NEELKAMAL REALTORS SUBURBAN PRIVATE LIMITED,MUMBAI vs. DCIT, CENTRAL CIRCLE - 8(1), MUMBAI, MUMBAI

The ratio laid down by the Coordinate Bench in the aforementioned decision squarely applies to the facts of the present appeals. No contrary decision has been brought to our notice by learned Departmental Representative. In view of the aforesaid, we have no hesitation in holding that the reopening of assessments u/s. 147 of the Act in the present appeals are invalid. Hence, we quash the impugned assessment orders. Consequently, the order of learned First Appellate Authority are set aside. Since, the appeals have been decided on the legal issue, the grounds raised on merits have become academic, hence, kept open. Accordingly, appeals are allowed. 9. Insofar as appeal relating to Assessment Year 2021-22, being ITA No. 3572/Mum/2026, is concerned, the assessee has raised a legal ground challenging

Learned DR submitted, the assessment has been validly made. 11. We have considered rival submissions and perused the materials on record. Undisputedly, a search and seizure operation was conducted in the case of the assessee on 07.10.2021, falling in Financial Year 2021-22, corresponding to Assessment Year 2022-23. Whereas, the Assessing Officer has initiated assessment proceedings under Section 143(3) of the Act and completed under the said provision. A reading of the provisions contained in Section 148 of the Act and more particularly, Explanation-2, make it clear that while for the assessment year in which the search and seizure operation took place, the assessment is

The starting point of the substituted regime is section 147. As substituted by the Finance Act, 2021 with effect from 01.04.2021, section 147 empowers the Assessing Officer, where income chargeable to tax has escaped assessment for any assessment year, subject to sections 148 to 153, to assess or reassess such income and also any other income Rajesh Kumar Jain chargeable to tax which has escaped assessment and comes to his notice subsequently in the course of proceedings. What is material for the present controversy is that the power under section 147 is expressly made subject to sections 148 to 153. The authority to assess escaped income and the statutory conditions governing the assumption and exercise of that authority thus operate together. Section 148, in turn, provides the jurisdictional mechanism by which proceedings under section 147 are set in motion. In its material part applicable to the statutory regime under consideration, it provided that before making assessment, reassessment or recomputation under section 147, and subject to section 148A, the Assessing Officer shall serve upon the assessee a notice requiring him to furnish a return for the relevant assessment year. The statutory command is therefore sequential: there must first exist the jurisdictional foundation contemplated by the reassessment provisions; the notice prescribed under section 148 must thereafter be issued in accordance with law; and the assessment or reassessment under section 147 follows upon valid assumption of such jurisdiction. A notice under section 148 is thus not an interchangeable procedural formality. It is the statutory instrument through which the jurisdiction contemplated by section 147 is invoked.

The ratio laid down in the aforesaid decision squarely applies to the facts of the present appeal. Even, the other decision cited by learned counsel for the assessee expresses similar view.