February 07, 2026 : The Mumbai Bench of the Income Tax Appellate Tribunal has set aside reassessment proceedings initiated against Gedalia Multitrading Pvt. Ltd. for Assessment Year 2018–19, holding that the notice issued under Section 148 was invalid as the underlying material was not furnished to the assessee. The order was passed by Smt. Beena Pillai, Judicial Member, in I.T.A. No. 6056/Mum/2025, pronounced on 6 February 2026.
The appeal arose from an order dated 19 September 2025 passed by the National Faceless Appeal Centre, Delhi, which had confirmed additions made under Section 68 read with Section 115BBE of the Income Tax Act, 1961.
Gedalia Multitrading Pvt. Ltd., based in Borivali (West), Mumbai, challenged both the reopening of assessment under the new reassessment regime and the additions made on merits.
The assessee contended that a notice under Section 148A(b) was issued on 11 March 2022. However, only the reasons recorded were annexed. The report of enquiry and the material forming the basis of the proposed reopening were not supplied. A screenshot of the ITBA portal was placed on record to show that no additional documents were attached with the notice.
On behalf of the assessee, it was argued that the failure to provide the underlying material violated the mandatory procedure prescribed under Section 148A(b), as introduced by the Finance Act, 2021. It was submitted that without access to the material relied upon, the assessee was deprived of the opportunity to file an effective reply, amounting to a breach of principles of natural justice.
Reliance was placed on the decision of the Bombay High Court in Anurag Gupta v. ITO and the Jharkhand High Court in Chotanagpur Diocesan Trust Association v. Union of India, where reassessment proceedings were interfered with for similar procedural lapses.
The Department, represented by the Senior Departmental Representative, argued that the reasons recorded had been supplied and were sufficient for the assessee to respond.
After examining the record, the Tribunal noted that it was an admitted position that no material forming the basis of reopening was supplied to the assessee, even though such material was available with the Assessing Officer.
The Tribunal observed that only a gist of the information was shared through the recorded reasons. Under the new reassessment framework, the material relied upon must be furnished to enable the assessee to file an effective response.
This position, the Tribunal held, stands fortified by the Supreme Court’s directions in Union of India v. Ashish Agarwal, which clarified the procedural safeguards under the substituted reassessment regime.
Holding that the order under Section 148A(d) was passed without granting a proper opportunity of hearing in accordance with law, the Tribunal concluded that the notice issued under Section 148 was bad in law. Consequently, the entire assessment proceedings were quashed.
However, the Tribunal clarified that the Revenue is at liberty to proceed afresh from the stage of issuing notice under Section 148A(b), after supplying the relevant material, subject to limitation Since the reassessment itself was set aside, the grounds on merits were rendered academic.
The appeal was accordingly allowed.
Appearance:
For the Appellant: Bhavik Chheda (Authorised Representative)
For the Respondent: Limbasiya Kavan Nareshkumar, Sr. DR
Cause Title: Gedalia Multitrading Pvt. Ltd. vs NFAC
Coram: Smt. Beena Pillai, Judicial Member
