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TMI Blog2024 (12) TMI 1539X X X X Extracts X X X X X X X X Extracts X X X X ..... to AY 2015-16 is that the assessee filed the return of income for AY 2015-16 on 19.09.2015 declaring a total loss of Rs. 1,95,79,100/-. The assessment under section 143(3) of the Income Tax Act (the Act) was completed on 27.12.2017. The Assessing Officer (AO) reopened the assessment by issuing notice under section 148 of the Act dated 29.06.2021 for the reason that the assessee has derived fictitious loss in the trading of equity derivatives and the assessee is a beneficiary of bogus capital gains. The said notice become deemed to be a notice issued under section 148A(b) of the Act, as per the directions of the Hon'ble Supreme Court in the case of Union of India vs Ashish Agrawal (Civil appeal No. 3005/2022). The AO subsequently passed the order under section 148A(d) on 29.07.2022 after rejecting the objections raised by the assessee with regard to the alleged fictitious transactions. The AO also issued notice under section 148 of the Act on 29.07.2022. The assessment was completed under section 147 of the Act in which the AO made an addition of Rs. 13,69,49,047/- considering the loss claimed by the assessee as non-genuine. On further appeal the CIT(A) considered the issue on m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... before 20.03.2020 or 31.03.2021 as has been held by the Hon'ble Supreme in the case of Rajeev Bansal (supra). The ld. AR also submitted that the similar issue has been considered by the Co-ordinate Bench in the case of ITO Vs. Pushpak Realities Pvt. Ltd. (ITA No. 4812, 4814, 4816/Mum/2024 dated 07.11.2024) where it has been held that the notice issued under section 148 of the Act dated 28.07.2022 issued for AY 2015-16 is barred by limitation. The ld. AR submitted that in assessee's case the notice under section 148 is dated 29.07.2022 and therefore, the issue is covered by the decision of the Co-ordinate Bench. 5. The ld. DR on the other hand submitted that the time limit of 4 years from the end of the relevant AY for AY 2015-16 fell on 31.03.2020 and therefore it squarely falls within the relaxation given by TOLA extending the time till 30.06.2021. The ld. DR further submitted that the original notice under section 148 was issued by the AO on 29.06.2021 and therefore it is not barred by limitation as contended by the assessee. 6. We heard the parties and perused the material on record. In assessee's case, the AO issued the original notice under section 148 dated 29.0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have had the power to reopen assessments for the year 2012-2013 if the escaped assessment amounted to Rupees fifty lakhs or more. The proviso limits the retrospective operation of Section 149(1)(b) to protect the interests of the assesses. 7. This issue of notice under section 148 issued for 2015-16 being time barred is considered by the coordinate bench in the case of Pushpak Realities Pvt. Ltd.(supra) and it is held that ****** 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 during the period prescribed under TOLA. Here notice u/s. 148 for the A.Y. 2015-16 has been issued on 28/07/2022 which is admittedly barred by limitation under the new provision of Section 149(1) and it is not covered under TOLA. Accordingly, all the notices are quashed being barred by limitation on the reasons given above and we are not going on the reasons given by the ld. CIT (A) for quashing the notice." 8. A combined reading of the above observations of the Hon'ble Supreme Court and the findings of coordinate bench makes it clear that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uired to be taken as per provisions of amended section 151 of the Act from Principal Chief Commissioner or Principal Director General or Chief Commissioner or Director General of Income Tax and not from Principal Commissioner of Income Tax and as laid down by the Hon'ble Supreme Court in case of Union of India vs. Rajeev Bansal (Civil Appeal No 8629 of 2024)." 12. The ld. AR submitted that the Hon'ble Supreme Court in the case of Rajeev Bansal (supra) has considered the issue of getting approval from appropriate authority under section 151 before issue of notice under section 148 of the Act to cases where the revenue has invoked the provisions of section 148A as per the directions of the Hon'ble Supreme Court in the case of Ashish Agrawal (supra). In this regard the ld. AR drew our attention to the relevant observations of the Hon'ble Hon'ble Supreme Court as extracted below: "73. Section 151 imposes a check upon the power of the Revenue to reopen assessments. The provision imposes a responsibility on the Revenue to ensure that it obtains the sanction of the specified authority before issuing a notice under section 148. The purpose behind this procedural chec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... taining 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; and (ii) If income escaping assessment is more 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) after three years after obtaining the prior approval of the Principal Chief Commissioner or Principal Director General or Chief Commissioner or Director General. 76. Grant of sanction by the appropriate authority is a precondition for the assessing officer to assume jurisdiction under Section 148 to issue a reassessment notice. Section 151 of the new regime does not prescribe a time limit within which a specified authority has to grant sanction. Rather, it links up the time limits with the jurisdiction of the authority to grant sanction. Section 151 (ii) of the new regime prescribes a higher level of authority if more than three years have elapsed from the end of the "elevant assessment year. Thus, non-compliance by the assessing officer with the stric ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Section 148; and d. Section 148-to issue a reassessment notice. 80. In Ashish Agarwal (supra), this Court directed that Section 148 notices which were challenged before various High Courts "shall be deemed to have been issued under Section 148-A of the Income Tax Act as substituted by the Finance Act, 2021 and construed or treated to be show-cause notices in terms of Section 148-A(b)." Further, this Court dispensed with the requirement of conducting any enquiry with the prior approval of the specified authority under Section 148A(a). Under Section 148A(b), an assessing officer was required to obtain prior approval from the specified authority before issuing a show cause notice. When this Court deemed the Section 148 notices under the old regime as Section 148A(b) notices under the new regime, it impliedly waived the requirement of obtaining prior approval from the specified authorities under Section 151 for Section 148A(b). It is well established that this Court while exercising its jurisdiction under Article 142, is not bound by the procedural requirements of law. 130 81. This Court in Ashish Agarwal (supra) directed the assessing officers to "pass orders in terms of Section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , if more than three years have elapsed from the end of the relevant assessment year. 15. In assessee's case from the perusal of para 3 of the notice issued under section 148 for AY 2016-17 we notice that the same is issued with the prior approval of Pr.CIT-19 Mumbai accorded on 29.07.2022 vide reference No.Pr.Cit- 19/148/2022-23 and this fact is not contravened by the ld DR. For AY 2016-17, the period of three years have elapsed as of 31.03.2020 and the notice is issued beyond three years on 30.07.2022. Therefore as per the decision of the Hon'ble Supreme Court, the approval should have been obtained under the amended provisions of section 151(ii) of the Act i.e. the approval should have been obtained from the Principal Chief Commissioner whereas the approval has been obtained from Pr.CIT as stated in the notice under section 148 itself. Therefore we see merit in the contention of the assessee that the notice under section 148 for AY 2016-17 is issued without obtaining the prior approval from the appropriate authority. Accordingly we hold that the notice under section 148 is invalid and the consequent assessment under section 147 is liable to be quashed. 16. Since we hav ..... X X X X Extracts X X X X X X X X Extracts X X X X
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