TaxTMI 
TaxTMI 
2025 (3) TMI 2167
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....sufficient cause' and admit the appeal for adjudication. 3. The assessee has raised the following grounds of appeal for AYs 2016-17 and 2017-18: Grounds of appeal for assessment year 2016-2017 ''1. The order of the Dispute Resolution Panel against the draft assessment order by the Id. AO is contrary to law and facts and circumstances of the case. 2. The Hon'ble DRP erred in passing the order without considering the information placed on record. 3. Reassessment proceeding initiated u/s 147 of the act are bad in law and is liable to be quashed. 4. The Id. AO erred in proceeding with the reassessment without issuance of notice u/s 143(2) of the act. 5. The Id AO has erred in denying the exemption under article 15(1) of the DTAA between India and Sweden for salary income received by the appellant amounting to Rs. 14,11,140/- for exercising employment in Sweden. 6. The Id AO failed to at appreciate that under article 15(1) of the DTAA between India and Sweden, exclusive right to tax income from salary is attached to the state in which employment is exercised and in the instant case, the appellant was physically present in S....
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.... state in which employment is exercised and in the instant case, the appellant was physically present in Sweden and exercised the employment there. 7. The Id AO failed to appreciate that section 5(2) can not be read and applied in isolation. It has to be read with the related provisions of the Act before taxability or otherwise is determined. In the appellant's case, section 5(2) has to be read with section 9 of IT act, whereby the income will not be taxable in India. The Id AO failed to appreciate that under 9(1)(I) of the act, income from salary is taxable in India if it is earned in India. 8. The Id AO ought to have appreciated the fact that if service is not rendered in India then income from salary earned in Sweden is not subject to tax under income tax act. 9. The Id AO ought to have appreciated that employment cost reimbursement was on a cost-to-cost basis and such there is no income taxable in India. 10. The Id AO failed to consider the payment of taxes in Sweden for the services rendered in Sweden. 11. The Id AO failed to consider the fact that the approvals were obtained beyond the extended period provided by TOLA and there....
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....xpired on 31.03.2020 and 31.03.2021 and the foreign remittance received by the appellant amounting to Rs. 23,80,674/- is less than the threshold limit of Rs. 50,00,000/- (Rupees fifty lakhs). In other words, according to the assessee, in these two cases, the AO had issued notices to assessee dated 30.06.2021 u/s.148 of the Act under the erstwhile Sec.148 of the Act (as it stood prior to its amendment by the Finance Act, 2021). The action of the AO was to be deemed to have been issued to assessee u/s.148A of the Act, as substituted by the Finance Act, 2021 (as ordered by the Hon'ble Supreme Court in the case of UoI v. Ashish Agarwal reported in [2022] 444 ITR 1 (SC) dated 04.05.2022). The Hon'ble Apex Court in Ashish Agarwal (supra) having ordered that all the notices issued by AO under the erstwhile Sec.148 of the Act to be treated as issued u/s.148A of the substituted Finance Act, 2021, also gave liberty to the assessee to raise all defense available to the assessee u/s.149 of the Act, and/or which may be available under the Finance Act, 2021. In this back ground, according to the assessee, it is raising the defense that AO could not have issued notices for AYs 2016-17 and 2017-18....
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....pulated. 20. Therefore, all safeguards are provided before notice under Section 148 of the IT Act is issued. At every stage, the prior approval of the specified authority is required, even for conducting the enquiry as per Section 148A(a). Only in a case where, the assessing officer is of the opinion that before any notice is issued under Section 148-A(b) and an opportunity is to be given to the assessee, there is a requirement of conducting any enquiry, the assessing officer may do so and conduct any enquiry. Thus if the assessing officer is of the opinion that any enquiry is required, the assessing officer can do so, however, with the prior approval of the specified authority, with respect to the information which suggests that the income chargeable to tax has escaped assessment''. Substituted Section 149 is the provision governing the time-limit for issuance of notice under Section 148 of the IT Act. The substituted Section 149 of the IT Act has reduced the permissible time-limit for issuance of such a notice to three years and only in exceptional cases ten years. It also provides further additional safeguards which were absent under the earlier regime pre-Finance Ac....
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....ssessment 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 served is a person 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 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 1st day of April, 2012. 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 year....
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....l High Courts would result in no reassessment proceedings at all, even if the same are permissible under the Finance Act, 2021 and as per substituted sections 147 to 151 of the IT Act. The Revenue cannot be made remediless and the object and purpose of reassessment proceedings cannot be frustrated. It is true that due to a bonafide mistake and in view of subsequent extension of time vide various notifications, the Revenue issued the impugned notices under section 148 after the amendment was enforced w.e.f. 01.04.2021, under the unamended section 148. In our view the same ought not to have been issued under the unamended Act and ought 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 Cou....
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....ot. 25. Therefore, we have proposed to pass the present 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. 27. The present order shall be applicable PAN INDIA and all judgments and orders passed by different High Courts on the issue and under which similar notices which were issued after 01.04.2021 issued under section 148 of the Act are set aside and shall be governed by the present order and shall stand modified to the aforesaid extent. The present order is passed in exercise of powers under Article ....
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..... 3. Hon'ble Supreme Court has held that these extended reassessment notices issued under the old law shall be deemed to be the show cause notices issued under clause (b) of section 148A of the new law and has directed Assessing Officers to follow the procedure with respect to such notices. It has also held that all the defences available to assessees under section 149 of the new law and whatever rights are available to the Assessing Officer under the new law shall continue to be available. Hon'ble Supreme Court has passed this order in exercise of its power under Article 142 of the Constitution of India. 4. The implementation of the judgment of Hon'ble Supreme Court is required to be done in a uniform manner. Accordingly, in exercise of its power under section 119 of the Act, the Central Board of Direct Taxes (hereinafter referred to as "the Board") directs that the following may be taken into consideration while implementing this judgment. 5.0 Scope of the judgment: 5.1 Taking into account the decision of the Hon'ble Supreme Court in various paragraphs, it is clarified that the judgment applies to all cases where extended reasse....
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....2013-14, AY 2014-15 and AY 2015-16: Fresh notice under section 148 of the Act can be issued in these cases, with the approval of the specified authority, only if the case falls under clause (b) of sub-section (1) of section 149 as amended by the Finance Act, 2021 and reproduced in paragraph 6.1 above. Specified authority under section 151 of the new law in this case shall be the authority prescribed under clause (ii) of that section. (ii) AY 16-17, AY 17-18: Fresh notice under section 148 can be issued in these cases, with the approval of the specified authority, under clause (a) of sub-section (1) of new section 149 of the Act, since they are within the period of three years from the end of the relevant assessment year. Specified authority under section 151 of the new law in this case shall be the authority prescribed under clause (i) of that section. 7.0 Cases where the Assessing Officer is required to provide the information and material relied upon within 30 days: 7.1 Hon'ble Supreme Court has directed that information and material is required to be provided in all cases within 30 days. However, it has also been noticed that notices cannot be issu....
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.... decide on the basis of material available on record including reply of the assessee, whether or not it is a fit case to issue a notice under section 148 of the Act. The Assessing Officer is required to pass an order under clause (d) of section 148A of the Act to that effect, with the prior approval of the specified authority of the new law. This order is required to be passed within one month from the end of the month in which the reply is received by him from the assessee. In case no such reply is furnished by the assessee, then the order is required to be passed within one month from the end of the month in which time or extended time allowed to furnish a reply expires. If it is a fit case to issue a notice under section 148 of the Act, the Assessing Officer shall serve on the assessee a notice under section 148 after obtaining the approval of the specified authority under section 151 of the new law. The copy of the order passed under clause (d) of section 148A of the Act shall also be served with the notice u/s 148. - If it is not a fit case to issue a notice under section 148 of the Act, the order passed under clause (d) of section 148A to that effect shall be served ....
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....mended provisions cannot be initiated. 12. For all the reasons aforestated, the impugned notice under Section 148 of the Act, 1961 issued on 01.04.2021 for the Assessment Year 2014-15 and the impugned notice dated 13.01.2022 under Section 144 of the Act, 1961 and the reassessment order dated 13.01.2022 under Section 147 read with Section 144B of the Act, 1961 for the Assessment Year 2014-15 passed by the respondent No.4 are hereby quashed. The writ petition is allowed''. 12. The Hon'ble High Court of Delhi in the case of Ganesh Dass Khanna Vs Income Tax Officer [(2024) 460 ITR 546 (Delhi) / (2023) 156 Taxmann.com 417 (Delhi) has considered the entire conspectus of legal arguments contended by the both sides, in similar situation held as under: "53.1 As would be evident from the extracts set forth above, both from the Finance Minister's speech and the Memorandum, the time limit for reopening under the new regime was reduced from six (06) years to three (03) years and only in respect of "serious tax evasion cases", that too, where evidence of concealment of income of Rs. 50 lakhs or more in a given period was found, the period for reopening the assessment was....