GUPTA BUILDERS AND DEVELOPERS ,MUMBAI V. ACIT CENTRAL CIRCLE 4(3), MUMBAI

ITA 69/MUM/2025

AI Insights

The case involves Gupta Builders and Developers appealing against an assessment order for the assessment year 2016-17, which was initially based on a notice issued under section 148 of the Income Tax Act, 1961. The legal contention centered on the validity of the notice issued under the un-amended law and its subsequent treatment under the amended law following the Supreme Court's decision in Ashish Agarwal's case and the Bombay High Court's decision in Emcure Pharmaceuticals Limited vs. ACIT. The Tribunal examined whether the assessment order should stand given the procedural changes mandated by these judicial decisions, which required notices under the un-amended section 148 to be treated as show-cause notices under section 148A(b) of the amended Act.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 714489 (ITAT-MUMBAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-08-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Assessment Year: 2016-2017
• Other Referred Cases: Emcure Pharmaceuticals Limited vs. ACIT, Union of India & Ors. vs. Ashish Agarwal
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SWAPNIL CHOUDHARY
• Assessee Lawyers: R I TI KA AGAR WA L
• Keywords: Set aside; Reasonable cause; Competent authority
• Section: 147; 148

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI “G” BENCH : MUMBAI BEFORE SHRI VIKRAM SINGH YADAV, ACCOUNTANT MEMBER AND SHRI SANDEEP GOSAIN, JUDICIAL MEMBER ITA No. 69/Mum/2025 Assessment Year : 2016-17 Gupta Builders and Developers, 1201 and 1202, Bhumiraj Costarica, Plot No.1 & 2, Near Moraj Circle, Sector-18, Sanpada, Navi Mumbai-400705. PAN :AAJFG3066H vs. Asst. Commissioner of Income Tax, Central Circle-4(3), Room No. 1921, 19th Floor, Air India Building, Nariman Point, Mumbai-400021. (Appellant) (Respondent) Assessee by : Ms. Ritika Agarwal Revenue by : Shri Swapnil Choudhary Date of Hearing : 30-07-2025 Date of Pronouncement : 05-08-2025 O R D E R PER VIKRAM SINGH YADAV, A.M : This is an appeal filed by the assessee against the order of the Learned Commissioner of Income Tax (Appeals)-52, Mumbai [„Ld.CIT(A)‟], dated 08-10-2024, pertaining to Assessment Year (AY) 2016-17. 2. At the outset, it is noted that there is a delay of 06 days in filing the appeal as pointed out by the Registry. After hearing both the parties and perusing the affidavit placed on record seeking condonation of delay, we Printed from counselvise.com 2 ITA No. 69/Mum/2025 find that there was reasonable cause for the delay in filing the present appeal and hence, the delay is hereby condoned and appeal is admitted for adjudication. 3. During the course of hearing, the Ld. AR taken us through one of the grounds of appeal no. 3 where the assessee has challenged the action of the Ld.CIT(A) in sustaining the assessment order passed u/s 147 dated 9/03/2022, whereby he has failed to consider the binding decision of the Hon‟ble Bombay High Court in the case of Emcure Pharmaceuticals Limited vs. ACIT (Writ Petition No. 5293 of 2022, dt. 05-05-2022). 4. In this regard, it was submitted that the notice u/s. 148 of the Act under the un-amended law was issued on 1st April, 2021 for the impugned assessment year 2016-17. It was submitted that in the light of decision of the Hon‟ble Supreme Court in the case of Union of India & Ors. vs. Ashish Agarwal, the said notice shall be deemed to have been issued u/s. 148A of the Act and construed as show cause notice in terms of section 148A(b) of the Act and pursuant to that, the AO has since issued a fresh notice dt. 25-05-2022, u/s. 148A(b) and thereafter, order u/s 148A(d) has been passed on 27-07-2022 and notice u/s 148 has been issued on 28-07- 2022. It was accordingly submitted that where the fresh proceedings have already been initiated under the amended law by the AO, there is no basis to continue with the present proceedings and which in any case have been held to be un-sustainable and required to be quashed as per the decision of the Hon‟ble Supreme Court. It was submitted that following the said decision of the Hon‟ble Supreme Court, the Hon‟ble Bombay High Court in the case of Emcure Pharmaceuticals Limited vs. ACIT (supra) has held that all the assessment orders passed under the said notices issued under the un-amended law shall stand quashed. Printed from counselvise.com 3 ITA No. 69/Mum/2025 5. In this regard, our reference was drawn to the decision of the Hon‟ble Bombay High Court in the case of Emcure Pharmaceuticals Limited vs. ACIT (supra), and the findings therein read as under: “1. The Hon'ble Apex Court in the judgment of Union of India & Ors. vs. Ashish Agarwal partially set aside the order and judgment passed by the Hon'ble High Court Judicature at Allahabad in Writ Tax No.524 of 2021 and other Writ Tax Petitions. The order also covers the judgments passed by various other High Courts including this court in Tata Communications Transformation Services Limited V/s. Assistant Commissioner of Income Tax 14(1) & Ors.2 2. The Hon'ble Apex Court has in paragraph no.10 passed the following directions: 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: (1) 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 show-cause 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 Revenue, so that the assessees can reply to the show-cause 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 one-time 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. 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 Printed from counselvise.com 4 ITA No. 69/Mum/2025 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. 3. In view of the above all petitions are disposed. 4. Certainly, since all rights and contentions of the parties are kept open, the assessees may take such steps if they are aggrieved by any order passed by the Assessing Officer. 5. In view of the above, wherever the assessment order has been passed those assessment orders will stand quashed and set aside. So also the consequential orders/notices. 6. Apex Court. Revenue may restart the process as directed by the Hon'ble Apex Court.” 6. It was submitted that the assessee has raised the said contention before the Ld.CIT(A), however, he has failed to take into consideration the decision of the Hon‟ble Bombay High Court as well as the decision of the Hon‟ble Supreme Court. 7. Per contra, the Ld.DR has relied on the findings of the Ld.CIT(A) which are contained at paragraph No.8.1 of the impugned order, which reads as under: “8.1. In the case of Union of India & Ors. vs. Rajeev Bansal Civil Appeal No 8629 of 2024 dated 03.10.2024, the Hon'ble Apex Court held that \"the time period of reopening assessment under old provisions stood extended in view of the TOLA [Taxation and Other Laws (Relaxation & Amendment of Certain Provisions) Act, 2020\". The law laid down by the Hon'ble Supreme Court is declaratory in nature and has to be followed by one and all. Although the AO may have issued subsequent notice u/s. 148A(b) of the Act dated 25.05.2022, the same does not invalidate a validly concluded prior proceedings. A case can be subjected to multiple Sec. 147 proceedings and each of the proceedings will have to be examined on their own merits. In view of the decision of Hon'ble Apex Printed from counselvise.com 5 ITA No. 69/Mum/2025 Court it is evident that the notice dated 01.04.2021 u/s. 148 cannot be stated to be time-barred as contended by the appellant.” 8. We have heard the rival contentions and perused the material available on record. In this case, notice u/s 148 was issued on 01-04- 2021 under the un-amended law for impugned assessment year 2016-17 and the assessment order u/s 147 was passed on 09-03-2022. Following the decision of the Hon‟ble Supreme Court in case of Ashish Agarwal, the AO has issued a fresh notice u/s 148A(b) of the Act dated 25/05/2022 and it would be useful to refer to the contents of the said notice and the same read as under: “1 On perusal of records maintained in this office shows that for the above mentioned assessment year a notice uls 148 of the Income Tax Act, 1961 was issued to you on 01.04.2021. Several Writ Petitions were filed before the Hon'ble Bombay High Court as well as other courts, challenging the validity of the said notice u/s 148 of the Act. The Hon'ble Bombay High Court has disposed of the said writ petitions vide order dated 29.03.2022. 2. Thereafter, the matter reached before Hon'ble Supreme Court. The Hon'ble Supreme Court in Civil Appeal No. 3005/2022, vide order dated 04.05.2022, has directed (in para 10 of the order) as under: 1. The impugned Section 148 notices issued to the respective assesses which were issued under unamended Section 148 of the I. T. 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 show-cause notices in terms of Section 148A(b). The assessing officer shall, within thirty days from today, provide to the respective assesses information and material relied upon by the Revenue, so that the assesses can reply to the show-cause notices with two weeks thereafter,\" 3. Further vide order dated 05.05.2022, Hon'ble Bombay High Court in the case of Emcure Pharmaceuticals Limited V/s. Assistant Commissioner of Income Tax Central Circle 2(1), Pune and Ors, vide para 5 of the order directed as under: \"5. In view of the above, wherever the assessment order has been passed those assessment orders will stand quashed and set aside. So also the consequential orders/notices.\" Printed from counselvise.com 6 ITA No. 69/Mum/2025 4. In view of the above mentioned directions, the above referred notice u/s 148 of the Act issued to you shall be construed or treated to be a show- cause notice in terms of Section 148A(b) of the (amended) Act. 5. The Hon'ble Supreme Court has also directed to provide the information and material relied upon by the Revenue. The information which suggests that income has escaped assessment and the reference material which is the basis of such information, are embedded in reasons recorded (based on the law applicable before 01.04.2021) to re-open your case before issuing notice u/s 148 of the I.T. Act. The same, which had the approval of the competent authority, is attached herewith for your ready reference. 6. The information and material relied upon, suggests that income chargeable to tax has escaped assessment in your case for the above mentioned assessment year within the meaning of the provisions of Section 147 of the Income-tax Act, 1961. 7. In view of the above, you are hereby requested to furnish your explanation along with supporting documents/evidences, as to why a notice u/s 148 of the Act should not be issued in your case for the above mentioned assessment year. Your reply may be sent on or before 08.06.2022.” 9. As is evident from the aforesaid notice issued u/s 148A(b), the AO himself has referred to the decision of the Hon‟ble Bombay High Court in case of Emcure Pharmaceuticals (supra) and has held that in view of the directions so given by the Hon‟ble Bombay High Court, earlier notice so issued under section 148 shall be treated as a show-cause in terms of section 148A(b) and the assessee explanation was sought as to why a fresh notice u/s 148 should not be issued. Thereafter, fresh notice u/s 148 has been issued on 28/07/2022 and fresh proceedings were thus initiated. 10. In light of the admitted facts, the impugned assessment order passed u/s 147 dated 09-03-2022 pursuant to original notice u/s 148 dated 01-04-2021 has no legs to stand in light of decisions of the Hon‟ble Bombay High Court wherein it has been clearly held that “wherever the assessment order has been passed those assessment orders will stand Printed from counselvise.com 7 ITA No. 69/Mum/2025 quashed and set aside” and is hereby set-aside. In the result, ground no. 3 of the assessee‟s appeal is allowed. 11. In light of aforesaid, other grounds of appeal have become academic in nature and the same are dismissed as infructious. 12. In the result, the appeal filed by the assessee is allowed. Order pronounced in the open court on 05-08-2025 Sd/- Sd/- [SANDEEP GOSAIN] [VIKRAM SINGH YADAV] JUDICIAL MEMBER ACCOUNTANT MEMBER Mumbai, Dated: 05-08-2025 TNMM Copy to : 1) The Appellant 2) The Respondent 3) The CIT concerned 4) The D.R, ITAT, Mumbai 5) Guard file By Order Dy./Asst. Registrar I.T.A.T, Mumbai Printed from counselvise.com "