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Income Tax Appellate Tribunal, DELHI BENCH: ‘D’ NEW DELHI
Before: SHRI M BALAGANESH & SHRI VIMAL KUMAR
PER VIMAL KUMAR, JUDICIAL MEMBER:
The appeal filed by the Department of Revenue is against order dated 11.02.2025 of Learned Commissioner of Income Tax (Appeals)/National Faceless Assessment Centre (NFAC), Circle-3(1)(1), Delhi (hereinafter referred to as “Ld. CIT(A)") under Section 250 of the Income Tax Act, 1961 (hereinafter referred to as "the Act”) arising out of order dated 29.05.2022 of the Learned Assessing Officer/Assessment Unit ((hereinafter referred to as "Ld. AO") assessment year 2022-23 under Sections 147 r.w.s. 144B of the Income Tax Act, 1961 (hereinafter referred as “the Act”) for A.Y. 2015-16.
Brief facts of the case are that as per information during financial year 2014-15 relevant to assessment year 2015-16 deposits/credits in ICICI Bank bearing bank Account Number 093205500016 of Rs.10,42,24,212/- on various dates were made. Proceedings under Section 148A of the Act were initiated as per the directions of the Hon'ble Supreme Court of India in Civil Appeal No. 3005/2022 An opportunity of being hearing was provided to the assessee by issuing show-cause notice dated 31.05.2022. The assessee filed his reply in response to the said notice. Subsequently, order under Section 148A(d) of the Act was passed after obtaining approval from the competent authority on 27.07.2022 and further notice under Section 148 of the Act was issued to the assessee on 27.07.2022. Notice under Section 148 of the Act dated 29.07.2022, intimation letter dated 02.11.2022, notice under Section 142(1) dated 20.01.2023, letter dated 27.02.2023, notice under Section 142(1) dated 24.03.2023 dated 20.04.2023 and 12.05.2023, notices under Section 143(2) dated 18.05.2023 were issued. Assessee submitted part responses to the notices. On completion of proceedings, Ld. AO vide order dated 29.05.2023 made addition of Rs.14,84,08,807/-.
Against order dated 29.05.2023 of Ld. AO, the appellant/assessee filed appeal before Ld. CIT(A) which was allowed vide order dated 11.02.2025.
4. Being aggrieved, Department of Revenue, preferred present appeal with following grounds: “
1. That the Id. CIT(A) is failed to appreciate the fact that the order u/s 148A(d) issued on 27.07.25022 in consequence to Hon'ble SC order dated 04.05.2022 wherein as per decision of Hon'ble Supreme Court in Civil Appeal No. 3005/2022, the notices under section 148 issued to the respective assessee after 01.04.2021 under un-named, provisions, shall be deemed to have been issued under section 148A of the I.t. Act as substituted by the Finance Act, 2021 and construed or treated to be show cause notices in terms of section 148A(b) of the I.t. Act, 1961. In view of this order produced by the Hon'ble Supreme Court, notices under section 148 already issued in this case is treated as show cause notice under section 148A(b). In view of the decisions and instruction No. 01/2022 issued by CBDT, underlying information & Material was supplied to the assessee vide this office letter dated 31.05.2022 through speed post.
2. That the Id. CIT(A) is failed to appreciate the fact that the order and notices issued during the re-assessment proceedings was as per procedure established by law and there was no violation of any principles of Natural Justice as proper opportunity of hearing was given to the assessee and all the statutory requirement of law in true sense was followed. The provisions of section 149, as it stood prior to the amendment by Finance Act, 2021 provides that the time limit-for issuance of notice under section 148 of the Act for the relevant assessment year is four years from the end of relevant assessment year or four to six years from the end of relevant assessment year in case the income chargeable to tax which has escaped assessment amounts to or is likely to amount to one lakh rupees or more for that year. For ready reference-of this Hon’ble Court, provisions of Section 149 of the Act, as it stood prior-to-the amendment by the Finance Act, 2021 is reproduced as under "Section 149 (prior of amendment by Finance Act, 2021) 149. Time limit for notice. (1) No notice under section 148 shall be issued for the relevant assessment year, (a) if four years have elapsed from the end of the relevant assessment year, unless the case falls under clause (b) and clause (c):
(b) if four years, but not more than six years, have elapsed from the end of relevant assessment year unless the income chargeable to tax which has escaped assessment amounts to or is likely to amount to one lakh rupees or more for that year......" As such, for the relevant A.Y. 2015-16, the time limit for issuance of the notice under section 148 of the Act was falling to expire on 31.03.2022 i.e. six years from the end of the A.Y. 2015-16. As the entire nation was going through the phase of Covid-19 pandemic in the year 2020-2021 & 2021-22, the Legislature in its wisdom- brought Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 (TOLA) vide notification dated 29.09.2020 in view of the provisions of section 3 of the TOLA the time limit for issuance of notice under unamended section 149 which was falling from 20.03.2020 till 31.03.2021 was extended up till the date as the Central Government may by notification specify in this behalf. In view of the powers conferred under the said Act, the Government of India vide its Notification No. 20/2021 dated 31.03.2021 and Notification No. 38/2021 dated 27.04.2021, extended the said period of time limit up till 30.06.2021. Since, the period of issuance of notice under unamended section 149 stood extended up till 30.06.2021, the initial notice issued by the department on 29.06.2021 under section 148 of the Act was rightly issued well in time. However, since the procedure for issuance of notice under Section 148 changed parallelly w.e.f. 01.04.2021 by insertion of section 148A into the Act the Hon'ble Supreme Court in all such matter by invoking the provisions of Article 142 of the Constitution of India in the case of Union of India vs Ashish Aggarwal, 2022 SCC Online SC 543 held that notices issued under section 148 of the Act between 01.04.2021 to 30.06.2021 will be deemed to have been issued under section 148A of the Act and as such the notice dated 16.04.2021 herein issued to the Petitioner stood revived in terms of the Ashish Aggarwal (supra). As such, in all nutshell, the time limit for issuance of notice under unamended Section 149 stood extended in law up till 30.06.2021 and as such, the notice (s) issued within the said extended period of the time cannot be said be time barred. Consequent to the fact and law that the time period stood extended up till 30.06.2021 and in terms of the directions issued by the Hon'ble Supreme Court of India in Ashish Aggarwal (supra), it was only the procedure which was ordered to adopted by issuance of notice under section 148A thereby upholding and reviving the initial notices under section 148 of the Act. As such, since the initial notices were issued within the extended period of time, the notice dated 31.05.2022 issued under section 148A(b) of the Act and the order passed under section 148A(d) of the Act cannot be said to be violative of the proviso to the amended section 149 of the Act. A perusal of amended section 149 of the Act and more specifically the Proviso' to the section would show that it is only where notice could not have been issued in time on account of being time barred under the unamended Section 149, the same cannot be issued under amended Section 149 of the Act. For kind reference of this Hon'ble Court, the amended provisions of section 149 is reproduced as under “section 149 (as it stood amended by Finance Act, 2021) Time Limit for notice. Section 149.-(1) No notice under section 148 shall be issued for the relevant assessment year, (a) if three years have elapsed from the end of the relevant assessment year, unless the case falls under clause (b); (b) if three years, but not more than ten years, have elapsed from the end of the relevant assessment year unless the Assessing Officer has in his possession books of account or other documents or evidence which reveal that the income chargeable to tax, represented in the form of asset, which has escaped assessment amounts to or is likely to amount to fifty lakh rupees or more for that year:; Provided that no notice under section 148 shall be issued at any time in a case for the relevant assessment year beginning on or before 1st day of April, 2021, if such notice could not have been issued at that time on account of being beyond the time limit specified under the provisions of clause (b) of sub section (1) of this section, as they stood immediately before the commencement of the Finance Act, 2021: As such, since the initial notice was within the period of Extended period of time, the said proviso would not get attracted and ds such the plea of the Petitioner to this effect is not sustainable in the eyes of law. Moreover, in the absence of challenge to the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 (TOLA) and consequent notifications, no directions contrary to the law can be sought by the Petitioner. Therefore, the writ petition deserves to be dismissed on this ground alone.
3. That the Id. CIT(A) is failed to appreciate the fact that so far as challenge to the CBDT Instructions No. 1/2022 dated 11.05.2022 is concerned, the same are also not tenable in the eyes of law and are as such liable to be rejected. The initial reassessment notice for AY 2015-16 has been issued to the assessee within the said extended period of limitation. The Hon'ble Supreme Court has declared that the said reassessment notice be deemed as a notice issued under section 148A of the Act and permitted revenue to complete the said proceedings. In this. case, the income alleged to have escaped assessment is more than Rs.50 lakhs and therefore, the rigour of section 149 (as amended by the Finance Act, 2021) has been satisfied.
That the Id. CIT(A) is failed to appreciate the fact that a bare reading of the provisions of section 148A of the Act would show that the only intention of the said section is to form a prima facie view as to whether a notice under section 148 of the Act is required to be issued to the Assessee or not. The Department is yet to conduct the fact finding assessment of the income of the assessee wherein the assessee would get all opportunities to put forth its defence along with all supporting documents. The assessee as such cannot be allowed to bypass the complete mechanism of the statutory procedure provided under the Act and challenge to the order passed under section 148A (d) of the Act, which is nothing but a prima facie opinion for commencement of the reassessment proceedings by issuance of notice under section 148 of the Act.
5. That the Id. CIT(A) is failed to appreciate the fact that the Hon'ble Apex Court in the case Anshul Jain Vs. Pr. Commissioner of Income Tax &Anr., (Divisional Bench), SLP (C) No. 14823 of 2022 dismissed the SLP filed by the Assessee aggrieved from decision of Hon'ble High Court for not rightly invoking writ jurisdiction to set aside the order passed under section 148A(d) as the same has to be agitated before the Assessing Officer in the re- assessment proceedings. The Hon'ble Apex Court held as under: "What is challenged before the High Court was the re- opening notice under Section 148A(d) of the Income Tax Act, 1961 The notices have been issued, after considering the objections raised by the petitioner. If the petitioner has any grievance 5.1 merits thereafter, the same has to be agitated before the Assessing Officer in the re-assessment proceedings. Under the circumstances, the High Court has rightly dismissed the writ petition. No interference of this Court is called for. The present Special Leave Petition stands dismissed."
That the Id. CIT(A) is failed to appreciate the fact that the Hon'ble Allahabad High Court in the case of Vivek Saran Agarwal v. Union of India and Others, Writ Tax No. 968 of 2023, dismissed the Writ Petition filed by the Assessee against the Tax Department, challenging the order passed under section 148A(d), on the ground that an alternative remedy was available to the Petitioner. The Hon'ble Court held as under: "....The ultimate determination made by the assessing authority under Section 147 for reassessments otherwise subject to appeal under Section 246-A of the Act Merits-of-the information referable to Section 148A thus remains subject to the reassessment proceedings initiated vide notice under Section 148 of the Act. It is for this reason that issues which require determination at the stage of reassessment proceedings and in respect of which departmental remedy is otherwise available are not required to be determined at the stage of decision by the assessing authority under Section 149A(d). The scope of decision under Section 148A(d) is limited to the existence or otherwise of information which suggests that income chargeable to tax has escaped assessment Thus, in our opinion, the impugned order under Section 148A(d) of the Act and notice under Section 148 would not warrant any interference under Article: 226 of the constitution of India as challenge to such order would be available to an assessee while challenging the order passed in reassessment proceedings consequent to the notice issued under Section 148 of the Act. The Apex Court in the case of Anshul Jain. Vs. Principal Commissioner, Income Tax, reported in (2022) 143 ...taxman.com 38 observed as under: - "What is challenged before the High Court was the re-opening notice under Section 148A(d) of the Income Tax Act, 1961. The notices have been issued, after considering the objections raised by the petitioner. If the petitioner has any grievance on merits thereafter, the same has to be agitated before the Assessing Officer in the re-assessment proceedings. Under the circumstances, the High Court has rightly dismissed the writ petition. No interference of this Court is called for. The present Special Leave Petition stands dismissed." In view of the above, we find no merit in the challenge laid to the order dated 25.05.2023 passed under Section 148A(d) of the Income Tax Act, 1961 as well as to the notice dated 26.07.2022 under Section 148 of the Act. The writ petition as framed fails and is dismissed. No order as to costs."
7. That the ld. CIT(A) is failed to appreciate the fact that the Hon'ble Delhi High Court in W.P.(C) 5787/2022 Gulmuhar Silk Pvt. Ltd. us. Income Tax Officer Ward 10(3) Delhi, while considering the above issue held that: "6. Though it is the petitioner's case that the impugned order is erroneous on facts, yet this Court is of the opinion that the petitioner would have ample opportunity during the course of proceedings before different statutory forums to show that the finding of fact arrived at was erroneous. Moreover, at this stage, no assessment order has been passed and it has only been observed that it is a fit case for issuance of notice under Section 148 of the Act. In fact, the Supreme Court in Commissioner of Income Tax and Ors. Vs. Chhabil Das Agarwal, (2014) 1 SCC 603 has held that as the Income Tax Act, 1961 provides complete machinery for assessment/reassessment of tax, assessee is not permitted to abandon that machinery and invoke jurisdiction of High Court under Article 226."
That the ld. CIT(A) is failed to appreciate the fact that the Hon'ble Calcutta High Court in the matter of Smt. RachnaSinghi v. Income Tax Officer, Ward 30(1), Kolkata and Anr., WPA 10215 of 2023, held that the order passed under section 148A(d) is neither a final assessment order nor any demand arises out of the same and hence any objection to the order may raise before the Statutory Authority and not to invoke the Writ Jurisdiction. The Hon'ble Court held as under: "I am also of the view that the order under Section 148A(d) of the Act is neither final assessment order nor any demand arises out of the same.
In view of the discussion made above, I am not inclined to entertain this writ petition being WPA 10215 of 2023, and accordingly, the same is dismissed. However, dismissal of this writ petition will not be a bar on the part of the petitioner to raise all the points in the impugned proceedings, which has been raised in this writ petition and the Assessing Officer to consider the same in accordance with law."
Learned Authorized Representative for the Department of Revenue submitted that Ld. CIT(A) failed to appreciate that the time limit for issuance of notice under Section 148 of the Act was expiring on 31.03.2022 i.e. six years from the end of assessment year 2015-16. The information was going through COVID -2019 Pandemic in the year 2020-21 and 2021-22, The legislature in its wisdom brought taxation and other laws (Relation and Amendment of Certain Provisions) Act, 2020 (TOLA) vide notification dated 29.09.2020 in view of the provisions of section 3 of the TOLA the time limit for issuance of notice under unamended section 149 which was falling from 20.03.2020 till 31.03.2021 was extended up till the date as the Central Government may by notification specify in this behalf. In view of the powers conferred under the said Act, the Government of India vide its Notification No. 20/2021 dated 31.03.2021 and Notification No. 38/2021 dated 27.04.2021, extended the said period of time limit up till 30.06.2021. Since, the period of issuance of notice under unamended section 149 stood extended up till 30.06.2021, the initial notice issued by the department on 29.06.2021 under section 148 of the Act was rightly issued well in time.
6. Learned Authorized Representative for the appellant/assessee relied on the impugned order.
From examination of record in light of aforesaid rival contentions, it is crystal clear that Ld. CIT(A) in para nos. 5.16 and 5.17 held as under: “5.16 During the course of argument in the matter, Mr N Venkataraman, learned Additional Solicitor General of India, inter alia made the following submissions on behalf of the Revenue- a. Section 149 of the new regime provides three crucial benefits to the assesses. These benefits will have to be allowed to the assessee with retrospective effect, they are- (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 for re- assessment beyond three years, b. 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:
AY Within year Expiry of Limitation Within Six Expiry of read with TOLA for Years (4) Limitation (2)(3) read with TOLA for (4)(5) 2013-14 31.03.2017 TOLA not applicable 31.03.2020 30.06.2021 2014-16 31.03.2018 TOLA not applicable 31.03.2021 30.06.2021 2015-16 31.03.2019 TOLA not applicable 31.03.2022 TOLA not applicable 2016-17 31.03.2020 TOLA not applicable 31.03.2023 TOLA not applicable 2017-18 31.03.2021 TOLA not applicable 31.03.2024 TOLA not applicable c. On the basis that TOLA will be applicable on proceedings of only such AY years, where proceeding was getting barred by limitation during the period starting from 20th of March 2020 and ending on 31st of March 2021 and accepting the beneficial provision of amended section 149 retrospective applicability, The Additional Solicitor General of India, on behalf of Revenue agreed that notices issued for the assessment year 2015-16, between 01.04.2021 and 30.06.2021 are not eligible for benefit of TOLA. Therefore, all notices issued on or after 1 April 2021 u/s 148 and before 30.06.2021, following the procedure of pre amended provisions of reassessment, will have to be dropped as they did not fall for completion during the period covered under TOLA and subsequent notification issued there under. For ready reference Para 19 f of Rajeev Bansal (supra) is quoted below- “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"
5.17 Now that it is admitted position of the notices issued under section 148 after 01.04.2021, following the old regime of re assessment was bad in law for AY. 2015-16, the impugned order of reassessment, which was initiated by issue of notice under section 148 on 29.06.2021 following the old regime of reassessment, will not survive for want of valid jurisdiction. Though, the appellant has not taken many of these arguments in his reply, in the spirit of justice, and following the binding precedence of Hon'ble Supreme Court and having regard to the stand for the revenue as spelt out by Hon'ble ASG in his submission before Hon'ble Supreme Court, the assumption of jurisdiction to re-assess is found to be bad in law and as a consequence the impugned order of assessment is also decided to be bad in law.”
8. In view of above discussion and observations of Ld. CIT(A), it is evident that for assessment year 2015-16, all the notices issued on or after 01.04.2021 are to be dropped being not covered by TOLA. Therefore, order of Ld. CIT(A) is upheld. The grounds of appeal nos. 1 to 8 being de void of merit are rejected.