TaxTMI 
TaxTMI 
2026 (6) TMI 332
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....ad in law. Proceedings conducted on an invalid notice are void ab initio. 3. The Appellant submits that the notice dated 13.04.2022 issued 3 u/s 148 itself is invalid as the notice is barred by limitation, issued beyond the time provided u/s 149 of the Act. 4. The appellant submits that after the introduction of faceless Assessment scheme, the JAO cannot issue notice under section 148A and notice under section 148. 5. The Appellant submits that even the notice u/s 142(1) has been issued by JAO which is against the provisions of Sec. 151A and 144B. 6. The appellant submits that she is not employed anywhere, has no business and there is no scope for her to make any earnings whether explained OR unexplained. The appellant submits that to make addition u/s 69A there should be a chance of earning and that chance should result in unexplained deposit." 3. 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 being barred by limitation provided u/sec. 149 of the Act. 4. The assessee is an individual and has not filed any return of income for the year under consideration ....
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....e period of 06 years from the end of the assessment year under consideration i.e., A.Y. 2015-2016. As per the unamended provisions of sec.148 of the Act, the notice u/sec.148 of the Act could be issued within the period of 06 years from the end of the assessment year under consideration. However, as per the amended provisions for reopening u/sec.148A and 148 r.w.s.149 of the Act, the limitation for reopening of the assessment has been reduced from 06 years to 03 years in cases where the income which is escaped assessment is less than Rs. 50 lakhs; but the limitation for reopening of the assessment is increased from 06 years to 10 years in the cases where the amount of income escaped assessment is Rs. 50 lakhs or more. The learned DR has submitted that as per the new provision of reopening u/sec.148A and 149 of the Act the limitation available to the Assessing Officer is 10 years from the end of the assessment year in the cases where the income escaped assessment is Rs. 50 lakhs or more. In the case of the assessee, the income escaped assessment was more than Rs. 50 lakhs and therefore, the 1st proviso to sec.149(1) would not apply to the case of the assessee. This contention of the....
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....tion 148A or the period during which the proceeding under section 148A is stayed by an order er injunction of any court, shall be excluded: Provided also that where immediately after the exclusion of the period referred to in the Immediately preceding proviso, the period of limitation available to the Assessing Officer for passing an order under clause (d) of section 148A does not exceed seven days, 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. 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 posi....
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....sment. Explanation in determining income chargeable to tax which has escaped assessment for the purposes of this sub-section, the provisions of Explanation 2 of section 147 shall apply as they apply for the purposes of that section. (2) The provisions of sub-section (1) as to the issue of notice shall be subject to the provisions of section 151. (3) If the person on whom a notice under section 148 is to be treated as the agent of a non-resident under section 163 and the assessment, reassessment or re-computation to be made in pursuance of the notice is to be made on him as the agent of such non-resident, the notice shall not be issued after the expiry of a period of six years from the end of the relevant assessment year. Explanation for the removal of doubt, it is hereby clarified that the provisions of sub-sections (1) and (3), as amended by the Finance Act, 2012, shall also be applicable for any assessment year beginning on or before the 1 day of April, 2012. ---------------- 12. Apparently, the fifth and sixth provisos of the amended Section 149 of the Act extracted hereinabove provide for excluding certain periods while comp....
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....ssued on or after" April 2021 based on the first proviso to Section 149 of the Act. Therefore, the fifth proviso cannot apply in a case where the first proviso applies because, if a notice under Section 148 of the Act could not be issued beyond the time period provided in the first proviso, then the fifth proviso could not save such notices The fifth proviso can only apply where one has to determine whether the time limit of three years and ten years in Section 149(1) of the Act are breached. 16. The sixth proviso to Section 149 of the Act has no impact as it only provides a situation where after exclusion of the time period referred to in the fifth proviso, the time available with the Assessing Officer for passing an order under Section 148A(d) of the Act is less than 7 days, then the remaining time frame shall be extended to 7 days and limitation also stands extended by 7 days" 14. Paragraph 12 of Shree Cement Ltd., (supra) is also extracted hereunder. "12. In this case, as it pertains to Assessment Year 2017-18, six years period would have expired on 31 March 2024 whereas notice under Section 148 of the Act itself came to be issued on 1 May 2024. Mr. S....
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.... the basis of the law existing as on the date on which the notice is issued under Section 148 of the Act, which in the present case is 31" July 2022, by which time the Finance Act, 2021 is already on the statute and in terms thereof, no notice under Section 148 of the Act for AY 2014-15 could be issued on or after 1" April 2021 based on the first proviso to Section 149 of the Act. Therefore, the fifth proviso cannot apply in case where the first proviso applies because, if a notice under Section 148 of the Act could not be issued beyond the time period provided in the first proviso, then the fifth proviso could not save such notices. The fifth proviso can only apply where one has to determine whether the time limit of three years and ten years in Section 149(1) of the Act are breached." 15. The reliance placed by the Revenue on the decision rendered by Patna High Court in the case of Chandra Shekhar (supra) is distinguishable as it relates to the Assessment Year 2020-21 in respect of which the notice under Section 148A(b) of the Act was issued on 28.03.2024. The petitioner therein had assailed the notice on the ground that the Assessing Officer had no jurisdiction to under....
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....ng evidences about additions to the block of assets. Hence, the AO has not verified the genuineness of the additions to the block of assets. Hence, the depreciation claimed of Rs. 78,26,412/- is not allowable and the same has to be added to the total income of the assessee. The tax effect of disallowing depreciation is Rs.27,08,565/-" 18. The reasons mentioned in the order passed under Section 148A(d) of the Act are also extracted hereunder: "5.1. The assessee requested that the claim of the assessee is found to be in order towards belated payments of ESVEPF amounting to Rs.6,35,949, However, in recent judgement passed by Apex court in the case of Mis Checkmate Services (P) Ltd Vs CIT (791 SC 2022) hell that it is an essential condition for the deduction of employees contribution that such amounts are deposited on or before the due dates defined by the respective statues Therefore contention of the assessee is not in order. 5.2. Further, the assessee furnished partial bills/vouchers towards additions made to fixed assets for the Y 2016-17 relevant to A.Y 2017-18. Since the volumes of the information furnished the same needs to be verified further with thi....
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....tion 148 of the Act for reopening of the assessment relating to the Assessment Year 2017-18 are barred by limitation and accordingly, set aside." 9.3. Thus, the Hon'ble Jurisdictional Telangana High Court has held that the notice issued by the Assessing Officer u/sec.148 of the Act dated 22.04.2024 was beyond the time limit stipulated u/sec.149(1)(a) of the Act though the show cause notice dated 28.03.2024 was well within the time limit. In the case in hand also the show cause notice u/sec.148A(b) of the Act was issued on 19.03.2022 which is well within the time limit, however, the Assessing Officer has not issued the notice u/sec.148 of the Act within the period of limitation as prescribed u/sec.149(1) read with proviso to the said section and therefore, the notice u/sec.148 was issued after 06 years from the end of the assessment year even after availing the time period given to the assessee for reply to the said show cause notice. An identical issue has been considered by this Tribunal in the case of Peda Subbarao Unnam vs. ITO (supra) in Para nos.17 to 20 as under: "17. We have heard both the parties, perused the material available on record and had gone throu....
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.... and perused the material on record. In assessee's case, the AO issued the original notice under section 148 dated 29.06.2021 for AY 2015-16 and consequent to the directions given by the Hon'ble Supreme Court in the case of Ashish Agrawal (supra), the said notice was deemed as notice issued under section 148A(b). The Assessing Officer 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 un-amended 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 ....
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....ng on the reasons given by the Id. CIT (A) for quashing the notice." 8. A combined reading of the above observations of the Hon'ble Supreme Court and the findings of coordinate bench makes it clear that the test for checking the validity of notices issued under section 148 under new regime for AYs 2021-22 or prior years is whether the period of six years has expired at the time of issue of such notice and in that case the notice under section 148 becomes invalid. These observations also makes it clear that the time limit of ten years as per the amended provisions of section 149(1)(b) can be applied only prospectively. In assessee's case when we apply this test for AY 2015-16, the period of six years has expired on 31.03.2022 and therefore the notice dated 29.07.2022 under section 148 of the Act for AY 2015-16 is invalid since it is barred by limitation. Accordingly the assessment completed under section 147 of the Act is liable to be quashed. 9. Since we have already quashed the order under section 147 based on the legal contention of notice being time barred the other legal contentions raised by the assessee in the CO have become academic not warranting a....
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....OF THE INCOME TAX OFFICER WARD 12(1),HYDERABAD/ To. SIRISHA THUMMURU FLAT NO 102 PLOT NO 19 WHISPER WOODS BLOCK 1, JUBILEE ENCLAVE BESIDE HO MADHAPUR HYDERABAD 500081 , Andhra Pradesh India PAN: AOFPT4101E A.Y: 2015-16 Dated: 13/04/2022 DIN & Notice No: ITBA/AST/S/148_1/2022- 23/1042734589(1) Notice under section 148 of the Income-tax Act. 1961 Sir/Madam/ M/s. . I have the following information in your case or in the case of the person in respect of which you are assessable under the Income tax Act, 1961(here in after referred to as "the Act") for Assessment Year 2015-16 · information flagged by the risk management strategy formulated in this regard suggesting that income chargeable to tax has escaped assessment within the meaning of section 147 of the Act. Order under sub-section (d) of section 148A of the Act has been passed In such case vide DIN ITBA/AST/F/148A/2022-23/1042730198(1) dated 13/04/2022 and annexed herewith for reference, 2. I, therefore, propose to assess or reassess such income or recompute the loss or the depreciation allowance or any other, allowance or deduction for the Assessment Year 2015-16 and I, hereby, requi....
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....d) of section 148A of the Income-tax Act.1961 As per NMS module of Insight portal, for F.Y 2014-15 (A.Y 2015-16), it is noticed that your case is identified as Non-filer with potential tax liabilities by analyzing the following information of transaction entered by you, received under Statement of Financial Transaction (SFT), TDS/TCS Statement, the details are as under: S.No Nature of Transaction Amount/Transaction Value (Rs.) 1 AIR-001-Deposited cash of Rs. 10,00,000 or more in a saving bank account- BANK OF INDIA 26,96,530 2 AIR-001-Deposited cash of Rs. 10,00,000 or more in a saving bank account- HDFC BANK LIMITED 30,05,512 It is seen that in spite of entering into the above high value transaction, you have not filed return of income for the year under consideration. Therefore, as per amended provision of Income-tax Act 1961, you are provided an opportunity of being heard by issuance of show cause notice u/s. 148A(b) of the Income-tax Act, 1961 and are required to show cause as to why notice u/s. 148 should not be issued on the basis of the above information which suggests that income chargeable to tax has escaped assessment In your case for A. Y 2015- 16. The show....