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TMI Blog2025 (4) TMI 1038X X X X Extracts X X X X X X X X Extracts X X X X ..... ity has grossly erred initiating reassessment proceeding without complying with the provisions of the law and the same is not in accordance with the direction of the Hon. Supreme court in the case of the union of India vs. Ashish Agarwal which is injudicious and bat at law. 4. Under the facts and circumstances of the case, the reassessment proceedings initiated by the Ld. AO are injudicious and bad at law. 5. Under the facts and circumstances of the case, the reply furnished by the assessee to the show cause notice under Section 148A(b) of the Act has not been considered as required by clause(c) of Section 148A of the Act. 6. Under the facts and circumstances of the case, the Ld. assessing officer failed to pass a judicious speaking order in accordance with clause(d) of Section 148A of the Act which is mandatory requirement for initiation of reassessment proceedings. 7. Under the facts and circumstances of the case, the sanction for initiation of reassessment proceedings is not in accordance with the provisions contained in Section 151 of the Act. 8. Under the facts and circumstances of the case, the addition made by the ld. A.O. is without any basis or evidence against t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... exempt income u/s 10(38) of the Act. The return of income was accepted by the Department. The information was received from the Investigation Wing through the Insight portal that during the year under consideration the assessee had received accommodation entries by way of bogus Long Term Capital Gain / Loss from M/s. PMC Fincorp Ltd. amounting to Rs. 56,20,500/-.A search operation was conducted in the case of M/s. PMC Limited on 11.10.2018 during the Investigation it was found that the company M/s. PMC Fincorp Ltd. provides accommodation entry by way of long- term capital gain to various beneficiaries in lieu of commission. The assessee's name among the list of beneficiaries. In pursuance of the direction of the Hon'ble Supreme Court Judgment in the case of Union of India Vs. Ashish Agarwal and incompliance with the amended procedure laid down u/s. 148 and 148A of the Act a show cause notice was issued to the assessee and thereafter the order under Section 148A(d) was passed with the approval specified authority wherein it was held that there was an escapement of income for AY 2013-14 and accordingly notice u/s. 148 of the Act was issued. 4. The Ld. Assessing officer (AO) in his ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... et aside any proposed variation or issue any direction under sub-section (5) for further enquiry is prohibited. The point that is made out here is that the scope of DRP is limited to deal with cannot set aside any issue or give direction further enquiry. The second limb in a sense empowers the DRP to conduct fresh inquiry, required if at all at its level only similar to the function of the AO being a quasi-judicial authority. Therefore, the technical grounds taken up by the assessee challenging the jurisdiction is beyond its legislative mandate. 6.8 The transactions entered into by the assessee exhibit similar features as mentioned in the case laws cited above. It is evident that the assessee is one of the beneficiaries of accommodation entry receipts in the form of Long-Term Capital Gains. Entire price movement of the PMC Fincorp shares were manipulated/rigged in a coordinated manner giving rise to such capital gains. He has failed to prove that share transactions are genuine. Though the assessee has received amounts through banking channels, the transactions cannot be treated as genuine in the presence of overwhelming evidences put forward by the AO. Considering the findings of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent-old 148 notices to be treated as show- cause notices under Section 148A(b). 19.05.2022 AO issues show-cause notice under Section 148A(b) without providing any specific material or information to the assessee. following Ashish Agarwal. 02.06.2022 Assessee replies, citing lack of adequate information 06.07.2022 Second intimation issued enclosing Dissemination Note relating to PMC Fincorp Ltd. (182 pages) 11.07.2022 Assessee submits response to the show-cause notice under Section 148A(b) 19.07.2022 Final deadline for issuance of notice u/s 148 of the Act. 23.07.2022 AO passes order u/s 148A(d) and issues notice u/s 148-beyond limitation. 9. She has further submitted that the case of the assessee is squarely covered the Hon'ble Delhi court case Ram Balram Build Home (P) Ltd. v. Income- tax officer {2025} 171 taxmann.com 99 (Delhi) In this case the Hon'ble Delhi High Court held as under: "63. It is clear from the above that the Supreme Court had in unambiguous terms held that (a) the date of notices issued under Section 148 of the Act, under the old regime which was subject matter of challenge in Union of India & Ors. v. Ashish Agarwal, has not been struck o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Agarwal (2023) 1 SCC 617 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. Rajeev Bansal 2024 SCC OnLine SC 2693. 68. In addition to the above, the time granted to the petitioner to respond to the notice dated 30.05.2022 - the period of two weeks -is also required to be excluded by virtue of the third proviso to Section 149(1) of the Act. The petitioner had furnished its response to the notice under Section 148A(b) of the Act on 13.06.2022. Thus, the period of limitation began running from that date. 69. As noted above, by virtue of TOLA, the AO had period of twenty-nine days limitation left on the date of commencement of the reassessment proceedings, which began on 01.06.2021, to issue a notice under Section 148 of the Act. The said notice was required to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elevant assessment year. 12. By virtue of section 3(1) OF TOLA time for completion of specified acts was extended till 30-06-2021. Thus, the notice dated 22-06-2021was issued 8 days prior to the expiry of period of limitation for issuing a notice u/s 148 of the Act as the extended time by TOLA. The period between 04-05-2022 to 30- 05-2022, the date on which the AO has issued the notice u/s 148A(b) of the Act in furtherance of his earlier notice dated 22- 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 Hon'ble Supreme Court in Rajeev Bansal Case. The AO has issued notice to the assessee dated 19-05-2022 and the two weeks-time was granted to respond the notice. The assessee had furnished its response to the notice u/s 148A(b) of the Act on 02-06-2022. The AO was issued the second notice dated 06-07-2022 (Page no 2 of the synopsis) to the assessee and the assessee has filed the response in the compliance on 11-07-2022.Thus, the period of limitation began running from that date i.e11-07-2022. By virtue of TOLA, the AO had period of 8 days limitation left on the date of commencement of the reassessment proceedings, whic ..... X X X X Extracts X X X X X X X X Extracts X X X X
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