TaxTMI 
TaxTMI 
2026 (7) TMI 1098
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....f the Income Tax Act, 1961 [hereinafter referred to as ''the Act'']. W.P.(MD)No.9188 of 2026 challenges the consequential penalty order passed under Section 271(1) (c) of the Act. B. The Petitioner's Case: 2. The petitioner is an individual assessee holding PAN: AGYPR3097E. For the Assessment Year 2015-2016, he did not file a return of income, claiming that he was under a bona fide belief that no tax liability arose for that assessment year. 3. The second respondent issued a notice under Section 148A(b) of the Act on 26.03.2022, alleging that the petitioner had made cash deposits in his bank accounts aggregating to Rs. 1,42,11,020/-, had made time deposits to the extent of Rs. 13,00,000/-, and had received interest income of Rs. 3,29,735/-, which was liable to deduction of tax at source under Section 194A of the Act. Thereafter, by order dated 18.04.2022 passed under Section 148A(d) of the Act, the second respondent recorded satisfaction that it was a fit case for issuance of notice under Section 148 of the Act for the Assessment Year 2015-2016. Consequently, a notice under Section 148 of the Act was issued on 18.04.2022. 4. Subsequently, an intimation d....
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....said concession was recorded by the Hon'ble Supreme Court in Union of India vs. Rajeev Bansal [(2024) SCC OnLine SC 2693] and connected matters, and has subsequently been noticed in several decisions. Therefore, it is contended that the Revenue cannot adopt a contrary stand in the case of the petitioner. 8. It is further contended that the notice issued under Section 148 of the Act is barred by limitation in view of the first proviso to Section 149(1) of the Act, as the proceedings were initiated beyond the period prescribed therein. The petitioner also challenges the impugned proceedings on the ground of violation of the principles of natural justice. C. The Respondent's Case: 9. The writ petitions are resisted by the Revenue through a detailed counter-affidavit. According to the Revenue, the petitioner maintained as many as 113 bank accounts. Despite substantial financial transactions during the relevant assessment year, he failed to file his return of income. During the relevant period, the petitioner is stated to have earned interest income of Rs. 3,29,735/-, made cash deposits exceeding Rs. 1.42 crores, and invested Rs. 13,00,000/- in time deposits. 10. Based o....
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....urnished by the petitioner. Even after completion of the assessment, repeated demand notices were issued. Thereafter, upon obtaining the necessary approval, attachment orders in respect of the petitioner's bank accounts were issued on 13.01.2026 and 14.01.2026. 14. With regard to the allegation of violation of the principles of natural justice, the Revenue contends that due procedure was strictly followed and that the petitioner alone is responsible for failing to respond to the notices issued by the Department. As regards the reliance placed on the concession recorded before the Hon'ble Supreme Court, it is contended that the concession was made in the peculiar context of the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 (TOLA) and cannot be mechanically extended to the facts of the present case. 15. The Revenue further contends that, under the first proviso to Section 149(1) of the Act, the time limit for issuing a notice under Section 148A(b) expired on 31.03.2022, and that the notice dated 26.03.2022 was therefore issued within the prescribed period after obtaining the requisite approval. According to the Revenue, the petitione....
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....uded. Thus, the period of limitation which was to end on 31.03.2022, stood extended up to 02.04.2022. Thereafter, under normal circumstances, the revenue had limitation to pass orders under Section 148A(d) of the act within one month from the month in which the time granted to show cause expired. The month in which the time to show cause expired is April, 2022 and as such, the revenue has time till May, 2022, that is upto 31.05.2022. 20. But considering the overall limitation that is prescribed under Section 149(1) as six years from the last date of the Assessment year, it can be seen that the Revenue had to immediately pass orders and issue notice under Section 148 of the Act. In such cases, where the time is less than 7 days, the period of limitation stands extended by another 7 days in view of the fourth proviso to Section 149(1) of the Act. Thus, the last date before which the Orders ought to have been passed under Section 148A(d), and notice should have been issued under Section 148 would only be 09.04.2022. However, the orders were passed under Section 148A(d) and notice was issued under Section 148 only on 18.04.2022 and as such is beyond the period of limitation. 21. ....