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TMI Blog2025 (4) TMI 895X X X X Extracts X X X X X X X X Extracts X X X X ..... eported that the transactions carried on by the parties in the above said scrip are bogus in nature. Accordingly, the AO reopened the assessment by issuing notice u/s. 148 of the Income Tax Act, 1961 ('the Act')on 09-04-2021. 3. With regard to the reopening of assessment, it is noticed that the Parliament has made changes in the provisions relating thereto. The Ld A.R explained the same. He submitted that the provisions relating to reopening of assessment have been substituted by Finance Act, 2021 w.e.f. 01-04-2021. As per the new provisions, the AO, before issuing notice u/s 148 of the Act for reopening of assessment, is required to issue a notice under newly inserted section 148A of the Act in order to for conduct enquiries relating to escaped income and also for providing an opportunity to the assessee before issuing notice u/s. 148 of the Act. The new provisions came into effect from 01-04-2021. In the instant case, the AO issued notice u/s 148 of the Act on 09.04.2021, i.e., after the date of insertion of new provisions, without following the mandatory requirement prescribed in sec.148A of the Act, i.e. the AO should have issued notice u/s. 148A of the Act and followed the pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shall thereafter pass an order in terms of section 148A(d) after following the due procedure as required under section 148A(b) in respect of each of the concerned assessees; (iv) All the defences which may be available to the assessee under section 149 and/or which may be available under the Finance Act, 2021 and in law and whatever rights are available to the Assessing Officer under the Finance Act, 2021 are kept open and/or shall continue to be available and; (v) The present order shall substitute/modify respective judgments and orders passed by the respective High Courts quashing the similar notices issued under unamended section 148 of the Income-tax Act irrespective of whether they have been assailed before this court or not. ...." 6. The Ld.AR submitted that the AO, accordingly treated the notice dated 9.4.2021 issued as per the old provisions of sec. 148, as the notice issued under new provisions of sec.148A of the Act. However, the AO issued another notice u/s 148A(b) of the Act on 20-05-2022. Under the new provisions of sec.148A(d), the AO is required to pass an order disposing the objections filed by the assessee. However, the AO is required to obtain prior appro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Financial Services Pvt. Ltd., vs. DCIT [2023] 457 ITR 647 (Bom). 7. The Ld. DR, on the contrary, submitted that the notice issued by the AO under the old provisions of section 148 has been regularized by the Hon'ble Supreme Court in the case of Ashish Agarwal (supra). He submitted that, under the old provisions, approval should be obtained from Principal Commissioner and hence, the AO has obtained approval from the PCIT. 8. We heard the rival contentions and perused the record. Though the AO had initially issued notice u/s 148 under old provisions, yet, subsequently, the AO has regularized the same as per the decision rendered by Hon'ble Supreme Court in the case of Ashish Agarwal (supra). Hence, the reassessment proceedings have been continued under new provisions only. Hence the AO has issued notice u/s 148A(b) and also passed order u/s. 148A(d) of the Act. The provisions of section 148A(d) of the Act would require the AO to pass order on the question, viz., whether or not it is a fit case to issue a notice u/s. 148 of the Act. In terms of that section, the order has to be passed with the prior approval of the "specified authority". We also noticed that the specified authority ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... meaning of the term "specified authority" as provided for in section 151 of the Act is to apply for the purpose of section 148. Section 148A(d) of the Act also requires the Assessing Officer to pass an order after considering the reply of the assessee as to whether or not it is a fit case to issue a notice under section 148 of the Act and such an order under section 148A(d) of the Act has to be passed with the prior approval of the specified authority. The Explanation to section 148A of the Act also incorporates the meaning of "specified authority" as provided for in section 151 of the Act. As per section 151 of the Act, the "specified authority" who has to grant his sanction for the purposes of section 148 and section 148A is the Principal Chief Commissioner or Principal Director General or where there is no Principal Chief Commissioner or Principal Director General, the Chief Commissioner or Director General if more than three years have elapsed from the end of the relevant assessment year. The present petition relates to the assessment year 2016-17, and as the impugned order and impugned notice are issued beyond the period of three years which elapsed on March 31, 2020 the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Act and since the sanction has been obtained in terms of section 151(i) of the Act, the impugned order and impugned notice are bad in law and should be quashed and set aside." 10.1. In the case of Siemens Financial Services Pvt. Ltd., (supra), the concerned AO had issued notice/passed order u/s 148A(d) after expiry of three years from the end of the relevant assessment year. The AO had obtained approval from Principal CIT. The Hon'ble jurisdictional Bombay High Court has held that the notice and also the order are bad in law. Since the facts of the present case are identical to the one decided by the Hon'ble Bombay High Court, respectfully following the same, we hold that the order passed u/s 148A(d) and also the notice issued u/s. 148 of the Act in the present case are bad in law and is liable to be quashed. Consequently, the impugned assessment order was bad in law and accordingly, the impugned orders passed by both the lower authorities are liable to be quashed. We order accordingly. 11. Since we have decided the legal issue in favour of the assessee, the issues raised on merits need not be addressed. 12. In the result, the appeal of the assessee is allowed. Order pronou ..... X X X X Extracts X X X X X X X X Extracts X X X X
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