PJP FOUNATION TRUST ,MUMBAI vs. ITO WARD 30(1)(1), MUMBAI

After having heard the counsel for both the parties on the application for seeking condonation of delay and considering the entire factual position as explained before us and also keeping in view the principles laid down by Hon'ble Supreme Court in the case of Land Acquisition Collector Vs MST Katiji and others 1987 AIR 1353 Supreme Court, wherein it has been held that where substantial justice is pitted against technicalities of non deliberate delay, then in that eventuality substantial justice is to be preferred. However, considering the fact that delay in filing the present appeal had accrued on account of the fact that email Id registered on the income tax portal belong to an employee, who had subsequently resigned from the company and the said email ID was no longer in use. Thus in this way the company was not made aware of the order passed there under.

The Ld.AR argued and first took up the legal ground related to assumption of jurisdiction by the Ld.AO for reopening the assessment under section 147 of the Act. The Ld.AR submitted a chart related to issuance of notice under section 148 of the Act and finally, the order passed under section 148A(d) of the Act and the notice was issued under section 148 of the Act, the dates and events are tabulated as follows:- Sr.No. Particulars AY 2015-15 1 Original notice issued u/s 28/04/2021 148 of the Act – Old provisions 2 Last date to issue notice 31/03/2022 under amended provision of the Act as per the 1st Proviso to section 149 of the Act 3 Order of the Hon’ble 04/05/2022 Supreme Court in the case of Union of India vs Ashish Agarwal 4 Show cause notice was 27/05/2022 issued in accordance with the decision in the case of Union of India vs Ashish Agarwal reported in (2022) 444 ITR 1 (SC) and the appellant was granted time upto 10.06.2022 5 Order passed by the Ld. 22/07/2022 JAO u/s 148A(d) of the Act 6 Notice issued u/s 148 of 22/07/2022 the Act – New Provisions The Ld. AR, during the course of arguments, submitted that the notice issued by the Ld. AO for A.Y. 2015-16 has been quashed by the Hon’ble Supreme Court in the case of Union of India v. Rajeev Bansal [2024] 167 taxmann.com 70 (SC).

Mr N Venkataraman, learned Additional Solicitor General of India, made the following submissions on behalf of the Revenue: (a) to (e)**** (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 they will not fall for completion during the period prescribed under TOLA;

The ingredients of the proviso could be broken down for analysis as follows:

The first proviso to Section 149(1)(b) requires the determination of whether the time limit prescribed under section 149(1)(b) of the old regime continues to exist for the assessment year 2021-2022 and before. Resultantly, a notice under Section 148 of the new regime cannot be issued if the period of six years from the end of the relevant assessment year has expired at the time of issuance of the notice. This also ensures that the new time limit of ten years prescribed under section 149(1)(b) of the new regime applies prospectively. For example, for the assessment year 2012-2013, the ten year period would have expired on 31 March 2023, while the six year period expired on 31 March 2019. Without the proviso to Section 149(1)(b) of the new regime, the Revenue could have had the power to reopen assessments for the year 2012-2013 if the escaped assessment amounted to Rupees fifty lakhs or more. The proviso limits the retrospective operation of Section 149(1)(b) to protect the interests of the assesses. 7. This issue of notice under section 148 issued for 2015-16 being time barred is considered by the coordinate bench in the case of Pushpak Realities Pvt. Ltd.(supra) and it is held that ****** For the A.Y.2015-16, the Revenue itself has contended before the Hon’ble Supreme Court as noted above, all the notices issued on or after 01/04/2021 will have to be dropped as they will not fall for completion during the period prescribed under TOLA. Here notice u/s. 148 for the A.Y. 2015-16 has been issued on 28/07/2022 which is admittedly barred by limitation under the new provision of Section 149(1) and it is not covered under TOLA. Accordingly, all the notices are quashed being barred by limitation on the reasons given above and we are not going on the reasons given by the ld. CIT (A) for quashing the notice.” 8. A combined reading of the above observations of the Hon'ble Supreme Court and the findings of coordinate bench makes it clear that the test for checking the validity of notices issued under section 148 under new regime for AYs 2021-22 or prior years is whether the period of six years has expired at the time of issue of such notice and in that case the notice under section 148 becomes invalid. These observations also makes it clear that the time limit of ten years as per the amended provisions of section 149(1)(b) can be applied only prospectively. In assessee's case when we apply this test for AY 2015-16, the period of six years has expired on 31.03.2022 and therefore the notice dated 29.07.2022 under section 148 of the Act for AY 2015-16 is invalid since it is barred by limitation. Accordingly the assessment completed under section 147 of the Act is liable to be quashed.

We have quashed the order of re-assessment for AY 2015- 16 considering the legal contentions raised by the assessee in the C.O. therefore the appeals of the revenue for AY 2015-16 contending the relief granted by the CIT(A) on the merits of the issues have become infructuous. Accordingly, the appeals of the revenue are dismissed.”

We have heard the rival submissions and perused the material available on record. We find that the facts of the assessee’s case are identical to those in the judgment of the Hon’ble Supreme Court in UOI v. Rajeev Bansal (supra). The Co-ordinate Bench of the ITAT, Mumbai, in the case of Manish Financial (supra), has also followed the said judgment. Although the Ld. DR has relied upon paragraph 112 of the judgment in Rajeev Bansal (supra), we find that the said observation is not applicable to A.Y. 2015–16. Accordingly, the ratio laid down by the Hon’ble Supreme Court is applicable to the present case. In view of the above, the appellate order is hereby set aside, and the addition of Rs. 2,02,90,700/- made by the Ld. AO is deleted.

The Ld. AR had raised an additional ground concerning the non-issuance of a Document Identification Number (DIN); PJP Foundation Trust, Mumbai. however, the said ground was not pressed during the course of hearing. Accordingly, the appeal of the assessee is allowed, and all other grounds are kept open for academic purposes.

In the result, the appeal of the assessee bearing allowed.

After having heard the counsels for both the parties and examining the facts of the present case and also the decision relied upon by the parties, we find that the facts of the assessee’s present case are identical with those in the decision of the Coordinate Bench of ITAT in the case of Mukesh Kumar Jain (supra), wherein the Coordinate Bench after considering the decision of Hon’ble Supreme Court in the case of Union of India Vs. Rajeev Bansal (supra) and Coordinate Bench in the case of Manish Finance (supra) had held the order of assessment to be time barred. Since the facts of the present case for deciding the legal issue are identical to the facts containing in the case of Mukesh Kumar B Jain (supra). Respectfully following the decision of the coordinate Bench we also held that the noticed dated 22.04.2022 u/s 148 of the Act for the year under consideration was invalid and barred by limitation and accordingly assessment completed u/s 147 of the Act is also liable to be quashed. Hence this ground raised by the assessee stands allowed.

Since we have already quashed the order u/s 147 of the Act based on the legal contentions of notice being time barred, therefore the other legal contentions raised by the assessee becomes academic.