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TMI Blog2024 (2) TMI 400X X X X Extracts X X X X X X X X Extracts X X X X ..... ioner has also challenged the reassessment order dated 31.05.2023 passed by respondent no. 3 against this petitioner under Section 147 of the Act for the Assessment Year 2016-17 and the consequential Notice of Demand dated 31.05.2023, which has been issued pursuant to the reassessment order for an amount of Rs. 50,27,860/- issued by respondent no. 3. 3. The brief facts of the case as indicated in the writ application is that the petitioner is a Private Limited Company registered under the Companies Act, 2013. One notice dated 30.06.2021 under Section 148 of the Act for the Assessment Year 2016-17 was issued to the petitioner. Pursuant thereto, the petitioner asked the department for reason to believe vide letter dated 22.07.2021. Thereafter, the Revenue issued a letter on 30.05.2022 deemed to be a notice under Section 148A(b) of the Act. However, no information and material relied upon by the respondent department were provided to the petitioner. In spite of that, vide letter dated 04.06.2022, the petitioner gave a detailed reply raising objection and pointed out major discrepancies. 4. Consequent to the submission of aforesaid reply, the respondent department had issued fresh no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tanding Counsel for the revenue made following submissions: (i) In the instant case, notice u/s 148 of the Income Tax Act for the Assessment Year 2016-17 was first issued on 30.06.2021 after getting necessary approval of the competent authority under Section 3(1) of the Income Tax Act and other Laws (Relaxation in Amendment of Certain Provisions) Act, 2020 (hereinafter known as 'TOLA') and the Notifications dated 31.03.2021 and 27.04.2021 issued by the C.B.D.T under the said provisions. (ii) Another notice u/s 148 was issued on 21/07/2022 after following the due procedure of law as provided in the newly introduced Section 148A of the Act after amendment in the Finance Act, 2021 w.e.f. 01.04.2021 and also in pursuance of the order of Hon'ble Supreme Court of India in the case of Union of India vs. Ashish Agrawal, reported in [2022] 138 taxmann.com 64 (S.C). (iii) The Assessee raised some technical objections to the proposed reopening of assessment which was duly disposed of by the Assessing Officer vide its order passed u/s 148A(d) dated 21.07.2022. (iv) Being aggrieved by the order of the Assessing Officer, the petitioner had initially preferred this writ petition being ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... present writ petition forthwith and direct the petitioner to avail alternative remedy available with him. (vii) The main allegation of the petitioner, in the instant Writ Petition, is that the impugned notices issued for reassessment under Section 148 are not valid in law as the said notices cannot be issued on or after 01.04.2021 i.e., the date of coming into effect the Finance Act, 2021. According to the petitioner, Section 3 of the Tax and other Laws (Relaxation in Amendment of Certain Provisions) Act, 2020 is repugnant to Section 148 and Section 149 of the Income Tax Act, 1961. It has been submitted that notice was issued under Section 148 of the Income Tax Act on the basis of the object and mandate of Section 3 (1) of the Tax and Other Laws (Relaxation in Amendment of Certain Provisions) Act, 2020 (TOLA) and the notifications dated 31.03.2021 and 27.04.2021 issued by the CBDT under TOLA. Thus, the actions of the Assessing Officer are not arbitrary and there is no illegality involved in this case. Further, Hon'ble Supreme Court has already settled this issue in the case of UOl vs. Ashish Agarwal and Ors. in Civil Appeal No. 3005/2022 dated 04.05.2022. (viii) The order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Assessing Officer has in his possession books of account or other documents or evidence which reveal that the income chargeable to tax, represented in the form of- (i) an asset; (ii) expenditure in respect of a transaction or in relation to an event or occasion; or (iii) an entry or entries in the books of account which has escaped assessment amounts to or is likely to amount to fifty lakh rupees or more. 10. By going through the aforesaid period of limitation coupled with the facts of this case it is evident that the notice dated 30.05.2022, under Section 148 A (b) of the Income Tax Act, 1961, clearly indicates that the alleged income, which has escaped assessment, is only Rs. 39,21,450/-. Further, from the Impugned Order dated 21.07.2022, under Section 148 A (d) of the Income Tax Act, 1961, it is also evident that the alleged income, which has escaped assessment, is only Rs. 39,21,450/-. As per Section 149 of the Income Tax Act, 1961, the limitation period for issuance of notice under Section 148 of the I.T Act, 1961 is normally three years from the end of the relevant assessment year (in this case A.Y 2016-17) and extendable beyond 3 years till 10 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... endable beyond 3 years till 10 years, provided the income which has escaped assessment is Rs. 50,00,000/- or more which is absent in the impugned Notices as indicated herein above. 13. Accordingly, the Impugned Notice dated 21.07.2022, issued under Section 148, is barred by the limitation period prescribed under Section 149 and is illegal, unsustainable and void ab initio and is liable to be set-aside and consequently, all subsequent actions/notice/orders are also liable to be quashed. Since the Impugned Reassessment Order, dated 31.05.2023, and the Notice of Demand, dated 31.05.2023, are consequential orders or demand pursuant to the Impugned Notice dated 21.07.2022 issued u/s 148 of the IT Act, 1961 are also liable to be quashed for the sole reason that the very initiation of reassessment proceeding is beyond jurisdiction. It is a well-established principle of law that if the foundation of any proceeding is illegal and unsustainable in law, then all consequential proceedings or order are also bad in law. Since the impugned notice dated 21.07.2022, u/s 148 of I.T Act, 1961, is illegal and unsustainable in law, accordingly, the Impugned Re-assessment order dated 31.05.2023 passed ..... X X X X Extracts X X X X X X X X Extracts X X X X
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