| आयकर अपीलीय अिधकरण (cid:12)ायपीठ, मुंबई | IN THE INCOME TAX APPELLATE TRIBUNAL “F” BENCH, MUMBAI BEFORE SHRI NARENDRA KUMAR BILLAIYA, HON’BLE ACCOUNTANT MEMBER &

SHRI ANIKESH BANERJEE, HON’BLE JUDICIAL MEMBER I.T.A. No. 6144/Mum/2017 Assessment Year: 2009-10 Shri Urmish M. Udani Asst. Commissioner of Income RH-12, J-12, Prabhukrupa Vs Tax – 10(3), Mumbai Sector-6, Vashi Navi Mumbai - 400705 [PAN: AAGPU5477P]

अपीलाथ(cid:22)/ (Appellant) (cid:23)(cid:24) यथ(cid:22)/ (Respondent)

Assessee by : Shri Madhur Agrawal/Shri Fenil Bhatt, A/Rs Revenue by : Shri Vivek Perampurna, CIT D/R सुनवाई की तारीख/Date of Hearing : 7/10/2025 घोषणा की तारीख /Date of Pronouncement: 09/10/2025 आदेश/O R D E R PER NARENDRA KUMAR BILLAIYA, AM:

This appeal by the assesse is preferred against the order of the ld.

CIT(A) – 24, Mumbai [hereinafter “the ld. CIT(A)”] dated 09/06/2017, pertaining to AY 2009-10.

2. The grievance of the assessee can be summarized as under:-

“1. Rejection of additional evidence application.

2. Reassessment proceedings without jurisdiction.

3. Addition on basis of wrong balance sheet.

4. Denial of Telescoping.

5. Taxation of Directors remuneration.

6. Capital gain on sale of agricultural land treated as business income.

7. Addition based on loose papers.

8. Addition under section 68.

9. Addition on account of non-compete receipt.

10. Addition on account of capital account.

3. The assessee has challenged the legality of notice u/s 148 of the Act on the ground that it is bad in law.

4. Representatives were heard at length. Case records carefully perused.

5. Briefly stated the facts of the case are that the assessee is an individual and is managing director of U.S. Roofs Limited, who filed is return of income belatedly on 14/06/2010 declaring total income of Rs. 62,96,500/- which was subsequently revised on 16/06/2010 revising the total income at Rs. 80,96,500/-.

6. The belated return so filed was a valid return and as per the proviso to Section 143(2) of the Act, the time limit available to the AO for issuance of notice u/s 143(2) of the Act was till 30/09/2011 i.e., six months from the end of the financial year in which the return of income was filed.

6.1. Instead of selecting the return for scrutiny assessment, the AO issued a notice u/s 148 of the Act dated 24/11/2010 alleging that income chargeable to tax has escaped assessment. The validity of this notice dated 24/11/2010 issued u/s 148 of the Act is under challenge on the ground that the AO failed to appreciate that a valid return of income was filed and the time limit to issue a notice u/s 143(2) of the Act was available, therefore, the AO grossly erred in issuing notice u/s

148 of the Act.

7. In our considered opinion, when a valid return is available with the AO, the said return of income can be selected for scrutiny assessment under regular assessment and, therefore, the question of any escapement of income does not arise. In our humble opinion, unless the return of income is scrutinized by the AO or the time limit to scrutinize the return of income is over, he cannot come to a conclusion of any escapement of income.

8. On identical facts, the Hon’ble High Court of Madras in the case of Commissioner of Income Tax Vs K.M. Pachayappan (2008) 304 ITR 264, quashed the reassessment proceedings. In the facts before the Hon'ble High Court, the Assessee filed a return of income under section 139(4) of the Act on March 15, 2000 and the time limit for issuance of notice under section 143(2) of the Act was expiring on March 31, 2000. The assessing officer instead of issuing a notice under section 143(2) of the Act directly issued a notice under section 148 of the Act dated March 15, 2000. The Hon'ble Madras High Court held that when a return of income has been filed and the same is pending, the proceedings are still pending. In such a situation, revenue could not have issued a notice for reopening under section 147 of the Act. The Hon'ble Court relied upon the decision of the Hon'ble Supreme Court in the c