TaxTMI 
TaxTMI 
2025 (8) TMI 454
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.... prayed for quashing and setting aside the aforesaid orders and restraining the Respondents from taking any steps whatsoever, in implementation of the notice under Section 148 as well as the assessment order and also the order passed under Section 264 by the Income Tax Act. 2. We have heard Mr. Dhiren Gandhi for the Petitioner and Advocate Ms. Susan Linhares for the Revenue. While issuing notice on 10.06.2024, this Court had directed that till the next date, no cohesive steps shall be taken against the Petitioner. On the pleadings being completed, we deem it appropriate to issue 'Rule' and have taken up the Petition for final hearing. 3. The Petitioner, engaged in real estate business and during the course of his business activity, purchases plot/plots and develop the same for its sale. Upto the AY 2010-11, the Petitioner regularly filed his Income Tax Returns, however, for the subsequent years from AY 2011-12 till 2016-17, the Tax Returns on his behalf were not filed as the Petition plead that though the Petitioner submitted his Books of Account to the Tax Consultant, the process of filing the Returns was not complete and the Petitioner was under the belief that the Returns ....
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....ed in issuance of notice under Section 143(2) on 11.02.2022, which disclose that the assessment was reopened on account of the fact that the Petitioner had entered into some transactions of purchase and sale of property, but he had not filed his Return of Income and therefore, his Returns did not take into consideration his income in the declaration filed under the IDS. This was followed by a show cause notice in form of draft assessment order dated 22.02.2022, alleging that the Petitioner had failed to comply with the notices and therefore, the Income Tax Officer proposed to make the best judgment assessment by adding all the amounts which were the basis of reopening the assessment and five days time was given to file his Returns, but the Petitioner failed to respond. This resulted in passing of the final assessment order by Respondent No. 2 to the best of his judgment on 21.03.2022, to be followed by a notice of demand issued by Respondent No. 1 under Section 156 of the Income Tax Act. A notice was also issued under Section 274 asking the Petitioner to show cause as to why a penalty should not be imposed. 6. Being aggrieved, the Petitioner filed an Application under Section 26....
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....sistant Commissioner of Income Tax Circle-1 [2012] 20 taxmann.com 716 (Bom), in support of his submission that when the Income Tax Act has conferred the power of sanction by according the satisfaction of the distinct Authorities, then the mandate of the statute must be strictly followed and when the statute mandates the satisfaction of a particular functionary for exercise of the power, the satisfaction must be of that Authority alone. Reliance is also placed upon a further decision of the Bombay High Court in the case of Commissioner of Income Tax, Central-4 Vs. Aquatic Remedies (P) Ltd. [2012] 20 taxmann.com 716 (Bom). 8. Contesting the stand of the Petitioner, Ms. Linhares for the Revenue, has placed before us the approval under Section 151 of the Income Tax Act with respect to the assessment of the Petitioner for AY 2015-16 and according to her, from the said document, it is evident that for the income escaping assessment computed at Rs. 2,05,90,000/- and the date of proposal is mentioned as 27.03.2021 and the recommendation remarks in Column No. 3, record as below:- "The reasons recorded by the A.O. is seen. I am satisfied that it is a fit case for reopening the as....
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....eferring to the financial transactions carried out by the Petitioner and his Spouse during the FY 2014-15, an income of Rs. 2,05,90,000/- was found to have escaped assessment, according to her, the assessment under Section 147 read with Section 144 along with Section 144B of the Income Tax Act for the AY 2015-16 was completed by the National Faceless Assessment Centre on 21.03.2022. This was preceded by issuance and service of notices on the Petitioner and thereafter, in absence of no response from the Petitioner, by order dated 21.03.2022, the income was assessed at Rs. 20,89,65,850/- after the addition of Rs. 2,05,90,000/- under Section 69A of the Income Tax Act. 12. An exhaustive reply is filed on the merits of the matter, but since Mr. Gandhi has restricted his case only on the point as to whether the case of the Petitioner would be governed by sub-section (1) or sub-section (2) of Section 151 of the Income Tax Act, an additional affidavit in reply is filed, wherein it is stated that the notice was issued on 31.03.2021 for the AY 2015-16, after expiry of four years from the relevant assessment year and therefore, sanction was obtained under Section 151(1) of the Income Tax A....
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....hief Commissioner or the Principal Commissioner or the Commissioner or the Joint Commissioner, as the case may be, being satisfied on the reasons recorded by the Assessing Officer about fitness of a case for the issue of notice under section 148, need not issue such notice himself.] 15. Section 148 is the provision pertaining to issuance of notice where income has escaped assessment and provision 148, prior to its amendment by Finance Act, 2024 reads thus: 148. Issue of notice where income has escaped assessment.-Before making the assessment, reassessment or recomputation under section 147, and subject to 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 a period of three months from the end of the month in which such notice is issued, or such further period as may be allowed by the Assessing Officer on the basis of an application made in this regard by the assessee, 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 t....
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.... return of income required under sub-section (1) shall be furnished in such form and verified in such manner and setting forth such other particulars, as may be prescribed, and the provisions of this Act shall, apply accordingly as if such return were a return required to be furnished under Section 139: Provided that any return of income required under sub-section (1), furnished after the expiry of the period specified in the notice under the said sub-section, shall not be deemed to be a return under Section 139. (3) For the purposes of this section and Section 148- A, the information with the Assessing Officer which suggests that the income chargeable to tax has escaped assessment means,- (i) any information in the case of the assessee for the relevant assessment year in accordance with the risk management strategy formulated by the Board from time to time; or (ii) any audit objection to the effect that the assessment in the case of the assessee for the relevant assessment year has not been made in accordance with the provisions of this Act; or (iii) any information received under an agreement referred to in Section 90 or Section 90-A o....
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....ble to tax had escaped assessment in his case for the relevant years. Upon receipt of the reply from the Assessee and on the basis of the material available, it is open for the Assessing Officer to pass an order with the prior approval of the specified Authority, determining whether or not it is a fit case to issue notice under Section 148. 18. Another provision which was amended is Section 149, setting out the time limit for the notices under Sections 148 and 148A, which reads thus: 149. Time limit for notices under Sections 148 and 148-A.-(1) No notice under Section 148 shall be issued for the relevant assessment year,- (a) if three years and three months have elapsed from the end of the relevant assessment year, unless the case falls under clause (b); (b) if three years and three months, but not more than five years and three months, 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 related to any asset or expenditure or transaction or entries which show that the income chargeable to tax, which has escaped assessment, amounts to or is likely to....
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....ocedure w.e.f. 01.04.2021. The background facts disclose that the Notifications dated 23.01.2021 and 27.04.2021, issued by the Central Government under Section 3(1) of TOLA contain an explanation declaring that the provisions under the old regime shall apply to the reassessment proceedings initiated under them and directed the Assessing Officers to apply the provisions of the old regime for reassessment notices issued after on 01.04.2021 and accordingly, the Assessing Officer issued reassessment proceedings between 01.04.2021 to 30.06.2021 by relying upon the provisions under Section 148 under the old regime. When these reassessment notices were challenged by the Assessee before the various High Courts, the High Court allowed the Writ Petitions and quashed the reassessment notices, issued between 01.04.2021 and 30.06.2021 under the old regime on the ground that Sections 147 to 151 were substituted by the Finance Act, 2021 w.e.f. 01.04.2021 and in the absence of any saving clause, the Revenue could initiate proceedings after 01.04.2021 only in accordance with the provisions of the new regime since they were more beneficial to the Assessee. 22. In Union of India Vs. Ashish Agar....
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....ner or the Principal Commissioner or the Commissioner, who could have accorded the approval and not the Additional Commissioner of Income Tax. 25. The Three-Judges Bench of the Apex Court in Rajeev Bansal (supra) considered the provisions of TOLA as introduced in the Income Tax Act and clarified that a notice could be issued under Section 148 of the new regime for the AY 2021-22 and before, only if the time limit for issuance of such notice continued to exist under Section 149(1)(b) of the old regime. It was clarified that the notices have to be judged according to the law, existing on the date the notice is issued and Section 149 of the old regime provided two time limits; (i) four years for all situations and (ii) beyond four years and within six years, if the income that escaped assessment amounted to Rupees One Lakh or more. After 01.04.2021, the time limit prescribed under the new regime came into force, when the ordinary time limit of four years was reduced to three years and therefore, in all situations, reassessment notices could be issued under the new regime if not more than three years have elapsed from the end of the relevant assessment year. ....
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....hief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner Section 151(i) of the new regime Three years or less than three years from the end of the relevant assessment year Principal Commissioner or Principal Director or Commissioner or Director Section 151(ii) of the new regime More than three years have elapsed from the end of the relevant assessment year Principal Chief Commissioner or Principal Director General or Chief Commissioner or Director General 28. In paragraph 74, the correlation of the Authority with the time when the notice is issued is clearly set out as below: 74. The above table indicates that the specified authority is directly co-related to the time when the notice is issued. This plays out as follows under the old regime: (i) If income escaping 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 notic....