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Facts
The assessee's appeals arose from orders passed by the CIT(A) confirming additions made by the AO. For AY 2012-13, the assessee contended that they could not represent their case effectively before the CIT(A) and sought an adjournment, which was denied. For AY 2013-14, the assessee challenged the validity of the notice issued u/s. 148 of the Act as time-barred.
Held
The Tribunal held that for AY 2012-13, the matter should be remitted back to the CIT(A) for a detailed order on merits, allowing the grounds partly. For AY 2013-14, the Tribunal found that the notice issued u/s. 148 was beyond the period of limitation and therefore quashed, leading to the reassessment order being void ab initio.
Key Issues
Whether the notice issued u/s. 148 for AY 2013-14 was time-barred considering the provisions of TOLA and Supreme Court judgments. Whether the CIT(A) order for AY 2012-13 was passed without affording sufficient opportunity to the assessee.
Sections Cited
147, 148, 148A, 149, 151, 68, 115BBE
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Income Tax Appellate Tribunal, “F” BENCH, MUMBAI
Before: SMT. BEENA PILLAI & SHRI RENU JAUHRI
The Ld.AR at the outset submitted that, the assessee could not represent is its case before the Ld.CIT(A) effectively and that &1036/Mum/2025; A.Y. 2012-13 & 2013-14 Uniquestar Gems (India) Pvt. Ltd. an adjournment was sought on 07/10/2024 which was not granted. Ld. CIT(A) subsequently passed impugned order confirming the additions made by the Ld.AO. He submitted that assessee need grant one more opportunity of being heard and to file necessary documents in respect of the claim.
The Ld.DR on the contrary relied on the orders passed by the authorities below. We have perused the submissions advance by both sides in the light of record placed before us. 3.1 It is noted that the assessee sought for adjournment in respect of last notice date 07/10/2024 which was denied. It is not case that assessee was not representing itself before the Ld. CIT(A). Under such circumstances we deem it appropriate to remit this issue back to Ld. CIT(A) with direction to pass detailed order on merits after considering the submissions of the assessee. Accordingly grounds raised for A.Y. 2012-13 stands partly allowed for statistical purposes. Assessment Year 2013-14
The Ld.AR submitted that the assessee raised legal ground challenging validity of notice issued u/s. 148 of the Act to be time barred. 4.1 The Ld.AR submitted that assessee filed revised grounds of appeal
as under: “1. The Ld. AO has erred in reopening the case u's 147 of the Act and in issuing the notice u/s 148 of the Act and also the Ld. CIT (A) has erred in confirming the same.
2. The Ld. AO has erred in the reopening of the case as in reason recording the name of the parties appearing, the assessee has no &1036/Mum/2025; A.Y. 2012-13 & 2013-14 Uniquestar Gems (India) Pvt. Ltd. transactions with those parties but in the assessment order, mentioned that the assessee has indirect transactions. It is clear that the reasons recorded by the Ld. AO has not applied his mind and re-opened the case just for information without further verification, 3. The assessee has submitted the corresponding sales against the alleged purchases. The Ld. AO has erred in making additions for bogus purchases but treated sales as genuine and Ld. CIT(A) has confirmed it.
4. The Ld. AO and Ld. CIT(A) has erred in not rejecting the books of accounts of the assessee before making any additions.
5. The Ld. AO has erred in applying section 68 r.w.s. 115BBE of the Act and also the Ld. CIT(A) has erred in confirming the same.
6. The Ld, AO has erred in making an addition of Rs.1,12,58,04,615/- being a bogus transaction and credit in Axis Bank and treated as accommodation entries and added u/s 68 r.w.s. 115BBE of the Act and also the Ld. CIT(A) has erred in confirming the same.
The appellant reserves the right to add, alter, amend, or withdraw any grounds of appeal
.” 4.2 He submitted that Ground No.1 raised by the assessee is challenging reopening of the assessment u/s.148 of the Act to be barred by limitation. 4.3 The Ld.AR submitted that assessee was issued notice u/s.148 of the old law on 29/06/2021. He submitted that the said notice was considered to be the notice issued as on 31/03/2021, pursuant to the directions of Hon’ble Supreme Court as per the decision of Hon’ble Supreme Court in case of Union Of India vs. Ashish Agarwal reported in (2022) 138 taxmann.com
62. The Ld.AR submitted that, subsequently notice u/s. 148A(b) was issued on 25/05/2022 granting 14 days time to the assessee to file its response. Subsequently, order u/s. 148A(d) was passed on 28/07/2022. After taking approval from the chief Commissioner of Income Tax Central 1 Mumbai notice u/s.148 was issued on 29/07/2022. 4.4 The Ld.AR submitted that, the notice issued u/s.148 of the new regime is beyond the period of limitation for the year under &1036/Mum/2025; A.Y. 2012-13 & 2013-14 Uniquestar Gems (India) Pvt. Ltd. consideration. He placed reliance on the decision of Hon’ble Supreme Court in case of UOI vs. Rajeev Bansal reported in (2024) 167 taxmann.com 70. The Ld.AR placed reliance on the following observation of Hon’ble Supreme Court in support of the contention. “19. Mr. N Venkataraman, learned Additional Solicitor General of India, made the following submissions on behalf of the Revenue: a. Parliament enacted TOLA as a free-standing legislation to provide relief and relaxation to both the assesses and the Revenue during the time of COVID- 19. TOLA seeks to relax actions and proceedings that could not be completed or complied with within the original time limits specified under the Income-tax Act; b. Section 149 of the new regime provides three crucial benefits to the assesses: (i) the four-year time limit for all situations has been reduced to three years; (ii) the first proviso to Section 149 ensures that re-assessment for previous assessment years cannot be undertaken beyond six years; and (iii) the monetary threshold of Rupees fifty lakhs will apply to the re assessment for previous assessment years; c. The relaxations provided under section 3(1) of TOLA apply "notwithstanding anything contained in the specified Act." Section 3(1), therefore, overrides the time limits for issuing a notice under section 148 read with Section 149 of the Income-tax Act; d. TOLA does not extend the life of the old regime. It merely provides a relaxation for the completion or compliance of actions following the procedure laid down under the new regime; e. The Finance Act 2021 substituted the old regime for re- assessment with a new regime. The first proviso to Section 149 does not expressly bar the application of TOLA. Section 3 of TOLA applies to the entire Income-tax Act, including Sections 149 and 151 of the new regime. Once the first proviso to Section 149(1)(b) is read with TOLA, then all the notices issued between 1 April 2021 and 30 June 2021 pertaining to assessment years 2013-2014, 2014-2015, 2015- 2016, 2016-2017, and 2017-2018 will be within the period of limitation as explained in the tabulation below: Assessment Assessment Expiry of Within six Expiry of Year Year Limitation Years Limitation read with read with TOLA for (2) TOLA for (4) (1) (2) (3) (4) (5) 2013-2014 31-3-2017 TOLA not 31-3-2020 30-6-2021 applicable 2014-2015 31-3-2018 TOLA not 31-3-2021 30-6-2021 applicable &1036/Mum/2025; A.Y. 2012-13 & 2013-14 Uniquestar Gems (India) Pvt. Ltd. 2015-2016 31-3-2019 TOLA not 31-3-2022 TOLA not applicable applicable 2016-2017 31-3-2020 30-6-2021 31-3-2023 TOLA not applicable 2017-2018 31-3-2021 30-6-2021 31-3-2024 TOLA not applicable 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; g. Section 2 of TOLA defines "specified Act" to mean and include the Income-tax Act. The new regime, which came into effect on 1 April 2021, is now part of the Income-tax Act. Therefore, TOLA continues to apply to the Income T a x Act even after 1 April 2021; and h. Ashish Agarwal (supra) treated Section 148 notices issued by the Revenue between 1 April 2021 and 30 June 2021 as show-cause notices in terms of Section 148A(b). Thereafter, the Revenue issued notices under section 148 of the new regime between July and August 2022. Invalidation of the Section 148 notices issued under the new regime on the ground that they were issued beyond the time limit specified under the Income-tax Act read with TOLA will completely frustrate the judicial exercise undertaken by this Court in Ashish Agarwal (supra).” 4.5 He thus submitted that for A.Y. 2013-14 TOLA being not applicable the notice u/s. 148 under new provisions should have been issued on or before 30/06/2021 be in the surviving period granted by Hon’ble Supreme Court by virtue of decision laid down in the case of UOI vs. Ashish Agarwal (supra). 4.6 On the contrary the Ld.DR relied on the orders passed by authorities below. We have perused the submissions advance by both sides in the light of record placed before us.
Admittedly, notice under old provision of the Section 148 was issued to the assessee on 29/06/2021. As per the table reproduced here in the decision Hon’ble Supreme Court in case of UOI vs. Ashish Agarwal (supra), 6 years expired on 31/03/2021. Thus by virtue of ratio laid down by Hon’ble Supreme Court in &1036/Mum/2025; A.Y. 2012-13 & 2013-14 Uniquestar Gems (India) Pvt. Ltd. case of UOI vs. Ashish Agarwal, notices issued between 01/04/2021 and 30/06/2021 was deemed to be issued as on 31/03/2021 and thus extended period to complete the procedure as per the new provisions of Section 148A is available only till 30/06/2021. Thus in the present facts of the case, the revenue had only 1 day to complete the entire procedure u/s.148A and to issue notice u/s.148 in the new regime.
However the procedure was completed u/s.148A and the notice u/s. 148 of the new regime was issued on 29/07/2022. The notice thus issued is beyond the period of limitation and deserves to be quashed. As notice u/s. 148 is quashed the reassessment order passed dose not survive and will be treated as void ab initio accordingly the assessee succeeds on the legal issue raised. Accordingly the grounds raised by the assessee stands allowed for A.Y. 2013-14. In the result the appeal filed by the assessee for A.Y. 2012-13 stands allowed for statistical purposes and appeal filed by the assessee for A.Y. 2013-14 stands allowed. Order pronounced in the open court on 08/04/2025 Sd/- Sd/- (RENU JAUHRI) (BEENA PILLAI) Accountant Member Judicial Member Mumbai: Dated: 08/04/2025 Poonam Mirashi, Stenographer Copy of the order forwarded to: