ITAT Pune Quashes Time-Barred Reassessment for AY 2015-16: Section 148 Notice Dated April 2022 Held Void Ab Initio

Case Overview

Case Name: Rahul Purswani Vs ITO (ITAT Pune)
Assessment Year: 2015–16
Order Reference: Appeal against Order under Section 250 of the Income Tax Act 1961 dated 23/07/2025, arising from Assessment Order dated 26/03/2024 passed under Section 147 read with Section 144B of the Income Tax Act 1961
Date of Pronouncement: 09 April, 2026

Background of the Dispute

In this matter, the Assessing Officer issued a notice under Section 148 of the Income Tax Act 1961 dated 12.04.2022 for Assessment Year 2015–16, along with an order under Section 148A(d) of the same date. The basis for initiating reassessment was information received on the Income Tax Portal indicating that the assessee had purchased an immovable property.

During the course of assessment proceedings, the assessee submitted a copy of the registered Deed of Apartment along with complete payment details. It was acknowledged by the Assessing Officer in the Assessment Order itself that the assessee had jointly purchased an immovable property with his mother, bearing registration number 7115/2014, registered on 21/07/2014, for a consideration of Rs. 66,41,850/-. Despite this, the Assessing Officer proceeded to make an addition of Rs. 12,75,000/- in AY 2015–16.

Aggrieved by the Assessment Order, the assessee carried the matter in appeal before the Commissioner of Income Tax (Appeals), and thereafter before the Income Tax Appellate Tribunal, Pune.

Two primary questions arose for determination before the ITAT Pune:

  1. Whether the notice under Section 148 dated 12.04.2022 for AY 2015–16 was legally valid or barred by limitation?
  2. Whether the addition of Rs. 12,75,000/- made during reassessment proceedings was sustainable on merits?

Issue I: Validity of Section 148 Notice — Time-Bar Challenge

Supreme Court's Binding Position

The Tribunal took note of the landmark ruling of the Hon'ble Supreme Court in the case of Deepak Steel & Power Ltd. Vs. CBDT [2025] 476 ITR 369 (SC) [02-04-2025], wherein the Apex Court unequivocally held as follows:

"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 v. Rajeev Bansal 2024 SCC OnLine SC 2693/[2024] 167 taxmann.com 70/301 Taxman 238/469 ITR 46 (SC), 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."