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TMI Blog2025 (3) TMI 1267X X X X Extracts X X X X X X X X Extracts X X X X ..... Act, 1961, by the Learned Commissioner of Income Tax (Appeals), Kanpur, is contrary to law and facts, and the Ld. CIT(A} has erred in upholding the action of the Learned Assessing Officer in making an addition of Rs. 5,54,50,000/- in respect of unsecured loans received, under Section 68 of the Income Tax Act, 1961. 2. That the assessment framed under section 147 is bad in law as the notice under section 148 was issued on 01.04.2021 without adhering to the new procedure applicable from 01.04.2021, specifically without complying with the provisions of section 148A. 3. That the Ld. CIT(A) has erred in not appreciating that the reasons recorded were based upon STR even though, the STR was in the name of AR Land crafts LLP and not in the name of Mukesh Khurana, the appellant. That the CIT(A) has further erred in not appreciating that there is wrong assumption of facts on the part of the AO while mentioning the figure of escaped income of Rs. 80 crores in the reasons recorded which is without any basis and as such, there was complete non application of mind on part of the AO. 4. That on the facts and the circumstances of the case, the CIT(A) has erred in upholding the addition made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... without proper consideration. That the Commissioner of Income Tax (Appeals) failed to recognize that the approval for 56 cases was granted on the same day, 28.03.21, which suggests a lack of application of mind. 9. That there is wrong assumption of facts in the reasons recorded under Section 147, since, in paragraph 3 of reasons recorded there is reference to the fact that the assessee has not disclosed the true nature of this transaction meaning thereby that the assessing officer has resorted to proviso 1 to section 147. That the said proviso and explanation has wrongly been invoked as the same is applicable if the original assessment has been completed u/s 143(3) which is against the facts of the case. 10. That the Ld. CIT{A} has erred in changing the charging section from 69A as invoked by the AO to section 68 and as such, the findings of the CIT{A} are contrary to the legal position. 10.1 Without prejudice to the ~foresaid grounds, the action of the CIT(A) in changing the charging section from 69A to section 68 without giving any opportunity to the appellant is against the principles of natural justice. 11. That the assessment conducted under Section 147 is legally flaw ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... show cause notice dated 25.03.2022 through ITBA portal was issued and assessee was asked to submit explanation regarding identity, creditworthiness and genuineness of the credit transactions in all bank accounts to the extent of above mentioned amount. The AO reproduced the list of credit entries in the assessment order at page 19 of the order. The AO observed that there is prima facie internal rotation of funds and business rationale is unclear. Vide notices u/s 142(1) dated 14.01.22, 24.02.22 and 21.03.22, the assessee failed to explain despite considerable time have passed, the assessee had submitted only partial compliances with no explanation regarding identity, creditworthiness and genuineness of these credits. In compliance to notice issued on 26.03.2022, no complete and satisfactory submissions were made by the due date, accordingly, he proceeded to make the above said amount as income of the assessee u/s 69A of the Act. 7. Aggrieved with the above order, the assessee preferred an appeal before Ld CIT(A) and filed detailed submissions along with the submissions that the assessee had filed the relevant information as called for by the AO, the relevant compliance date set fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 13(1) of the information technology act 2000 provides that unless otherwise agreed, the dispatch of the electronic record occurs when it enters into the computer resources and outside the control of the originator. Therefore, mere digitally signing of the notice is not enough and requirement is issuance of notice. In the present case the notice has been issued on 01.04.2021 and as such, governed by substituted provisions which have not been followed by the AO. 15.5 The copy of the order sheet generated from the E-proceedings platform, enclosed at page no.11 of the Paper Book (PB), clearly indicates that the date of dispatch for the notice is 01.04.2021. This evidence confirms that the notice was dispatched on the mentioned date. 15.6 This issue is clearly covered by judgments of various high courts and tribunal and the same are produced as under: - a) The Madhya Pradesh High Court Yuvraj v. ITO in [W.P.(C) No. 28293 of 2021, dated 3-3-2022], similarly dealt with a case of a section 148 Notice dated 31-3-2021, which was sent bye-mail to the assessee on 16-4-2021. The High Court held that the Notice was issued on 16-4-2021 and quashed the same reserving liberty to the dep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of notice (Validity of notice) - Assessment years 2013-14 to 2017-18 - Sections 147, 148, 149 and 151 were amended vide Finance Act of 2021, with effect from 1-4-2021 - Since there was a regime change with respect to law of limitation coming into effect from 1-4-2021, which curtailed time limit for reopening of assessment from 6 years to 3 years, revenue, with a view to avail limitation prescribed under unamended section 149, generated reassessment notices under section 148 dated 31-3-2021, but same were dispatched on or after 1.4.2021 - Assessee challenged validity of notices issued under section 148 - Whether function of generation of notice on ITBA portal and digital signing of notice is executed by Assessing Officer while function of drafting of e-mail to which notice is attached and triggering e-mail to assessee is performed by ITBA e-mail software system - Held, yes - Whether thus, mere generation of notice under section 148 on ITBA software cannot in fact or in law constitute issue of notice, it is only upon due dispatch that notice can be said to have been 'issued' - Held, yes - Whether 'dispatch' as per section 13 of Act of 2000 is sine qua non for issuance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lly handed over to post office for purpose of effecting service on assessee - Held, yes - Whether in circumstances, impugned notices having been issued on 7-4-2010 which was clearly beyond period of six years from end of relevant assessment year, were clearly barred by limitation and as such, could not be sustained - Held, yes h) The Madras High Court in Smt. Parveen Amin Bhathara (supra), after approving the dicta of Kanubhai Patel (supra) and considering section 282 and rule 127 of IT Rules. categorically rejected the submission of the department that signing of Notice, without despatch, would amount to issuance of Notice as contemplated under section 149." 11. On the other hand, Ld DR vehemently argued in support of the findings of Ld CIT(A) on the issue of jurisdiction u/s 147 of the Act and submitted that the assessee has not submitted the relevant information during the assessment and Ld CIT(A) has already given clear findings on the jurisdiction issues. Therefore, she heavily relied on the findings of Ld. CIT(A). 12. Considered the rival submissions and material placed on record. We observed from the record submitted before us that the AO has issued the notice u/s 148 on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssued only on 01.04.2021 and he cannot proceed to apply the old provisions to complete the assessment. From the record, we observed that the AO has proceeded to complete the assessment in hurry without even waiting for information from the assessee considering the limitation period based on the old provisions. The fact brought on record shows that the AO merely satisfied the information received from the investigation wing on receipt of STR without proper investigation on his part and after collecting partial information from the assessee and proceeded to complete the assessment with the incomplete information and without giving any opportunity, also not shared the information to the assessee and also not considered the information filed by the assessee. 15. In our considered view, the AO should have followed the amended and new provisions with effect from 01.04.2021 based on the fact that the notice was actually issued only on 01.04.2021 and even AO was aware of the fact that the notice was only issued on 01.04.2021 and also, he was aware of the fact that new provisions are applicable with effect from 01.04.2021. Therefore, the assessment passed u/s 147 is without adhering to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her to attend the office of the Assessing Officer or to produce, or cause to be produced before the Assessing Officer any evidence on which the assessee may rely in support of the return: Provided that no notice under this sub-section shall be served on the assessee after the expiry of six months from the end of the financial year in which the return is furnished. 18.3 That your honor's kind attention is drawn towards the AY 2015- 16 where the notice u/s 148 was issued on the same date and the department has issued the notice u/s 143(@) or the said year: However, the department has failed to issue the notice u/s 143(2) for the AY 2016- 17. The relevant summary of notices issued is being produced hereunder :- Return Filed AY 2015-16 AY 2016-17 AY 2017-18 Return of Income originally filed 31.10.2015 05.08.2017 28.03.2018 Notice issued u/s 148 01.04.2021 31.03.2021 31.03.2021 Return of Income in response to Section 148 08.02.2022 08.02.2022 08.02.2022 Notice issued u/s 143(2) 28.02.2022 NOT ISSUED NOTE ISSUED 18.4 That the CIT(A) at internal page no 45-46 has rejected this ground by mentioning the fact that there was no requirement to issue notice u/s 143 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pursuant to the notice under section 148. The aforesaid view also stands fortified from the very fact that after the assessee had filed the 'return of income' pursuant to the notice under section 148, the same was acted upon by the Assessing Officer and a Notice under section 143(2) was issued to the assessee, followed by culmination of the same into an assessment under section 143(3) read with section 147. Thus, now when issuance of a notice under section 143(2) presupposes the availability of a 'return of income' of the assessee on record, and when in the instant case the Assessing Officer acted upon the 'return of income' filed by the assessee, and issued a notice under section 143(2), which thereafter had culminated into an assessment under section 147 read with section 143(3), therefore, it would not be permissible on the part of the revenue to turnaround and claim that no valid 'return of income' was filed by the assessee.[Para 8] b) Delhi Kalyan 5amiti, New Delhi vs Assessee on 4 March, 2015 ITA No. 1770/De1l2010, 1771/Del/2010 and 1772/Del/2010." 19. On the other hand, Ld DR objected to the above submissions and relied on the findings of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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