Section 148 Reopening Annulled Due to Time-Bar and Escaped Income Threshold: ITAT Mumbai in Manojbhai Parsottambhai Poriya Vs ITO

Background of the Dispute

The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT Mumbai) in “Manojbhai Parsottambhai Poriya Vs ITO” examined the validity of a reassessment initiated for Assessment Year (AY) 2017-18. The appeal was directed against an order dated 07.01.2025 passed by the Commissioner of Income Tax (Appeals), Mumbai / National Faceless Appeal Centre, Delhi (CIT(A)) under Section 250 of the Income Tax Act 1961.

The assessee challenged multiple aspects of the reassessment, including:

  • Legality of reopening under Sections 147 and 148
  • Compliance with the amended limitation provisions in Section 149(1)(b)
  • Validity of notice under Section 148 (including absence of DIN as per CBDT Circular No. 19 of 2019 dated 14.08.2019)
  • Additions made under Section 69C and Section 56(2)(vii)(b)
  • Levy of penalties under Section 270A and Section 272A(1)(d)
  • Charging of interest under Section 234B

However, the Tribunal ultimately decided the appeal at the jurisdictional stage itself, on the fundamental issue of limitation and eligibility to issue notice under Section 148 in light of the amended reassessment framework and the monetary threshold of ₹50 lakh for escaped income.

Grounds Raised Before the Tribunal

The assessee placed on record several grounds, which, in essence, included:

  1. The CIT(A) wrongly dismissed the appeal without adjudicating the issues on merits.
  2. The reopening under Section 147 was bad in law and ought not to have been sustained.
  3. The reassessment was time-barred considering Section 149(1)(b) for AY 2017-18.
  4. The notice under Section 148 was invalid due to:
    • Being issued beyond the permissible time limit under the amended law, and
    • Not carrying a Document Identification Number (DIN), contrary to CBDT Circular No. 19 of 2019 dated 14.08.2019.
  5. Addition of ₹47,61,500/- under Section 69C was unjustified, as the assessee contended that the source of funds for the property purchase was fully explained.
  6. Addition of ₹1,93,250/- under Section 56(2)(vii)(b) was improper.
  7. The difference between purchase consideration and stamp duty valuation was within the permissible tolerance band and thus did not warrant addition under Section 56(2)(vii)(b).
  8. Penalties levied under Section 270A and Section 272A(1)(d) were wrongly upheld.
  9. Interest charged under Section 234B was also challenged.
  10. A general ground to add, modify, or delete grounds at the time of hearing.