TaxTMI 
TaxTMI 
2026 (7) TMI 2030
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....es of the case, the order passed by the learned Commissioner (Appeals)/NFAC dated 15-12-2025 is erroneous and unsustainable on facts and in law. 2. The learned CIT (A)/NFAC erred in not admitting the additional evidence despite the finding that the evidence sought to be produced is vital and important for adjudication of the case and confirmed the addition of Long-Term Capital Gains (LTCG) of Rs. 50,96,308/-. 3. The learned CIT(A)/NFAC ought to have considered that the Appellant is a house-wife and not well-versed with the technicalities of taxation laws to submit the relevant evidence during the course of assessment proceedings. In view of the same, the Appellant ought not to have been mulcted with such huge tax liability for mere procedural lapse. 4. The learned CIT(A)/NFAC erred in not considering the case of the Appellant on merits despite availability of all the relevant documents with him. 5. For these and other grounds that may be urged, it is prayed that the appeal may be allowed. Apart from that, the assessee appellant has raised the following additional grounds of appeal before us: "A. On the facts and in the circumstances o....
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....at the Appellant is a widow and is not well-versed with the tax laws to comply with the statutory requirements. In view of the same, non-consideration of the case on merits and levy of penalty is harsh and unwarranted. 5. For these and other grounds that may be urged, it is prayed that the appeal may be allowed." 4. Succinctly stated, the AO based on information gathered from the office of the Sub-Registrar, Ranga Reddy District, that the assessee had sold an immovable property during the relevant previous year for a consideration of Rs. 60,00,000/-, but had not filed her return of income under section 139 of the Act for AY 2018-19, initiated proceedings under Section 147 of the Act after following the procedure prescribed under sections 148A and 148 of the Act. Thereafter, the AO passed an order under Section 148A(d) of the Act, dated 21/04/2022. Notice under Section 148 of the Act, dated 25/04/2022, was issued to the assessee. 5. During the proceedings under section 148A of the Act, the assessee submitted that she had purchased the property on 27.08.2012 for a consideration of Rs. 6,64,480/- and sold the same on 12.03.2018 for Rs. 60,00,000/-. The assessee, while c....
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....apital gains. Accordingly, the assessee's appeal was dismissed vide order dated 15.12.2025. 9. The assessee, being aggrieved by the aforesaid order of the learned CIT(A), has carried the matter in appeal before us. 10. We have heard the Learned Authorized Representatives of both parties, perused the orders of the lower authorities and the material available on record, as well as considered the judicial pronouncements that have been pressed into service by them to drive home their respective contentions. 11. Ms K Prabhabati, Advocate, the Learned Authorised Representative (for short, "Ld. AR") for the assessee, at the threshold of hearing of the appeal, submitted that as the AO had issued notice under section 148 of the Act, dated 25/04/2022 without obtaining approval of the specified authority as contemplated under section 151(ii) of the Act, therefore, the assessment order passed by him was liable to be quashed for want of valid assumption of jurisdiction. The Ld. AR, to buttress her contention, had drawn our attention to the notice issued under section 148 of the Act, dated 25/04/2022, which revealed that the Income Tax Officer, Ward-9(1), Hyderabad, had issued the s....
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...., if required, under clause (d) of section 148A, requiring him to furnish within such period, as may be specified in such notice, a return of his income or the income of any other person in respect of which he is assessable under this Act during the previous year corresponding to the relevant assessment year, in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed; and the provisions of this Act shall, so far as may be, apply accordingly as if such return were a return required to be furnished under section 139: Provided that no notice under this section shall be issued unless there is information with the Assessing Officer which suggests that the income chargeable to tax has escaped assessment in the case of the assessee for the relevant assessment year and the Assessing Officer has obtained prior approval of the specified authority to issue such notice. Explanation 1.-For the purposes of this section and section 148A, the information with the Assessing Officer which suggests that the income chargeable to tax has escaped assessment means, - (i) any information flagged in the case of the a....
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....Officer shall, before issuing any notice under section 148, - (a) conduct any enquiry, if required, with the prior approval of specified authority, with respect to the information which suggests that the income chargeable to tax has escaped assessment; (b) provide an opportunity of being heard to the assessee, with the prior approval of specified authority, by serving upon him a notice to show cause within such time, as may be specified in the notice, being not less than seven days and but not exceeding thirty days from the date on which such notice is issued, or such time, as may be extended by him on the basis of an application in this behalf, as to why a notice under section 148 should not be issued on the basis of information which suggests that income chargeable to tax has escaped assessment in his case for the relevant assessment year and results of enquiry conducted, if any, as per clause (a); (c) consider the reply of assessee furnished, if any, in response to the show cause notice referred to in clause (b); (d) decide, on the basis of material available on record including reply of the assessee, whether or not it is a fit case to issue a....
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....e could not have been issued at that time on account of being beyond the time limit specified under the provisions of clause (b) of subsection (1) of this section, as they stood immediately before the commencement of the Finance Act, 2021: Provided further that the provisions of this subsection 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 ....
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.... of opinion of the assessing officer and (4) lastly the mandatory procedure laid down by this Court in the case of GKN Driveshafts (India) Ltd. Vs. Income Tax Officer and ors; (2003) 1 SCC 72, has not been followed. 6.1 Further pre-Finance Act, 2021, the reopening was permissible for a maximum period up to six years and in some cases beyond even six years leading to uncertainty for a considerable time. Therefore, Parliament thought it fit to amend the Income Tax Act to simplify the tax administration, ease compliances and reduce litigation. Therefore, with a view to achieve the said object, by the Finance Act, 2021, sections 147 to 149 and section 151 have been substituted. 6.2 Under the substituted provisions of the IT Act vide Finance Act, 2021, no notice under section 148 of the IT Act can be issued without following the procedure prescribed under section 148A of the IT Act. Along with the notice under section 148 of the IT Act, the assessing officer (AO) is required to serve the order passed under section 148A of the IT Act. section 148A of the IT Act is a new provision which is in the nature of a condition precedent. Introduction of section 148A of the IT Act....
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.... and only in exceptional cases ten years. It also provides further additional safeguards which were absent under the earlier regime pre- Finance Act, 2021. 7. Thus, the new provisions substituted by the Finance Act, 2021 being remedial and benevolent in nature and substituted with a specific aim and object to protect the rights and interest of the assessee as well as and the same being in public interest, the respective High Courts have rightly held that the benefit of new provisions shall be made available even in respect of the proceedings relating to past assessment years, provided section 148 notice has been issued on or after 1st April, 2021. We are in complete agreement with the view taken by the various High Courts in holding so. 8. However, at the same time, the judgments of the several High Courts would result in no reassessment proceedings at all, even if the same are permissible under the Finance Act, 2021 and as per substituted sections 147 to 151 of the IT Act. The Revenue cannot be made remediless and the object and purpose of reassessment proceedings cannot be frustrated. It is true that due to a bonafide mistake and in view of subsequent extension ....
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....ich have been quashed by the High Courts; (iii) The assessing officers shall thereafter pass an order in terms of section 148A(d) after following the due procedure as required under section 148A(b) in respect of each of the concerned assessees; (iv) All the defenses which may be available to the assessee under section 149 and/or which may be available under the Finance Act, 2021 and in law and whatever rights are available to the Assessing Officer under the Finance Act, 2021 are kept open and/or shall continue to be available and; (v) The present order shall substitute/modify respective judgments and orders passed by the respective High Courts quashing the similar notices issued under unamended section 148 of the IT Act irrespective of whether they have been assailed before this Court or not. 9. There is a broad consensus on the aforesaid aspects amongst the learned ASG appearing on behalf of the Revenue and the learned Senior Advocates/learned counsel appearing on behalf of the respective assessees. We are also of the opinion that if the aforesaid order is passed, it will strike a balance between the rights of the Revenue as well as the respecti....
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.... approval of specified authority is not mandatory but it is for the concerned Assessing Officers to hold any enquiry, if required; (iii) The assessing officers shall thereafter pass orders in terms of section 148A(d) in respect of each of the concerned assessees; Thereafter after following the procedure as required under section 148A may issue notice under section 148 (as substituted); (iv) All defences which may be available to the assesses including those available under section 149 of the IT Act and all rights and contentions which may be available to the concerned assessees and Revenue under the Finance Act, 2021 and in law shall continue to be available. 11. The present order shall be applicable PAN INDIA and all judgments and orders passed by different High Courts on the issue and under which similar notices which were issued after 01.04.2021 issued under section 148 of the Act are set aside and shall be governed by the present order and shall stand modified to the aforesaid extent. The present order is passed in exercise of powers under Article 142 of the Constitution of India so as to avoid any further appeals by the Revenue on the very issue by c....
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.... 2023 with effect from 01.04.2023. The relevant Section 151 with its proviso is applicable to the case of the petitioner is quoted hereunder: 151. Sanction for issue of notice:- Specified authority for the purposes of Section 148 and Section 148A shall be,- (i) Principal Commissioner or Principal Director or Commissioner or Director, if three years or less than three years have elapsed from the end of the relevant assessment year; (ii) Principal Chief Commissioner or Principal Director General or Chief Commissioner or Director General, if more than three years have elapsed from the end of the relevant assessment year: Provided that the period of three years for the purposes of clause (i) shall be computed after taking into account the period of limitation as excluded by the third or fourth or fifth provisos or extended by the sixth proviso to sub-section (1) of Section 149. 49. In the present case, the order under Section 148A(d) and notice under Section 148 have been issued on 07.04.2022 relatable to the relevant Assessment Year 2018- 19 i.e., after more than three years from the end of the relevant assessment year. The approval before passing t....
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.... the case of the assessee before them, i.e., for AY 2018-19, the specified authority for granting approval under section 151 of the Act was the Principal Chief Commissioner or Principal Director General or Chief Commissioner or Director General as a period of more than three years had lapsed from the end of the relevant Assessment Year, but had also rejected the claim of the revenue that the "proviso" to section 151 of the Act as had been made available on the statute vide the Finance Act, 2023 w.e.f. 01/04/2023 was to be given a retrospective effect. 18. We, thus, in terms of our aforesaid observation, concur with the Ld. AR that in the present case before us for A.Y. 2018-19, wherein notice under Section 148 of the Act was issued on 25/04/2022, i.e., beyond a period of three years from the end of the assessment year, the A.O. was statutorily obligated to have obtained the approval from either of the authorities specified u/s. 151(ii) of the law as was then available on the statute, viz. Principal Chief Commissioner or Principal Director General or where there is no Principal Chief Commissioner or Principal Director General, Chief Commissioner or Director General. However, as t....
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....sessment framed by the AO under section 147 r.w.s 144 r.w.s. 144B of the Act, dated 29/09/2023, for want of a valid assumption of jurisdiction to issue a notice under section 148 of the Act. As we have quashed the assessment, we refrain from dealing with the other contentions raised before us, which are thus left open. 21. Resultantly, the appeal filed by the assessee is allowed in terms of our aforesaid observations. ITA No. 236/Hyd/2026 AY: 2018-19 22. We shall now take up the appeal filed by the assessee against the order passed by the CIT(A), NFAC, Delhi, dated 15/12/2025, which in turn arises from the order passed by the AO under section 270A of the Act, dated 20/03/2024 for the AY 2018-19. 23. As we have quashed the assessment framed by the AO vide his order passed under section 147 r.w.s. 144 r.w.s. 144B of the Act, dated 29/09/2023 for want of valid assumption of jurisdiction in absence of the approval of the prescribed authority as contemplated under section 151(ii) of the Act, therefore, as the very foundation based on which the impugned penalty was initiated, i.e., the aforesaid assessment order does no more survive, the impugned penalty imposed by the AO ....