TaxTMI 
TaxTMI 
2026 (2) TMI 1462
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....dence, probabilities, facts and circumstances of the Appellant's case. 2. The appellant denies himself liable to be assessed on a total income determined by the learned assessing officer amounting to Rs. 75,69,043/- as against the income returned and reported by the appellant of Rs.15,850/-, on the facts and circumstances of the case. 3. Grounds on addition made under section 68 of the Act amounting to Rs.47,00,000/-. 3.1 The learned assessing officer and the learned DRP were not justified in making an addition of Rs.47,00,000/- as unexplained credits section 68 of the Act, on the facts and circumstances of the case. 3.2 The learned assessing officer and the learned DRP failed to appreciate that the appellant has filed the confirmation from parties who have bought the antique furnitures, from the appellant and erroneously made the additions under section 68 of the Act, on the facts and circumstances of the case. 3.3 The learned assessing officer and the learned DRP failed to appreciate that the Appellant has discharged the primary onus casted upon the appellant as per the provisions of section 68 of the Act, as regards to the identit....
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....ppreciate that the appellant having re-invested the capital gains arising from sale of original property in a new residential house is eligible for claim of exemption under section 54 F of the Act, and ought to have given all the benefits and exemptions available as per the statute, on the facts and circumstances of the case. 5. Without prejudice, to the right to seek waiver as per the parity of reasoning of the decision of the Hon'ble Apex Court in the case of Karanvir Singh 349 ITR 692, the Appellant denies himself liable to be changed to interest under section 234A, 234B & 234C of the Income Tax Act on the facts and circumstances of the case. The Appellant contends that the levy of interest under section 234A, 234B & 234C of the Act is also bad in law as the period, rate, quantum and method of calculation adopted by the learned assessing officer on which interest is levied are not discernible and are wrong on the facts of the case. 6. The appellant craves leave to add, alter, amend, substitute or delete any or all of the grounds of appeal urged above. 7. For the above and other grounds to be urged during the course of hearing of the appeal the Appe....
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....ty of investigation of any fresh facts for the purpose of the adjudication of above grounds. Further we are also of the opinion that the additional grounds raised in the present case are purely legal in nature & therefore these are critical for a fair adjudication of the matter. The Hon'ble Madras High Court in the case of CIT Vs Indian Bank (2015) 230 Taxman 635 (Madras) held that Rule 11 of the I.T. Rules makes it clear that the assessee has the right to raise additional grounds and if the same is beneficial to the assessee, the same should be considered by the Tribunal. 4.1 Further, the Hon'ble Karnataka High Court in the case of Gundathur Thimmappa & Sons vs. CIT, Mysore, reported in (1968) 70 ITR 70 held that when the point raised by the assessee is a point which went to the root of the matter and affected not merely his liability to pay tax but also jurisdiction of the Tribunals and Authorities themselves to subject the amount concerned to tax, the Appellate Tribunal had the discretion to permit point of law to be raised for the first time in appeal because the question went to the root of the case. The Hon'ble Supreme Court in the case of National Thermal Powe....
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....falling during the Period 20/03/2020 - 31/12/2020 stand extended to the 31/03/2021. Further the Relaxation Ordinance, 2020 was replaced by the Taxation and other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 (hereinafter to be referred as the Relaxation Act, 2020) introduced with effect from 29/09/2020. As per sub-section (1) of Section 3 of the Relaxation Act, 2020 the time limits specified in the specified Acts which fell during the period from 20/03/2020 to 31/12/2020 or such other date after 31/12/2020 as the central Government may notify, were extended to 31/03/2021 or such other date after 31/03/2021 as the Central Government may by notification specify. Such extension would operate notwithstanding anything contained in the specified Act. On 31/12/2020 the Central Government issued another Notification S.O.4805(E) in exercise of the powers u/s 3(1) Relaxation Act, 2020 whereby the relaxation /extension under the section was extended to all actions that were required to be completed/complied with during the period starting from 20/03/2020 and upto 30/03/2021. The last date for all such action was extended up to 31/03/2021. The Parliament (Legislature) being f....
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....s U/s 3(1) of the Relaxation Act, 2020 can override the clear intentions of the Legislature ( Parliament) by way of Finance Act, 2021. As held by the various High Courts the said notice was unsustainable in law as it was issued in accordance with the statutory regime as existed prior to 31/03/2021. The High courts had set aside such notices that were issued after 31/03/2021 without following the procedure as prescribed under section 148A of the Act. Thus, the High Courts struck down notices that were issued under section 148 of the Act after 31/03/2021 but under the unamended provisions relating to the re-assessment of income that had escaped assessment. The Revenue appealed the decisions rendered by the various High Courts to the Supreme Court of India. 5.4 In Union of India v. Ashish Agarwal [2022] 444 ITR 1 (SC) which was one of such appeals arising from the decision of the Hon'ble Allahabad High Court, the Supreme Court delivered its decision on 04/05/2022, whereby it concurred with the view that the amended provisions which came into force after 31/03/2021 would be applicable to notices issued thereafter. However, the Hon'ble Apex Court also issued certain direction....
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.... responded to the said notice and filed his reply along with the copy of the return filed on 01/8/2016 for the assessment year 2016-17 on 02/06/2022. 5.6 The ITO, ward-4(3)(2), Bengaluru after considering the material available on record and the details filed by the assessee and with prior approval of the Pr. Commissioner of Income Tax, Bengaluru- 2, Bengaluru accorded on 27/07/2022 vide F.No. 148A(d)/PCIT- 2/2022-23 passed order u/s 148A(d) of the Act on 29/07/2022deciding that it is a fit case for issue of notice u/s 148 of the Act. Accordingly, with prior approval of thePr. Commissioner of Income Tax, Bengaluru-2, Bengaluru accorded on 27/07/2022 vide F.No. 148A(d)/PCIT-2/2022-23a notice u/s 148 of the Act was also issued to the assessee on the same day i.e. on 29/07/2022. 5.7 Before proceeding further, it is very apposite here to note down the chronological date of event as discussed in the preceding paragraphs for a better appreciation of fact which are detailed below: - Sl. No Particulars of Event Date PB Page (i) The assessee for the impugned Assessment Year 2016-17, had filed his original return of income, declaring a total income o....
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....rincipal Director General of Income Tax/ Chief Commissioner of Income Tax/ Director General of Income Tax as per provisions of section 151 (ii) of the Act. As the sanction in the instant case has been obtained from the Principal Commissioner of Income Tax, Bengaluru-2, Bengaluru on 27/07/2022, which is not in accordance with the provisions of section 151 of the act and consequently the sanction is required to be quashed. 5.10 Before us, the ld. CIT, DR vehemently submitted that the original notice u/s 148 of the Act dated 29/06/2021 was treated as show cause notice u/s 148A(b) of the Act as per the directions of the Hon'ble supreme Court in the case of Union of India & Ors v. Ashish Agarwal (supra) and accordingly the order u/s 148A(d) of the Act was passed on 29/07/2022 and the notice issued under section 148 of the Act was issued on the same day after obtaining the sanction from the Principal Commissioner of Income Tax, Bengaluru-2, Bengaluru. The ld. CIT DR also submitted that the period of three years for the purposes of section 151 (i) of the Act shall be computed after taking into account the period of limitation as excluded by the 3rd or 4th or 5th provisos or extende....
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....ity on the Revenue to ensure that it obtains the sanction of the specified authority before issuing a notice under section 148. The purpose behind this procedural check is to save the assesses from harassment resulting from the mechanical reopening of assessments Sri krishna (P.) Ltd. v. ITO [1996] 87 Taxman 315/221 ITR 538 (SC)/[1996] 9 SCC 534. A table representing the prescription under the old and new regime is set out below: Regime Time limits Specified authority Section 151(2) of the old regime Before expiry of four years from the end of the relevant assessment year Joint Commissioner Section 151(1) of the old regime After expiry of four years from the end of the relevant assessment year Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner Section 151(i) of the new regime Three years or less than three years from the end of the relevant assessment year Principal Commissioner or Principal Director or Commissioner or Director Section 151(ii) of the new regime More than three years have elapsed from the end of the relevant assessment year Principal Ch....
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.... limit within which a specified authority has to grant sanction. Rather, it links up the time limits with the jurisdiction of the authority to grant sanction. Section 151(ii) of the new regime prescribes a higher level of authority if more than three years have elapsed from the end of the relevant assessment year. Thus, non-compliance by the assessing officer with the strict time limits prescribed under section 151 affects their jurisdiction to issue a notice under section 148. 77. Parliament enacted TOLA to ensure that the interests of the Revenue are not defeated because the assessing officer could not comply with the pre conditions due to the difficulties that arose during the COVID-19 pandemic. Section 3(1) of TOLA relaxes the time limit for compliance with actions that fall for completion from 20 March 2020 to 31 March 2021. TOLA will accordingly extend the time limit for the grant of sanction by the authority specified under section 151. The test to determine whether TOLA will apply to Section 151 of the new regime is this: if the time limit of three years from the end of an assessment year falls between 20 March 2020 and 31 March 2021, then the specified authority u....
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.... Section 148A(b) notices under the new regime, it impliedly waived the requirement of obtaining prior approval from the specified authorities under section 151 for Section 148A(b). It is well established that this Court while exercising its jurisdiction under Article 142, is not bound by the procedural requirements of law High Court Bar Association v. State of U P [2024] 160 taxmann.com 32/299 Taxman 21 (SC)/[2024] 6 SCC 267. 81. This Court in Ashish Agarwal (supra) directed the assessing officers to "pass orders in terms of Section 148-A(d) in respect of each of the assesses concerned." Further, it directed the assessing officers to issue a notice under Section 148 of the new regime "after following the procedure as required under section 148-A." Although this Court waived off the requirement of obtaining prior approval under section 148A(a) and Section 148A(b), it did not waive the requirement for Section 148A(d) and Section 148. Therefore, the assessing officer was required to obtain prior approval of the specified authority according to Section 151 of the new regime before passing an order under section 148A(d) or issuing a notice under section 148. These notices ought....
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....t held that the period of 3 years from the end of the assessment year 2016-17 r.w.s. 3 (1) of the Taxation & Other laws (Relaxation & Amendment of certain provisions) Act, 2020 (for short, "TOLA") expired on 30.06.2021. The authority specified u/s 151 (i) of the Act could have granted sanction till 30.6.2021. However, the aforesaid order u/s 148A (d) of the Act was passed on 13.7.2022 which was after the expiry of 3 years from the end of the assessment year 2016-17. In such a case, the authority specified u/s 151 (ii) of the Act i.e. the Principal Chief Commissioner (PCCIT) or Principal Director General (PDGIT) or where there is no PCCIT or PDGIT, the Chief Commissioner (CCIT) or the Director General (DGIT) was required to grant approval. Since the approval was obtained from the authority specified u/s 151 (i) of the new regime instead of the authority specified u/s 151 (ii) of the Act, non-compliance with the provisions of section 151 of the Act vitiated the jurisdiction of the Income Tax authorities to issue a notice u/s 148 of the Act. 6.4 In the present case, the period of 3 years from the end of the assessment year 2016-17 read with TOLA, fell for completion on 30.6.2021. T....