9911796707
TMI Blog2025 (5) TMI 322X X X X Extracts X X X X X X X X Extracts X X X X ..... of sec 149(1)(b); reopening of reassessment u/s 148/147 is invalid and is liable to be quashed; relied on Hexaware Technologies Ltd (2024) (Born); Arati Marketing (P) Ltd (2024) (Cal HC); New India Assurance Co Ltd (2023) (Born); Keenara Industries PL (2023) (Guj); Rajeev Bansal (2023) (All HC). 2. On the facts and circumstances of the case and in law, notice u/s 148 dt.29-7-22 is invalid; issued by ITO-1(1), Raipur (i.e., the 'Jurisdictional AO'), while it ought to have been made by 'faceless AO' after the scheme framed u/s 151A dt.29-3-22/ CBDT Notification No.18 dt.29-3-22; impugned notice u/s 148 dt. 29-7-22 issued by ITO-1(1) in violation of scheme framed u/s 151A dt.29-3-22, would be invalid; hence, assessment made u/s 147 rws.143(3) rws.144B dt.30-5-23 would be invalid and is liable to be quashed. 3. On the facts & circumstances of the case and in law, CIT(A) has erred in sustaining addition of Rs. 2,29,87,000 i.e., alleged bogus purchase of 'goods' from 8 parties; assessee is 'trader in goods'; 'corresponding sales' of such trading items has been accepted by AO; addition of Rs. 2,29,87,000 is unjustified; is liable to be deleted; ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment made u/s 147 rws.143(3) rws.1448 dt.30-5-23 would be invalid and is liable to be quashed." Addl. Gr. No. 3 "On the facts & circumstances of the case and in law, CIT(A) has erred in sustaining addition of Rs. 2,29,87,000 i.e., alleged bogus purchase of 'goods' from 8 parties; assessee is 'trader in goods'; 'corresponding sales' of such trading items has been accepted by AO; addition of Rs. 2,29,87,000 is unjustified; is liable to be deleted; relied on Nitin Ramdeoji Lohia (2022) (Born HC)." Addl.Gr.No.4 "On the facts and circumstances of the case and in law, ClT(A) has erred in sustaining addition of Rs. 2,29,87,000 on disallowance of business expenditure i.e., purchases of goods, is unjustified; assessment made u/s 143(3); books of account has been accepted; sales of Rs.13,48,22,653 & purchases of Rs. 12,54,31,935 has been accepted; resultant GP would be 23.28% from GP shown at 6.23% (i.e., GP would increase by 17.05%) which is impossible in the 'trading business' of assessee; addition is liable to be deleted; relied on Smt Sudha Loyalka (2018) (Del- Trib). Addl.Gr.No.5 On the facts & circumstances of the case and in law, CIT(A) has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ver, the same could not find favour from the Ld. CIT(A), therefore, the appeal of assessee was held to be dismissed. 7. Dissatisfied with the aforesaid order Ld. CIT(A), assessee preferred an appeal before the Tribunal, which is under consideration in the present case. 8. At the outset, Shri Sunil Kumar Agrawal, CA, Authorized Representative on behalf of the assessee, (in short "Ld. AR"), sought the liberty to withdraw additional ground no. 3, 4 & 5 of the present appeal, to which no objection was raised by the revenue, therefore, additional ground no. 3, 4 & 5 are permitted to withdraw, consequently, these grounds are dismissed as not pressed. 9. Ld. AR further requested to take up the additional ground no. 1, raising the legal contention that the order u/s 148A(d) dated 26.07.2022 and notice of reopening u/s 148 dated 29.07.2022 for the AY 2015-16 are barred by limitation. In order to substantiate the aforesaid contention, Ld. AR placed before us the following facts, contentions and dates of events: (i) Notice issued u/s 148 (old regime) for AY 2015-16 - 30.06.2021, which is considered to be deemed notice u/s 148A(b) in terms of order of Hon'ble Apex Court in the case of UOI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rated by the Tribunal and have held as under: 13. Apropos the validity of the jurisdiction that was assumed by the AO for framing the impugned assessment, the Ld. AR submitted that as the notice u/s. 148 of the Act, dated 25.07.2022 is barred by limitation, therefore, the consequential assessment order passed by the A.O u/s. 147r.w.s. 144B of the Act, dated 29.04.2023 cannot be sustained and is liable to be quashed on the said count itself. Elaborating further on his contention, the Ld. AR had taken us through a "Chart", as per which, notice u/s. 148 of the Act, dated 25.07.2022 in the case of the assessee firm could have been issued latest by 16.06.2022. The Ld. AR submitted that as the notice u/s. 148 of the Act had been issued by the A.O on 25.07.2022 i.e. much after 16.06.2022, therefore, the same being barred by limitation was invalid. 14. Apropos the aforesaid issue, Dr. Priyanka Patel, Ld. Sr. Departmental Representative (for short 'DR') submitted that as the A.O had validly assumed jurisdiction and framed the assessment vide his order passed u/s. 147 r.w.s. 144B of the Act, dated 29.04.2023, therefore, no infirmity did emanate from his order. 15. Before proceeding any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (i) Principal Commissioner or Principal Director or Commissioner or Director if three years or less have elapsed from the end of the relevant assessment year; and (ii) Principal Chief Commissioner or Principal Director General or Chief Commissioner or Director General if more than three years have elapsed from the end of the relevant assessment year. 18. The Taxation and Other Laws (Relaxation of Certain Provisions) Ordinance Act, 2020 [for short "TOLA], had come into force with retrospective effect from March 31, 2020. Section 3(1) of TOLA extended the time limit for completion of actions or compliances under the "Specified Act", which fell for completion or compliance during the period from March 20, 2020 to March 31 2021. Section 3(1) of the TOLA empowered the Central Government to extend the time limit beyond 31st March, 2021 by a notification. In pursuance of its powers, the Central Government issued Notifications to extend the period of relaxation till June 30, 2021. The effect of TOLA, 2020 and the notifications issued under the legislation was that, viz. (i) if the time prescribed for passing of any order or issuance of any notice, sanction, or approval fell for completi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... within 30 days provide to the respective assessees, the information and material relied upon by the department, so that the assessee's could reply to the show-cause notices within two weeks thereafter. The requirement of conducting any enquiry, if required, with the prior approval of specified authority u/s. 148A(a) was hereby dispensed with as a one-time measure vis-à-vis those notices which had been issued u/s. 148 of the un-amended Act from 01-4-2021 till date, including those which was quashed by the High Courts. It was directed that the A.Os shall thereafter pass orders in terms of Section 148A(d) in respect of each of the assessees concerned and, thereafter, following the procedure as required u/s. 148A of the Act, they may issue notice u/s. 148 of the Act. For the sake of clarity, the observations of the Hon'ble Apex Court in the case of Union of India Vs. Ashish Agrawal (supra), wherein the notices issued by the department u/s. 148 of the Act, as per the old regime were to be treated as "Show Cause Notices" issued u/s. 148A(b) of the Act, are culled out as under: "8. However, at the same time, the judgments of the several High Courts would result in no rea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es within two weeks thereafter; (ii) The requirement of conducting any enquiry with the prior approval of the specified authority under section 148A(a) be dispensed with as a onetime measure vis à vis those notices which have been issued under Section 148 of the unamended Act from 01.04.2021 till date, including those which have been quashed by the High Courts; (iii) The assessing officers 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 IT Act irrespective of whether they have been assailed before this Court or not." Accordingly, the Hon'ble Apex Court in the case of U ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with two requirements, viz. (i) issuance of a show cause notice; and (ii) supply of all the relevant information which formed the basis of the show-cause notice. (v) the total time that was excluded for computation of limitation for the deemed notices is, viz. (i) the time during which the show-cause notices were effectively stayed, that is, from the date of issuance of the deemed notice between 1st April, 2021 and 30th June, 2021 till the supply of relevant information or material by the assessing officers to the assesses in terms of the directions in Union of India & Ors Vs. Ashish Agarwal (supra); and (ii) two weeks allowed to the assesses to respond to the show-cause notices. (vi) that the time surviving under the Act read with TOLA, 2020 that would be available to the department to complete the remaining proceedings in furtherance of the deemed notices, including issuance of reassessment notices u/s. 148 of the new regime could be calculated by computing the number of days between the date of issuance of the deemed notice and June 30, 2021. For the sake of clarity, the observations of the Hon'ble Apex Court in the case of Union of India & Ors. Vs. Rajeev Bansal (supra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the backdrop of the aforesaid judicial pronouncements of the Hon'ble Apex Court, submitted that as the notice u/s. 148 of the Act, dated 25.07.2022 had been issued beyond the surviving/balance period that was available with the A.O, therefore, the same was barred by limitation. Elaborating further on his contention, the Ld. AR submitted that the A.O pursuant to the judgment of the Hon'ble Apex Court in the case of Union of India & Ors Vs. Ashish Agarwal (supra), had issued show- cause notice u/s. 148A(b) of the Act, dated 25.05.2022, Page 1 & 2 of APB, wherein the assessee firm was called upon to furnish its reply within two weeks from the date of receipt of the said letter. In compliance, the assessee firm which though was allowed a time period of two weeks to furnish its reply, had filed/uploaded the same on 30.05.2022, Page 3 to 7 of APB. The Ld. AR submitted that the period of two weeks allowed to the assessee firm to file its reply to the show-cause notice issued u/s. 148A(b) of the Act lapsed as on 07.06.2022. Carrying his contention further, the Ld. AR submitted, that as observed by the Hon'ble Apex Court in the case of Union of India & Ors Vs. Rajeev Bansal (su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der TOLA, 2020); * as the balance/surviving period available with the A.O for passing an order under clause (d) of 148A of the Act was 1 day i.e. less than 7 days, therefore, as per the "fourth proviso" to Section 148A of the Act, the period of limitation so available would stand extended to 7 days; * the A.O could have validly issued notice u/s. 148 of the Act (under the new regime) latest by 14.06.2022; 24. As the A.O in the present case had issued notice u/s. 148 of the Act, dated 25.07.2022 i.e. much subsequent to lapse of the period of limitation as was available with him upto 13.06.2022, therefore, as stated by the Ld. AR (subject to correction of the date by the Ld. AR as 16.06.2022), and rightly so, the same is found to be barred by limitation. Accordingly, the assessment order passed by the A.O u/s. 147 r.w.s. 144B of the Act, dated 29.04.2013 in absence of a valid notice issued u/s. 148 of the Act cannot be sustained and, is quashed. 11. Based on aforesaid submissions, it was the prayer by Ld. AR that the present case of the assessee is squarely covered by the aforesaid case, wherein under identical circumstances, the issue was decided in favour of the assessee, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t for A.Y. 2016-17 was issued on 30.06.2021 with the prior approval of the Pr. CIT-1, Raipur (who was the specified authority u/s 151 of the Act as the period was within four years from the end of the relevant assessment year). In the meantime, the judgment in the Civil Appeal No. 3005/2022 in the case of UOI and other Vs Shri Ashish Agrawal & others was given by the Hon'ble Supreme Court on 04.05.2022. 3. In compliance of the said verdict of the Apex Court, the information/material available on record which suggested for income escaping assessment within the meaning of the provisions of section 147 of the Act were provided to the assessee on 26.05.2022 seeking reply as to why order u/s 148A(d) of the Act should not be passed in the case of the assessee which remained undelivered. Therefore, another letter was sent on 08.06.2022 through email, which was duly delivered to him on 08.06.2022 seeking reply as to why order u/s 148A(d) of the Act should not be passed in his case holding it to be a fit case for issue of notice u/s 148. The assessee was allowed to file his reply with other relevant material within two weeks from the date of the said letter. However, no reply was file ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pex Court the order u/s 148A(d) was well within time as per the Act. In terms of aforesaid submissions and contentions, it was the prayer that the contention of assessee regarding failure on the part of AO to issue SCN u/s 148(b), passing of order u/s 148A(d) and issuance of notice u/s 148 are barred by limitation, is not maintainable and deserves to be rejected. 14. We have considered the rival submissions, perused the material available on record and case laws placed before us to support the contentions by the Ld. AR. After having given a thoughtful consideration to the aforesaid facts, circumstances, observations and judicial pronouncements, we are of the firm conviction that the case of assessee is squarely covered by the decision of this tribunal in the case of Kachrulal Jitendra Kumar Vs. ITO (supra). 15. Our aforesaid view is further fortified by the judgment of Hon'ble Delhi High Court in the case of Ram Balram Buildhome (P.) Ltd. Vs. Income Tax Officer (2025) 171 taxmann.com 99 (Delhi), wherein under the similar facts and circumstances Hon'ble High Court has held as under: Analysis - In the Factual Context 65. Thus, in the facts of the present case, the last date for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rovided under Section 149(1) of the Act, had expired prior to issuance of the impugned notice on 30.07.2022. The said is squarely beyond the period of limitation. 71. It is contended on behalf of the Revenue that the AO is required to pass an order under Section 148A(d) of the Act by the end of the month following the month on which the reply to the notice under Section 148A(b) of the Act was received. Thus, the order under Section 148A(d) of the Act as well as the notice under Section 148 of the Act (both dated 30.07.2022) are within the prescribed period. This contention is without merit as it does not take into account that proceedings under Section 148A of the Act necessarily required to be completed within the period available for issuing notice under Section 148 of the Act, as prescribed under Section 149 of the Act. Thus, the time available to the AO to pass an order under Section 148A(d) of the Act was necessarily truncated and the same was required to be passed on or before 12.07.2022. The fourth proviso to Section 149 of the Act did not come into play as the time period available for the AO to pass an order under Section 148A(d) of the Act was in excess of the seven day ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of India & Ors Vs. Ashish Agrawal (supra)] lapsed on 08.06.2022; (iv) the balance/surviving period available with the A.O to issue notice u/s 148 of the Act (under new regime) was 1 day [time between 30.06.2021 (the date of issuance of notice u/s. 148A of the Act) AND 30.06.2021 i.e. (extended time period under TOLA, 2020); (v) as the balance/surviving period available with the A.O for passing an order under clause (d) of 148A of the Act was 1 day i.e. less than 7 days, therefore, as per the "fourth proviso" to Section 148A of the Act, the period of limitation so available would stand extended to 7 days; (vi) the A.O could have validly issued notice u/s. 148 of the Act (under the new regime) latest by 14.06.2022; 18. In backdrop of aforesaid facts of the present case, as the order u/s 148A(d) of the Act was issued on 26.07.2022 and the notice u/s 148 (new regime) of the Act was issued on 29.07.2022, much beyond the period of limitation as was available with him up to 14.06.2022, therefore, the contentions raised by Ld. AR found to be of substance that the order u/s 148A(d) as well as the notice u/s 148 (new regime) are barred by limitation, accordingly, the assessment order ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
