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TMI Blog2024 (11) TMI 763X X X X Extracts X X X X X X X X Extracts X X X X ..... irection of Shri Ashish Agarwal will extent to all re-assessment notice issued in old regime i.e. from 01/04/2021 to 30/06/2021 and finally Court held that ld. AO was required to issue re-assessment notice u/s. 148 under the new regime within the time limit surviving u/s. 148 of the Income Tax Act r.w. TOLA. Thus, in all such instances for the relevant assessment years under question the time limit was extended only up to 30/06/2021 for issuance of notice u/s. 148. Now here in this case as noted above for A.Y.2013-14 after 148A (b), notice u/s. 148 was issued on 29/07/2022; for A.Y. 2014-15 it was issued on 31/07/2022; and for A.Y.2015-16 it was issued 28/07/2022. Thus, in all these years as noted above the original time limit for six years for A.Y.2013-14 was upto 31/03/2020; for 2014-15 it was 31/03/2021; and for A.Y. 2015-16 it was 31/03/2022. Even under the TOLA, the time limit for issuance of notice u/s 148 had expired on 30/06/2021 both for A.Y. 2013-14 A.Y. 2014-15. For the A.Y.2015-16, the Revenue itself has contended before the Hon ble Supreme Court as noted above, all the notices issued on or after 01/04/2021 will have to be dropped as they will not fall for completion du ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the old law are deemed to be show-cause notice issued under 148(b) under the new law and has directed the ld. AO to follow the procedure with respect to such notices. Accordingly, ld. AO provided the information and material relied upon the issue of notice u/s. 148 to the assessee on 28/05/2022 as per the provision of Section 148A(b) and order u/s. 148A(d) was passed and simultaneously notice u/s. 148 was issued on 29/07/2022. 5. Similarly, in A.Y.2014-15 first notice u/s. 148 was issued on 23/04/2021 and thereafter, another notice was issued u/s. 148 on 26/04/2021. The reasons for reopening were provided on 04/08/2021 against which assessee filed an objection on 24/09/2021 which was disposed of by the ld. AO vide order dated 13/12/2021. The ld. AO thereafter, issued a letter dated 28/05/2022, in view of the decision of the Hon ble Supreme Court in the case of Ashish Agarwal (supra) wherein, ld. AO treated the notice u/s. 148 issued on 26/04/2021 as notice issued u/s. 148(b) which was issued by the JAO. Order u/s. 148A (d) passed on 28/07/2022 and notice u/s. 148 was issued on 31/07/2022. 6. For A.Y.2015-16 first notice and second notice was issued on 23/04/2021 and 26/04/2021 and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it 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, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mediately before the commencement of the Finance Act, 2021. Thus, the proviso specifically refers to the time limits specified under Section 149(1)(b) of the old regime. The Revenue accepts that without application of TOLA, the time limit for issuance of reassessment notices after 1 April 2021 expires for assessment years 2013-2014, 2014-2015, 2015-2016, 2016-2017, and 2017-2018 in the following manner: (i) for the assessment years 2013-2014 and 2014-2015, the six year period expires on 31 March 2020 and 31 March 2021 respectively; and (ii) for the assessment years 2016-2017 and 2017-2018, the three year period expires on 31 March 2020 and 31 March 2021 respectively. a. Finance Act 2021 substituted the old regime. 11. Thereafter, the Hon ble Supreme Court has elaborated the law brought by the Finance Act, 2021 substituting u/s. 147 to 151 and the TOLA providing for relaxation of time limit prescribed under the specified Acts. Further, their Lordships have also observed that Section 3(1) of TOLA starts with non-obstante clause which has to be read as controlling the provisions of the specified Acts including the provision of Income Tax Act which also overrides Section 149 only to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... after the expiry of four years, and (ii) If income escaping was more than Rupees one lakh (a) a reassessment notice could be issued within four years after obtaining the approval of the Joint Commissioner: and (b) after four years but within six years after obtaining the approval of the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner 75. After 1 April 2021, the new regime has specified different authorities for granting sanctions under Section 151 The new regime is beneficial to the assessee because it specifies a higher level of authority for the grant of sanctions in comparison to the old regime. Therefore, in terms of Ashish Agarwal (supra), after 1 April 2021, the prior approval must be obtained from the appropriate authorities specified under Section 151 of the new regime. The effect of Section 151 of the new regime is thus (i) If income escaping assessment is less than Rupees fifty lakhs: (a) a reassessment notice could be issued within three years after obtaining the prior approval of the Principal Commissioner, or Principal Director or Commissioner or Director, and (b) no notice could be issued after the expiry of three years, a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ourt in Ashish Agarwal (supra) and the provisions of the Income Tax Act read with TOLA. a. Third proviso to Section 149 95. The third proviso to Section 149 reads thus: Provided also that for the purposes of computing the period of limitation as per this section, the time or extended time allowed to the assessee, as per show-cause notice issued under clause (b) of section 148A or the period during which the proceeding under section 148A is stayed by an order or injunction of any court, shall be excluded. 96. The third proviso excludes the following periods to calculate the period of limitation: (i) the time allowed to the assessee under Section 148A(b); and (ii) the period during which the proceedings under Section 148A are stayed by an order or injunction of any court. 14. Finally, after analyzing the judgment of Shri Ashish Agarwal in various time limits provided in the Act and the time extended by TOLA, the Hon ble Supreme Court concluded as under:- 114. In view of the above discussion, we conclude that: a. After 1 April 2021, the Income Tax Act has to be read along with the substituted provisions; b. TOLA will continue to apply to the Income Tax Act after 1 April 2021 if any ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd if the time limit of three years falls between 21/03/2021 and 31/03/2021 then the specified authority u/s. 151(i) has extended time limit till 30/06/2021. The direction of Shri Ashish Agarwal will extent to all re-assessment notice issued in old regime i.e. from 01/04/2021 to 30/06/2021 and finally Court held that ld. AO was required to issue re-assessment notice u/s. 148 under the new regime within the time limit surviving u/s. 148 of the Income Tax Act r.w. TOLA. Thus, in all such instances for the relevant assessment years under question the time limit was extended only up to 30/06/2021 for issuance of notice u/s. 148. 16. Now here in this case as noted above for A.Y.2013-14 after 148A (b), notice u/s. 148 was issued on 29/07/2022; for A.Y. 2014-15 it was issued on 31/07/2022; and for A.Y.2015-16 it was issued 28/07/2022. Thus, in all these years as noted above the original time limit for six years for A.Y.2013-14 was upto 31/03/2020; for 2014-15 it was 31/03/2021; and for A.Y. 2015-16 it was 31/03/2022. Even under the TOLA, the time limit for issuance of notice u/s 148 had expired on 30/06/2021 both for A.Y. 2013-14 A.Y. 2014-15. For the A.Y.2015-16, the Revenue itself has c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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