TaxTMI 
TaxTMI 
2025 (12) TMI 1862
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....d under Section 148 dated 30/06/2021 is invalid, as the Assessing Officer did not follow the procedure laid down under Section 148A. The Assessing Officer did not pass an order under Section 148A(d) and did not serve any such order on the appellant before issuing the notice under Section 148. Hence, the notice itself is bad in law. 3. The appellant further submits that the notice issued under Section 148 dated 29-07-2022 is also invalid, as the Assessing Officer obtained approval from the Principal Commissioner of Income Tax, whereas as per law the approval should have been obtained from the Principal Chief Commissioner of Income Tax. Since the approval was taken from the wrong authority, the notice is without jurisdiction. 4. The appellant also submits that the notice issued on 29- 07-2022 is beyond the period of limitation of three years, as the alleged escaped income is less than Rs. 50 lakhs. As per Section 149(1) (a), when the escaped income is less than Rs. 50 lakhs, the Assessing Officer cannot issue notice after three years from the end of the relevant assessment year. Therefore, this notice is time-barred. 5. The appellant further submi....
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....er or Principal Director General or Chief Commissioner or Director General is mandatory. It was submitted that in the present case the Ld. AO issued notice under section 148 of the Act only after obtaining approval of the Principal Commissioner of Income Tax, who is not the authority prescribed under section 151(ii) of the Act for granting approval in cases falling beyond the limitation of three years. The Ld. AR further submitted that the absence of approval from the prescribed authority goes to the very root of jurisdiction, and therefore the notice issued under section 148 of the Act is void ab initio. Since the jurisdictional condition precedent for assumption of reassessment jurisdiction has not been fulfilled, the consequential reassessment order passed under section 147 read with section 144 of the Act dated 31.05.2023 is liable to be quashed. 5. Per contra, the Learned Departmental Representative ("Ld. DR") relied upon the findings of the lower authorities and supported the reassessment order. 6. We have carefully considered the rival submissions and perused the material available on record including the case law relied upon. In this regard, we have gone through the n....
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....he prior approval of the Pr. Commissioner of Income- Tax dated 18.04.2022 vide reference No. 100000029981043. For the sake of clarity, we deem it fit to cull out the notice u/s 148 dated 18.04.2022. 12. At this stage, it would be relevant to point out that nothing has been placed on our record by the Ld. DR to rebut the aforesaid factual position as had been brought to our notice. 13. Apropos the challenge by the Ld. AR regarding the validity of the jurisdiction assumed by the A.O. for initiating proceedings u/s. 147 of the Act, i.e., without obtaining the approval of the specified authority u/s. 151(ii) of the Act, we find substance in the same. Admittedly, the reassessment proceedings u/s. 147 of the Act had been revamped vide the Finance Act, 2021 w.e.f. 01.04.2021. The substituted Sections 147 to 149 and Section 151 of the Act, applicable w.e.f. 01.04.2021 are culled out as under: "Income escaping assessment- 147. If any income chargeable to tax, in the case of an assessee, has escaped assessment for any assessment year, the Assessing Officer may, subject to the provisions of sections 148 to 153, assess or reassess such income or recompu....
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....he relevant assessment year has not been made in accordance with the provisions of this Act. Explanation 2.- For the purposes of this section, where,- (i) a search is initiated under section 132 or books of account, other documents or any assets are requisitioned under section 132A, on or after the 1st day of April, 2021, in the case of the assessee; or (ii) a survey is conducted under section 133A, other than under subsection (2A) or subsection (5) of that section, on or after the 1st day of April, 2021, in the case of the assessee; or (iii) the Assessing Officer is satisfied, with the prior approval of the Principal Commissioner or Commissioner, that any money, bullion, jewellery or other valuable article or thing, seized or requisitioned under section 132 or under section 132A in case of any other person on or after the 1st day of April, 2021, belongs to the assessee; or (iv) the Assessing Officer is satisfied, with the prior approval of Principal Commissioner or Commissioner, that any books of account or documents, seized or requisitioned under section 132 or section 132A in case of any other person on or after the 1st day of April, ....
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....which time or extended time allowed to furnish a reply as per clause (b) expires: Provided that the provisions of this section shall not apply in a case where,- (a) a search is initiated under section 132 or books of account, other documents or any assets are requisitioned under section 132A in the case of the assessee on or after the 1st day of April, 2021; or (b) the Assessing Officer is satisfied, with the prior approval of the Principal Commissioner or Commissioner that any money, bullion, jewellery or other valuable article or thing, seized in a search under section 132 or requisitioned under section 132A, in the case of any other person on or after the 1st day of April, 2021, belongs to the assessee; or (c) the Assessing Officer is satisfied, with the prior approval of the Principal Commissioner or Commissioner that any books of account or documents, seized in a search under section 132 or requisitioned under section 132A, in case of any other person on or after the 1st day of April, 2021, pertains or pertain to, or any information contained therein, relate to, the assessee. Explanation .- For the purposes of this section, specifie....
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....le property, being land or building or both, shares and securities, loans and advances, deposits in bank account. (2) The provisions of subsection (1) as to the issue of notice shall be subject to the provisions of section 151.' Sanction for issue of notice- "151. Specified authority for the purposes of section 148 and section 148A shall be- (i) Principal Commissioner or Principal Director or Commissioner or Director, if three years or less than three years have elapsed from the end of the relevant assessment year; (ii) Principal Chief Commissioner or Principal Director General or where there is no Principal Chief Commissioner or Principal Director General, Chief Commissioner or Director General, if more than three years have elapsed from the end of the relevant assessment year." 14. The Hon'ble Apex Court in the case of Union of India & Ors. Vs. Ashish Agrawal, Civil Appeal No. 3005/2022, dated 04.05.2022, after deliberating at length on the aforesaid amended provisions had, inter alia, observed as under: "5. We have heard Shri N. Venkataraman, learned ASG appearing on behalf of the Revenue and Shri C.A. S....
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....g the reasons for reopening and an opportunity to the assessee and the decision of the objectives were required to be followed as per the judgment of this Court in the case of GKN Driveshafts (India) Ltd. (supra). 6.4 However, by way of section 148A, the procedure has now been streamlined and simplified. It provides that before issuing any notice under section 148, the assessing officer shall (i) conduct any enquiry, if required, with the approval of specified authority, with respect to the information which suggests that the income chargeable to tax has escaped assessment; (ii) provide an opportunity of being heard to the assessee, with the prior approval of specified authority; (iii) consider the reply of the assessee furnished, if any, in response to the show cause notice referred to in clause (b); and (iv) decide, on the basis of material available on record including reply of the assessee, as to whether or not it is a fit case to issue a notice under section 148 of the IT Act and (v) the AO is required to pass a specific order within the time stipulated. 6.5 Therefore, all safeguards are provided before notice under section 148 of the IT Act is issued. At eve....
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....to have been issued under the substituted provisions of sections 147 to 151 of the IT Act as per the Finance Act, 2021. There appears to be genuine non- application of the amendments as the officers of the Revenue may have been under a bonafide belief that the amendments may not yet have been enforced. Therefore, we are of the opinion that some leeway must be shown in that regard which the High Courts could have done so. Therefore, instead of quashing and setting aside the reassessment notices issued under the unamended provision of IT Act, the High Courts ought to have passed an order construing the notices issued under unamended Act/unamended provision of the IT Act as those deemed to have been issued under section 148A of the IT Act as per the new provision section 148A and the Revenue ought to have been permitted to proceed further with the reassessment proceedings as per the substituted provisions of sections 147 to 151 of the IT Act as per the Finance Act, 2021, subject to compliance of all the procedural requirements and the defences, which may be available to the assessee under the substituted provisions of sections 147 to 151 of the IT Act and which may be available under ....
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....ent order with a view avoiding filing of further appeals before this Court and burden this Court with approximately 9000 appeals against the similar judgments and orders passed by the various High Courts, the particulars of some of which are referred to hereinabove. We have also proposed to pass the aforesaid order in exercise of our powers under Article 142 of the Constitution of India by holding that the present order shall govern, not only the impugned judgments and orders passed by the High Court of Judicature at Allahabad, but shall also be made applicable in respect of the similar judgments and orders passed by various High Courts across the country and therefore the present order shall be applicable to PAN INDIA. 10. In view of the above and for the reasons stated above, the present Appeals are ALLOWED IN PART. The impugned common judgments and orders passed by the High Court of Judicature at Allahabad in W.T. No. 524/2021 and other allied tax appeals/petitions, is/are hereby modified and substituted as under: (i) The impugned section 148 notices issued to the respective assessees which were issued under unamended section 148 of the IT Act, which were ....
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....ection 148 of the Act issued after 01.04.2021 are under challenge. 12. The impugned common judgments and orders passed by the High Court of Allahabad and the similar judgments and orders passed by various High Courts, more particularly, the respective judgments and orders passed by the various High Courts particulars of which are mentioned hereinabove, shall stand modified/ substituted to the aforesaid extent only. All these appeals are accordingly partly allowed to the aforesaid extent. In the facts of the case, there shall be no order as to costs." (emphasis supplied by us) 15. Apart from that, we find that the CBDT vide Instruction No. 01/2022 while directing implementation of the judgment of the Hon'ble Supreme Court in the case of Union of India & Ors Vs. Ashish Agrawal, Civil Appeal No. 3005/2022, dated 04.05.2022, had, while laying down the procedure that is required to be followed by the jurisdictional Assessing Officers/ Assessing Officer, inter alia, held that if it is a fit case to issue notice u/s. 148 of the Act, the Assessing Officer shall serve on the assessee a notice u/s 148 after obtaining approval of the specif....
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....vant assessment year; (ii) Principal Chief Commissioner or Principal Director General or Chief Commissioner or Director General, if more than three years have elapsed from the end of the relevant assessment year: Provided that the period of three years for the purposes of clause (i) shall be computed after taking into account the period of limitation as excluded by the third or fourth or fifth provisos or extended by the sixth proviso to sub- section (1) of Section 149. 49. In the present case, the order under Section 148A(d) and notice under Section 148 have been issued on 07.04.2022 relatable to the relevant Assessment Year 2018- 19 i.e., after more than three years from the end of the relevant assessment year. The approval before passing the order under Section 148A(d) of the Act and before issuing of notice under Section 148 of the Act has been taken from the Principal Commissioner of Income Tax by the respondent No. 1, which is permissible only if three years or less than three years have lapsed from the end of the relevant assessment year. In the present case, the relevant three years lapsed on 31.03.2022. Therefore, the prior approval of the P....
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....o section 151 of the Act as had been made available on the statute vide the Finance Act, 2023 w.e.f. 01/04/2023 was to be given a retrospective effect. 18. We, thus, in terms of our aforesaid observation, concur with the Ld. AR that in the present case before us for A.Y. 2018-19, wherein notice under Section 148 of the Act was issued on 18.04.2022, i.e., beyond a period of three years from the end of the assessment year, the A.O. was statutorily obligated to have obtained the approval from either of the authorities specified u/s. 151(ii) (as was then available on the statute), viz. Principal Chief Commissioner or Principal Director General or, where there is no Principal Chief Commissioner or Principal Director General, Chief Commissioner or Director General. However, as the A.O. had obtained the approval from the Pr. Commissioner of Income Tax, i.e., an authority who was not vested with any jurisdiction as per the mandate of Section 151 of the Act (as made available on the statute w.e.f 01.04.2021), therefore, the assessment so framed by him u/s. 147 r.w.s. 144B of the Act, dated 20.03.2024, being devoid and bereft of any valid assumption of jurisdiction, is liable to be ....
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....ffect that the assessment has not been made in accordance with the provisions of Act; A survey-was conducted-under section-133A of the Act, other than under section-133A(2A) or section 133A(5) of the Act, Information which requires action in consequence of the judgement of the Hob'ble Supreme Court in the case Union of India Vs. Ashish Agarwal, Civil Appeal 3005/2022, dated 4th May, 2022 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 ITBA/COM/F/17/2022-23/1044267241(1) dated 29.07.2022 and annexed herewith for reference. (B) I have information that a search was initiated under section 132 of the Act in your case-or-in your case-or in the case of the person-in-respect of which you are asseassable under the Act on the date. (C) + have information that-books of accounts, other documents or any assets have been requisitioned under section 132A-of the Act in your case-or in the case-or in the case of the person in respect of which you are assessable under the Act. (D) I am satisfied, with the approval of Principal Commissio....