ITO-23.1.6, MUMBAI, MUMBAI vs. GHEVARCHAND JETHMALJI JAIN, MUMBAI

The respondent-assessee is in the business of cheque discounting on commission basis. The assessee filed Return of Income (RoI) for the relevant assessment year on 31.08.2015 declaring an income of Rs.2,54,760/-. The return was processed and an intimation was issued on 19.09.2015. Subsequently, the AO sought

"Whether on the facts and circumstances of the case and in law, the CIT(A) has erred in quashing notice u/s 148 of the Act by stating that the notice was issued beyond the limitation time provided and directed by the Hon'ble Supreme Court in the case of Union of India vs Ashish Agrawal (supra) and Rajeev Bansal (supra), without considering the fact that AO issued notice w/s 148 of the Act after considering the time limitation provided under section 149 and provisos thereto, in pursuance of the directions issued by the Hon'ble Supreme Court in the case of Union of India vs Ashish Agrawal (supra) and Rajeev Bansal (Supra)?"

"Whether on the facts and circumstances of the case and in law, the CIT(A) not appreciated that the Hon'ble Delhi High Court in the case of Salil Gulati Vs ACIT, Circle -49(1), Delhi and Ors. (supra) has upheld the Revenue's stand that the decision of the Supreme Court in Union of India Vs. Ashish Agarwal (supra) read with the time extension provided by Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 (for short TOLA) allows extended reassessment notices to travel back in time to their original date when such notices were to be issued and then new section 149 of the Act is to be applied at that point. ?"

“Whether on the facts, in the circumstances of the case and in Law, the Hon'ble CITIA) has erred in not considering the provision of 148A of the Act which provides for passing order u/s 148A(d) of the Act 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, and therefore, in the facts of the case, the order u/s 148A(d) & consequent notice u/s 148 were passed well in time?"

“The appeal u/s 253A of the I.Tax Act, is filed, as the tax effect involved in this case is Rs. 1,03,40,800/-, which is above the prescribed limit mentioned in the CBDT's Circular F.No.279/Misc.142/2007-ITJ(Pt) amended vide No. 09/2024 dated. 17.09.2024.”

It is submitted by the learned DR that the CIT(A) was not justified in quashing the reopening as the notice under Section 148 of the Act was issued within the limitation provided under Section 149 of the Act and the proviso thereto in pursuance of the direction issued by the Supreme Court in the case of Union of India vs Ashish Agarwal, 444 ITR 1 (SC) and Rajeev Bansal (supra). On behalf of the Revenue, reliance is placed on the decision of Delhi High Court in Salil Gulati vs ACIT (W.P.(C) 12541/2022 dated 31.08.2022). It is submitted that the CIT(A) has failed to consider the provisions of Section 148A of the Act which provides for passing of order under Section 148A(d) of the Act 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 the reply as per clause (b) expires. It is submitted that the order under Section 148A(d) of the Act was passed within time.

The learned AR has submitted that the issue is squarely covered by the decision of Supreme Court in case of Rajeev Bansal (supra). It is submitted that so far as the assessment year 2015-16 is concerned, any notice seeking reopening issued after 01.04.2021 would be invalid.

The decision of Delhi High Court in Salil Gulati (supra) came on 31.08.2022, i.e. prior to the decision in the case of Rajeev Bansal (supra) with which we are now governed. Once we find that the very issuance of notice was beyond the period of limitation, any subsequent proceedings would be invalid. We have gone through the impugned order passed by the learned CIT(A) and we do not find any reason to interfere with the same. The appeal is without any merit and is accordingly dismissed.

The Appellant 2. The Respondent 3. The PCIT/CIT concerned 4. DR, ITAT, Mumbai 5. Guard File.