TaxTMI 
TaxTMI 
2025 (3) TMI 2298
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.... of notice u/s 148 and 148A is PCCIT whereas sanction is given by PCIT which is not the authority specified u/s 151(ii) of the I.T. Act, 1961. 3. In view of provisions of section 149(1)(b) of the I.T. Act, 1961, learned CIT(A) ought to have held that assumption of jurisdiction by A.O. u/s 147 r.w.s 148 and 148A is vitiated as at the time of passing order u/s 148A(d) A.O. was not in possession of books of account or other documents or evidence which reveal that the income chargeable to tax, represented in the form of an asset, amounting to or likely to amount to fifty lacs or more has escaped assessment. 4. Notice u/s 148 is bad in law also on the ground that it does not bear DIN, does not give reason for issuing the same without DIN, does not mention that approval of specified authority is obtained to issue it without DIN and hence is in violation of circular issued by CBDT being circular No 19 of 2019 dated 14th August, 2019. 5. On facts and in the circumstances of the case and in law learned CIT(A) erred in upholding the sanction u/s 151 given by Pr CIT although it was given by Pr CIT carelessly, without carefully perusing the underlying record, notice,....
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....ning to the bad in law, as the notice was issued u/s. 148 of the new regime beyond three years period without satisfying the requirements u/s.151(i) and sec.149(2)(b) of the Act. The Ld.AR submitted that, the case of the assessee was reopened by issuing notice u/s.148 of the old regime on 07/05/2021 along with reasons recorded after obtaining necessary approval from the competent authority. 6.1 It is submitted that, the said notice was treated to be the deemed notice issued under section 148A(b) of the act, as per the directions of Hon'ble Supreme Court in case of UOI vs Ashish Agarwal reported in (2022) 138 taxmann.com 64. 6.2 The Ld.AO subsequently, passed order under section 148A(d) on 26/07/2022 rejecting the objections raised by the assessee. Accordingly notice under section 148 in the new regime was issued under the new regime on 23/08/2022. The assessee was subsequently called upon to furnish details on merits of the addition. Ld.AO after considering assessee's submission passed assessment order making addition in the hands of assessee amounting to Rs. 3,15,865/-. 6.3 The Ld.AR submitted that, assessee challenged validity of the order passed by the Ld.AO under secti....
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....eyond 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 a 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 preceding proviso, the period of limitation available to the Assessing Officer for passing an order under clause (d) of section 148A is less than seven days, such remaining period shall be ....
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....e. The first proviso to Section 149 does not expressly bar the application of TOLA. Section 3 of TOLA applies to the entire Income-tax Act, including Sections 149 and 151 of the new regime. Once the first proviso to Section 149(1)(b) is read with TOLA, then all the notices issued between 1 April 2021 and 30 June 2021 pertaining to assessment years 2013-2014, 2014-2015, 20152016, 2016-2017, and 2017-2018 will be within the period of limitation as explained in the tabulation below: Assessment Year Assessment Year Expiry of Limitation read with TOLA for (2) Within six Years Expiry of Limitation read with TOLA for (4) (1) (2) (3) (4) (5) 2013-2014 31-3-2017 TOLA not applicable 31-3-2020 30-6-2021 2014-2015 31-3-2018 TOLA not applicable 31-3-2021 30-6-2021 2015-2016 31-3-2019 TOLA not applicable 31-3-2022 TOLA not applicable 2016-2017 31-3-2020 30-6-2021 31-3-2023 TOLA not applicable 2017-2018 31-3-2021 30-6-2021 31-3-2024 TOLA not applicable f. The Revenue concedes that for the assessment year 2015-16, all notices issued on or after 1 April 2021 will have to be dropped as t....
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....n and material by the assessing officer. Due to the legal fiction, the assessing officers were deemed to have been inhibited from acting in pursuance of the Section 148A(b) notice till the relevant material was supplied to the assesses. Therefore, the show cause notices were deemed to have been stayed until the assessing officers provided the relevant information or material to the assesses in terms of the direction issued in Ashish Agarwal (supra). To summarize, the combined effect of the legal fiction and the directions issued by this Court in Ashish Agarwal (supra) is that the show cause notices that were deemed to have been issued during the period between 1 April 2021 and 30 June 2021 were stayed till the date of supply of the relevant information and material by the assessing officer to the assessee. After the supply of the relevant material and information to the assessee, time begins to run for the assesses to respond to the show cause notices. 107. The third proviso to Section 149 allows the exclusion of time allowed for the assesses to respond to the show cause notice under section 149A(b) to compute the period of limitation. The third proviso excludes "the time ....
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....ld have to be issued within the time limits extended by TOLA. As a corollary, the reassessment notices to be issued in pursuance of the deemed notices must also be within the time limit surviving under the Income-tax Act read with TOLA. This construction gives full effect to the legal fiction created in Ashish Agarwal (supra) and enables both the assesses and the Revenue to obtain the benefit of all consequences flowing from the fiction. 110. The effect of the creation of the legal fiction in Ashish Agarwal (supra) was that it stopped the clock of limitation with effect from the date of issuance of Section 148 notices under the old regime [which is also the date of issuance of the deemed notices]. As discussed in the preceding segments of this judgment, the period from the date of the issuance of the deemed notices till the supply of relevant information and material by the assessing officers to the assesses in terms of the directions issued by this Court in Ashish Agarwal (supra) has to be excluded from the computation of the period of limitation. Moreover, the period of two weeks granted to the assesses to reply to the show cause notices must also be excluded in terms of....
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.... (i) for the assessment years 2013-2014 and 2014-2015, the six year period expires on 31 March 2020 and 31 March 2021 respectively; and (ii) for the assessment years 2016-2017 and 2017-2018, the three year period expires on 31 March 2020 and 31 March 2021 respectively. ............ 60. The above principles can be applied as follows to the factual situation in the present appeals: (i) The Finance Act 2021 substituted Sections 147 to 151 of the Income-tax Act with effect from 1 April 2021; (ii) Sections 147 to 151 of the old law ceased to operate from 1 April 2021; (iii) After 1 April 2021, any reference to the Income-tax Act means the Income-tax Act as amended by the Finance Act 2021; (iv) The time limits prescribed for issuing reassessment notices under section 149 operate retrospectively for three years for all situations and six years in case the escaped assessment amounts to or is likely to amount to more than Rupees fifty lakhs. (Emphasis supplied) 69. For instance, Section 149(1)(a) of the new regime specified the time limit of three years from the end of the relevant assessment year for reopening of the assessment. For ....