9911796707
TMI Blog2025 (5) TMI 680X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the Income of the Appellant at INR 3,98,31,781/- instead of nil returned income is contrary to provisions of the Act and therefore, void-ab-initio. 2. That on the facts and in the circumstances of the case and in law, the notice issued under section 148 on July 29, 2022, is barred by time limitation as the Ld. AO while issuing the notice has not considered the time limit specified under first proviso to Section 149(1) of the Act. The benefit and relaxations conferred under The Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 (TOLA') will not extend the limitation provided under the first proviso to section 149(1) of the Act. 2.1 That on facts and in the circumstances of the case and in law, the Ld. AO has erred in issuing notice under section 148 as the same cannot be issued as per the provisions of section 149(1)(b) in the absence of any income escaped assessment represented in the form of "asset" 3. On the facts and circumstances of the case and in law, the notice dated March 17, 2023 issued under section 143(2) of the Act by the Ld. AO is invalid, bad in law and liable to be quashed as the Ld. AO has not considered the return of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... services in management consultancy, cost control and risk management, IT consultancy, internet consultancy and computer software house. 2.1 A Survey action u/s 133A of the IT Act 1961 was conducted on 29.08.2019 in the case of Aptivaa India by DGIT(Inv), Mumbai. Subsequently, information was shared with Ld.AO vide letter dated 22.03.2021 regarding the survey findings. As per the survey findings, the Ld.AO noted that the control and management of the affairs of Aptivaa Dubai is wholly situated in India. It was also established during survey proceedings that Aptivaa Dubai booked various non-genuine expenditure to inflate its expenses. Further, it was also noted by the Ld.AO that, the assessee did not file its return of income for the all years under consideration. Subsequently, notice under section 147 was issued under the erstwhile reassessment regime for the years under consideration on 15/04/2021. 2.2 The said notice was treated to be the deemed notice issued under section 148A(b) of the act, as per the directions of Hon'ble Supreme Court in case of UOI vs Ashish Agarwal reported in (2022) 138 taxmann.com 64. The Ld.AO subsequently, passed order under section 148A(d) on 29/07/2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d within the time limit prescribed under the provisions of section 153(2) of the Act. d) That, the notices were issued without obtaining prior approval from the specified authority as per section 148A read with section 151 of the Act. 5.1 The details of the notices issued u/s. 148 for year under consideration are as under: S.No. Assessment Year Notice u/s.148 issued under old regime Notice u/s. 148 issued under new regime 1. 2015-16 15/04/2021 29/07/2022 2. 2016-17 15/04/2021 29/07/2022 3. 2017-18 15/04/2021 29/07/2022 6. For assessment year 2015-16, the Ld.AR submitted that, time limit to issue of notice under the un-amended provisions of section 149 expired on 31/03/2022. He submitted that, relaxation under the TOLA is not applicable in assessee's case as TOLA provisions are applicable only to cases where the time limit for issuing notices expired on or before 20/03/2020 to 31/03/2021 and till 31/06/2021, has been held by the Hon'ble Supreme Court in the case of UOI vs. Rajeev Bansal reported in (2024) 167 taxmann.com 70. 6.1 The Ld.AR thus contended that the notice issued on 29/07/2022 is bad in law as held by Hon'ble Supreme Court in case of UOI vs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r issue of notice under unamended section section 149 expired on 31.03.2022 i.e. six years from the end of the relevant assessment year where the escaped assessment amounts to or is likely to amount to one lakh rupees or more for that year. 6.5 The relevant submission on behalf of Revenue before Hon'ble Supreme Court in case of Rajeeve Bansal (supra) are as under: 19. Mr. N Venkataraman, learned Additional Solicitor General of India, made the following submissions on behalf of the Revenue: a. Parliament enacted TOLA as a free-standing legislation to provide relief and relaxation to both the assesses and the Revenue during the time of COVID- 19. TOLA seeks to relax actions and proceedings that could not be completed or complied with within the original time limits specified under the Income-tax Act; b. Section 149 of the new regime provides three crucial benefits to the assesses: (i) the four-year time limit for all situations has been reduced to three years; (ii) the first proviso to Section 149 ensures that re-assessment for previous assessment years cannot be undertaken beyond six years; and (iii) the monetary threshold of Rupees fifty lakhs will apply to the re assessme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issued beyond the time limit specified under the Income-tax Act read with TOLA will completely frustrate the judicial exercise undertaken by this Court in Ashish Agarwal (supra). 48. Notices have to be judged according to the law existing on the date the notice is issued. Section 149 of the old regime primarily provided two time limits: (i) four years for all situations and (ii) beyond four years and within six years if the income chargeable to tax which escaped assessment amounted to Rupees one lakh or more. After 1 April 2021, the time limits prescribed under the new regime came into force. The ordinary time limit of four years was reduced to three years. Therefore, in all situations, reassessment notices could be issued under the new regime if not more than three years have elapsed from the end of the relevant assessment year. For example, for assessment year 2018-2019, the four year period would have expired on 31 March 2023 under the old regime. However, if the notice is issued after 1 April 2021, the three year time limit prescribed under the new regime will be applicable. The three year time limit will expire on 31 March 2022. 49. The first proviso to Section 149(1)(b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f of the Revenue that all notices issued under the new regime by invoking the six year time limit prescribed under section 149(1)(b) of the old regime will have to be dropped if the income chargeable to tax which has escaped assessment is less than Rupees fifty lakhs. 53. The position of law which can be derived based on the above discussion may be summarized thus: (i) Section 149(1) of the new regime is not prospective. It also applies to past assessment years; (ii) The time limit of four years is now reduced to three years for all situations. The Revenue can issue notices under section 148 of the new regime only if three years or less have elapsed from the end of the relevant assessment year; (iii) the proviso to Section 149(1)(b) of the new regime stipulates that the Revenue can issue reassessment notices for past assessment years only if the time limit survives according to Section 149(1)(b) of the old regime, that is, six years from the end of the relevant assessment year; and (iv) all notices issued invoking the time limit under section 149(1)(b) of the old regime will have to be dropped if the income chargeable to tax which has escaped assessment is less than Rupees fifty ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble Supreme Court clearly emphasised about the competent authority who has to approve such notices are as under: 73. Section 151 imposes a check upon the power of the Revenue to reopen assessments. The provision imposes a responsibility on the Revenue to ensure that it obtains the sanction of the specified authority before issuing a notice under section 148. The purpose behind this procedural check is to save the assesses from harassment resulting from the mechanical reopening of assessments Sri krishna (P.) Ltd. v. ITO [1996] 87 Taxman 315/221 ITR 538 (SC)/[1996] 9 SCC 534. A table representing the prescription under the old and new regime is set out below: Regime Time limits Specified authority Section 151(2) of the old regime Before expiry of four years from the end of the relevant assessment year Joint Commissioner Section 151(1) of the old regime After expiry of four years from the end of the relevant assessment year Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner Section 151(i) of the new regime Three years or less than three years from the end of the relevant assessment year Principal Commissioner or Principal Direct ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ks up the time limits with the jurisdiction of the authority to grant sanction. Section 151(ii) of the new regime prescribes a higher level of authority if more than three years have elapsed from the end of the relevant assessment year. Thus, non-compliance by the assessing officer with the strict time limits prescribed under section 151 affects their jurisdiction to issue a notice under section 148. 77. Parliament enacted TOLA to ensure that the interests of the Revenue are not defeated because the assessing officer could not comply with the pre conditions due to the difficulties that arose during the COVID-19 pandemic. Section 3(1) of TOLA relaxes the time limit for compliance with actions that fall for completion from 20 March 2020 to 31 March 2021. TOLA will accordingly extend the time limit for the grant of sanction by the authority specified under section 151. The test to determine whether TOLA will apply to Section 151 of the new regime is this: if the time limit of three years from the end of an assessment year falls between 20 March 2020 and 31 March 2021, then the specified authority under section 151(i) has an extended time till 30 June 2021 to grant approval. In the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d authorities under section 151 for Section 148A(b). It is well established that this Court while exercising its jurisdiction under Article 142, is not bound by the procedural requirements of law High Court Bar Association v. State of U P [2024] 160 taxmann.com 32/299 Taxman 21 (SC)/[2024] 6 SCC 267. 81. This Court in Ashish Agarwal (supra) directed the assessing officers to "pass orders in terms of Section 148-A(d) in respect of each of the assesses concerned." Further, it directed the assessing officers to issue a notice under Section 148 of the new regime "after following the procedure as required under section 148-A." Although this Court waived off the requirement of obtaining prior approval under section 148A(a) and Section 148A(b), it did not waive the requirement for Section 148A(d) and Section 148. Therefore, the assessing officer was 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. These notices ought to have been issued following the time limits specified under section 151 of the new regime read with TOLA, where applicable. 7.2 T ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
