TaxTMI 
TaxTMI 
2026 (3) TMI 1746
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....1 (Act) 1.2. That on the facts and circumstances of the case and in law the Ld. NFAC has erred in upholding the Reassessment proceedings for as the Notice under section 148 of the Act is issued in violation of CBDT Circular 19 of 2019. 1.3. That on the facts and circumstances of the case and in law the Ld. NFAC has erred in upholding the Reassessment proceedings, though the income escaping assessment is not in the form of an asset. 1.4. That on the facts and circumstances of the case and in law the Ld. NFAC has erred in upholding the Reassessment proceedings, though the information and statements relied on by the Ld. Assessing Officer (AO) was not shared with the Appellant in spite of specific requests 2. Addition of Rs. 3,02,93,611/- as Bogus Purchases 2.1. That on the facts and circumstances of the case and in law the Ld. NFAC has erred in confirming the additions made by the Ld. AO without any basis. 2.2. That on the facts and circumstances of the case and in law the Ed. NFAC has erred in confirming the additions made by the Ld. AO, whereas the appellant has provided all documents and shifted the burden of proof onto the reve....
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....al of the sanctioning authority. Subsequently, the procedure of reopening was initiated, as per amended regime following the decision of Union of India vs. Ashish Agarwal [2022] 138 taxmann.com 64 (SC). After following the entire proceedings, notice under section 148 dated 27.03.2022 was issued to the assessee. During the course of proceedings statutory notices under section 143(2) and 142(1) of the Act were issued along with questionnaire which were responded by the assessee. On deliberations, the ld. AO was not convinced with the submissions of assessee, therefore had added the entire amount of alleged bogus purchase to the income of the assessee. The issue then was carried before the ld. CIT(A), who had discussed the legal contentions raised by the assessee as well as the contentions on merits and have dismissed the appeal of assessee by confirming the addition made by ld. AO. 4. Being aggrieved with the aforesaid decision of ld. CIT(A), the assessee preferred the present appeal which is under consideration before us. The first legal contention raised by ld. AR was that the assessee's case was reopened following the provisions of section 149 of the Act. The ld. AR has ....
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....ng Officer has in his possession books of account or other documents or evidence which reveal that the income chargeable to tax, represented in the form of- (i) an asset; (ii) expenditure in respect of a transaction or in relation to an event or occasion; or (iii) an entry or entries in the books of account, which has escaped assessment amounts to or is likely to amount to fifty lakh rupees or more: Provided that no notice under section 148 shall be issued at any time in a case for the relevant assessment year beginning on or before 1st day of April, 2021, if a notice under section 148 or section 153A or section 153C 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 or section 153A or section 153C, as the case may be, 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 a case, where a notice under section 153A, or section 1530 read with section 153A, is required to be issued in relation to a search initiated under section 132 or books of ....
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....riod 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 injunction of any court, shall be excluded: or Provided also that where immediately after the exclusion of the period referred to in the immediately preceding proviso, the period of limitation available to the Assessing Officer for 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. Explanation.-For the purposes of clause (b) of this subsection, "asset" shall include immovable property, being land or building or both, shares and securities, loans and advances, deposits in bank account. (1A) Notwithstanding anything contained in sub-section (1), where the income chargeable to tax represented in the form of an asset or expenditure in relation to an event or occasion of the value referred to in clause (b) of sub section (1), has escaped the assessment and the invest....
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....this sub-section shall not apply in a case, where a notice under section 153A. or section 153C read with section 1534, is required to be issued in relation to a search initiated under section 132 or books of other documents account, or assets any requisitioned under section 1324, 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 1484 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 preceding proviso, the period of limitation available to the Assessing Officer for passing an order under clause (d) of section 1484 is less than 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. Explanation. For the purposes of clause (b) of this subsection, "asset" shall include immovable property, bei....
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....s Master Guide to Income tax Act. **For the meaning of the term "issued", see Taxmann's Direct Taxes Manual, Vol. 3. + For the meaning of the expressions "escaped assessment" and "likely to amount to one lakh rupees or more", see Taxmann's Direct Taxes Manual, Vol. 3 to the assessment years within the period referred to in clause (b) of sub section (1), a notice under section 148 shall be issued for every such assessment year for assessment, reassessment or recomputation, as the case may be. (2) The provisions of sub-section (1) as to the issue of notice shall be subject to the provisions of section 151.'. 5. Referring to the aforesaid changes in section 149, it is submitted by the ld. AR that the case of assessee was reopened beyond three years and there is no income represented in the form of asset that has escaped assessment in accordance with the applicable provisions of section 149(1)(b) of the Act as per finance Act, 2021 which was later amended by Finance (No.2) Act, 2024 w.e.f. 01.09.2024. It was the submission that earlier the provisions of section 149(1)(b) were applicable only in cases wherein the ld. AO has in his possession books of acc....
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....t. To support this contention the ld. AR placed his reliance on the decision of Hon'ble Bombay High Court in the case of Hexaware Technologies Ltd. vs. ACIT [2024] 162 taxmann.com 225 (Bom.HC), wherein on the issue of deduction under section 80JJA it was held by the Hon'ble Court that the deduction under section 80JJA cannot represent escapement of income in the form of asset, therefore the notice issued by ld. AO has been held as invalid. The relevant findings of Hon'ble Court in Hexaware Technologies Ltd. (supra) are as under: "40. As regards issue no. 5, it is petitioner's case that the issues raised in the impugned initial notice and the impugned order pertain to correct claim of deduction/allowances or the expenditure incurred. There is also no allegation regarding income escaping tax on account of any undisclosed asset. In the impugned order, the Assessing Officer has restricted the escapement of income only with regard to Rs. 6,54,04,038/-on the claim of deduction under section 80JJAA of the Act and disallowance of excess claim of Forex loss of Rs. 6,90,80,180/-, On the Forex loss, respondent has prima facie accepted the contentions of petitioner tha....
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....oftware development activity constitutes 'manufacture/production of article or thing'. The claim of deduction under section 80JJAA of the Act was also disclosed in the Tax Audit Report filed by petitioner alongwith the return of income. Further, during the assessment proceedings, the Assessing Officer had issued a notice dated 5th October 2017 asking for details of deduction claimed under Chapter VI of the Act. Petitioner vide a letter dated 13th November 2017 gave the details of deduction claimed under Chapter VI of the Act alongwith supporting documents. The Assessing Officer has passed the assessment order dated 30th November, 2017 allowing the claim of deduction under section 80JJAA of the Act. The claim for deduction under section 80JJAA of the Act was allowed by the Assessing Officer in the previous years as well. Hence, the present case is clearly a case of change of opinion or review of the original assessment order which is not permissible even under the new provisions." 8. The ld. AR further placed his reliance on the aforesaid issue that whether suppression of income / wrong claim of disallowance will constitute an asset, Hon'ble Madras High Court in the c....