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TMI Blog2024 (12) TMI 1560X X X X Extracts X X X X X X X X Extracts X X X X ..... ENT : 2.1 The Learned Income Tax Officer, Ward 1, Jalna ['the Ld. JAO'] has erred in initiating the reassessment proceedings u/s. 148 of the Income tax Act, 1961 ['the Act']. 2.2 On the facts and in the circumstances of the case, the Ld. JAO has initiated the reassessment proceedings without fulfilling the preconditions required to initiate the reassessment proceedings u/s. 148- 151 of the Act. Further, the Ld. JAO failed to follow the directions as provided by the Hon'ble Apex Court in case of UOI v. Ashish Agrawal- [(2022) 138 taxmann.com 64 (SC)] 2.3 On the facts and in circumstances of the case, the Ld. JAO initiated and passed the assessment order without application of mind to the facts of the case. 2.4 In the above circumstances, facts and in law, the Appellants submits that this case is not fit for initiation of reassessment proceedings. Therefore, the assessment order passed is illegal and deserves to be quashed. WITHOUT PREJUDICE TO ABOVE : 3. ADDITION OF Rs. 11,61,395/- u/s. 69A OF THE ACT 3.1 In the facts and circumstances of the case and in law, the Ld. CIT (A) has grossly erred in confirming the addition made by the Assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 21. As the said period fell within the TOLA relaxation period (20.03.2020 to 31.03.2021), therefore, the said period got extended to 30.06.2021. (Ref: Para 69 of the Judgement). 5. Further, as per the direction of the Hon'ble Supreme Court in Ashish Agrawal (supra), the notice u/s. 148 issued between period 01.04.2021 to 30.06.2021 as per the unamended law was deemed as show cause notice u/s. 148A(b) as per the amended law. Further, the Hon'ble Supreme Court in the said decision had directed to the AO to provide the information to the Assessee as required u/s 148A(b). The same was provided to the Appellant in the present case on 28.05.2022. 6. Accordingly, the Hon'ble Supreme Court in Rajeev Bansal (supra) held that period up to 30.06.2021 is covered by the provisions of Income-tax Act read with TOLA. (Ref: Para 94 of the Judgement). 7. Thereafter, in Rajeev Bansal the Hon'ble Supreme Court by relying on third proviso to section 149 held that the period from 01.07.2021 to 03.05.2022 (that is period before the decision in Ashish Agarwal) is deemed to have been stayed by order of Hon'ble Supreme Court in Ashish Agarwal (supra) from the date of their issua ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h Agarwal (supra) deemed these reassessment notices under the old regime as show cause notices under the new regime with effect from the date of issuance of the reassessment notices. The effect of creating the legal fiction is that this Court has to imagine as real all the consequences and incidents that will inevitably flow from the fiction. Therefore, the logical effect of the creation of the legal fiction by Ashish Agarwal (supra) is that the time surviving under the Income-tax Act read with TOLA will be available to the Revenue to complete the remaining proceedings in furtherance of the deemed notices, including issuance of reassessment notices under section 148 of the new regime. The surviving or balance time limit can be calculated by computing the number of days between the date of issuance of the deemed notice and 30 June 2021, (Ref: Para 108 of the Judgement). 11. From the aforesaid directions of the Hon'ble Supreme Court, the position that emerges is as follows: i) The period starting from the date of deemed show cause notice till the date of receipt of the information/material as per the directions in the judgement of Ashish Agarwal (supra) is to be excluded. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... regime) issued by the Ld. JAO is barred by limitation as per the judgement of the Hon'ble Apex Court in Rajeev Bansal and therefore it deserves to be quashed. ON MERITS : 1. The Ld. AO in the present case has invoked the provisions of section 197(b) of the Income Declaration Scheme, 2016 on the ground that the declaration was made of 11,61,395/- against which the tax payable was 5,22,630/-. However, it is alleged by the Ld. AO that the Appellant has made payment of only 3,91,973/- and not made full payment. 2. In this regard it is humbly submitted that the tax was paid fully of 5,22,630/-. It was only that the Appellant inadvertently had two PAN number. However, she was regularly using PAN no. ABKPR1119C. However, while filing the declaration under the IDS, the declaration was filed on the old PAN number (ACVPR9382B). Further the payment of the challans was made as mentioned in the Para 2 of the background. 3. Before making further submission, it is apposite to reproduce the relevant provisions of section 197(b) of the IDS. The same is as follows: "197. For the removal of doubts, it is hereby declared that- (a).. (b) where any declaration has been made und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6. The ld. Counsel for the assessee based on his understanding and interpretation of the judgment of Hon'ble Apex Court in the case of Union of India Vs. Rajeev Bansal (supra) is contending that since the notice u/s. 148 of the Act has been issued on 30.06.2021, there was no surviving time left with the AO to carry out further the proceedings under the amended section 148 of the Act. Contention of the ld. Counsel for the assessee has been observed in para 13 of its written submissions extracted (supra). 7. Before examining the facts, I would first like to go to the relevant extracts from the judgment of Hon'ble Apex Court in the case Union of India Vs. Rajeev Bansal (supra) which read as under : "108. The Income Tax Act read with TOLA extended the time limit for issuing reassessment notices under Section 148, which fell for completion from 20 March 2020 to 31 March 2021, till 30 June 2021. All the reassessment notices under challenge in the present appeals were issued from 1 April 2021 to 30 June 2021 under the old regime. Ashish Agarwal (supra) deemed these reassessment notices under the old regime as show cause notices under the new regime with effect from the date of issuanc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee under Section 149A(c); (ii) take a decision under Section 149A(d) based on the available material and the reply of the assessee; and (iii) issue a notice under Section 148 if it was a fit case for reassessment. Once the clock started ticking, the assessing officer was See State of A P v. A P Pensioners Association, (2005) 13 SCC 161 [28]. [This Court observed that the "legal fiction undoubtedly is to be construed in such a manner so as to enable a person, for whose benefit such legal fiction has been created, to obtain all consequences flowing therefrom."] PART F required to complete these procedures within the surviving time limit. The surviving time limit, as prescribed under the Income Tax Act read with TOLA, was available to the assessing officers to issue the reassessment notices under Section 148 of the new regime. 112. Let us take the instance of a notice issued on 1 May 2021 under the old regime for a relevant assessment year. Because of the legal fiction, the deemed show cause notices will also come 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment year falls between 20 March 2020 and 31 March, then the specified authority under Section 151(i) has extended time till 30 June 2021 to grant approval; e. In the case of Section 151 of the old regime, the test is: if the time limit of four years from the end of an assessment year falls between 20 March 2020 and 31 March 2021, then the specified authority under Section 151(2) has extended time till 31 March 2021 to grant approval; f. The directions in Ashish Agarwal (supra) will extend to all the ninety thousand reassessment notices issued under the old regime during the period 1 April 2021 and 30 June 2021; g. The time during which the show cause notices were deemed to be stayed is from the date of issuance of the deemed notice between 1 April 2021 and 30 June 2021 till the supply of relevant information and material by the assessing officers to the assesses in terms of the directions issued by this Court in Ashish Agarwal (supra), and the period of two weeks allowed to the assesses to respond to the show cause notices; and h. The assessing officers were required to issue the reassessment notice under Section 148 of the new regime within the time limit surviving under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... held that if any notice u/s. 148 of the Act under the unamended law has been issued after 01.04.2021 then it will be deemed to have been issued u/s. 148A of the Act. In the instant case, even though the AO was having the period of four years from the end of relevant assessment year for reopening the assessment proceedings but since the notice u/s. 148 of the Act was issued after 01.04.2021, the new and amended provisions effective from 01.04.2021 were applicable and in a case where the income escaped is less than Rs. 50.00 lakhs the time limit for issuing notice u/s. 148 of the Act was three years. 9. Now in the case of assessee, first notice u/s. 148 was issued on 30.06.2021. Subsequently Hon'ble Apex Court in the case of Ashish Agrawal (supra) has given certain directions as a result of which firstly it was held that the notice issued u/s. 148 between 01.04.2021 to 30.06.2021 as per the unamended law are deemed as show cause notice u/s. 148A(b) as per the amended law. Thereafter, the Hon'ble Apex Court in the case of Union of India Vs. Rajeev Bansal (supra) held that the period upto 30.06.2021 is covered by TOLA. The Hon'ble Court in case of Rajeev Bansal (supra) further re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s plea of the assessee is considered, then all the further proceedings carried out in the instant case after 28.05.2022 would become redundant. In my view, this is not the right interpretation by the ld. Counsel for the assessee of the ratio laid down by the Hon'ble Apex Court in the case of Rajeev Bansal (supra). 12. A perusal of section 148A(d) of the Act provides that once the assessee has replied to the letter issued u/s. 148A(b) of the Act, then the ld. AO has to decide on the basis of material available on record including reply of the assessee, whether or not it is a fit case to issue a notice u/s. 148, by passing an order, with the prior approval of specified authority, within one month from the end of the month in which the reply referred to in clause (c) of section 148A of the Act is received by him or whether no such reply is furnished, within one month from the end of the month in which time or extended time allowed to furnish a reply, as per clause (b) expires. So considering the date of reply filed by the assessee on 15.06.2022, one month from the end of the month June 2022 is 31.07.2022, and this is the last date before which the AO could issue notice u/s. 148. Peru ..... X X X X Extracts X X X X X X X X Extracts X X X X
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