TaxTMI 
TaxTMI 
2026 (9) TMI 493
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....ecision of the Hon'ble Supreme Court in the case of NTPC 229 ITR 383 (SC). Ld. DR opposed the request of the Ld. AR for admission of additional grounds and adjudication thereof. 3. Following are the additional grounds raised by the assessee in its respective appeals:- AY 2015-16 - That under the facts and circumstances of the case, both notices issued u/s. 148 are barred by limitation. - That under the facts and circumstances of the case, the proceedings initiated u/s. 148 are barred by limitation. AY 2016-17 - That under the facts and circumstances of the case, no notice u/s. 143(2) had been issued which makes the assessment illegal and bad in law. AY 2017-18 - That under the facts and circumstances, notice u/s. 148 dated 7.7.2022 is barred by limitation. - That in the absence of prior approval as required u/s. 151, the whole proceedings are without jurisdiction. - That under the facts and circumstances of the case, the Ld. CIT(A) erred in law as well as on facts in enhancing the income of the assessee without issuing any enhancement notice. 4. The assessee has moved applications to condone the delay in filing th....
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....3 TOLA not applicable 2017-18 31-03-2021 30-06-2021 31-03-2024 TOLA not applicable (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" 6. In the above sited case, the revenue concedes that for the assessment year 2015- 16, all notices issued on or after 1st April 2021 will have to be dropped as they will not fall for completion during the period prescribed under TOLA. 7. The Ld. DR has submitted that assessee, company has never raised this issue that the assessment, is time barred before the Ld.AO during the re-assessment proceedings. The notice was issued within time in the pursuant to the judgment of the Hon'ble Supreme Court in Union of India v. Ashish Agarwal after complying the all conditions. He relied the order of the Assessing Officer. 8. We have heard the revival contention of the parties and gone through the material available on record. In view of the observation of the Hon'ble Supreme Court in the ca....
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.... nonest and proceed with passing the order as contemplated in Section 144 of the Act." It is further noted that the income tax return was filed much before the completion of assessment. Hence, the action of the AO in treating the return as nonest is not sustainable in the eyes of law. Since no notice u/s. 143(2) issued although belated income tax return in response to notice u/s. 148 notice filed, reassessment without issuing notice u/s. 143(2) is without jurisdiction and deserve to be quashed. We hold and direct accordingly. Our decision, is fortified by the following case laws:- - PCIT vs. Shri Jai Shiv Shankar Traders P Ltd. [2015] 64 taxmann.com 220 (Delhi High Court) dated 14.10.2015 wherein, it has been held: "Held yes, Assessing Officer picked up assessee's return for scrutiny assessment and issued notice on assessee under section 148 - assessee informed AO that return originally field should be treated as return filed pursuant to notice u/s. 148. Thereafter Assessing officer without issuing notice under section 143(2) to assessee passed reassessment order. - Whether failure by Assessing Officer to issue notice under section 143(2) was fatal to order of rea....
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....d 28th April, 2025 has already settled the instant issue in the assessee's favour and against the department that the Assessing Officer's foregoing failure in obtaining proper section 151 approval vitiates the reopening itself as follows: "2. The petitioner is a national political party and is registered under Section 29A of the Representation of Peoples Act, 1951. The petitioner filed its return of income for the assessment year [AY] 2016-17 on 15.10.2016, declaring a NIL income, after claiming exemption under Section 13A of the Income Tax Act, 1961. 3. The initial notice under Section 148 of the Act for AY 2016-17 was issued on 28.06.2021. The said notice was unsustainable as it was issued in accordance with the statutory regime as existed prior to 31.03.2021. This court in the case of Mon Mohan Kohli v. Assistant Commissioner of Income Tax & Anr.: Neutral Citation No.: 2021:DHC:4181-DB had set aside such notices that were issued after 31.03.2021 without following the procedure as prescribed under Section 148A of the Act. Some of the other High Courts also took a similar view and struck down notices that were issued under Section 148 of the Act after 31.03.2021 ....
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....nsidered at the time of filing the return of income. 7. The learned AO was not persuaded with the explanation provided by the petitioner and passed an order dated 29.07.2022 under Section 148A(d) of the Act, holding that it was a fit case for reopening the assessment proceedings under Section 147/148 of the Act. The said order was issued with the approval of the Commissioner of Income Tax (Exemption) [CIT(E)] on an assumption that the CIT(E) was a specified authority under the provisions of Section 151 of the Act. 8. The AO issued a notice dated 29.07.2022 under Section 148 of the Act accompanied with the order dated 29.07.2022 passed under Section 148A(d) of the Act. It is the petitioner's case that the said notice is barred by limitation. 9. It is material to note that the original notice under Section 148 of the Act [deemed to be a show cause notice under Section 148A(b) of the Act in terms of the decision in the case of Union of India & Ors. v. Ashish Agarwal (supra)] was issued on 28.06.2021, that is, two days prior to the expiry of the limitation period as extended by virtue of the Taxation and Other Laws (Relaxation and Amendment of Certain Pro....
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....s court in several cases including Twylight Infrastructure Pvt. Ltd. v. Income Tax Officer Ward 25 3 Delhi & Ors.: Neutral Citation No.2024:DHC:259-DB and Abhinav Jindal HUF v. Income Tax Officer Ward 54(1) Delhi & Ors.: Neutral Citation No.: 2024:DHC:7238-DB. This court had held that TOLA would have no relevance for determining the specified authority whose approval was mandatory under Section 151 of the Act for issuance of a notice under Section 148 of the Act. We consider it apposite to refer to the following extract from the decision of this court in Abhinav Jindal HUF v. Income Tax Officer Ward 54(1) Delhi & Ors. (supra). The same is set out below: "17. As was noticed in the introductory parts of this decision, the respondents had, contrary to the above, argued that once a notice for reassessment comes to be issued after the expiry of four years by virtue of the extended period of time made available by TOLA, all the impugned notices would fall within the ken of sub-section (2) of the pre-amendment Section 151 and consequently the sanction and approval accorded by the JCIT would be in accordance with law. *** *** *** 38. It would therefore be wholly ....
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.... Rs.50,00,000/- or less. In the aforesaid context, this court also considered the question as to the specified authority, whose prior approval was required and held as under: "10. As indicated above, the specified authority changes depending on the time limit prescribed in section 151 of the Act. It is on this account that there is a linkage between ruling rendered in Ganesh Dass Khanna [Ganesh Dass Khanna v. ITO, (2024) 460 ITR 546 (Delhi); 2023 SCC OnLine Del 7286; 2023 : DHC : 8187-DB.] and the instant matters. 11. It may also be noted that in Ganesh Dass Khanna [Ganesh Dass Khanna v. ITO, (2024) 460 ITR 546 (Delhi); 2023 SCC OnLine Del 7286; 2023 : DHC : 8187-DB.], we had recorded the stand of the Revenue that the issue concerning limitation and the specified authority are "intertwined". For convenience, the relevant part of the judgment is extracted hereafter (page 567 of 460 ITR): "24. On behalf of the Revenue, the following broad submissions were made:... (viii) Both under the unamended 1961 Act and amended 1961 Act, the issue concerning limitation is inextricably intertwined with two aspects: (a) First, the rank of the authority ....
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....gned orders and notices are set aside, liberty be given to the Revenue to commence the reassessment proceedings afresh. 13. Therefore, having regard to the aforesaid, the impugned notices and orders in each of the above- captioned writ petitions are quashed on the ground that there is no approval of the specified authority, as indicated in section 151(ii) of the Act. The direction is issued with the caveat that the Revenue will have liberty to take steps, if deemed necessary, albeit as per law." 14. In J M Financial & Investments Consultancy Services Private Limited v. ACIT, Circle 3(2)(1) & Ors., W.P. No. 1050/2020, decided on 04.04.2022, the Bombay High Court had made observations to the effect that even if the time to issue notice may have been extended by TOLA, the same would not amend the provisions of Section 151 of the Act. The relevant extract of the said decision is set out below: "5. Respondents have relied upon a letter dated 18th March 2021 issued by one Income Tax Officer, who has given an opinion to the Additional Commissioner of Income Tax that in view of the Taxation and other Laws (Relaxation of Certain Provisions) Act, 2020 (Relaxation A....
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....re than three years have elapsed from the end of the relevant assessment year. The present petition relates to the assessment year 2016-17, and as the impugned order and impugned notice are issued beyond the period of three years which elapsed on March 31, 2020 the approval as contemplated in section 151(ii) of the Act would have to be obtained which has not been done by the Assessing Officer. The impugned notice mentions that the prior approval has been taken of the "Principal Commissioner of Income- tax-8" ("PCIT-8") which is bad in law as the approval should have been obtained in terms of section 151(ii) and not section 151(i) of the Act and the Principal Commissioner of Income- tax- 8 cannot be the specified authority as per section 151 of the Act. Further, even in the affidavit-in-reply, the Department has accepted that the approval obtained is of the "Principal Commissioner of Income-tax-8" and, hence, such an approval would be bad in law. 25. The Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, enacted on September 29, 2020 and came into force on March 31, 2020 ([2020] 428 ITR (St.) 29 ). It, inter alia, provided for a relaxation of cert....
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....9 has the effect of incorporating by reference to preamended section 151. In order to substantiate the contention that preamended section 151 gets incorporated by reference, learned standing counsel relied on subsection (2) to the preamended section 149. It should be noticed that the proviso to sub-section (1) of the amended section 149 does not even incorporate the whole of preamended section 149. It merely makes the time limit prescribed therein applicable to the issuance of notices for reassessment in respect of any assessment year beginning before April 1, 2021. A fortiori the proviso certainly does not incorporate preamended section 151 by reference and make it applicable. 14. The next question to be examined is the impact of the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020. Undoubtedly, the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 extended the time limits under specified enactments, including the Income-tax Act. As per clause (a)(ii) of subsection( 1) of section 3 thereof, time limits for grant of sanction or approval were also extended. Since the petitioner does not challenge the sanctio....
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....t of 2021 with effect from April 1, 2021. In other words, in each of these cases, the notice under section 148 of the Income-tax Act has been issued prior to April 1, 2021. In many of them, in fact, the date of the notice is March 31, 2021. 3. In each of these cases, the relevant assessment year (AY) in relation to which such notice has been issued is more than four years prior to the date of the reopening, i.e., it is beyond four years from the expiry of the assessment year in question and is clearly therefore, time barred in terms of the first proviso to section 147 of the Income-tax Act. 4. The stand of the Revenue that in view of the notifications issued by the Central Government in terms of the provisions of the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020, the said time limits stood extended is clearly untenable as those notifications were issued to deal with the situation arising from the amendment to the Income tax Act by the Finance Act, 2021 with effect from April 1, 2021 whereas in these cases the notices were issued prior to April 1, 2021. 5. This court had an occasion in similar circumstances to quash an ....