TaxTMI 
TaxTMI 
2026 (1) TMI 1635
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.... for issuing the notice, only prima facie escapement of income can be considered. The notice was issued on 06.04.2022, based on info from A.Y. 2015-16, which is clearly beyond the 4-year limit. Case Law: CIT vs. Rajesh Jhaveri Stock Brokers P. Ltd. (2007) 291 ITR 500 (SC): The Supreme Court emphasized that the "reason to believe" for reopening must be based on tangible material and must be valid in law, including adherence to the time limits prescribed u/s 149. 2. Addition u/s 69A is Legally Unsustainable as the Assessee is Not Required to Maintain Books of Account. Objection: The CIT(A) erred in confirming the addition of Rs. 12,90,000 u/s 69A.The very precondition of Section 69A is that the money, bullion, etc., is "not recorded in the books of account, if any, maintained by him. Fact: The appellant is a retired government employee (Mandal Educational Officer) with no business income. He is not mandated to maintain any books of account under the Income Tax Act, 1961. The CIT(A) confirming that the assessee no need to maintain any Books, as he is retired government employee, erred arriving conclusion, assessee to maint....
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....hanan vs. CIT (2001) 251 ITR 99 (SC): 5. The CIT(A) erred in relying on judicial precedents inappropriately and failed to apply the binding principles from case laws cited by the appellant, thereby passing an order that is legally untenable. a) The learned CIT(A), in paragraph 5.1.1 of the impugned order, dismissed the appellant's reliance on the legal principle established in CIT v. Hersh Washesher Chadha regarding the essential conditions for invoking Section 69A. The CIT(A) vaguely stated that the cited cases are "distinguishable on facts" without providing any reasoned analysis as to how the fundamental legal principle laid down in those judgments- which is squarely applicable to the appellant's case-was in fact distinguished. b) The action of the CIT(A) is a gross error because the essence of a judicial precedent lies in the ratio decidendi (the underlying legal principle) and not merely the factual matrix of the case. c) The CIT(A) mechanically relied on a string of case laws for scenarios like cash found during a search & seizure operation, seizure of valuables by customs authorities, hawala transactions unearthed by enforcement di....
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....out the appellant's guilt even before passing the assessment order, violating the principles of natural justice and impartial adjudication." 3. Thereafter, on 09.01.2026, the assessee has raised the following additional grounds : "1. That on the facts and circumstances of the case and in law, the notice issued u/s 148 of the Act dt. 09-04-2022 for the AY 2015-16 is barred by limitation as prescribed u/s. 149(1)(a) of the Act since the alleged income escaped assessment was less than Rs.50 lakhs. 2. That, without prejudice to the additional ground no.1, even if the extended period of 6 years as prescribed u/s. 149(1)(b) of Act is taken into consideration, the notice issued u/s 148 of the Act dt. 09-04-2022 for the AY 2015-16 is barred by limitation, since the last date for issuing the said notice is 31-03-2022 only as per the first proviso to section 149(1)(b) of the Act and hence the impugned assessment order dt. 28-11-2023 is bad-in-law and is liable to be quashed. 3. That the notice issued u/s 148 of the Act dt.09-04-2022 is invalid as it was not signed by the Assessing Officer as required u/s 282A(1) of the Act and hence the impugned assessment o....
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.... school teacher from the State Government of Andhra Pradesh and that the cash deposits were made out of past savings, withdrawals from bank accounts, and amounts received from two persons, namely, B. Veeraiah and U. Srinivasa Rao. The assessee further submitted that, the time deposits were made out of Provident Fund, Gratuity, and other retirement benefits received earlier. The assessee also stated that, the interest income was inadvertently not offered to tax. 5. The A.O., after considering the submissions of the assessee and examining the bank statements obtained by issuing notices under Section 133(6) of the Act, observed that, the assessee failed to substantiate the source of cash deposits with supporting documentary evidence. The A.O. further observed that, the assessee could not establish the identity, creditworthiness, and genuineness of the alleged lenders and also failed to correlate the cash deposits with past withdrawals. The A.O. also observed that, the assessee did not offer interest income earned from fixed deposits to tax. Accordingly, the A.O. rejected the explanation of the assessee and made addition of Rs. 12,90,000/- under Section 69A of the Income-tax Act, 19....
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....gal grounds and pleaded that, in view of the decision of Hon'ble Supreme Court in the case of National Thermal Power Co. Ltd. Vs. Commissioner of Income Tax, (1998) 229 ITR 383, the additional grounds filed by the assessee are purely legal grounds which can be admitted for adjudication. 10. The learned Senior A.R. for the Revenue, Ms. P. Sumitha, on the other hand, has not opposed the admission of additional grounds filed by the assessee. 11. Having heard both sides and considered the relevant grounds taken by the assessee in the petition filed on 09.01.2026 for admission of additional grounds, we find that, the assessee has taken certain legal grounds in light of notice issued under Section 148 of the Act dated 09.04.2022 and also the first proviso to Section 149(1)(b) of the Act, and argued that, the said notice is beyond the time limit provided under the Act and consequently the assessment order passed by the A.O. is bad in law and liable to be quashed. Since the legal grounds taken by the assessee are purely legal issues which go to the root of the matter and it can be taken at any point of time, including at the stage of the appellate proceedings, in our considered v....
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....d, she relied upon the decision of Hon'ble Supreme Court in the case of Raymond Woollen Mills Ltd. Vs. ITO (1999) 236 ITR 34 (SC). The learned Senior A.R. further submitted that, there is no merit in the other legal grounds taken by the assessee because the A.O. had issued notice under Section 148 of the Act as per the amended provisions of Section 149(1)(a) of the Act and as per the said provision, where the income escaped assessment is more than Rs. 50 lakhs, the A.O. can issue notice up to ten assessment years. 16. Insofar as the third legal ground of the assessee regarding non-signing of the notice by the A.O. is concerned, the Ld. AR. For the Revenue submitted that, once the A.O. had initiated proceedings and opened the ITBA portal without signatures, he cannot upload the notice and therefore the arguments of the assessee are incorrect and cannot be accepted. 17. We have heard both the parties, perused the material available on record and had gone through the orders of the authorities below. We have also carefully considered the relevant notice issued by the A.O. under Section 148 of the Act dated 09.04.2022 in the light of the first proviso to Section 149(1)(b) of t....
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....of Ashish Agrawal (supra), the said notice was deemed as notice issued under section 148A(b). The AO after passing the order under section 148A(d) issued the notice under section 148 dated 29.07.2022. The contention of the assessee is that the said notice is barred by limitation as per the first proviso to the unamended provisions of section 149(1) as has been confirmed by the decision of the Hon'ble Supreme Court in the case of Rajeev Bansal (Supra). The relevant observations of the Hon'ble Supreme Court reads as under- 19. Mr N Venkataraman, learned Additional Solicitor General of India, made the following submissions on behalf of the Revenue: (a) to (c)**** (f). The Revenue concedes that for the assessment year 2015-16, all notices issued on or after 1 April 2021 will have to be dropped as they will not fall for completion during the period prescribed under TOLA; 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 ....