ACIT 32 1 MUMBAI, MUMBAI V. ASHA P KEDIA, MUMBAI

ITA 3672/MUM/2024

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The case involves an appeal by the Revenue Department and a Cross Objection by the Assessee, Ms. Asha P Kedia, against the order passed by the National Faceless Appeal Center (NFAC)/Commissioner of Income Tax (Appeals) for the Assessment Year 2017-18. The Assessee's income was initially declared and assessed without regular assessment under section 143(3) of the Act. However, following a reopening under section 147 and subsequent notices, a significant addition to the Assessee's income was made, citing unexplained cash credit. The Assessee contested this addition both on merit and legal grounds, particularly challenging the validity of the notice issued for reassessment due to procedural lapses in the approval process.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 470677 (ITAT-MUMBAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-03-2025
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2017-2018
• Other Referred Cases: Union of India vs. Ashish Agarwal, Vodafone India Idea Ltd. vs. DCIT
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAM KRISHN KEDIA; LD.
• Assessee Lawyers: SHASHANK MEHTA; LD
• Keywords: Unexplained cash credit; Period of limitation
• Section: 147; 148; 144; 143(3); 250; 68

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH “A”, MUMBAI BEFORE SHRI NARENDER KUMAR CHOUDHRY, JUDICIAL MEMBER AND SHRI PRABHASH SHANKAR, ACCOUNTANT MEMBER ITA No.3672/M/2024 Assessment Year: 2017-18 ACIT 32 1 252, Kautilya Bhavan, BKC, Bandra East, Maharashtra - 400051. Vs. Ms. Asha P Kedia 602, Vishwananak Bldg, ICT Link Rd, Andheri East, Maharashtra - 400099. PAN: AIQPK0746F (Appellant) (Respondent) CO No.181/M/2024 (Arising out of ITA No. 3672/M/2024) Assessment Year: 2017-18 Ms. Asha P Kedia Plot No. 18, Sagar Jyoti, 6th Road, Jvpd Scheme, Vile Parle (West), Mumbai-400056. PAN: AIQPK0746F Vs. Assistant Commissioner of Income Tax-32 (1) 252, Kautilya Bhavan, BKC, Bandra East, 400020. (Appellant) (Respondent) Present for: Assessee by : Shri Shashank Mehta, Ld. A.R. Revenue by : Shri Ram Krishn Kedia, Ld. D.R. Date of Hearing : 17 . 03 .2025 Date of Pronouncement : 28 . 03 .2025 O R D E R Per : Narender Kumar Choudhry, Judicial Member: This appeal by the Revenue Department and the Cross Objection by the Assessee have been preferred against the order dated 21.05.2024, impugned herein, passed by the National Faceless Appeal Center (NFAC)/ Ld. Commissioner of Income Tax (Appeals) (in short Ld. Commissioner) u/s 250 of the Income Tax Act, 1961 (in short ‘the Act’) for the A.Y. 2017-18. ITA No.3672/MUM/2024 & CO. No. 181/MUM/2024 Ms. Asha P Kedia 2 2. Considering the delay of 4 days in filing of the CO by the Assessee is miniscule, bonafide and unintentional as claimed by the Assessee is condoned. 3. In this case, the Assessee had declared her total income at Rs.8,24,900/- by filing her return of income on dated 31.07.2017. No regular assessment was done u/s 143(3) of the Act. The case of the Assessee was reopened u/s 147 of the Act by issuing a notice dated 11.06.2021 u/s 148 of the Act, in response to which the Assessee filed her return of income on dated 23.11.2021 declaring total income of Rs.8,24,900/-. Subsequently, there was change in the relevant provisions of the Act and therefore Hon’ble Apex Court in the case of Union of India vs. Ashish Agarwal (order dated 04.05.2022 in civil appeal No.3005/2002) issued certain directions for issuing the show cause notice u/s 148A of the Act and therefore considering the directions of the Hon'ble Apex Court, the Assessing Officer (AO) issued fresh notice dated 27.07.2022 u/s 148 of the Act and ultimately vide assessment order dated 19.04.2023 u/s 147 r.w.s. 144 r.w.s. 144B of the Act, made the addition of Rs.1,71,30,715/- which was found credited in the Assessee’s account as unexplained cash credit u/s 68 r.w.s. 115BBE of the Act and added the same in the total income of the Assessee. 4. The Assessee, being aggrieved, challenged the aforesaid addition on various grounds, as well as on merit. The Assessee though succeeded on merit but could not get succeeded on the legal ground and thus has preferred the instant cross objection, wherein the Assessee has raised the legal issue and therefore for the sake of brevity we are inclined to decide the same first, before proceeding to the Revenue’s appeal. 5. The Assessee has contended that in this case, the show cause notice u/s 148A(b) of the Act was issued on dated 25.05.2022 and ITA No.3672/MUM/2024 & CO. No. 181/MUM/2024 Ms. Asha P Kedia 3 thereafter an order u/s 148A(d) of the Act was passed and consequently notice u/s 148 of the Act was issued on dated 27.07.2022 which is admittedly, beyond three years from the end of the relevant A.Y. 2017-18 and therefore the specified authority for granting the approval for issuing such notice would be the authority as specified in sub clause (ii) of section 151 of the Act, but not Ld. Pr. Commissioner of Income Tax-2, Mumbai from whom approval has been taken and therefore, the notice issued u/s 148 of the Act and assessment order passed in pursuance to such notice, would be un-sustainable being void ab initio. 6.1 The Ld. D.R. on the contrary has claimed that the time of three years as prescribed in the sub clause (i) of section 151 of the Act, shall be computed after taking into account the period of limitation as excluded by 3rd or 4th or 5th or 6th proviso to sub section (i) of section 149 of the Act and hence the contention of the Assessee is un-tenable. 6.2. The Assessee in response to aforesaid submission of the Ld. DR, has submitted that the above provisos as demonstrated by the Ld. D.R., were inserted vide the Finance Act, 2023 and w.e.f. 01.04.2023 and thus the same at all were not in existence at the time of issuing the impugned notice dated 27.07.2022 u/s 148 of the Act and thus the same would not be applicable to the case of the Assessee. 7. We have given thoughtful considerations to the peculiar facts and circumstances of the case. Admittedly, the Hon’ble Jurisdictional High Court has dealt with such provisos, as involved in the instant case, in the case of Vodafone India Idea Ltd. vs. DCIT (write petition 2768 of 2022 decided on 06.02.2024), wherein it has been held as under: “3. The impugned order and the impugned notice both dated 7th April 2022 state that the Authority that has accorded the sanction ITA No.3672/MUM/2024 & CO. No. 181/MUM/2024 Ms. Asha P Kedia 4 is the PCIT, Mumbai 5. The matter pertains to Assessment Year (\"AY\") 2018-19 and since the impugned order as well as the notice are issued on 7th April 2022, both have been issued beyond a period of three years. Therefore, the sanctioning authority has to be the PCCIT as provided under Section 151 (ii) of the Act. The proviso to Section 151 has been inserted only with effect from 1st April 2023 and, therefore, shall not be applicable to the matter at hand.\" 8. In the instant case, admittedly the notice u/s 148 of the Act was issued for reopening of the case on dated 27.07.2022 i.e. after elapsing of three years from the end of the relevant assessment year and therefore as per sub clause (ii) of section 151 of the Act, the specified authority for granting the approval for issuing the notice u/s 148 of the Act, would have been, either Principal Chief Commissioner or Principal Director or where there is no such post then the Chief Commissioner or Director General, for granting the sanction for issuing of notice u/s 148 of the Act, but not the Ld. PCIT-2, Mumbai who has granted the approval in this case and/or authority specified under sub clause (i) of section 151 of the Act. Relevant provisions of law, which are very much clear and the Hon’ble Jurisdictional High Court in the case of Vodafone India Idea Ltd. has also clearly held that proviso to section 151 of the Act has been inserted w.e.f. 01.4.2023 and therefore shall not be applicable to the A.Y. 2018-19. In effect, the Hon’ble High Court has clarified that provisos to section 151 of the Act would be effective from 01.04.2023 onwards and would not be applicable to the prior period. Thus, the impugned notice dated 27.07.2022 u/s 148 of the Act, as issued by the AO in the instant case by taking approval from the Ld. Pr. CIT-2, Mumbai but not from the Ld. Pr. CCIT and in pursuance to that the assessment order dated 23.01.2023 u/s 147 r.w.s. 144 & 144B of the Act, is liable to be quashed being void, ab- initio and thus, the same is quashed accordingly. Thus, the CO is allowed. ITA No.3672/MUM/2024 & CO. No. 181/MUM/2024 Ms. Asha P Kedia 5 9. As we have quashed the reopening and therefore the appeal of the Revenue has become infructuous and thus the same is liable to be dismissed. 10. In the result, the CO filed by the Assessee is allowed, whereas the appeal filed by the Revenue stands dismissed. Order pronounced in the open court on 28.03.2025. Sd/- Sd/- (PRABHASH SHANKAR) (NARENDER KUMAR CHOUDHRY) ACCOUNTANT MEMBER JUDICIAL MEMBER * Kishore, Sr. P.S. Copy to: The Appellant The Respondent The CIT, Concerned, Mumbai The DR Concerned Bench //True Copy// By Order Dy/Asstt. Registrar, ITAT, Mumbai. "