TaxTMI 
TaxTMI 
2025 (4) TMI 2191
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....wing the claim of deduction made under section 80P of the Act in the return of income filed in response to the 148 notice, on the facts and circumstances of the case. 4. The appellant craves to add, alter, amend, substitute, change and delete any of the grounds of appeal. 5. For the above and other grounds that may be urged at the time of hearing of the appeal, the Appellant prays that the appeal may be allowed and justice rendered and the appellant shall be awarded cost in prosecuting the appeal and also order for the refund of institution fees as part of the cost." 3. Further the assessee, through later dated 29-10-2024 raised the following additional ground of appeal: "a. The notice issued under section 148 of the Act is bad in law, on the facts and circumstances of the case. b. The notice issued under section 148 of the Act by the learned Income Tax Officer, Ward-1 & TPS, Mandya is without jurisdiction subsequent to the 'faceless assessment scheme', on the facts and circumstances of the case. c. The notice issued under section 148 of the Act in invalid for failure to strike off the irrelevant portion, on the facts and circ....
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.... 6.1 From the above, it is evident that the view limiting the Tribunal's jurisdiction to issues arising solely from the appeal before the Commissioner (Appeals) is too restrictive to define the Tribunal's powers. The Tribunal undoubtedly has the discretion to permit or decline the raising of a new ground. Since the issue raised in the additional ground of appeal is purely legal in nature, and in light of the judgment cited above, I admit the additional ground raised by the assessee. The issue raised in additional grounds of appeal are legal in nature and pertain to validity of the assessment order therefore I proceed to adjudicate the additional ground of appeal first. 7. The facts in brief are that the assessee is a primary agricultural society and primarily engaged in providing credit facility to its members. The assessee for the year under consideration i.e. A.Y. 2018-19 has not filed return of income. The AO received information regarding cash deposits and cash withdrawal by the assessee society for Rs. 2,12,56,200/- and Rs. 1,54,13,000/- respectively. Accordingly, a notice under section 148 of the Act was issued for income escaping assessment as on 1st April 2022. The asse....
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....ar on or before the due date specified in section 139(1) of the IT Act. The requirement of making the claim for deduction in a return of income filed by the assessee can be seen as a statutory pre-condition for claiming the benefit of deduction under the Act. It is trite that a provision for deduction or exemption under a taxing Statute has to be strictly construed against the assessee. The similar view has also supported by the Hon'ble Kerala High Court in case of Nileshwar Rangekallu Chethu Vyavasaya Sahakarana Sangham vs. Commissioner of Income-tax [2023 152 taxmann.com 347 (Kerala), (IT APPEAL NOS. 120 OF 2019/11 OF 2022 MARCH 14, 2023) wherein it is held as under: ********* 5.3. In the present case, it is evident from the record that the appellant has failed to file return of income for the AY 2018-19 as per provision of section 139(1) of the Act. Therefore keeping in view of provision of section 80AC and respectively following the above judicial pronouncement, I am of the view that the appellant would not be eligible for deduction claimed u/s 80P of the Act. Accordingly, the observations and the findings of the AO appears to be in order which does not pe....
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....e, 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 notice under section 148, by passing an order, with the prior approval of specified authority, within one month from the end of the month in which the reply referred to in clause (c) is received by him, or where no such reply is furnished, within one month from the end of the month in which time or extended time allowed to furnish a reply as per clause (b) expires: 14.2 From the perusal of the above provision, it is transpired that the AO before issuing notice un....
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....hould be provided an opportunity of being heard by serving upon the assessee a notice to show cause within such time as may be specified in the notice being not less than seven days but not exceeding thirty days from the date on which said notice has been issued. Since the notice dated 15th March 2023 provides only for five days when the law requires minimum seven days to be given, the notice itself was bad-in-law. 5. Alongwith reply, Petitioner also provided a photo copy of the notarized affidavit of Petitioner's brother affirmed on 18th March 2023, in which the brother has confirmed of giving gift of Rs. 75 lakhs to Petitioner on 26th March 2019, which is much beyond the relevant Assessment Year. 6. Respondent No.1 has passed the impugned order dated 31st March 2023 under Clause D of Section 148A of the Act. In the order, Respondent No.1 states that from the statement issued by HDFC Bank for the period 1st April 2018 to 31st March 2019 of the brother, it is seen that there is a credit entry of Rs. 1 Crore on 19th March 2019, out of which Rs. 75 lakhs has been paid to Petitioner on 26th March 2019. Respondent No.1 also states that the gift deed submitted by P....
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....o be made as a mandatory requirement and failure to comply with would render a notice itself invalid. Therefore, on this ground alone, the notice requires to be quashed and set aside. Perhaps, being aware of this position, Respondent No.1 has chosen not to deal with these objections raised by Petitioner in the reply to the show cause notice. 10. We also found in the said guidelines a provision that the order under section 148A(d) of the Act shall be sent to assessee along with the approval of the specified authority for such order under section 148A(d) of the Act. In the case at hand, the approval that has been sent is of some other assessee and not Petitioner. This also indicates non-application of mind by Respondent No.1. On this ground also, the order dated 31st March 2023 impugned in the Petition is required to be quashed and set aside. 11. Further, in the guidelines to which is annexed a template of the order to be passed under section 148A(d) of the Act provides for mentioning of amount escaped based on the information and how this amount is represented in the form of assets. It also provides that the Assessing Officer will specify the quantum of in....
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....uch remedies as available in law. 14.4 Before parting it is important to note that the learned DR at the time of hearing before me argued that the assessee has participated in the assessment proceedings and has not agitated, the issue of time limit provided against the notice issued under section 148A(b) of the Act. Therefore, the assessee in accordance with the provision of section 292BB/292B cannot object the validity of the same at the Tribunal stage. In this regard, I find that failure to afford a reasonable opportunity of being heard under section 148A(b) of the Act, prior to passing the order under section 148A(d) of the Act and issuing the consequential notice under section 148 of the Act, constitutes a violation of mandatory statutory requirements and principles of natural justice. Such a defect is substantive in nature and not a mere procedural irregularity. Therefore, the said defect cannot be cured by invoking the provisions of section 292B or 292BB of the Act. The jurisdictional error arising from noncompliance with section 148A(b) renders the entire proceedings initiated under section 148A(d) and section 148 of the Act null and void in the eyes of law. In holding so....