TaxTMI 
TaxTMI 
2026 (8) TMI 378
X X X X Extracts X X X X
X X X X Extracts X X X X
....e intention to raise the assessee's income to cross the monetary bar prescribed U/ s 149, he had added certain incomes for the relevant year twice. Although the assessing authority has later found that the total income for the previous year does not exceed 50 lakhs, he initiated proceedings for reopening of the assessment U/ s 148 arbitrarily. C: The authorities below ought to have find that the reassessment could not be done after the prescribe period under section 149, i.e. after three years since the alleged income has not been exceeded 50 lakhs rupees. Thus, period of reopening of reassessment U/ s 148 has come to an end by the year 2019. But, by ignoring such a bar to initiate proceedings, the AO has initiated reassessment proceedings. D: Regardless of the valid objection pointing out this illegality in reassessment proceedings before the appellate authority, he also confirmed the demand and dismissed the appeal. E: Additionally, the assessing officer as well as the appellate authority has ignored the fact that the Appellant was a Non-Resident till the month of September of the year 2014-15. The residential status of the appellant has not been co....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s. 17,82,926/- (Rs.16,67,740/- + Rs. 1,15,186/-) by passing order u/s 147 r.w.s. 144 of the Act on 14.2.2024. 4. Aggrieved by the aforesaid order of AO passed u/s 147 r.w.s. 144 of the Act dated 14.2.2024, the assessee preferred an appeal before the ld. CIT(A)/NFAC. 5. The ld. CIT(A)/NFAC dismissed the appeal of the assessee not only on the legal ground as raised by the assessee but also on the merit of the case by holding that the assessee had neither given any proof regarding his being an NRI till August, 2014 nor any documentary evidence of receiving cash out of any explained sources of his so-called family settlement. 6. Again, aggrieved by the order of ld. CIT(A)/NFAC, the assessee has filed the present appeal before this Tribunal. The assessee has also filed stay application in SA 3/Coch/2026 praying to grant stay of disputed demand amounting to Rs. 15,92,309/-. 7. Before us, the ld. AR of the assessee at the outset by raising the legal ground vehemently argued that the notice issued u/s. 148 of the Act dated 06/05/2022 are barred by limitation. The ld. AR of the assessee submitted that as per the provisions of section 149 of the Act as introduced by Finance Act 2....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... income of Rs. 17,82,926/- only. On perusal of the assessment order, we take note of the fact that the main allegation of the AO was that the assessee had made certain investments in time deposits, cash deposits in Saving Bank Account, the total value of which were exceeding 50 lakhs and accordingly had reason to believe that income relatable to the investments/ cash deposits were not explained & same had escaped assessment for the Asst. year 2015-16. The AO invoked the extended period since the above investments/income fall in the category of 'asset' as per explanation to section 149(1) and the income escaping assessment represented in the form such assets, amounts to more than fifty lakh rupees. During the course of assessment proceedings, the assessee submitted that he was a NRI till September, 2014 and some of his earnings, which he had saved in the form of NRE deposit etc. was closed and proceeds were deposited in his Catholic Syrian Bank for meeting living expenses etc and hence the money deposited was never his income taxable under the Act. The AO disbelieved the same, however restricted the additions to Rs. 16,67,740/- as unexplained investment u/s 69 of the Act and also ad....
X X X X Extracts X X X X
X X X X Extracts X X X X
....be issued at any time in a case for the relevant assessment year beginning on or before 1st day of April, 2021, if such notice could not have been issued at that time on account of being beyond the time limit specified under the provisions of clause(b) of sub-section (1) of this section, as they stood immediately before the commencement of the Finance Act, 2021: Provided further that the provisions of this sub-section shall not apply in case, where a notice under section 153A, or section 153C read with section 153A, is required to be issued in relation to a search initiated under section 132 or books of account, other documents or any assets requisitioned under section 132A, on or before the 31st day of March, 2021: Provided also that for the purposes of computing the period of limitation as per this section, the time or extended time allowed to the assessee, as per show-cause notice issued under clause(b) of section 148A or the period during which the proceeding under section 148A is stayed by an order or injunction of any court, shall be excluded: Provided also that where immediately after the exclusion of the period referred to in the immediately prece....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... & 4thprovisos to Section 149(1) of the Act as stood then does not arise at all. Thus, under the unamended Section 149(1)(b) of the Act, a notice under Section 148 of the Act could generally be issued within six years from the end of the relevant assessment year, provided the income escaping assessment amounted to or was likely to amount to one lakh rupees or more. Therefore, the last date for issuing a notice for AY 2015-16 under the old regime was March 31, 2022. Thus, the first proviso to amended section 149(1) acts as a statutory bar, preventing the issuance of a notice under Section 148 for an assessment year like AY 2015-16 (which began on or before April 1, 2021) if such notice could not have been issued under the time limits of the old law. As stated earlier, the time limit for issuing a notice for AY 2015-16 under the old law expired on March 31, 2022. The notice in question was issued on May 06, 2022, which is after March 31, 2022. Consequently, the condition precedent for issuing a notice for AY 2015-16 under the new regime, as laid down by the first proviso to Section 149(1), is not met. The notice, having been issued after the expiry of the time limit under the old law....
X X X X Extracts X X X X
X X X X Extracts X X X X
....the date of assessment. The extension of the time limit was challenged by the respondents on the ground that the assessments which had attained finality because of the expiry of the period of four years could not be reassessed. This Court observed that it was the clear intention of the notification to permit the Commissioner to revise any assessment made or order passed, provided the assessment had not been made before six years. It was held that if the legislative intention is clear and the language is unambiguous, full effect must be given to the legislative intention by reading the notification as applying not only to the incomplete assessments but also to assessments that had reached finality because of lapse of the earlier prescribed period. The principle that emanates from Biswanath Jhunjhunwalla (supra) is that the courts should give full effect to the legislative intention of granting reassessment powers to assessing officers unless the legislature, by express provision, states otherwise. 48. Notices have to be judged according to the law existing on the date the notice is issued. Section 149 of the old regime primarily provided two time limits: (i) four years for ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ch has escaped assessment Old regime Four years but not more than six years Rupees one lakh or more New regime Three years but not more than ten years Rupees fifty lakhs or more 51. Given Section 149(1)(b) of the new regime, reassessment notices could be issued after three years only if the income chargeable to tax which escaped assessment is more than Rupees fifty lakhs. The proviso to Section 149(1)(b) limits the retrospectivity of that provision with respect to the time limits specified under section 149(1)(b) of the old regime. 52. In Ashish Agarwal (supra), this Court held that the benefit of the new regime must be provided for the reassessment conducted for the past periods. The increase of the monetary threshold from Rupees one lakh to Rupees fifty lakh is beneficial for the assesses. Mr Venkataraman has also conceded on behalf of the Revenue that all notices issued under the new regime by invoking the six year time limit prescribed under section 149(1)(b) of the old regime will have to be dropped if the income chargeable to tax which has escaped assessment is less than Rupees fifty lakhs. 53. The position of law which can be deri....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e Act stipulates the time limit to issue the notice u/s 148 of the Act & not for the issuing the SCN u/s 148A(b) of the Act. This time limit has nothing to do with the issuance of show cause notice u/s 148A(b) of the Act & passing of the order u/s 148A(d) of the Act unlike in section 151 of the Act which categorically prescribed the specified authority for sanction for issue of notice for the purposes of both section 148 as well as section 148A of the Act. We are of the opinion that provisions of section 148A proceedings are completely different with that of the 148 proceedings. After the amendment in Finance Act, 2021 the proceedings u/s 148 of the Act can only be commenced after completion of 148A proceedings, however subject to certain exceptions. Before issue of the notice u/s 148 of the Act, the AO shall conduct an enquiry, provide an opportunity of being heard to the assessee by serving SCN and after considering the reply furnished if any, decide, on the basis of material available on record including the reply of the assessee whether or not it is a fit case to issue notice u/s 148 of the Act by passing an Order. Thus the section 148A of the Act is complete code in itself. Th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....at first proviso to section 149(1) of the Act is a restriction and the erstwhile 3rd& 4th Provisos (which allow for exclusion of time for certain events) cannot override this fundamental restriction. The first proviso acts as a gatekeeper. This means that even if there were delays due to assessee's response or court stays, these exclusions cannot revive a notice that is already time-barred by the first proviso. In Assistant Commissioner of Income-tax v. Godrej Industries Ltd. [2024] 160 taxmann.com 13 (Bombay), for AY 2014- 15, the High Court held that the validity of a notice must be judged on the law existing on the date of issuance of the Section 148 notice. It emphasized that "the fifth proviso cannot apply in a case where the first proviso applies because, if a notice under section 148 could not be issued beyond the time period provided in the first proviso, then the fifth proviso could not save such notices" (Para 15). This means that if the notice is already time-barred under the old regime as per the first proviso, the exclusion of time for Section 148A proceedings under the 3rd proviso or 4th provisos cannot revive it. Further, the Hon'ble Gujarat High Court in the case of....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ot applicable 31-3-2022 TOLA not applicable 2016-2017 31-3-2020 30-06-2021 31-3-2023 TOLA not applicable 2017-2018 31-3-2021 30-06-2021 31-3-2024 TOLA not applicable 19(f). The Revenue concedes that for the assessment year 2015-16, all notices issued on or after April 1, 2021 will have to be dropped as they will not fall for completion during the period prescribed under the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020; 49. The first proviso to Section 149(1)(b) requires the determination of whether the time limit prescribed under Section 149(1)(b) of the old regime continues to exist for the assessment year 2021-22 and before. Resultantly, a notice under Section 148 of the new regime cannot be issued if the period of six years from the end of the relevant assessment year has expired at the time of issuance of the 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 2012-13, the ten-year period would have expired on March 31, 2023, while the six-year period expired on Mar....