TaxTMI 
TaxTMI 
2026 (3) TMI 626
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....ficer erred in assuming jurisdiction u/s. 69 of the Act by holding that the Appellant was required to explain the source of the source when there was no statutory requirement to this effect. 4. The Learned Assessing Officer erred in disregarding the evidence furnished by Appellant in support of his claim that the said amount of Rs. 76,70,000/- was a gift received from his sister. 5. The Learned Dispute Resolution Panel erred in rejecting to application filed by the Appellant without appreciate to the facts and circumstances of the matter. 6. The Learned Dispute Resolution Panel erred in confirming the action of the Assessing Officer's proposition to make an addition u/s. 69 of the Act. 7. Both lower authorities erred in holding that the gift received for assessee's sister has unexplained investment in terms of section 69 of the Act. 8. The Appellant craves leave to add, amend, alter or withdraw any or all Grounds of Appeal as may be advised from time to time. 3. The assessee has also raised an additional ground of appeal as follows :- 1. The Appellant submits that the Notice u/s. 148 and the consequential order are ba....
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.... purpose of adjudication as there was no investigation of any fresh facts otherwise on record and these are critical for a fair adjudication of the matter. 4. Now the brief facts of the case are that the assessee being an individual non-resident Indian did not file his return of income for the AY 2015-16 under the provisions contained under section 139 of the Act. There was information available on records which suggest that the income chargeable to tax has escaped assessment in the case of the assessee for the AY 2015-16. Subsequently, the Order u/s. 148A(d) of the Act was passed on 08/04/2022 and accordingly notice u/s. 148 of the Act was issued on the same day. In response to notice u/s. 148 of the Act dated 08/04/2022, the assessee filed his return of income on 26/04/2022 declaring total income of Rs. 2,54,880/- and claimed refund of Rs. 2,46,630/-. Thereafter notices u/s. 142(1) of the Act was issued on various dates and assessee had also furnished his reply. 4.1 It is seen from the submission of the assessee that the assessee had sold two immovable property (composite property) apartment no. 13F & 13G situated at 13th floor of tower "Windsor" Merlin Residency, Prince An....
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....ed the HDFC Bank account statement and confirmation letter from his sister. The DRP-2 on examining the said bank account found that the account had periodic cash deposits and apart from these cash deposits, there are hardly any transactions in the account which clearly shows that the sister did not have credit worthiness to transfer an amount of Rs. 76,70,000/- & accordingly affirm the order of the AO. Thereafter, the AO, based on the direction of ld. DRP-2, Bangalore an amount of Rs. 76,70,000/- was added to the total income of the assessee under the head income from other sources as unexplained investment as per the provisions of section 69 of the Act for the AY 2015-16. The AO concluded the assessment proceedings on a total assessed income of Rs. 79,24,880/- as detailed below :- Particulars Amount (In Rs. ) Income as per return of income filed u/s. 139 Not Filed Income as per return of income filed u/s. 148 2,54,880/- Addition: Unexplained Investment as per the provisions of Sec. 69 of the I.T. Act, 1961 76,70,000/- Assessed Income 79,24,880/- 5. Aggrieved by the assessment order passed u/s 147 r.w.s 144C(13) of the Act dated 27/01/2025, the asse....
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....s. 148A(b) as cited in the Notice u/s. 148A(b) 01/04/2022 Date of response by the Assessee Not Filed Approval by Specified Authority- PCCIT (IT), Delhi as cited in the order u/s. 148A(d) 08/04/2022 Date of Order u/s. 148A(d) 08/04/2022 Issuance of Notice u/s. 148 08/04/2022 Thus, the core issue revolves around whether the issuance of the notice under section 148 of the Act on April 08, 2022, for AY 2015- 16, falls within the permissible time limits or not? 8.1 Before proceeding further, it is apposite here to mention the relevant provisions of the Act as it stood then which are as follows- 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, represente....
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....barred under the old law, failing the test of the first proviso to section 149(1) of the Act. Thus, the validity of the notice issued u/s 148 of the Act on April 08, 2022, for AY 2015-16, is primarily governed by the first proviso to the substituted Section 149(1) of the Act. This proviso stipulates that no notice under Section 148 shall be issued for an assessment year beginning on or before April 1, 2021, if such notice could not have been issued under the time limits of the old regime (pre-Finance Act, 2021). It is an undisputed fact that for AY 2015- 16, the last date for issuing a notice under the old regime was March 31, 2022. Since the notice was issued on April 08, 2022, it was issued after this cut-off date, rendering it time-barred under the old law. Consequently, the first proviso to the amended Section 149(1) acts as a bar, making the notice invalid, irrespective of the procedural compliance with Section 148A of the Act. We are also of the opinion that the exclusion of time under the 3rd & 4th provisos to Section 149(1) of the Act for Section 148A proceedings does not revive a notice that was already time-barred under the old regime as per the first proviso. We are of t....
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....e 1st day of April 2021, if such notice could not have been issued at that time on account of being immediately 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:" [Emphasis supplied] 46. The ingredients of the proviso could be broken down for analysis as follows: (i) no notice under section 148 of the new regime can be issued at any time for an assessment year beginning on or before 1 April 2021; (ii) if it is barred at the time when the notice is sought to be issued because of the "time limits specified under the provisions of" 149(1)(b) of the old regime. Thus, a notice could be issued under section 148 of the new regime for assessment year 2021-2022 and before only if the time limit for issuance of such notice continued to exist under section 149(1)(b) of the old regime. 47. In CTO v. Biswanath Jhunjhunwalla 1996 taxmann.com 1141 (SC)/[1996] 5 SCC 626 the Bengal Sales Tax Rules 1941 empowered the Commissioner to revise any assessment within four years from the date of assessment. Subsequently, the State Government issued a no....
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.... years from the end of the relevant assessment year has expired at the time of issuance of the notice. This also ensures that the new time limit of ten years prescribed under section 149(1)(b) of the new regime applies prospectively. For example, for the assessment year 2012-2013, the ten year period would have expired on 31 March 2023, while the six year period expired on 31 March 2019. Without the proviso to Section 149(1)(b) of the new regime, the Revenue could have had the power to reopen assessments for the year 2012-2013 if the escaped assessment amounted to Rupees fifty lakhs or more. The proviso limits the retrospective operation of Section 149(1)(b) to protect the interests of the assesses. 50. Another important change under section 149(1)(b) of the new regime is the increase in the monetary threshold from Rupees one lakh to Rupees fifty lakhs. The old regime prescribed a time limit of six years from the end of the relevant assessment year if the income chargeable to tax which escaped assessment was more than Rupees one lakh. In comparison, the new regime increases the time limit to ten years if the escaped assessment amounts to more than Rupees fifty lakhs. This ....
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....on (1) of this section, as they stood immediately before the commencement of the Finance Act, 2021." Thus, the proviso specifically refers to the time limits specified under section 149(1)(b) of the old regime.........." 8.4 Thus, the Apex Court held that "no notice under section 148 of the new regime can be issued at any time for an assessment year beginning on or before 1 April 2021; if it is barred at the time when the notice is sought to be issued because of the 'time limits specified under the provisions of 149(1)(b) of the old regime" (Para 46). This means that for AY 2015-16, a notice under the new Section 148 could only be issued if it was not time-barred under the old regime's Section 149(1)(b) of the Act. Further, the Apex Court held that for the AY 2015-16, the six-year limitation period under the unamended Section 149(1)(b) expired on March 31, 2022 (six years from the end of the relevant assessment year, i.e., March 31, 2016). The Supreme Court explicitly stated that "a notice under Section 148 of the new regime cannot be issued if the period of six years from the end of the relevant assessment year has expired at the time of issuance of the notice" (Para 49....
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.... the Revenue that the notice under section 148A(b) of the Act was issued on 25/03/2022 by which assessee was asked to give response/ objection to the same within 01/04/2022. In response to the same, assessee did not file any objection. On a plain reading of 5th proviso to Section 149, the time period of 7 days allowed to assessee to give response/ objection needs to be excluded. Further as per 6th proviso a period of 7 days also need to be excluded. The assessing officer has passed the order u/s. 148A(d) on 08/04/2022 and issued the notice u/s. 148 on 08/04/2022, which very well falls within the limitation period. In this regard we are of the considered opinion that undisputedly the erstwhile third proviso to amended section 149(1) of the Act allows for the exclusion of the time taken for Section 148A proceedings. However, this exclusion is for computing the period of limitation as per section 149 of the Act. It does not override the first proviso to Section 149(1) of the Act, which acts as a threshold condition for the applicability of the new regime to old assessment years. If a notice was already time-barred under the old law, the exclusion of time under the 3rd or 4th provisos ....
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....ld as under- "5. As rightly contended by the learned counsel for the petitioner, the material on record discloses that the impugned proceedings is relating to the Assessment Year 2015-16 in respect of the petitioner; however, it is an undisputed fact that the respondents issued impugned notice at Annexure-A2 under Section 148 of the I.T.Act on 01.04.2022, beyond the period of limitation and the same has already been held not to be permissible by the Apex Court in Rajeev Bansal's case (supra), which reads as under: - "19(e). The Finance Act, ([2021]) 431 ITR (St.) 52) substituted the old regime for reassessment with a new regime. The first proviso to Section 149 does not expressly bar the application of Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020. Section 3 of Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 applies to the entire Income-Tax Act, including Sections 149 and 151 of the new regime. Once the first proviso to Section 149(1)(b) is read with Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020, then all the notices issued between April 1, 2021 and Jun....
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....isputed fact that the impugned proceedings is relating to the Assessment Year 2015-16, while the impugned notice under Section 148 of the Act dated 01.04.2022 was issued beyond/after 01.04.2021 which is impermissible in law and barred by limitation and consequently, the impugned orders/notices etc., deserve to be quashed. 7. In the result, I pass the following :- 'ORDER (i) Petition is hereby allowed. (ii) The impugned orders/Notices at Annexures-A1, A2, B, C1, D1 and E1 dated 01.04.2022, 01.04.2022, 15.03.2022, 09.03.2022, 27.08.2024 and 27.08.2024 respectively and subsequent orders/notices issued by the 1st respondent are hereby quashed." 9.1. Further, the Hon'ble High Court of Karnataka in the case of Tarish Investment and Trading Company (P) Ltd v. Union of India reported in [2025] 179 taxmann.com 198 (Karnataka) has under the similar facts & circumstances but for the AY 2017-18 also taken a similar view. The relevant paragraph of the said judgment is reproduced below- "2. The petitioner in the subject petition calls in question an order passed by the 2nd respondent under Section 148A(d) of the Income Tax Act and consequen....
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....t prescribed under section 149(1)(b) of the old regime continues to exist for the assessment year 2021-2022 and before. Resultantly, a notice under Section 148 of the new regime cannot be issued if the period of six years from the end of the relevant assessment year has expired at the time of issuance of the notice. This also ensures that the new time limit of ten years prescribed under Section 149(1)(b) of the new regime applies prospectively. For example, for the assessment year 2012-2013, the ten year period would have expired on March 31, 2023, while the six year period expired on March 31, 2019. Without the proviso to section 149(1)(b) of the new regime, the Revenue could have had the power to reopen assessments for the year 2012-2013 if the escaped assessment amounted to rupees fifty lakhs or more. The proviso limits the retrospective operation of section 149(1)(b) to protect the interests of the assesses. 53. The position of law which can be derived based on the above discussion may be summarized thus: (i) Section 149(1) of the new regime is not prospective. It also applies to past assessment years; (ii) The time limit of four years is now reduced to three years for....
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....appearing for the petitioner submits that the issue stands covered by the decision of this Court in Manju Somani v. Income Tax Officer [2024] 165 taxmann.com 675/300 Taxman 516/466 ITR 758 (Delhi): Neutral Citation: 2024:DHC:5411-DB. 6. It is also relevant to note that the Supreme Court in a recent decision of Union of India v. Rajeev Bansal: 2024 SCC OnLine SC 2693/[2024] 167 taxmann.com 70 (SC) (SC) has observed as under: "46. The ingredients of the proviso could be broken down for analysis as follows: (i) no notice under Section 148 of the new regime can be issued at any time for an assessment year beginning on or before 1 April 2021; (ii) if it is barred at the time when the notice is sought to be issued because of the "time limits specified under the provisions of" 149(1)(b) of the old regime. Thus, a notice could be issued under Section 148 of the new regime for assessment year 20212022 and before only if the time limit for issuance of such notice continued to exist under Section 149(1)(b) of the old regime. **** 49. The first proviso to Section 149(1)(b) requires the determination of whether the time limit prescribed under Section 149(1)(b....