TaxTMI 
TaxTMI 
2025 (4) TMI 1775
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.... liable to be quashed. III. The notice issued under section 148 of the Act does not indicate the intention of your learned Authority to assess/ reassess the income, which is mandatory as per provisions of section 148 of the Act, and consequently, the said notice is bad in law. IV. The notice dated 30-Jun-2021 issued under Section 148 for initiating income escaping assessment is invalid under the amended provisions of Sections 147-151, as the initiation should have been made through a notice under Section 148A. Furthermore, TOLA does not apply in this case since the due date for issuing the notice is 31-Mar-2023, given the alleged escaped income exceeds Rs. 50 lakhs. V. The learned CIT (Appeals) erred by misinterpreting the appellant's plea and wrongly relying on TOLA provisions, which are inapplicable to this case, thereby compounding the Assessing Officer's error. VI. The notice under Section 148 and the order under Section 148A(d) were issued after 01.04.2021. As per the amended provisions of Sections 147 to 151, prior approval for such issuance must be obtained from the Chief Commissioner of Income Tax (CCIT) or Principal Chief Commissioner of Inc....
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....er Section 50C without providing evidence that the appellant received more than the documented sale consideration in cash. The appellant had explained all bank statement remarks and provided details of cash deposits, yet the Assessing Officer made the addition arbitrarily, without the necessary evidence. XV. The learned assessing officer ought to have considered "the stamp duty value as on the date of agreement rather than the date of registration when the part amount is received prior to execution of the sale deed which is clearly evident in the sale deed submitted during the assessment proceedings." XVI. The learned Assessing Officer should have considered that the property was agricultural land, which was only converted prior to the sale, but had been used for agricultural purposes until that time. XVII The learned CIT (Appeals) erred in upholding the disallowance of Rs. 15,65,300/- for the cost of improvements, despite the appellant providing a valid explanation that the development costs were for daily labor, where invoices are not issued for the services rendered. XVIII. The Appellant craves leave to add, alter, substitute, and delete any or all the gr....
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....d the case of the assessee. As against the said order, the assessee is in appeal before this Tribunal. 4. We have heard the arguments of both sides and perused the materials available on record. 5. At the time of hearing, the Ld.AR filed a small paper book and also filed a written submissions. The Ld.AR also filed the order of the ITAT, Mumbai in the case of ACIT vs. Surya Ferrous Alloys (P.) Ltd. in ITA No. 1406/Mum/2024 dated 24/12/2024 in which the similar issue came up for consideration and decided in favour of the assessee. 6. The Ld.AR also relied on the provisions as well as CBDT Notification dated 29/03/2022 and submitted that the disputed A.Y. is 2016-17 and therefore the notice issued after the period of 3 years, has to be issued only after getting approval from the specified authority as specified in section 151 of the Act. The Ld.AR submitted that the escaped income involved in this case is more than Rs. 50 Lakhs and also the three years period was over on 31/03/2020 and therefore the proper authority for granting the approval for issuing the notice u/s. 148 and 148A is the Principal Chief Commissioner or the Chief Commissioner. The Ld.AR further submitted that....
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....os. 6-8, the following instructions were given. "6.0 Operation of the new section 149 of the Act to identify cases where fresh notice under section 148 of the Act can be issued: 6.1 With respect of operation of new section 149 of the Act, the following may be seen: ● Hon'ble Supreme Court has held that the new law shall operate and all the defences available to assessee under section 149 of the new law and whatever rights are available to the Assessing Officer under the new law shall continue to be available. ● Sub-section (1) of new section 149 of the Act as amended by the Finance Act,2021 (before its amendment by the Finance Act, 2022) reads as under :- 149. (1) No notice under section 148 shall be issued for the relevant assessment veal ;- (a) if three years have elapsed from the end of the relevant assessment yea, 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 ta....
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.... the income escaping assessment, in that case for that year, amounts to or is likely to amount to less than fifty lakh rupees. Hence, in order to reduce the compliance burden of assessee, it is clarified that information and material may not be provided in a case for AY 2013-14, AY 2014-15 and AY 2015-16, if the income escaping assessment, in that case for that year, amounts to or is likely to amount to less than fifty lakh rupees. Separate instruction shall be issued regarding procedure for disposing these cases. 8.0 Procedure required to be followed 130 the Assessing Officers to comply with the Supreme Court judgment: 8.1 The procedure required to be followed by the Jurisdictional Assessing Officer/Assessing Officer, in compliance with the order of the Hon'ble Supreme Court, is as under: ● The extended reassessment notices are deemed to be show cause notices under clause (b) of section 148A of the Act in accordance with the judgment of Hon'ble Supreme Court. Therefore, all requirement of new law prior to that show cause notice shall be deemed to have been complied with. ● The Assessing Officer shall exclude cases as per clar....
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.... served on the assessee." 11. As seen from the said instructions, it was clarified that the Hon'ble Supreme Court has held that the new law shall operate and all the defences available to assessees u/s. 149 of the new law and whatever rights are available to the AO under the new law shall continue to be available. Further, the CBDT had clarified that the AO should provide the information and material relied upon for issuance of extended reassessment notices on or before 02/06/2022. In this case, the AO had provided the correct details only on 20/07/2022 i.e. after the time granted by the CBDT in their instructions dated 11/05/2022. The earlier notice dated 26/05/2022 could not be treated as a valid notice since the details of the property mentioned in that notice is not at all relevant to the issue and therefore that notice could not be taken as a valid notice issued within the time granted in the instructions. Further, we have seen that the assessing officer had estimated the long term capital gains at Rs. 2,83,61,200/- apart from the other additions. Admittedly, the income estimated by the AO is more than Rs. 50 Lakhs and the notice was also issued after the period of 3 ye....
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....r considering the various provisions and also the Hon'ble Supreme Court judgment, had given the following findings: "8. We find that in a recent decision by the Hon'ble Supreme Court in the case of Union of India and other Vs. Rajeev Bansal [2024] 167 taxmann.com 70 (SC), dated 03.10.2024, Hon'ble Court after the fall out of its own decision in the case of Ashish Agarwal (supra) had dealt with the issue in respect of sanction of the specified authority and concluded that TOLA will extend the time limit for the grant of sanction by the authority specified u/s. 151. According to the Hon'ble Court, the test to determine whether TOLA will apply to section 151 of the new regime is that if the time limit of three years from the end of the Assessment Year falls between 20.03.2020 and 31.03.2021 then, the specified authority u/s. 151(i) has extended time till 30.06.2021 to grant the approval. According to the Hon'ble Court, Assessing Officers were required to issue the re- assessment notice u/s. 148 of the new regime within the time limit surviving under the Act read with TOLA. All notices issued beyond the surviving period are time barred and liable t....
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....l to the assessee because it specifies a higher level of authority for the grant of sanctions in comparison to the old regime. Therefore, in terms of Ashish Agarwal (supra), after 1 April 2021, the prior approval must be obtained from the appropriate authorities specified under Section 151 of the new regime. The effect of Section 151 of the new regime is thus: (i) If income escaping assessment is less than Rupees fifty lakhs: (a) a reassessment notice could be issued within three years after obtaining the prior approval of the Principal Commissioner, or Principal Director or Commissioner or Director; and (b) no notice could be issued after the expiry of three years; and (ii) If income escaping assessment is more than Rupees fifty lakhs: (a) a reassessment notice could be issued within three years after obtaining the prior approval of the Principal Commissioner, or Principal Director or Commissioner or Director; and (b) after three years after obtaining the prior approval of the Principal Chief Commissioner or Principal Director General or Chief Commissioner or Director General. 76. Grant of sanction by the appropriate authority is a precondition for the a....
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....ssue a notice u/s. 148 of the new regime "after following the procedure as required u/s. 148-A." Although this quote waived off the requirement of obtaining prior approval u/s. 148A(a) and section 148A(b), it did not waive the requirement for section 148A(d) and section 148. Therefore, the Assessing Officer was required to obtain prior approval of the specified authority according to section 151 of the new regime before passing an order u/s. 148A(d) or issuing a notice u/s.148. These notices ought to have been issued following the time limits specified u/s. 151 of the new regime r.w. TOLA, where applicable .... 114. ......d. TOLA will extend the time limit for the grant of sanction by the authority specified u/s.151. The test to determine whether TOLA will apply to section 151 of the new regime is this: if the time limit of three years from the end of an Assessment Year falls between 20 March 2020 and 31 March 2021, the then specified authority u/s. 151(i) has extended time till 30 June 2021 to grant approval; .. " 8.1. From the above, we note that in para 73, in the table last two rows relate to provisions of Section 151(i)(ii) of the new regime prescrib....
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....rior approval for issuing notice u/s.148 is not in coherence with the guidelines mandated by the Hon'ble Apex Court as enunciated above. Repeatedly, Hon'ble Court has stated including by way of illustration that TOLA extends time line from the old regime which survives making the notice validly issued subject to the approval requirements of Section 151 under the new regime. Accordingly, the prior approval requirement is mandated under the section 151 of new regime. 8.3. In the present case, the relevant Assessment Year is 2017-18 and the time limit of three years lapsed on 31.03.2021 which falls between n 20.03.2020 and 31.03.2021 during which provisions of Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 (TOLA) would apply. Accordingly, the amended provisions under the Act read with TOLA extended the time limit for granting of approval till 30.06.2021 by the specified authority. Thus, on the above stated facts and law, in the present case, three years had lapsed from the end of the Assessment Year when the order u/s. 148A(d) and notice u/s. 148 was issued on 30.07.2022. In the present case, since the notice u/s. 148 and order u/s.....