limitation; section 148 notice issued after six-year outer limit: The reported order concerns limitation under the post-2021 reassessment regime. It treats the date of the jurisdictional section 148 notice—not merely the earlier section 148A(b) show-cause—as critical, and reports the reassessment as time-barred for AY 2015-16.

Material facts and background

submissions on the issues relating to legal ground. We have also perused the judicial precedents relied upon, for which a legal compilation is placed on record. Assessee has also furnished a paper book containing 126 pages to corroboratively demonstrate the factual matrix relevant to the legal issues to be dealt herein. Merits of the case have not been argued upon by either party nor any submissions made to that effect. Accordingly, we draw facts from the records relating to the legal grounds argued before the Bench.

3 ITA No.913/MUM/2025 Mohamedali Shabanali Badami, AY 2015-16

Brief facts of the case are that assessee did not file his return of

income u/s. 139(1). Case of the assessee was reopened by recording reasons which are reproduced in para-1 of the impugned assessment order, relating to income on transaction of sale of immovable property which according to the ld. Assessing Officer had escaped from assessment. Notice u/s. 148 was issued on 19.04.2022.

4.1. Ld. Assessing Officer issued a show cause notice u/s.148A(b), dated 24.03.2022, show causing the assessee as to why in view of the details contained in Annexure-A, a notice u/s.148 should not be issued. Ld. Assessing Officer provided the information in Annexure-A to the said notice, which according to him suggested that income chargeable to tax had escaped assessment within the meaning of section 147 of the Act. Subsequently, ld. Assessing Officer passed an order u/s. 148A(d), dated 19.04.2022, wherein it was noted that information was flagged in accordance with Risk Management Strategy (RMS) which constituted information with the ld. Assessing Officer suggesting that income chargeable to tax had escaped assessment for the purpose of section 148 and section 148A. No reply was furnished by the assessee. In para 5 of the said order, ld. Assessing Officer noted that section 148A(d) requires the Assessing Officer to decide on the basis of the material available on record including reply of the assessee, as to whether or not, it is a fit case for issue of notice u/s.148 of the Act. Since assessee did not furnish any explanation or reply in response to the information supplied to...

4 ITA No.913/MUM/2025 Mohamedali Shabanali Badami, AY 2015-16

148 was issued dated 09.04.2022 requiring the assessee to furnish a return in prescribed form within 30 days of service of the said notice.

Appellant / assessee submissions

The judgment copy does not separately set out this component in a distinct section; refer to the full order and the reasoning section below.

Revenue / respondent submissions

The judgment copy does not separately set out this component in a distinct section; refer to the full order and the reasoning section below.

Court / Tribunal analysis and reasoning

Court of Bombay in the case of Hexaware Technologies Ltd. vs. ACIT in Writ Petition No.1778 of 2023, dated 03.05.2024, wherein Hon'ble Court while dealing with the provisos to section 149(1)(b) under the new regime for the Assessment Years covered by the erstwhile provisions of section 149(1) observed that the section has to be interpreted so as to give meaning to all the words and phrases used in the said section. It could not be interpreted in such a way so as to render any part or phrase in the said section otiose. According to the Hon'ble Court, terms “at that time” in the first proviso refers to the date on which notice u/s.148 is to be issued by the Assessing Officer. The term “at that time” has to refer to the term “at any time” used earlier in the said proviso. According to the Hon'ble Court the reference to “at any time” is to the date of the notice to be issued by the Assessment officer and therefore, the term “at that time” would also refer to the said date. Thus, on the said date, if a notice could not have been issued under the provision of section 149(1)(b) of the old regime for any Assessment Year beginning on or before 01.04.2021, the notice cannot be issued even...

7.2. Relevant paragraph is extracted below: “30. With respect to applicability of the fifth proviso and the sixth proviso to Section 149(1)(b) of the Act for extension of limitation for issuing the notice under Section 148 of the Act, fifth and sixth provisos are only applicable with respect to the period of limitation prescribed in Section 149(1) of the Act, i.e., three years or ten years, as the case may be. Fifth proviso or sixth proviso extend limitation for issuing notice under Section 149 of the Act, however, the first proviso is an exception to the period of limitation and provides for a restriction on the notices under Section 148 being issued for Assessment Years upto 2021-22 beyond a certain date. Therefore, the way the Section would operate, is first to decide whether a notice issued under Section 148 of the Act is within the period of limitation in terms of Section 149(1)(a) or (b) of the Act. To decide whether the notice is within the period of limitation under Section 149(1)(a) or (b) of the Act, the extension of time as per the fifth and/or sixth proviso would be considered. Once, the notice is otherwise within the period of limitation, thereafter one has to see...

which was issued pursuant to order passed u/s.148A(d) which is also of the even date, wherein it was held by the Assessing Officer that it is a fit case to issue notice u/s.148 of the Act. The moot case of the controversy arisen in this case is on account of show cause notice issued u/s.148A(b) which is dated 24.03.2022 and is prior to the date of 31.03.2022 when the limitation under the old regime expires. However, the notice u/s.148 is issued subsequent to this date, i.e., on 19.04.2022. Thus, the process of initiation of considering whether reopening is to be done or not was initiated within the limitation period available as per the old regime but it got concluded beyond the period of limitation. In this background from the perusal of provisions contained in section 149(1), we note that it states that no notice u/s.148 shall be issued for the relevant Assessment Year prescribing the conditions and time limit. It does not refer to show cause notice/s.148A(b). The first proviso to section 149(1)(b) also carves out an exception to the limitation in respect of notice u/s.148 and not under section 148A(b). Further, Hon'ble High Court of Bombay in the case

8.1. Admittedly, the undisputed fact in the present case is that impugned notice issued u/s.148 is dated 19.04.2022 which is after the limitation expired on 31.03.2022 within the meaning of first proviso to section 149(1)(b). In view of the above stated deliberations, on the factual matrix of the present case and the applicable law including the jurisprudence discussed above, we hold that notice for

Operative decision and relief

8.1. Admittedly, the undisputed fact in the present case is that impugned notice issued u/s.148 is dated 19.04.2022 which is after the limitation expired on 31.03.2022 within the meaning of first proviso to section 149(1)(b). In view of the above stated deliberations, on the factual matrix of the present case and the applicable law including the jurisprudence discussed above, we hold that notice for

Assessment Year 2015-16 issued on 19.04.2022 u/s.148 of the new regime is barred by limitation and hence bad in law, liable to be quashed, resulting in impugned re-assessment proceedings as well as the impugned assessment order bad in law. Accordingly, ground nos. 1 and 2 raised by the assessee are allowed.

Order is pronounced in the open court on 16 June, 2025 Sd/(Amit Shukla) Judicial Member

Copy to : 1. The Appellant 2. The Respondent 3. DR, ITAT, Mumbai 4. Guard File 5. CIT BY ORDER,

Authorities and precedents appearing in the judgment

• Supreme Court in the case of Union of India and others vs. Rajeev Bansal
• Court of Bombay in the case of Hexaware Technologies Ltd. vs. ACIT

This list is machine-assisted from the judgment text and is not a substitute for checking the full citation chain in the PDF.

Ratio and legal principle

The decision turns on Reassessment limitation; section 148 notice issued after six-year outer limit. The operative result is classified as Quashed Or Set Aside. Read the rule only with the statutory version, factual findings and precedent chain recorded in the full judgment.

Why this judgment matters

The case is relevant to taxpayers, advisers and litigators dealing with Reassessment limitation; section 148 notice issued after six-year outer limit. Its practical value lies in the interaction between the statutory text, the evidentiary record and the procedural route followed in this case.

Practitioner action points

• Reconstruct the reassessment timeline: original assessment, section 148A notice/reply, approval authority, notice date and the applicable section 149 limitation window.
• Preserve the complete response to section 148A(b), objections and proof of disposal; jurisdictional defects are often decided from the documentary chronology.
• For litigation, attach the full judgment/order to the working paper and cite the paragraph/page supporting the proposition rather than relying on a headnote alone.

Full judgment and source trail

Read / download the clean local judgment copy

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