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TMI Blog2025 (4) TMI 1351X X X X Extracts X X X X X X X X Extracts X X X X ..... me during the period. Therefore, it is submitted that due to the aforesaid circumstances the present appeals could not be filed within the prescribed limitation period. In support of the aforesaid submission, the assessee has also placed on record the copy of her passport. 3. We find that the reasons stated by the assessee for seeking condonation of delay fall within the parameters for grant of condonation laid down by the Hon'ble Supreme Court in the case of Collector Land Acquisition, Anantnag Vs. MST Katiji and others: 1987 SCR (2) 387. It is well established that rules of procedure are handmaid of justice. When substantial justice and technical considerations are pitted against each other, the cause of substantial justice deserves to be preferred. In the present case, the assessee did not stand to benefit from the late filing of the appeal. In view of the above and having perused the affidavit, we are of the considered view that there exists sufficient cause for not filing the present appeals within the limitation period and therefore, we condone the delay in filing the appeals by the assessee and we proceed to decide the appeals on merits. 4. Since in both the appeals the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s void ab initio. 8. The brief facts of the case pertaining to this issue, as emanating from the record, are: The assessee is an individual and advocate by profession. For the year under consideration, the assessee did not file her return of income. Subsequently, on the basis of the information available on AIR/ITS, it was found that as per Form 26AS, the assessee received INR 52,22,917 as fees for professional services rendered for the year under consideration, however, the same was not disclosed as the return of income itself was not filed by the assessee. Accordingly, on the basis of the aforesaid information, the AO issued notice under section 148 of the Act on 29/06/2021. 9. Subsequently, in view of the decision of the Hon'ble Supreme Court in Union of India vs. Ashish Agarwal, reported in [2022] 444 ITR 1 (SC), original notice issued under section 148 on 29/06/2021 was deemed to be issued under section 148A(b) of the Act. Vide show cause notice dated 24/05/2022, the information and material relied upon by the Revenue was provided to the assessee and time was granted to the assessee to respond on or before 08/06/2022 in terms of the provisions of section 148A(b) of the Act. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... round of limitation, as the same was issued pursuant to the guidelines laid down by the Hon'ble Supreme Court in Ashish Agarwal (supra), which were not amended in the subsequent decision of the Hon'ble Supreme Court in Rajeev Bansal (supra). The learned DR further submitted that as per the third proviso to section 149 of the Act, as amended by the Finance Act, 2021, the time period from the date of issuance of deemed show cause notice till the date of filing of response by the assessee shall be excluded for the purpose of computation of time limit for issuance of notice under section 148 of the Act. The learned DR submitted that as per the fourth proviso to section 149 of the Act if after exclusion of the aforesaid time period, the period of limitation available to the AO is less than 7 days, then such remaining period shall be extended to 7 days and the period of limitation under section 149 of the Act shall be deemed to be extended accordingly. Further, by referring to the provisions of section 148A(d) of the Act, the learned DR submitted that the AO has time period of one month from the end of the month in which the reply is received from the assessee to pass the order. Thus, it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iately after the exclusion of the period referred to in the immediately preceding proviso, the period of limitation available to the Assessing Officer for passing an order under clause (d) of section 148A is less than seven days, such remaining period shall be extended to seven days and the period of limitation under this sub-section shall be deemed to be extended accordingly. Explanation - For the purposes of clause (b) of this sub-section, "asset" shall include immovable property, being land or building or both, shares and securities, loans and advances, deposits in bank account. (2) The provisions of sub-section (1) as to the issue of notice shall be subject to the provisions of section 151." 14. Therefore, from the plain reading of the provisions of Section 149 of the Act, it is evident that no notice under section 148 of the Act shall be issued after the expiry of 3 years from the end of the relevant assessment year, unless the case falls under clause (b) to section 149(1) of the Act. Further, clause (b) to section 149(1) of the Act provides the time period of 10 years to issue notice under section 148 of the Act, if the conditions laid down therein are satisfied. We find ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the Finance Act, 2021, it is evident that the same provides period of 4 years, up to 6 years, and up to 16 years for issuance of notice under section 148 of the Act, provided the conditions laid down therein are satisfied. In the present case, it cannot be disputed that the time limit of 4 years from the end of the relevant assessment year, i.e., assessment year 2013-14, expired on 31/03/2018, and the period of 6 years from the end of the relevant assessment year expired on 31/03/2020. Therefore, in the present case, the time period covered under the provisions of the TOLA, i.e. from 20/03/2020 to 31/03/2021, only includes 30/03/2020, i.e., 6 years from the end of the relevant assessment year. It is evident from the record that the original notice under section 148 of the Act, which was deemed to be a notice issued under section 148A(b) of the Act pursuant to the decision of the Hon'ble Supreme Court in Ashish Agarwal (supra), was issued on 29/06/2021. We find that the Hon'ble Supreme Court in Rajeev Bansal (supra) in paragraph-114(b) held that the TOLA will continue to apply to the Act after 01/04/2021 if any action or proceeding specified under the substituted provisions of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... period of limitation. The third proviso excludes "the time or extended time allowed to the assessee." Resultantly, the entire time allowed to the assessee to respond to the show cause notice has to be excluded for computing the period of limitation. In Ashish Agarwal (supra), this Court provided two weeks to the assesses to reply to the show cause notices. This period of two weeks is also liable to be excluded from the computation of limitation given the third proviso to Section 149. Hence, the total time that is excluded for computation of limitation for the deemed notices is: (i) the time during which the show cause notices were effectively stayed, that is, from the date of issuance of the deemed notice between 1 April 2021 and 30 June 2021 till the supply of relevant information or material by the assessing officers to the assesses in terms of the directions in Ashish Agarwal (supra); and (ii) two weeks allowed to the assesses to respond to the show cause notices." 18. From the perusal of the aforesaid findings of the Hon'ble Supreme Court in Rajeev Bansal (supra), it is evident that the Hon'ble Supreme Court directed that while computing the time limit for issuance of notice u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... into effect from 1 May 2021. After accounting for all the exclusions, the assessing officer will have sixty-one days [days between 1 May 2021 and 30 June 2021] to issue a notice under Section 148 of the new regime. This time starts ticking for the assessing officer after receiving the response of the assessee. In this instance, if the assessee submits the response on 18 June 2022, the assessing officer will have sixty- one days from 18 June 2022 to issue a reassessment notice under Section 148 of the new regime. Thus, in this illustration, the time limit for issuance of a notice under Section 148 of the new regime will end on 18 August 2022." 20. Therefore, the surviving/balance time limit can be calculated by computing the number of days between the date of issuance of deemed notice and 30/06/2021. Since, in the present case, we find that the period of 6 years from the end of the relevant assessment year expires on 31/03/2020, which falls within the time period from 20/03/2020 to 31/03/2021, in order to compute the surviving/balance time as per the decision of the Hon'ble Supreme Court in paragraph-108, it is relevant to note the following dates: - S. No. Particulars Dates 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 48 of the Act. The said notice was required to be accompanied by an order under Section 148A(d) of the Act. Thus, the AO was required to pass an order under Section 148A(d) of the Act within the said twenty-nine days notwithstanding the time stipulated under Section 148A(d) of the Act. This period expired on 12.07.2022. 70. Since the period of limitation, as provided under Section 149(1) of the Act, had expired prior to issuance of the impugned notice on 30.07.2022. The said is squarely beyond the period of limitation. 71. It is contended on behalf of the Revenue that the AO is required to pass an order under Section 148A(d) of the Act by the end of the month following the month on which the reply to the notice under Section 148A(b) of the Act was received. Thus, the order under Section 148A(d) of the Act as well as the notice under Section 148 of the Act (both dated 30.07.2022) are within the prescribed period. This contention is without merit as it does not take into account that proceedings under Section 148A of the Act necessarily required to be completed within the period available for issuing notice under Section 148 of the Act, as prescribed under Section 149 of the Act. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... owing grounds: - "1. On the facts and circumstances of the case and in law, the learned Assessing Officer erred passing order u/s 147 of the Act. a. Notices absolutely time barred b. Presumption and surmises and c. Mechanically approved d. Without disposing objections well e. Based on reasons not recorded particularly in respect of the addition made f. No asset is found above Rs. 50 lacs g. Wrongly reopened by JAO instead of FAO h. Notice u/s 148 issued after 4 years i. No hearing granted u/s 148A j. No verification was done by JAO 2. On the facts and circumstances of the case and in law, the learned FAO erred in disallowing Rs. 10,40,822/- (2,92,530 + 3,74,700 + 3,73,592) u/s 37(1) of the Act being 30% of Rs. 34,69,407/ - (9,75,100+ 12,49,000+12,45,307) in respect of total expenses claimed towards Rent, Salaries & Wages and Traveling expenses in Profit & Loss account for lack of documentary evidences on ad hoc basis. 3. On the facts and circumstances of the case and in law, the learned Commissioner of Income Tax (A) erred in confirming the same. 4. On the facts and circumstances of the case and in law, the learned A.O. erred in levying interest u/s 234A ..... X X X X Extracts X X X X X X X X Extracts X X X X
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