Bombay High Court

JAYPRAKASH BARBHAYAversusTHE INCOME TAX OFFICER -29 (1)(5)

Decided: 28 September 2026
Disposal: DISPOSED OFF

Holding

A reassessment under Section 147 is void unless the Assessing Officer first disposes of the assessee’s objections to the reopening by a separate speaking order; therefore the Tribunal’s order upholding the reassessment is quashed.

Summary

The appellant, a sole proprietor dealing in aluminium extrusion, challenged a reassessment order issued under Section 147 of the Income Tax Act for AY 2010-11. He argued that the Assessing Officer had not passed a separate speaking order disposing his objections to the reopening notice, contrary to the Supreme Court's directive in GKN Driveshafts. The Tribunal had upheld the reassessment without addressing this procedural defect. The High Court held that the Assessing Officer must first dispose of objections by a distinct order; failure renders the reassessment jurisdictionally defective. Accordingly, the Tribunal’s order was quashed and the appellant's appeal was allowed, while related appeals were dismissed as infructuous. The Court affirmed that no further consideration of the second substantial question of law was necessary.

Issues considered

Whether the Tribunal erred in upholding a reassessment order under Section 147 without a separate speaking order disposing the assessee’s objections to the reopening notice.
Whether the absence of such a speaking order vitiates the jurisdiction of the Assessing Officer to pass a reassessment.

Legislation cited

Income Tax Act, 1961 — s. 143(3), 147, 148, 153(2), 254(2), 260A

Subjects

Income Tax
Reassessment
Section 147
Objection to reopening
Speaking order
Jurisdiction
Assessment order
Bogus purchases
High Court
Tribunal

Judgment

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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION

INCOME TAX APPEAL NO. 95 OF 2020
WITH
INCOME TAX APPEAL NO. 92 OF 2020
WITH
INCOME TAX APPEAL NO. 100 OF 2020
WITH
INCOME TAX APPEAL NO. 103 OF 2020

Jayprakash Barbhaya .. Appellant
V/s.
The Income Tax Officer-29(1)(5) .. Respondent

______________________________________
Mr. Devendra H. Jain a/w Ms. Saukhya Lakade a/w Mr. Shashank A. Mehta for
Appellant.
Ms. Sushma Nagaraj a/w Mr. Abhinav Palsikar for Respondent.
_______________________________________
CORAM : B. P. COLABAWALLA AND
FARHAN P. DUBASH, JJ.

DATE : 28th SEPTEMBER 2026

P.C.:

1. Income Tax Appeal No. 95 of 2020 challenges the order dated 27th November

2018 passed by the Income Tax Appellate Tribunal (“the Tribunal”) in Appeal

No. 4486/Mum/2016, which primarily deals with the ground raised by the

Appellant challenging the jurisdiction to pursue the re-assessment proceedings

under Section 147 of the Income Tax Act, 1961 (“the Act”) for Assessment

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Year (“A.Y”) 2010-11.

2. Income Tax Appeal No. 92 of 2020 challenges the order dated 24th November

2017 passed by the Tribunal in Appeal No. 4486/Mum/2016, which primarily

deals with the ground on merits concerning the additions made in respect of

alleged bogus purchases made by the Appellant, for A.Y. 2010-11.

3. Income Tax Appeal No. 103 of 2020 challenges the order dated 27th November

2018 passed by the Tribunal in Appeal No. 4485/Mum/2016, which primarily

deals with the ground raised by the Appellant challenging the jurisdiction to

pursue the re-assessment proceedings under Section 147 of the Act for A.Y.

2009-10.

4. Income Tax Appeal No. 100 of 2020 challenges the order dated 24th November

2017 passed by the Tribunal in Appeal No. 4485/Mum/2016, which primarily

deals with the ground on merits concerning the additions made in respect of

alleged bogus purchases made by the Appellant, for A.Y. 2009-10.

Income Tax Appeal No. 95 of 2020:

5. Considering the matter on hand and with the consent of the parties, we first

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take up the Income Tax Appeal No. 95 of 2020 (for A.Y. 2010-11). Further,

considering the subject matter of the Appeal, we are of the view that the same

can be disposed of at this stage itself. Consequently, this Appeal is admitted,

and with the consent of parties, is taken up for final disposal.

6. This Appeal has been preferred by the Assessee under Section 260A of the Act,

proposing the following questions as substantial question of law:-

“A. Whether on the facts and in the circumstances of the case and in law
the Tribunal erred in upholding the assessment order passed u/s 147
without disposing of the appellant’s objections to reopening of assessment
thereby violating the law laid down by Hon’ble Supreme Court in GKN
Driveshafts (India) Ltd. v/s D.C.I.T. (2003) 259 ITR 19 (SC) &
Jurisdictional High Court in KSS Petron Private Ltd vs. ACIT [ITA No.
224 of 2014] (Bom HC).

B. Whether on the facts and in the circumstances of the case and in law,
the Tribunal erred in observing that vide order of the Tribunal dated
23.07.2017 in Miscellaneous Application No. 163/M/2018, the order
dated 24.11.2017 was recalled only to the limited extent of declining
validity of reopening u/s 147?”

7. The brief facts, as submitted by Mr. Jain, the learned Counsel appearing on

behalf of the Appellant, are as under:

7.1 The Appellant is an individual and carrying on business of reselling of

aluminum extrusion. The assessment was reopened by issuance of a

notice under Section 148 dated 23rd March 2013, on the basis of

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information allegedly received from the Sales Tax Department, Mumbai.

7.2 Against the reasons recorded for reopening, the Appellant, vide letter

dated 11th February 2014, raised objections challenging the validity of the

reopening of assessment.

7.3 Without first disposing of the objections raised by the Appellant [by a

speaking order], on 21st March 2014, the Respondent passed the

Reassessment Order under Section 143(3) read with Section 147 of the

Act, making an aggregate addition of Rs. 2,46,46,744/- (being 100% of

alleged bogus purchases). In paragraphs 15 and 16 of the said

Reassessment Order, the Respondent disposed of the jurisdictional

objections which were raised by the Appellant in its letter dated 11 th

February 2014.

7.4 Aggrieved by the Reassessment Order, the Appellant preferred an Appeal

before the Commissioner of Income-tax (Appeals)-33 on 28 th April 2014.

During the appellate proceedings before the Commissioner of Income

Tax (Appeals) [“CIT(A)”], the Appellant made detailed submissions on

both the jurisdictional and substantive issues and furnished various

documentary evidences, as submitted before the Respondent, in support

of his contentions. The CIT(A), vide order dated 1st March 2016, partly

allowed the appeal and restricted the addition to 20% of the alleged

purchases. However, the CIT(A) dismissed the grounds challenging the

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jurisdiction of reopening.

7.5 Aggrieved by the said order of the CIT(A), the Appellant preferred an

appeal before the Tribunal on 29th June 2016, challenging, inter alia, the

validity of the re-opening as well as the addition sustained by the

CIT(A). The Revenue also preferred an appeal before the Tribunal on 25 th

May 2016 against the relief granted by the CIT(A) in its order.

7.6 The Tribunal, while dealing with the merits of the addition, recorded

findings of fact, inter alia, that the reassessment had been completed on

suspicion, that payments to the suppliers had been made through

account-payee cheques and that there was no evidence to establish that

the Appellant had received back cash from the suppliers. The Tribunal,

therefore, dismissed the appeal filed by the Income Tax Department, and

vide order dated 24th November 2017 in ITA No. 4486/Mum/2016 (the

first order of the Tribunal), and directed the Respondent to restrict the

impugned additions to 12.50% of the alleged bogus purchases.

7.7 Since the jurisdictional ground challenging the validity of the reopening

had not been adjudicated by the Tribunal in its order, the Appellant, on 7 th

March 2018, filed a Miscellaneous Application (“First MA”) under

Section 254(2) of the Act [bearing MA No. 163/Mum/2018] before the

Tribunal seeking recall of the said order.

7.8 The Tribunal, vide order dated 23rd July 2018, allowed the First MA and

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recalled its order dated 24th November 2017.

7.9 The Tribunal thereafter adjudicated the jurisdictional ground challenging

the validity of the reopening and decided the same against the Appellant

vide its order dated 27th November 2018 (the second order of the

Tribunal) [(bearing ITA No. 4486/Mum/2016 for A.Y. 2010-11)]. Thus,

the jurisdictional challenge to the reassessment proceedings came to be

rejected by the Tribunal in the second order of the Tribunal. However, in

the said second order, in paragraph 14, it was recorded by the Tribunal

that the Respondent had initiated the reopening after disposing the

objections raised by the Appellant against the reopening of assessment.

The Tribunal also found that the Assessing Officer had adopted a proper

procedure for reopening of the assessment after recording valid reasons

and disposing the objections of the Appellant. The Appellant had

specifically contended that the Respondent had not passed a separate

order disposing objections raised against the reassessment.

7.10 Being aggrieved by the aforesaid incorrect assertion made in the second

order of the Tribunal, the Appellant filed a further Miscellaneous

Application No. 339/M/2019 (“Second MA”) before the Tribunal on 4th

June 2019, stating that the matter be recalled so as to adjudicate the

contention of the Appellant regarding violation of the directions laid

down by the Hon’ble Supreme Court in the case of GKN Driveshafts

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(India) Ltd. v. ITO [(2003) 259 ITR 19 (SC)]. The Appellant relied upon

the decision of this Court in the case of KSS Petron Private Limited vs.

ACIT [ITXA No. 224 of 2014, decided on 3 rd October 2016] and Bayer

Material Science Pvt Ltd vs. ACIT [2016] 382 ITR 333 (Bom HC) to

contend that not passing a separate speaking order against the objections

raised for reopening is in violation of the directions laid down in the case

of GKN Driveshafts (India) Ltd. v. ITO (supra).

7.11 On 28th June 2019, the Appellant, out of abundant caution, filed an appeal

against the order of the Tribunal before this Court, bearing ITXA No. 92

of 2020, challenging the addition of 12.5% of impugned bogus purchases

which was sustained by the Tribunal in its order dated 24 th November

2017 (the first order of the Tribunal).

7.12 Further, along with the above appeal, the Appellant filed an appeal before

this Court, bearing ITXA No. 95 of 2020, against the second order of the

Tribunal dated 27th November 2018 challenging the dismissal of the

legal/jurisdictional grounds [viz. reassessment made without passing

separate order disposing the objection raised against the reopening]

raised by the Appellant.

7.13 The Second MA (against the second order of the Tribunal dated 27 th

November 2018) was heard by the Tribunal and dismissed vide order

dated 7th November 2019. The Tribunal held that the Appellant was, in

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substance, seeking a review of the earlier order and that such review was

not permissible in law. The Tribunal further observed that the issue

relating to the validity of reopening and the procedure prescribed by the

Hon’ble Supreme Court in GKN Driveshafts (India) Ltd. (supra) had

already been considered while passing the earlier order.

7.14 Aggrieved by the dismissal of the aforesaid Miscellaneous Application,

the Appellant preferred Writ Petition No. 1162 of 2020 before this Court.

This Court, vide order dated 11th January 2022, dismissed the Writ

Petition noting that the Appellant had already filed an Appeal (viz. the

present Appeal) before this Court against the principal order of the

Tribunal, which was pending at that point of time. The Court observed

that, if the Appellant was aggrieved by the principal order passed by the

Tribunal, he could raise his grievance in the above appeal. The Writ

Petition was accordingly dismissed.

8. In this factual backdrop, the controversy in the present Appeal can be

considered with reference to the first substantial question of law mentioned

hereinabove, which is again reproduced hereunder:

“A. Whether on the facts and in the circumstances of the case and in law
the Tribunal erred in upholding the assessment order passed u/s 147
without disposing of the appellant’s objections to reopening of
assessment thereby violating the law laid down by Hon’ble Supreme
Court in GKN Driveshafts (India) Ltd. v/s D.C.I.T. (2003) 259 ITR 19

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(SC) & Jurisdictional High Court in KSS Petron Private Ltd vs. ACIT
[ITA No. 224 of 2014] (Bom HC)”

9. Mr. Jain submits that the Tribunal has committed a gross error on facts and in

law in upholding the reassessment order passed under Section 147 of the Act,

without appreciating that the objections raised by the Appellant to the

reopening of the assessment were not disposed of by the Assessing Officer by

a separate and speaking order. He submits that the objections were dealt with

only in the body of the Assessment Order and no separate order disposing of

the objections was passed prior to completion of the reassessment proceedings.

Accordingly, the same is contrary to the mandatory procedure laid down by

the Hon’ble Supreme Court in GKN Driveshafts (India) Ltd. (supra), was the

submission.

10. Mr. Jain further submits that this issue is no longer res integra and has been the

subject matter of several decisions of various High Courts, including this

Court, which have consistently held that the Assessing Officer is bound to

dispose of the objections raised by the Assessee to the reopening of assessment

by passing a separate speaking order before proceeding with the assessment.

The disposal of such objections in the body of the Assessment Order is not

sufficient compliance with the mandatory procedure prescribed by the Hon'ble

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Supreme Court in GKN Driveshafts (India) Ltd. (supra).

In support of the above contention, Mr. Jain has placed reliance on the

following decisions:

i. Bayer Material Science (P) Ltd. (supra).

ii. KSS Petron Private Ltd. v. ACIT (supra).

iii. Fomento Resorts & Hotels Ltd. v. ACIT [(Tax Appeal No. 63/2007,

order dated 30.08.2019) (Bom HC) (Goa Bench)].

11. Mr. Jain contends that, in fact, this Court in the case of Asian Paints Ltd. v.

Deputy Commissioner of Income Tax [(2008) 296 ITR 90 (Bom)] has

categorically held that after disposing of the objection of the Assessee (raised

against the reasons recorded), the Assessing Officer should not proceed with

the reassessment for at least four weeks so as to grant time to the Assessee to

decide whether to approach the High Court under its writ jurisdiction to

challenge such order disposing of the objections.

12. Ms. Nagaraj, the learned Counsel for the Respondent-Revenue, in all fairness,

accepts that the directions laid down by the Hon’ble Supreme Court in the case

of GKN Driveshafts (India) Ltd. (supra) were contravened as no separate order

disposing of the objections was passed. She, however, submits that the proper

course of action is to remand the matter to the Assessing Officer for fresh

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disposal of the objections and not to quash the reassessment proceedings. In

support of this submission, the learned Counsel relied upon the following

decisions:

i. Modern Realty (P.) Ltd. v. DCIT [(2025) 174 taxmann.com 64 (Bom)]

ii. MGM Exports v. DCIT [(2010) 323 ITR 331 (Gujarat HC)]

13. In rebuttal of the above submission, Mr. Jain submits that this Court in the case

of KSS Petron Limited (supra) has specifically dealt with the contention as

raised by the learned Counsel for the Revenue in the present case and held that

when there is a jurisdictional defect in following the procedure of

reassessment, the entire reassessment stands vitiated and there is no need for

restoring the matter back to the Assessing Officer. He also relied on the

decision of Delhi High Court in Ferrous Infrastructure (P.) Ltd. v. DCIT

[(2015) 63 taxmann.com 201 (Delhi)].

14. We have heard the learned Counsel for both the parties and have perused the

material on record. The Revenue has not disputed the fact about the

jurisdictional objection having been raised by the Appellant vide letter dated

11th February 2014. It is also not disputed that the Respondent did not pass any

separate order disposing of the said objections, but proceeded to address the

same directly in paragraphs 15 and 16 of the impugned reassessment order.

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15. Thus, the moot question that arises for our consideration is whether the

disposal of the objections raised by the Appellant [against the reopening of

assessment] in the Assessment Order dated 21 st March 2014 constitutes

sufficient compliance with the procedure prescribed by the Hon’ble Supreme

Court in GKN Driveshafts (India) Ltd. (supra), or whether the Assessing

Officer was required to first dispose of the Appellant’s objections by a separate

and speaking order and communicate the same to the Appellant before

proceeding with the reassessment proceedings.

16. In GKN Driveshafts (India) Ltd. (supra), the Hon’ble Supreme Court held that

when a notice under Section 148 of the Act is issued, the proper course of

action for the noticee is to file the Return of Income, and if he so desires, seek

the reasons recorded for issuing the notice. The Assessing Officer is then

bound to furnish the reasons within a reasonable time. Upon receipt of the

reasons, the noticee is entitled to file objections to the issuance of the notice,

and the Assessing Officer is bound to dispose of such objections by passing a

speaking order before proceeding with the assessment.

17. The Tribunal, in paragraph 8 of its order dated 27 th November 2018,

specifically recorded the contention advanced on behalf of the Appellant

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regarding the manner in which the objections to the reopening had been dealt

with. The relevant portion reads as under:

“8. As per learned AR in the case of re-opening of the assessment, the AO
should have decided the objection raised by the assessee. In the
assessment order in para 11 for the AY 2009-10, the AO incorporated the
submissions wherein it has been mentioned that Section 147 postulates
that the AO has to have reason to believe that there is an escapement of
income and he has to record reasons u/s 148(2) before issuing notice u/s
148…”

...

“14. In view of the above, we found that there was sufficient reason to
believe before the AO for initiating reassessment proceedings. We also
found that AO has adopted proper procedure for reopening of assessment
after recording valid reasons and asking the objection of assessee if any.
After disposal of the objection, the AO has initiated reassessment
proceedings. Accordingly, we do not find anything wrong in initiating
reassessment proceedings for the years under consideration.”
(emphasis supplied)

18. We find that while recording the specific contention of the Appellant in

paragraph 8 of its order, the Tribunal has not examined the aforesaid factual

and legal issue in its proper perspective. The finding recorded in paragraph 14

that the Assessing Officer had followed the proper procedure and that “after

disposal of the objection” the reassessment proceedings were initiated, does

not disclose the basis on which the Tribunal arrived at such conclusion. In

particular, the Tribunal has not identified any separate order passed by the

Assessing Officer disposing of the objections raised by the Appellant, nor has

it adverted to the fact that the objections were dealt with only in the body of

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the Assessment Order dated 21st March 2014. Even before us, the Revenue has

not brought on record any such separate speaking order disposing of the

objections raised by the Appellant.

19. The legal position in this regard is no longer res integra. In Bayer Material

Science (P.) Ltd. (supra), this Court after considering the decision of the

Hon’ble Supreme Court in GKN Driveshafts (India) Ltd. (supra), held that the

Assessing Officer is required to dispose of the Assessee’s objections to the

reasons recorded for reopening by a speaking order and that only thereafter

can the Assessing Officer proceed with the reassessment proceedings. This

Court treated the passing of an Assessment Order without first disposing of the

objections as being in defiance of the procedure laid down by the Hon’ble

Supreme Court in GKN Driveshafts (India) Ltd. (supra).

The relevant extract of the said decision is as under:

“11. In the present facts, we find that the draft Assessment order was
passed on 30th March, 2015 without having disposed of the Petitioner's
objections to the reasons recorded in support of the impugned notice.
The reasons were supplied to the Petitioner only on 19th March, 2015
and the Petitioner had filed the objections to the same on 25th March,
2015. This passing of the draft Assessment order without having
disposed of the objections is in defiance of the Supreme Court's decision
in GKN Driveshafts (India) Ltd. (supra). Thus, the draft Assessment
order dated 30th March, 2015 is not sustainable being without
jurisdiction. This for the reason that it has been passed without disposing
of the objections filed by the Petitioner to the reasons recorded in
support of their impugned notice. Accordingly, we set aside the draft
Assessment order dated 30th March, 2015. We are not dealing the
validity of the reasons in support of the impugned notice in the present

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facts as the time limit to pass the Assessment order as provided under 4th
Proviso to sub-Section(2) of Section 153 of the Act has already expired
when the petition was filed.”

20. This principle was reiterated by this Court in KSS Petron Private Ltd. (supra)

In that case, the Tribunal had held that the Assessing Officer was not justified

in finalizing the assessment without first disposing of the Assessee’s objections

to the reopening. The relevant extract of the said decision is as under:

“7. On further Appeal, the Tribunal passed the impugned order. By the
impugned order it held that the Assessing Officer was not justified in
finalizing the Assessment, without having first disposed of the
objections of the appellant. This impugned order holds the Assessing
Officer is obliged to do in terms of the Apex Court's decision in GKN
Driveshafts (India) Ltd., v/s. ITO 259 ITR 19. In the aforesaid
circumstances, the order of the CIT(A) and the Assessing Officer were
quashed and set aside. However, after having set aside the orders, it
restored the Assessment to the Assessing Officer to pass fresh order
after disposing of the objections to re-opening notice dated 28th March,
2008, in accordance with law.

8. We note that once the impugned order finds the Assessment Order is
without jurisdiction as the law laid down by the Apex Court in GKN
Driveshafts (supra) has not been followed, then there is no reason to
restore the issue to the Assessing Officer to pass a further/fresh order. If
this is permitted, it would give a licence to the Assessing Officer to pass
orders on re-opening notice, without jurisdiction (without compliance of
the law in accordance with the procedure), yet the only consequence,
would be that in appeal, it would be restored to the Assessing Officer
for fresh adjudication after following the due procedure. This would
lead to unnecessary harassment of the Assessee by reviving stale/ old
matters.”

21. Further, the Goa Bench of this Court in the case of Fomento Resports & Hotels

Ltd. (supra) under identical circumstances after relying on the decision of this

Court as cited above held as under:

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“ 24. According to us, the rulings in Bayer Material Science (P) Ltd.
(supra) and KSS Petron Private Ltd. (supra) afford a complete answer to
the contentions raised by Ms. Linhares in defence of the impugned order.

25. Since, in the present case, the Assessing Officer has purported to
assume the jurisdiction for reopening of the assessment, without having
first disposed of the Assessee’s objections to the reasons by passing a
speaking order, following the law laid down in GKN Driveshafts (India)
Ltd. (supra), Bayer Material Science (P) Ltd. (supra) and KSS Petron
Private Ltd. (supra), we are constrained to hold that such assumption of
jurisdiction by the Assessing Officer was ultra vires Section 11 of the said
Act. The first substantial question of law will, accordingly, have to be
answered in favour of the Appellant and against the Respondent-
Revenue”.

22. Mr. Jain has also brought to our notice that the Special Leave Petition filed by

the Revenue against the above order of this Court (Goa Bench) in Fomento

Resorts & Hotels Ltd. (supra) was dismissed by the Hon’ble Supreme Court

vide order dated 16th November 2022 in SLP(C) No. 1725/2020, by observing

that there were no merits. This further reinforces the legal position that the

Assessing Officer is bound to dispose of the objections raised by the Assessee

to the reopening of assessment by passing a separate speaking order before

proceeding with the assessment.

23. Applying the aforesaid legal position to the facts of the present case, we are

unable to accept the contention that the disposal of the objections by the

Assessing Officer in paragraphs 15 and 16 of the Assessment Order dated 21 st

March 2014 constitutes sufficient compliance with the mandatory procedure

prescribed by the Hon’ble Supreme Court in GKN Driveshafts (India) Ltd.

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(supra). The Assessing Officer was required to dispose of the objections raised

by the Appellant by a separate and speaking order before proceeding with the

reassessment proceedings. Failure to follow the prescribed procedure has,

therefore, vitiated the reassessment proceedings and rendered the assumption

of jurisdiction by the Assessing Officer unsustainable in law.

24. Ms. Nagaraj, however, relied upon the decision of this Court in Modern Realty

(P.) Ltd. (supra) and the decision of Gujarat High Court in MGM Exports

(supra) to contend that at the highest, the matter ought to be remanded to the

Assessing Officer for fresh disposal of the objections. We are unable to accept

the said contention in the facts of the present case because in Modern Realty

(P.) Ltd. (supra), this Court was dealing with a situation where the Assessing

Officer had passed an order disposing of the objections, but had failed to

actually deal with any of the objections raised by the Assessee and proceeded

with the assessment. Assessee challenged the said action by filing a Writ

Petition before this Court. This Court directed the Assessing Officer to

consider and dispose of the objections. The factual position in the present case

is materially different. Here, the Assessing Officer did not pass any separate

order disposing of the objections before proceeding with the reassessment, the

objections were dealt with only in the Assessment Order itself. The Revenue’s

reliance on Modern Realty P. Ltd. (supra), therefore, does not assist the

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Revenue in the facts of the present case.

25. Further, in MGM Exports (supra), the Gujarat High Court held that framing of

a reassessment order without disposing the objections raised by the Assessee

was a jurisdictional defect and directed the Assessing Officer to first pass the

order disposing objections. We are of the opinion that this Court itself in KSS

Petron Ltd (supra) has specifically held that once reassessment is without

jurisdiction and contrary to the directions laid down by Hon’ble Supreme

Court in the case of GKN Driveshaft (supra), there was no reason to restore

the issue to the Assessing Officer as it would lead to unnecessary harassment

of the Assessee by reviving stale/old matters. This is categorically stated by

this Court in paragraph 8 of the said decision, which is reproduced earlier. We

are not only inclined, but also bound, to follow the above referred decision of

this Court.

26. In view of the aforesaid discussion, we hold that the first substantial question

of law is required to be answered in favour of the Appellant and against the

Respondent-Revenue. The impugned order dated 27th November 2018 passed

by the Income Tax Appellate Tribunal, Mumbai Bench “F”, in ITA No.

4486/Mum/2016 for the A.Y. 2010-11, insofar as it relates to the first

substantial question of law, is unsustainable in law and is liable to be quashed

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and set aside.

27. In view of our answer to the first substantial question of law, there is no

necessity to advert to the second substantial question of law, at least insofar as

the present Appeal is concerned.

28. The Appeal is, accordingly, allowed. The Assessment Order dated 21 st March

2014 passed by the Assessing Officer under Section 143(3) read with Section

147 of the Act, the order dated 1st March 2016 passed by the Commissioner of

Income-tax (Appeals)-40 and the order dated 27 th November 2018 passed by

the Income Tax Appellate Tribunal, Mumbai Bench “F”, Mumbai in ITA No.

4486/Mum/2016 for the A.Y. 2010-11 are set aside on the ground of non-

compliance with the jurisdictional parameters prescribed for reassessment

proceedings, without adjudicating upon the second substantial question of law.

Income Tax Appeal No. 92 of 2020:

29. In view of the Assessment Order dated 21st March 2014 for A.Y. 2010-11

having being quashed, the above Appeal which challenges the impugned order

dated 24th November 2017 passed by the Tribunal sustaining additions of

12.5% of alleged bogus purchases, now stands infructuous. Accordingly, this

Appeal is dismissed as infructuous.

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Order dated 28th September 2026
2. ITXA-95-2020.doc
Jayprakash vs The Income Tax Officer

Income Tax Appeal No. 103 of 2020:

30. This Appeal pertains to A.Y. 2009-10 against the order of the Tribunal dated

27th November 2018 in Appeal No. 4485/Mum/2016, wherein the question of

law raised is identical to what has been decided by us in the ITXA No. 95 of

2020. As the circumstantial facts and the legal consideration involved are

similar, we allow the above Appeal in terms of our discussion in ITXA No. 95

of 2020.

Income Tax Appeal No. 100 of 2020

31. In view of the Assessment Order dated 21st March 2014 for A.Y. 2009-10

having being quashed in ITXA No. 103 of 2020, the above appeal which

challenges the impugned order dated 24th November 2017 passed by the

Tribunal sustaining additions of 12.5% of alleged bogus purchases, now stands

infructuous. Accordingly, this Appeal is dismissed as infructuous.

32. We clarify that for A.Y. 2010-11 as well as A.Y. 2009-10, the Respondent-

Revenue shall be at liberty to take such further action as may be permissible in

law.

Page 20 of 21
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Order dated 28th September 2026
2. ITXA-95-2020.doc
Jayprakash vs The Income Tax Officer

33. This order will be digitally signed by the Private Secretary / Personal Assistant

of this Court. All concerned will act on production by fax or email of a

digitally signed copy of this order.

( FARHAN P. DUBASH, J. ) ( B. P. COLABAWALLA, J.)

Jyoti Pawar

Digitally signed
JYOTI by JYOTI
PRAKASH
PRAKASH PAWAR
PAWAR Date: 2026.10.05
13:08:33 +0530

Page 21 of 21
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Order dated 28th September 2026

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