HAZEL MERCANTILE LIMITED,MUMBAI vs. ASSISTANT COMMISSIONER OF INCOME TAX CENTRAL CIRCLE 4(4), MUMBAI, MUMBAI

ITA 3475/MUM/2023Status: DisposedITAT Mumbai30 May 2024AY 2016-1727 pages

AI SummaryN/A

Facts

The assessee's assessment for AY 2015-16 and 2016-17 was reopened under Section 147 of the Income Tax Act, 1961, leading to significant additions/disallowances. The assessee challenged the validity of the reassessment notices, which were dated 31/03/2021 but dispatched via email on 16/04/2021, arguing that the new reassessment regime (effective 01/04/2021) should apply, and the notices were unsigned, thus void-ab-initio or time-barred under the amended provisions, as per the Supreme Court's Ashish Agarwal judgment. The CIT(A) partly allowed the appeal, upholding the validity of reassessment but granting partial relief on merits.

Held

The Tribunal held that while the notices, despite being unsigned, were valid as they fulfilled the authentication requirements of Section 282A and Rule 127A, their date of issuance was the dispatch date (16/04/2021), not the generation date (31/03/2021). Consequently, the new reassessment regime and procedures mandated by the Ashish Agarwal judgment and CBDT Instruction No. 1/2022 applied. As the Revenue failed to follow these new procedures, the assessment orders passed under the un-amended provisions were quashed as bad in law, rendering the Revenue's appeals on merits infructuous.

Key Issues

1. Whether reassessment notices issued without a digital or physical signature are valid under the Income Tax Act. 2. What is the correct date of issuance for reassessment notices sent via email (generation date vs. dispatch date). 3. Whether the new reassessment regime (post-April 1, 2021 amendments) applies to notices dispatched after this date, and if failure to follow its procedure renders the assessment orders invalid.

Sections Cited

Section 147 of Income Tax Act, 1961, Section 148 of Income Tax Act, 1961, Section 148A of Income Tax Act, 1961, Section 149 of Income Tax Act, 1961, Section 151 of Income Tax Act, 1961, Section 143(1) of Income Tax Act, 1961, Section 143(3) of Income Tax Act, 1961, Section 153C of Income Tax Act, 1961, Section 132 of Income Tax Act, 1961, Section 133A of Income Tax Act, 1961, Section 69C of Income Tax Act, 1961, Section 10AA of Income Tax Act, 1961, Section 115JB of Income Tax Act, 1961, Section 282A of Income Tax Act, 1961, Section 292B of Income Tax Act, 1961, Section 144B(6)(i)(b) of Income Tax Act, 1961, Rule 127A of Income Tax Rules, 1962

IN THE INCOME TAX APPELLATE TRIBUNAL "E" BENCH, MUMBAI SHRI OM PRAKASH KANT, ACCOUNTANT MEMBER SHRI RAHUL CHAUDHARY, JUDICIAL MEMBER ITA No. 3476/MUM/2023 & ITA No. 3475/MUM/2023 (Assessment Year: 2015-16) (Assessment Year: 2016-17) M/s Hazel Mercantile Limited, Veritas House, 70 Mint Road, Fort, Mumbai - 400001 [PAN: AAACH2671K] Appellant Vs Assistant Commissioner of Income Tax, Central Circle 4(3), Mumbai, Air India Building, Nariman Point, Mumbai - 400021 Respondent AND ITA No. 3600/MUM/2023 & ITA No. 3596/MUM/2023 (Assessment Year: 2015-16) (Assessment Year: 2016-17) Deputy Commissioner of Income Tax, Central Circle 4(4), Mumbai, Room No. 1918, Air India Building, Nariman Point, Mumbai - 400021 Appellant Vs M/s Hazel Mercantile Limited, 181, Ashoka Shopping Centre, Mumbai G.P.O., Mumbai - 400001 [PAN: AAACH2671K] Respondent Appearance For the Appellant/Assessee : Shri Rakesh Joshi For the Respondent/Department : Shri P.D. Chougule Date Conclusion of hearing : 02.05.2024 Pronouncement of order : 30.05.2024 ORDER Per Bench This is a batch of two cross-appeals pertaining to Assessment Years 2015-16 and 2016-17 which were heard together as the same involved identical issues and are, therefore, being disposed off by way of a common order. Assessment Year 2015-16 With the consent of both the sides we would first take up cross-appeals for the Assessment Year 2015-16 as lead matters. These cross-appeals arise from the order, dated 31/07/2023, passed by the Learned Commissioner of Income Tax (Appeals)- 52, Mumbai [hereinafter referred to as `the CIT(A)'] whereby the CIT(A) had partly allowed the appeal preferred by the Assessee against the Assessment Order, dated 31/03/2022, for the Assessment Year 2015-16 passed under Section 147 of the Income Tax Act, 1961 [hereinafter referred to as `the Act']. The Assessee has raised the following grounds of appeal in ITA No. 3476/Mum/2023: 1. On the facts and circumstances of the case as well as in law, the Learned CIT(A) has erred in confirming the action of Learned Assessing Officer in reopening the assessment completed u/s.143(3) r.w.s 153C of the Income Tax Act, 1961, without considering the facts and circumstances of the case.

On the facts and circumstances of the case as well as in law, the Learned CIT(A) has erred in directing the assessing officer to examine the realization of exports, without considering the facts & circumstances of the case and the provisions of the Act.

On the facts and circumstances of the case as well as in law, the Learned CIT(A) has erred in restricting the addition to the extent of Rs.3,67,21,145/-u/s 69C of the Act, without considering the facts & circumstances of the case. The Assessee has also raised the following Additional Grounds of grounds of appeal vide letter dated 15/03/2024: 1. The Learned Assessing Officer has erred in serving unsigned notice u/s. 148 of the Income Tax Act, 1961 dated 31.03.2021 on 16.04.2021, which is barred by limitation as per the provision of section 149 of the Income Tax Act, 1961 and also in violation of provisions of section 282A of the Act.