TaxTMI 
TaxTMI 
2026 (7) TMI 403
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....justice. The ld. CIT(A) failed to appreciate that the notices were not properly served on the appellant. 2. Without prejudice to the above, the Id. CIT(A) erred in sustaining the addition made by the AO of Rs. 5,43,250 as income from other sources. 3. The authorities below failed to appreciate that the appellant could not file return of income in response to the notice issued u/s. 142(1) of the Act, as the option for filing was disabled. 4. The authorities below erred in not giving credit for TDS of Rs. 79,001 while arriving to the demand. 5. Any other ground that may be urged at the time of hearing." 2. Succinctly stated, the AO based on information that the assessee society during the subject year had carried out substantial financial transactions, viz., (i) cash deposits in savings bank account with State Bank of Hyderabad, Gunfoundry Branch: Rs. 39,64,205/-; (ii) time deposits with State Bank of Hyderabad, City Civil Court Branch: Rs. 19,35,238/-; and (iii) receipt of interest other than interest on securities on deposits with State Bank of Hyderabad, City Civil Court Branch: Rs. 6,98,879/-, but had not filed its return of income for the y....
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....the present appeal by the assessee appellant. 9. We have given thoughtful consideration and are of the view that, as there are bona fide reasons explaining the delay of 5 days involved in filing the present appeal, the same merits to be condoned. 10. Coming to the merits of the case, the Ld. AR submitted that the AO had grossly erred in law and facts of the case in assuming jurisdiction for framing the impugned assessment vide his order passed under section 147 r.w.s. 144 r.we.s 144B of the Act, dated 05/03/2024. Elaborating on his contention, the Ld. AR submitted that as the AO as per "first proviso" to section 149(1) of the Act (post amended) as was applicable at the time of issuing the notice under section 148 of the Act, dated 06/05/2022 was divested of his jurisdiction to issue any such notice seeking to reopen the case of the assessee for the subject year AY 2015-16 beyond 31/03/2022, i.e., beyond the time limit specified under the clause (b) of sub-section (1) of section 149 of the Act as was available on the statute before commencement of the Finance Act, 2021, therefore, the initiation of the impugned proceedings and the consequential framing of the assessment by him....
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.... clause (b) of sub-section (1) of section 149 of the Act, as was available on the statute prior to the commencement of the Finance Act, 2021, the same could not have been issued as per the clear mandate of the "first proviso" to section 149 of the Act as had been made available on the statute by the Finance Act, 2021. Apart from that, we are of the view that the period sought to be excluded for the purpose of computing the period of limitation as contemplated in the "fifth proviso" of section 149(1) of the Act (post amended) and also the extension of time limit to seven days in a case where after the exclusion of the time limit contemplated in the "fifth proviso" to seven days (as per the "sixth proviso") of section 149(1) of the Act cannot be read into for the purpose of computing the period of limitation for issuance of notice under section 148 of the Act as contemplated in the "first proviso" of post amended section 149(1) of the Act. Our aforesaid view is fortified by the judgment of the Hon'ble High Court of Telangana in the case of Cyberabad Citizens Health Services Private Limited vs. DCIT (supra), wherein, based on exhaustive deliberations, it was observed as under:- ....
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....ion of this Court to the notice under Section 148A(b) of the Act dated 26.03.2024. It is submitted that the instant notice was issued prior to the expiry of six years period for reopening the assessment proceedings under the unamended Section 149 of the Act for the Assessment Year 2017-18. The order under Section 148A(d) of the Act was passed on 22.04.2024. Further, the petitioner took time to file its reply on the date fixed as 10.04.2024. It is submitted that therefore, the benefit of the fifth and sixth provisos to amended Section 149 of the Act come into play. Therefore, the impugned notice under Section 148 of the Act dated 22.04.2024 is not barred by limitation. 9. Upon consideration of the rival submissions and the materials referred to hereinabove placed on record, we are of the considered view that the impugned notice under Section 148 of the Act dated 22.04.2024 relating to the Assessment Year 2017-18 is barred by limitation as per the first proviso to Section 149 of the Act brought into effect from 01.04.2021. The relevant part of amended Section 149 and the first, fifth and sixth provisos are extracted in the footnote". 10. This, we say so for the foll....
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....or 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. 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 interests of the assessee's." "53 The position of law which can be derived based on the above discussion may be summarized thus: (10) Section 149(1) of the new regime is not prospective. It also applies to past assessment years; (ii) The time limit of four years is now reduced to three years for all situations. The Revenue can issue notices under Section 148 of ....
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.... 151. (3) If the person on whom a notice under section 148 is to be served is a person 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 doubts, 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 extended time allowed to the assessee as per the show cause notice under clause (b) of Section 148 of the Act or the period during which the proceeding under Section 148A of the Act is stayed shall be excluded. The sixth proviso to the amended Section 149 of the Act also deals with....
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....nly 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 provisos to Section 149(1)(b) of the Act would save the period of limitation for issuing notice under Section 148 of the Act. We are afraid we do not agree with him. Same argument was raised in Hexaware Technologies Ltd. (supra) and was rejected. The Court held, with respect to ....
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....o 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." 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 after 31.03.2024 with reference to the second notice issued on 22.04.2024 as it was beyond the time limit stipulated under Section 149(1)(a) of the Act. In the aforesaid facts, the learned Court held that the combined reading of the fifth and sixth provisos meant that the first notice dated 28.03.2024 w....