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2025 (3) TMI 1605
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....nting to Rs.7,53,410/- and exempted income amounting to Rs.2,74,63,203/ -. The petitioner received notice dated 20.04.2021 issued by respondent No.2 (Income Tax Officer, Ward 1, Panipat) under Section 148 of the Income Tax Act, 1961, wherein it was stated that respondent No.2 (Income Tax Officer, Ward- 1, Panipat) has the reason to believe that income chargeable to tax of the petitioner for the Assessment Year 2015-2016 has escaped assessment within the meaning of Section 147 of the Income Tax Act, 1961. Further, pursuant to the notice dated 20.04.2021, the petitioner filed return of income on 27.05.2021. Thereafter, the petitioner received notice dated 17.11.2021 under Section 143(2) read with Section 147 of the Income Tax Act, 1961. Aggrieved by the validity of reassessment proceedings initiated under Section 148A of the Income Tax Act, 1961, the petitioner challenged the validity by filing CWP-2619 of 2022 titled as "Nisha Garg Vs. Income Tax Officer & Others". CWP-2619-2022 was disposed of as not pressed on 22.09.2022 in view of the decision dated 04.05.2022 of Hon'ble Supreme Court in "Union of India & Others. Vs. Ashish Aggarwal". Thereafter, the petitioner received no....
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....nder Section 142(1) of the Income Tax Act, 1961 dated 09.12.2024 and order passed under Section 148A(d) dated 27.07.2022 along with notice under Section 148 of the Income Tax Act, 1961 for the Assessment Year 2015-2016 on the ground of being barred by limitation in view of the judgment passed by the Hon'ble Supreme Court in the case of Union of India Vs. Rajeev Bansal. SUBMISSIONS 4. Learned counsel for the petitioner contends that notice issued under Section 142(1) dated 09.12.2024 and order passed under Section 148A(d) dated 27.07.2022 along with notice under Section 148 of the Income Tax Act, 1961 for the Assessment Year 2015-2016 are barred by limitation in light of the judgment passed by the Hon'ble Supreme Court in the case of Union of India Vs. Rajeev Bansal [2024] 469 ITR 46 (SC). 5. Learned counsel for the respondents could not rebut the settled proposition of law as laid down by the Hon'ble Supreme Court in Union of India Vs. Rajeev Bansal (Supra), by which the case of the petitioner is squarely covered. 6. We have heard learned counsel for the parties and perused the whole record of the present case. JOINT READING OF JUDGMENTS OF HON'BLE SU....
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....aterial evidence could with due diligence have been discovered by the Assessing Officer will not necessarily amount to disclosure within the meaning of the foregoing proviso. Explanation 2 .- For the purposes of this section, the following shall also be deemed to be cases where income chargeable to tax has escaped assessment, namely :- (a) where no return of income has been furnished by the assessee although his total income or the total income of any other person in respect of which he is assessable under this Act during the previous year exceeded the maximum amount which is not chargeable to income-tax; (b) where a return of income has been furnished by the assessee but no assessment has been made and it is noticed by the Assessing Officer that the assessee has understated the income or has claimed excessive loss, deduction, allowance or relief in the return; (ba) where the assessee has failed to furnish a report in respect of any international transaction which he was so required under section 92E; (c) where an assessment has been made, but- (i) income chargeable to tax has been underassessed; or (ii) such income has....
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....hed during the period commencing on the 1st day of October, 1991 and ending on the 30th day of September, 2005 in response to a notice served under this section, and (b) subsequently a notice has been served under sub-section (2) of section 143 after the expiry of twelve months specified in the proviso to subsection (2) of section 143, as it stood immediately before the amendment of said sub-section by the Finance Act, 2002 (20 of 2002) but before the expiry of the time limit for making the assessment, re- assessment 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: Provided further that in a case- (a) where a return has been furnished during the period commencing on the 1st day of October, 1991 and ending on the 30th day of September, 2005, in response to a notice served 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 assessmen....
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....nction for issue of notice :- 151. (1) No notice shall be issued under section 148 by an Assessing Officer, after the expiry of a period of four years from the end of the relevant assessment year, unless the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner is satisfied, on the reasons recorded by the Assessing Officer, that it is a fit case for the issue of such notice. (2) In a case other than a case falling under sub-section (1), no notice 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." 3.1 In pursuance to the power vested ....
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.... the order passed, if required, under clause (d) of section 148A, requiring him to furnish within such period, as may be specified in such notice, 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 the relevant assessment year, in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed; and the provisions of this Act shall, so far as may be, apply accordingly as if such return were a return required to be furnished under section 139: Provided that no notice under this section shall be issued unless there is information with the Assessing Officer which suggests that the income chargeable to tax has escaped assessment in the case of the assessee for the relevant assessment year and the Assessing Officer has obtained prior approval of the specified authority to issue such notice. Explanation 1 .- For the purposes of this section and section 148A, the information with the Assessing Officer which suggests that the income chargeable to tax has escaped assessment means- (i) any information flagged in ....
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....- "148A. The Assessing Officer shall, before issuing any notice under section 148- (a) conduct any enquiry, if required, with the prior approval of specified authority, 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, with the prior approval of specified authority, 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 n....
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.... of April, 2021, if such notice could not have 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 the Assessing Officer for passing an or....
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....r Advocates and other learned counsel appearing on behalf of the respective assessee. 6. It cannot be disputed that by substitution of sections 147 to 151 of the Income Tax Act (IT Act) by the Finance Act, 2021, radical and reformative changes are made governing the procedure for reassessment proceedings. Amended sections 147 to 149 and section 151 of the IT Act prescribe the procedure governing initiation of reassessment proceedings. However, for several reasons, the same gave rise to numerous litigations and the reopening were challenged inter alia, on the grounds such as (1) no valid "reason to believe" (2) no tangible/reliable material/information in possession of the assessing officer leading to formation of belief that income has escaped assessment, (3) no enquiry being conducted by the assessing officer prior to the issuance of notice; and reopening is based on change of opinion of the assessing officer and (4) lastly the mandatory procedure laid down by this Court in the case of GKN Driveshafts (India) Ltd. v. Income Tax Officer and ors; (2003) 1 SCC 72, has not been followed. 6.1 Further pre-Finance Act, 2021, the reopening was permissible for a maximum p....
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....every stage, the prior approval of the specified authority is required, even for conducting the enquiry as per section 148A(a). Only in a case where, the assessing officer is of the opinion that before any notice is issued under section 148A(b) and an opportunity is to be given to the assessee, there is a requirement of conducting any enquiry, the assessing officer may do so and conduct any enquiry. Thus if the assessing officer is of the opinion that any enquiry is required, the assessing officer can do so, however, with the prior approval of the specified authority, with respect to the information which suggests that the income chargeable to tax has escaped assessment. 6.6 Substituted section 149 is the provision governing the time limit for issuance of notice under section 148 of the IT Act. The substituted section 149 of the IT Act has reduced the permissible time limit for issuance of such a notice to three years and only in exceptional cases ten years. It also provides further additional safeguards which were absent under the earlier regime pre-Finance Act, 2021. 7. Thus, the new provisions substituted by the Finance Act, 2021 being remedial and benevolent i....
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....r the Finance Act, 2021 and in law. Therefore, we propose to modify the judgments and orders passed by the respective High Courts as under: - (i) The respective impugned section 148 notices issued to the respective assessees shall be deemed to have been issued under section 148A of the IT Act as substituted by the Finance Act, 2021 and treated to be show-cause notices in terms of section 148A(b). The respective assessing officers shall within thirty days from today provide to the assessees the information and material relied upon by the Revenue so that the assessees can reply to the notices within two weeks thereafter; (ii) The requirement of conducting any enquiry with the prior approval of the specified authority under section 148A(a) be dispensed with as a one-time measure vis-a-vis those notices which have been issued under Section 148 of the unamended Act from 01.04.2021 till date, including those which have been quashed by the High Courts; (iii) The assessing officers shall thereafter pass an order in terms of section 148A(d) after following the due procedure as required under section 148A(b) in respect of each of the concerned assessees; (....
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....ter of writ petitions before the various respective High Courts shall be deemed to have been issued under section 148A of the IT Act as substituted by the Finance Act, 2021 and construed or treated to be show cause notices in terms of section 148A(b). The assessing officer shall, within thirty days from today provide to the respective assessees information and material relied upon by the Revenue, so that the assesees can reply to the show- cause notices within two weeks thereafter; (ii) The requirement of conducting any enquiry, if required, with the prior approval of specified authority under section 148A(a) is hereby dispensed with as a one-time measure vis- avis those notices which have been issued under section 148 of the unamended Act from 01.04.2021 till date, including those which have been quashed by the High Courts. Even otherwise as observed hereinabove holding any enquiry with the prior approval of specified authority is not mandatory but it is for the concerned Assessing Officers to hold any enquiry, if required; (iii) The assessing officers shall thereafter pass orders in terms of section 148A(d) in respect of each of the concerned assessees; Thereaft....
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....mation and material relied upon by the Revenue, so that the Assessees can reply to the show cause notices within 2 weeks thereafter. It was further held by the Hon'ble Supreme Court that the requirement of conducting any enquiry, if required, with the prior approval of specified authority under Section 148A(a) is dispensed with as one time measure viz-a-viz those notices which were issued under Section 148 of the unamended Act from 01.04.2021 (Finance Act, 2021) till date i.e. 04.05.2022 (Decision in Ashish Aggarwal). Further that the Assessing Officer shall thereafter pass orders in terms of Section 148A(d) in respect of each of the concerned assessees and thereafter, after following the procedure as required under Section 148A may issue notice(s) under Section 148 (as substituted). 11. On 11.05.2022 following the decision in Union of India and Others Vs. Ashish Aggarwal, the Central Board of Direct Taxes issued instructions for the implementation of the decision in Ashish Aggarwal's case (supra), wherein it was clarified that the judgment in Ashish Aggarwal would apply to all the cases where extended reassessment notices were issued, irrespective of the fact whether su....
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....a Vs. Rajeev Bansal [2024] 469 ITR 46 (SC). The same is reproduced as under :- B. Issues 18. The present batch of appeals gives rise to the following issues :- a Whether TOLA and notification issued under it will also apply to reassessment notices issued after 1 April 2021; and b. Whether the reassessment notices issued under Section 148 of the new regime between July and September 2022 are valid. C. Submissions 19. Mr N Venkataraman, learned Additional Solicitor General of India, made the following submissions on behalf of the Revenue: a. Parliament enacted TOLA as a free-standing legislation to provide relief and relaxation to both the assesses and the Revenue during the time of COVID- 19. TOLA seeks to relax actions and proceedings that could not be completed or complied with within the original time limits specified under the Income Tax Act; b. Section 149 of the new regime provides three crucial benefits to the assesses: (i) the four- year time limit for all situations has been reduced to three years; (ii) the first proviso to Section 149 ensures that re-assessment for previous assessment....
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....dated 27.07.2022 passed under Section 148A(d) of the Income Tax Act, 1961 and notice dated 27.07.2022 under Section 148 of the Assessment year 2015-2016 were issued to the petitioner without following the procedure for issuance of notice as per law amended by the Finance Act, 2021. 16. A perusal of the record shows that the petitioner had earlier approached this Court by way of filing of CWP-2619 of 2022 which was disposed of as not pressed, in view of the decision dated 04.05.2022 of Hon'ble Supreme Court in "Union of India & Others. Vs. Ashish Aggarwal". Subsequently petitioner filed another CWP No.24073 of 2022 titled as "Nisha Garg Vs. Central Board of Direct Taxes, North Block-New Delhi through Secretary, Ministry of Finance, New Delhi & Others" which was disposed of by this Court in terms of decision in CWP-18032-2022 titled as "Kulwant Singh Vs. Union of India and Others". In Kulwant Singh's case this Court had categorically directed the Revenue to examine each and every case relating to the 'deemed notices' issued under Section 148 of the Act, in the light of the observations made by the Hon'ble Supreme Court "Union of India Vs. Rajeev Bansal [2024] 4....