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TMI Blog2025 (2) TMI 891X X X X Extracts X X X X X X X X Extracts X X X X ..... hus, is rendered as bad in law, therefore, stands quashed.
As the impugned assessment for AY 2014-15 in the instant case has been rendered as quashed for the want of valid assumption of jurisdiction by the Ld. AO, therefore, we refrain to deliberate upon and to deal with the other contentions raised by the assessee qua the impugned addition made by the Ld. AO and to the extent sustained by the Ld. CIT(A), thus, the same is left open.
Assessment for the want of valid assumption of jurisdiction by the Ld. AO quashed, therefore, the issues raised by the revenue become infructuous, accordingly, the appeal of the revenue stands dismissed. X X X X Extracts X X X X X X X X Extracts X X X X ..... dustries vs. ITO In ITA No. 62& 74/RPR/2020 for the Asstt. Year 2014-15, without going to the merits of the case?" 2. "Whether on the facts and in the circumstance of the case Id. CIT(A) was justified in deleting the additions made by the AO to the tune of Rs. 1,49,23,907/- by applying GP @8% instead of entire bogus purchase?" 3. "Whether on the facts and in the circumstance of the case Id. CIT(A) has erred while deciding the appeal in favour of the appellant, failed to allude to relevant facts on record, misread the evidence and its probative value thereby giving rise to perversity in the order of Id. CIT(A), which itself gives rise to Question of Law as held in several case laws including the case of Sudarshan Silk and Sarees 300 ITR 205 (SC)?" 4. The order of the CIT(A) is erroneous both in law and on facts. 5. Any other ground which may be adduced at the-time of hearing. Grounds of Cross Objection in ITA No. 03/RPR/2025 (Arising out of ITA No. 30/RPR/2025): 1. Ld. CIT(A) erred in confirming addition of Rs. 10,99,243/- out of addition of Rs. 1,60,23,150/- made by AO on account of alleged bogus purchases from certain parties. The addition made by AO & confirmed by Ld. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,220/-. 6. Aggrieved by aforesaid additions by the Ld. AO, assessee preferred an appeal before the Ld. CIT(A), wherein Ld. CIT(A) had taken a different stand towards the purchases made by the assessee and had estimated profit on the amount of bogus purchases @ 8% which comes to Rs. 7,31,000/- (8% of Rs. 91,37,500/-) and the extra profit shown by the assessee in the return filed in response to notice u/s 148 for Rs. 2,79,600/- was reduced from the aforesaid estimated profit, accordingly, the addition of Rs. 4,51,400/- (7,31,000 - 2,79,600) was sustained by the Ld. CIT(A) and the appeal of assessee is partly allowed. 7. Against the aforesaid relief granted by the Ld. CIT(A), the department is in appeal to challenge the justification of relief granted for Rs. 86,86,100/-, whereas the assessee is in cross objection against the confirmation of addition for Rs. 4,51,400/- sustained by the Ld. CIT(A). 8. At the threshold of the hearing, Shri R. B. Doshi, CA, Authorized Representative of the assessee (in short "Ld. AR"), submitted that the notice u/s 148 issued in the present case is barred by limitation, therefore, the ground of Cross Objection No. 2, wherein the reassessment order is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessing officer to initiate proceedings only based on prior information and with the prior approval of the specified authority; (ii) Section 148A requires the A.O to provide an opportunity of being heard to the assessee before deciding to issue a reassessment notice u/s. 148 of the Act; (iii) Section 148A requires the A.O to, viz. (a) conduct any enquiry, if required, with the prior approval of the specified authority; (b) provide an opportunity of being heard to the assessee, with the prior approval of the specified authority; (c) consider the reply furnished by assessee, if any, in response to the show-cause notice; and (d) decide on the basis of material available on record including reply of the assessee, whether or not it is a fit case to issue a notice u/s.148 of the Act by passing an order; (iv) Further, the time limit under Section 149 has been reduced from four years to three years from the end of the relevant assessment year for all situations. However, an exception has been carved out, as per which, an assessment can be reopened beyond three years but within ten years from the end of the relevant assessment year if the income chargeable to tax which has escaped assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essment notices between April 1, 2021 and June 30, 2021 by relying on the provisions under Section 148 of the old regime. These reassessment notices issued between April 1 2021 and June 30, 2021 under the old regime were challenged by the assessee's before various High Courts, which quashed the same for the reasons, viz.(i) Sections 147 to 151 stood substituted by the Finance Act, 2021 from April 1, 2021; (ii) that in the absence of any saving clause, the department could initiate reassessment proceedings after April 1, 2021 only in accordance with the provisions of the new regime since they were remedial, beneficial, and meant to protect the rights and interests of the assessee's; and (iii) the Central Government could not exercise its delegated authority to re-activate the pre-existing law. 20. Thereafter, the Hon'ble Apex Court in the case of Union of India & Ors Vs. Ashish Agrawal, (2022) 444 ITR 1 (SC), to resolve the multi-facet controversies that had cropped up inter-se the assessee's and the department, had held, that it was in complete agreement with the view taken by the various High Courts in holding that the benefit of the new provisions shall be made availabl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Finance Act, 2021. There appears to be genuine non-- application of the amendments as the officers of the Revenue may have been under a bonafide belief that the amendments may not yet have been enforced. Therefore, we are of the opinion that some leeway must be shown in that regard which the High Courts could have done so. Therefore, instead of quashing and setting aside the reassessment notices issued under the unamended provision of IT Act, the High Courts ought to have passed an order construing the notices issued under unamended Act/unamended provision of the IT Act as those deemed to have been issued under section 148A of the IT Act as per the new provision section 148A and the Revenue ought to have been permitted to proceed further with the reassessment proceedings as per the substituted provisions of sections 147 to 151 of the IT Act as per the Finance Act, 2021, subject to compliance of all the procedural requirements and the defences, which may be available to the assessee under the substituted provisions of sections 147 to 151 of the IT Act and which may be available under the Finance Act, 2021 and in law. Therefore, we propose to modify the judgments and orders passe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... escapement; (iii) that a period of two weeks shall thereafter be allowed to the assessee's to file reply in response to the notice issued u/s. 148A(b) of the Act; (iv) the A.O shall, thereafter, pass an order u/s. 148A(d) of the Act with the prior approval of the specified authority, within one month from the end of the month, in which, the assessee's reply is received by him; or where no such reply is furnished, within one month from the end of the month in which time or extended time allowed to furnish the aforesaid reply expires. 21. Thereafter, the Hon'ble Apex Court in the case of Union of India and Ors. Vs. Rajeev Bansal (2024) 469 ITR 46 (SC) had, inter alia, further clarified as under: (i) The A.O is required to obtain prior approval of the specified authority according to section 151 of the new regime before passing an order under section 148A(d) or issuing a notice under section 148 of the Act which were required to be issued within the time limit specified under section 151 of the new regime r.w. TOLA, 2020, where applicable; (ii) that the directions issued by the Hon'ble Apex Court in the case of Union of India & Ors Vs. Ashish Agrawal (supra) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... test to determine whether TOLA will apply to Section 151 of the new regime is this: if the time limit of three years from the end of an assessment year falls between 20 March 2020 and 31 March 2021, then the specified authority under Section 151(i) has extended time till 30 June 2021 to grant approval; e. In the case of Section 151 of the old regime, the test is: if the time limit of four years from the end of an assessment year falls between 20 March 2020 and 31 March 2021, then the specified authority under Section 151(2) has extended time till 31 March 2021 to grant approval; f. The directions in Ashish Agarwal (supra) will extend to all the ninety thousand reassessment notices issued under the old regime during the period 1 April 2021 and 30 June 2021; g. The time during which the show cause notices were deemed to be stayed is from the date of issuance of the deemed notice between 1 April 2021 and 30 June 2021 till the supply of relevant information and material by the assessing officers to the assesses in terms of the directions issued by this Court in Ashish Agarwal (supra), and the period of two weeks allowed to the assesses to respond to the show cause notices; and h. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng an order under clause (d) of Section 148A of the Act was less than 7 days, then such remaining period shall be extended to seven days and the period limitation shall be deemed to be extended accordingly. Elaborating further on his contention, the Ld. AR submitted that the time started ticking for the A.O to issue notice u/s. 148 of the Act within the time period of 7 days from the lapse of period of two weeks (14 days) to respond to the SCN issued to the assessee firm u/s. 148A(b) of the Act, dated 25.05.2022, which, thus, lapsed on 16.06.2022. The Ld. AR submitted that as the A.O in the present case had issued notice u/s. 148 of the Act, dated 25.07.2022 i.e. much beyond the period of limitation which expires on 16.06.2022, therefore, the same was barred by limitation. 23. We have thoughtfully considered the contentions advanced by the Ld. Authorized Representatives of both the parties. Admittedly, the following facts are discernible from the record:- * Notice u/s. 148 of the Act under the old regime (deemed notice u/s 148A) was issued by the A.O to the assessee firm on 30.06.2021; * show-cause notice u/s 148A(b) of the Act was issued by the A.O to the assessee firm on 26 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 03. The date on which, the time period of two weeks (14 days) from the date of issuing of notice u/s. 148A(b) [as per the judgment of the Hon'ble Apex Court in the case of Union of India & Ors Vs. Ashish Agrawal (supra)]has been lapsed. 02.06.2022 04. the balance/surviving period available with the A.O to issue notice u/s 148 of the Act (under new regime) [time between the date of issuance of notice u/s.148A of the Act as per Sr. No. 1 of this table and 30.06.2021] i.e. (extended time period under TOLA, 2020); 22 days (days from 09 to 30.06.2021) 05. the balance/surviving period available with the A.O for passing an order under clause (d) of 148A of the Act: (i) the days calculated at Sr. No.4 of this table or (ii) 7 days (as per the "fourth proviso" to Section 148A of the Act, the period of limitation so available would stand extended to 7 days), whichever is higher 22 days 06. the A.O could have validly issued notice u/s. 148 of the Act (under the new regime) latest by the days from the date under Sr. No. 3 of this table (i.e., date of issuance of notice u/s 148A(b) 23.06.2022 (22 days fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 66. By virtue of Section 3(1) of TOLA time for completion of specified acts, which fell during the period 20.03.2020 to 31.12.2020 were extended till 30.06.20218. Thus, the notice dated 01.06.2021 was issued twenty-nine days prior to the expiry of period of limitation for issuing a notice under Section 148 of the Act as was extended by TOLA. As noted above, the period from 01.06.2021, the date of issuance of notice, and 04.05.2022, being the date of decision of the Supreme Court in Union of India & Ors. v. Ashish Agarwal2 is required to be excluded by virtue of the third proviso to Section 149(1) of the Act. 67. Additionally, the period from the date of decision in Union of India & Ors. v. Ashish Agarwal2 till the date of providing material, as required to the accompanied with a notice under Section 148A(b) of the Act, is required to be excluded. Thus, the period between 04.05.2022 to 30.05.2022, the date on which the AO had issued the notice under Section 148A(b) of the Act in furtherance of his earlier notice dated 01.06.2021, is also required to be excluded by virtue of the third proviso to Section 149(1) of the Act as held by the Supreme Court in Union of India & Ors. v. Raje ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mpugned order dated 30.07.2022 passed under Section 148A(d) of the Act; the impugned notice dated 30.07.2022 issued under Section 148 of the Act; and the assessment order dated 30.05.2023 framed under Section 147 of the Act pursuant to the notice dated 30.07.2022 for AY 2013-14, are set aside. Pending application is also disposed of. 16. As the impugned assessment for AY 2014-15 in the instant case has been rendered as quashed for the want of valid assumption of jurisdiction by the Ld. AO, therefore, we refrain to deliberate upon and to deal with the other contentions raised by the assessee qua the impugned addition made by the Ld. AO and to the extent sustained by the Ld. CIT(A), thus, the same is left open. 17. Adverting to the grounds of appeal raised by the revenue in ITA No.29/RPR/2025 for the AY 2014-15, as we have quashed the assessment for the want of valid assumption of jurisdiction by the Ld. AO, therefore, the issues raised by the revenue become infructuous, accordingly, the appeal of the revenue stands dismissed. 18. In result, the appeal of assessee in ITA No. 29/RPR/2025 of the revenue is dismissed and CO of the assessee in CO No. 02/RPR/2025 is allowed. 19. Havin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... framed on the basis of notice u/s 148 (new regime) dated 29.06.2022, which is barred by limitation, cannot survive, therefore, stands quashed. 21. As the impugned assessment for AY 2015-16, in the instant case has been rendered as quashed for the want of valid assumption of jurisdiction by the Ld. AO, therefore, we refrain to deliberate upon and to deal with the other contentions raised by the assessee in CO No. 03/RPR/2025 qua the impugned addition made by the Ld. AO and to the extent sustained by the Ld. CIT(A), thus, the same is left open. 22. Adverting to the grounds of appeal raised by the revenue in ITA No.30/RPR/2025 for the AY 2015-16, as we have quashed the assessment for the want of valid assumption of jurisdiction by the Ld. AO, therefore, the issues raised by the revenue become infructuous, accordingly, the appeal of the revenue stands dismissed. 23. In result, the appeal of assessee in ITA No. 30/RPR/2025 of the revenue is dismissed and CO of the assessee in CO No. 03/RPR/2025 is allowed. 24. In combined result, both the appeals of revenue i.e., ITA No. 29 & 30/RPR/2025 is dismissed and Cross Objections of the assessee in CO No. 02 & 03/RPR/2025 is allowed, in term ..... X X X X Extracts X X X X X X X X Extracts X X X X
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