TaxTMI 
TaxTMI 
2025 (2) TMI 1698
X X X X Extracts X X X X
X X X X Extracts X X X X
....1961 ("the Act"). Your Appellant submits that the re-opening of the assessment u/s. 147 of the Act is bad-in-law, illegal and the same ought to be quashed. 2. On the facts and in the circumstances of the case and in law, the Learned CIT(A) erred in confirming the action of re-opening of assessment by the Assessing Officer to be valid and as per law and supported by specific material from the investigation wing. The Appellant submits that the reopening of assessment on the basis of details / evidences received from the Investigation wing without providing the same to the Appellant and without providing an opportunity for cross examination of the said information/party is bad in law, illegal, void and the said order ought to be quashed. B. PRINCIPLES OF NATURAL JUSTICE: 3. On the facts and in the circumstances of the case and in law, the Learned CIT(A) erred in confirming the action of the Assessing Officer of passing the re-assessment order u/s. 143(3) r.w.s. 147 of the Act without providing the details / evidences received from the Investigation wing to the Appellant and without providing an opportunity for cross examination of the said ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....75,00,000 is wrongly made and the same ought to be deleted. D. COMPUTATION OF BOOK PROFITS U/S. 115JB 8. On the facts and in the circumstances of the case and in law, the Learned CIT(A) erred in dismissing the ground of appeal raised with respect to computation of book profits u/s. 115JB as arising out of the Order u/s. 154 dated 19.10.2023 and not from the Order u/s. 147 rws 144B dated 11.05.2023 in respect of which the appeal was filed. The Appellant submits that the Assessing Officer had not discussed and not computed the book profits u/s. 115JB in the body of the assessment order and straight away computed the book profits u/s. 115JB at Rs. 1,12,42,922 In the computation sheet attached to the order as against the book loss of Rs. 767,73,76,418 for which the Appellant had raised a ground and the same ought to have been decided by CIT(A). 9. On the facts and in the circumstances of the case and in law, the Learned CIT(A) erred in appreciating that the Assessing Officer had computed the book profit at Rs. 1,12,42,922 as against the book loss of Rs. 767,73,76,418 and for which the ground was raised. The Appellant submits that the CIT(A) ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....editors, proof of genuineness of the transaction, PAN and latest postal address of creditors. The assessee was also asked to furnish the confirmation of accounts along with details of banking transactions, copy of ITR and balance sheet of preceding 3 years of creditors along with bank statement etc. The assessee in response vide letter dated 07.04.2023 filed the details. However, the AO stated that assessee has not furnished the copy of return of income, Financial & Bank Statements of the creditors stating that these were the private and confidential documents of the lenders. The AO further stated that a notice u/s 133(6) of the Act was issued to the Katyani Trading Enterprises Pvt. Ltd., Elvina Real Estate Pvt. Ltd. asking to furnish the copy of ledger account of Sonata Investment Ltd. as per their books of account, copy of ITR, balance sheet etc. However, no response has been received, therefore, the assessing officer held that identity, creditworthiness and genuineness of the transaction remained unexplained. Therefore, treated the loan transaction of Rs. 39,75,00,000/- as unexplained u/s 68 of the Act. 4. The assessee filed appeal before the ld. CIT(A). The ld. CIT(A) has di....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he original return of income was filed on 30.09.2015. Thereafter scrutiny assessment was completed u/s 143(3) of the Act on 29.12.2017. Subsequently, the assessment was reopened by issuing of notice u/s 148 of the Act on 31.07.2022. As per the copy of reasons recorded for reopening the case information has been received from the DDIT(Inv.) Unit- 3(4), Mumbai that on the basis of search action carried out in the case of Himanshu Verma and others on 13.04.2017 at Noida it was found that he was involved in providing accommodation entries in lieu of commissions through the number of shell companies. List of Mumbai beneficiary was shared by the office of DDIT(Inv.), Mumbai which also included the name of the assessee as M/s. Sonata Investment Ltd. now known as CLE Pvt. Ltd. The Hon'ble Supreme Court in the case of Union of India vs Ashish Agarwal (2022) 138 taxmann.com 64 (SC) dated 04.05.2022 held notice u/s 148 of the Act issued during the period 01.04.2021 to 30.06.2021 under the old law shall be deemed to be show cause notices issued u/s 148A(b) of the new law and has directed the assessing officer to follow the procedures with respect to such notices. 8. However, in view of the ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e Finance Act substituted the old regime for reassessment with the new regime. The first proviso to section 149 does not expressly bar the application of TOLA. Section 3 of TOLA applies to the entire Income-tax Act including Sections 149 and 151 of the new regime. As per clause 19(e) of the order of the Hon'ble Supreme Court in the case of Rajeev Bansal once the first proviso to section 149(1)(b) is read with TOLA then all the notices issued between 01.04.2021 and 30.06.2021 pertaining to A.Y. 2013-14 to A.Y. 2016-17 and A.Y. 2017-18 will be within the period of limitation as explained in the tabulation below: Assessment Year Within 3 Years Expiry of limitation read with TOLA for (2) Within six Years Expiry of limitation read with TOLA for (4) 1 2 3 4 5 2013-14 31.03.2017 TOLA not applicable 31.03.2020 30.06.2021 2014-15 31.03.2018 TOLA not applicable 31.03.2021 30.06.2021 2015-16 31.03.2019 TOLA not applicable 31.03.2022 TOLA not applicable 2016-17 31.03.2020 30.06.2021 31.03.2023 TOLA not applicable 2017-18 31.03.2021 30.06.2021 31.03.2024 TOLA not applicable 11. Proviso to....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e provides three crucial benefits 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 procedure laid down under the new regime; e. The Finance Act 2021 substituted the old regime for reassessment with a new regime. The first proviso to Section 149 does not expressly bar the application of TOLA. Section 3 of TOLA 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 TOLA, then all the....
X X X X Extracts X X X X
X X X X Extracts X X X X
....mit till 31/06/2021 in the following manner:- "54. The proviso to Section 149(1)(b) of the new regime uses the expression "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." Thus, the proviso specifically refers to the time limits specified under Section 149(1)(b) of the old regime. The Revenue accepts that without application of TOLA, the time limit for issuance of reassessment notices after 1 April 2021 expires for assessment years 2013-2014, 2014-2015, 2015-2016, 2016-2017, and 2017- 2018 in the following manner: (i) for the assessment years 2013-2014 and 2014-2015, the six year period expires on 31 March 2020 and 31 March 2021 respectively; and (ii) for the assessment years 2016-2017 and 2017-2018, the three year period expires on 31 March 2020 and 31 March 2021 respectively. a. Finance Act 2021 substituted the old regime." 11. Thereafter, the Hon'ble Supreme Court has elaborated the law brought by the Finance Act, 2021 substituting u/s. 147 to 151 and the TOLA providing for relaxation of time limit prescr....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d authority is directly co- related to the time when the notice is issued This plays out as follows under the old regime (i) If income escaping assessment was less than Rupees one lakh (a) a reassessment notice could be issued under Section 148 within four years after obtaining the approval of the Joint Commissioner, and (b) no notice could be issued after the expiry of four years, and (ii) If income escaping was more than Rupees one lakh (a) a reassessment notice could be issued within four years after obtaining the approval of the Joint Commissioner: and (b) after four years but within six years after obtaining the approval of the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner 75. After 1 April 2021, the new regime has specified different authorities for granting sanctions under Section 151 The new regime is beneficial 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 th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d three important periods: i. The period up to 30 June 2021 - this period is covered by the provisions of the Income Tax Act read with TOLA; ii. The period from 1 July 2021 to 3 May 2022 - the period before the decision of this Court in Ashish Agarwal (supra); and iii. The period after 4 May 2022 - the period after the decision of this Court in Ashish Agarwal (supra). This period is covered by the directions issued by PART F this Court in Ashish Agarwal (supra) and the provisions of the Income Tax Act read with TOLA. a. Third proviso to Section 149 95. The third proviso to Section 149 reads thus: "Provided also that for the purposes of computing the period of limitation as per this section, the time or extended time allowed to the assessee, as per show-cause notice issued under clause (b) of section 148A or the period during which the proceeding under section 148A is stayed by an order or injunction of any court, shall be excluded." 96. The third proviso excludes the following periods to calculate the period of limitation: (i) the time allowed to the assessee under Section 148A(b); and (ii) the period during which the proceeding....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ued beyond the surviving period are time barred and liable to be set aside; 15. Thus, from the aforesaid judgment, it is clear that firstly, after 01/04/2021, the Income Tax Act has to be read alongwith substituted provisions of TOLA will continue to apply after 01/04/2021 if any action or proceedings provided under the substituted provision of the Income Tax falls for completion between 21/03/2020 to 31/03/2021 and Section 3(1), overrides Section 149 of the Income Tax Act; Similarly, TOLA will extend the time limit for grant of sanction by the authorities specified u/s.151 and if the time limit of three years falls between 21/03/2021 and 31/03/2021 then the specified authority u/s.151(i) has extended time limit till 30/06/2021. The direction of Shri Ashish Agarwal will extent to all re-assessment notice issued in old regime i.e. from 01/04/2021 to 30/06/2021 and finally Court held that ld. AO was required to issue reassessment notice u/s.148 under the new regime within the time limit surviving u/s.148 of the Income Tax Act r.w. TOLA. Thus, in all such instances for the relevant assessment years under question the time limit was extended only up to 30/06/2021 for issuance ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....for the reason as discussed above in this order. 15. Since, we have quashed the assessment, therefore, other grounds of appeal filed by the assessee on merit become academic and same required no adjudication and left open. Accordingly, the appeal of the assessee is allowed. ITA No. 6270/M/2024 (A.Y. 2017-18) "A. RE-OPENING OF ASSESSMENT IS BAD IN LAW: 1. On the facts and in the circumstances of the case and in law, the Learned Commissioner of Income Tax (Appeals) 51, Mumbai (hereinafter referred to as CIT(A)] erred in confirming the action of the Dy. Commissioner of Income Tax, Central Circle 3(4), Mumbai (hereinafter referred to as Assessing Officer) in re-opening the assessment u/s. 147 of the Income Tax Act, 1961 ("the Act"). Your Appellant submits that the re-opening of the assessment u/s. 147 of the Act is bad-in-law, illegal and the same ought to be quashed. 2. On the facts and in the circumstances of the case and in law, the Learned CIT(A) erred in confirming the action of re-opening of assessment by the Assessing Officer to be valid and as per law and supported by specific material from the investigation wing. The Appellant....
X X X X Extracts X X X X
X X X X Extracts X X X X
....on. The Appellant submits that the addition u/s. 68 is wrongly made and ought to be deleted. 7. On the facts and in the circumstances of the case and in law, the Learned CIT(A) erred in confirming the addition u/s. 68 of the Act on the alleged ground that the Appellant had failed to provide any document relating to the lenders for verification by the Assessing Officer and the lenders have not responded to the notices issued by the Assessing Officer. The Appellant submits that non-receipt of the documents / information from the lenders after issue of notice u/s. 133(6) cannot be the basis for making addition u/s. 68 and therefore the above addition u/s. 68 of so- called unexplained cash credit of Rs. 4,10,00,000/- is wrongly made and the same ought to be deleted. E. GENERAL 8. The Appellant craves leave to add, to amend, vary or alter, including by substitution, any of the above grounds of appeal." 16. Similarly, in this case the AO observed that assessee had taken unsecured loan of Rs. 4,10,000,000/- from M/s. Supnext Infraheights Pvt. Ltd. which was an entity involved in providing accommodation entries only. The assessing officer iss....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e u/s 148 of the Act wherein it is held that notice issued beyond period of 3 year from end of assessment year fall within the provision of section 151(ii) of amended law whereby specified authority for grant of approval was specified as Principal Chief Commissioner or Principal Director General or Chief Commissioner or Director General and approval obtained from Principal Commissioner of Income Tax was not valid. The relevant extract of the decision is reproduced as under: "8.3. In the present case, the relevant Assessment Year 2017-18 and the time limit of three years lapsed on 31.03.2021 which falls between 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. 148A....