TaxTMI 
TaxTMI 
2026 (6) TMI 1037
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....y mala fide conduct on the part of the assessee. Accordingly, the Ld. AR submitted that the delay may be condoned and the appeal of the assessee may be admitted for adjudication on merits. 3. The Ld. DR did not raise any serious objection to the condonation of delay. 4. We have considered the rival submissions and perused the material available on record. We find that the assessee has explained the reasons for the delay by filing a duly sworn affidavit. The delay of 41 days appears to have occurred on account of circumstances beyond the control of the assessee, namely, the health issues of the counsel handling the matter. We do not find any material on record to suggest that the delay was deliberate or occasioned due to any mala fide intention on the part of the assessee. It is a settled proposition of law that while considering an application for condonation of delay, a liberal and justice-oriented approach should be adopted so that substantial justice is not defeated on technical grounds. The Hon'ble Supreme Court has consistently held that unless gross negligence, deliberate inaction or lack of bona fides is attributable to a litigant, the Courts should lean in favour of a....
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.... 5. The Hon'ble CIT (A), NFAC is unjustified in upholding the addition of Rs.15,00,000/- made by the Learned Assessing officer by treating the cash deposited in bank as unexplained money u/s. 69A of the Income tax Act, 1961. The said addition was made without considering the fact that the cash deposited was out of the savings accumulated by the appellant over a period of 20 years. Hence, the said addition is unjustified and deserves to be deleted. 6. The Hon'ble CIT (A), NFAC is unjustified in upholding the addition of Rs.97,134/- made by the Learned Assessing officer by disallowing the interest on borrowed capital in respect of housing loan u/s. 24(b) of the Income tax Act, 1961. The said interest ought to have been allowed as deduction. 7. The Hon'ble CIT (A), NFAC is unjustified in upholding the addition of Rs.1,37,196/- made by the Learned Assessing officer by disallowing the deductions claimed under Chapter VIA of the Income tax Act, 1961. The said deductions ought to have been allowed. 8. The Hon'ble CIT (A), NFAC ought to have appreciated the fact that the show cause notice is bad in law for the reasons stated as under: i. ....
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....or adjudication in terms of Rule 11 of the Rules owing to the fact that objection raised in additional ground is legal in nature for which relevant facts are stated to be emanating from the existing records. 9. Inviting our attention to the first proviso to section 149(1) of the Act, the Ld. AR submitted that where the assessment year relates to the assessment year beginning on or before 01.04.2021, no notice under section 148 of the Act can be issued if such notice could not have been issued at that time on account of being beyond the time limit specified under the provisions of section 149 of the Act as they stood prior to the amendment brought by the Finance Act, 2021. The Ld. AR submitted that the assessment year under consideration is Assessment Year 2015-16 and, therefore, the period of six years from the end of the relevant assessment year expired on 31.03.2022. Inviting our attention to para no.2 of the order of the Ld. AO, the Ld. AR submitted that the actual date of issuance of notice under section 148 of the Act is 07.04.2022. Therefore, the notice was issued after expiry of the limitation period prescribed under law. The Ld. AR further submitted that once the notice ....
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....al activities carried out by you during the year under consideration. 2. Detailed computation of income for AY under consideration. 3. Please furnish details of all the bank account(s) held during the year as under. Sr. No. Name of the Bank Complete Address of the bank branch along with email ID Bank Account Number Type of bank account 12. On perusal of the above, it is evidently clear that the notice under section 148 of the Act has been issued by the Ld. AO on 07.04.2022. We have also considered the provisions of the first proviso to section 149(1) of the Act, which is to the following effect: 149. (1) No notice under section 148 shall be issued for the relevant assessment year,- (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, but not more than ten years, have elapsed from the end of the relevant assessment year unless the Assessing Officer has in 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) expendi....
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.... such asset or expenditure in relation to such event or occasion has been made or incurred, in more than one previous years relevant to the assessment years within the period referred to in clause (b) of subsection (1), a notice under section 148 shall be issued for every such assessment year for assessment, reassessment or recomputation, as the case may be.] (2) The provisions of sub-section (1) as to the issue of notice shall be subject to the provisions of section 151." 13. The first proviso to section 149(1) of the Act specifically provides that no notice under section 148 of the Act shall be issued at any time in a case for an assessment year beginning on or before 01.04.2021 if such notice could not have been issued on account of being beyond the time limit specified under the erstwhile provisions of section 149 of the Act. We have gone through the provisions of section 149 as applicable prior to the Finance Act, 2021, which is to the following effect: 149. (1) No notice under section 148 shall be issued for the relevant assessment year,- (a) if four years have elapsed from the end of the relevant assessment year, unless the case falls under clause ....
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....A No.495/Hyd/2026 for Assessment Year 2015-16 dated 15.05.2026 has dealt with an identical issue, which is to the following effect: "6. 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 24.03.2022 and thereafter passed order u/sec.148A(d) on 05.04.2022. In ITA.No.495/Hyd./2026 Para no.4 of the Order passed u/sec.148A(d) the Assessing Officer has stated as under: "4. However, the assessee failed to submit any explanation or to file any objection with regard to escapement of income as discussed supra and as informed vide show cause notice u/s. 148A(b) of Income Tax Act, 1961 within the stipulated time. It clearly establishes that the assessee doesn't have any explanation to offer and income has been escaped for the year under consideration which is exceeding Rs. 50 lakhs, represented in the form of asset." 6.1. 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 c....
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...., 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 learned DR is not acceptable in view of the plain language of the proviso to sec....
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....A 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 assessee's." "53. The position of law which can be derived based on the above discussion may b....
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....d 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 recomputation 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 computing the period of limitation as per the amended Section. It prescribes the time or ....
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....herefore, 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. Siddharth Bapna, counsel for Revenue, made an attempt to argue that fifth and sixth p....
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....h 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 undertake the assessment for the Assessment Year 2020-21 a....
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....ence, 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 third party confirmations, Therefore, the depreciation ....
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....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 through the orders of the authorities below. We have ....
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....'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 the proviso could be broken down for analysis a....
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....g 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 any adjudication. Accordingly the CO is partly allowed.....
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....notice u/sec.148 of the Act issued after 06 years from end of the assessment year beginning on or before 01.04.2021 is invalid being barred by limitation. In the case in hand, undisputedly the notice was issued u/sec.148 of the Act on 06.04.2022 which is beyond the period of six years from the end of the assessment year under consideration. Therefore, the limitation provided u/sec.149(1)(b) read with proviso to the said section makes it clear that no notice u/sec.148 of the Act shall be issued after ITA.No.495/Hyd./2026 the expiry of six years from the end of the assessment year beginning on or before 01.04.2021. In the case in hand, the assessment year under consideration is 2015-2016 and therefore, the assessment year is prior to 01.04.2021 and hence, the limitation for issuing the notice u/sec.148 of the Act would be six years as per the proviso and cannot be extended to 10 years as per the amended provisions of the Act. In view of earlier Orders of this Tribunal as well as Judgment of Hon'ble High Court of Telangana in the case of Cyberabad Citizens Health Services Private Limited vs. DCIT & Anr. (supra), we hold that the notice issued by the Assessing Officer u/sec.148 of ....
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....48A of the Income-tax Act. 1961 Sir/Madam/M/s Whereas I have information which suggests that income chargeable to tax for the Assessment Year 2015-16 has escaped assessment within the meaning of section 147 of the Income-lax Act, 1961. The details of the information 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. VURANDURŲ P NARASIMHA RAO WARD 10(1) HYDERABAD Document 2 GOVERNMENT OF INDIA MINISTRY OF FINANCE INCOME TAX DEPARTMENT OFFICE OF THE INCOME TAX OFFICER WARD 10(1),HYDERABAD/ To. SUDHEER PARIMALA 7-1-59/7 DHARAM KARAN ROAD , AMEERPET H....