TaxTMI 
TaxTMI 
2025 (6) TMI 1993
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....limine, without appreciating the bonafide and unavoidable reasons for the delay of ten days in filing the appeal. 2. That on the facts and circumstances of the case and in law, the notice issued under section 148 of the Act is time barred, invalid and without jurisdiction as per the decision of the Hon'ble Supreme Court in the case of Union of India vs. Rajeev Bansal: (2024) 167 taxmann.com 70 (SC). 3. That on the facts and circumstances of the case and in law, the Ld. CIT has erred in sustaining the addition made by the Ld. AO amounting to Rs. 1,35,21,188/- under section 69C of the Act by holding the same as bogus purchases from Shri Amit Kumar (Prop M/s Rishabh Trading Company). 4. That on the facts and circumstances of the case and in law, the CIT(A) has failed to appreciate that Ld. AO has not provided any material for reopening of the assessment. 5. That on the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in sustaining the addition based on an order where the Ld. AO has reopened on the basis of information which is grossly incorrect, contradictory, inconsistent and incapable of being acted upon; there are two ....
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....21 issued u/s 148 of the Act has been considered to a show cause notice u/s 148A(b) of the Act. An opportunity of being heard as per provision of Section 148A(b) Act has been provided to the Assessee by issuing show cause notice darted 25/05/2022 requiring the Assessee as to why notice u/s 148 of the Act should not be issued on her. In response, the Assessee filed submission dated 10/06/2022, which has not been found to be satisfactory by the A.O. and consequentially the order u/s 148A (d) of the Act was passed on 23/07/2022 and the notice u/s 148 of the Act was issued to the Assessee on 23/07/2022. 4. An assessment order came to be passed u/s 147 r.w. Section 144 r.w. Section 144B of the Act on 27/01/2023 against the Assessee by determining the income of the Assessee at Rs. 1,40,24,500/-. Aggrieved by the assessment order dated 27/01/2023, the Assessee preferred an Appeal before the Ld. CIT(A) with a delay of 10 days. The Assessee contended before the Ld. CIT(A) that delay of 10 days was due to bonafide reason that the representative of the Assessee has failed to represent the Assessee during the assessment proceedings and has not even informed the fact of passing of the assess....
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....s concerned. It is the case of the Assessee that the issue involved in the appeal is squarely covered in the ratio laid down by the Hon'ble Supreme Court in the case of union of India Vs. Rajiv Bansal (supra). Considering the fact that the issue is squarely covered by the Judgment of Hon'ble Supreme Court and finding no fruitful object will be achieved if the issue is remanded to the file of the Ld. CIT(A), therefore, we deem it fit to decide the Appeal by adjudicating the issue of limitation to issue Notice under Section 148 of the Act. 9. In the present case, the notice under erstwhile provision of Section 148 of the Act was issued on 23/06/2021 under the provision of Section 148 of the Act i.e.prior to substitution of Section 148 by Finance Act, 2021, w.e.f. 01/04/2021. 10. The Hon'ble Supreme Court vide its Judgment dated 04/05/2022 in the case of Union of India Vs. Ashish Agarwal (2023) 1 SCC 617, deeming the notice issued under the erstwhile Section 148 of the Act as Notice under Section 148A(b) of new Law as amended by Finance Act, 2021 and directing that material/information be given in 30 days from date of the said order and Assessee's shall reply wit....
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....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, as they stood immediately before the commencement of the Finance Act, 2021: Provided further that the provisions of this sub-section 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 or any assets requisitioned under section 132A, on or before the 31st day of March, 2021: Provided also that for the purposes of computing the period of limitation as per this section, the time or extended time allowed to the assessee, as per show cause notice issued under clause (b) of section 148A or the period during which the proceeding under section 148A is stayed by an order or injunction of any court, shall be excluded: Provided also that where immediately after the exclusion of the period referred to in the immediately preceding proviso, the period of limitation available to ITAs No.6140 & 6167/Mum/2024 (A.Ys. 2013-14 & 2014-15) 8 the Assessing Officer for pa....
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....cial interest in any entity) located outside India, chargeable to tax, has escaped assessment. Explanation. -- In determining income chargeable to tax which has escaped assessment for the purposes of this sub-section, the provisions of Explanation 2 of section 147 shall apply as they apply for the purposes of that section. (2) The provisions of subsection (1) as to the issue of notice shall be subject to the provisions of section 151. (3) If the person on whom a notice under section 148 is to be served is a person treated as the agent of a non-resident under section 163 and the assessment, reassessment or recomputation to be made in pursuance of the notice is to be made on him as the agent of such non-resident, the notice shall not be issued after the expiry of a period of six years from the end of the relevant assessment year. Explanation. -- For the removal of doubts, it is hereby clarified that the provisions of sub-sections (1) and (3), as amended by the Finance Act, 2012, shall also be applicable for any assessment year beginning on or before the 1st day of April, 2012." 16. From the plain reading of section 149 of the Act, prior to its amen....
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....ays from the date of the judgment. A show cause notice is effectively issued in terms of Section 148A(b) only if it is supplied along with the relevant information and material by the assessing officer. Due to the legal ITAs No.6140 & 6167/Mum/2024 (A.Ys. 2013- 14 & 2014-15) 11 fiction, the assessing officers were deemed to have been inhibited from acting in pursuance of the Section 148A(b) notice till the relevant material was supplied to the assesses. Therefore, the show cause notices were deemed to have been stayed until the assessing officers provided the relevant information or material to the assesses in terms of the direction issued in Ashish Agarwal (supra). To summarize, the combined effect of the legal fiction and the directions issued by this Court in Ashish Agarwal (supra) is that the show cause notices that were deemed to have been issued during the period between 1 April 2021 and 30 June 2021 were stayed till the date of supply of the relevant information and material by the assessing officer to the assessee. After the supply of the relevant material and information to the assessee, time begins to run for the assesses to respond to the show cause notices. 107....
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....ate of issuance of the reassessment notices. The effect of creating the legal fiction is that this Court has to imagine as real all the consequences and incidents that will inevitably flow from the fiction. 163 Therefore, the logical effect of the creation of the legal fiction by Ashish Agarwal (supra) is that the time surviving under the Income Tax Act read with TOLA will be available to the Revenue to complete the remaining proceedings in furtherance of the deemed notices, including issuance of reassessment notices under Section 148 of the new regime. The surviving or balance time limit can be calculated by computing the number of days between the date of issuance of the deemed notice and 30 June 2021." 19. Thus, the Hon'ble Supreme Court held that the surviving time under the Act read with the TOLA will be available to the Revenue to complete the remaining proceedings in furtherance of the deemed notice, including issuance of re-assessment notice under section 148 of the Act under the new regime. While explaining the methodology for computation of the surviving or balance time limit, the Hon'ble Supreme Court in paragraph-112 of Rajeev Bansal (supra) ob....
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....(b) of the Act. However, undisputedly, in the present case, the notice under section 148 of the Act was issued on 28/07/2022, i.e., 32 days after the surviving/balance time period as per the decision of the Hon'ble Supreme Court in Rajeev Bansal (supra). 22. We find that even if the benefit of the fourth proviso to section 149 of the Act is granted to the Revenue, since the remaining period in the present case, after the exclusion of time period as provided in the third proviso to section 149, is less than 7 days, even then the notice dated 28/07/2022 under ITAs No.6140 & 6167/Mum/2024 (A.Ys. 2013-14 & 2014-15) 14 section 148 of the Act was issued much beyond the 7 days' extension provided in the fourth proviso to section 149 of the Act. 23. As regards the other contention of the learned DR that as per the provisions of section 148A(d) of the Act, the AO has time period of one month from the end of the month in which the reply is received from the assessee, and therefore, since in the present case, the assessee filed its reply on 24/06/2022, the order passed under section 148A(d) and notice issued under section 148 of the Act on 28/07/2022 is within the li....