TaxTMI 
TaxTMI 
2026 (8) TMI 1664
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....f the Act with prior approval of specified authority, (c) reassessment notice dated 31.10.2023 issued by Respondent No.3 under section 148 of the Act; (d) ex-parte best judgment assessment order dated 05.12.2025 passed by Respondent No.1 under sections 147/144 of the Act, along with consequential notice of demand dated 05.12.2025 issued under section 156 of the Act; (e) penalty notice [dated 05.12.2025] issued by Respondent No.1 under section 270A of the Act; " 2. The petitioner is a company engaged in the business of organizing sports events, maintaining sports teams and carrying out other ancillary and related activities. On 30.10.2017, the petitioner company filed its return of income for the Assessment Year (AY) 2017-18 declaring a loss of Rs. 1,68,58,353/-. 3. Petitioner's case was selected for scrutiny assessment vide the order dated 30.11.2019 during which an inquiry on the following issues was made :- 1. Share capital / Capital 2. Investments/ advances/ loan 3. Expenses incurred for earning exempt income. 4. According to the petitioner, during the regular assessment proceedings for AY 2017-18 all transaction....
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....ection 148A(b) of the Act of 1961. The Respondent No. 3 thus issued fresh notice dated 20.05.2022 calling for petitioner's response. 10. On 30.07.2022, an order under Section 148A(d) of the Act of 1961 came to be passed and a notice under Section 148 of the Act of 1961 of even date was issued by respondent No.3. 11. The petitioner claims to have requested respondent No.3 to provide a copy of the approval granted prior to issuance of notice dated 14.06.2021 and the order dated 30.07.2022, but the same was not provided to the petitioner. 12. The petitioner company thereafter preferred a writ petition being W.P.(C) 937/2023 impugning the order dated 30.07.2022 passed under Section 148A(d) of the Act of 1961 and corresponding notice of even date. Vide judgment dated 25.01.2023, a Coordinate Bench of this Court allowed the writ petition while observing thus: "10. The impugned assessment order and the notice are set aside. 10.1. The AO will accord personal hearing to the authorized representative of the petitioner. 10.2. Notice in this behalf would be issued, fixing the date and time for personal hearing. 10.3. Before proceeding further in....
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....y availed before the Commissioner of Income Tax (Appeals) rather than bothering this Court to exercise its writ jurisdiction against such an order. He argued that in the face of availability of alternate remedy coupled with the fact that the petitioner as a matter of fact has availed the remedy, this Court should dismiss the present petition at the threshold. 19. Responding to such preliminary objection, Mr. Ajay Vohra, learned senior counsel for the petitioner argued that the statutory appeal was preferred only with a view to ensure that limitation for filing the appeal does not pass. He argued that the initiation of the proceedings vide the impugned notice dated 30.10.2023 under Section 148 of the Act of 1961 and its culmination into the ex-parte assessment order dated 05.12.2025 is per-se illegal, arbitrary and violative of the petitioner company's rights and thus the remedy of statutory appeal should not be a bar. He added that simply because the petitioner company has preferred an appeal with a view to arrest the limitation, the doors of this Court should not be closed as the proceedings are illegal for the following reasons: (i) The assessment order dated 30.1....
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....ad in the eye of law as the alleged escaped income has not been represented by any assets and none of the conditions mentioned under section 149(1)(b) of the Act of 1961 was satisfied and, therefore, the notice was without jurisdiction. 23. While accepting that for the AY 2017-18, TOLA would not apply, he invited Court's attention towards judgment of Hon'ble the Supreme Court in the case of Union of India v. Rajeev Bansal, reported in (2024) 469 ITR 46 (SC), more particularly the table mentioned in para 19(e) of the said judgment and highlighted that so far as AY 2017-18 is concerned, the limitation of 03 years for issuance notice had expired on 30.06.2021. He submitted that since the fresh notice dated 30.07.2022 came to be issued pursuant to the liberty given by Hon'ble the Supreme Court in the case of Ashish Agarwal (supra), its permissible time limit has to be examined on the anvil of surviving period given in the case of Rajeev Bansal (supra), which would apply to AY 2017-18 as well. 24. While highlighting that in pursuance of the direction of de-novo proceedings given in the petitioner's case being W.P.(C) 937/2023 which was decided on 25.01.2023, a fres....
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....2 issued under Section 148 of the Act of 1961 is barred by limitation cannot be entertained, as the petitioner did not raise this contention nether in its reply nor in the earlier writ petition, and is therefore precluded from urging the same at this stage. 29. Mr. Agarwal, learned senior standing counsel for the respondents further submitted that the notice might have been issued beyond the period of limitation of three years but if the fact that period of six years was available then and which was later on extended to ten years is taken into consideration, the notice dated 30.07.2022 cannot be said to be barred by limitation. He argued that, true, it is, on 30.07.2022, three years period stood expired (on 30.06.2021), but the Assessing Officer was well justified in initiating the proceedings, if extended period of six years is taken into account. 30. Heard learned counsel for the parties. 31. We find that the petitioner's case was taken up for scrutiny assessment on the following three counts - (a) share capital/capital; (b) expenses incurred for earning exempt income; (c), investment/advances/loans. Such fact is discernible from the notice dated 08.08.2018 (Annexure....
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....22: "5. Time Barred The reopening of AV 2017-18 is time barred as per section 149(1)(b) of the Act and Show Cause is unlawful and void ab initio. Section 149(1)(b) of the Act mandates that for issuance of notice u/s 148 beyond 3 years (and upto 10 years), AO should have in his possession: i. books of account or other documents or evidence which reveal income chargeable to tax has escaped assessment This condition is clearly not met. Information and material shared with the Assessee does not reveal any income having escaped assessment whatsoever. The many legal & factual justifications including filings with regulatory authorities and scrutiny assessment without any adverse finding establish this conclusively. ii. Income chargeable to tax has to be represented in the form of: a. an asset: this condition is not met b. expenditure in respect of a transaction or in relation to any event or occasions: this condition is not applicable c. an entry or entries in the books of account: this too is not applicable" 35. It is to be noted that even while seeking the approval of the Principal Commissioner of Income Tax, Ce....
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.... had decided the case of Ashish Agrawal (supra), is required to be excluded in terms of the 5th proviso to Section 149(1) of the Act of 1961. 39. Apart from such exclusion, the time provided till the relevant material was made available to the assessee and the corresponding time made available to the assessee to respond to such notice is also required to be excluded by virtue of third 3rd proviso to Section 149(1) of the Act. Such fiction and the legal position can be discerned from the table given in para 19(e) of the judgment of Hon'ble the Supreme Court in the case of Rajeev Bansal (supra). We deem it appropriate to reproduce paras 19(e), 106, 107 & 108 of the judgment in the case of Rajeev Bansal (supra), which read as follows: "19. Mr. N Venkataraman, learned Additional Solicitor General of India, made the following submissions on behalf of the Revenue: (e) ... Assessment Year Within 3 Years Expiry of Limitation read with TOLA for (2) Within six Years Expiry of Limitation read (4) 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 TO....
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....ion for the deemed notices is (1) the time during which the show-cause notices were effectively stayed, that is, from the date of issuance of the deemed notice between April 1, 2021 and June 30, 2021 till the supply of relevant information or material by the Assessing Officers to the assessee in terms of the directions in Union of India Agarwal and (ii) two weeks allowed to the assessee to respond to the show-cause notices. (b) Interplay of Union of India v. Ashish Agarwal with Taxation and other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 108. The Income-tax Act read with Taxation and other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 extended the time limit for issuing reassessment notices under section 148, which fell for completion from March 20, 2020 to March 31, 2021, till June 30, 2021. All the reassessment notices under challenge in the present appeals were issued from April 1, 2021 to June 30, 2021 under the old regime Union of India v Ashish Agarwal deemed these reassessment notices under the old regime as show-cause notices under the new regime with effect from the date of issuance of the reassessment notices. The ....
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.... I, hereby, require you to furnish, within 30 days from the service of this notice, a return in the prescribed form for the Assessment Year 2017-18. 3. This notice is being issued after obtaining the prior approval of the Pr.CIT-1, New Delhi accorded on date 7/30/2022 (mm/dd/yy) vide Reference No. 943." Emphasis supplied 41. We, therefore, unhesitatingly hold that the present proceedings are barred by limitation also, as per amended Section 149(1)(a) since the fresh notice dated 30.07.2022 issued pursuant to the liberty given by the Hon'ble Supreme Court in the case Ashish Agarwal (Supra) was beyond the surviving period, set out in the Rajeev Bansal's case (supra), applicable for AY 2017-18, as explained hereunder: S. No. Particulars AY 2017-18 Remarks 1. Limitation u/s 149 3 years Revenue abided by period of 3 years referred in Table 19(c) as is evident from the following (a) Reasons nowhere refers to invocation of extended period of 6 years u/s 149(1)(b); [Pg. 345 of the paperbook] (b) No recording of satisfaction of conditions for invoking extended limitation, [Pgs. 360 & 1071 of the paperbook] ....
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....o be correct to the extent that the period of 3 years for AY 2017-18 was falling within the aforesaid judgments, the Petitioner has provided a table at Pgs.45- 46 of the present Petition which appears to be correct to the extent that the period of 3 years for AY 2017-18 was falling within the limitation period extended by the Taxation & Other Laws (Relaxation & Amendment of Certain Provisions) Act, 2020 (TOLA), Le. 30.06.2021. Accordingly, by calculating the surviving time period of 16 days (from date of 1" original Section 148 notice) and adding it to the period available for passing order U/s 148A(d) after the last date of filing reply provided in the notice U/s 148A(b), dt. 05.06.2022, it appears that the order U/s. 148A(d) and notice U/s. 148 both dated 30 07.2022 were issued beyond the limitation period of 3 years, though the prior approval was taken from the appropriate specified authority." 43. We are not much convinced with the argument of Mr. Agarwal, learned senior standing counsel for the respondents that although the three- year period had expired on 30.07.2022, the Assessing Officer was justified in initiating proceedings by taking into account the extended period o....