TaxTMI 
TaxTMI 
2025 (1) TMI 326
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....wance of purchases to 1% on account of bogus purchases without considering the fact that the entry provider has himself admitted that assessee company has entered into bogus purchases with his company and similar other companies and provided a layer of accommodation during the course of search. 2. Whether on the facts and circumstances of the case and in law, the order of Ld.CIT(A) is not bad in law in not realizing that the gods purchased by the assessee in cash through grey market invokes provisions of section 40A(3), hence the assessee is not entitled for any relief. 3. Whether on the facts and circumstances of the case and in law the order of the Ld.CIT(A) is not bad in law in legalizing the illegal purchases. 4. Whether on the facts and circumstances of the case and in law the order of the Ld.CIT(A) is not bad in law in legalizing the purchases made in grey market. 5. The appellant prays that the order of the CIT(A) on the above grounds be set aside and that of the Assessing Officer be restored." 2.1. Grounds taken by the assessee are reproduced as under: 1. The Id JAO had no jurisdiction to issue show cause notice u/s 148A(b) da....
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.... u/s.148, ld. Assessing Officer in para 8 of the order passed u/s.148A(d) noted that necessary approval for passing the said order and for issuing notice u/s.148 was taken from PCIT-6, Mumbai. Consequent to this order passed by ld. Assessing Officer, notice u/s.148, dated 30.07.2022 was issued with DCIT-15(3)(2), Mumbai as the undersigning authority. The said notice is manually signed by the ld. Officer who is identifiable. 4.1. According to the information available with the ld. Assessing Officer, assessee has entered into purchase transaction during the year under consideration wherein it has transferred Rs.7,19,90,000/- to M/s. Artlink Vintrade Ltd. According to him, said income of Rs.7,19,90,000/- has escaped assessment in the hands of the assessee owing to which case of the assessee was re-opened by issuing a notice u/s.148 of the Act. 5. On the above stated facts, ld. Counsel for the assessee has emphasised on the second aspect of the two legal issues which is not in compliance with the provisions of law that is approval obtained by the Assessing Officer for the purpose of issuing notice is not in accordance with the provisions of section 151 under the new regime as con....
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....le to tax which escaped assessment is more than Rs.50,00,000/-, since ld. Assessing Officer has alleged that assessee had obtained accommodation entries for bogus bills amounting to Rs.7,19,90,000/-. Also, it is undisputed that notice u/s.148 has been issued after the expiry of three years from the end of the relevant Assessment Year. Three years from the end of the Assessment Year 2017-18 lapsed on 31.03.2021. As per section 149(1)(b) of the Act (new regime), reassessment proceedings could have been initiated after the expiry of three years from the end of the relevant Assessment Year only if the income chargeable to tax which escaped assessment is more than Rs.50,00,000/-. These admitted facts are relevant on the legal aspect relating to obtaining prior approval from the specified authority which are undisputed and nothing has been brought on record by the Revenue to controvert the same. 8. We find that in a recent decision by the Hon'ble Supreme Court in the case of Union of India and other Vs. Rajeev Bansal [2024] 167 taxmann.com 70 (SC), dated 03.10.2024, Hon'ble Court after the fall out of its own decision in the case of Ashish Agarwal (supra) had dealt with the is....
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....scaping assessment was less than Rupees one lakh: (a) a reassessment notice could be issued under Section 148 within four years after obtaining the approval of the Joint Commissioner, and (b) no notice could be issued after the expiry of four years; and (ii) If income escaping was more than Rupees one lakh: (a) a reassessment notice could be issued within four years after obtaining the approval of the Joint Commissioner; and (b) after four years but within six years after obtaining the approval of the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner. 75. After 1 April 2021, the new regime has specified different authorities for granting sanctions under Section 151. The new regime is beneficial to the assessee because it specifies a higher level of authority for the grant of sanctions in comparison to the old regime. Therefore, in terms of Ashish Agarwal (supra), after 1 April 2021, the prior approval must be obtained from the appropriate authorities specified under Section 151 of the new regime. The effect of Section 151 of the new regime is thus: (i) If income escaping assessment is less than Rupees fifty lakhs....
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....n 151(2) has time till 31 March 2021 to grant approval. The time limit for Section 151 of the old regime expires on 31 March 2021 because the new regime comes into effect on 1 April 2021. 78. For example, the three years time limit for assessment year 2017-2018 falls for completion on 31 March 2021. It falls during the time period of 20 March 2020 and 31 March 2021, contemplated under Section 3(1) of TOLA. Resultantly, the authority specified under Section 151(i) of the new regime can grant sanction till 30 June 2021..... 81. This quote in Ashish Agrawal (supra) directed the Assessing Officers to "pass orders in terms of Section 148-A(d) in respect of each of the assessee concerned." Further, it directed the Assessing Officers to issue a notice u/s.148 of the new regime "after following the procedure as required u/s.148-A." Although this quote waived off the requirement of obtaining prior approval u/s.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 u/s....
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....not on the aspect of "when" for the procedural compliance for issuance of notice u/s.148 but on the aspect of "by whom" it ought to have been issued. Ld. Sr. DR has contended that there is hierarchical escalation vis-à-vis obtaining approval for issuing notice u/s.148. In this respect, Hon'ble Court has very categorically held in para 75 that the prior approval must be obtained from the appropriate authorities specified u/s.151 of the new regime for the notices issued in terms of Ashish Agrawal (supra) after 01.04.2021. Reference by ld. Sr. DR to Section 149(1)(a) deals with time limit for issuing notice u/s.148. Contention of the ld. Sr. DR that there is no hierarchical escalation for obtaining prior approval for issuing notice u/s.148 is not in coherence with the guidelines mandated by the Hon'ble Apex Court as enunciated above. Repeatedly, Hon'ble Court has stated including by way of illustration that TOLA extends time line from the old regime which survives making the notice validly issued subject to the approval requirements of Section 151 under the new regime. Accordingly, the prior approval requirement is mandated under the section 151 of new regime. 8.3. In the pr....