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TaxTMI 
TaxTMI 
TaxTMI 
2024 (6) TMI 269
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...., has not enclosed the reasons recorded u/s 148(2) of the Act and the sanction accorded u/s 151 of the Act, which, thus the notice issued is itself invalid and is without jurisdiction. 4. The Ld. A.O. ought to have obtained the prior approval of the competent authority before issuing notice u/s 148 as laid down under the provisions of section 151 of the IT Act, 1961. 5. The Ld. A.O. erred in reopening the assessment under section 147 of the Act and issuing notice under section 148 of the Act, without having reasonable satisfaction or bonafide belief on his part to show that the assessee's actual income has escaped assessment. 6. The Ld. A.O erred in reopening the assessment u/s 147 of the Act and issuing notice u/s 148 of the Act on the basis of a borrowed satisfaction which is incorrect and unjustified. 7. The Ld. A.O erred in not applying his independent mind and has not made any proper inquiry and reopened the assessment u/s 147 of the Act which is incorrect and against the principles of natural justice. 8. The Ld. A.O made an addition of Rs. 22,00,000/- as unexplained Investment u/s 69 without appreciating the facts of the case w....
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....h is unjustified. 21. The Ld. A.O erred in not appreciating the fact that the assessee has submitted all the information/explanations as required which is unjustified. 22. The Assessing officer erred in initiating penalty proceedings u/s 274 rws 271AAC(1) of the Income Tax Act. 23. The assessee may, add or alter or amend or modify or substitute or delete and/or rescind all or any of the Grounds of objections at any time before or at the time of hearing of the objection." 3. Facts of the case, in brief, are that the assessee Shri Syed Gulam Mohiuddeein is a non-resident, did not file his return of income for the A.Y 2017-18. The assessee is residing in Saudi Arabia for the financial year 2016-17 relevant to A.Y 2017-18 under reference and earned income from outside India. The assessment has been reopened u/s 147 of the Income Tax Act, 1961 for the reasons stated as per which, the income chargeable to tax had been escaped assessment on account of non-disclosure of consideration paid for purchase of property. As per the reasons recorded by the Assessing Officer, a search and seizure operation u/s 132 of the I.T. Act was conducted in the case of M/s. Skill....
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....ribed u/s 153(2) of the Act. Since the additional ground taken by the assessee are purely legal ground and further to decide the said legal ground, there is no need to ascertain fresh facts and thus invoked the decision of the Hon'ble Supreme Court in the case of NTPC Ltd vs. CIT (1998) 229 ITR 383, and submitted that the additional ground of the appeal filed by the assessee may be admitted. 6. The learned Counsel for the assessee referring to the additional ground of appeal filed by the assessee submitted that in the present case, notice u/s 148 of the Act was issued on 30.03.2021. As per the provisions of section 153(2) of the Act, the assessment order should be passed on or before one year from the end of the relevant A.Y i.e. on or before 31.3.2022. However, the Assessing Officer has passed the final assessment order u/s 144 r.w.s. 144C(13) on 12.02.2023 which is beyond the time limit prescribed under the Act and thus, 555 barred by limitation. In this regard, he relied upon the decision of the ITAT in the case of Shri Farooq Ali vs. Income Tax Officer in ITA No.104/Hyd/2023. 7. The learned DR, on the other hand, supporting the order of the DRP submitted that the asse....
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....sed on 30th January, 2023, after incorporating the directions of the Learned DRP, which is beyond the time limit of 12 months prescribed u/s. 153(2) and therefore, the same is time barred. 4. The undersigned has requested a time till 5 pm tomorrow i.e. 17thMay, 2024, to file written submissions and it was informed that the case is heard without even going on merit. The written submissions of CIT (DR) are as under: ON TIME LIMITS OF PASSING DRAFT AND FINAL ASSESSMENT ORDERS: i. The department submits that provisions of Sec. 153 determine the time limit of the draft order. ii The department submits that in the below mentioned cases, it has been held that draft order must be passed within the time limit of Section 153. Tally India Pvt. Ltd. 435 ITR 137 (Kar.) Lionbridge Technologies 260 Taxman 273 (Bom.) iii) The department respectfully submits that, it is fact that, the assessee preferred an appeal before the Hon'ble DRP against the additions made by the AO. iv. The department prays to draw attention of the Hon'ble Bench to the provisions contained in Section 144C(13) of the I.T.Act .The usage of the phra....
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....e the AO against the Assessment order or file objections before ethe Ld. DRP Bengaluru. In case of acceptance of the order by the assessee, final Assessment Order is to be passed by the AO within 30 days of communication of acceptance by the assessee. vi) Therefore, the assessee has only 30 days to accept the draft assessment order or raise objection against the assessment order before the AO. After, receipt of acceptance or objections against, the Assessing Officer has one month time from the end of the receipt of the communication from the assessee to pass final order. It is emphasized that this time limit has overriding effect over the time limits mentioned in the section 153 and 153B as is clear from the plain reading of the provisions mentioned above. vii) However, as the Assessee did not accept the draft Assessment and chose to raise objection before the Ld DRP Bengaluru, the time limit for passing final order by the Assessing Officer was to be governed by the provisions u/s 144C(12) &% 144C(13): Sec. 144C(12) "No direction under sub-section (5) shall be issued after nine months from the end of the month in which the draft order is forwarde....
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....f the Assessment was raised before the Ld. DRP. Therefore, fresh ground cannot be raised before the Hon'ble ITAT, if it was not raised before the First Appellate Authority. 2) No original Grounds: On perusal of the Grounds of Appeals filed by assessee before the Hon'ble Tribunal, it is seen that there is no ground related to the issue of time barring of Assessment in Form 36 filed before the bench. Hence, it is prayed that before the Hon'ble Tribunal, not to entertain this issue. In view of the above submissions, the Hon'ble Bench is requested to provide opportunity to the Department to argue the case on merit." 8. We have heard both the parties, perused the material available on record and gone through the orders of the authorities below. The assessee is a non-resident individual for the A.Y 2017- 18 and is an eligible assessee as per section 144C(15) of the I.T. Act, 1961. As per section 144C of the Act, the assessment of an eligible assessee shall be dealt with in accordance with the said provision. As per the provision of section 144C, in case of an eligible assessee, the Assessing Officer shall pass a draft assessment order and served on th....
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.... even though the said assessment proceedings is covered u/s 144C of the Act. Since the extended time limit of 12 months is not available in the case of Non-Resident as per section 153(4) of the Act, in our considered view, the Assessing Officer ought to have completed the assessment as per the provisions of section 153(2) of the Act which is one year from the end of the financial year in which notice u/s 148 was served. In the present case, if we go by date of notice issued u/s 148 of the Act i.e. 30.03.2021, the time limit for completing the assessment u/s 147 was available up to 31/03/2022 and thus, the final assessment order passed by the Assessing Officer u/s 144 r.w.s. 144C dated 12.01.2023 is clearly barred by limitation. 10. This proposition is covered by the decision of the Hyderabad Bench of the Tribunal in the case of Shri Farooq Ali vs. Income Tax Officer in ITA No.104/Hyd/2023 order dated 10/04/2024. The relevant findings of the Tribunal are as under: "23. We have heard the rival arguments made by both the sides, perused the orders of the AO and the learned DRP and the paper book filed on behalf of the assessee. We have also considered the various decisions ....
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....the assessment year commencing on the- (i) 1st day of April, 2019, the provisions of this sub-section shall have effect, as if for the words "twenty-one months", the words "twelve months" had been substituted; (ii) 1st day of April, 2020, the provisions of this sub-section shall have effect, as if for the words "twenty-one months", the words "eighteen months" had been substituted: Provided also that in respect of an order of assessment relating to the assessment year commencing on or after the 1st day of April, 2021, the provisions of this sub-section shall have effect, as if for the words "twenty-one months", the words "nine months" had been substituted.] (1A) Notwithstanding anything contained in sub-section (1), where a return under sub-section (8A) of section 139 is furnished, an order of assessment under section 143 or section 144 may be made at any time before the expiry of nine months from the end of the financial year in which such return was furnished.] (2) No order of assessment, reassessment or re-computation shall be made under section 147 after the expiry of nine months from the end of the financial year in which the notice ....