TaxTMI 
TaxTMI 
2025 (9) TMI 1760
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.... of Rs. 27,83,470/-. The case of the assessee was reopened u/s 147 of the Act by issue of notice u/s 148 on 19.04.2021, copy of the same is placed in PB-4 of 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, the said notice was deemed to have been issued as show cause notice u/s 148A(b) of the Act and consequently, after receiving the submission from the assessee, order u/s 148A(d) was passed on dated 28.07.2022 which was digitally signed on 29.7.2022 and notice u/s 148 was issued on 28.07.2022, copy of the same is placed at PB pages 25 to 26. Thereafter, the re-assessment proceedings were completed, and order was passed u/s 147 r.w.s. 144B of the Act wherein additions of Rs. 59,95,80,000/- were made in the hands of the assessee by treating the long terms capital gains as unexplained. Against the said order an appeal was filed before the Ld. CIT(A) who dismissed the appeal of the assessee. 4. Aggrieved by the said order, assessee is in appeal before the Tribunal wherein the assessee has taken following grounds of appeal: "1. Based on facts and ....
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....148 and consequent reassessment order passed by AO under Section 147 r ... 144 of the Act are illegal and void-ab-initio as the same have been issued and passed without following the statutory conditions and procedures prescribed under the Act 11. On the facts and circumstances of the case, the learned CIT(A) has erred both on facts and in law in confirming the reopening of the reassessment proceedings despite the fact that notice under section 148 has been issued beyond three years without there being any books of accounts, evidence or other documents in the possession of the AO related to any asset or expenditure or entry which shows that income chargeable to tax has escaped assessment. 12. On the facts and circumstances of the case, the learned CIT(A) has erred both on facts and in law in confirming the action of AO despite the fact that the order under Section 147 r.w.s. 144 has been passed ignoring the first proviso to section 148 which provides that notice under section 148 shall not be issued unless there is "information" [as defined under Explanation 1 to section 148] with the assessing officer which suggests that income chargeable to tax in the case of as....
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....ase, the learned CIT(A) has erred both on fact and in law, in confirming the addition despite the fact that the same has been made by the AO indulging in conjectures and surmises without bringing on record any direct evidence against the assessee, only on the basis of presumptions, suspicion and assumptions." 6. The additional grounds of appeal taken by the assessee are legal in nature wherein the assessee has challenged the reassessment order on the grounds of limitations etc. As these additional grounds of appeal go to the root of the matter and are purely legal in nature requires no fresh investigation thus, the same are admitted for adjudication. 7. First, we take the additional grounds of appeal Nos.7 to 9 taken by the assessee, wherein the assessee has challenged the legality of the reassessment order passed u/s 147 in violation to the directions given by the hon'ble Supreme court in the case of Union of India Vs. Rajeev Bansal reported in (2024) 469 ITR 46 (SC). 8. Heard both the parties at length and perused the material available on record. It is seen that in the instant case, the appeal of the assessee was related to Assessment Year 2015-16 wherein after pass....
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....s 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 be nefits 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 years cannot be undertaken beyond six years; and (iii) the monetary threshold of Rupees fifty lakhs will apply to the re- assessment for previous assessment years; c. The relaxations provided under Section 3(1) of TOLA apply "notwithstanding anything contained in the specified Act." Section 3(1), therefore, overrides the time limits for issuing a notice under Section 148 read with Section 149 of the Income Tax Act; d. TOLA does not extend the life of the old regime. It merely provides a relaxation for the completion or compliance of actions following the procedu....
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....or after 1st April, 2021, therefore, both the notice deserves to be dropped in view of the admission made by the Revenue before the Hon'ble Supreme Court. Further, for Assessment Year 2015-16, no notice u/s 148 of the Act could be issued after the expiring of six years from the end of the relevant assessment year which limitation expired on 31st March, 2022. As the Hon'ble Supreme Court in the case of Rajiv Bansal (supra) has observed that Tola is not applicable for Asst. Year 2015-16, therefore, even otherwise under the old provisions of section 149 of the Act, the notice issued u/s 148 of the Act for Asst. Year 2015-16 on 25/07/2022 is barred by limitation. In view of these facts, the notice issued u/s 148 of the Act dated 25/07/2022 is hereby quashed. Accordingly, legal ground taken by the assessee is allowed." 9. Further the Co-ordinate Bench of the ITAT, 'B' Bench with same combination in the case of Guru Charan Singh vs. ITO in ITA No.2846/Del/2025 & 2847/Del/2025 has made the following observations: "2. We notice during the course of hearing that there arises the first and foremost issue of validity of the impugned reopening(s) itself set into mot....
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....law based on which the reassessment for the AY 2015-16 was framed by the AO on 31.5.2023. The reassessment was challenged before the Ld. CIT(Appeals) and the Ld. CIT(Appeals) dismissed the appeal for non-prosecution by the assessee. 6. In the case of Make My Trip (India) Put. Ltd. Vs. DCIT (supra) the Jurisdictional High Court considered whether reassessment completed for the AY 2015-16 based on a notice issued u/s 148 and the viz. a viz. the applicability of the provisions of TOLA and based on the concession of the Revenue that for the AY 2015-16 all the notices issued on or after 1.4.2021 will have to be dropped as they will not fall for completion during the period prescribed under the TOLA, held that the notice issued under 148 was beyond the period of limitation and consequently the same is liable to be set aside. 7. Further the Hon'ble Supreme Court in the case of Deepak Steel & Power Ltd. Vs. CBDT & Others (supra) quashed the notices issued u/s 148 observing as under: - "2. These appeals arise from 'the order passed by the High Court of Orissa at Cuttack in Writ Petition (C) Nos. 2446 of 2823, 2543 of 2023 dated 1.2.2023 and 2544 of 2023 da....
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....46 of 2023, 2543 of 2023 and 2544 of 2023 respectively filed before the High Court of Orissa at Cuttack stands allowed. 7. The impugned notice therein stands quashed and set aside." 8. Above decisions squarely applies to the fact situation of the assessee and therefore respectfully following the above decisions, we hold that the notices issued u/s 148 on or after 1.4.2021 for reopening the assessment for the AY 2015-16 are barred by limitation and consequently the reassessment made based on such notices are bad in law and void ab initio. Thus, the impugned reassessment order having been made pursuant to notice issued u/s 148 dated 30.07.2022 the reassessment order is hereby held to be bad in law and the same is quashed. Ground Nos. B, C & D of grounds of appeal of the assessee are allowed." 3. We adopt the above extracted detailed reasoning mutatis mutandis to quash both these reopening(s) in the instant twin cases in very terms. All the Revenue's vehement contentions supporting the same are hereby rejected. All other pleadings between the parties on merits etc. stand rendered academic. 4. These twin assessees' as many appeals IT....
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.... of Rs. 1,54,00,000/- as Undisclosed Short-Term Capital Gain ● The learned Commissioner of Income Tax (Appeals) ["CIT(A)"] erred in upholding the addition of Rs. 1,54,00,000/ - on account of undisclosed short-term capital gain, despite the appellant providing details regarding the sale of properties. ● The Assessing Officer (AO) failed to consider the explanations submitted by the appellant and did not provide a proper opportunity to explain the source and cost of acquisition. 2. Incorrect Rejection of Evidence ● The CIT(A) failed to appreciate that the appellant had provided supporting details regarding the sale consideration, cost of acquisition, and deductions claimed under Section 48 of the Income Tax Act. ● The appellant was not given adequate opportunity to provide additional documentary evidence to substantiate her claims. 3. Violation of Principles of Natural Justice ● The assessment order and appellate order were passed without granting a reasonable opportunity for the appellant to explain the capital gain computation. ● The assessment was conducted in a faceless man....
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.... the Act, order passed under Section 148A(d), notice issued under section 148 and consequent reassessment order passed by AO under Section 147 r.w.s. 144 of the Act are illegal and void-ab-initio as the same have been issued and passed without following the statutory conditions and procedures prescribed under the Act. 9. On the facts and circumstances of the case, the learned CIT(A) has erred both on facts and in law in confirming the reopening of the reassessment proceedings despite the fact that notice under section 148 has been issued beyond three years without there being any books of accounts, evidence or other documents in the possession of the AO related to any asset or expenditure or entry which shows that income chargeable to tax has escaped assessment. 10.On the facts and circumstances of the case, the learned CIT(A) has erred both on facts and in law in confirming the action of AO despite the fact that the order under Section 147 r.w.s. 144 has been passed ignoring the first proviso to section 148 which provides that notice under section 148 shall not be issued unless there is "information" [as defined under Explanation 1 to section 148] with the assess....
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....rcular No. 19/2019. 16.On the facts and circumstances of the case, the learned CIT(A) has erred both on fact and in law, in confirming the addition despite the fact that the same has been made by the AO indulging in conjectures and surmises without bringing on record any direct evidence against the assessee, only on the basis of presumptions, suspicion and assumptions." 16. From the perusal of the additional grounds of appeal taken by the assessee, it is seen that they are legal in nature wherein the assessee has challenged the reassessment order on the grounds of limitations etc. As these additional grounds of appeal go to the root of the matter and are purely legal in nature and require no fresh investigation thus, the same are admitted for adjudication. 17. In additional grounds of appeal No. 6 & 7, assessee has challenged the reassessment order passed u/s 147 of the Act by alleging that the notice issued u/s148 is barred by limitations as per order of hon'ble Supreme court in the case of Rajeev Bansal (supra). 18. Heard both the parties at length and perused the materials available on record. In this case, the issue on validity of the proceedings u/s 148 h....
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....e 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 to the legal fiction, the assessing officers were deemed to have been inhibited from acting in pursuance of the Section 148A(b) notice till the relevant material was supplied to the assesses. Therefore, the show cause notices were deemed to have been stayed until the assessing officers provided the relevant information or material to the assesses in terms of the direction issued in Ashish Agarwal (supra). To summarize, the combined effect of the legal fiction and the directions issued by this Court in Ashish Agarwal (supra) is that the show cause notices that were deemed to have been issued during the period between 1 April 2021 and 30 June 2021 were stayed till the date of supply of the relevant information and material by the assessing officer to the assessee. After the supply of the relevant material and information to the assessee, time begins to run for the assesses to respond to the show cause notices. 107. The third proviso to Section 149 allows the exclusion of time allowed for the assesses to respond to the show ....
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....ording 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. As a corollary, the reassessment notices to be issued in pursuance of the deemed notices must also be within the time limit surviving under the Income Tax Act read with TOLA. This construction gives full effect to the legal fiction created in Ashish Agarwal (supra) and enables both the assesses and the Revenue to obtain the benefit of all consequences flowing from the fiction. 110. The effect of the creation of the legal fiction in Ashish Agarwal (supra) was that it stopped the clock of limitation with effect from the date of issuance of Section 148 notices under the old regime [which is also the date of issuance of the deemed notices]. As discussed in the preceding segments of this judgment, the period from the date of the issuance of the deemed notices till the supply of relevant information and material by the assessing officers to the assesses in terms of the directions issued by this Court in Ashish Agarwal (supra) has to be excluded from the computation of the period of limitation. Moreover, the period of two wee....
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....ity specified under Section 151. A notice issued without complying with the preconditions is invalid as it affects the jurisdiction of the assessing officer. Therefore, the reassessment notices issued under Section 148 of the new regime, which are in pursuance of the deemed notices, ought to be issued within the time limit surviving under the Income Tax Act read with TOLA. A reassessment notice issued beyond the surviving time limit will be time barred. G. Conclusions 114. In view of the above discussion, we conclude that: a. After 1 April 2021, the Income Tax Act has to be read along with the substituted provisions; b. TOLA will continue to apply to the Income Tax Act after 1 April 2021 if any action or proceeding specified under the substituted provisions of the Income Tax Act falls for completion between 20 March 2020 and 31 March 2021; c. Section 3(1) of TOLA overrides Section 149 of the Income Tax Act only to the extent of relaxing the time limit for issuance of a reassessment notice under Section 148; d. TOLA will extend the time limit for the grant of sanction by the authority specified under Section 151. The test to dete....
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....e 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, the AO had, by virtue of the fourth proviso to Section 149(1) of the Act, seven days to pass an order under Section 148A(d) of the Act (which was necessarily required to accompany a notice under Section 148 of the Act). The said period expired on 16.06.2022. Therefore, the order passed under Section 148A(d) of the Act was beyond the period of limitation. 10. The impugned notice is also liable to be set aside on the ground that it was issued without the approval of the authority specified under Section 151 of the Act. Since the impugned notice was issued beyond the period of three years from the end of the relevant assessment year, thus, in terms of Section 151(ii) of the Act, the same was required to be approved by the Principal Chief Commissioner or Principal Director General or where there is no such authority, by Chief Commissioner or Director General. The determination of the specified authority for grant of approval under Section 151 of the Act depends on whether the notice under Section 148 of the Act has been issued after....