TaxTMI 
TaxTMI 
2025 (2) TMI 1429
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....me. The AO received certain information from the DDIT(Inv.) with regard to Finalysis Credit & Guarantee Company Ltd. (FCGCL) a penny stock company and the AO noticed that the assessee during the year under consideration has sold the shares of the said company. Therefore the AO had a reason to believe that the income of the assessee has escaped assessment and accordingly vide notice dated 30.06.2021 issued under section 148 of the Act the AO reopened the assessment. Subsequently pursuant to the directions of the Hon'ble Supreme Court in the case of Union of India Vs. Ashish Agrawal [2022] 444 ITR 1 (SC) the notice dated 30.06.2021 was treated as notice under section 148A of the Act. The AO then issued a notice under section 148A(b) on 28....
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.... 148 of the Act is time barred and therefore, void ab initio." 4. The additional grounds raised are pure legal issue, which does not require investigation of new facts. Hence, placing reliance on the judgment of the Hon'ble Apex Court in the case of National Thermal Power Co. Ltd. v. CIT (1998) 229 ITR 383 (SC), we admit the additional grounds. Since the additional grounds pertain to the legal contentions, they are taken up first for the purpose of adjudication. 5. The ld. AR argued that the notice issued by the AO under section 148A of the Act is barred by limitation. The ld. AR argued that notice issued under section dated 28.07.2022 is barred by limitation as per the provisions of section 149. The ld AR submitted that the AO issued....
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.... month in which the reply is received by the AO or the time given in the notice under section 148A(b) expires (iv) The AO issues notice under section 148 initiating the reassessment proceedings. 8. In the cases where section 148 notices issued under the old regime between 01.04.2021 to 30.06.2021, by virtue of the decision of the Hon'ble Supreme Court in the case of Ashish Agarwal (supra) were deemed to be issued under section 148A of the Act. For such notices deemed as issued under 148A for AY 2013-14 and 2014-15, (where TOLA is applicable) the Hon'ble Supreme Court in the case Rajeev Bansal (supra), provided clarity as to the time limit available to the AO for completing the procedure under section 148A and for issuing....
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....ime limit. The surviving time limit, as prescribed under the Income-tax Act read with TOLA, was available to the assessing officers to issue the reassessment notices under section 148 of the new regime. 112. Let us take the instance of a notice issued on 1 May 2021 under the old regime for a relevant assessment year. Because of the legal fiction, the deemed show cause notices will also come into effect from 1 May 2021. After accounting for all the exclusions, the assessing officer will have sixty-one days [days between 1 May 2021 and 30 June 2021] to issue a notice under section 148 of the new regime. This time starts ticking for the assessing officer after receiving the response of the assessee. In this instance, if the assessee s....
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.... relevant provisions of section 149 which reads as under - Time 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); (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 notic....
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....med to be extended accordingly. 10. A combined reading of the observations of the Hon'ble Supreme Court and the provisions of section 149, it is clear that the surviving time limit available to the AO for issue of notice under section 148 is number of days from the date of the issuance of the deemed notices 148A(a) till 30.06.2021 besides the period granted to the assesses to reply to the show cause notices in terms of the third proviso to Section 149. Further as per the fourth proviso if the surviving time limit is less that 7 days then, such remaining period shall be extended to seven days for the purpose of period limitation. 11. In the background of the above legal position we will now examine the facts in assessee's case.....