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TMI Blog2024 (3) TMI 1419X X X X Extracts X X X X X X X X Extracts X X X X ..... advocate Mrs. Kalpana K. Raval for the respondent. 2. Rule returnable forthwith. Learned Senior Standing Counsel Mr. Varun Patel waives service of notice of rule for the respondents. 3. Having regard to the controversy in the narrow compass, with the consent of the learned advocates for the parties, the matter is taken up for hearing. 4. Brief facts of the case are as under: 4.1 The petitioner is a Limited Liability Partnership and had filed its return of income for A.Y. 2018-19 on 16.08.2018 declaring total income at Rs. 2,20,86,330/-. The case of the petitioner was selected for limited scrutiny under E-assessment scheme for verification of expenses incurred for earning exempt income and Share capital/other capital. Assessment was finalized and the assessment order u/s. 143(3) of the Income Tax Act,1961 (for short 'the Act') was passed on 23.03.2021 accepting the returned income as assessed income. 4.2 On 21.03.2022, respondent has issued notice u/s 148A(b) of the Act for re-assessment of income for A.Y. 2018-19. The main contention for re-opening of the case was that objections were raised by the Comptroller and Auditor General of India that it was observed from the Balance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , STT paid, brokerage, etc. was given. It was therefore, submitted that the capital gain is exempt u/s 10(38) of the IT Act. 4.6 However, by way of an order dated 07.04.2022 passed under section 148A(d) of the Act, the respondent has rejected the objection raised by the petitioner and issued notice u/s. 148 of the Act. Being aggrieved, the petitioner has approached this Court by way of present petition by challenging the same. 5. Learned advocate Mr. Hardik Vora for the petitioner submitted that respondent- Assessing Officer has failed to consider that the petitioner has not offered any Long-Term Capital Gain by claiming exemption under section 10(38) of the Act amounting to Rs. 20,27,41,312/- earned by the petitioner by selling the bonus shares of Hindustan Petroleum Corporation Ltd. and the petitioner has already paid as the shares sold were bonus share and the cost of acquisition was considered as only, moreover, the petitioner also paid the STT of Rs. 2,03,306/- on the sale of those shares duly reflected in the contract note issued by the share broker of the petitioner. 5.1 It was further submitted that the reopening of the case of the petitioner is based upon the audit obj ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the parliament and public account committee of parliament and therefore it would not be finalized. It was therefore submitted that notice under section 148A(b) of the Act does not contain any averment to demonstrate that the objection raised by C&AG was placed before the parliament and public account committee and therefore the Assessing Officer could not have assumed the jurisdiction to reopen the assessment and issue notice under section 148A(b) of the Act considering such objection as an information as referred to in Explanation-1(ii) of section 148 of the Act. 5.6 It was submitted that the respondent Assessing Officer without considering the reply of the Assessee has passed the impugned order dated 07.04.2022 under section 148A(d) of the Act. 5.7 It was also submitted that notice under section 148A(b) was issued on 21.03.2022 asking the petitioner to file reply on or before 28.03.2022 giving only six days' time to respond which is contrary to the provision of section 148A (b) of the Act which requires the Assessing Officer to issue notice to show cause providing minimum seven days' time and accordingly the notice under section 148A(b) is invalid. Reliance was placed on the de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... chargeable to tax has escaped assessment in his case for the relevant assessment year and results of enquiry conducted, if any, as per clause (a);" 8. In the facts of the case, notice dated 21.03.2022 under section 148(b) of the Act reads as under: " Notice under clause (b) of section 148A of the Income Tax Act, 1961 Sir/Madam/M/s Whereas I have information which suggests that income chargeable to tax for the Assessment Year 2018-19 have escaped assessment within the meaning of section 147 of the Income Tax Act, 1961. The details of the information and enquiry, if conducted, are enclosed with this notice in Annexure A. 2. You are required to show-cause as to why, in view of the details contained in Annexure A, a notice section 148 of the income tax Act, 1961 should not be issued. 3 You may, to the extent technologically feasible, submit your response with supporting documents (if any) on the above mentioned issues electronically in 'e-proceeding' facility through your account in e filing portal at your convenience on or before 28/03/2022............" 9. On perusal of the above notice, it is clear that the Assessing Officer has provided less than seven days time to file ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1995) 212 ITR 653 where, the words "within seven years" as interpreted by this Court in case of New India Industries Ltd vs. CIT [1977] 108 ITR 181 and subsequently approved by the Supreme Court wherein it is held by the Apex Court as under: "1. The question for decision in these appeals relates to the construction of the proviso to Rule 1(v) of the Second Schedule to the Companies (Profits) Surtax Act, 1964. It may be mentioned that the provision contained in the proviso to Rule 1(v) therein has been omitted from April 1, 1977. This question therefore is not of any practical significance at this stage. 2. The High Court has taken the view that there was a modification of the agreement by the subsequent correspondence between the parties as a result of which the loan fell put of the purview of the aforesaid proviso to Rule 1(v). The finding of the High Court is as under (at page 205): "Therefore, if the spread over of the repayment has been provided in the terms of the agreement in such a manner that the repayment is completed by a date beyond seven years from the first advance made under the agreement under which the moneys are borrowed, the loan in question will qualify for ..... 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