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Facts
The assessee is in the business of inter corporate deposits, loans, advances, and share trading. They filed a return for AY 2016-17 which was accepted in scrutiny. Later, a notice u/s 148 was issued on 30.06.2021, based on unamended provisions, which the assessee challenged.
Held
The Tribunal held that the notice u/s 148 was issued without the approval of the appropriate authority as per Section 151 of the amended Act. The approval obtained was from the Principal Commissioner instead of the Principal Chief Commissioner/Chief Commissioner, as the notice was issued beyond three years. Therefore, the reassessment proceedings are quashed.
Key Issues
Whether the notice issued u/s 148 for reopening of assessment is valid when the approval for issuance was not obtained from the appropriate authority as per Section 151 of the Income Tax Act?
Sections Cited
148, 147, 143(3), 144B, 69A, 115BBE, 271(1)(c), 234A, 234B, 234C, 234D, 148A, 151
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, MUMBAI BENCH “A” MUMBAI
Before: SHRI OM PRAKASH KANT & MS. KAVITHA RAJAGOPAL
This appeal by the assessee is directed against order dated 06.01.2025 passed by the Ld. Commissioner of Income-tax (Appeals) [in short ‘the Ld. CIT(A)’] for assessment year 2016-17, raising following grounds:
The Ld. CIT(A) has erred in upholding the validity of notice issued u/s. 148 the Act for reopening of the assessment by the Assessing Officer.
2. The notice u/s148 is bad in law and 2. The notice u/s148 is bad in law and without jurisdiction without jurisdiction as the jurisdictional requirements of section 147 to 151 have as the jurisdictional requirements of section 147 to 151 have as the jurisdictional requirements of section 147 to 151 have not been fulfilled. not been fulfilled.
3. The reopening of assessment is without proper application 3. The reopening of assessment is without proper application 3. The reopening of assessment is without proper application of mind and therefore, bad in law. of mind and therefore, bad in law.
4. The provisions of section 148A have not been followed 4. The provisions of section 148A have not been followed 4. The provisions of section 148A have not been followed and as a result, the reassessment proceedings are bad in law. as a result, the reassessment proceedings are bad in law. as a result, the reassessment proceedings are bad in law. The sanction u/s 151 is bad in law and as a result, the The sanction u/s 151 is bad in law and as a result, the The sanction u/s 151 is bad in law and as a result, the reassessment proceeding is bad in law. reassessment proceeding is bad in law. 6. The Ld. CIT(A) has erred in confirming the reopening 6. The Ld. CIT(A) has erred in confirming the reopening 6. The Ld. CIT(A) has erred in confirming the reopening proceedings and upholding he order passed u proceedings and upholding he order passed u/s. 147 r.w.s. /s. 147 r.w.s. 143(3) r.w.s. 144B of the Act without appreciating that the 143(3) r.w.s. 144B of the Act without appreciating that the 143(3) r.w.s. 144B of the Act without appreciating that the same was against the principle of Natural Justice and is bad same was against the principle of Natural Justice and is bad same was against the principle of Natural Justice and is bad in law. 7. The Ld. CIT(A) has erred in upholding the addition made 7. The Ld. CIT(A) has erred in upholding the addition made 7. The Ld. CIT(A) has erred in upholding the addition made by the Assessing Officer u/s. by the Assessing Officer u/s. 69A r.w.s. 115BBE of th 69A r.w.s. 115BBE of the Act, by adding the entire sale proceeds of the four scrips, by adding the entire sale proceeds of the four scrips, (i) Syncom Formulation (India) Ltd. (i) Syncom Formulation (India) Ltd. - Rs. 3,93,91,482/-, , (i) Stampede Capital Ltd. (i) Stampede Capital Ltd. - Rs. 3,16,83,459/-, (iii) Virtual Global Education Ltd. Virtual Global Education Ltd. - Rs. 1,17,87,390/-, (iv) Nyssa Corporation Ltd. (iv) Nyssa Corporation Ltd. - Rs. 60,26,810/-, totaling totaling to Rs. 8,88,89,141/- as unexplained money to Rs. 8,88,89,141/ as unexplained money of the assesses. assesses. 8. The Ld. CIT(A) has erred in upholding the adding back of 8. The Ld. CIT(A) has erred in upholding the adding back of 8. The Ld. CIT(A) has erred in upholding the adding back of entire sale proceeds of the four scrips of Rs. 8,88,89,141/ entire sale proceeds of the four scrips of Rs. 8,88,89,141/ entire sale proceeds of the four scrips of Rs. 8,88,89,141/- u/s. 69A r.w.s. 11SBBE of the Act without appreciatin u/s. 69A r.w.s. 11SBBE of the Act without appreciatin u/s. 69A r.w.s. 11SBBE of the Act without appreciating the fact that the net profit earned of Rs. 63,35,453/ fact that the net profit earned of Rs. 63,35,453/- from the from the said four scrips was already offered for tax by assesse as said four scrips was already offered for tax by assesse as said four scrips was already offered for tax by assesse as business income. business income. 9. The Ld. CIT(A) has erred in confirming the initiation of 9. The Ld. CIT(A) has erred in confirming the initiation of 9. The Ld. CIT(A) has erred in confirming the initiation of penalty proceedings u/s. penalty proceedings u/s. 271(1)(c) of the Act. 10. The Ld. CIT(A) has erred in confirming the levy of interest Ld. CIT(A) has erred in confirming the levy of interest Ld. CIT(A) has erred in confirming the levy of interest u/s. 234A, 234B, 234C and 234D u/s. 234A, 234B, 234C and 234D of the Act.
Briefly stated, facts of the case are that Briefly stated, facts of the case are that the assessee is the assessee is engaged in the business of inter corporate deposits/loans and engaged in the business of inter corporate deposits/loans and engaged in the business of inter corporate deposits/loans and advances, investment in shares & advances, investment in shares & securities and share trading etc. securities and share trading etc. The assessee filed return of income on 01.09.2016 declaring total he assessee filed return of income on 01.09.2016 declaring total he assessee filed return of income on 01.09.2016 declaring total income at Rs.1,75,13, income at Rs.1,75,13,680/-. The return of income filed by the . The return of income filed by the assessee was selected for scrutiny assessee was selected for scrutiny assessment and statutory notices and statutory notices under the Income-tax tax Act, 1961 (in short ‘the Act’) were issued and Act, 1961 (in short ‘the Act’) were issued and served upon the assessee. In the scrutiny assessment completed served upon the assessee. In the scrutiny assessment completed served upon the assessee. In the scrutiny assessment completed u/s 143(3) of the Act on 30.11.2018, the returned income filed by u/s 143(3) of the Act on 30.11.2018, the returned income filed by u/s 143(3) of the Act on 30.11.2018, the returned income filed by the assessee was acc the assessee was accepted. Subsequently, the notice epted. Subsequently, the notice u/s 148 of the Act was issued on 30.06.2021. This notice was issued under the d on 30.06.2021. This notice was issued under the d on 30.06.2021. This notice was issued under the un-amended old provisions of 148 under the Act , o rovisions of 148 under the Act , o rovisions of 148 under the Act , on the premise that limitation which was expiring on 31.03.2020 that limitation which was expiring on 31.03.2020, was extended up was extended up to 30.06.2021 by way of to 30.06.2021 by way of The Taxation and Other Laws ( Relaxation The Taxation and Other Laws ( Relaxation and Amendments of certain Provisions ) Act , 2020 ( in short the nts of certain Provisions ) Act , 2020 ( in short the nts of certain Provisions ) Act , 2020 ( in short the TOLA). The Department had issued such notices under . The Department had issued such notices under old . The Department had issued such notices under provisions with extended period of TOLA in many cases which extended period of TOLA in many cases which extended period of TOLA in many cases which were subjected to writ petition subjected to writ petitions before various Hon’ble High Courts. The Hon’ble High Courts. The Hon’ble Supreme Court in the case of Ashish Agarwal me Court in the case of Ashish Agarwal in (2022) 138 me Court in the case of Ashish Agarwal taxmann.com 64(SC) taxmann.com 64(SC) held that w.e.f. 01.04.2021, the provis held that w.e.f. 01.04.2021, the provisions of section 148 of the Act section 148 of the Act are amended with introduction of three stage introduction of three stage process before actually issue of notice u/s 148 of the Act. Therefore, process before actually issue of notice u/s 148 of the Act. Therefor process before actually issue of notice u/s 148 of the Act. Therefor the Hon’ble Supreme Court held that once the new provisions have the Hon’ble Supreme Court held that once the new provisions have the Hon’ble Supreme Court held that once the new provisions have been made effective from 01.04.2021 the old or the un-amended been made effective from 01.04.2021 the old or the un been made effective from 01.04.2021 the old or the un provisions u/s 148 are not operation as on 01.04.2021 and provisions u/s 148 are not operation as on 01.04.2021 and provisions u/s 148 are not operation as on 01.04.2021 and therefore, same cannot be extended by way of TOLA, the Hon’ble therefore, same cannot be extended by way of TOLA, the Hon’ble therefore, same cannot be extended by way of TOLA, the Hon’ble Supreme Court held that however TOLA will be applicable on the me Court held that however TOLA will be applicable on the me Court held that however TOLA will be applicable on the new provisions during the period from 01.04.2021 to 30.06.2021. new provisions during the period from 01.04.2021 to 30.06.2021. new provisions during the period from 01.04.2021 to 30.06.2021. But as a onetime measure, the Hon’ble Supreme Court invoking the But as a onetime measure, the Hon’ble Supreme Court invoking the But as a onetime measure, the Hon’ble Supreme Court invoking the Article 142(1) of the Constitution Article 142(1) of the Constitution of India directed to treat the directed to treat the notices u/s 148 of the Act old provisions as notice issued u/s ices u/s 148 of the Act old provisions as notice issued u/s ices u/s 148 of the Act old provisions as notice issued u/s 148A(b) of the Act amended reassessment provisions. amended reassessment provisions. amended reassessment provisions.
Accordingly, the notice u/s 148 of the Act issued in the case of Accordingly, the notice u/s 148 of the Act issued in the case of Accordingly, the notice u/s 148 of the Act issued in the case of assessee on 30.06.2021 was held assessee on 30.06.2021 was held to be issued u/s 148A(b) of the issued u/s 148A(b) of the Act. Further, in the case of Rajiv Agrawal (supra), the various in the case of Rajiv Agrawal (supra), the various in the case of Rajiv Agrawal (supra), the various assessees challenged the limitation in completing the process of the assessees challenged the limitation in completing the process of the assessees challenged the limitation in completing the process of the reassessment under amended provisions and issue of notice u/s reassessment under amended provisions and issue of notice u/s reassessment under amended provisions and issue of notice u/s 148 of the Act as well as sanction/approval of the notice u/s 151 of 148 of the Act as well as sanction/approval of the notice u/s 151 of 148 of the Act as well as sanction/approval of the notice u/s 151 of the Act under the amended provisions. The Hon’ble Supreme Court t under the amended provisions. The Hon’ble Supreme Court t under the amended provisions. The Hon’ble Supreme Court in the case of Rajeev Bansal [2024] 167 taxmann.com 70 (SC) held in the case of Rajeev Bansal [2024] 167 taxmann.com 70 (SC) held in the case of Rajeev Bansal [2024] 167 taxmann.com 70 (SC) held that the period from the issue of the notice u/s 148 of the Act that the period from the issue of the notice u/s 148 of the Act that the period from the issue of the notice u/s 148 of the Act under old provisions up to the period of filing of reply by the under old provisions up to the period of filing of reply by the under old provisions up to the period of filing of reply by the assessee before the Assessing officer, before the Assessing officer, consequent to the decision of consequent to the decision of the Hon’ble Supreme Court in the case of Ashish Agarwal (supra), the Hon’ble Supreme Court in the case of Ashish Agarwal (supra) the Hon’ble Supreme Court in the case of Ashish Agarwal (supra) will be deemed to be stayed and the Assessing Officer will get will be deemed to be stayed and the Assessing Officer will get will be deemed to be stayed and the Assessing Officer will get survival period for issue of completion of the entire three step survival period for issue of completion of the entire three step survival period for issue of completion of the entire three step process of reassessment and issue of the notice u/s 148 of the Act process of reassessment and issue of the notice u/s 148 of the Act process of reassessment and issue of the notice u/s 148 of the Act under the amended provisions. under the amended provisions.
In the case of the assessee notice u/s 148 of the Act under the old In the case of the assessee notice u/s 148 of the Act under the old In the case of the assessee notice u/s 148 of the Act under the old provisions was issued on 30.06.2021 issued on 30.06.2021, So no survival period is , So no survival period is available to the AO and available to the AO and entire procedure was to be completed within ire procedure was to be completed within the day of filing of reply by the assessee subsequent to the decisions the day of filing of reply by the assessee subsequent to the decisions the day of filing of reply by the assessee subsequent to the decisions of Ashish Agarwal (supra) (supra).
Before us, the Ld. counsel for the assessee has however not Before us, the Ld. counsel for the assessee has however not Before us, the Ld. counsel for the assessee has however not challenged the validity of the limitation in issuing challenged the validity of the limitation in issuing notice u/s 148 of notice u/s 148 of the Act. The assessee has only challenged the approval for issue of the Act. The assessee has only challenged the approval for issue of the Act. The assessee has only challenged the approval for issue of the notice u/s 148 of the Act from the appropriate authority. the notice u/s 148 of the Act from the appropriate authority. the notice u/s 148 of the Act from the appropriate authority.
We have heard rival submissions of the parties and perused We have heard rival submissions of the parties and perused We have heard rival submissions of the parties and perused the relevant materials on record the relevant materials on record. The ground No. 5 of the appeal of the assessee specifically relate to the issue of sanction u/s 151 of the assessee specifically relate to the issue of sanction u/s 151 of the assessee specifically relate to the issue of sanction u/s 151 of the Act. Under the old provisions notice u/s 148 could be issued up the Act. Under the old provisions notice u/s 148 could be issued up the Act. Under the old provisions notice u/s 148 could be issued up upto four years without any income limit but from four to six years to four years without any income limit but from four to six years to four years without any income limit but from four to six years from the end of the relevant from the end of the relevant assessment year where where minimum tax evaded income exceeds exceeds Rs.1,00,000/-. But in amended provision . But in amended provision now w.e.f. 01.04.2021 no limit of income escaped is for issue of now w.e.f. 01.04.2021 no limit of income escaped is for issue of now w.e.f. 01.04.2021 no limit of income escaped is for issue of notice within three years from the end of the relevant assessment notice within three years from the end of the relevant assessment notice within three years from the end of the relevant assessment year, but notice beyond 3 years up to 10 years could be issued only but notice beyond 3 years up to 10 years could be issued only but notice beyond 3 years up to 10 years could be issued only if the tax evaded income exceeded Rs.50,00,000/ if the tax evaded income exceeded Rs.50,00,000/-. But by way of . But by way of proviso to section 147 under the amended provisions further proviso to section 147 under the amended provisions further proviso to section 147 under the amended provisions further restriction has been imposed not to apply restriction has been imposed not to apply the period upto 10 years the period upto 10 years for evasion exceeding Rs.50,00,000/ exceeding Rs.50,00,000/- retrospectively. Thus under retrospectively. Thus under the new provisions along with TOLA, the notices u/s 148 could be the new provisions along with TOLA, the notices u/s 148 could be the new provisions along with TOLA, the notices u/s 148 could be issued up to 30.06.2021 issued up to 30.06.2021 in respect of assessment year up to in respect of assessment year up to assessment year 2016 assessment year 2016-17 in case of tax evaded income up to Rs.50 in case of tax evaded income up to Rs.50 lakhs and in case of tax evaded income exceeding Rs.5 hs and in case of tax evaded income exceeding Rs.5 hs and in case of tax evaded income exceeding Rs.50,00,000/-, the notices under 14 the notices under 148 could be issued only up to assessment year issued only up to assessment year 2013-14. In the instant case, the income evaded is more than Rs.
14. In the instant case, the income evaded is more than Rs.
In the instant case, the income evaded is more than Rs. 50,00,000/- and assessment year being 2016 and assessment year being 2016-17, then notice u/s then notice u/s 148 of the Act could have been issued under the amended 48 of the Act could have been issued under the amended 48 of the Act could have been issued under the amended provisions beyond the period of three years up to 31.03.2023. Since beyond the period of three years up to 31.03.2023. Since beyond the period of three years up to 31.03.2023. Since notice u/s 148 of the Act has been issued on 29.07.2022, therefore, notice u/s 148 of the Act has been issued on 29.07.2022 notice u/s 148 of the Act has been issued on 29.07.2022 it is within the limitation even without invoking TOLA provisions. it is within the limitation even without invoking TOLA provisions it is within the limitation even without invoking TOLA provisions The assessee challenged limitation of issuing u/s 148 of the Act The assessee challenged limitation of issuing u/s 148 of the Act The assessee challenged limitation of issuing u/s 148 of the Act during submission before the Assessing Officer however, the during submission before the Assessing Officer however, the during submission before the Assessing Officer however, the Assessing Officer in his order passed u/s 148A(d) of the Act dated Assessing Officer in his order passed u/s 148A(d) of the Act dated Assessing Officer in his order passed u/s 148A(d) of the Act dated 29.07.2022 has rejected the contention of the assessee. A copy of 29.07.2022 has rejected the contention of the assessee. A copy 29.07.2022 has rejected the contention of the assessee. A copy the said order is available on Paper Book page 214 to 227 of the the said order is available on Paper Book page 214 to 227 of the the said order is available on Paper Book page 214 to 227 of the Paper Book. Therefater notice u/s 148 has been issued on Therefater notice u/s 148 has been issued on Therefater notice u/s 148 has been issued on 29.07.2022 , a copy of which is available on Paper Book page 213. opy of which is available on Paper Book page 213. opy of which is available on Paper Book page 213.
4.1 Before us, the Ld. counsel for the assessee has not challen Before us, the Ld. counsel for the assessee has not challen Before us, the Ld. counsel for the assessee has not challenged the limitation in issuing notice u/s 148 of the Act but only the limitation in issuing notice u/s 148 of the Act but only the limitation in issuing notice u/s 148 of the Act but only challenged the appropriate authority from whom sanction for issue challenged the appropriate authority from whom sanction for issue challenged the appropriate authority from whom sanction for issue of notice u/s 148 should should have been obtained. The Ld. counsel . The Ld. counsel referred to the section 151 of the Act referred to the section 151 of the Act and submitted that for a submitted that for a period within three years of the relevant assessment year, for issue period within three years of the relevant assessment year period within three years of the relevant assessment year of notice approval of the Ld. of notice approval of the Ld. Principal Commissioner of Income Principal Commissioner of Income-tax( PCIT) was required whereas for issue of not was required whereas for issue of notice beyond three years ice beyond three years from the end of the relevant assessment year approval of the Ld. from the end of the relevant assessment year approval from the end of the relevant assessment year approval Principal Chief Commissioner of Income Principal Chief Commissioner of Income-tax (PCCIT) or Chief tax (PCCIT) or Chief Commissioner of Income Commissioner of Income-tax(CCIT) was required. Undisputedly, the was required. Undisputedly, the notice u/s 148 of the Act had been issued beyond the period of notice u/s 148 of the Act had been issued beyond the period of notice u/s 148 of the Act had been issued beyond the period of three years from the end of the relevant assessment years and three years from the end of the relevant assessment year three years from the end of the relevant assessment year therefore, in our opinion, the approval of Ld. P therefore, in our opinion, the approval of Ld. PCCIT was required. CIT was required. For ready relevant provision of section 151 is reproduced as under: For ready relevant provision of section 151 is reproduced as under: For ready relevant provision of section 151 is reproduced as under:
“Sanction for issue of notice. “Sanction for issue of notice.
Specified authority for the purposes of section 148 and 151. Specified authority for the purposes of section 148 and 151. Specified authority for the purposes of section 148 and section 148A shall be, section 148A shall be,— (i) Principal Commissioner or Principal Director or Commissioner ) Principal Commissioner or Principal Director or Commissioner ) Principal Commissioner or Principal Director or Commissioner or Director, if three years or less than three years have elapsed or Director, if three years or less than three years have elapsed or Director, if three years or less than three years have elapsed from the end of the relevant assessment year; from the end of the relevant assessment year; (ii) Principal Chief Commissioner or Principal Director General or ) Principal Chief Commissioner or Principal Director General or ) Principal Chief Commissioner or Principal Director General or where here is no Principal Chief Commissioner or Principal is no Principal Chief Commissioner or Principal is no Principal Chief Commissioner or Principal Director Gen- -eral, Chief Commissioner or Director General, it eral, Chief Commissioner or Director General, it more than three years have elapsed from the end of the relevant more than three years have elapsed from the end of the relevant more than three years have elapsed from the end of the relevant assessment year.] year.]” 4.2 Before us, the Ld. counsel for the assessee has referred to para Before us, the Ld. counsel for the assessee has referred to para Before us, the Ld. counsel for the assessee has referred to para 3 of the notice u/s 148 of the 3 of the notice u/s 148 of the Act issued on 29.07.2022 where Act issued on 29.07.2022 where it is mentioned that prior approval of the PCIT mentioned that prior approval of the PCIT-4, Mumbai was obtained 4, Mumbai was obtained vide his letter dated 26.07.2022. Since notice u/s 148 of the Act vide his letter dated 26.07.2022. Since notice u/s 148 of vide his letter dated 26.07.2022. Since notice u/s 148 of has been issued beyond the period of three years, the approval issued beyond the period of three years, the approval issued beyond the period of three years, the approval should have been obtained from the PC should have been obtained from the PCCIT/CCIT whereas approval whereas approval has been obtained from the PCIT and therefore, approval not being has been obtained from the PCIT and therefore, approval not being has been obtained from the PCIT and therefore, approval not being from the appropriate authority under the from the appropriate authority under the law notice u/s law notice u/s 148 issued in the case of the assessee is liable to be quashed. Identical issue in the case of the assessee is liable to be quashed. Identical issue in the case of the assessee is liable to be quashed. Identical issue came up before the Tribunal in the case of in up before the Tribunal in the case of came up before the Tribunal in the case of 3551/Mum/2024 for assessment year 2017 3551/Mum/2024 for assessment year 2017-18 wherein the 18 wherein the Tribunal held similar finding. The relevant part of the decision is Tribunal held similar finding. The relevant part of the decision is Tribunal held similar finding. The relevant part of the decision is reproduced as under: under:
“7. On bare reading of the above extract of the judgment of 7. On bare reading of the above extract of the judgment of 7. On bare reading of the above extract of the judgment of Hon'ble Supreme Court in the case of Hon'ble Supreme Court in the case of Rajeev Bansal (supra), we (supra), we find that the Hon'ble Supreme Court had clarified as under find that the Hon'ble Supreme Court had clarified as under find that the Hon'ble Supreme Court had clarified as under: (a) Under new regime introduced by the (a) Under new regime introduced by the Finance Act, 2021 Finance Act, 2021 Assessing Officer was required to obtain prior approval or Assessing Officer was required to obtain prior approval or Assessing Officer was required to obtain prior approval or sanction of the 'Specified Authority' at four stages sanction of the 'Specified Authority' at four stages - at first stage under Sectio at first stage under Section 148A(a), at second stage under n 148A(a), at second stage under Section 148A(b), at third stage under Section 148A(d), and at Section 148A(b), at third stage under Section 148A(d), and at Section 148A(b), at third stage under Section 148A(d), and at fourth stage under fourth stage under Section 148. In the case of Ashish Ashish Agarwal (supra) the Hon'ble Supreme Court waived off the requirement of (supra) the Hon'ble Supreme Court waived off the requirement of (supra) the Hon'ble Supreme Court waived off the requirement of obtaining prior approval under section 148A(a) and obtaining prior approval under section 148A(a) and obtaining prior approval under section 148A(a) and Section 148A(b) of the Act only. Therefore, the Assessing Officer was of the Act only. Therefore, the Assessing Officer was of the Act only. Therefore, the Assessing Officer was required to obtain prior approval of the 'Specified Authority' o obtain prior approval of the 'Specified Authority' o obtain prior approval of the 'Specified Authority' according to Section 151 Section 151 of the new regime before passing an of the new regime before passing an order under Section 148A(d) or issuing a notice under order under Section 148A(d) or issuing a notice under order under Section 148A(d) or issuing a notice under Section 148. (b) Under new regime if income escaping assessment is more (b) Under new regime if income escaping assessment is more (b) Under new regime if income escaping assessment is more than Rupees 50 lakhs a reassessment notice could be issued than Rupees 50 lakhs a reassessment notice could be issued than Rupees 50 lakhs a reassessment notice could be issued after expiry of three years from the end of the relevant previous after expiry of three years from the end of the relevant previous after expiry of three years from the end of the relevant previous year only after obtaining the prior approval of the Principal year only after obtaining the prior approval of the Principal year only after obtaining the prior approval of the Principal Chief Commissioner or Principal Director General or Chief issioner or Principal Director General or Chief issioner or Principal Director General or Chief Commissioner or Director General. Commissioner or Director General. (c) The test to determine whether TOLA will apply to (c) The test to determine whether TOLA will apply to Section 151 Section 151 of the new regime is this: if the time limit of three y of the new regime is this: if the time limit of three years from the ears from the end of an assessment year falls between 20th March 2020 and end of an assessment year falls between 20th March 2020 and end of an assessment year falls between 20th March 2020 and 31st March 2021, then the 'Specified Authority' under 31st March 2021, then the 'Specified Authority' under 31st March 2021, then the 'Specified Authority' under Section 151(i) has an extended time till 30th June 2021 to grant has an extended time till 30th June 2021 to grant has an extended time till 30th June 2021 to grant approval. (d) Section 151(ii) Section 151(ii) of the new regime prescribes a higher level of of the new regime prescribes a higher level of authority if more than three years have elapsed Assessment authority if more than three years have elapsed Assessment authority if more than three years have elapsed Assessment Year 2017-18 from the end of the relevant assessment year. 18 from the end of the relevant assessment year. 18 from the end of the relevant assessment year. Thus, non-complia compliance by the assessing officer with the strict nce by the assessing officer with the strict time limits prescribed under time limits prescribed under section 151 affects their jurisdiction affects their jurisdiction to issue a notice under to issue a notice under section 148 (e) Grant of sanction by the appropriate authority is a (e) Grant of sanction by the appropriate authority is a (e) Grant of sanction by the appropriate authority is a precondition for the assessing officer to assume jurisdiction precondition for the assessing officer to assume jurisdiction precondition for the assessing officer to assume jurisdiction under section 148 section 148 to issue a reassessment notice.
In the present case the perio 8. In the present case the period of 3 years from the end of the d of 3 years from the end of the Assessment Year 2017 Assessment Year 2017-2018 fell for completion on 31st March 2018 fell for completion on 31st March 2021. The expiry date fell during the time period of 20th March 2021. The expiry date fell during the time period of 20th March 2021. The expiry date fell during the time period of 20th March 2020 and 31st March 2021, contemplated under 2020 and 31st March 2021, contemplated under Section 3(1) Section 3(1) of TOLA. Resultantly, the authority specified under TOLA. Resultantly, the authority specified under Section 151(i) Section 151(i) of the new regime could have granted sanction till 30 th June of the new regime could have granted sanction till 30 th June of the new regime could have granted sanction till 30 th June 2021. On perusal of the order, dated 30/07/2022, passed 2021. On perusal of the order, dated 30/07/2022, passed 2021. On perusal of the order, dated 30/07/2022, passed under Section 148A(d) Section 148A(d) of the Act we find that the aforesaid of the Act we find that the aforesaid order was passed after taking approval from Principal order was passed after taking approval from Principal order was passed after taking approval from Principal Commissioner of Income Tax. Since the aforesaid order was Commissioner of Income Tax. Since the aforesaid order was Commissioner of Income Tax. Since the aforesaid order was passed after the expiry of 3 years f passed after the expiry of 3 years from the end of the rom the end of the Assessment Year 2017 Assessment Year 2017- 2018, as per the new regime, the 2018, as per the new regime, the authority specified under authority specified under Section 151(ii) of the Act (i.e. Principal of the Act (i.e. Principal Chief Commissioner or Chief Commissioner) was required to Chief Commissioner or Chief Commissioner) was required to Chief Commissioner or Chief Commissioner) was required to grant ant ant approval. We note approval. We note that even the notice, dated approval. We note that that even the notice, even the notice, dated dated 30/07/2022, was issued under 30/07/2022, was issued under Section 148 of the Act (new of the Act (new regime) after obtaining the prior approval of the Principal regime) after obtaining the prior approval of the Principal regime) after obtaining the prior approval of the Principal Commissioner of Income Tax. Accordi Commissioner of Income Tax. Accordingly, we conclude that in ngly, we conclude that in the present case the approval has been obtained by authority the present case the approval has been obtained by authority the present case the approval has been obtained by authority specified under specified under Section 151(i) of the new regime instead of the of the new regime instead of the authority specified under authority specified under Section 151(ii) of the new regime. of the new regime.
The non-compliance by the Assessing Officer with the compliance by the Assessing Officer with the compliance by the Assessing Officer with the provisions Assessment Year 2017 provisions Assessment Year 2017-18 contained in Section 18 contained in Section 148A(d) read with 148A(d) read with Section 151(ii) of the new regime affects the of the new regime affects the jurisdiction of the Assessing Officer to issue a notice under jurisdiction of the Assessing Officer to issue a notice under jurisdiction of the Assessing Officer to issue a notice under Section 148 of the Act. Accordingly, the order, dated of the Act. Accordingly, the order, dated 30/07/2022 passed under 30/07/2022 passed under Section 148A(d) of the Act, the of the Act, the consequential reassessment proceedings and the order, dated consequential reassessment proceedings and the order, dated consequential reassessment proceedings and the order, dated 25/05/2023, passed under 25/05/2023, passed under Section 147 read with Section 144B Section 144B of the Act are quashed as bad in law being violative of the of the Act are quashed as bad in law being violative of the of the Act are quashed as bad in law being violative of the provisions contained in Section 148A(d), provisions contained in Section 148A(d), Section 148 Section 148 and Section 151(ii) Section 151(ii) of the Act. Thus, Cross-Objection raised by the Objection raised by the Assessee is allowed and accordingly, all the grounds raised by Assessee is allowed and accordingly, all the grounds raised by Assessee is allowed and accordingly, all the grounds raised by the Revenue in the departmental appeal in relation to the relief the Revenue in the departmental appeal in relation to the relief the Revenue in the departmental appeal in relation to the relief granted by the CIT(A) on merits are dismissed as having been granted by the CIT(A) on merits are dismissed as having been granted by the CIT(A) on merits are dismissed as having been rendered infructuous. dered infructuous.”
4.3 In view of the aforesaid discussion, the reassessment In view of the aforesaid discussion, the reassessment In view of the aforesaid discussion, the reassessment proceedings in the case of the assessee are quashed. The ground proceedings in the case of the assessee are quashed. The ground proceedings in the case of the assessee are quashed. The ground No. 5 of the appeal of the assessee is accordingly allowed. No. 5 of the appeal of the assessee is accordingly allowed. No. 5 of the appeal of the assessee is accordingly allowed.
4.4 Since we have already quashed the reassessment p Since we have already quashed the reassessment p Since we have already quashed the reassessment proceedings, the other grounds raised by the assessee are rendered merely the other grounds raised by the assessee are rendered merely the other grounds raised by the assessee are rendered merely academic and therefore we are not adjudicating upon the same. academic and therefore we are not adjudicating upon the same. academic and therefore we are not adjudicating upon the same.
In the result, the appeal of the assessee is allowed. In the result, the appeal of the assessee is allowed. In the result, the appeal of the assessee is allowed.