TaxTMI 
TaxTMI 
2024 (10) TMI 1652
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....ss. 2. Ld. CIT (A) erred in confirming addition of Rs. 53,59,000/- made by A.O without appreciating that the reassessment proceedings and the reassessment order passed by A.O is illegal ab initio void inasmuch as no notice u/s. 143(2) was issued by AO. The assessment order is liable to be quashed. 3. Ld. CIT (A) erred in dismissing the appeal without appreciating that the initiation of reassessment is illegal and invalid inasmuch as approval granted u/s. 151 is not in accordance with provisions of law. Consequently reassessment proceedings and the reassessment order is illegal and liable to be quashed. 4. Without prejudice to above grounds, the Ld. CIT (A) erred in dismissing the appeal without providing due and proper opportunity of hearing. 5. The appellant reserves the right to amend, modify or add any of the ground/s of appeal." 2. Succinctly stated, the A.O based on credible information that though there were credit entries of Rs. 66.10 lacs in the bank account of the assessee but he had not filed his return of income for the year under consideration, i.e. A.Y. 2017-18, initiated proceedings u/s. 147 of the Act. Notice u/s. 148 ....
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....e appellant failed to make any submissions in support of grounds of appeal, this gives rise to an undisputable conclusion that the assessee has got nothing more to say in this regard. I have gone through the record before me and based on the record I have decided to adjudicate the issue on the merits of the case. In the instant case the AO has rightly assessed an income of Rs. 66,10,000/- under the head "unexplained investment u/s 69 r.w.s 115BBE of the Income Tax Act, 1961" amounting to Rs. 53,59,000/-. Since the appellant failed to substantiate appellant's claim and addition made by the Assessing Officer of Rs. 53,59,000/-is hereby confirmed. 6. Ground Nos Ito 2 of the appeal are dismissed. 7. Ground No. 3 is general in nature. 8. In the result, the appeal is dismissed." 5. The assessee being aggrieved with the order of the CIT(Appeals) has carried the matter in appeal before us. 6. We have heard the Ld. Authorized Representatives of both the parties, perused the orders of the lower authorities and the material available on record, as well as considered the judicial pronouncements/CBDT instruction that have been pressed int....
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.... inter alia, in a case where a period of more than 3 years had lapsed from the end of the relevant assessment year was statutorily required to be obtained from the authorities therein specified, viz. Principal Chief Commissioner or Principal Director General or where there is no Principal Chief Commissioner or Principal Director General, Chief Commissioner or Director General. The Ld. AR submitted that as the A.O. in the present case had obtained the approval from the Pr. Commissioner of Income Tax, i.e. an authority who was not vested with any jurisdiction as per the mandate of Section 151 of the Act, therefore, the assessment so framed by him was liable to be struck down for want of valid assumption of jurisdiction. 10. Apropos the validity of the jurisdiction that was assumed by the A.O. for framing of the impugned assessment vide his order u/s. 147 r.w.s. 144 r.w.s. 144B of the Act, dated 11.05.2023 de hors a notice u/s 143(2) issued by the A.O., the Ld. AR submitted that though the assessee had complied to notice u/s. 148 of the Act, dated 30.06.2022 and filed his return of income on 26.04.2023, Page 1 of APB., but the A.O. without issuing notice u/s. 143(2) of the Act, had....
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....he purposes of assessment or reassessment or recomputation under this section, the Assessing Officer may assess or reassess the income in respect of any issue, which has escaped assessment, and such issue comes to his notice subsequently in the course of the proceedings under this section, irrespective of the fact that the provisions of section 148A have not been complied with.". Issue of notice where income has escaped assessment 148. Before making the assessment, reassessment or recomputation under section 147, and subject to the provisions of section 148A, the Assessing Officer shall serve on the assessee a notice, along with a copy of the order passed, if required, under clause (d) of section 148A, requiring him to furnish within such period, as may be specified in such notice, a return of his income or the income of any other person in respect of which he is assessable under this Act during the previous year corresponding to the relevant assessment year, in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed; and the provisions of this Act shall, so far as may be, apply accordingly as if such....
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.... in the case of the assessee for the three assessment years immediately preceding the assessment year relevant to the previous year in which the search is initiated or books of account, other documents or any assets are requisitioned or survey is conducted in the case of the assessee or money, bullion, jewellery or other valuable article or thing or books of account or documents are seized or requisitioned in case of any other person. Explanation 3.- For the purposes of this section, specified authority means the specified authority referred to in section 151." Conducting inquiry, providing opportunity before issue of notice under section 148-"148A. The Assessing Officer shall, before issuing any notice under section 148,- (a) conduct any enquiry, if required, with the prior approval of specified authority, with respect to the information which suggests that the income chargeable to tax has escaped assessment; (b) provide an opportunity of being heard to the assessee, with the prior approval of specified authority, by serving upon him a notice to show cause within such time, as may be specified in the notice, being not less than seven days and but not exc....
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....lapsed from the end of the relevant assessment year, unless the case falls under clause (b); (b) if three years, but not more than ten years, have elapsed from the end of the relevant assessment year unless the Assessing 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 asset, which has escaped assessment amounts to or is likely to amount to fifty lakh rupees or more for that year: 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 such notice could not have been issued at that time on account of being beyond the time limit specified under the provisions of clause (b) of subsection (1) of this section, as they stood immediately before the commencement of the Finance Act, 2021: Provided further that the provisions of this subsection shall not apply in a case, where a notice under section 153A, or section 153C read with section 153A, is required to be issued in relation to a search initiated under section 132 or books of account, other documents ....
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...., 2021, radical and reformative changes are made governing the procedure for reassessment proceedings. Amended sections 147 to 149 and section 151 of the IT Act prescribe the procedure governing initiation of reassessment proceedings. However, for several reasons, the same gave rise to numerous litigations and the reopening were challenged inter alia, on the grounds such as (1) no valid "reason to believe" (2) no tangible/reliable material /information in possession of the assessing officer leading to formation of belief that income has escaped assessment, (3) no enquiry being conducted by the assessing officer prior to the issuance of notice; and reopening is based on change of opinion of the assessing officer and (4) lastly the mandatory procedure laid down by this Court in the case of GKN Driveshafts (India) Ltd. Vs. Income Tax Officer and Ors.; (2003) 1 SCC 72, has not been followed. 6.1 Further pre Finance Act, 2021, the reopening was permissible for a maximum period up to six years and in some cases beyond even six years leading to uncertainty for a considerable time. Therefore, Parliament thought it fit to amend the Income Tax Act to simplify the tax administration,....
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....rtunity is to be given to the assessee, there is a requirement of conducting any enquiry, the assessing officer may do so and conduct any enquiry. Thus if the assessing officer is of the opinion that any enquiry is required, the assessing officer can do so, however, with the prior approval of the specified authority, with respect to the information which suggests that the income chargeable to tax has escaped assessment. 6.6 Substituted section 149 is the provision governing the time limit for issuance of notice under section 148 of the IT Act. The substituted section 149 of the IT Act has reduced the permissible time limit for issuance of such a notice to three years and only in exceptional cases ten years. It also provides further additional safeguards which were absent under the earlier regime pre Finance Act, 2021. 7. Thus, the new provisions substituted by the Finance Act, 2021 being remedial and benevolent in nature and substituted with a specific aim and object to protect the rights and interest of the assessee as well as and the same being in public interest, the respective High Courts have rightly held that the benefit of new provisions shall be made avail....
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....een issued under section 148A of the IT Act as substituted by the Finance Act, 2021 and treated to be show cause notices in terms of section 148A(b). The respective assessing officers shall within thirty days from today provide to the assessees the information and material relied upon by the Revenue so that the assessees can reply to the notices 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/o....
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....of section 148A(b). The assessing officer shall, within thirty days from today provide to the respective assessees information and material relied upon by the Revenue, so that the assesees can reply to the show cause notices within two weeks thereafter; (ii) The requirement of conducting any enquiry, if required, with the prior approval of specified authority under section 148A(a) is hereby 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. Even otherwise as observed hereinabove holding any enquiry with the prior approval of specified authority is not mandatory but it is for the concerned Assessing Officers to hold any enquiry, if required; (iii) The assessing officers shall thereafter pass orders in terms of section 148A(d) in respect of each of the concerned assessees; Thereafter after following the procedure as required under section 148A may issue notice under section 148 (as substituted); (iv) All defences which may be available to the assesses including those available under section 149 ....
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....essing Officer, in compliance with the order of the Hon'ble Supreme Court. is as under: ● The extended reassessment notices are deemed to be show cause notices under clause (b) of section 148A of the Act in accordance with the judgment of Hon'ble Supreme Court. Therefore, all requirement of new law prior to that show cause notice shall be deemed to have been complied with. ● The Assessing Officer shall exclude cases as per clarification in paragraph 7.1 above. ● Within 30 days i.e. by 2nd June 2022. the Assessing Officer shall provide to the assessees, in remaining cases, the information and material relied upon for issuance of extended reassessment notices. ● The assessee has two weeks to reply as to why a notice under section 148 of the Act should not be issued, on the basis of information which suggests that income chargeable to tax has escaped assessment in his case for the relevant assessment year. The time period of two weeks shall be counted from the date of last communication of information and material by the Assessing Officer to the assessee. ● In view of the observation of Hon'ble Supr....
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....Delhi and Pr. DGIT (NADT), Nagpur. 8. ITCC (3 copies). 9. ADG (System)-4, for uploading on the Department's website. 10. Data Base Cell for uploading or irsofficeronline.gov.in. 11. njrs [email protected] for uploading on NJRS. 12. Hindi Cell for translation. 13. Guard file. 15. We, thus, in terms of our aforesaid observation concur with the Ld. AR that in the present case before us for A.Y. 2017-18, wherein notice u/s. 148 of the Act was issued on 30.06.2022, i.e. beyond a period of three years from the end of the assessment year, the A.O. was statutorily obligated to have obtained the approval from either of the authorities specified u/s. 151(ii) of the extant law, viz. Principal Chief Commissioner or Principal Director General or where there is no Principal Chief Commissioner or Principal Director General, Chief Commissioner or Director General. However, as the A.O. had obtained the approval from the Pr. Commissioner of Income Tax, i.e. an authority who was not vested with any jurisdiction as per the mandate of Section 151 of the Act (as made available on the statute w.e.f 01.04.2021), therefore, the assessment so fra....
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....ue is regarding seeking of approval of the Pr.CCIT as the assessment year involved is A.Y. 2017-18 which is more than 3 years. In this context, it is respectfully submitted that the approval for re-opening of the assessment for A.Y. 2017-18 was obtained under section 151 of Income Tax Act, 1961 from the Jt./Addl.CIT. Range-1, Bhilai, on 23.04.2021, vide DIN & Document No.ITBA/AST/S/118/2021- 22/1032628774(1), as per extant provision contained in section 151 of Income Tax Act, 1961 prior to its substitution by the Finance Act. 2021 with effect from 01.04.2021. Prior to substitution, section 151 reads as under; "151. Sanction for issue of notice : (1) No notice shall be issued under section 148 by an Assessing Officer, after the expiry of a period of four years from the end of the relevant assessment year, unless the Principal Chief Commissioner or Chief Commissioner of Principal Commissioner or Commissioner is satisfied, on the reasons recorded by the Assessing Officer, that it is a fit case for the issue of such notice. (2) In a case other than a case falling under sub-section(1), no notice shall be issued under section 148 by an Assessing Officer, who is below the rank of Jo....