TaxTMI 
TaxTMI 
2025 (4) TMI 1206
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 14.08.2024, the assessment order dated 17.05.2023 passed by the Assessing Officer has been set aside. 4. As is available from the assessment order dated 17.05.2023, the Assessing Officer assessed total income of the assessee at Rs. 19,18,18,106. Assessment order was passed u/s 147/143(3) r.w.s. 144B of the Act. Thereby, variations have been made by the Assessing Officer. Said variations have been tabulated in para 5 of the assessment order, as under:- S. No. Description Amount (in INR) 1. Income as per return of income filed 4483340/- 2. Income as computed u/s 143(1)(a) 0 3. Variation in respect of issue as discussed above. 187334766/- 4. Variation in respect of issue of <> (if any) 5. Total income/loss determined as per the above proposal 19,18,18,106/- 5. It is a case of the department that its Investigation Wing on 16.05.2018 conducted a search and survey operation u/s 132/133 of the Act as regards the group known as Dutta and Tayagi Group. After enquiry, it was found that scrip of M/s Yamini Investment Company Ltd (in short 'YICL') listed in BSE having scrip code-511012" was managed and controlled to the ben....
X X X X Extracts X X X X
X X X X Extracts X X X X
....f merits and law as already the assessment proceedings were initiated in present case of assessee and the issue of capital gain on sale of shares of M/s Yamini Investment Pvt. Ltd was specifically raised by the Assessing Officer during the original assessment however after considering the same the Ld. Assessing Officer passed the order u/s 143(3) on 11/12/2018 accepting the return of income of the assessee, thus the impugned assessment order passed dated 17.05.2023 is merely a review under garb of reassessment proceedings. Thus, the impugned assessment order dated 17.05.2023 deserved to be quashed." 11. As is available from page 14 to 17 of the impugned order, in support of abovesaid ground No.7, following submissions were put forth before NFAC, on behalf of the appellant-assessee, :- "Submissions of Appellant on above ground are as follows: 1. the scrutiny assessment in the case of the Appellant has already been completed u/s 143(3) of the Act and all the aspects in regard to the Capital gain arising on the sale of shares of Yamini Investment was considered various time, thus the present proceedings has been carried out for the verification purpose which is no....
X X X X Extracts X X X X
X X X X Extracts X X X X
....based on the very same material with a view to take another view. 4. Because the Appellant submitted all the documents during the scrutiny assessment such as copy of demat account, demat transaction statement, copy of broker note for sale of shares of Yamini Investment, Bank Statement for the year consideration, share certificate of Anax Trade Limited, Copy of Scheme of amalgamation of Anax Trade with Yamini Investment and contract bills of broker. Thus, the Ld.AO had all the documents with him before passing the scrutiny assessment order dated 11/12/2018 and after considering all such documents the return income of the Appellant was accepted. Thus, it is inte law that the reassessment can only be done on the basis of new material and in the present case. There is no new material to which a reference is to b found and the entire basis for reopening the assessment is the disclosure which has been made by the assessee in the course of the assessment proceedings. Further during the alleged reassessment proceedings the same information was provided by the Appellant to the Ld AO again and again as there was new material. Judgments relied by the Appellant in his defence....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d the appellant each time replied to the same and provided each and every detail related to the transaction. The details of the notices issued by the revenue and reply to the same by Appellant are tabulated as under: S. no. Notice date Reply date 1. 12.09.2018 17.09.2018 2. 17.09.2018 20.09.2018 3. 29.09.2018 27.09.2018 4. 03.10.2018 07.10.2018 5. 10.10.2018 12.10.2018 6. 19.10.2018 24.10.2018 7. 05.11.2018 11.11.2018 8. 12.11.2018 13.11.2018 4.6 It is seen that AO during the scrutiny assessment issued the letter dated 12/09/2018 whereby appellant was asked to submit the details through e-filing which also included the demat account for F.Y. 2015-16, details of work done in F&O and form no 10DDB, computation of income of LTCG for the F.Y. 2015-16 and the source of investment in shares/F&O transaction with supporting evidences. The appellant in pursuance to the letter dated 12/09/2018 submitted the requisite details vide its reply dated 17/09/2018. The AO again vide letter dated 17/09/2018 directed the appellant to provide the ledger in the books of broker of the Share Transactions done in the ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d 12.10.2018. The AO yet again vide clarification letter dated 19/10/2018 directed the appellant to submit the bank statements from which payments for primary allotment of shares of Anax Com Trade was made. In pursuance to the same, appellant provided the bank statement of his which shows the payment made for allotment of shares of Anax Com Trade. The AO further vide its show cause notice dated 05/11/2018 directed the appellant to provide some other detail in regard to the payment made for allotment of shares of Anax Com Trade Limited to which the Appellant replied and submitted the details vide its reply dated 11/11/2018. The AO further vide its clarification letter dated 12/11/2018 again requested the details in regard to the share transaction to which the appellant replied and submitted the reply dated 13/11/2018 along with ledger showing the loan amount to repaid to Vistaar Infra Property Pvt Ltd taken for purchase of shares of Anax in the year2012. It is seen that the AO after considering all the documents and replies of the appellant on various occasions passed the order u/s143(3) dated 11/12/2018 accepting the returned income of the appellant at Rs. 45,83,340 without making ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ent merely to re-examine any transaction for non-application of his mind on the materials already with him. In the case of Gemini Leather Stores v. ITO [1975] 100 ITR 1, the Hon'ble Supreme Court held "After discovery of the primary facts relating to the transactions evidenced by the drafts it was for the officer to make the necessary enquiries and draw proper inference as to whether the amounts represented by the drafts could be treated as part of the total income of the appellant. This the officer did not do It was plainly a case of oversight and it could not be said that income chargeable to tax had escaped assessment by reason of the omission or failure on the part of the appellant to disclose fully and truly all material facts He could not, thereafter, take recourse to Section 147(a) to remedy the error resulting from his own oversight." 4.13 In the case of Calcutta Discount co. v. ITO (1961) 41 ITR 191, the Hon'ble Supreme Court held that once the assessee disclosed all primary facts, his duty ends and it is for the AO to draw conclusion from the same "Does the duty however extend beyond the full and truthful disclosure of all primary facts?....
X X X X Extracts X X X X
X X X X Extracts X X X X
....LP against Bombay High Court order in Writ Petition No.3497 of 2019, that where during assessment proceedings assessee-company had furnished material related to alleged purchase and sale of shares and capital gain/loss made therein and Assessing Officer after considering said details had conclusively taken a view on same, reassessment proceedings initiated under section 147 based on reconsideration of same material that was available at time of original proceedings would tantamount to change of opinion and thus would be liable to be set aside. In the said case, the Hon'ble Bombay High Court had held as under:- "6 Therefore, all material facts had been disclosed by petitioner in the course of the regular assessment proceedings and the reasons recorded for initiation of reassessment too give reference only to the details already submitted by petitioner in the course of the original assessment proceedings and nothing more. It is a well settled judicial principle that the true test of income chargeable to tax escaping assessment is whether there exists fresh "tangible material" on the basis of which an appropriate conclusion can be reached. In the absence of such fresh mat....
X X X X Extracts X X X X
X X X X Extracts X X X X
....may be mentioned here that the appeal in the form of Cross Objections is accompanied by an application seeking condonation of delay. The impugned order passed by NFAC is dated 14.08.2024. Appeal in the form of Cross objections came to be presented on 11. 02.2025. Surprisingly, the Registry raised a deficiency note that the appeal in the form of Cross Objections came to be filed only 11 days delay, whereas the assessee-objector-applicant has claimed delay of 86 days in filing thereof. Even Learned DR for the department has rightly pointed out that cross-objections are delayed not only by 11 days, and that same have been filed only after this fact was pointed out in the course of arguments on appeal that the assessee could not raise legal ground for want of any cross-objection. Assessee-applicant has alleged that the assessee was required to file Cross Objections u/s 253(4) of the Act within 30 days of the receipt of notice i.e. by 17.11.2024. As per record, notice of appeal filed by the department was issued by the Registry to the assessee on 16.10.2024. As per column No.7 of the Cross-objections, the assessee was in receipt of notice of appeal on 17.10.2024 i.e. on t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....R for the assessee has submitted that such a legal objection can be raised by the assessee at any stage of the appellate proceedings, and without filing of Cross Objections, but in order to avoid any technical objection, the same has been filed. Ld. AR has categorically stated in that he was under bonafide impression that no Cross Objections is required to be filed. 19. A perusal of the Cross Objections would reveal that only a legal ground as to the validity of notice 148 of the Act, is sought to be raised. This fact is not being disputed even from the side of the department. As is available from the grounds of appeal submitted before NFAC, the assessee raised a specific ground No.4 that the assessment order under section 147 read with section 144 read with section 144B of the Act was invalid for want of sanction under section 151. Section 151 pertains to sanction for issue of notice under section 148 and section 148A. 20. In the given situation, when AR for the applicant has candidly pleaded that he was under the bonafide impression that for raising such a legal ground no cross-objection was required to be filed, and that he could straightway argue the same in the ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ous approval of the authority specified under section 151; that a notice issued without complying with the preconditions shall be invalid as the same would affect the jurisdiction of the Assessing Officer. The reassessment notices issued under section 148 of the new regime, in pursuance of the deemed notices, ought to be issued within the time limit surviving under the Income Tax Act read with TOLA. Admittedly, a reassessment notice issued beyond the surviving time limit, would be time-barred, as per decision by Hon'ble Apex Court in Ashish Agarwal's case. 26. Here, the question involved is not that the reassessment notice came to be issued beyond the surviving time limit. The question is about grant of sanction under section 151 of the Act by the proper authority. 27. In Rajeev Bansal's case, the Hon'ble Supreme Court, while dealing with the issue of approval and the competent authority, as regards notice u/s 148 of the Act, observed as under:- "73. Section 151 imposex 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....
X X X X Extracts X X X X
X X X X Extracts X X X X
....aping assessment is less than Rupees fifty lakhs: (a) a reassessment notice could be issued within three years after obtaining the prior approval of the Principal Commissioner, or Principal Director or Commissioner or Director; and (b) no notice could be issued after the expiry of three years; and (ii) If income escaping assessment is more than Rupees fifty lakhs: (a) a reassessment notice could be issued within three years after obtaining the prior approval of the Principal Commissioner, or Principal Director or Commissioner or Director; and (b) after three years after obtaining the prior approval of the Principal Chief Commissioner or Principal Director General or Chief Commissioner or Director General. 76. Grant of sanction by the appropriate authority is a precondition for the assessing officer to assume jurisdiction under Section 148 to issue a reassessment notice. Section 151 of the new regime does not prescribe a time limit within which a specified authority has to grant sanction. Rather, it links 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....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... noted that this requirement has been deleted by the Finance Act 2022; c. Section 148A(d) - to pass an order deciding whether or not it is a fit case for issuing a notice under Section 148; and d. Section 148 - to issue a reassessment notice. 80. In Ashish Agarwal (supra), this Court directed that Section 148 notices which were challenged before various High Courts "shall be deemed to have been issued under Section 148-A of the Income Tax Act as substituted by the Finance Act, 2021 and construed or treated to be show-cause notices in terms of Section 148-A(b)." Further, this Court dispensed with the requirement of conducting any enquiry with the prior approval of the specified authority under Section 148A(a). Under Section 148A(b), an assessing officer was required to obtain prior approval from the specified authority before issuing a show cause notice. When this Court deemed the Section 148 notices under the old regime as Section 148A(b) notices under the new regime, it impliedly waived the requirement of obtaining prior approval from the specified authorities under Section 151 for Section 148A(b). It is well established that this Court while exercising ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....sequently, an opportunity of being heard as per provisions of section 148A(b) of the Income Tax Act, 1961 was provided to the assessee with prior approval from the competent authority vide DIN and Notice dated 25.5.2022. In said report, the Assessing Officer has further reported that the competent authority for approving the proposal order under section 148A(d) was Pr.CIT-2, Jaipur. In this way, the Assessing Officer has admitted the case of the assessee that for the relevant Assessment Year 2016-17, Pr. CIT-2 Jaipur was the competent authority for the purposes of sanction under section 151 of the Act. Copy of approval for passing order under section 148A(d), dated 22/25.7.2022, as per directions of Hon'ble Apex Court would reveal that said order was passed with the approval of the Principal Commissioner of Income tax-2, Jaipur. This fact also finds mention in Order under section 148A(d) of the Act issued on 27.7.2022. Conclusion 30. In view of the above discussion, we hold that the notice under section 148 of the Act is invalid in the eye of law. Result 31. As a result of the above findings, the reassessment order dated 17.5.2023 deserves to be set aside on this ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....to provide ledger and the books of the broker of the share transactions done in the assessment year 2016-17. In compliance thereto, the assessee provided ledger of Swastik Investment Ltd., depicting all the transactions of the shares shown by the broker as carried out by the assessee during the year under consideration. Again notice dated 26-09-2018 was issued to the assessee whereby the AO directed the assessee to submit copies of the bills relating to share transactions made in the year under consideration, and, in response thereto, the assessee submitted contract note cum bill of Swastik Investment Ltd. Said documents revealed name of the scrip of Yamini Investment Co. Ltd. (for short ''YICL''), its sale prices, date, and net amount paid to the assessee. Another notice u/s 142(1) of the Act was issued by the AO to the assessee on 30-03-2018 raising a specific query in respect of shares of YICL and to provide D-mat account from the date of purchase of shares of the said company upto 31-03-2016, in addition to purchase bills/contract notes of shares purchased of YICL. It was in response to the said notice that the assessee submitted reply dated 7-10-2018. Therein, t....