TaxTMI 
TaxTMI 
2024 (7) TMI 1224
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.... of Appeal Nos. 2 to 5: Invalidity of impugned proceedings under section 147 of the Act 2. failed to appreciate that the impugned proceedings have been initiated beyond the time limit prescribed under provisions of section 149 of the Act and thereby, vitiating the impugned proceedings and making it liable to be quashed; 3. failed to appreciate that notice under section 148 of the Act dated 29 July 2022 issued manually without mentioning the mandatory Document Identification Number and in contravention to the Circular No. 19/2019 dated 14 August 2019 shall be deemed never to have existed and therefore, the impugned proceedings based on such jurisdictionally defective notice is bad in law and liable to be quashed; 4. failed to specify the nature of information which suggests income chargeable to tax has escaped assessment and instead indicating that the proceedings have been initiated on account of "information which requires action in consequence of the judgement of the Hon'ble Supreme Court in the case of Union of India Vs. Ashish Agarwal, Civil Appeal 3005/;2022, dated 4th May 2022" and such jurisdictional error goes to the root of the matter, vitiat....
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....x paid during regular assessment amounting to Rs. 1,59,91,956; Ground of Appeal No. 13: Levy of interest under section 234A of the Act 13. erred in levying interest under section 234A of the Act amounting to Rs. 32,53,03,275 without appreciating the Appellant's return of income has been filed within the due date of filing the return of income; Ground of Appeal No. 14; Levy of Interest under section 234B of the Act. 14. erred in levying interest under section 234B of the Act amounting to Rs. 41,09,09,400; Each of the grounds of appeal referred above is separate and may kindly be considered independent of each other. The Appellant craves leave to add, alter, vary, omit, substitute, amend or withdraw any or all of the above grounds of appeal and to submit such statements, documents and papers as may be considered necessary either at or before the hearing of this appeal so as to enable the Hon'ble Income-tax Appellate Tribunal to decide this appeal acceding to law." 3. Ground No. 1 is general in nature and needs no separate adjudication. 4. Vide Ground No. 2, assessee has challenged the validity of the assessment order, st....
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....g Officer has in his possession books of account or other documents or evidence which reveal that the income chargeable to tax, represented in the form of- (i) an asset; (ii) expenditure in respect of a transaction or in relation to an event or occasion; or (iii) an entry or entries in the books of account, which has escaped assessment amounts to or is likely to amount to fifty lakh rupees or more:] Provided that no notice under section 148 shall be issued at any time in a case for the relevant assessment year beginning on or before 1st day of April, 2021, if ^74[a notice under section 148 or section 153A or section 153C could not have been issued at that time on account of being beyond the time limit specified under the provisions of clause (b) of sub-section (1) of this section or section 153A or section 153C, as the case may be], as they stood immediately before the commencement of the Finance Act, 2021:" 7.1. In the memorandum explaining the provisions in the Finance Bill, 2021, it has been interalia explained that another restriction has been provided that the notice under section 148 of the Act cannot be issued at any time in a case for ....
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....shish Agarwal (supra) did not disturb the findings of this Court in Tata Communications (supra). The Apex Court only modified the orders passed by the respective High Courts to the effect that the notices issued under section 148 of the Act, which were subject matter of writ petitions before various High Courts, shall be deemed to have been issued under section 148A(b) of the Act and the Assessing Officer was directed to provide within 30 days to the respective assessee the information and material relied upon by the Revenue so that the assessee could reply to the show cause notices within two weeks thereafter. The Apex Court held that the Assessing Officer shall thereafter, pass orders in terms of Section 148A(d) in respect of each of the concerned assessees and having followed the procedure as required under section 148A of the Act may issue notice under section 148 of the Act. The Apex Court also kept open expressly all contentions which may be available to the assessee including those available under section 149 of the Act and all rights and contentions, which may be available to the concerned assessee and Revenue under the Finance Act, 2021 and in law, shall be continued to be....
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....eto, the Rajasthan High Court in Sudesh Taneja (supra), which was followed by this Court in Tata Communications (supra), in paragraph 37 held as under : ** ** ** In Sudesh Taneja (supra), the Court held that for any action of issuance of notice under section 148 after 1st April 2021 the newly introduced provisions under the Finance Act, 2021 would apply. Mere extension of time limits for issuing notice under section 148 would not change this position that obtains in law. The Court held that a notice, which had become time barred prior to 1st April 2021 as per the then prevailing provisions, would not be revived by virtue of application of Section 149(1)(b) effective from 1st April 2021. We respectfully agree with this view. As noted earlier in Ashish Agarwal (supra), the Hon'ble Supreme Court categorically confirmed the view taken by various High Courts including the Hon'ble Rajasthan High Court. Therefore, the impugned notices pertaining to AY 2013-14 pursuant to Ashish Agarwal (supra) are barred by limitation. 24. We could also note that the provisions of TOLA have no application relating to AY 2013-14. Section 3(1) of TOLA reads as under: ....
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....e under section 148 as per time limit specified in Section 149 and 'the time limit for such action expires on 30th April 2021 due to its extension by the said Notifications', such time limit shall further stand extended to 30th June 2021. The Notification dated 27th April 2021 reads as under: ** ** ** Therefore, it only extends the time limit prescribed in Notification S.O. 1432(E) to 30th June 2021. When the Notification S.O. 1432(E) was not applicable to AY 2013-14, the question of time limit for AY 2013-14 being extended beyond 31st March 2021 does not arise. 27. Therefore, under the Income-tax Act, when the completion of any action relates to issuance of notice under section 148 as per time limit specified in Section 149 was 31st March 2021, it shall stand extended to 30th April 2021. The time limit under section 149 expired on 31st March 2021 only for AY 2014-15 (and not for AY 2013-14, which expired on 31st March 2020) and has got extended by virtue of clause (a) of sub-section (1) of Section 3 of TOLA. The Notification does not say "issuance of notice under section 148 as per time limit specified in Section 149 as extended under sub-section....
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....vel back to the original date. Paragraphs 28 to 31 of the said judgment read as under : ** ** ** 33. In Ganesh Dass Khanna (supra), the Delhi High Court has already declared paragraph 6.1 and 6.2(ii) of the Instructions as bad in law. Further, this Court in Group M Media India P. Ltd. (supra) has held that a declaration of a Board's instruction as ultra vires by a competent Court would be binding on all authorities administering the Act all over the country and accordingly, the officers implementing the Act were bound by the decision of the Delhi High Court. Paragraphs 44.4, 49, 51, 52 and 55 of Ganesh Dass Khanna (supra) read as under : ** ** ** Paragraphs 6 and 8 of Group M Media India P. Ltd. (supra) read as under : ** ** ** 34. It will be also useful to note that even in Hindustan Aeronautics Ltd. (supra) the Apex Court has held that circulars/instructions are only binding on the Revenue and not on the assessees and certainly not on the Hon'ble Courts. 35. The Revenue's contention that the reopening notice was to relate back to an earlier date is entirely flawed and unacceptable. Thus, the reass....
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....e Hon'ble Apex Court held :....." 10. The Hon'ble Bombay High Court in the case of Hexaware Technologies Ltd. v. Assistant Commissioner of Income-tax [2024] 162 taxmann.com 225 (Bombay), had the occasion to consider a similar issue and held as under:- "27. The interpretation as canvassed by the Revenue would render the first proviso to Section 149 of the Act redundant and otiose. The time limit to issue notice under section 148 of the Act had already expired on 1st April 2021 for Assessment Year 2013-2014 and 2014-2015, when Section 149 of the Act was amended. Therefore, reopening for Assessment Years 2013-2014 and 2014-2015 had already been barred by limitation on 1st April 2021. Accordingly, the extended period of ten years as provided in Section 149(1)(b) of the Act would not have been applicable to Assessment Years 2013-2014 and 2014-2015, de hors the proviso. It is a settled principle of law that when limitation has already expired, it cannot be revived by way of a subsequent amendment and, hence, for Assessment Years 2013-2014 and 2014-2015 proviso to Section 149 of the Act was not required. Hence, to give meaning to the proviso it has to be interpreted to be ....
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....ation canvassed by the Revenue is to be accepted then, not only various parts of the Section would be rendered otiose, one would have to also substitute one phrase with another phrase in the said Section, which is clearly not permissible in law. Reliance in this regard is placed on the decision of the Hon'ble Apex Court in the case of CIT v. Sham L. Chellaram [2015] 54 taxmann.com 348/373 ITR 292 (Bom.). 29. It was submitted on behalf of Revenue that the period of limitation for the purposes of Section 149 of the Act has to be seen with respect to the original notice under section 148 of the Act, which was issued to petitioner on 8th April 2021 and as the said notice was issued within the period of six years from the end of the relevant assessment year, which was expiring on 31st March 2022, the reassessment proceedings are within the period of limitation prescribed in Section 149 of the Act. It is not acceptable. Section 149 of the Act sets out, inter alia, the time limit for issuing notice under section 148 of the Act. Apart from the period of limitation set out in the said Section, the first proviso lays down a further restriction on the issue of a notice u....
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....ed under section 148 of the Act is within the period of limitation in terms of Section 149(1)(a) or (b) of the Act. To decide whether the notice is within the period of limitation under section 149(1)(a) or (b) of the Act, the extension of time as per the fifth and/or sixth proviso would be considered. Once, the notice is otherwise within the period of limitation, thereafter one has to see whether the said time limit is within the restriction provided in the first proviso or not. If the notice is beyond the restriction period, the notice is invalid. The fifth and/or the sixth proviso cannot apply at this stage to extend the period of restriction as per the first proviso. Hence, if a notice is not within the time prescribed under the first proviso to Section 149(1) of the Act, then such period cannot be extended by fifth proviso and sixth proviso. In Godrej Industries Ltd. (supra) paragraph 15 reads as under : 15. Based on petitioner's facts, the show cause notice under section 148A(b) of the Act was issued on 24th May 2022 asking petitioner to furnish a reply by 8th June 2022. Petitioner filed a detailed reply in response to the show cause notice on 8th June 2022 and, ....