9911796707
TMI Blog2025 (2) TMI 865X X X X Extracts X X X X X X X X Extracts X X X X ..... 30/06/2021 was issued to the assessee on 16/07/2021 1.3. That, notice u/s. 148 dt. 30/06/2021 was not signed, neither manually not digitally. 1.4. That, notice u/s. 148 dt. 30/06/2021 has been issued on the basis of 'change of opinion' on the same material on which assessment u/s. 143(3) has been made. 2. That, without prejudice to above, Ld. CIT (A) ought to have restricted the addition to Rs. 4,33,810.00 only instead of Rs. 12,11,800.00, following the judgment of Jurisdictional Raipur Bench of ITAT in case of M/s. P.D. Rice Udyog [ITA No. 210/RPR/2018 dt. 17.10.2022]. 3. That, the appellant reserves the right to add or amend any ground." Also, the assessee firm has raised an additional ground of appeal, which reads as under: "In the facts and in law, notice u/s. 148 dt. 25/07/2022 issued by the Ld. ITO-1(2), Raipur is illegal and bad in law, as such it is invalid and therefore, consequent reassessment order passed u/s. 147 r.w.s. 144B dt. 29.04.2023 is also invalid and unsustainable." On the other hand, the revenue has assailed the impugned order on the following grounds of appeal: "1. Whether on the facts and in the circumstances of the case, and in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the notices issued under the old regime u/s. 148 of the Act i.e. between 01.04.2021 to 30.06.2021 were to be deemed to have been issued u/s. 148A of the Act and treated as "Show Cause Notices" (SCNs) as per Section 148A(b) of the Act. The A.O following the directions of the Hon'ble Apex Court in the case of Union of India & Ors. Vs. Ashish Agrawal (supra), issued a letter dated 25.05.2022 a/w. copy of the relevant material (through speed post/email), wherein the assessee firm was called upon to put forth an explanation that based on information which suggested that its income for the subject year chargeable to tax had escaped assessment, why a notice u/s. 148 of the Act may not be issued. 5. In reply, the assessee firm responded on 30.05.2022 and 24.06.2022 wherein, it stated that it was already assessed u/s. 143(3) of the Act, dated 28.12.2016, and purchases of Rs. 6,00,23,750/- were held as bogus, which, thus, had resulted to a consequential addition of Rs. 1,50,05,938/- u/s. 69C of the Act. The assessee firm furnished complete details of the parties whose purchases in the course of regular assessment framed by the A.O u/s. 143(3) of the Act, dated 26.12.2016 were ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... observed that it had though disclosed to have made purchases from M/s. Tirupati Trading Company (supra) of Rs. 1,40,97,500/-, but as per the ledger account of M/s. Tirupati Trading Company (supra) in the books of account of the said concern, the total transactions were reflected at Rs. 1,51,47,500/-. The A.O observed that though a perusal of the records revealed that the assessee firm had made payment of the entire amount of purchase consideration of Rs. 1,51,47,500/- (supra) through banking channel on 31.03.2014, but its bank account with Nagarik Sahakari Bank revealed that cash was deposited prior to issuing of cheques to the aforesaid concern, viz. M/s. Tirupati Trading Company. Accordingly, the A.O established the trail of cash deposits and the corresponding cheque payments that were made by the assessee firm towards the impugned purchase transactions that were claimed to have been made from M/s. Tirupati Trading Company. 8. As the assessee firm had failed to substantiate the authenticity of the purchases that it had claimed to have made from M/s. Tirupati Trading Company (supra), therefore, the A.O made addition of the impugned purchases of Rs. 1,51,47,50 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s relied upon the decision of the Hon'ble High Court of Bombay in the case of Pr. CIT Vs. Mohammed Haji Adam & Co in ITA No. 1004 of 2016. Hon'ble ITAT decision in the case of M/s. P.D. Rice Udyog Vs. DCIT, Raipur, ITA No. 210/RPR/2018. I have gone through the decisions. The facts are similar to the decision of appellant's case. By respectfully following the decisions of Jurisdictional ITAT, it is fair to estimate the Gross Profit at the rate of 8% as the income escaped the assessment as against Rs. 1,51,47,500/- disallowed by the A.O in the assessment order. 7.4 In view of the above the A.O is directed to restrict the disallowance at the rate of 8% on total purchase of Rs. 1,51,47,500/-that is worked out into Rs. 12,11,800/-. Accordingly, Ground No. 2 is partly allowed." 10. Both the assessee firm and the revenue being aggrieved with the order of the CIT(Appeals) have carried the matter in appeal before us. 11. We have heard the Ld. Authorized Representatives of both the parties, perused the orders of the lower authorities and the material available on record, as well as considered the judicial pronouncements that have been pressed into service by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to issue a reassessment notice u/s. 148 of the Act; (iii) Section 148A requires the A.O to, viz. (a) conduct any enquiry, if required, with the prior approval of the specified authority; (b) provide an opportunity of being heard to the assessee, with the prior approval of the specified authority; (c) consider the reply furnished by assessee, if any, in response to the show-cause notice; and (d) decide on the basis of material available on record including reply of the assessee, whether or not it is a fit case to issue a notice u/s. 148 of the Act by passing an order; (iv) Further, the time limit under Section 149 has been reduced from four years to three years from the end of the relevant assessment year for all situations. However, an exception has been carved out, as per which, an assessment can be reopened beyond three years but within ten years from the end of the relevant assessment year if the income chargeable to tax which has escaped assessment amounts to or is likely to amount to Rupees fifty lakhs or more; (v) The "1st proviso" to Section 149 prohibits the issuance of a reassessment notice under the new regime if such notice have become time-barred under the old regime; a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee's before various High Courts, which quashed the same for the reasons, viz. (i) Sections 147 to 151 stood substituted by the Finance Act, 2021 from April 1, 2021; (ii) that in the absence of any saving clause, the department could initiate reassessment proceedings after April 1, 2021 only in accordance with the provisions of the new regime since they were remedial, beneficial, and meant to protect the rights and interests of the assessees; and (iii) the Central Government could not exercise its delegated authority to re-activate the pre-existing law. 20. Thereafter, the Hon'ble Apex Court in the case of Union of India & Ors Vs. Ashish Agrawal, (2022) 444 ITR 1 (SC), to resolve the multi-facet controversies that had cropped up inter-se the assessees and the department, had held, that it was in complete agreement with the view taken by the various High Courts in holding that the benefit of the new provisions shall be made available even in respect of proceedings relating to the past assessment years, provided Section 148 notice was issued on or after 01-4-2021. However, the Court in order to balance the interests of the Revenue and the assessee exercised its discretionary jur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... must be shown in that regard which the High Courts could have done so. Therefore, instead of quashing and setting aside the reassessment notices issued under the unamended provision of IT Act, the High Courts ought to have passed an order construing the notices issued under unamended Act/unamended provision of the IT Act as those deemed to have been issued under section 148A of the IT Act as per the new provision section 148A and the Revenue ought to have been permitted to proceed further with the reassessment proceedings as per the substituted provisions of sections 147 to 151 of the IT Act as per the Finance Act, 2021, subject to compliance of all the procedural requirements and the defences, which may be available to the assessee under the substituted provisions of sections 147 to 151 of the IT Act and which may be available under the Finance Act, 2021 and in law. Therefore, we propose to modify the judgments and orders passed by the respective High Courts as under: (i) The respective impugned section 148 notices issued to the respective assessees shall be deemed to have been issued under section 148A of the IT Act as substituted by the Finance Act, 2021 and treated to be sho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecified authority, within one month from the end of the month, in which, the assessee's reply is received by him; or where no such reply is furnished, within one month from the end of the month in which time or extended time allowed to furnish the aforesaid reply expires. 21. Thereafter, the Hon'ble Apex Court in the case of Union of India and Ors. Vs. Rajeev Bansal (2024) 469 ITR 46 (SC) had, inter alia, further clarified as under: (i) The A.O is required to obtain prior approval of the specified authority according to section 151 of the new regime before passing an order under section 148A(d) or issuing a notice under section 148 of the Act which were required to be issued within the time limit specified under section 151 of the new regime r.w. TOLA, 2020, where applicable; (ii) that the directions issued by the Hon'ble Apex Court in the case of Union of India & Ors Vs. Ashish Agrawal (supra) applied PAN-India including all the 90,000 reassessment notices issued under section 148 of the old regime during the period April 1, 2021 to June 30, 2021. (iii) the department was directed to provide all the relevant material or information to the assessee's and thereafter, allow th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... val; e. In the case of Section 151 of the old regime, the test is: if the time limit of four years from the end of an assessment year falls between 20 March 2020 and 31 March 2021, then the specified authority under Section 151(2) has extended time till 31 March 2021 to grant approval; f. The directions in Ashish Agarwal (supra) will extend to all the ninety thousand reassessment notices issued under the old regime during the period 1 April 2021 and 30 June 2021; g. The time during which the show cause notices were deemed to be stayed is from the date of issuance of the deemed notice between 1 April 2021 and 30 June 2021 till the supply of relevant information and material by the assessing officers to the assesses in terms of the directions issued by this Court in Ashish Agarwal (supra), and the period of two weeks allowed to the assesses to respond to the show cause notices; and h. The assessing officers were required to issue the reassessment notice under Section 148 of the new regime within the time limit surviving under the Income Tax Act read with TOLA. All notices issued beyond the surviving period are time barred and liable to be set aside;" 22. Shri Ravi Agrawal, Ld. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issue notice u/s. 148 of the Act within the time period of 7 days from the lapse of period of two weeks (14 days) to respond to the SCN issued to the assessee firm u/s. 148A(b) of the Act, dated 25.05.2022, which, thus, lapsed on 16.06.2022. The Ld. AR submitted that as the A.O in the present case had issued notice u/s. 148 of the Act, dated 25.07.2022 i.e. much beyond the period of limitation which expires on 16.06.2022, therefore, the same was barred by limitation. 23. We have thoughtfully considered the contentions advanced by the Ld. Authorized Representatives of both the parties. Admittedly, the following facts are discernible from the record:- ● Notice u/s. 148 of the Act under the old regime (deemed notice u/s. 148A) was issued by the A.O to the assessee firm on 30.06.2021; ● show-cause notice u/s 148A(b) of the Act was issued by the A.O to the assessee firm on 25.05.2022; ● the time period of two weeks (14 days) from the date of issuing of notice u/s. 148A(b) dated 25.05.2022 [as per the judgment of the Hon'ble Apex Court in the case of Union of India & Ors Vs. Ashish Agrawal (supra)] lapsed on 07.06.2022; ● the balance/surviving period avai ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
