February 07, 2026 : In a significant ruling under the post–Finance Act, 2021 reassessment framework, the Mumbai Bench of the Income Tax Appellate Tribunal has quashed reassessment proceedings for Assessment Year 2018–19 on the ground that the Assessing Officer failed to furnish the material relied upon while issuing notice under Section 148A(b) of the Income Tax Act, 1961.

The decision was rendered by the “SMC” Bench comprising Judicial Member Beena Pillai in Gedalia Multitrading Pvt. Ltd. v. NFAC, I.T.A. No. 6056/Mum/2025, pronounced on 06.02.2026.

Background of the Case

The appeal was filed by Gedalia Multitrading Pvt. Ltd. against an order dated 19.09.2025 passed by the National Faceless Appeal Centre (NFAC), Delhi, which had confirmed additions made under Section 68 read with Section 115BBE of the Act.

Before the Tribunal, the assessee raised a jurisdictional challenge to the reopening under the new reassessment regime introduced by the Finance Act, 2021. It was contended that although a notice under Section 148A(b) was issued on 11.03.2022, only the “reasons recorded” were annexed. The enquiry report and underlying material forming the basis of reopening were not furnished. A screenshot of the ITBA portal was placed on record to show that no additional annexures were attached.

Assessee’s Arguments

The assessee argued that the procedure prescribed under Section 148A(b), as well as the principles of natural justice, were violated since the material relied upon by the Assessing Officer was not supplied. In the absence of such material, an effective reply to the show cause notice could not be filed.

Reliance was placed on the judgments of the Bombay High Court in Anurag Gupta v. ITO and the Jharkhand High Court in Chotanagpur Diocesan Trust Association v. Union of India.

Tribunal’s Findings

After examining the record, the Tribunal noted that it was an admitted position that no material was supplied to the assessee, despite such material being available with the Assessing Officer. Only the gist of information was shared through the reasons recorded.

The Tribunal emphasized that under the new reassessment regime, the material forming the basis of reopening must be furnished to the assessee. Failure to do so deprives the assessee of the opportunity to file an effective response.

The Bench relied on the Supreme Court’s directions in Union of India v. Ashish Agarwal (2022) 444 ITR 1 (SC), which underscored the procedural safeguards embedded in Section 148A.

Reassessment Held Invalid

Holding that the mandatory procedure was not followed, the Tribunal concluded that the notice issued under Section 148 and the order passed under Section 148A(d) were bad in law. The entire assessment proceedings were accordingly quashed.

However, the Tribunal clarified that it would be open to the Revenue to proceed afresh from the stage of issuing a notice under Section 148A(b), after supplying the relevant material, subject to limitation.

Since the reassessment was quashed on jurisdictional grounds, the issues raised on merits were treated as academic. The appeal of the assessee was allowed.

Cause Title: Gedalia Multitrading Pvt. Ltd. v. NFAC
Case No.: I.T.A. No. 6056/Mum/2025
Coram: Judicial Member Beena Pillai
Assessment Year: 2018–19