TaxTMI 
TaxTMI 
2025 (8) TMI 917
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....-21 without sanction from a specified authority namely, the Principal Chief Commissioner of Income Tax or the Director General of Income Tax (Inv.) mandated in Section 151 of the Income Tax Act, 1961 (hereinafter called the Act); without issue of notice under Section 143(2) within the prescribed time despite availability thereof on the same set of material in the knowledge and possession of the respondent no.3 being wholly without jurisdiction be set aside and quashed. (ii) The order dated 25.09.2024 (as contained in Annexure-P10) passed by the respondent no. 4 under Section 148A(d) without sanction from the specified authority mentioned in section 151 of the Act and without consideration of the reply of the assessee beyond the time limit prescribed in section 148A(d) of the Act being wholly without jurisdiction be set-aside and quashed. (iii) For granting any other relief(s) to which the petitioner is otherwise found entitled to." Brief facts of the case 2. The petitioner is a partnership firm though one of it's partners of the firm is the citizen of India, they derived income under the head 'income from business'. A survey was conducted by the authorized o....
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....had not asked for any time to reply to the notice. In its written submissions (Annexure-P9), the petitioner submitted that a reference to sub-clause (d) of Section 148 of the Act of 1961 would show that the order under the said sub-clause is to be passed within a period of one month from the end of the month in which the reply referred to in clause (c) is received by him or where no such reply is furnished within one month from the end of the month in which time or extended time allowed to furnish a reply as per clause (b) expires. It is submitted that the exclusions in the proviso appended to section 148A has no application in the present case. 8. Learned senior counsel for the petitioner further submits that the petitioner in the present case had only asked for supply of relevant documents and the materials on the basis of which the notice was issued. The petitioner had not asked for any time to reply to the notice. Therefore, since no extension of time was prayed for by the petitioner, the question of allowing any further time in terms of sub-clause (b) does not arise. According to him, the period of limitation as provided in sub-clause (d) of Section 148A of the Act of 1961 ....
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.... thus, submitted that in absence of sanction by the appropriate authority, the assumption of jurisdiction under Section 148 of the Act of 1961 would be wholly illegal. 11. Learned senior counsel submits that the Principal Commissioner of Income Tax who has granted sanction in the present case has acted mechanically in a routine manner and sanction has been granted without application of judicious mind. For this reason as well, the order under Section 148A (d) of the Act of 1961 would stand vitiated. Submissions on behalf of the respondents 12. A counter affidavit has been filed on behalf of the Department. It is stated therein that information were received from insight portal uploaded by the ITO, Ward-3(1), Gaya which suggested that income chargeable to tax for the Assessment Year 2020-21 has escaped assessment within the meaning of Section 147 of the Act of 1961. A survey was conducted in the premises of the assessee. The documents found during the said survey reveals the receipt of Rs. 1,72,64,207/- for the financial year 2020-2021, but the assessee has shown receipt amounting to Rs. 23,37,200/- only in its corresponding ITR. The assessee was called upon to explain the ....
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....e assessee to judge as to whether or not it is a fit case to issue a notice under Section 148 by passing an order with the prior approval of the specified authority. 16. Learned senior counsel submits that from the kind of stand taken by the assessee that "the major part' of the receipt found in course of survey belong to Dr. Vimlendu Vimal and that "some part" of the OPD/consultancy are of the Healing Touch Hospital, the firm was required to be assessed properly to find out the correct and true picture. It is the duty of the assessee to maintain complete books of account but in this case there is no such document or books of account maintained by the assessee. In spite of having been provided with sufficient time and opportunity to furnish evidences in support of its claim, the assessee could not submit any corroborative evidence in this regard. It is pointed out that in the written submission dated 03.06.2024 filed by the assessee, an opportunity of hearing was requested and considering its request, the assessee has been granted one more opportunity of being heard in the matter in person by the office DIN vide letter dated 30.07.2024. In response to this letter, the assessee h....
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.... and it may not pertain to the present case. It was contended that column '17' of the table shows the details of the information which suggests that income chargeable to tax has escaped assessment. It refers Order under Section 148A(d). It was contended that if the order under Section 148A(d) was already available on 17.03.2024, then there would not have been any question to seek sanction for conducting enquiry under Section 148A(d) of the Act Income Tax Act on 25.09.2024, therefore, the second page of the approval sheet under Section 151 of the Act was disputed. Later, in course of hearing of the matter on 10.07.2025, the learned Senior Standing Counsel has submitted on instruction that from Column '12' of the approval sheet under Section 151 it will appear that in answer to the same the word 'No' has been mentioned. It is submitted that sanction has been obtained at the stage of Section 148A(d) on 25.09.2024 but in Column '20' due to a typographical error it mentions "Section 148A(a)". In fact the approval has been granted for order under Section 148A(d) which will be evident from the proposal of the DCIT and recommendations of the Joint C.I.T. The Principal Commissioner, Income ....
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....d assessment for any assessment year subject to the provisions and safeguards provided in this Section. The Assessing Officer can reassess income for assessment year irrespective of which whether the original assessment was merely an intimation under Section 143(1) or the original assessment was a full-fledged scrutiny assessment under Section 143(3) of the Act of 1961. The power to take proceedings under this provision is not confined to the cases where the assessee had concealed his income, but it also extends to cases where the Assessing Officer has reasons to believe, on the basis of some tangible materials in his possession that the income has escaped assessment. 26. On a bare reading of Section 147 of the Act, it would be evident that the action envisaged under Section 147 is subject to the provisions of Section 148 to 153. 27. Section 148 reads as under:- ^1[Issue of notice where income has escaped assessment.^2 148. 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, ....
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....n 135A; or (v) any information which requires action in consequence of the order of a Tribunal or a Court.] Explanation 2.-For the purposes of this section, where,- (i) a search is initiated under section 132 or books of account, other documents or any assets are requisitioned under section 132A, on or after the 1st day of April, 2021, in the case of the assessee; or (ii) a survey is conducted under section 133A, other than under sub-section (2A) ^7[***] of that section, on or after the 1st day of April, 2021, in the case of the assessee; or (iii) the Assessing Officer is satisfied, with the prior approval of the Principal Commissioner or Commissioner, that any money, bullion, jewellery or other valuable article or thing, seized or requisitioned under section 132 or section 132A in case of any other person on or after the 1st day of April, 2021, belongs to the assessee; or (iv) the Assessing Officer is satisfied, with the prior approval of Principal Commissioner or Commissioner, that any books of account or documents, seized or requisitioned under section 132 or section 132A in case of any other person on or after the 1st day of....
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...., 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, ^10[***] 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 exceeding thirty days from the date on which such notice is issued, or such time, as may be extended by him on the basis of an application in this behalf, as to why a notice under section 148 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 and results of enquiry conducted, if any, as per clause (a); (c) consider the reply of assessee furnished, if any, in response to the show-cause notice referred to in clause (b); (d) decide, on the basis of material available on record including reply of the assessee, whether or not it is a fit case to issue a notice under section 148, by passing an order, with the prior approval of specified authority, within one month from the end of the month in which the reply referred to in clause (c) i....
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.... time to show cause may be extended on the basis of an application in this behalf. It is evident that this opportunity of being heard is to be provided to show cause as to why a notice under Section 148A should not be issued. 31. It is further evident from Clause (c) of Section 148A that the Assessing Officer has to consider the reply of the assessee pursuant to the show cause notice referred to in Clause (b). Thereafter, Clause (d) of Section 148A provides for a decision on the basis of the material available on the record including reply of the assessee. The Assessing Officer has to decide as to whether or not it is a fit case to issue a notice under Section 148 by passing an order with the prior approval of a specified authority, within one month from the end of the month in which the reply referred to in Clause (c) is received by him or where no such reply is furnished within one month from the end of the month in which the time or extended time allowed to furnish a reply as per Clause (b) expires. 32. In the present case, a notice dated 29.03.2024 was issued under Section 148A (b) to the petitioner. It is the case of the petitioner that the notice was not containing any ....
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....5/2024 DIN & Letter No. ITBA/COM/F/17/2024-25/1065139800(1) Sir/Madam/ M/s Subject: Online service of Orders - Letter Sub-Notice under clause(b) of section 148A of the Income-tax Act, 1961-reg. Ref. Your letter dated 22/04/2024. Kindly refer to the above. In connection with the above, documents/information is being provided to you as requested. It is pertinent to mention here that in this case information has been received from Insight portal uploaded by ITO, Ward 3(1), Gaya (Concerned verification details is attached here). Besides, as per the survey record, total receipt has been computed on the basis of receipt found and register of indoor patient, details of X-ray receipt which are as under- (i) Receipt from consultancy (OPD)-HTH(Admn) -57 to 62 Rs. 1,26.47.207/- (ii) HTH-01 (OPD) -4475(4475x500) - Rs. 17,90,000/- (iii) HTH(RxR) Total Receipt 3654 (3654x500) Rs. 18,27,000/- You are requested to furnish your submission in this regard on or before 03.06.2024. AAIFH8721M-HEALING TOUCH HOSPITAL A.Y.2020-21 ITBA/COM/F/17/2024-25/1065139800(1) Swati Kumari Sujata DCIT/ACI....
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....nder the scheme of Section 148A, though there is no specific provision for allowing an opportunity of personal hearing, to this Court it appears that in order to provide the petitioner an opportunity to put forth an effective reply, if the Assessing Officer thought it just and proper to accept the prayer of the petitioner to provide an opportunity of personal hearing before passing an order under Clause (d) of Section 148A, no fault may be found with the same and that would not allow the petitioner to contend that the decision under Clause (d) of Section 148A not having been taken within one month from the end of the month in which the reply was received by the Assessing Officer, the order passed after one month shall be barred by limitation. This we say in the facts of the present case where it is evident that the date of personal hearing was fixed by the Assessing Officer on 30.07.2024, which is before the expiry of one month from the end of the month in which the reply was submitted by the petitioner. This, in our opinion, was an extension as envisaged under Clause (b) of Section 148A and the basis of this was the application submitted by the petitioner seeking a personal hearin....
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.... drawn towards Section 149 of the Act of 1961, which provides the time limit for notice under Section 148 and Section 148A. Section 149 has been substituted by the Finance Act 2021 with effect from 01.04.2021. Prior to its substitution, Section 149 was amended by the Direct Tax Laws (Amendment) Act, 1987 with effect from 01.04.1989, Direct Tax Laws (Second Amendment) Act, 1989 with effect from 01.04.1989 and Finance Act, 2001 with effect from 01.06.2001 and Finance Act, 2012 with effect from 01.07.2012. We reproduce Section 149 of the Act of 1961 as under:- "^15Time limit for notice. 149. (1) No notice under section 148 shall be issued for the relevant assessment year,- (a) if three years have elapsed from the end of the relevant assessment year, unless the case falls under clause (b); ^16[(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- (i) an asset; (ii) expenditure in respect of a transaction or i....
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....l year, a period of fifteen days shall be excluded for the purpose of computing the period of limitation as per this section and the notice issued under clause (b) of section 148A in such case shall be deemed to have been issued on the 31st day of March of such financial year:] 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 the Assessing Officer for passing an order under clause (d) of section 148A ^19[does not exceed seven days], such remaining period shall be extended to seven days and the period of limitation under this sub-section shall be deemed to be extended accordingly. Explanation.-For the purposes of clause (b) of this sub-section, "asset" shall include immovable property, being land or building or bo....
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....culation of time-limit in terms of Section 149, but in this case, the period from 1st of April, 2021 to 20th of March, 2022 shall be liable to be excluded while counting the period of limitation. In the case of Abha Saraf (supra), the Hon'ble Division Bench of this Court has held that the saving of limitation applies equally to individuals insofar as approaching the Courts or legal forums for redressal and also to the Departments, who are statutorily mandated to initiate proceeding within a specific time. Keeping in view the judgment of the Hon'ble Supreme Court in the matter of Cognizance for Extension of Limitation (supra) and of the Hon'ble Division Bench of this Court in Abha Saraf (supra), we have no iota of doubt that in the present case as well the Department would be entitled to get the benefit of saving of limitation for the period 1st of April 2021 to 20th March, 2022. If that period is excluded from counting the limitation, notice under Section 148 of the Act of 1961 issued on 25.09.2024 would not be barred by limitation. In such circumstance, the sanction granted by the Principal Commissioner in accordance with Section 151 (i) of the Act of 1961 is in accordance with la....
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....under this section, and (b) subsequently a notice has been served under clause (ii) of sub-section (2) of section 143 after the expiry of twelve months specified in the proviso to clause (ii) of sub section (2) of section 143, but before the expiry of the time limit for making the assessment, reassessment or recomputation as specified in sub-section (2) of section 153, every such notice referred to in this clause shall be deemed to be a valid notice. Explanation-For the removal of doubts, it is hereby declared that nothing contained in the first proviso or the second proviso shall apply to any return which has been furnished on or after the 1st day of October, 2005 in response to a notice served under this section. (2) The Assessing Officer shall, before issuing any notice under this section, record his reasons for doing so." *For Notification No. SO 1178, dated 11-2-1982, log on to www.taxmann.com. **For relevant case laws, see Taxmann's Master Guide to Income-tax Act. For meaning of the term "serve", see Taxmann's Direct Taxes Manual, Vol. 3. For the meaning of the expression "so far as may be", see Taxmann's Direct Ta....
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....ice shall be issued under section 148 by an Assessing Officer, who is below the rank of Joint Commissioner, unless the Joint Commissioner is satisfied, on the reasons recorded by such Assessing Officer, that it is a fit case for the issue of such notice. (3) For the purposes of sub-section (1) and sub-section (2), the Principal Chief Commissioner or the Chief 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." 13. Words "where there is no Principal Chief Commissioner or Principal Director General," omitted by the Finance Act, 2023 w.e.f. 1-4-2023 14. Inserted, ibid. 15. Substituted by the Finance Act, 2021, w.e.f. 1-4-2021. Prior to its substitution, section 149, as amended by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1989, Direct Tax Laws (Second Amendment) Act, 1989, w.e.f. 1-4-1989, Finance Act, 2001, w.e.f. 1-6-2001 and Finance Act, 2012, w.e.f. 1-7-2012, read as under: "149. Time limit for notice.-(1) No notice unde....