ARYA INFRAHOUSING PRIVATE LIMITED,AGRA vs. THE PRESCRIBED AUTHORITY, NFAC, DELHI, ITO2(1)(1), AGRA, AGRA

The assessee did not file its return of income for the year. Pursuant to receipt of information that the assessee stood beneficiary of credit entries from certain entities, the case was reopened u/s 147 and a notice u/s 148 dated 31-03-2021 was issued to the assessee. The assessee filed return of income on 23-12-2021 declaring nil income. The same was followed by notices u/s 142(1) wherein the assessee was directed to substantiate the said credits. It was alleged by Ld. AO that the assessee received credit entries of Rs.195 Lacs from M/s Pawansut Housing Holding Ltd. (PHHL) and another credit entry of Rs.25 Lacs from M/s Junoon Capital Services Pvt. Ltd. (JCSPL). During the course of assessment proceedings, the assessee furnished various explanations and documentary evidences. The assessee stated the funds were used in business activity and the loans were repaid in subsequent years. In support, the assessee furnished account statement, assessment order, financial statements, income tax computations, confirmation of accounts etc with respect to both the entities. However, primarily going by the investigation findings, Ld. AO added both the amounts u/s 68. The Ld. AO also estimated commission of 2.5% against these items which resulted into another addition of Rs.5.50 Lacs u/s 69C. Finally, the assessment was framed which was subjected to assessee’s further challenge before Ld. CIT(A). The Ld. CIT(A) confirmed the same for want of submissions from the assessee. Aggrieved, the assessee is in further appeal before us.

The Ld. AR, at the outset, raised a pertinent legal issue and stated that notice u/s 148 though dated 31-03-2021, it was issued only on 01- 04-2021 and therefore, the same was clearly time barred. The Ld. AR referred to subsequent notice issued by Ld. AO u/s 148A(b) on 25-05- 2022, vide DIN and letter No. ITBA/COM/F/17/2022-23/1043159096(1) pursuant to the decision of Hon’ble Supreme Court in the case of UOI vs. Ashish Agarwal (CA No.2005/2022) holding that notices issued during the extended period 01-04-2021 to 30-06-2021 shall be deemed to be issued u/s 148A of the Act and was to be construed as notice issued in terms of Sed.148A(b) of the Act. In second para, Ld.AO has stated as under: - “The notice u/s 148 of the Income Tax Act, 1961 in your case was issued on 31.03.2021 for the A.Y.2013-14 with the prior approval of the competent authority u/s 152 of the Income Tax Act, 1961 and sent on 01.04.2021 through registered post. Therefore, your case is covered by the above-mentioned judgment. As such, I am enclosing herewith the relevant documents relied upon for issuing notice u/s 148 in your case for the A.Y.2013-14 (Annexure enclosed).”

Pursuant to the same, an order u/s 148A(d) has been passed on 31-07- 2022 which is followed by notice u/s 148 on the same day.

The above facts remain uncontroverted before us. It is quite clear that fresh proceedings have been initiated against the assessee on the same issue pursuant to the decision of Hon’ble Apex Court in the case of UOI vs. Ashish Agarwal (CA No.2005/2022). This being the case, the impugned assessment so framed by Ld. AO would not survive. The notice is clearly issued on 01-04-2021 and the proceedings would thus be nullity in view of subsequent decision of Hon’ble Supreme Court. The parallel proceedings could not continue against the assessee. Therefore, we quash the impugned assessment order.

The appeal stand allowed. Order pronounced u/r 34(4) of Income Tax (Appellate Tribunal) Rules, 1963.