TaxTMI 
TaxTMI 
2025 (11) TMI 1967
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....f income was passed by the Income Tax Officer, Ward 1(1), Hyderabad, on 20.12.2019 making additions under Section 68 of the Act. Thereafter, the Income Tax Officer passed an order dated 23.12.2019 under Section 154 of the Act read with Section 143(3) of the Act rectifying a typographical error in the Assessment Order wherein an adjustment of Rs. 40,00,00,000/- was erroneously mentioned as Rs.40,00,000/-. Subsequently, another notice under Section 154 of the Act dated 20.01.2022 was issued by respondent No.1 for rectification of the order dated 23.12.2019 for correction of a mistake apparent on record. The mistake proposed to be rectified was Rs.40.00 lac as against Rs.40.00 crore in the computation of total income. Therefore, there was short addition of Rs.39,60,00,000/-. The Assessment Officer had not made disallowance of Rs.6,35,949/- under Section 36(1)(va) of the Act with respect to non-payment of contribution to the Provident Fund within the due dates prescribed under the Act. The Assessment Officer had not verified the genuineness of the additions to the block of assets. Therefore, the depreciation claim of Rs.78,26,412/- was not allowed. It was to be added to the total incom....
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.... Section 154 of the Act on the same issue, it cannot be made. The attention of this Court has been drawn to the notice dated 20.01.2022 issued for rectification of mistake and the order under Section 148A(d) of the Act passed on 22.04.2024. Reliance has been placed on the following decisions rendered by the Apex Court in Union of India v. Rajiv Bansal [(2024) 167 taxmann.com 70 (SC)] ; High Court of Delhi in Sheetal International (P) Ltd v. Chief Commissioner of Income-tax, Central-2 [(2024) 168 taxmann.com 308 (Delhi)] ; High Court of Karnataka at Bengaluru in Tarish Investment and Trading Company (P) Ltd., v. Union of India [Writ Petition No. 17389 of 2024 (T-IT)]; High Court of Rajasthan in Shree Cement Ltd., v. Assistant Commissioner of Income-tax [(2025) 177 taxmann.com 538 (Rajasthan)] ; High Court of Bombay in Godrej Industries Ltd., v. The Assistant Commissioner of Income Tax, Circle 14(1)(2), Mumbai [Writ Petition No. 450 of 2023], and by a coordinate Bench of this Court in M/s. Sri Sai Dhurga Balaji Health and Educational Welfare Society v. the Income Tax Officer [Writ Petition No. 16014 of 2024] All these decisions relate to the Assessment Year 2017-18 except the case of....
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.... of the Act. The relevant paragraphs 49 and 53 thereof are extracted hereunder: "49. The first proviso to Section 149(1)(b) requires the determination of whether the time limit 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 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 assessees." "53. The position of law which can be derived based on the above discussion may b....
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....Accordingly, both the fifth and sixth provisos in the first place do not amount to clarification of the first proviso. These two provisos qualify the substantive amended Section 149 of the Act and do not relate to the un-amended Section 149 of the Act for which the first proviso takes care of. The contention of the learned counsel for the Revenue that the time spent from the issuance of notice under Section 148A(b) of the Act up to the passing of the order under Section 148A(d) of the Act in terms of the fifth and sixth provisos stands excluded for reckoning the limitation period for issuance of notice under Section 148 of the Act is not worth acceptance. Section 148A of the Act lays down the procedure for issuance of notice under Section 148 of the Act whereas Section 149 of the Act prescribes strict time limit within which notice under Section 148 of the Act can be issued in the prescribed circumstances. The Revenue is therefore obliged to adhere to the timeline prescribed under Section 149 of the Act for issuance of such notice and undertake the procedure before issuance of notice under Section 148A of the Act. 13. In this regard, it is apposite to refer to opinion of the Del....
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....xtend limitation for issuing notice under Section 149 of the Act, however, first proviso is an exception to the period of limitation and provides for a restriction on the notices under Section 148 of the Act being issued for assessment years up to 2021-22 (in this case, it is Assessment Year 2017-18) beyond a certain date. Therefore, the way the section would operate, is to first decide whether a notice issued under Section 148 of the Act is within the period of limitation under Section 149(1)(a) or (b) of the Act. To decide whether the notice is within the period of limitation under Section 149(1)(a) or (b) of the Act, the extension of time as prescribed in fifth and/or sixth proviso would be considered. The Court further held once, the notice is otherwise within the period of limitation, thereafter one has to see whether the said limit is within the prescribed restriction provided in first proviso or not. If the notice is beyond the restriction period, the notice is invalid, and the fifth and/or the sixth proviso cannot apply at this stage to extend the period of restriction as per first proviso. Hence, if a notice is not within the time prescribed under first proviso to Section ....
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....he Act read with the first proviso thereof brought into effect from 01.04.2021. 17. We are also in agreement with the submission made by the learned Senior Counsel for the petitioner that the grounds on which the notice under Section 148 of the Act and the order under Section 148A(d) of the Act have been issued are already taken up in the rectification proceedings vide notice dated 20.01.2022. It is pertinent to refer to the grounds taken in the rectification notice under Section 154 of the Act which are extracted hereunder: "1. On perusal of the assessment order u/s.143(3), it is seen that addition made of Rs. 40,00,00,000/- on unexplained cash credits with regard to shares allotment to M/s. Cancer Treatment Services Hyderabad Pvt. Ltd. However, AO added only Rs. 40,00,000/- instead of Rs. 40,00,00,000/- in the computation of total income. This amounts to short addition made of Rs. 39,60,00,000/- having tax effect of Rs. 30,59,10,000/- excluding interest. 2. From the tax audit report in Farm 3CD, it is observed that the assessee's company has not paid employees contribution to PF within the due dates prescribed under the acts. In view of the same, the same has....
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....lso quoted hereunder. "4. Having heard learned counsel appearing on behalf of the respective parties and having gone through the impugned judgment and order passed by the High Court, we are of the opinion that the High Court has committed serious error in observing and holding that the notice under section 154 was invalid as the same was beyond the period of limitation as prescribed/provided under section 154(7) of the Act. It is required to be noted that the proceedings under section 154 of the Act were not the subject-matter before the High Court. Nothing was on record that, in fact, the notice under section 154 of the Act was withdrawn on the ground that the same was beyond the period of limitation prescribed under section 154(7) of the Act. In the absence of any specific order of withdrawal of the proceedings under section 154 of the Act, the proceedings initiated under section 154 of the Act can be said to have been pending. 5. In that view of the matter, during the pendency of the proceedings under section 154 of the Act, it was not permissible on the part of the Revenue to initiate the proceedings under section 147/148 of the Act pending the proceedings und....