ITAT allows appeal, quashes Section 148 notice and reassessment order in AY 2017-18 tax dispute

Income tax litigation update.

Fri 9 Oct 2026

Appeal Allowed

ITAT, Mumbai 'G' Bench has allowed the company's appeal (ITA No. 5803/MUM/2026) for Assessment Year 2017-18

Addition to Income Removed

₹13.40 crore (₹13,39,79,699) addition made to income will be removed

Order Quashed

Notice under Section 148 and consequential reassessment order dated May 30, 2023 quashed as invalid and void ab initio

An income tax dispute goes the company's way

The company has disclosed the outcome of an income tax dispute relating to Assessment Year 2017-18 (Financial Year 2016-17).

What the dispute was about

• The Assessing Officer, by order dated May 30, 2023 passed under Section 147 of the Income-tax Act, 1961, had added ₹13.40 crore (₹13,39,79,699) to the income of the company for Assessment Year 2017-18.
• The addition was made by disallowing the exemption claimed on dividend income under Section 10(35) and adding the amount back under Section 68.
• The company's appeal against that order before the Commissioner of Income Tax (Appeals) was dismissed by order dated April 27, 2026. The company then shared a further appeal, ITA No. 5803/MUM/2026, before the Income Tax Appellate Tribunal, Mumbai 'G' Bench.

What the ITAT has held

• The appeal shared by the company has been allowed.
• The ITAT held that the notice issued under Section 148 was invalid, because the approval for issuing it was not obtained from the specified authority prescribed under Section 151 of the Act.
• The notice and the consequential reassessment order dated May 30, 2023 have accordingly been quashed as invalid and void ab initio.

What this means financially

• The addition of ₹13.40 crore made to the income for Assessment Year 2017-18 will be removed, subject to the consequential effect to be given by the Assessing Officer, as applicable.
• The company has stated the expected financial implications are favourable, and that the financial impact, if any, will be determined once effect to the order is given.
• The company will take the necessary steps in accordance with the order, including following up with the Assessing Officer for giving the consequential effect.

Other details of the proceedings

• The ITAT order is dated October 01, 2026 and was received by the company on October 09, 2026.
• The opposing party is the Assistant Commissioner of Income Tax, Mumbai, as respondent before the ITAT.
• The matter has not been settled, and no litigation against key managerial personnel, promoters or the ultimate person in control is involved.

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