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TMI Blog2024 (11) TMI 1029X X X X Extracts X X X X X X X X Extracts X X X X ..... date of reference, there was no valid proceeding pending before the ld. Assessing Officer, whereas for making any reference to the ld. PCIT by the ld. Assessing Officer during a pending proceeding is sine quo non, which were not there in the instant cases as these notices were clearly time barred by limitation. Therefore, on this count, we are inclined to quash the orders passed by the ld. PCIT withdrawing the approval under section 10(23C)(vi) of the Act. Second proviso to section 143(3) of the Act was brought on the Statute Book w.e.f. 1st April, 2022 and is accordingly applicable for A.Y. 2022-23 onwards - We observe that the AO is vested with the power to make reference during the course of pending proceedings before him but in the instant case a reference was made by the ld. AO under 2nd proviso to section 143(3) of the Act, which was not applicable to the assessments under consideration and thus the reference is also invalid and, therefore, the consequent orders passed by the ld. PCIT under section 10(23C)(vi) of the Act withdrawing the approval for all these assessment years are invalid and accordingly quashed. The ld. Case of the assessee finds support from the decision of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment orders were passed on 31.03.2022 under section 147/143(3) of the Act. For all the above assessment years, assessee appealed against before the ld. 1st Appellate Authority. In the meantime, the judgment of the Hon ble Supreme Court in the case of Union of India -vs.- Ashish Agrawal was pronounced on 4th May, 2022, wherein it was held that the reassessment notice issued under the Old Law (unamended provisions of the Income Tax Act, 1961) shall be deemed to be the show-cause notice issued under clause (b) of Section 148A of the new law (Amended provisions of Income Tax Act, 1961 by Finance Act, 2021) thereby directing the ld. Assessing Officer to provide the information and material relied upon by the revenue to the assessee along with notice under section 148A of the Act. Accordingly, ld. Assessing Officer declared the assessment orders framed on 31.03.2022 as invalid and issued a notice under section 148A(b) of the Act to the assessee on 25.05.2022 for assessment years 2018-19, 2019-20 and 2020-21. Orders under section 148A(d) of the Act were accordingly passed and notices under section 148 of the Act were issued to the assessee on 21.07.2022, 22.07.2022 and 26.07.2022for the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Shah which belied the allegation of siphoning of funds and as a matter of fact, the money was used for meeting the expenses of the society and not for personal purposes as alleged. The said reply of the assessee was not accepted by the ld. PCIT and finally he held that the assessee-society was not eligible for recognition/approval under section 10(23C)(vi) of the Act for assessment years 2017-18 to 2020-21 and the Notification issued earlier dated 04.07.2013 was withdrawn. 5. The ld. A.R. vehemently submitted before the bench that withdrawal of approval under section 10(23C) of the Act for A.Ys. 2018-19 to 2021-22 was invalid and was not in consonance with the provisions of the Act. The ld. A.R. submitted that the second proviso to section 143(3) of the Act was inserted in the Statute Book w.e.f. 01.04.2022 and was accordingly applicable to A.Y. 2022-23 onwards. However, ld. PCIT, Patna, consequent to a reference made by the ld. Assessing Officer under 2nd proviso to section 143(3) of the Act, passed the impugned orders withdrawing the approval granted to the society under section 10(23C)(vi) of the Act for A.Ys. 2018-19 to 2021-22. The ld. A.R. submitted that the very initiation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der section 148 of the Act dated 30.06.2021 as invalid for all the assessment years, i.e. 2018-19, 2019-20 and 2020-21 by issuing fresh notice under section 148A(b) of the Act dated 25.05.2022 by virtue of the judgment of the Hon ble Apex Court in the case of Union of India -vs.- Ashish Agarwal (supra). 6. The ld. A.R. submitted that in the meantime, the most recent judgment of the Hon ble Apex Court in the case of Rajeev Bansal and Others was pronounced on 03.10.2024 reported in [2024] 167 taxmann.com 70 (SC), wherein it was held that the time during which the show cause notices were deemed to be stayed is from the date of issuance of the deemed notice between 1st April, 2021 and 30th June, 2021 till the supply of relevant information and material by the Assessing Officers to the assessee in terms of the directions issued by this Court in Ashish Agarwal (supra) and the period of two weeks was to be allowed to the assessee to respond to the show cause notices. It was further submitted that the ld. Assessing Officer was required to issue the reassessment notice under section 148 under the new regime within the time limit surviving under the Income Tax Act read with TOLA and all noti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e ld. Assessing Officer to make reference to the ld. PCIT which was sine quo non for making reference under second proviso to section 143(3) of the Act for assessment years 2018-19, 2019-20 and 2020-21. Finally, to sum up the arguments, the ld. A.R. prayed that the impugned orders passed by the ld. PCIT withdrawing the approval granted to the assessee under section 10(23C)(vi) of the Act were without jurisdiction and liable to be quashed for the following reasons:- (i) 2nd proviso to section 143(3) of the Act was not applicable for the subject assessment years being A.Ys. 2018-19 to 2021-22 and therefore the reference was itself invalid and not as per the provisions of the Act. (ii) Reference was made under 2nd proviso to section 143(3) of the Act, during the course of invalid proceedings for A.Ys. 2018-19, 2019-20 and 2020-21, which were barred by limitation meaning thereby that no valid pending proceedings as on the date reference when it was made to PCIT. (iii) Reference was made in terms of 2nd proviso of section 143(3) to the ld. PCIT (Central), Patna to whom the ld. Assessing Officer was subordinate is not permissible, rather it was the dl. Commissioner (exemptions), Patna ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act on the founder of the assessee-Society Shri Nand Kumar Prasad Shah (deceased) on 17.09.2020, when it was found that certain receipts were not accounted for by the assessee-Society in its books of account. The assessments were framed by the ld. Assessing Officer under section 143(3) read with section 147 vide orders dated 31.03.2022 for A.Ys. 2015-16 to 2020-21. The said assessment orders were challenged before the ld. CIT(Appeals), but due to the decision of the Hon ble Apex Court in the case of Union of India -vs.- Ashish Agarwal dated 4th May, 2022, the ld. Assessing Officer declared the assessment orders framed on 31.03.2022 as invalid and issued fresh notices under section 148A(b) of the Act to the assessee on 25.05.2022 for assessment years 2018-19, 2019-20 and 2020-21. Thereafter orders under section 148A(d) of the Act were passed and notices under section 148 were issued to the assessee on 21.07.2022, 22.07.2022 and 26.07.2022. During the said proceedings, the ld. Assessing Officer made a reference to the ld. PCIT (Central), Patna vide letters dated 22.12.2022 in terms of second proviso to section 143(3) of the Act and accordingly ld. PCIT, Patna issued notices to the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 148 of the Act under the new regime dated 21.07.2022 for A.Y. 2018-19, on 22.07.2022 for A.Y. 2019-20 and dated 26.07.2022 for A.Y. 2020-21 were clearly barred by limitation. In other words, on the date of reference, there was no valid proceeding pending before the ld. Assessing Officer, whereas for making any reference to the ld. PCIT by the ld. Assessing Officer during a pending proceeding is sine quo non, which were not there in the instant cases as these notices were clearly time barred by limitation. Therefore, on this count, we are inclined to quash the orders passed by the ld. PCIT withdrawing the approval under section 10(23C)(vi) of the Act. 12. So far as the second contention of the assessee is concerned, that the second proviso to section 143(3) of the Act was brought on the Statute Book w.e.f. 1st April, 2022 and is accordingly applicable for A.Y. 2022-23 onwards, we observe that the AO is vested with the power to make reference during the course of pending proceedings before him but in the instant case a reference was made by the ld. Assessing Officer under 2nd proviso to section 143(3) of the Act, which was not applicable to the assessments under consideration and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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