TaxTMI 
TaxTMI 
2026 (2) TMI 1084
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....-20 14.11.2024 30.01.2024 - do - 2. Though these appeals are for different Assessment Years however, as they pertained to one assessee thus, they are decided by a common order. We first take up the appeal in ITA No. 393/Del/2025 for Assessment Year 2014-15. ITA No.393/Del/2025 [Assessment Year 2014-15] 3. Brief facts of the case are that assessee is a firm and filed its return of income on 26.11.2014, declaring total income of Rs. 4,41,260/-. The case of the assessee was reopened u/s 147 of the Act by issue of notice u/s 148 on 15.06.2021, copy of the same is placed in PB-1 filed by the assessee. In terms of the decisions of Hon'ble Supreme Court in the case of Union of India and Ors. vs. Ashish Agarwal in Civil Appeal No.3005/2022 dated 04.05.2022, said notice was deemed to have been issued as show cause notice u/s 148A(b) of the Act and the AO had supplied information to the assessee vide letter dt. 18.05.2022, placed at paper book pages 2- 3. In response, the Assessee filed reply on 01.06.2022 online vide acknowledgement No. 644721721010622. After receiving the submission from the assessee, another show cause notice was issued on 07.07.2022 which was replied....
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....od. 6. Heard both the parties at length and perused the materials available on record. The notice u/s 148 under old provisions was issued on 15.06.2021 leaving 15 days as surviving period with the Assessing Officer till the period of limitation i.e. 30.6.2021 extended under TOLA. Thereafter, in terms of the judgement of Hon'ble Supreme Court in the case of Ashish Agarwal (supra), notice issued u/s 148 dated 15.06.2021 was deemed to have been issued u/s 148A(b) of the Act and information was supplied to the assessee vide notice u/s 148A(b) on 18.5.2022. The said notice was duly replied by the assessee on 01.06.2022. The AO sought further clarifications vide letter dated 07.07.2022 which was replied on 14.07.2022. The order u/s 148A(d) was passed on 25.7.2022 followed by the notice u/s 148 issued on the same day. Claim of the assessee was that the notice u/s 148 dt. 25.7.2022 was issued after the surviving period of 15 days available with the AO from the date of first reply furnished by the assessee in response to notice issued u/s 148A(b) on 01.06.2022 thus is barred by limitations. The revenue contended that second reply in response to letter dated dt. 07.07.2022 was filed by th....
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.... Court in the exercise of its jurisdiction under Article 142 is an order of a court. The third proviso to Section 149 of the new regime provides that the period during which the proceedings under Section 148A are stayed by an order or injunction of any court shall be excluded for computation of limitation. During the period from the date of issuance of the deemed notice under Section 148A(b) and the date of the decision of this Court in Ashish Agarwal (supra), the assessing officers were deemed to have been prohibited from passing a reassessment order. Resultantly, the show cause notices were deemed to have been stayed by order of this Court from the date of their issuance (somewhere from 1 April 2021 till 30 June 2021) till the date of decision in Ashish Agarwal (supra), that is, 4 May 2022. 106. In Ashish Agarwal (supra), this Court directed the assessing officers to provide relevant information and materials relied upon by the Revenue to the assesses within thirty days 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 t....
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.... were issued from 1 April 2021 to 30 June 2021 under the old regime. Ashish Agarwal (supra) deemed these reassessment notices under the old regime as show cause notices under the new regime with effect from the date 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. 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. 109. If this Court had not created the legal fiction and the original reassessment notices were validly issued according to the provisions of the new regime, the notices under Section 148 of the new regime would have to be issued within the time limits extended by TOLA....
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....is time starts ticking for the assessing officer after receiving the response of the assessee. In this instance, if the assessee submits the response on 18 June 2022, the assessing officer will have sixty-one days from 18 June 2022 to issue a reassessment notice under Section 148 of the new regime. Thus, in this illustration, the time limit for issuance of a notice under Section 148 of the new regime will end on 18 August 2022. 113. In Ashish Agarwal (supra), this Court allowed the assesses to avail all the defences, including the defence of expiry of the time limit specified under Section 149(1). In the instant appeals, the reassessment notices pertain to the assessment years 2013- 2014, 2014-2015, 2015-2016, 2016-2017, and 2017-2018. To assume jurisdiction to issue notices under Section 148 with respect to the relevant assessment years, an assessing officer has to: (i) issue the notices within the period prescribed under Section 149(1) of the new regime read with TOLA; and (ii) obtain the previous approval of the authority specified under Section 151. A notice issued without complying with the preconditions is invalid as it affects the jurisdiction of the assessing offic....
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....ng under the Income Tax Act read with TOLA. All notices issued beyond the surviving period are time barred and liable to be set aside." 10. In the case of Communist Party of India (Marxist) vs. CIT Exmpt. reported in [2025] 174 taxmann.com 925 (Delhi), the Hon'ble Delhi High Court has held as under: "8. The AO issued a notice dated 29.07.2022 under Section 148 of the Act accompanied with the order dated 29.07.2022 passed under Section 148A(d) of the Act. It is the petitioner's case that the said notice is barred by limitation. 9. It is material to note that the original notice under Section 148 of the Act [deemed to be a show cause notice under Section 148A(b) of the Act in terms of the decision in the case of Union of India & Ors. v. Ashish Agarwal (supra)] was issued on 28.06.2021, that is, two days prior to the expiry of the limitation period as extended by virtue of the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 [TOLA]. Thus, the AO had two days to issue the notice under Section 148 of the Act after receiving the reply dated 08.06.2022 filed by the petitioner. Since the said period was less than seven days, th....
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....AY 2016-17 in ITA No.396/Del/2025 and for AY 2017-18 in ITA No. 394/Del/2025, since both the appeals are having common issues and this fact is admitted by both the parties before us, who made the common submission for both the assessment years, thus they are taken together and adjudicated as under: 16. The return of income u/s 139 of the Act for AY 2016-17 was filed on 16.10.2016 and for AY 2017-18, it was filed on 29.10.2017. Notices u/s 148 of the Act for both the Assessment Years were issued on 12.4.2021 and 09.04.2021 respectively. Thereafter, the notices us/ 148 were issued after passing the orders us/ 148A(d) for both the assessment years and the assessments were completed u/s 147 r.w.s. 144B of the Act by making various additions in both the years. Against the said orders, separate appeals were filed before the ld. CIT(A) who vide separate orders both are dt.14.11.2024, dismissed both the appeals filed by the assessee. Aggrieved by the said orders of ld. CIT(A), assessee preferred present appeals before the Tribunal. 17. In both appeals, the assessee is challenging assumption of jurisdiction on the basis of incorrect approval from an authority which was not competent t....
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....val is contrary to the provisions of section 151 of the Act as amended/substituted by the Finance Act, 2021 where as per section 151 of the Act, if more than three years have lapsed from the end of the relevant assessment year, approval of Principal Chief Commissioner of Income-tax or Principal Director General or Chief Commissioner or Director General was required to be obtained. In the present case for both the assessment years, the notices u/s 148 have been issued on 23.07.2022 i.e., after expiry of three years from the end of relevant assessment years, therefore, sanction/approval for issue of notice u/s 148 must be obtained from Principal Chief Commissioner of Income-tax or Principal Director General or Chief Commissioner or Director General however, the same was granted by Pr.CIT, Delhi-15. Reliance in this regard is placed on the decision of the Hon'ble Supreme Court in Union of India vs. Rajeev Bansal, [2024] 469 ITR 46 (SC). Further the hon'ble jurisdictional high court in the case of Communist Party of India (Marxist) vs. CIT Exmpt. (supra) has dealt this issue and observed as under: "10. The impugned notice is also liable to be set aside on the ground that it wa....
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....oundation of such notice are liable to be quashed and CIT (A) erred in not holding so. 2. On the facts and circumstances of the case and in law, the reassessment proceedings initiated is bad in law, without jurisdiction and contrary to the provisions of law including the specific provisions of section 147 to section 151A Act and therefore, the reassessment proceeding initiated along with assessment order passed are liable to be quashed and CIT(A) erred in not holding so. 3. On the facts and circumstances of the case and in law, the assessment order passed by the assessing officer is bad-in-law, without jurisdiction and barred by limitation. 4. On the facts and circumstances of the case and in law, the CIT(A) erred in confirming the addition made by the assessing officer of Rs. 3,00,74,998/- on the account of unexplained expenditure u/s 69C of the Act. 5. On the facts and circumstances of the case and in law, the CIT(A) erred in confirming the addition made by the assessing officer of Rs. 15,39,782/- on the account of unexplained money u/s 69C of the Act." 26. Before us, Ld. AR submits that for this year, notice u/s 148 was issued by ACIT, Circ....
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.....2011, the territorial jurisdiction over the assessee lies with the ITO as the income of the assessee was below Rs. 20.00 lacs. It is an admitted position that in the present case, the notice u/s 148 was issued by the AO who was not having jurisdiction over the assessee thus, the reassessment order passed on wrong assumption of jurisdiction in the case of assessee is invalid. 30. The Jurisdictional High Court in the case of PCIT Vs. Vimal Gupta reported in 2017 (10) TMI 1670 (Delhi) under identical circumstances held as under: 1. "This is an appeal filed by the Revenue against an order dated 23rd December 2015 passed by the Income Tax Appellate Tribunal ('ITAT') in ITA No. 1211/Del/2010 for the Assessment Year ('AY') 2006-07. 2. Although other grounds have been pressed by the Revenue regarding the validity of the impugned order of the ITAT holding the assessment order passed under Section 148 of the Income Tax Act, 1961 ('Act') to be invalid, a threshold ground urged is that the ITAT erred in holding in the impugned order that the assessment made by the Additional Commissioner of Income Tax ('ACIT') Circle 34 (1) was without jurisdiction. It has been noticed th....
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....nd reproduced above categorically mentions the fact that it is only on 15.05.2024, the PAN of the assessee has been transferred to ACIT, Circle 1(1)(1), Meerut, from ITO, Ward 1(2)(5), Meerut, as per CBDT Instruction No. 05/2011 dated 31.01.2011 vide which jurisdiction of noncorporate returns above Rs. 15 lakhs lies with ACIT/DCIT and upto Rs. 15 lakhs lies with ITO. 5.1 Now, admittedly, the notice u/s 148 dated 30.03.2021, copy of which is placed at page 7 of the paper book, is issued by ITO, Ward-1(2)(5), Meerut. Thus, certainly, this Revenue Officer did not have the pecuniary jurisdiction as vested by the Board vide CBDT Instructions No. 01/2011 dated 31.03.2011. 5.2 In this context, the coordinate Bench order in the case of J. Mitra & Brothers vs. ACIT, ITA No. 3643/Del/2023 decided on 10.04.2024 has been relied by the ld. AR wherein the coordinate Bench, relying another decision in the case of Kelvin International vs. DCIT, ITA No. 5363/Del/2017, order dated 22.12.2023, has held that the exercise of jurisdiction of Revenue Officer who did not have the jurisdiction given by the CBDT Instructions cannot be sustained and the assessment order is vitiated. The Hon....