TaxTMI 
TaxTMI 
2026 (6) TMI 203
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....red by limitation. 4. Without prejudice to Ground no.2 and Ground no.3, the learned Commissioner of Income Tax (Appeals) ought to have quashed the notice issued u/s 148 of the Act as invalid and consequently the learned Commissioner of Income Tax (Appeals) ought to have quashed the reassessment proceedings as void ab initio since the notice was issued by the jurisdictional assessing officer in contravention of S. 151A of the Act. 5. Without prejudice to Ground no.2 to Ground no.4, the learned Commissioner of Income Tax (Appeals) ought to have deleted the addition of Rs. 1,65,05,300 made u/s 69A of the Act towards unexplained deposits in bank account. 6. Any other grounds may be urged at the time of hearing." 2.1. In ground no.3 the assessee challenged the validity of the notice issued u/sec. 148 of the Income Tax Act [in short "the Act"], 1961 dated 04.04.2022 being barred by limitation. Since the issue raised by the assessee in ground no.3 is legal in nature and goes to the root of the matter, therefore, we first take-up ground no.3 for hearing and adjudication. 3. The learned Authorised Representative of the Assessee has submitted that the Assessi....
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....ti vs. ACIT [2023| 455 ITR 24 (Del.) (HC). The learned DR has also relied upon Judgment of Hon'ble Madras High Court in the case of Ramadoss Srikanthi vs. ACIT [2025] 481 ITR 126 (Mad.) (HC). 5. We have considered the rival submissions as well as relevant material on record. The Assessing Officer has issued show cause notice u/sec.148A(b) on 23.03.2022 and thereafter passed order u/sec.148A(d) on 04.04.2022. In Para no.6 of the Order passed u/sec.148A(d) the Assessing Officer has stated as under: "6. As per the show cause notice, the assessee was required to furnish reply on or before 30.03.2022. However, no reply has been furnished by the assessee to the show cause notice. In the absence of any response from the assessee, it is considered that the assessee has no explanation to offer and has no objection to the proposed issue of notice u/sec. 148." 5.1. Thus, it is clear that in response to show cause notice u/sec.148A(b) of the Act, the assessee did not file any reply and thereafter, the Assessing Officer has passed the Order u/sec.148A(d). Therefore, the case does not fall even for exclusion of certain time period from the period of limitation as per 5th and 6....
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....), the position of law stands clear as regards the operation of amended Section 149(1) 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 (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, that not more than ten years, have elapsed from the end of the relevant assessment yes unless the Assessing Officer has it his possession books of account or other documents or evidence which reveal that the income chargeable to tax, represented in the form of- (i) an asset (ii) expenditure in respect of a transaction or in relation to an event of occasion; or (iii) an entry or entries in the books of account, Which has escaped assess....
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....e relevant assessment year, (iii) the proviso to Section 149(1)(b) of the new regime stipulates that the Revenue can issue reassessment notices for past assessment years only if the tune limit survives according to Section 149(1)(b) of the old regime, that is, six years from the end of the relevant assessment year, and (iv) all notices issued invoking the time limit under Section 149(1)(b) of the old regime will have to be dropped if the income chargeable to tax which has escaped assessment is less than Rupees fifty lakhs." 11. The first proviso to the amended Section 149 of the Act prescribes that no notice under Section 148 of the Act shall be issued at any time in a case for the relevant assessment year beginning on or before 01.04.2021, if a notice under Section 148 of the Act could not have been issued at that time on account of being beyond the time limit specified under the provisions of clause (b) of sub-section (1) of Section 149 of the Act or as they stood immediately before the commencement of the Finance Act, 2021. For the purposes of appreciating the first proviso, the un-amended Section 149 of the Act is also extracted in the foot note. -------------....
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....he fifth proviso i.e., the period of limitation available to the Assessing Officer for passing an order under clause (d) of Section 148A of the Act if it does not exceed seven days. In that event, such remaining period shall be extended to seven days and the period of limitation under this sub-section shall be deemed to be extended. 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 ....
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....ction 149(1)(b) of the Act for extension of limitation for issuing notice under Section 148 of the Act, fifth and sixth provisos are only applicable with respect to the period of limitation prescribed under Section 149(1) of the Act ie, three years or ten years, as the case may be. The Court also held that fifth and sixth provisos extend 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 Net is within the period of limitation under Section 149(1)(2)(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 prescr....
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....refore, the Assessment Officer has jurisdiction. 16. In view of the above discussion, the initiation of reopening of assessment by the impugned notice dated 22.04.2024 is barred by limitation being beyond the period of six (6) years reckoned from the relevant Assessment Year 2017-18 as per the un-amended Section 149 of the 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....
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....n which is not permissible in law. Reliance has also been placed upon the decision of the Apex Court in S.M. Overseas (P.) Ltd., (supra) on the proposition that parallel proceedings cannot be initiated for reopening of the assessment during pendency of the proceedings under Section 154 of the Act. Paras 4 and 5 of the said decision are also 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 Ac....
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.... beginning on or before 01.04.2021 if a notice under Section 148 of the Act could not have been issued at that time on account of being beyond the time limit specified under the provisions of clause (b) of Section 149 of the Act, as it stood immediately before the commencement of the Finance Act, 2021. 18. In the present case, the assessment year involved is 2015-16 and as per the unamended provisions of Section 149, if the income escaped assessment is more than Rs. 1 lakh, then the assessment can be reopened up to six years from the end of the relevant assessment year. Accordingly, for the assessment year 2015-16, the assessment could have been reopened on or before 31.03.2022. Since the time limit available for issuance of notice under Section 148 of the Act, as per the old regime of reassessment, was up to 31.03.2022, in our considered view, the A.O. cannot issue reassessment notice under Section 148 of the Act for the assessment year 2015-16 on or after 01.04.2022. In the present case, it is an undisputed fact that the A.O. has issued notice under Section 148 of the Act on 09.04.2022, which is beyond six years from the end of the relevant assessment year. Therefore, th....
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.... 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. 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....
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.... 20. In view of the above discussion and respectfully following the ratio laid down by the Hon'ble High Court of Telangana, we hold that the notice issued under Section 148 of the Act dated 09.04.2022 is barred by limitation and therefore the consequent assessment order passed by the A.O. under Section 147 r.w.s. Section 144 of the Act dated 28.11.2023 is bad in law and liable to be quashed. Accordingly, we quash the assessment order passed by the A.O. 21. In the result, the appeal filed by the assessee is allowed." 9.4. Accordingly, in the facts and circumstances of the case and by following the binding precedent of Hon'ble Jurisdictional High Court (supra), we hold that the notice issued by the Assessing Officer u/sec. 148 of the Act dated 15.04.2022 is barred by limitation and the same is liable to be quashed. We Order accordingly. Since we have quashed the notice issued u/sec. 148 of the Act being invalid which also vitiates the re-assessment order passed by the Assessing Officer, therefore, the other grounds raised by the assessee becomes infructuous." 5.2. Thus, the Tribunal by following the Judgments of Hon'ble High Court of Telangana in th....
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....rmation and enquiry, if conducted, are enclosed with this notice in Annexure A. 2. You are required to show-cause as to why, in view of the details contained in Annexure A, a notice section 148 of the Income tax Act, 1961 should not be issued. 3. You may, to the extent technologically feasible, submit your response with supporting documents (if any) on the above mentioned issues electronically in 'e-proceeding' facility through your account in e- filing portal at your convenience on or before 23/03/2022. 4. This notice is being issued after obtaining the prior approval of the PCCIT, AP & TELANGANA accorded on date 19/03/2022 vide Reference No. 100000029533054. VURANDURU P NARASIMHA RAO WARD 10(1),HYDERABAD/ Document 2 To. SUDHEER PARIMALA 7-1-59/7 DHARAM KARAN ROAD , AMEERPET HYDERABAD 500016 , Andhra Pradesh India PAN: A.Y: Dated: DIN & Notice No: AHPPP7572E 2015-16 15/04/2022 ITBA/AST/F/148A/2022-23/1042746680(1) Name of the assessee SUDHEER PARIMALA Address of the assessee 7-1-59/7 DHARAM KARAN ROAD , AMEERPET HYDERABAD 500016 , Andhra Pradesh India Resident/ Not Ordinarily Resident/ Non-Resident Date of order 15/04/2022 Specified authority app....