Income Tax Appellate Tribunal - Jaipur
Mohamed Sarif, Sikar vs Dcit Cir. International Taxation, ... on 21 February, 2023
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IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES,'A' JAIPUR
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BEFORE: SHRI SANDEEP GOSAIN, JM & SHRI RATHOD KAMLESH JAYANTBHAI, AM
vk;dj vihy la-@IT(IT) A No. 23 to 27/JPR/2022
fu/kZkj.k o"kZ@Assessment Year :2013-14 to 2017-18
Sh. Mohamed Sarif cuke DCIT,
S/o Haji Gulab Vs. Circle International Taxation,
Mohalla Beopariyan Ward No. 9, Jaipur.
Balayon Ke Kuwe Ke Pass,
Sikar.
LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.: DQMPS9986L
vihykFkhZ@Appellant izR;FkhZ@Respondent
fu/kZkfjrh dh vksj ls@ Assessee by : Shri Shrawan Kumar Gupta (Adv.)
jktLo dh vksj ls@ Revenue by : Shri James Kurian (CIT)
lquokbZ dh rkjh[k@ Date of Hearing : 15/02/2023
mn?kks"k.kk dh rkjh[k@Date of Pronouncement: 21/02/2023
vkns'k@ ORDER
PER BENCH:
These are five appeals filed by the assessee aggrieved from the order of the Learned Commissioner of Income (Appeals)-Delhi-
42 [Here in after referred as to "CIT(A)"], for the assessment years 2013-14 to 2017-18 all dated 20.07.2022, which in turn arises from the order passed by the DCIT, Circle (Intl. Tax.), Jaipur passed 2 IT(IT) A No. 23 to 27/JPR/2022 Mohamed Sarif under Section 147 r.w.s. 144C(3) of the Income tax Act, 1961 (in short 'the Act') all dated 17.05.2022 respectively.
2. At the outset of hearing, the Bench observed that there is delay of 74 days in filing the appeal by the assessee for which the ld. AR of the assessee filed an application for condonation of delay with following prayers:
" 1. In this connection it is submitted that the applicant is individual and NRI and IT assessee. In this case the assessment u/s 147/148/144C was completed for A.Y. 2013-14 on dated 17.05.2022 after making the addition of Rs.29,96,427/-by the DCIT Circle International Taxation, Jaipur. Against which the assessee had filed an appeal before the ld. CIT(A)-42, Delhi on dt.30.05.2022. The ld. CIT(A) has passed the exparty order of appeal on dt. 20.07.2022 which was not served upon the assessee physical. However as per date of order the appeal was to be filed on or before 18.09.2022 but the same is being filed on by 30.11.2022 i.e by delay of about 2 month 12 days late. Although actually there is no delay if following facts are being considered.
2. The reason of late filing was that the order was not served physically. The same was send by on Email: [email protected]. This email has not been used by the assessee regularly and the email has been left to be seen. As the assessee has engaged counsel at Sikar and Jaipur for the appellate work and under impression that they will take care and the appeal shall be taken time being filed some months ago. Further the counsel of the assessee was under impression that if any communication, notice or order is received on the email of the assessee , the assessee shall communicate to them. Hence counsels were not aware about the notices or orders sent by the office of ld. CIT(A). However on 17.11.2022 the counsel of the assessee from the Jaipur went to Delhi in the Office of ld. CIT(A)-42- Delhi regarding the appeal matters of other assessee and also for the inquiry status of appeal matters of the assessee. Then he has come to know that the orders have already been passed on dt. 20.07.2022. Then on next day counsel of the assessee intimated to the local counsel of the assessee , then he inquired and asked to the assessee to check his email of dt. 20.07.2022. Then the assessee checked and download the orders on dt.18.11.2022. Thus the assessee has come to know about the order on 3 IT(IT) A No. 23 to 27/JPR/2022 Mohamed Sarif dt. 18.11.2022 passed by the CIT(A)-42 Delhi and come to know that the appeal has been dismissed, then assessee asked to the counsel to prepare and file the appeal as he is not having the knowledge of orders earlier.
3. That thereafter our counsel has stated to prepare the appeal and the appeal has been prepared on 25.11.2022 and sent to me singe.
4. That the assessee is/was not in habit to check this email and e-filling portal regularly etc as it was not in habit and was under impression communication shall also be sent to the counsel. As I had engaged a counsel for the CIT(A) appeal proceedings. Thus there was no also negligence's of either assessee nor the counsel. Thus it has never come in my notice before 17/18.11.2022 that any order has been passed, otherwise I could have contacted to the counsel and filed the appeal. Thus there was bonfide mistake of me.
Due to all this reason the appeal could not be filed within time. In support of these contention an affidavit of the Legal Heir is enclosed.
5. It is submitted that the Hon'ble Supreme Court in the case of Collector, Land & Acquisition v. Mst. Katiji & Others (1987) 167 ITR 471 (SC) has advocated for a very liberal approach while considering a case for condonation of delay. The following observations of the Hon'ble Court are notable:
"The legislature has conferred the power to condone delay by enacting section 5 of the Limitation Act 1963 in order to enable the Courts to do substantial justice to parties by disposing of matters on 'merits'. The expression sufficient cause' employed by the legislature is adequately elastic to enable the Courts to apply the law in a meaningful manner which subserves the ends of justice-that being the life-purpose of the existence of the institution of Courts. It is common knowledge that this Court has been making a justifiably liberal approach in matters instituted in this Court. But, the message does not appear to have percolated down to all the other Courts in the hierarchy."
The said judgment is a leading case on the subject and has a binding force on all the officers subordinate thereto.
6. The action or inaction by an assessee, on the advice of its counsel, whether correct or incorrect, if caused a delay, has been held to be reasonable and sufficient cause in these cases also. Kindly refer N. Balakrishnan v. M. Krishna Murthy(1998) 7 SCC 123 published in 30 BCAJ 922, Concord of India Insurance Co. Ltd. v. Smt. Nirmala Devi and Anothers 118 ITR 507 .
That it is also settled that for the mistake of the Counsel, the party cannot be suffered. Reliance on Mahaveer Prasad Jain v/s CIT, 172 ITR 331(MP), Concord India Insurance Co. Ltd v/s Smt. Nirmala Devi, 118 ITR 507(SC), Kripa Shankar v/s CIT/CWT 181 ITR 183(All), N. Balakrishnan v/s M. Krishanmurthy 7 SSC123.
4 IT(IT) A No. 23 to 27/JPR/2022Mohamed Sarif
7. The Hon'ble Jaipur Bench of ITAT has also condoned the dealy in the case of Ganesh Himalaya Pvt.Ltd. v. ACIT 22 Tax World 415 (Jp) where the filing was delayed because the son of the Managing Director had become victim of some misdeeds committed by the Holigans, particularly when on the similar points in the earlier four years, the appeals were filed in time.
In the instant case also, the appeal could not be filed in time because of the above time taking a various process which were bonafide and was a sufficient cause and there was no melafide intention.
8. Recent Decision of Apex Court : in a recent decision, the apex court have again reiterated that the expression "sufficient cause" should receive a liberal construction. The Hon'ble court have also held that advancing of substantial justice should be of prime importance. Kindly refer Vedbai vs. Shantaram Baburam Patil & Others 253 ITR 798 (SC). Prayer : In view of above facts and circumstance and with the sympathy and settled legal position, the delay so caused may kindly be condoned."
3. During the course of hearing, the ld. DR has not raised any specific objection to assessee's application for condonation of delay and prayed that tribunal may decide the issue as deem fit and proper in the case.
4. We have heard both the parties and also have considered the submission of the ld. AR as well as the arguments of the ld. DR on the issue. Based on the materials available on record the bench noted that the assessee prayed for condonation of delay of 74 days. The reasons placed on record has merit and we concur with the submission of the assessee. Thus the delay of 74 days in filing the appeal by the assessee is condoned in view of the decision of the apex court decision in case of Collector, Land Acquisition vs 5 IT(IT) A No. 23 to 27/JPR/2022 Mohamed Sarif MST Katiji, wherein the Hon'ble Supreme Court has held that the expression 'Sufficient Cause' employed by the legislature is adequately elastic to enable the Courts to apply the law in a meaningful manner to sub-serves the ends of justice that being the life-purpose of the existence of the institution of Courts. It was further held by the Hon'ble Supreme Court that such liberal approach is adopted on one of the principles that refusing to condone delay can result in a meritorious matter being thrown out at the very threshold and cause of justice being defeated. As against this, when delay is condoned, the highest that can happen is that a cause would be decided on merits after hearing the parties. Another principle laid down by the Hon'ble Supreme Court is that when substantial justice and technical considerations are pitted against each other, the cause of substantial justice deserves to be preferred for the other side cannot claim to have vested right in injustice being done because of a non-deliberate delay. It was also held by the Hon'ble Supreme Court that there is no presumption that delay is occasioned deliberately, or on account of culpable negligence, or on account of male fides. A litigant does not stand to benefit by resorting to delay. In fact, he runs a serious 6 IT(IT) A No. 23 to 27/JPR/2022 Mohamed Sarif risk. In the instant case, applying the same principles, we find that the assessee has all along acted diligently in safeguarding his legal rights and availing the remedies available to him and has acted and taken action but has sufficient reasons so as to bring this appeal. Considering the facts of the case and considering the interest of justice the delay of 74 days in bringing this appeal is condoned and the appeal is hereby admitted for adjudication on merits.
5. Since the issues involved in all these appeals of the assessee for all years are almost identical, are common, all these appeals were heard together with the agreement of both the parties and are being disposed off by this consolidated order.
6. At the outset, the ld. AR has submitted that the matter pertaining to Mohamed Sarif in ITA No. 23/JPR/2022 may be taken as a lead case for discussions as the issues involved in the lead case are common and inextricably interlinked or in fact interwoven and the facts and circumstances of other cases are exactly identical except the difference in the amount added and disputed and difference in the assessment years under appeal. The ld. DR 7 IT(IT) A No. 23 to 27/JPR/2022 Mohamed Sarif did not raise any specific objection against taking that case as a lead case. Therefore, for the purpose of the present discussions, the case of ITA No. 23/JPR/2022 is taken as a lead case.
7. Based on the above arguments we have also seen that for all these bunch of five appeals are having similar facts, similar grounds and arguments were similar. Therefore, were heard together and are disposed by taking lead case facts, grounds and arguments from the folder in ITA No. 23/JPR/2022.
8. Before moving towards the facts of the case we would like to mention that the assessee has assailed the appeal in ITA No. 23/JPR/2022 before us on the following grounds;
"1.1 The impugned order u/s 147 rws 144C(3) of the I.T. Act, 1961 dated 17.05.2022 as well as the notice u/s 148 and proceedings or action so taken u/s 147/148 by the ld. AO are illegal, bad in law, barred by limitation, without jurisdiction, without approval/satisfaction from the proper or competent authority, against the principle of natural justice and various other reasons or and further contrary to the real facts of the case hence the same may kindly be quashed.
2. The ld. CIT(A) has grossly erred in law as well as on the facts of the case in passing the Exparty order and confirming the order of the ld. AO without providing adequate and reasonable opportunity of being heard and not considering the material on record in the gross breach of natural justice. Hence the same entire addition may kindly be deleted and the assessment order may kindly be quashed.
3. Rs.29,96,427/-: The ld. CIT(A) has grossly erred in law as well as on the facts of the case in confirming the addition of Rs.29,96,427/- made by the ld. AO as alleged undisclosed income on account of interest 8 IT(IT) A No. 23 to 27/JPR/2022 Mohamed Sarif received from the bank which were out of NRI/NRE funds/income as the assessee is NRI, the impugned interest is not taxable. The Ld. AO as well as the ld. CIT(A) both have also erred in not considering the vital facts and material available on record in their true perspective and sense. Hence the addition so made by the ld. AO and confirmed by the ld. CIT(A) is also being contrary to the real facts of the case and not according to the provision of law, hence the same is illegal, bad in law, against the principle of natural justice the same may kindly be deleted in full.
4. The ld. AO has grossly erred in law as well as on the facts of the case in charging the interest u/s 234A, B,C. The interest so charged is being totally contrary to the provision of law and on facts of the case and hence same may kindly be deleted in full."
9. The facts as culled out from the records is that the AO had received an information from the Directorate of Systems (Income Tax) that during FY 2012-13, the assessee had received interest of Rs. 22,18,195/- from State Bank of Bikaner and Jaipur on which TDS of Rs. 2,21,823/- was deducted; and interest of Rs. 5,02,528/-
was received from State Bank of India on which TDS of Rs.
50,253/- was deducted. As no return of income had been filed, notice u/s 148 was issued after completing necessary statutory procedure.
9.1 In response to notice u/s 148, the assessee filed return of income on 22.02.2022 declaring nil income. On being asked to explain the taxability of interest, the assessee claimed that the interest pertains to the FDRS made from NRE fund and therefore, 9 IT(IT) A No. 23 to 27/JPR/2022 Mohamed Sarif the same was exempt. The AO also observed that apart from the aforesaid aggregate interest of Rs. 27,20,723/- which was reflected in Form 26AS, the assessee had also received interest aggregating to Rs. 2,75,204/- in 12 other accounts. The AO issued a detailed show cause notice to the assessee on 24.03.2022. The assessee submitted reply on 25.03.2022 contending that the funds of investment was from NRE account, therefore, interest on FDR is not taxable. The AO noted that the FDRS made in SBI/SBBJ, Sikar branch were NRO account and not the NRE account. The AO also observed that TDS had been deducted on the said interest income.
He, therefore, rejected the contention of the assessee that the impugned interest was exempt from tax. The AO accordingly, added the aggregate interest of Rs. 29,96,427/- (Rs. 27,20,723/- + 2,75,204/-) to the total income. The assessment was finalized at the total income of Rs. 29,96,427/-
10. Aggrieved with the order of assessment, the assessee preferred an appeal before the ld. CIT(A). The ld. CIT(A) has observed that following notices were issued:
Sr No. Date on which notice Date of which compliance 10 IT(IT) A No. 23 to 27/JPR/2022 Mohamed Sarif issue called for 1 15.06.2022 23.06.2022 2 28.06.2022 05.07.2022 3 08.07.2022 15.07.2022* * mentioned as final opportunity As the assessee did not appear and filed any written submission the appeal of the assessee was decided by the ld. CIT(A) based on the merits of the case. Apropos to the various grounds raised by the assessee the ld. CIT(A) has given his findings which are reiterated here in below :
"11.1 The appellant has not disputed that during FY 2012-13, he had received interest of Rs. 22,18,195/- from State Bank of Bikaner and Jaipur on which TDS of Rs. 2,21,823/- was deducted; and interest of Rs. 5,02,528/- was received from State Bank of India on which TDS of Rs. 50,253/- was deducted. Further, the appellant has not disputed that he received interest aggregating to Rs. 2,75,204/- in 12 other accounts. The appellant has only raised a contention that the interest on FDRS was not taxable as the funds of investment was from NRE account. The appellant has not submitted any evidence, both at the time of assessment as well as appeal, in support of this contention. It is observed that the AO has made a categorical finding that these FDRS made in SBI/SBBJ, Sikar branch were NRO account and not the NRE account. The AO also observed that TDS has been deducted on the said interest income. The appellant has not disputed this fact that the FDRS were made from NRO account.
11.2 It is pertinent to note that only interest earned on an NRE account is exempt under Section 10(4) of the Act. However, it is trite that interest credited on NRO account/FD made from NRO account is fully taxable in India and the banks are required to deduct tax at source on the interest credited on all NRO bank account.
11.3 It is undisputed in this case that the FDs pertained to the NRO account. It is also a fact that the banks have duly deducted TDS from the interest on the said FDs. Therefore, in view of the legal position, the impugned interest is taxable in India. The legal contention of the 11 IT(IT) A No. 23 to 27/JPR/2022 Mohamed Sarif appellant is without any merit. There is no reason to interfere with the findings of assessment. The addition of interest of Rs. 29,96,427/- (Rs. 27,20,723/- + 2,75,204/-) is confirmed. This ground is dismissed.
12. Ground No. 3 is against charging of interest u/s 234A, 234B and 234C.
12.1 Charging of interest is consequential and mandatory in nature. The AO does not have any discretion in these matters. This ground is dismissed."
11. The ld. AR of the assessee submitted in the affidavit filed for condonation of delay submitted that reasons for non-
appearance before the ld. CIT(A) was on account of the following reasons:
"4. The reason of late filing was that the order was not served physically. The same was send by on Email:
[email protected]. This email has not been used by me regularly and the email has been left to be seen by me. As I have has engaged counsel at Sikar and Jaipur for the Income tax and appellate work and under impression that they will take care and the appeal shall be taken time being filed some months ago i.e 3th May 2022. Further our counsel was also under impression that if any communication, notice or order is received on the my email, I shall communicate to them. Hence my counsels were not aware about the notices or orders sent by the office of ld. CIT(A). However on 17.11.2022 my counsel from the Jaipur went to Delhi in the Office of ld. CIT(A)-42- Delhi regarding the appeal matters of other assessee and also for the inquiry status of my appeal matters. Then he has come to know that the orders have already been passed on dt. 20.07.2022. Then on next day he intimated to my local counsel, then he inquired and asked to me to check my email of dt. 20.07.2022. Then I checked and download the orders on dt.18.11.2022. Thus I have has come to know about the order on dt. 18.11.2022 passed by the CIT(A)-42 Delhi and come to know that the appeal has been dismissed, then I asked to the counsel to prepare and file the appeal as he is not having the knowledge of orders earlier."12 IT(IT) A No. 23 to 27/JPR/2022
Mohamed Sarif
12. As the assessee finding not any favour on merits the assessee has preferred this appeal on the grounds as raised by him as stated in para 8 above. In support of the various grounds so raised by the assessee the ld. AR of the assessee has submitted following written submission:
"GOA:1&2 : Invalid action, notice u/s 147/148 and invalid assessment order FACTS: 1. The brief facts of the case are that the applicant assessee is an NRI and not filed his ROI originally being the income below taxable in India. The assessee residing and working in Kuwait from last 35-40 years. In this case the ITO Ward-1 Sikar has issued the notice u/s 148. The ld. AO stated that the notice generated on dt.31.03.2021 and issued on 01.04.2021 (as after filling the ROI u/s 148 on dt. 22.02.2022 the notices upload on IT portal as per AO) but as per speed post and assessment record the same was issued and post on 05.04.2021 (PB7) on the reason that "As per the information available, the assesse received an amount of Rs.22,18,195/- in the form of interest and TDS of Rs.2,21,823/- was deducted by State Bank of Bikaner and Jaipur. The assessee also received an amount of Rs.5,02,528/- in the form of interest and TDS of Rs. 50,253/- was deducted by State Bank of India during the year under consideration. The assessee has not filed his return of income for A.Y. 2013-14, therefore the interest income earned during the year under consideration remained unexplained." (vide Page 1-2 of the assessment order) also PB3. For A.Y. 2014-15 to 2017-18 also the same reasons except figure and amount.
2. As this notice u/s 148 was not served upon the assessee timely. The Notice issued u/s 148 (PB7) by the ITO Ward -1 Sikar O/o Pr. Commissioner of Income Tax-2 Jaipur was without jurisdiction and also invalid. The ld. AO has issued the notices u/s 142(1) on 28.06.2021. In response to the notice u/s 148 the assessee has filed the ROI on dt. 22.02.2022 declaring the total income of Rs. Nil (PB18-19) in the residential status NRI.
3. The assessee has also filed the objections against the notice u/s 148 on dt. 25.02.2022(PB20-21) and also asked for the reasons recorded. The assessee has also filed the reply on dt.16.03.2022, 22.03.2022 and 25.03.2022(PB 22-23 and 64-68) with the details. After filing the last reply dt. 25.03.2022 by the assesee, the ld. AO has provided the copy of reasons recorded on dt. 26.03.2022 and disposed off the objections in partly on 26.03.2022 itself, filled by the assessee earlier, without giving the further 13 IT(IT) A No. 23 to 27/JPR/2022 Mohamed Sarif opportunity after providing the reasons recorded and passed the draft assessment order on dt. 28.03.2022 u/s 144C.
4. Thereafter he passed the impugned assessment order on dt. 17.05.2022. While passing the assessment order he has made the addition of Rs.29,96,427/- by stating that
5. Notice u/s 133(6) were issued to the Branch Manager, State Bank of India, Kotwali Road, Sikar on 07.02.2022 and 14.02.2022 to furnish bank account statement, FDR statement and KYC details of the assessee for the F.Y. 2012- 13 and to reconcile the receipts as per 26AS.
6. In response thereto, the Branch Manager State Bank of India has submitted copies of statement of FDRs of the assessee on 25.02.2022 and vide letter dated 28.02.2022 wherein it has submitted as under-
"with reference to your letters dated 14.02.2022, 24.02.2022 we have submitted the account statement copy on email on 17.02.2022. We also confirm that interest and TDS figures shown in 26AS are correct as per bank statement. As you mentioned that there is difference in figures of interest in account statement and 26AS due to accrual basis of accounting."
7. The ld. AO has stated that perusal of 26AS statement of the assessee for A.Y. 2013-14 reveals that the assessee has received interest of Rs.27,20,723/- from State Bank of India and State Bank of Bikaner & Jaipur(now merged into SBI) but the same was not declared by the assessee and no ITR was furnished by the assessee for the A.Y. 2013-14 as required u/s 139(1) of the I.T. Act, 1961. Apart from this fact, the assessee has not declared his complete income even in the ITR filed on 22.02.2022 in response to notice u/s 148, the assessee has declared total income at Rs. NIL.
8. The ld. AO issued a show cause notice to the assess on 16.03.2022 as under-
"as per your form 26AS for the A.Y. 2013-14 it is noticed that you have received interest income of Rs. 27,20,723/- in NON-NRE/NRO Account held with SBBJ bank during the F.Y. 2012-13 but the same has not been declared in your ITR for the year under consideration. You are to show cause that why this interest income of Rs. 27,20,723/- should not be added back to your total income of the year under consideration. On failure to furnish the requisite information the total amount of Rs. 29,67,258/- shall be added to your total income for the year under consideration".
9. In response to the said notice the assessee has filed the reply vide page 3 of the assessment order and (PB23), thereafter the ld. AO has again issued the notice on dt. 24.03.2022 fixing the date on 25.03.2022. In response thereto the assessee has filed the detailed replies on dt. 25.03.2022 (PB64-
68). The ld. AO has not properly see the reply of the assessee and only stated that reply found to be not acceptable.
14 IT(IT) A No. 23 to 27/JPR/2022Mohamed Sarif
10. The ld. AO has further stated that the FDRs were made in SBI/SBBJ branch Sikar in the NRO account and not in NRE account. This state is also evident from the 26AS statement of the assessee for the relevant period as the TDS has been made on the interest income of the assessee at the specified rate. Thus there is no justification in the reply of the assessee to consider the interest income earned form the bank FDRs to be exempt income of the assessee for the relevant year. Also on perusal of the Bank statement and Form 26AS, the total interest received by the assessee for the F.Y. 2012-13 not declared in the ITR filed on 22.02.2022 is Rs.29,96,427/- (Rs.2720723/- as per 26AS and Rs.2,75,704/- from accounts other than 26AS receipts).
The ld. AO has stated that since the assessee has not declared interest income in the ITR for A.Y. 2013-14, entries of Rs. 27,20,723/-(reflected in 26AS) and Rs.2,75,204- (Interest other than 26AS receipts) are considered as undisclosed income of the assessee and added back to the total income of the assessee for A.Y. 2013-14.
11. Against this the assessee has filed the appeal before the ld. CIT(A)-42 Delhi on dt. 30.05.2022, who has confirmed the order of the ld. AO. The ld. CIT(A) has mentioned the facts of the case at page-2 . The ld. CIT(A) at page4 in Para 10 has stated that In ground no. 1, the appellant has generally contended that the notice u/s 148 is illegal and the assessment is bad in law and barred by limitation.
10.1 I, have carefully perused the assessment order. The same is found to be in order from the procedural angle. The appellant has raised general contentions without showing in any way as to how the notice/ assessment is "bad in law". The ground is without any merit and is therefore, dismissed.
12. On the merit of the case the ld. CIT(A) has stated that 11.1 The appellant has not disputed that during FY 2012-13, he had received interest of Rs. 22,18,195/- from State Bank of Bikaner and Jaipur on which TDS of Rs. 2,21,823/- was deducted; and interest of Rs. 5,02,528/- was received from State Bank of India on which TDS of Rs. 50,253/- was deducted. Further, the appellant has not disputed that he received interest aggregating to Rs. 2,75,204/- in 12 other accounts. The appellant has only raised a contention that the interest on FDRs was not taxable as the funds of investment was from NRE account. The appellant has not submitted any evidence, both at the time of assessment as well as appeal, in support of this contention. It is observed that the AO has made a categorical finding that these FDRs made in SBI/SBBJ, Sikar branch were NRO account and not the NRE account. The AO also observed that TDS has been deducted on the said interest income. The appellant has not disputed this fact that the FDRs were made from NRO account.
15 IT(IT) A No. 23 to 27/JPR/2022Mohamed Sarif 11.2 It is pertinent to note that only interest earned on an NRE account is exempt under Section 10(4) of the Act. However, it is trite that interest credited on NRO account/FD made from NRO account is fully taxable in India and the banks are required to deduct tax at source on the interest credited on all NRO bank account.
11.3 It is undisputed in this case that the FDs pertained to the NRO account. It is also a fact that the banks have duly deducted TDS from the interest on the said FDs.
Therefore, in view of the legal position, the impugned interest is taxable in India. The legal contention of the appellant is without any merit. There is no reason to interfere with the findings of assessment. The addition of interest of Rs. 29,96,427/- (Rs. 27,20,723/- + 2,75,204/-) is confirmed. This ground is dismissed.
Hence this appeal.
SUBMISSIONS:
1. Notice's U/S 148 is non-est, invalid, illegal and barred by the limitation and case now covered by the decision of the Honble Supreme Court and CBDT:
At the very outset it is submitted that the ld. AO has stated that the notice is generated on 31.01.2021 but now the undersigned or counsel has inspected the assessment record and obtained the certified copies of the documents and notices on dt. 01.02.2023 from the office of DCIT(AIntl. Tax), Jaipur/AO. From the perusal of the same it is clear that Add. CIT has communicated the approval of the ld. PCIT on dt. 05.04.2021(PB6) to the ITO Ward-1 Sikar for taking the action u/s 148 and thereafter the ld. AO has issued the notice u/s 148 on dt.05.04.2021(PB7) as the notice has been sent by the speed post on 05.04.2021 as clearly appearing from the certified copies of notice u/s 148(PB7) and also speed post track report(PB8). Also vide order sheet copy of the same is enclosed(PB58-63). Thus admittedly notice has been issued on 05.04.2021 is now nonest, invalid illegal and void -ab-intio. 1.1 As the Honble All High Court in the case of Daujee Abhushan Bhansar(P) Ltd v/s UOI (2022) 136 Taxman.com 246(All) dt. 10.03.2022 it has been held "Section 149, read with section 148, of the Income-tax Act, 1961 - Income escaping assessment - Time-limit for issuance of notice (General) -
Assessment year 2013-14 - Whether mere digitally signing a notice is not issuance of notice and point of time when a digitally signed notice in form of electronic record is entered in computer resources outside control of originator, i.e., Assessing Officer, that shall be date and time of issuance of notice under section 148 read with section 149 - Held, yes - Assessee filed its return and assessment was completed accordingly - Subsequently, a notice under section 148 digitally signed by Assessing Officer was sent to assessee through e-mail and e-mail was received by assessee on his registered e-mail 16 IT(IT) A No. 23 to 27/JPR/2022 Mohamed Sarif ID on 6-4-2021 - Assessee submitted that reassessment notice was issued on 6-4-2021 whereas limitation for issuing notice under section 148 read with section 149 expired on 31-3-2021 and, thus, notice was time-barred - Said objection was rejected on ground that since notice was digitally signed by Assessing Officer on 31-3-2021, it would be deemed to have been issued within time, i.e., on 31-3-2021 - Whether since impugned notice under section 148 was issued to assessee on 6-4-2021 through e-mail, impugned notice under section 148 was time-barred and consequently, it was to be quashed - Held, yes [Paras 22-30] [In favour of assessee]."
Full copy of judgment is enclosed. Annexure-1 Thus there is no dispute regarding the date of issue of notice u/s 148. Thus the notices issued u/s 148 are barred by the limitation 1.2 Notice u/s 148 issued without adopting the procedure as provided u/s 148 in the amendment acts and that is why now The Honble Supreme Court in the case of UOI & Ors V/s Ashish Agrawal in Civil Appeal No. 3005/2022 with other appeals dt. 04.05.2022 the Honble Supreme Court has held au under:-
" (i) The respective impugned section 148 notices issued to the respective assessees shall be deemed to have been issued under section 148A of the IT Act as substituted by the Finance Act, 2021 and treated to be show cause notices in terms of section 148A(b). The respective assessing officers shall within thirty days from today provide to the assessees the information and material relied upon by the Revenue so that the assessees can reply to the notices within two weeks thereafter.
(ii) The requirement of conducting any enquiry with the prior approval of the specified authority under section 148A(a) be dispensed with as a onetime measure vis à vis those notices which have been issued under Section 148 of the unamended Act from 01.04.2021 till date, including those which have been quashed by the High Courts;
(iii) The assessing officers shall thereafter pass an order in terms of section 148A(d) after following the due procedure as required under section 148A(b) in respect of each of the concerned assesses.
(iv) All the defences which may be available to the assessee under section 149 and/or which may be available under the Finance Act, 2021 and in law and whatever rights are available to the Assessing Officer under the Finance Act, 2021 are kept open and/or shall continue to be available."
Full copy of judgment is enclosed which may kindly be consider as our arguments before your honor. Annexure-2 1.3 As this order has been passed by the Honble Supreme Court on dt. 04.05.2022 and thereafter the ld. CBDT has issued the Notification on dt. 11th 17 IT(IT) A No. 23 to 27/JPR/2022 Mohamed Sarif May 2022 (copy is enclosed), wherein it has been clearly mentioned that the fresh notice is to be issued in case the notices issued from 01.04.2021 to 30.06.2021, in view of the decision of the Honble Supreme Court dt. 04.05.2022 whether notices has been challenged or not, despite this the ld. AO has passed the order on dt. 17.05.2022 and the ld. CIT(A) has also ignored the same or not taken in to consideration and confirmed the action of the ld. AO. Here we would like to submit that the ld. AO was mandatorily required to issue fresh notice u/s 148/148(b) within the period from 04.05.2022 to 04.06.2022. And admittedly the ld. AO has not issued any fresh notice in the present case in view of the decision of Honble Supreme Court and CBDT instruction. In support we have to submit that the ld. AO has also issued the penalty notices again on 15.11.2022 u/s 271(1)(c)/270A in consequent of these assessment orders, other-wise she could not have issued. Copies of these notices are enclosed for ready reference.
As the matter is now directly covered by the decision of the Honble Supreme Court CBDT instruction which is binding upon the IT Authorities, thus all the proceedings and assessment orders liable to be quashed.
2. Notice Without jurisdiction: 2.1 Further it is submitted that the assessee was not a regular IT assessee being the income below the taxable limit in India, the applicant assessee was an NRI and filed his ROI for the A.Y.s 2013- 14 to 2017-18 on dt. 22.02.2022 in response to the notice u/s 148 (PB18-19) declaring the total income as per ITR's in the status of NRI. The assessee was residing and working in Kuwait since 35-40 years. Thus he is falling within the jurisdiction of ACIT/DCIT (Intl. Tax), Jaipur. However the Notice was issued u/s 148 by the ITO Ward-1 Sikar Raj. O/o Pr. Commissioner of Income Tax-2 Jaipur which was without jurisdiction, when admittedly jurisdiction over the assessee was with the DCIT/ACIT International Taxation Jaipur Raj. Pr. Commissioner of Income Tax (International Taxation) Delhi. Thus the notice issued u/s 148 is without jurisdiction, without approval/sanction/satisfaction of appropriate higher authorities invalid, illegal, void-ab-initio, and liable to be quashed. Because it is the settled legal position of law that no notice u/s 148 can be issued without jurisdiction, without approval/ sanction/satisfaction of appropriate higher authorities.
2.2 That it cannot be said that the department was not having the information regarding assessee being the NRI. As the information regarding the interest received from bank on the basis of which the notice u/s 148 was given available before the ld. AO, as the interest was received from bank was out of NRE/ NRO account. It mean there are evidence in the form of NRE bank statements also, which proves that the assessee was NRI. Thus at the time of reasons recorded the department was having the proof of NRI, that is why thereafter the assessment record has been transferred to the ACIT/DCIT (Intl. Tax), Jaipur on 14.03.2022 2.3 The assessee has filled the objection on the facts of the jurisdiction through letter dt. 25.02.2022(PB20-21) and also on the service of notice u/s 18 IT(IT) A No. 23 to 27/JPR/2022 Mohamed Sarif 148, which is available on the record. However the ld. AO has not decided our these objections vide disposal order dt. 26.03.2022(PB69-71) nor provided the copy of reasons recorded u/s148 before last show cause notice and after filling our final reply on 25.03.2022 the ld. AO has provided the copy of reasons recorded on 26.03.2022 and passed the draft assessment order u/s 144C on dt. 28.03.022 and thereafter the ld. AO has also passed the assessment order.
2.4 And it is very well settled legal position that no notice u/s 148 can be issued without jurisdiction. Kindly refer CIT vs. Poonam Chand Surana (2014) 105 DTR 332 (Raj) held Income tax authorities--Jurisdiction of Assessing Officers--Survey u/s. 133-A was conducted at business premises of Assessee and notice u/s. 148 was issued by ITO at Suratgarh--CIT(A) held that pecuniary or territorial jurisdiction as contemplated u/s. 124 was not applicable as Assessee was filling his return of income with ITO at Chennai-- ITAT held that Assessee was regularly filing his returns of income at Chennai and at time of issuance of notice under Section 148, ITO at Suratgarh had no jurisdiction over Assessee--Held, High Court found no error or illegality in observations of CIT(A), as approved by ITAT--ITO at Suratgrarh got jurisdiction over Assessee only on 21.08.2007 and prior to that, he had no jurisdiction over Assessee when he was filing returns of income with ITO at Chennai--Proposal for transfer of jurisdiction over Assessee, from Chennai to Suratgarh, materialized only on 21.08.2007 and proceedings initiated prior to such date by issuance of notice under Section 148 was not authorized and competent--When proceedings were sought to be adopted by ITO at Suratgarh, jurisdiction for assessment in relation to Assessee was being exercised at Chennai--High Court was unable to find any cogent reason to entertain appeal so as to interfere with concurrent Orders passed by CIT (A) and ITAT--Revenue's appeal dismissed.
Recently the Honble Madras High Court in the case of Charu K. Bagdia v/s ACIT in 146 Taxman.com 345(Mad). It has been held that "14. Applying the provisions of law as well as the legal proposition laid down in the aforesaid decisions to the facts of the present case, herein, admittedly, the appellant is an assessee on the file of the second respondent and hence, the first respondent has no jurisdiction over the appellant to issue notice under section 148 for reopening the assessment for the relevant assessment year, after recording the reasons to believe that some of the income of the appellant has escaped assessment, this court is of the opinion that the notice dated 28.03.2018 issued by the first respondent under section 148 of the Act, without jurisdiction, lacks legal sanctity and hence, the same is held to be invalid. As a sequitur, the continuation of the reassessment proceedings by the second respondent, who is the jurisdictional assessing officer, without issuing any fresh notice as contemplated under section 148, but issuing notice dated 14.12.2018 under section 143(2) r/w 129 of the Act, which applies only for change in incumbent within the same jurisdiction, is also held to be invalid.
15. Pertinently, it is to be pointed out at this stage that "if an order is 19 IT(IT) A No. 23 to 27/JPR/2022 Mohamed Sarif passed by a judicial or quasi-judicial authority having no jurisdiction, it is an obligation of Appellate Court to rectify the error and set aside the order passed by the authority or forum having no jurisdiction" [Refer: State of Gujarat v. Rajesh Kumar Chimanlal Barot and another, AIR 1996 SC 2664]. Therefore, the notice issued by the first respondent under section 148 as well as the consequential notice issued by the second respondent under section 143(2) r/w 129, cannot be allowed to be sustained. However, the learned Judge erred in directing the second respondent to continue the reassessment proceedings and granting liberty to the appellant to file objections and avail the opportunity of personal hearing to be provided, by the order impugned herein, which is liable to be set aside, in the considered view of this court
16. As already held by this court, the first respondent, who recorded the reasons for reopening the assessment under section 148(2), has no jurisdiction over the appellant, to issue notice dated 28.03.2018 under section 148(1). Though the files pertaining to the reassessment proceedings of the appellant were transferred, the second respondent has no authority to continue the reassessment proceedings under section 129 and hence, the notice dated 14.12.2018 issued by him is also held to be invalid. The invalid notices so issued by the respondents vitiate the entire reassessment proceedings initiated against the appellant. Admittedly, no notice under section 148 was issued by the second respondent, who is the jurisdictional assessing officer, for reassessment of the return of income of the appellant, within the time frame stipulated under the Act. In this case, the limitation period of six years for reopening the assessment for the year 2011-12 under section 147 of the Act, came to an end on 31.03.2018. In such circumstances, there is no requirement for this court to go into the other issue based on the factual matrix projected by the appellant i.e., whether the appellant has disclosed fully and truly all the material particulars that are necessary for assessment for the relevant assessment year."
Copy is enclosed Annexure-8 Here would also like to submit at the point of time when the record has been transferred u/s 127 to jurisdictional AO, which shows that the department has accepted that the ITO Ward -1 Sikar was not having the jurisdiction over the assessee.
Also refer City Garden v/s ITO 148 TTJ 637(Jd) also refer In the case of CIT v/s Anjali Dua 219 CTR 0183(Del) held that The Tribunal noted that the request of the assessee to transfer the jurisdiction was noted in the letter dt. 25th March, 1998, whereby the no objection of CIT, New Delhi, was conveyed to the CIT, Ludhiana. It is also noted that thereafter the assessee submitted returns for the asst. yrs. 1997-98 onwards at New Delhi. It is in these facts and circumstances that the Tribunal came to the conclusion that insofar as, the assessee was concerned, after the said transfer, it is only Revenue authorities at New Delhi who had jurisdiction over the assessee's cases and who were competent to issue a notice in terms of s. 148. It may also be pointed that pursuant to the issuance of impugned notice under s. 148 20 IT(IT) A No. 23 to 27/JPR/2022 Mohamed Sarif on 28th March, 2003, when the notice under s. 142(1) was issued to the assessee in December, 2003, the assessee by her reply dt. 21st Jan., 2004 indicated that her AO was not located in Ludhiana, but was at New Delhi. The Tribunal has come to the conclusion on the basis of the facts available on the record and, no substantial question of law arises in the present case. No interference with the impugned order is called for. The appeal is dismissed. In this case objection has been raised by the assessee after 8 months. The above judgment has been followed in the case of Dr. (Mrs.) K.B. Kumar V/s ITO 131 TTJ 0511(Del). Held that "briefly stated, the relevant and undisputed facts relating to this issue involved in ground No. 2 of the appeal of the assessee are that ITO, Ward-21(3), Ghaziabad, based on information received by him from Addl. CIT, Range-I, Ghaziabad, regarding receipt of Rs. 5 lacs on 19th Feb., 2000 from Sanjay Mohan Aggarwal recorded reasons of income escaping assessment on 25th March, 2008 and issued notice under s. 148 on 27th March, 2008. The assessee vide her letter dt. 20th Nov., 2008 submitted to ITO, Ghaziabad that she had filed her IT return for asst. yr. 2001- 02 on 3rd Sept., 2001 declaring income of Rs. 4,61,330 with ITO, Range 48, New Delhi and hence this notice issued by ITO, Ghaziabad was without jurisdiction (refer to pp. 1, 2, 5 and 6 of the paper book). Thereafter, on the asking of the ITO, Ghaziabad, the assessee vide letter dt. 6th Dec., 2008 submitted a copy of IT return for asst. yr. 2007-08 along with acknowledgement receipt of AO, Ward-34(2), New Delhi (paper-book p. 20). 4.1 Further, it appears that the ITO, Ghaziabad transferred the case to the office of AO, Ward-34(2), New Delhi who issued a notice dt. 16th Dec., 2008 to the assessee under s. 143(2) for appearance before him on 23rd Dec., 2008 (see paper book p. 22).
4.2 In response to the said notice the assessee submitted her reply dt. 23rd Dec., 2008, placed at p. 23 of the paper book, mentioning therein that the proceedings under s. 148 had become time-barred and was illegal and proceedings deserved to be filed. However, the assessee received a letter dt. 23rd Dec., 2008 from the ITO, New Delhi, assessing income of the assessee at a sum of Rs. 9,61,380 by adding the gifted amount of Rs. 5 lacs and on appeal the same was confirmed by the learned CIT(A).
5. The learned Authorised Representative for the assessee contended before us that the reassessment order passed by the ITO, Ward-34, New Delhi was without jurisdiction and liable to be quashed because he has simply framed the reassessment by issuing a notice under s. 143(2) on 16th Dec., 2008 without recording any reasons and without issuing a fresh notice under s. 148 of the Act. He further submitted that now the issue, i.e., whether in the absence of any valid recording of reasons by the AO having jurisdiction and without issuing notice under s. 148 the order passed by the AO was without jurisdiction and liable to be quashed, stands covered in favour of assessee and against the Revenue. In support of his contentions, the learned Authorised Representative for the assessee relied on the following decisions :
(i) ITO vs. Krishan Kumar Gupta (2008) 16 DTR (Del)(Trib) 1--wherein the Tribunal, Delhi Bench 'E' held reassessment completed by an ITO on the basis of notice under s. 148 issued by another ITO who had no jurisdiction 21 IT(IT) A No. 23 to 27/JPR/2022 Mohamed Sarif over the assessee is not valid. Reassessment was also held to be invalid for the reason that the jurisdiction over assessee's case was not transferred by any order passed under s. 127 by any competent authority to the ITO who passed the impugned assessment order.
(ii) Ranjeet Singh vs. Asstt. CIT (2009) 120 TTJ (Del) 517 : (2008) 10 DTR (Del)(Trib) 181--wherein the Tribunal held that notice under s. 148 issued by the ITO at Ghaziabad to the assessee who was assessed to tax in Delhi was without jurisdiction and, therefore, assessment framed on the basis of said notice is bad in law; impugned notice was not in substance and effect in conformity with the provisions of s. 120 r/w s. 147 and thus, the provisions of s. 292B are not applicable."
We rely upon further judgments of Honble ITAT Jaipur Bench Jaipur in the case of Sh. Subhash Chand Ajmera v/s ITO Ward 1(4), Jaipur, in ITA No.61/Jp/2017 dt. 30.01.2020 wherein the honble ITAT has quashed the assessment on the jurisdiction under the same facts. Hence now the matter is directly covered. Copy of order is enclosed.
Here also the same position.
3. No Approval from Jurisdictional or competent Authority: Further the approval must be obtained from the competent or jurisdictional authority. In the present case the competent or jurisdictional authority was Add.CIT(Intl. Tax)-Delh and CIT(Intl tax.)Delhi not Add.CIT-7 Jaipur and PCIT-2 Jaipur. In the case of CIT V/s SPL's Siddhartha Ltd 345 ITR 223(Del). Reassessment--Sanction for issue of notice u/s 151(1)--AO issued notice u/s 147 read with S. 148 for reopening assessment after expiry of four years from end of relevant assessment year, which was subsequently set aside by ITAT on ground that requisite approval of Additional CIT, which is mandatorily required, was not taken--Held, AO was required to take approval of Competent Authority u/s 151 (1)--AO had specifically sought approval of Commissioner only--Therefore, it cannot be said that the Joint Commissioner/Additional Commissioner had granted the approval--Further, even though the file was routed through Additional Commissioner, he did not apply his mind or gave any sanction--Instead, he requested Commissioner to accord the approval--It, thus, cannot be said that it is an irregularity curable u/s. 292B--If a statutory authority has been vested with jurisdiction, he has to exercise it according to its own discretion--If discretion is exercised under direction or in compliance with some higher authorities instruction, then it will be case of failure to exercise discretion altogether--Therefore, the Tribunal has rightly decided the legal aspect.
In the case of CIT vs. Soyuz Industrial Resources Ltd.(2015) 232 Taxman 0414 (Delhi HC) held Reassessment--Sanction for issuance of notice-- Assessee had filed its returns in a normal course and assessment was framed u/s 143(1)--Based upon information received by AO, a satisfaction note was recorded and a notice was issued beyond four years from the end of the assessment year, under proviso to s 147(1)--Reassessment proceedings were completed--Assessee claimed that the notice u/s 147 was unsustainable because it was not approved by the competent authority in 22 IT(IT) A No. 23 to 27/JPR/2022 Mohamed Sarif accordance with Section 151--CIT(A) sanctioned re-assessment proceedings through issuance of notice u/s 148--ITAT's allowed assessee's appeal by holding that the CIT lacked the authority to sanction re-assessment proceedings through issuance of notice u/s 148--Held, Privy Council in Nazir Ahmad V. Emperor had laid down that if the statute mandates that something be done in a particular manner, it should be in that manner or not at all--Thus, it was not court's job to render, in the process of interpretation, an entire provision academic or inoperative--As per Section 151, in case the original assessment was completed "other than" i.e. otherwise than u/s 143(3) or during the course of re-assessment proceedings, competent authority would be the Joint Commissioner--Instant Court had to give effect to plain words of the statute which unambiguously stated that the competent authority in such cases was the Joint Commissioner and not the Chief Commissioner or the Principal Commissioner--Since the original assessment was completed "other than" the eventualities contemplated in Section 151(1), i.e. it was processed u/s 143(1), thus, clearly Section 151(2) would be applicable--No infirmity was found in the order of the ITAT--Revenue's appeal dismissed.
In the case of Pr. CIT vs. N.C. CABLES LTD.(2017) 98 CCH 0018 DelHC held that Reassessment--Issuance of Notice--Sanction for issue of Notice-- Assessee had in its return for AY 2001-02 claimed that sum of Rs. 1 Crore was received towards share application amounts and a further sum of Thirty Five Lakhs was credited to it as an advance towards loan--Original assessment was completed u/s 143(3)--However, pursuant to reassessment notice, which was dropped due to technical reasons, and later notice was issued and assessments were taken up afresh--After considering submissions of assessee and documents produced in reassessment proceedings, AO added back a sum of Rs.1,35,00,000--CIT(A) held against assessee on legality of reassessment notice but allowed assessee's appeal on merits holding that AO did not conduct appropriate enquiry to conclude that share inclusion and advances received were from bogus entities--Tribunal allowed assessee's appeal on merits--Revenue appealed against appellate order on merits--Assessee's cross appeal was on correctness of reopening of assessment--Tribunal upheld assessee's cross-objections and dismissed Revenue's appeal holding that there was no proper application of mind by concerned sanctioning authority u/s Section 151 as a pre-condition for issuing notice u/s 147/148--Held, Section 151 stipulates that CIT (A), who was competent authority to authorize reassessment notice, had to apply his mind and form opinion--Mere appending of expression 'approved' says nothing--It was not as if CIT (A) had to record elaborate reasons for agreeing with noting put up--At same time, satisfaction had to be recorded of given case which could be reflected in briefest possible manner--In present case, exercise appears to have been ritualistic and formal rather than meaningful, which was rationale for safeguard of approval by higher ranking officer--Revenue's appeal dismissed.
23 IT(IT) A No. 23 to 27/JPR/2022Mohamed Sarif Also refer the decision of Honble Raj High Court in the case of Dhadha Exports V/s ITO 377 ITR 347(Raj.)
4. Copy of reasons Recorded not supplied nor decided the objections which has been raised by the assessee: Further after filling the ITR u/s 148 on dt. 22.02.2022 we had demanded the copy of reasons recorded u/s 148 and also filed the objections against the issuance of notice or proceedings u/s 148 vide letter dt. 25.02.2022 (PB20-21), wherein we had specifically objected jurisdiction issue and service of notice. However the ld. AO has neither provided the copy of reasons recorded u/s 148 before last show cause notice, which was mandatory as per law and settled legal position of law nor provided opportunity to file further objection after proving the copy of reasons recorded u/s 148 as we had specifically asked for the same vide letter dt. 25.02.2022 para 5 (PB21).
Recently the honble ITAT Jaipur Bench in the case of Banwari Lal pareek V/s ITO Ward 1(5), Jaipur in ITA No. 135/Jp/2020 dt. 27.07.2022 it has been held that "2.3 We have heard both the parties and perused the material available on record. It is an admitted fact that from the very beginning the assessee had been demanding the reasons recorded and in this regard the reply dated 27- 11-2017 (PBP 53-54) of the assessee written to the ITO, wherein the assessee had specifically asked and demanded the AO to provide the reasons for issuance of Notice u/s 148 of the Act to the assessee. However, the AO did not provide the same. In appeal before the ld. CIT(A), the assessee had categorically raised the specific ground that the reasons recorded for reopening of the assessment was never supplied / provided to the assessee. However, the ld. CIT(A) had ignored the said ground of the assessee and also did not deal with the specific ground raised by the assessee. In our view, the AO was bound to furnish reasons recorded by him within a reasonable time as has been held by the Hon'ble Supreme Court in the case of GKN Driveshafts (India) Ltd. vs ITO (supra) wherein the Hon'ble Court held as under:-
''5. We see no justifiable reason to interfere with the order under challenge. However, we clarify that when a notice u/s 148 of the Income Tax Act is issued, the proper course of action for the noticee is to file return and he so desires, to seek reasons for issuing notices. The Assessing Officer is bound to furnish reasons within a reasonable time. On receipt of reasons, the noticee is entitled to file objections to issuance of notice and the assessing officer is bound to dispose of the same by passing a speaking order. .In the instant case, as the reasons have been disclosed in these proceedings, the assessing officer has to dispose of the objections, if filed, by passing a speaking order, before proceeding with the assessment in respect of the above said five assessment years.'' 24 IT(IT) A No. 23 to 27/JPR/2022 Mohamed Sarif As per record, since the reasons recorded for reopening of the assessment were not furnished to the assessee till the completion of the assessment, therefore, in our considered view, the reassessment order in these circumstances of the case, cannot be upheld. For reaching this conclusion, we draw strength from the decision of Hon'ble Bombay High Court in the case of CIT vs Videsh Sanchar Nigam Ltd (2012) 340 ITR 66 wherein Hon'ble Bombay High Court had categorically held that since the reasons recorded for reopening of the assessment were not furnished to the assesse till the completion of the assessment then reassessment order cannot be upheld and thus dismissed the appeal filed by the Revenue. Even in the case of CIT vs Trend Electronics reported in (2015) 379 ITR 456, Hon'ble Bombay High Court has categorically held as under:-
''Income Tax Act 1961 Section 147 and 148 Reopening of assessment - validity of - Notice - Objections - Recording of reasons and furnishing of reasons to be strictly complied with - Failure on part of assessee to furnish reasons recorded to assessee when sought for - Reassessment not valid - Quashed - Appeal dismissed.'' Hon'ble Karnataka High Court in the case of Pr.CIT and Another vs V. Ramaiah (ITA No. 451 of 2017 dated 02-07-2018) has held as under:-
''8. The decision relied upon by the learned counsel for the Revenue is distinguishable on facts. The order which was to be passed by the assessing authority as preliminary objection of the assessee, once the assessee has raised the objection to such reassessment' proceedings, the meeting of such objections in the main reassessment order, could be procedural aspect of the matter but the recording of the reasons before the initiation of the reassessment proceedings and communication thereof to the assessee is sine qua non as held by the Hon'ble Supreme Court and that goes to the root of the matter and confers or deprives the assessing authority of the jurisdiction to undertake such reassessment proceedings, as the case may be.
9. In the present case, admittedly, such reasons were not supplied to the assessee during the contemporary period before going ahead with the reassessment proceedings. Therefore, the Tribunal in our opinion was perfectly justified in quashing such reassessment order.
10. We do not find any substantial question of law arising in the matter. Therefore, the appeal of the Revenue stands dismissed. No costs.'' The SLP of the Revenue against the above order of Karnataka High Court (supra) has also been dismissed by the Hon'ble Supreme Court reported in (2019) 262 Taxman 16. Therefore considering the totality of the facts and circumstances of the case and keeping in view the legal proposition as discussed above, we hold that recording of reasons before initiation of reassessment proceedings and communication thereof to the assessee is 25 IT(IT) A No. 23 to 27/JPR/2022 Mohamed Sarif sine qua non as held by the Hon'ble Supreme Court (supra) that goes to the root of the matter and confers or deprives the assessing authority of the jurisdiction to undertake such reassessment proceedings, as the case may be. In the present case, admittedly such reasons were not supplied to the assessee during the contemporary period before going ahead with the reassessment proceedings. Therefore, in our view, the reassessment proceedings initiated and consequential order passed by the AO and appeal order passed by the ld. CIT(A) are not justified and, therefore, we quash such reassessment order. Therefore, the ground raised by the assessee is allowed and consequential appeal of the assessee is also allowed with no order as to cost."
Here also the same position.
5. Further the Honble Raj. High Court in the case of M/s K.C. Mercantile V/s DCIT Circle-2, Jaipur in DBIT No. 292/2016 dt. 07.11.2017 it has been held.
Before proceeding with the matter, it is not out of place to mention that the law declared by the Supreme Court in GKN Driveshafts (supra) clearly held that the preliminary objection is to be decided as the first, it cannot be decided subsequently. The argument which has been canvassed by the assessee is required to be considered very seriously more particularly in view of the observations made by the Supreme Court in the case of KSS Petron Private Ltd (supra) which is followed in Hotel Blue Moon (supra), the law declared by the Supreme Court is taken in true spirit whether it will open a second inning in his own. Section 153(3) is to be read very cautiously as 153 powers are given to the Department, the Court has to look into whether the law declared by the Supreme Court is given away or protected. In the present case, as the Assessing Officer has clearly ignored the law declared by the Supreme Court, in that view of the matter, the issues which are raised in the matter, the Tribunal ought not to have remitted back for reassessment since period of limitation has already expired as the authority will get extended time of limitation beyond 9 months which is not the object of the Income Tax Act.
In that view of the matter, on issue No. 1 and 2, the order of reassessment passed by the Tribunal is declared null and void. The questions are answered in favour of assessee and against the Department.
Thus on the above legal position of law the notice u/s 148 or proceedings u/s 147/148 and consequent assessment order liable to quashed.
6. Assessment was passed in gross breach of principal of natural justice:
Further the ld. AO has passed the assessment order in gross breach of principal of natural justice. As the ld. AO has issued the show cause notice on dt.25.03.2022 asking the assesee to file the reply till 25.03.2022. We had also objected the same vide letter dt. 25.03.2022(PB64). In this regard assessee had objected this notice and submitted that this notice is illegal, invalid and void ab-initio and issued in gross breach of law and against the principal of 26 IT(IT) A No. 23 to 27/JPR/2022 Mohamed Sarif natural justice without following proper procedures and time as per law. Hence liable to be dropped. And also requested to give 10 days time. However despite this the ld.AO has passed the order u/s 144C on dt.28.03.2022. and even the ld. AO has not considered this letter as clearly appearing from the assessment order. It means the ld. AO predetermined to make the addition.
Thus the order passed is as in the case of Sh. Ashutosh Bhargav v/s Pr. CIT, Jaipur in ITA No.20/Jp/2021 dt.06.01.2022 the Honble ITAT it has been held that "After hearing the parties on this issue, we have perused the notice of hearing which is at page No. 46 of the paper book and according to the said notice of hearing which was issued by the office of the Pr.CIT to the assessee. The said notice is dated 18/03/2021 wherein the matter for final hearing was fixed on 24/03/2021 at 6.04 PM. However, on 24/03/2021, the assessee requested for seeking some more time for engaging and for submitting documents. However, the ld. Pr.CIT, did not consider the request of the assessee and passed order on 31/3/2021 itself. Thus, considering the said facts, we are of the view that right to fair hearing is guaranteed right to an assessee and thus granting of effective opportunity is sine qua non in Section 263 of the Act for setting aside a statutory order. Thus, in our view, it was the duty of the ld. Pr.CIT to provide the assessee an effective and reasonable opportunity of hearing so as to enable him to substantiate its claim. In any case, it is one of the fundamental principles of natural justice that no person can be condemned unheard i.e audi alteram partem, the impugned order was thus passed in violation of the principles of natural justice in absence of any effective/reasonable opportunity of hearing provided to the assessee. Although, the ld. CIT-DR has relied upon the decision in the case of Deniel Merchants P. ltd. & Anr. Vs ITO & Anr in Special Leave Petition No. 23976/2017 dated 29/11/2017, however, the facts of the present case are altogether different from the facts of case as relied by the ld. CIT-DR as in that case, the issue was receipt of share application money whereas the facts of the present case are altogether different. The said case, as relied by the ld. CIT-DR, is not found application in the facts of the case under consideration. In our view, it is mandatory to apply the principles of natural justice irrespective of the fact as to whether there is any statutory provision or not. As per facts of the present case, the assessee was not afforded opportunity much less sufficient opportunity to give the reply to the show cause notice. Therefore it is clear that the ld. Pr. CIT in a hurriedly manner without affording opportunity of hearing to the assessee, had passed impugned order by violating principles of audi alteram partem. Thus, keeping in view the principles laid down by the Coordinate Bench of Cuttak ITAT in the case of Jaidurga Minerals v/s Pr. CIT (supra) and in the case of Jagnnath Prasad Bhargva vs Lal Nathimal AIR 1943 All 17 and in view of the above factual position, the 27 IT(IT) A No. 23 to 27/JPR/2022 Mohamed Sarif ld. Pr.CIT has committed a gross error in not providing effective/reasonable opportunity of being heard to the assessee before passing the order. Accordingly, the revisional proceedings framed U/s 263 of the Act by the ld. Pr.CIT stands quashed."
Here also the same position and liable to be quashed the assessment order
7. No notice to the assessee while transferring the case u/s 127 or in proceedings u/s 127: Further The ld. AO has started the proceedings u/s 127 on 24.02.2022 and transferred the case on 15.03.2022 from ITO Ward-1 Sikar to DCIT(Intl. Tax) Jaipur but in this proceedings no notice has been given to the assessee which was also required as per law.
Prayer: Thus in view of the above facts, circumstances and the legal position of law the proceedings so initiated and assessment so passed may kindly be quashed.
8. Further our submissions on GOA1-2 for A.Y. 2014-15 to 2017-18 in IT(IT)A No. 24 to 27/Jp/2022 except figure or amount are same as for A.Y. 2013-14 in IT(IT)A No. 23/Jp/2022 which may kindly be treated in these years also and considered the same also here.
GOA-3: Addition of Rs.29,96,427/-on account of interest received from bank.
FACTS: Kindly refer facts mentioned in GOA-1:
SUBMISSIONS:
1. On the additions kindly refer our reply to AO dt. 25.03.2022(PB64-68) and also our reply dt.25.02.222(PB20-21) and 22.03.2022(PB23), wherein we have clearly explained everything and the ld. AO has not rebutted or disproved our contentions or plea and made huge additions in all the year otherwise no such additions were required to be made.
2. Further the ld. AO while making the additions has ignored the facts that the assessee was NRI and the FDR's were being made from the funds in NRE accounts.
3. Further the ld. AO has made the additions as under vide Annexure-1 On looking to this chart it is clearly appearing that firstly no additions is required to be made. Secondly at the worst as per record if any, only the addition is to be made to the extent of interest income as appearing in 26AS. 3.1 In the A.Y. 2013-14 and 2014-15 the ld. AO has made additions of Rs.27,20,723/- and Rs.29,67,258/- respectively on account of interest income as per 26AS. The ld. AO has also made the addition of TDS amount of Rs.
2,72,076/- and 2,96,729/- respectively which was already included in the total interest income shown in 26AS, which absolutely wrong , invalid and double tax of same amount, the ld. AO has also made the addition of saving bank 28 IT(IT) A No. 23 to 27/JPR/2022 Mohamed Sarif interest income of Rs.3,628/- and 3,765/- respectively, which is also exempt as per the Act.
3.2.1 In the A.Y. 2015-16 the ld. AO has made addition of Rs.31,27,801/-on account of interest income as per 26AS. The ld. AO has also made the addition the ld. AO has also made the addition of saving bank interest income of Rs.3,854/-, which is also exempt as per the Act.
3.2.2 The ld. AO has also made the addition of FDR's Maturity Interest amount of Rs.85,34,147/- which was already included and taxed in the total interest income in the earlier years interest income (otherwise it must have been reflected in the 26AS because it has come from bank FDR's not from any elsewhere), which absolutely wrong , invalid and double tax of same amount. The ld. AO has not think necessary to verifies these facts from the bank in case of any doubt before making such huge additions and made additions blindly.
3.2.3 The ld. AO has also made the addition of Rs.2,82,48,430/- on account of Reinvestment or renewal of FDRs. In this regard it is submitted that the ld. AO has wrongly ignored the bank statements, FDR;s statements, reply of the assessee etc and blindly made the additions. As the admittedly facts available on record the assessee has not made any new FDRs'. The assessee has only renewed the earlier FDRs' i.e only reinvested the amount, which has been received on the maturity of earlier FDR's. The ld. AO has not think necessary to verifies these facts from the bank in case of any doubt before making such huge additions and made additions blindly. 3.3.1 In the A.Y. 2016-17 and 2017-18 the ld. AO has made addition of Rs.32,21,694/- and 30,02,997/- respectively on account of interest income as per 26AS. The ld. AO has also made the addition.
3.3.2 The ld. AO has also made the addition of FDR's Maturity Interest amount of Rs. 2,68,924/- and 7,08,627/- respectively which was already included and taxed in the total interest income in the earlier years interest income (otherwise it must have been reflected in the 26AS because it has come from bank FDR's not from any elsewhere), which absolutely wrong , invalid and double tax of same amount. The ld. AO has not think necessary to verifies these facts from the bank in case of any doubt before making such huge additions and made additions blindly.
In support we are also enclosing herewith FDRS's Charts details showing clear positions vide Annexure's-6-7. And also form 26AS for all the years Annexure-4.
4. Thus looking the above facts, chart, bank account details, statements, FDR's details. The ld. AO has made about 70% excess additions as per actual addition which was to be made as per of the ld. AO. However/although we have not accepted even remaining 30% additions.
29 IT(IT) A No. 23 to 27/JPR/2022Mohamed Sarif
5. As the assessee had made the FDR's in NRE account before 2011 and in the year 2011 the bank has converted these FDR's in the NRO account without taking the consent of the assesse (as stated by the assessee). The bank has not brought the facts on record that the FDR's interest is taxable in NRO account, which were exempt in the NRE's account. If the bank has brought these vital facts in the notice of the assessee he could have stopped to the bank. And if the assessee has come to know that TDS has been deducted on these FDR's, he could have filed the ROI and claimed the TDS amount. A person shall never want to transfer the FDR's or income from exempt to taxable. Hence only due to mistake of bank officer a bonafide assessee should not be suffer.
6. No supporting material with AO: Further the assessee in support had filed detailed written submissions, supporting papers/ documents, copy of bank account, statement of FDRS's. Other side the ld. AO has not filed a single evidence in his support except in his own assumption, presumption, guess work and suspicion and blindly ignored these very vital facts or evidences of the case and proceeded on their own guess work, assumption, presumption and suspicion and it is the settled legal position that no addition can be the basis of suspicion, assumptions' and presumption. An allegation remains a mere allegation unless proved. Suspicion may be strong however cannot take the place of reality, are the settled principles kindly refer Dhakeshwari Cotton Mills 26 ITR 775 (SC) also refer R.B.N.J. Naidu v/s CIT 29 ITR 194 (Nag), Kanpur Steel Co. Ltd. v/s CIT 32 ITR 56 (All).Also refer CIT v/s KulwantRai 291 ITR 36( Del). In CIT v/s Shalimar BuildwellPvt Ltd 86 CCH 250(All) it has been held that the AO made the addition merely on suspicion which was not desirable in the eye of law.
Prayer: In view of the above facts, circumstances and legal position of the proceeding u/s 147/148, assessment order may kindly be quashed and also the entire addition may kindly be deleted in full and oblige."
13. In addition, the above written submission the ld. AR of the assessee drawn our attention to the notice issued u/s. 148 of the Act. The same is extracted here in below:
30 IT(IT) A No. 23 to 27/JPR/2022Mohamed Sarif
14. From the above notice the ld. AR of the assessee objected to the issue of the impugned above notice so issued having issued on 05.04.2021 though dated 31.03.2021 is required to be issued in the new regime. At the same time relying the decision of Hon'ble Supreme Court in the case of Union of India & Ors. Vs. 31 IT(IT) A No. 23 to 27/JPR/2022 Mohamed Sarif Ashish Agarwal in Civil Appeal No. 3005/2022 dated 04.05.2022 the ld. AR of the assessee submitted that the court has directed to the department to follow certain procedure and the same is not followed by the ld. AO The order of the apex court is dated 04.05.2022 where as the order under appeal is dated 17.05.2022 i.e. after the pronouncement of the judgement in that case. The observations of the Hon'ble Supreme Court in that case is reiterated here in below:-
" 5. We have heard Shri N. Venkataraman, learned ASG appearing on behalf of the Revenue and Shri C.A. Sundaram and Shri S. Ganesh, learned Senior Advocates and other learned counsel appearing on behalf of the respective assessee.
6. It cannot be disputed that by substitution of sections 147 to 151 of the Income Tax Act (IT Act) by the Finance Act, 2021, radical and reformative changes are made governing the procedure for reassessment proceedings. Amended sections 147 to 149 and section 151 of the IT Act prescribe the procedure governing initiation of reassessment proceedings. However, for several reasons, the same gave rise to numerous litigations and the reopening were challenged inter alia, on the grounds such as (1) no valid "reason to believe" (2) no tangible/reliable material/information in possession of the assessing officer leading to formation of belief that income has escaped assessment, (3) no enquiry being conducted by the assessing officer prior to the issuance of notice; and reopening is based on change of opinion of the assessing officer and (4) lastly the mandatory procedure laid down by this Court in the case of GKN Driveshafts (India) Ltd. Vs. Income Tax Officer and ors; (2003) 1 SCC 72, has not been followed. 6.1 Further preFinance Act, 2021, the reopening was permissible for a maximum period up to six years and in some cases beyond even six years leading to uncertainty for a considerable time. Therefore, Parliament thought it fit to amend the Income Tax Act to simplify the tax administration, ease compliances and reduce litigation. Therefore, with a view to achieve the said object, by the Finance Act, 2021, sections 147 to 149 and section 151 have been substituted.
6.2 Under the substituted provisions of the IT Act vide Finance Act, 2021, no notice under section 148 of the IT Act can be issued without 32 IT(IT) A No. 23 to 27/JPR/2022 Mohamed Sarif following the procedure prescribed under section 148A of the IT Act. Along with the notice under section 148 of the IT Act, the assessing officer (AO) is required to serve the order passed under section 148A of the IT Act. section 148A of the IT Act is a new provision which is in the nature of a condition precedent. Introduction of section 148A of the IT Act can thus be said to be a game changer with an aim to achieve the ultimate object of simplifying the tax administration, ease compliance and reduce litigation.
6.3 But prior to preFinance Act, 2021, while reopening an assessment, the procedure of giving the reasons for reopening and an opportunity to the assessee and the decision of the objectives were required to be followed as per the judgment of this Court in the case of GKN Driveshafts (India) Ltd. (supra).
6.4 However, by way of section 148A, the procedure has now been streamlined and simplified. It provides that before issuing any notice under section 148, the assessing officer shall (i) conduct any enquiry, if required, with the approval of specified authority, with respect to the information which suggests that the income chargeable to tax has escaped assessment; (ii) provide an opportunity of being heard to the assessee, with the prior approval of specified authority; (iii) consider the reply of the assessee furnished, if any, in response to the showcause notice referred to in clause (b); and (iv) decide, on the basis of material available on record including reply of the assessee, as to whether or not it is a fit case to issue a notice under section 148 of the IT Act and (v) the AO is required to pass a specific order within the time stipulated. 6.5 Therefore, all safeguards are provided before notice under section 148 of the IT Act is issued. At every stage, the prior approval of the specified authority is required, even for conducting the enquiry as per section 148A(a). Only in a case where, the assessing officer is of the opinion that before any notice is issued under section 148A(b) and an opportunity is to be given to the assessee, there is a requirement of conducting any enquiry, the assessing officer may do so and conduct any enquiry. Thus if the assessing officer is of the opinion that any enquiry is required, the assessing officer can do so, however, with the prior approval of the specified authority, with respect to the information which suggests that the income chargeable to tax has escaped assessment.
6.6 Substituted section 149 is the provision governing the time limit for issuance of notice under section 148 of the IT Act. The substituted section 149 of the IT Act has reduced the permissible time limit for issuance of such a notice to three years and only in exceptional cases ten years. It also provides further additional safeguards which were absent under the earlier regime preFinance Act, 2021.
7. Thus, the new provisions substituted by the Finance Act, 2021 being remedial and benevolent in nature and substituted with a specific aim and object to protect the rights and interest of the assessee as well as and the same being in public interest, the respective High Courts have 33 IT(IT) A No. 23 to 27/JPR/2022 Mohamed Sarif rightly held that the benefit of new provisions shall be made available even in respect of the proceedings relating to past assessment years, provided section 148 notice has been issued on or after 1st April, 2021. We are in complete agreement with the view taken by the various High Courts in holding so.
8. However, at the same time, the judgments of the several High Courts would result in no reassessment proceedings at all, even if the same are permissible under the Finance Act, 2021 and as per substituted sections 147 to 151 of the IT Act. The Revenue cannot be made remediless and the object and purpose of reassessment proceedings cannot be frustrated. It is true that due to a bonafide mistake and in view of subsequent extension of time vide various notifications, the Revenue issued the impugned notices under section 148 after the amendment was enforced w.e.f. 01.04.2021, under the unamended section
148. In our view the same ought not to have been issued under the unamended Act and ought to have been issued under the substituted provisions of sections 147 to 151 of the IT Act as per the Finance Act, 2021. There appears to be genuine nonapplication of the amendments as the officers of the Revenue may have been under a bonafide belief that the amendments may not yet have been enforced. Therefore, we are of the opinion that some leeway must be shown in that regard which the High Courts could have done so. Therefore, instead of quashing and setting aside the reassessment notices issued under the unamended provision of IT Act, the High Courts ought to have passed an order construing the notices issued under unamended Act/unamended provision of the IT Act as those deemed to have been issued under section 148A of the IT Act as per the new provision section 148A and the Revenue ought to have been permitted to proceed further with the reassessment proceedings as per the substituted provisions of sections 147 to 151 of the IT Act as per the Finance Act, 2021, subject to compliance of all the procedural requirements and the defences, which may be available to the assessee under the substituted provisions of sections 147 to 151 of the IT Act and which may be available under the Finance Act, 2021 and in law. Therefore, we propose to modify the judgments and orders passed by the respective High Courts as under:
(i) The respective impugned section 148 notices issued to the respective assessees shall be deemed to have been issued under section 148A of the IT Act as substituted by the Finance Act, 2021 and treated to be showcause notices in terms of section 148A(b). The respective assessing officers shall within thirty days from today provide to the assessees the information and material relied upon by the Revenue so that the assessees can reply to the notices within two weeks thereafter;
(ii) The requirement of conducting any enquiry with the prior approval of the specified authority under section 148A(a) be dispensed with as a onetime measure visàvis those notices which have been issued under Section 148 of the unamended Act from 01.04.2021 till date, including those which have been quashed by the High Courts;34 IT(IT) A No. 23 to 27/JPR/2022
Mohamed Sarif
(iii) The assessing officers shall thereafter pass an order in terms of section 148A(d) after following the due procedure as required under section 148A(b) in respect of each of the concerned assessees;
(iv) All the defences which may be available to the assessee under section 149 and/or which may be available under the Finance Act, 2021 and in law and whatever rights are available to the Assessing Officer under the Finance Act, 2021 are kept open and/or shall continue to be available and;
(v) The present order shall substitute/modify respective judgments and orders passed by the respective High Courts quashing the similar notices issued under unamended section 148 of the IT Act irrespective of whether they have been assailed before this Court or not.
9. There is a broad consensus on the aforesaid aspects amongst the learned ASG appearing on behalf of the Revenue and the learned Senior Advocates/learned counsel appearing on behalf of the respective assessees. We are also of the opinion that if the aforesaid order is passed, it will strike a balance between the rights of the Revenue as well as the respective assesses as because of a bonafide belief of the officers of the Revenue in issuing approximately 90000 such notices, the Revenue may not suffer as ultimately it is the public exchequer which would suffer.
Therefore, we have proposed to pass the present order with a view avoiding filing of further appeals before this Court and burden this Court with approximately 9000 appeals against the similar judgments and orders passed by the various High Courts, the particulars of some of which are referred to hereinabove. We have also proposed to pass the aforesaid order in exercise of our powers under Article 142 of the Constitution of India by holding that the present order shall govern, not only the impugned judgments and orders passed by the High Court of Judicature at Allahabad, but shall also be made applicable in respect of the similar judgments and orders passed by various High Courts across the country and therefore the present order shall be applicable to PAN INDIA.
10. In view of the above and for the reasons stated above, the present Appeals are ALLOWED IN PART. The impugned common judgments and orders passed by the High Court of Judicature at Allahabad in W.T. No. 524/2021 and other allied tax appeals/petitions, is/are hereby modified and substituted as under:
(i) The impugned section 148 notices issued to the respective assessees which were issued under unamended section 148 of the IT Act, which were the subject matter of writ petitions before the various respective High Courts shall be deemed to have been issued under section 148A of the IT Act as substituted by the Finance Act, 2021 and construed or treated to be showcause notices in terms of section 148A(b). The assessing officer shall, within thirty days from today provide to the respective assessees information and material relied upon by the 35 IT(IT) A No. 23 to 27/JPR/2022 Mohamed Sarif Revenue, so that the assesees can reply to the showcause notices within two weeks thereafter;
(ii) The requirement of conducting any enquiry, if required, with the prior approval of specified authority under section 148A(a) is hereby dispensed with as a onetime measure visàvis those notices which have been issued under section 148 of the unamended Act from 01.04.2021 till date, including those which have been quashed by the High Courts.
Even otherwise as observed hereinabove holding any enquiry with the prior approval of specified authority is not mandatory but it is for the concerned Assessing Officers to hold any enquiry, if required;
(iii) The assessing officers shall thereafter pass orders in terms of section 148A(d) in respect of each of the concerned assessees; Thereafter after following the procedure as required under section 148A may issue notice under section 148 (as substituted);
(iv) All defences which may be available to the assesses including those available under section 149 of the IT Act and all rights and contentions which may be available to the concerned assessees and Revenue under the Finance Act, 2021 and in law shall continue to be available.
11. The present order shall be applicable PAN INDIA and all judgments and orders passed by different High Courts on the issue and under which similar notices which were issued after 01.04.2021 issued under section 148 of the Act are set aside and shall be governed by the present order and shall stand modified to the aforesaid extent. The present order is passed in exercise of powers under Article 142 of the Constitution of India so as to avoid any further appeals by the Revenue on the very issue by challenging similar judgments and orders, with a view not to burden this Court with approximately 9000 appeals. We also observe that present order shall also govern the pending writ petitions, pending before various High Courts in which similar notices under Section 148 of the Act issued after 01.04.2021 are under challenge.
12. The impugned common judgments and orders passed by the High Court of Allahabad and the similar judgments and orders passed by various High Courts, more particularly, the respective judgments and orders passed by the various High Courts particulars of which are mentioned hereinabove, shall stand modified/substituted to the aforesaid extent only.
All these appeals are accordingly partly allowed to the aforesaid extent."
36 IT(IT) A No. 23 to 27/JPR/2022Mohamed Sarif
15. After the aforesaid land mark judgment of the apex court the central board of direct taxes (CBDT) has passed a detailed guideline to all the assessing officer upon which the ld. AR also relied upon. The content of the CBDT Circular No. 01/2022 dated 11.05.2022 reiterated here in below:-
"Subject: Implementation of the judgment of the Hon'ble Supreme Court dated 04.05.2022 (2022 SCC Online SC 543) (Union of India v. Ashish Agarwally-Instruction regarding
1. Hon'ble Supreme Court, vide its judgment dated 04.05.2022 (2922 SCC Online SC 543), in the case of Union of India v. Ashish Agarwal has adjudicated on the validay of the issue of reassessment notices issued by the Assessing Officers during the period beginning on 1 April, 2021 and ending with 30 June 2021,within the time extended by the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act 2020 hereinafter referred to as "TOLA"] and various notifications issued thereunder these reassessment notices hereinafter referred to as "extended reassessment notices")
2. These extended reassessment notices were issued by the Assessing Officers under the provision of section 148 of the Income- tax Act, 1961 (hereinafter referred to as "he Acts following the procedure prescribed under various sections pertaining to reassenes sandy sections 147 to 151, as they existed prior to their amendment by the Finance Act. 2121 (hereinafter referred to as "old law"). With effect from 1 April 2021, the old law has been substinated with new sections 147-151 (hereinafter referred to as the "new law).
3. Hon'ble Supreme Court has held that these extended reassessment notices issued under the old law shall be deemed to be the show cause notices issued under clause (b) of Section 148A of the new law and has directed Assessing Officers to follow the procedure with respect to such notices. It has also held that all the defences available assessors under section 149 of the new law and whatever rights are available to the Assessing Officer under the new faw shall continue to be available Hon'ble Supreme Court has passed 37 IT(IT) A No. 23 to 27/JPR/2022 Mohamed Sarif this order in exercise of its power under Article 142 of the Continuation of India.
4. The implementation of the judgment of Hon'ble Supreme Court is required to be done in a uniform manner. Accordingly, in exercise of its power under section 119 of the Act the Central Board of Direct Taxes (hereinafter referred to as "the Board") directs that the following may be taken into consideration while implementing this judgment.
5.0 Scope of the judgment:
5.1 Taking into account the decision of the Hon'ble Supreme Court in various paragraphs, is clarified that the judgment applies to all cases where extended reassessment notices have been issued. This is irrespective of the fact whether such notices have been challenged or not.
6.0 Operation of the new section 149 of the Act to identify cases where fresh notice under section 148 of the Act can be issued:
6.1 With respect of operation of new section 149 of the Act, the following may be seen:
Hon'ble Supreme Court has held that the new law shall operate and all the defences available to assessees under section 149 of the new law and whatever rights are available to the Assessing Officer under the new law shall continue to be available.
Sub-section (1) of new section 149 of the Act as amended by the Finance Act.2021 (before its amendment by the Finance Act, 2022) reads as under-
149.) No notice under section 148 shall be issued for the relevant assessment year:-
a) if three years have elapsed from the end of the relevant assessment or unless the case falls under clause (b):
(b) if three years, but not more than ten years have elapsed from the end of the relevant assessment year unless the Assessing Officer has 38 IT(IT) A No. 23 to 27/JPR/2022 Mohamed Sarif in his possession books of account or other documents or evidence which reveal then the income chargeable to tax, represented in the form of asset, which has escaped assessment amounts to or is likely to amount to fifty lakh rupees or more for that year:-
Provided that no notice under section 148 shall be issued at any time in a case for the relevant assessment year beginning on or before 1st day of April, 2021, if such notice could not have been issued at that time on account of being beyond the time limit specified under the provisions of clause by of sub-section of this section, as they stood immediately before the commencement of the Finance Act 2021:
• Hon'ble Supreme Court has upheld the views of High Courts that the benefit of new law shall be made available even in respect of proceedings relating to past assessment years. Decision of Hon'ble Supreme Court read with the time extension provided by TOLA will allow extended reassessment notices to travel back in time to their original date when such notices were to be issued and then new section 149 of the Act is to be applied at that point.
6.2 Based on above, the extended reassessment notices are to be dealt with as under:
(1)AY AY 2014-15 and AY 2015-16: Fresh notice under section 148 of the Act can be issued in these cases, with the approval of the specified authority, only if the case falls under clause (b) of sub-
section (1) of section 149 as amended by the Finance Act. 2021 and reproduced in paragraph 6.1 above. Specified authority under section 151 of the new law in this case shall be the authority prescribed under clause (ii) of that section.
(ii )AY 16-17, AY 17-18: Fresh notice under section 148 can be issued in these cases, with the approval of the specified authority, under clause (a) of sub-section (1) of new section 149 of the Act, since they are within the period of three years from the end of the relevant assessment year Specified authority under section 151 of the new law in this case shall be the authority prescribed under clause (i) of that section.
7.0 Cases where the Assessing Officer is required to provide the information and material relied upon within 30 days:
39 IT(IT) A No. 23 to 27/JPR/2022Mohamed Sarif 7.1 Hon'ble Supreme Court has directed that information and material is required to be provided in all cases within 30 days. However, it has also been noticed that notices cannot be issued in a case for AY 2013-14, AY 2014-15 and AY 2015-16. if the income escaping assessment, in that case for that year, amounts to or is likely to amount to less than fifty lakh Hence, in order to reduce the compliance burden of assessees, it is clarified that information and material may not be provided in a case for AY 2013-14. AY 2014-15 and AY if the income escaping assessment, in that case for that year, amounts to or is likely to amount to less than fifty lakh rupees.
Separate instruction shall be issued regarding procedure for disposing these cases.
8.0 Procedure required to be followed by the Assessing Officers to comply with the Supreme Court judgment:
8.1 The procedure required to be followed by the Jurisdictional Assessing Officer/Assessing Officer, in compliance with the order of the Hon'ble Supreme Court, is as under:
The extended reassessment notices are deemed to be show cause notices under clause (b) of section 148A of the Act in accordance with the judgment of Hon'ble Supreme Court. Therefore, all requirement of new law prior to that show cause notice shall bedeemed to have been complied with.
The Assessing Officer shall exclude cases as per clarification in paragraph 7.1 above.
Within 30 days i.e. by 2nd June 2022, the Assessing Officer shall provide to the assessees, in remaining cases, the information and material relied upon for issuance of extended reassessment notices.
The assessee has two weeks to reply as to why a notice under section 148 of the Act should not be issued, on the basis of information which suggests that income chargeable to tax has escaped assessment in his case for the relevant assessment year. The time period of two weeks shall be counted from the date of last communication of information and material by the Assessing Officer to the assessee.
In view of the observation of Hon'ble Supreme Court that all the defences of the new law are available to the assessee, if assessee 40 IT(IT) A No. 23 to 27/JPR/2022 Mohamed Sarif makes a request by making an application that more time be given to him to file reply to the show cause notice, then such a request shall be considered by the Assessing Officer on merit and time may be extended by the Assessing Officer as provided in clause (b) of new section 148A of the Act.
After receiving the reply, the Assessing Officer shall 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 under section 148 of the Act. The Assessing Officer is required to pass an order under clause
(d) of section 148A of the Act to that effect, with the prior approval of the specified authority of the new law. This order is required to be passed within one month from the end of the month in which the reply is received by him from the assessee. In case no such reply is furnished by the assessee, then the order is required to be passed within one month from the end of the month in which time or extended time allowed to furnish a reply expires.
If it is a fit case to issue a notice under section 148 of the Act, the Assessing Officer shall serve on the assessee a notice under section 148 after obtaining the approval of the specified authority under section 151 of the new law. The copy of the order passed under clause (d) jof section 148A of the Act shall also be served with the notice u/s 148.
If it is not a fit case to issue a notice under section 148 of the Act, the order passed under clause (d) of section 148A to that effect shall be served on the assessee."
16. Based on the above provisions of law as clarified / interpreted by Hon'ble Supreme Court coupled with the CBDT circular the ld. Assessing Officer has not followed the procedure and passed the order considering the case under the old regime of section 148 of the Act. Therefore, the assessment order passed by the Assessing Officer is bad in law and required to be quashed.
41 IT(IT) A No. 23 to 27/JPR/2022Mohamed Sarif
17. In addition to the above, the ld. AR of the assessee has also argued that the assessee being NRI notice issued u/s 148 of the Act by ITO, Ward-1, Sikar is without having any jurisdiction as jurisdiction lies with the DCIT, Circle, International Taxation, Jaipur and he has not issued any notices u/s 148 of the Act and therefore, the assessment made based on the notice issued by the ITO Ward-1, Sikkar is bad in law and assessment framed there upon is required to be quashed. To support these arguments the ld. AR of the assessee has relied upon the judgments and also submitted that the assessment is without issue of proper notice and therefore required to be quashed. To support this view the ld. AR of the assessee has relied up on the decision of Hon'ble Madras High Court in case Chari K. Bagadia vs. ACIT in Writ appeal No. 2493 of 2021 dated 27.06.2022 is reiterated hereinbelow:-
" 13. Reference was made by the learned counsel for the appellant to the following decisions:
(i)Shibani Dutta v. Commissioner of Income-tax [(2012) 26 taxmann.com 105 (Delhi), in which, it was held as under:
"10....The period of limitation gets extended under clause (iii) of Explanation I only by the time taken to reopen the whole or any part of the proceeding or giving an opportunity to the assessee (to be 42 IT(IT) A No. 23 to 27/JPR/2022 Mohamed Sarif reheard) under the proviso to Section 129. If we turn to section 129 of the Act we find that it provides for the procedure to be followed when there is a "change of incumbent of an office". ...
11.We do not see how this provision helps the Revenue. It is applicable when in the same jurisdiction, there is a change of incumbent and one Assessing Officer is succeeded by another. In such a case, the main Section provides that the successor - officer is entitled to continue the proceeding from the stage at which it was left by his predecessor subject to the caveat, expressed in the proviso, that if the assessee demands that before the proceeding is continued the previous proceedings or any part thereof shall be reopened or that before any assessment order is passed against him, he shall be reheard, such a demand has to be accepted. If as a result of accepting the assessee's demand under the proviso to section 129 some time is taken and the assessment proceedings cannot be completed within the normal period of limitation, then the period of limitation gets extended by such time taken for giving the assessee an opportunity to reopen the earlier proceedings or for rehearing. Section 129 is applicable to normal assessments made under section 143(3) of the Act as well as the block assessments made under section 158BC of the Act...."
(ii)Commissioner of Income-tax v. M.I.Builders (P) Ltd [(2014) 44 taxmann.com 360 (Allahabad)], wherein, it was observed as follows:
"17.Having heard learned counsel for the parties and perusing the records, we are of the view that on 29.3.2004, when the notice under section 148(1) of the Act was issued, ACIT, Range-IV, Lucknow have no jurisdiction over the Assessee on the date of issuance of such notice as the jurisdiction over the Assessee was transferred to the Additional CIT, Range-I, Lucknow vide order dated 1.8.2001 passed under section 120 of the Act by the CCIT, Lucknow. Therefore, it cannot be situation where two Assessing Officer would have simultaneous jurisdiction over the assessee, one being Additional CIT, Range-I, Lucknow and other being ACIT, Range-IV, Lucknow. In these backgrounds, the Tribunal has rightly held that the issuance of notice under section 148(1) of the Act by the ACIT, Range-IV, Lucknow was without jurisdiction."43 IT(IT) A No. 23 to 27/JPR/2022
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(iii)Pr.Commisioner of Income Tax-II Lucknow v. Mohd. Rizwan Prop. M/s.M.R.Garments Moulviganj [ITA No.100 of 2015 dated 30.03.2017], in which, it was held as under:
"34.Section 148 clearly talks of issue of notice by A.O. Meaning thereby, A.O. having jurisdiction over Assessee. In fact, it is his satisfaction which is to be recorded for justifying reopening of assessment / reassessment proceedings as contemplated under section 147 and recording of reasons for the same purpose is mandatory. The satisfaction of A.O. could not have been hired or be delegated to any other authority."
"43.The reason for issuance of notice by Competent A.O. is quite obvious inasmuch as such notice could have been issued only when concerned A.O. has reason to believe that some income has escaped assessment and recomputation / reassessment is needed. Now such satisfaction can be of that A.O. only who has jurisdiction in the matter and not of any third party.
44.We, therefore, hold that in the present case, no valid notice under section 148 was issued by Jurisdictional A.O before making assessment / reassessment and, therefore, proceedings of reassessment pursuant to notice issued under section 148 by an incompetent officer are void and ab initio."
(iv)Pankajbhai Jaysukhlal Shah v. Assistant Commissioner of Income-tax Circle 2 [(2019)110 taxmann.com.51 (Gujarat), which was affirmed by the Hon'ble Supreme Court in Assistant Commissioner of Income-tax Circle-2 v. Pankajbhai Jaysukhlal Shah [(2020) 120 taxmann.com 318 (SC)] and the ratio laid down therein is as follows:
"10.....while the reasons for reopening the assessment have been recorded by the jurisdictional Assessing Officer viz., the Deputy Commissioner of Income Tax, Circle-2, Jamnagar, the impugned notice under section 148(1) of the Act has been issued by the Income Tax Officer, Ward 2(2), Jamnagar who had no jurisdiction over the petitioner and hence, such notice was bad on the count of having been issued by an officer who had not authority in law to issue such notice. As a necessary corollary it follows that no proceedings could 44 IT(IT) A No. 23 to 27/JPR/2022 Mohamed Sarif have been taken under section 147 of the Act in pursuance of such invalid notice. In the aforesaid premises, the impugned notice under section 148(1) of the Act as well as all the proceedings taken pursuant thereto cannot be sustained."
The legal proposition laid down in the aforesaid decisions is that "notice under section 148 is mandatory to reopen/ reassess the income of the assessee and such a notice should have been issued by the competent assessing officer, who has jurisdiction"; "The jurisdictional Assessing Officer, who records the reasons for reopening the assessment as contemplated under sub section (2) of section 148, has to issue notice under section 148(1), then only, such a notice issued under section 148(1) would be a valid notice"; "The officer recording the reasons under section 148(2) of the Act and the officer issuing notice under section 148(1) has to be the same person"; "Section 129 is applicable when in the same jurisdiction, there is a change of incumbent and one assessing officer is succeeded by another"; and "when once the initiation of reassessment proceedings is held to be invalid, whatever follows thereafter must also, necessarily be invalid".
18. The ld. AR of the assessee further relied upon the fact that the provisions of law as well as legal proposition laid down by the above decision in the case of Ashish Agarwal, to the facts in the present case that the Assessing Officer who has issued noticed u/s 148 of the Act as no jurisdiction and the assessment made by the Assessing Officer by DCIT, Circle, International Taxation has not issued any notice u/s 148/148A. Therefore, the assessment made lacks jurisdiction & without issue of any notice and without following procedure as laid down by the Hon'ble Supreme Court in case of Union of India & Ors Ashish Agarwal (supra) the 45 IT(IT) A No. 23 to 27/JPR/2022 Mohamed Sarif assessment made by the Assessing Officer is required to be quashed as lacks jurisdiction and procedure laid down under the law.
19. Per contra, the ld. DR has argued that the objections raised by the ld. AR is not raised before the ld. CIT(A) and even before the AO. Even though the sufficient opportunity were given to the assessee to raise their views on the assessment in appeal by the ld. CIT(A) but the assessee remained non compliant before the ld.
CIT(A). The legal points raised by the ld. AR of the assessee are for the first time raised before this tribunal needs to be established as the assessment order is well reasoned in accordance with law required to be sustained.
20. In the rejoinder the ld. AR of the assessee submitted that the issue raised before the tribunal are legal in nature and there is no facts needs to be verified and based on the legal provision of the law the tribunal is empowered to render the decision based on the decision of the apex court and provision of law and there is no justification to give second chance to revenue in this matter.
46 IT(IT) A No. 23 to 27/JPR/2022Mohamed Sarif
21. We have heard the rival contentions, perused the material on record and order of the lower authorities. We have also gone through the various judicial decision cited by the ld. AR of the assessee in support his arguments before us. The Bench has observed that the notice is issued u/s 148 of the Act is treated as valid notice by the decision of Hon'ble Supreme Court in case of Union of India & Ors Ashish Agarwal (supra) but at the same time the Hon'ble Apex Court as directed that the Assessing Officer to follow the certain procedure the same is reiterated here in below:-
"(i) The respective impugned section 148 notices issued to the respective assessees shall be deemed to have been issued under section 148A of the IT Act as substituted by the Finance Act, 2021 and treated to be show cause notices in terms of section 148A(b).
The respective assessing officers shall within thirty days from today provide to the assessees the information and material relied upon by the Revenue so that the assessees can reply to the notices within two weeks thereafter;
(ii) The requirement of conducting any enquiry with the prior approval of the specified authority under section 148A(a) be dispensed with as a onetime measure visàvis those notices which have been issued under Section 148 of the unamended Act from 01.04.2021 till date, including those which have been quashed by the High Courts;
(iii) The assessing officers shall thereafter pass an order in terms of section 148A(d) after following the due procedure as required under section 148A(b) in respect of each of the concerned assessees;
(iv) All the defences which may be available to the assessee under section 149 and/or which may be available under the Finance Act, 2021 and in law and whatever rights are available to the Assessing Officer under the Finance Act, 2021 are kept open and/or shall continue to be available and;
(v) The present order shall substitute/modify respective judgments and orders passed by the respective High Courts quashing the similar notices issued under unamended section 148 of the IT Act irrespective of whether they have been assailed before this Court or not."
47 IT(IT) A No. 23 to 27/JPR/2022Mohamed Sarif
22. After the above direction of the apex court the CBDT has also issued a detailed guidelines to all the assessing officer vide circular dated 11.05.2022 where in the board has clarified to all the assessing officer in para 3 of the circular that as per the decision of Hon'ble Supreme Court these extended reassessment notices issued under the old law shall be deemed to be the show cause notices issued under clause (b) of section 148A of the new law and has directed the assessing officers to follow the procedure with respect to such notices. It has also held by the court that all the defenses available to assessee under the new law shall continue to be available. Hon'ble Supreme court has passed this order in exercise of power under article 142 of the Constitution of India.
23. As the dispute is related issue of notice under new law or old law as it is issued and disputed by the assessee. The said issue is rest by the decision of the Hon'ble Apex court in the case of Ashish Agarwal wherein the apex court has clarified exercising power granted under article 142 of the constitution of India that the notice issued u/s. 148 of the Act shall be deemed to have been issued under section 148A of the Act as substituted by the 48 IT(IT) A No. 23 to 27/JPR/2022 Mohamed Sarif Finance Act, 2021 and treated to be show cause notices in terms of section 148A(b). The Court has further directed that the respective assessing officers shall within thirty days from the date of judgment will provide to the assessee the information and material relied upon by the revenue so that the assessee can reply to the notices within two weeks thereafter. Since the dispute is related to the new provision of law, the law laid down by that section is reiterated here in below :
9[Conducting inquiry, providing opportunity before issue of notice under section 148.
148A. The Assessing Officer shall, before issuing any notice under section 148,--
(a) conduct any enquiry, if required, with the prior approval of specified authority, with respect to the information which suggests that the income chargeable to tax has escaped assessment;
(b) provide an opportunity of being heard to the assessee, 1[***] by serving upon him a notice to show cause within such time, as may be specified in the notice, being not less than seven days and but not exceeding thirty days from the date on which such notice is issued, or such time, as may be extended by him on the basis of an application in this behalf, as to why a notice under section 148 should not be issued on the basis of information which suggests that income chargeable to tax has escaped assessment in his case for the relevant assessment year and results of enquiry conducted, if any, as per clause (a);
(c) consider the reply of assessee furnished, if any, in response to the show-cause notice referred to in clause (b);
(d) 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 under section 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) is received by him, or where 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:
Provided that the provisions of this section shall not apply in a case where,--49 IT(IT) A No. 23 to 27/JPR/2022
Mohamed Sarif
(a) a search is initiated under section 132 or books of account, other documents or any assets are requisitioned under section 132A in the case of the assessee on or after the 1st day of April, 2021; or
(b) the Assessing Officer is satisfied, with the prior approval of the Principal Commissioner or Commissioner that any money, bullion, jewellery or other valuable article or thing, seized in a search under section 132 or requisitioned under section 132A, in the case of any other person on or after the 1st day of April, 2021, belongs to the assessee; or
(c) the Assessing Officer is satisfied, with the prior approval of the Principal Commissioner or Commissioner that any books of account or documents, seized in a search under section 132 or requisitioned under section 132A, in case of any other person on or after the 1st day of April, 2021, pertains or pertain to, or any information contained therein, 2[relate to, the assessee; or
(d) the Assessing Officer has received any information under the scheme notified under section 135A pertaining to income chargeable to tax escaping assessment for any assessment year in the case of the assessee.] Explanation.--For the purposes of this section, specified authority means the specified authority referred to in section 151.]
24. From the arguments so placed and on perusal of the new scheme of the Act, decision of the apex court and the detailed circular of the CBDT dated 11.05.2022 we have seen that the ld.
AO has not followed the detailed guideline as directed by the CBDT based on the decision of the apex court. The board has given a detailed guidelines to all the AO and the same is reproduced here in below:
8. Procedure required to be followed by the Assessing Officers to comply with the Supreme Court judgment:
8.1 The procedure required to be followed by the Jurisdictional Assessing Officer/Assessing Officer, in compliance with the order of the Hon'ble Supreme Court, is as under:
♦ The extended reassessment notices are deemed to be show cause notices under clause (b) of section 148A of the Act in accordance with the judgment of Hon'ble Supreme Court. Therefore, all requirement of new law prior to that show 50 IT(IT) A No. 23 to 27/JPR/2022 Mohamed Sarif cause notice shall be deemed to have been complied with. ♦ The Assessing Officer shall exclude cases as per clarification in paragraph 7.1 above.
♦ Within 30 days i.e. by 2nd June, 2022, the Assessing Officer shall provide to the assessees, in remaining cases, the information and material relied upon for issuance of extended reassessment notices.
♦ The assessee has two weeks to reply as to why a notice under section 148 of the Act should not be issued, on the basis of information which suggests that income chargeable to tax has escaped assessment in his case for the relevant assessment year. The time period of two weeks shall be counted from the date of last communication of information and material by the Assessing Officer to the assessee. ♦ In view of the observation of Hon'ble Supreme Court that all the defences of the new law are available to the assessee, if assessee makes a request by making an application that more time be given to him to file reply to the show cause notice, then such a request shall be considered by the Assessing Officer on merit and time may be extended by the Assessing Officer as provided in clause (b) of new section 148A of the Act.
♦ After receiving the reply, the Assessing Officer shall 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 under section 148 of the Act. The Assessing Officer is required to pass an order under clause (d) of section I48A of the Act to that effect, with the prior approval of the specified authority of the new law. This order is required to be passed within one month from the end of the month in which the reply is received by him from the assessee. In case no such reply is furnished by the assessee, then the order is required to be passed within one month from the end of the month in which time or extended time allowed to furnish a reply expires.
♦ If it is a fit case to issue a notice under section 148 of the Act, the Assessing Officer shall serve on the assessee a notice under section 148 after obtaining the approval of the specified authority under section 151 of the new law. The copy of the order passed under clause (d) of section 148A of the Act shall also be served with the notice u/s 148. ♦ If it is not a fit case to issue a notice under section 148 of the Act, the order passed under clause (d) of section 148A to that effect shall be served on the assessee.51 IT(IT) A No. 23 to 27/JPR/2022
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25. The bench has observed that the assessee has raised objection vide letter dated 16.03.2022 and the ld. AO has not passed an order as required under section 148A(d) justifying the notice issued u/s. 148A of the Act and has directly passed an order on 17.05.2022 under section 147 r.w.s. 144C(3) which is in gross violation of the provision of law, decision of the apex court and the detailed guide lines of the CBDT on the issue. Therefore, we are of the considered view that the order of the assessment made in this case is in gross violation of the provision of law, apex court's decision and detailed guideline of the CBDT and therefore, the same is not sustainable and required to be quashed. Based on these observations the assessment order passed by the assessing officer is here by quashed.
26. Since we have decided the case of the assessee based on the technical objections raised by the assessee and we have not touched upon the merits of the case. But at the same time revenue is at liberty to take action against the new provisions of the law afresh after following the due process of law. Hence, the appeal of the assessee is allowed.
52 IT(IT) A No. 23 to 27/JPR/2022Mohamed Sarif
27. As regards the other appeals of the assessee bearing in IT(IT)A No. 24 to 27/JPR/2022 the assesmsnet years 2014- 15 to 2017-18, the decision taken by us in ITA No. 23/JPR/2022 shall apply mutatis mutandis upon them.
28. In the result, all appeals of the assessee are allowed.
Order pronounced in the open court on 21/02/2022
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(Sandeep Gosain) (Rathod Kamlesh Jayantbhai)
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fnukad@Dated:- 21/02/2022
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vkns'k dh izfrfyfi vxzsf'kr@Copy of the order forwarded to:
1. vihykFkhZ@The Appellant- Shri Mohamed Sarif, Sikar.
2. izR;FkhZ@ The Respondent- DCIT Circle International Taxation, Jaipur.
3. vk;dj vk;qDr@ CIT
4. foHkkxh; izfrfuf/k] vk;dj vihyh; vf/kdj.k] t;iqj@DR, ITAT, Jaipur.
5. xkMZ QkbZy@ Guard File {IT(IT) A Nos. 23 to 27/JPR/2022} vkns'kkuqlkj@ By order, lgk;d iathdkj@Asst. Registrar