TMI Blog2023 (12) TMI 103X X X X Extracts X X X X X X X X Extracts X X X X ..... n committed by the AO in issuing Notice u/s 148 of the Act for the AY 2013-14. It goes without saying that Section 148A is not applicable in this case as information emanated from searched party and materials/documents pertained to/relates to the both Assessee i.e., where the search is conducted and against the 3rd person whose documents have been seized which goes to show that the information and the documents forms an asset and beyond 50 Lakh. Further the records suggest that investigating team has also alleged about the entries in the Books of Account. Thus, the first and the main contention of the learned counsel for the respective Assessee that the Notice u/s 148 is time barred, has no legs to stand in the eye of law in view of the discussions made in the preceding paragraphs. Accordingly, the judgments cited by the learned counsel is not applicable in the instant case, inasmuch as, the Notice issued by the Revenue is not time barred as discussed herein above. Contention of petitioner hat no search was made in the case of Assessee and only survey was conducted as such 10 years will not be applicable in its case - Even this submission is misconceived because of the f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o issuance of notice dated 31.03.2023 to the respective Assessees issued under section 148 of the Act by the Respondent. The basis of issuance of the aforesaid notices was stated to be search and seizure operations conducted on the business premises of Mr. Naresh Kumar Kejriwal on 09.06.2022. Pertinently, Devika Constructions was only subjected to survey under section 133A of the Act. Thus, in both these writ applications the petitioners have challenged the jurisdiction for issuance of notice under Section 148 of the Act. 4. Ms. Kavita Jha, learned counsel assisted by Ms. Lavanya Gadodia appearing for the Assessee in both these writ applications made following submissions: - (i) The legislative intent behind introduction of Finance Act, 2021 was to reduce the time limit in ordinary cases to three years and to increase the threshold amount of income having escaped assessment to Rs.50 lakhs for invoking extended time limit of ten years was to reduce litigation and compliance burden, remove discretion, impart certainty and promote ease of doing business. (ii) The Grandfathering clause in the form of Proviso, incorporated in section 149 of the Act, is in built safeguard to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nn.com 64 (SC) has held in Para-7 8 (part) as under: 7. Thus, the new provision substituted by the Finance Act, 2021 being remedial and benevolent in nature and substituted with a specific aim and object to protect the rights and interest of the assessee as well as and the same being in public interest, the respective High Courts have rightly held that the benefit of new provisions shall be made available even in respect of the proceedings relating to past assessment years, provided section 148 notice has been issued on or after 1st April, 2021. We are in complete agreement with the view taken by the various High Courts in holding so. 8. However, at the same time, the judgments of the several High Courts would result in no reassessment proceeding at all, even if the same are permissible under the Finance Act, 2021 and as per substituted section 147 to 151 of the I.T. Act. The Revenue cannot be made remediless and the object and purpose of reassessment proceeding cannot be frustrated .. He further submits that to give effect to the judgment of Hon ble Supreme Court, the CBDT has issued detail guidelines being instruction No.01/2022 dated 11.05.2022 wherein in sub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ma-facei it appears from this fact that the Petitioner Company has not declared any loan in ITR filed for AY 2013-14. The sole question which is to be decided by this Court is whether in the facts and circumstances of these cases, with the amendment brought in by Finance Act 2021, the respective notices issued to the respective petitioners under Section 148 of the Act for the Assessment Year 2013-14 is/are beyond jurisdiction? To decide the aforesaid issue few provisions of law is to be examined. For brevity Section 148, 149 of the Amended Act/Finance Act 2021 and 153A and 153C of the Income Tax Act prior to the amendment is quoted hereinbelow: - 148. Before making the assessment, reassessment or recomputation under section 147, and subject to the provisions of section 148A, the Assessing Officer shall serve on the assessee a notice, along with a copy of the order passed, if required, under clause (d) of section 148A, requiring him to furnish within such period, as may be specified in such notice, a return of his income or the income of any other person in respect of which he is assessable under this Act during the previous year corresponding to the relevant assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... therein, relate to, the assessee, the Assessing Officer shall be deemed to have information which suggests that the income chargeable to tax has escaped assessment in the case of the assessee for the three assessment years immediately preceding the assessment year relevant to the previous year in which the search is initiated or books of account, other documents or any assets are requisitioned or survey is conducted in the case of the assessee or money, bullion, jewellery or other valuable article or thing or books of account or documents are seized or requisitioned in case of any other person. Explanation 3. For the purposes of this section, specified authority means the specified authority referred to in section 151.] 149. (1) No notice under section 148 shall be issued for the relevant assessment year, (a) if three years have elapsed from the end of the relevant assessment year, unless the case falls under clause (b); (b) if three years, but not more than ten years, have elapsed from the end of the relevant assessment year unless the Assessing Officer has in his possession books of account or other documents or evidence which reveal that the income chargeabl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e notice to such person requiring him to furnish within such period, as may be specified in the notice, the return of income in respect of each assessment year falling within six assessment years and for the relevant assessment year or years referred to in clause (b), in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed and the provisions of this Act shall, so far as may be, apply accordingly as if such return were a return required to be furnished under section 139; (b) assess or reassess the total income of six assessment years immediately preceding the assessment year relevant to the previous year in which such search is conducted or requisition is made and for the relevant assessment year or years : Provided that the Assessing Officer shall assess or reassess the total income in respect of each assessment year falling within such six assessment years and for the relevant assessment year or years : Provided further that assessment or reassessment, if any, relating to any assessment year falling within the period of six assessment years and for the relevant assessment year or years referred to in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r which has abated under the second proviso to sub-section (1), shall stand revived with effect from the date of receipt of the order of such annulment by the Principal Commissioner or Commissioner: Provided that such revival shall cease to have effect, if such order of annulment is set aside. Explanation. For the removal of doubts, it is hereby declared that, (i) save as otherwise provided in this section, section 153B and section 153C, all other provisions of this Act shall apply to the assessment made under this section; (ii) in an assessment or reassessment made in respect of an assessment year under this section, the tax shall be chargeable at the rate or rates as applicable to such assessment year. 153C. (1) Notwithstanding anything contained in section 139, section 147, section 148, section 149, section 151 and section 153, where the Assessing Officer is satisfied that, (a) any money, bullion, jewellery or other valuable article or thing, seized or requisitioned, belongs to; or (b) any books of account or documents, seized or requisitioned, pertains or pertain to, or any information contained therein, relates to, a person other than the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1) of section 142 has been issued to him, or (b) a return of income has been furnished by such other person but no notice under sub-section (2) of section 143 has been served and limitation of serving the notice under sub-section (2) of section 143 has expired, or (c) assessment or reassessment, if any, has been made, before the date of receiving the books of account or documents or assets seized or requisitioned by the Assessing Officer having jurisdiction over such other person, such Assessing Officer shall issue the notice and assess or reassess total income of such other person of such assessment year in the manner provided in section 153A. Emphasis Supplied 7. From conjoint reading of the aforesaid provisions of the Act few things are apparent: - (i) Prior to the amendment, the Assessing Officer in the case of search could assess Six assessment years, however explanation-1 of 153A which was inserted with effect from 01.04.2017 by way of Finance Act 2017, it was clarified that the expression relevant assessment year shall mean an assessment year preceeding the assessment year relevant to the previous year in which search is conducted or requisition is mad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . After the amendment by Finance Act-21, by virtue of first proviso to sub section (b) of 149(1) read with fourth proviso to section 153A and section 153C (2) of the Income Tax Act, 1961, the present proceedings under section 148 of the Act could be initiated, inasmuch as, the 1st proviso of the amended section 149(1), squarely covers these cases under section 153A/153C of the unamended provision of the Act, because of the fact that the first proviso to Section 149 stipulates that no notice under Section 148 shall be issued at any time in a case for the relevant assessment year beginning on or before first day of April 2021, if notice under Section 148 or Section 153 A or under Section 153 C could not have been issued at that time on account of being beyond the time limit specified under the provisions of clause (b) of sub-Section (1) of this section or Section 153A or 153C as the case may be. In other words, any notice under Section 148 in the amended provision can be issued if the same could have been issued under the old provision of 153A and/or 153C. To elaborate this issue, it is evident that in this case the search was conducted on 09.06.22 which falls in the financi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iven at the interest rate of Rs. 1.5% per month. However, the enquires conducted by the Investigating Officer reveal that the aforesaid loans given by Mr. Kejriwal to M/s Devika Construction and Developers Private Limited have not been accounted for in the books of account of the petitioner company. It further appears that the petitioner company in its ITR filed before the department for AY 2013-14, has declared its liability as NIL . All these facts lead to the conclusion that there is no error in the action of the AO to issuing Notice u/S 148 of the Act. (iv) At this stage it is very relevant to reiterate explanation-1 of section 153A of the Act which explains the expression of relevant assessment year. It stipulates that relevant assessment year shall mean as assessment year preceding the assessment year relevant to the previous year in which search is conducted or requisition is made which falls beyond Six assessment years but not later than 10 assessment year from the end of assessment year relevant to previous year in which search is conducted or requisition is made. Thus, in the instant case since the search was conducted on 09.06.22 which falls in the financial year ..... X X X X Extracts X X X X X X X X Extracts X X X X
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