INCOME TAX OFFICER , INCOME TAX DEPARTMENT V. KACHRULAL JITENDRA KUMAR PARBOILING PLANT RAIPUR, GANDHI CHOWK, NEORA, RAIPUR

ITA 350/RPR/2024

AI Insights

The case involves cross-appeals by M/s. Kachrulal Jitendra Kumar Parboiling Plant and the Income Tax Officer (ITO) against the order of the Commissioner of Income-Tax (Appeals), which arose from a reassessment order for the assessment year 2014-15. The primary contention by the assessee was the invalidity of the notice under section 148, claiming it was time-barred and not properly signed. The ITO contested the CIT(A)'s decision which had reduced the addition made under section 69C of the Act. The Tribunal's decision focused on the procedural validity of the reassessment notice, leading to the quashing of the reassessment order.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 36565 (ITAT-RAIPUR)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-02-2025
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2014-2015
• Other Referred Cases: National Thermal Power Company Ltd. Vs. CIT, Union of India & Ors. Vs. Ashish Agrawal, Pr. CIT Vs. Mohammed Haji Adam & Co, M/s.P.D. Rice Udyog Vs. DCIT, Raipur, Union of India & Ors Vs. Rajeev Bansal
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PRIYANKA PATEL
• Assessee Lawyers: RAVI AGRAWAL
• Keywords: Set aside; Difference of opinion; Change of opinion; Opportunity of being heard; Retrospective amendment; Reassessment proceedings; Bogus purchase; Bonafide belief; Period of limitation; Bonafide mistake; Bogus
• Section: 147; 148; 143(3); 131; 69C; 20

Judgement Text

"आयकर अपीलȣय अͬधकरण Ûयायपीठ रायपुर मɅ। IN THE INCOME TAX APPELLATE TRIBUNAL, RAIPUR BENCH, RAIPUR BEFORE SHRI RAVISH SOOD, JUDICIAL MEMBER AND SHRI ARUN KHODPIA, ACCOUNTANT MEMBER आयकर अपील सं. / ITA No.307/RPR/2024 Ǔनधा[रण वष[ / Assessment Year : 2014-15 M/s. Kachrulal Jitendra Kumar Parboiling Plant, Gandhi Chowk, Neora, Raipur-493 114 (C.G.) PAN: AACFK7668L .......अपीलाथȸ / Appellant बनाम / V/s. The Income Tax Officer, Ward-1(2), Raipur (C.G.) ……Ĥ×यथȸ / Respondent आयकर अपील सं. / ITA No.350/RPR/2024 Ǔनधा[रण वष[ / Assessment Year : 2014-15 The Income Tax Officer, Ward-1(2), Raipur (C.G.) .......अपीलाथȸ / Appellant बनाम / V/s. 2 M/s. Kachrulal JItendra Kumar Parboiling Plant Vs. ITO, Ward-2(1), Raipur ITA Nos. 307 & 350/RPR/2024 M/s. Kachrulal Jitendra Kumar Parboiling Plant, Gandhi Chowk, Neora, Raipur-493 114 (C.G.) PAN: AACFK7668L ……Ĥ×यथȸ / Respondent Assessee by : Shri Ravi Agrawal, CA Revenue by : Dr. Priyanka Patel, Sr. DR सुनवाई कȧ तारȣख / Date of Hearing : 25.11.2024 घोषणा कȧ तारȣख / Date of Pronouncement : 05.02.2025 आदेश / ORDER PER RAVISH SOOD, JM: The captioned cross-appeals filed by the assessee firm and revenue are directed against the order passed by the Commissioner of Income-Tax (Appeals), National Faceless Appeal Center (NFAC), Delhi, dated 10.06.2024, which in turn arises from the order passed by the A.O under Sec.147 r.w.s. 144B of the Income-tax Act, 1961 (in short ‘the Act’) dated 29.04.2023 for the assessment year 2014-15. The assessee firm has assailed the impugned order on the following grounds of appeal before us: “1. That on the facts and in law, the order passed u/s. 147 r.w.s. 144B dt.29.04.2023 is bad in law and illegal, as such it is liable to be quashed. 1.1. That, notice u/s. 148 dt.30/06/2021 is time barred. 1.2. That, notice u/s.148 dt.30/06/2021 was issued to the assessee on 16/07/2021 3 M/s. Kachrulal JItendra Kumar Parboiling Plant Vs. ITO, Ward-2(1), Raipur ITA Nos. 307 & 350/RPR/2024 1.3. That, notice u/s.148 dt.30/06/2021 was not signed, neither manually not digitally. 1.4. That, notice u/s.148 dt.30/06/2021 has been issued on the basis of ‘change of opinion’ on the same material on which assessment u/s.143(3) has been made. 2. That, without prejudice to above, Ld. CIT(A) ought to have restricted the addition to Rs.4,33,810.00 only instead of Rs.12,11,800.00, following the judgment of Jurisdictional Raipur Bench of ITAT in case of M/s. P.D. Rice Udyog [ITA No.210/RPR/2018 dt.17.10.2022]. 3. That, the appellant reserves the right to add or amend any ground.” Also, the assessee firm has raised an additional ground of appeal, which reads as under: “In the facts and in law, notice u/s. 148 dt.25/07/2022 issued by the Ld. ITO-1(2), Raipur is illegal and bad in law, as such it is invalid and therefore, consequent reassessment order passed u/s. 147 r.w.s. 144B dt.29.04.2023 is also invalid and unsustainable.” On the other hand, the revenue has assailed the impugned order on the following grounds of appeal: “1. Whether on the facts and in the circumstances of the case, and in law, the ld. CIT(A) was justified in deleting the additions of Rs.1,51,47,500/- made by the Assessing Officer u/s.69C of the Income Tax Act, 1961? 2. The order of ld. CIT(A) is not accordance with laws and facts of the case. 3. Any other ground which may be adduced at the time of hearing.” 4 M/s. Kachrulal JItendra Kumar Parboiling Plant Vs. ITO, Ward-2(1), Raipur ITA Nos. 307 & 350/RPR/2024 As the assessee firm based on the additional grounds of appeal has assailed the validity of the jurisdiction that was assumed by the A.O for framing the impugned assessment, the adjudication of which would not require looking any further beyond the facts available on record, therefore, we have no hesitation in admitting the same. Our aforesaid view that where an assessee, had raised, though for the first time, an additional ground of appeal before the Tribunal which involves purely a question of law and requires no further verification of facts, then, the same merits admission finds support from the judgment of the Hon’ble Supreme Court in the case of National Thermal Power Company Ltd. Ltd. Vs. CIT (1998) 229 ITR 383 (SC). 2. Succinctly stated, the assessee firm had filed its return of income for A.Y.2014-15 on 28.09.2014, declaring an income of Rs.2,75,340/. Subsequently, the original assessment was framed by the A.O vide his order passed u/s.143(3) of the Act, dated 26.12.2016, wherein, the income of the assessee firm was determined at Rs.1,53,81,280/-. 3. Thereafter, the A.O based on STR information in the Insight portal gathered that the assessee firm was a beneficiary of bogus purchases of Rs.1,03,77,500/- made from Shri Narad Kumar Sahu, proprietor of M/s. Tirupati Trading Company and M/s. Shri Khand Agrotech (BDZPS0772E). The A.O observed that Shri Narad Kumar Sahu (supra) in his statement 5 M/s. Kachrulal JItendra Kumar Parboiling Plant Vs. ITO, Ward-2(1), Raipur ITA Nos. 307 & 350/RPR/2024 recorded u/s. 131(1A) of the Act, dated 29.09.2014, had deposed before the ADIT (Inv.)-1, Raipur that his proprietorship concerns had no business activities and were only providing bogus bills to different parties (beneficiaries). Accordingly, the A.O based on the aforesaid information, held a conviction that the assessee firm had booked bogus purchases of Rs.1,03,77,500/- for the subject year and, thus, issued notice u/s. 148 of the Act, dated 30.06.2021. 4. Subsequently, the A.O observed that the Hon’ble Supreme Court in the case of Union of India & Ors. Vs. Ashish Agrawal, Civil Appeal No.3005/2022, dated 04.05.2022, had held that the notices issued under the old regime u/s. 148 of the Act i.e. between 01.04.2021 to 30.06.2021 were to be deemed to have been issued u/s. 148A of the Act and treated as “Show Cause Notices” (SCNs) as per Section 148A(b) of the Act. The A.O following the directions of the Hon’ble Apex Court in the case of Union of India & Ors. Vs. Ashish Agrawal (supra), issued a letter dated 25.05.2022 a/w. copy of the relevant material (through speed post/email), wherein the assessee firm was called upon to put forth an explanation that based on information which suggested that its income for the subject year chargeable to tax had escaped assessment, why a notice u/s. 148 of the Act may not be issued. 6 M/s. Kachrulal JItendra Kumar Parboiling Plant Vs. ITO, Ward-2(1), Raipur ITA Nos. 307 & 350/RPR/2024 5. In reply, the assessee firm responded on 30.05.2022 and 24.06.2022 wherein, it stated that it was already assessed u/s. 143(3) of the Act, dated 28.12.2016, and purchases of Rs.6,00,23,750/- were held as bogus, which, thus, had resulted to a consequential addition of Rs.1,50,05,938/- u/s. 69C of the Act. The assessee firm furnished complete details of the parties whose purchases in the course of regular assessment framed by the A.O u/s. 143(3) of the Act, dated 26.12.2016 were held as bogus, as under: 6. The A.O based on the aforesaid details provided by the assessee firm, observed that the bogus purchases of Rs.1,91,85,000/- made by the assessee firm made from Shrikhand Agrotech, Raipur (supra) i.e. the proprietary concern of Shri Narad Kumar Sahu (supra) were already added Sl. No. Name of the party Amount(Rs.) 1. Agrawal Agro, Raipur 73,00,000 2. Annapurna Foods, Raipur 44,50,000 3. Sakshi Gopal Corporation, Raipur 45,25,000 4. Sri Shyam Rice Agrotech, Raipur 87,50,000 5. Sri Bajrang Food Products, Raipur 85,58,000 6. Shrikhand Agrotech, Raipur 1,91,85,000 7. Eaden Rice Mills 14,70,000 8. Hardaha Agency, Raipur 57,85,000 7 M/s. Kachrulal JItendra Kumar Parboiling Plant Vs. ITO, Ward-2(1), Raipur ITA Nos. 307 & 350/RPR/2024 u/s. 69C of the Act while framing the original assessment in its case. However, the A.O observed that the assessee firm had made bogus purchases of Rs.1,03,77,500/- from M/s. Tirupati Trading Company (supra), i.e. the other proprietary concern of Shri Narad Kumar Sahu (supra). Accordingly, the A.O holding a conviction that the income of the assessee firm chargeable to tax had escaped assessment passed an order u/s.148A(d) of the Act, dated 22.07.2022 after obtaining the prior approval of the Pr. Chief Commissioner of Income Tax, Raipur. Thereafter, the A.O issued notice u/s. 148 of the Act, dated 25.07.2022. In compliance, the assessee firm filed its return of income u/s. 148 of the Act on 16.08.2022, declaring an income of Rs.2,75,340/-. 7. During the course of the re-assessment proceedings, the A.O in order to verify the authenticity of the purchases that the assessee firm had claimed to have made from M/s. Tirupati Trading Company (supra), directed it to place on record supporting documentary evidence which, inter alia, included copies of invoices, PAN details, complete postal addresses, bank statements reflecting payments, etc. In compliance, the assessee failed to furnish complete details as were called for by the A.O. The A.O after deliberating on the information/evidence i.e. STR information in the case of M/s. Tirupati Trading Company (supra) and statement of Shri Narad Kumar Sahu (supra) that was recorded u/s. 131 8 M/s. Kachrulal JItendra Kumar Parboiling Plant Vs. ITO, Ward-2(1), Raipur ITA Nos. 307 & 350/RPR/2024 of the Act, dated 29.09.2014, observed that the assessee firm had not made any genuine purchases but had only obtained accommodation purchase bills from the subject party. On a perusal of the purchase register filed by the assessee, the A.O observed that it had though disclosed to have made purchases from M/s.Tirupati Trading Company (supra) of Rs.1,40,97,500/-, but as per the ledger account of M/s. Tirupati Trading Company (supra) in the books of account of the said concern, the total transactions were reflected at Rs.1,51,47,500/-. The A.O observed that though a perusal of the records revealed that the assessee firm had made payment of the entire amount of purchase consideration of Rs.1,51,47,500/- (supra) through banking channel on 31.03.2014, but its bank account with Nagarik Sahakari Bank revealed that cash was deposited prior to issuing of cheques to the aforesaid concern, viz. M/s. Tirupati Trading Company. Accordingly, the A.O established the trail of cash deposits and the corresponding cheque payments that were made by the assessee firm towards the impugned purchase transactions that were claimed to have been made from M/s. Tirupati Trading Company. 8. As the assessee firm had failed to substantiate the authenticity of the purchases that it had claimed to have made from M/s. Tirupati Trading Company (supra), therefore, the A.O made addition of the impugned purchases of Rs.1,51,47,500/- (as claimed by the assessee firm 9 M/s. Kachrulal JItendra Kumar Parboiling Plant Vs. ITO, Ward-2(1), Raipur ITA Nos. 307 & 350/RPR/2024 in its books of account) u/s. 69C of the Act. Accordingly, the A.O vide his order passed u/s.147 r.w.s. 144B of the Act, dated 29.04.2023 determined the income of the assessee firm at Rs.3,08,04,120/-. 9. Aggrieved the assessee firm carried the matter in appeal before the CIT(Appeals). The CIT(Appeals) observed that in the course of the original assessment framed in the assessee’s case u/s. 143(3), dated 26.12.2016, the A.O had disallowed 25% of the impugned bogus purchases. Apart from that, the CIT(Appeals) relied on the judgment of the Hon’ble High Court of Bombay in the case of Pr. CIT Vs. Mohammed Haji Adam & Co in ITA No.1004 of 2016 and order of the ITAT, Raipur in the case of M/s.P.D. Rice Udyog Vs. DCIT, Raipur, ITA No.210/RPR/2018 and, thus, on an estimate basis restricted the addition in the hands of the assessee to GP rate of 8% i.e. Rs.12,11,800/-[8% of Rs.1,51,47,500/-]. For the sake of clarity, the observations of the CIT(Appeals) are culled out as under: “7. Ground No.2: Disallowance of purchase of Rs.1,51,47,500/- 7.1. The second Ground was raised on disallowance of the bogus purchase u/s 69C of the IT Act. The appellant claimed that notice issued u/s 148 of the IT Act dated 30.06.2021 was time barred. However, there is no such Ground raised by the appellant in Form No. 35. The AO clearly recorded the reason that after the decision of Hon'ble Supreme Court in the case of Union of India Vs Ashish Aggarwal, fresh notice u/s 148 of the IT Act was issued and in response to tile notice the appellant filed submissions before the AO. Hence, this issue raised by the appellant without any specific Grounds of Appeal is not admissible. 10 M/s. Kachrulal JItendra Kumar Parboiling Plant Vs. ITO, Ward-2(1), Raipur ITA Nos. 307 & 350/RPR/2024 7.2. The appellant also claimed that notice issued u/s 148 of the IT Act dated 30.06.2021, was not singed. However, this Ground is also not admissible as the reassessment proceedings was initiated after the decision of Hon'ble Supreme Court in the case of Union of India Vs Ashish Aggarwal, by issuing a fresh notice u/s 148 of the IT Act dated 26.07.2022. Hence, this issue raised by the appellant without any specific Grounds of Appeal is also not admissible. 7.3 On merit the appellant claimed that, on bogus purchase entire expenditure cannot be disallowed and only Gross Profit has to be charged. In this connection, he has relied upon the decision of the Hon’ble High Court of Bombay in the case of Pr. CIT Vs. Mohammed Haji Adam & Co in ITA No.1004 of 2016. Hon’ble ITAT decision in the case of M/s. P.D. Rice Udyog Vs. DCIT, Raipur, ITA No.210/RPR/2018. I have gone through the decisions. The facts are similar to the decision of appellant’s case. By respectfully following the decisions of Jurisdictional ITAT, it is fair to estimate the Gross Profit at the rate of 8% as the income escaped the assessment as against Rs.1,51,47,500/- disallowed by the A.O in the assessment order. 7.4 In view of the above the A.O is directed to restrict the disallowance at the rate of 8% on total purchase of Rs.1,51,47,500/-that is worked out into Rs.12,11,800/-. Accordingly, Ground No.2 is partly allowed.” 10. Both the assessee firm and the revenue being aggrieved with the order of the CIT(Appeals) have carried the matter in appeal before us. 11. We have heard the Ld. Authorized Representatives of both the parties, perused the orders of the lower authorities and the material available on record, as well as considered the judicial pronouncements that have been pressed into service by the Ld. AR to drive home his contentions. 11 M/s. Kachrulal JItendra Kumar Parboiling Plant Vs. ITO, Ward-2(1), Raipur ITA Nos. 307 & 350/RPR/2024 12. As Shri Ravi Agrawal, Ld. Authorized Representative (for short ‘AR’) for the assessee firm has assailed the validity of the jurisdiction that was assumed by the A.O for framing the impugned assessment, therefore, we deem it fit to first deal with the said issue. 13. Apropos the validity of the jurisdiction that was assumed by the AO for framing the impugned assessment, the Ld. AR submitted that as the notice u/s. 148 of the Act, dated 25.07.2022 is barred by limitation, therefore, the consequential assessment order passed by the A.O u/s. 147 r.w.s. 144B of the Act, dated 29.04.2023 cannot be sustained and is liable to be quashed on the said count itself. Elaborating further on his contention, the Ld. AR had taken us through a “Chart”, as per which, notice u/s. 148 of the Act, dated 25.07.2022 in the case of the assessee firm could have been issued latest by 16.06.2022. The Ld. AR submitted that as the notice u/s. 148 of the Act had been issued by the A.O on 25.07.2022 i.e. much after 16.06.2022, therefore, the same being barred by limitation was invalid. 14. Apropos the aforesaid issue, Dr. Priyanka Patel, Ld. Sr. Departmental Representative (for short ‘DR’), submitted that as the A.O had validly assumed jurisdiction and framed the assessment vide his order passed u/s. 147 r.w.s. 144B of the Act, dated 29.04.2023, therefore, no infirmity did emanate from his order. 12 M/s. Kachrulal JItendra Kumar Parboiling Plant Vs. ITO, Ward-2(1), Raipur ITA Nos. 307 & 350/RPR/2024 15. Before proceeding any further, we deem it fit to cull out the substitution of the scheme of the assessment under section 147 to 151 of the Act, as had been made available on the statute vide the Finance Act, 2021 w.e.f. 01.04.2021, along with the scope of the said amendments as had been looked into by the Hon’ble Supreme Court in the backdrop of The Taxation and Other Laws (Relaxation of Certain Provisions) Ordinance Act, 2020. 16. The Finance Act, 2021 had substituted the entire scheme of reassessment under Sections 147 to 151 of the Income Tax Act w.e.f 1st April 2021. Broadly speaking, the changes made available on the statute by the legislature in all its wisdom are, viz. (i) Section 148 now mandates the assessing officer to initiate proceedings only based on prior information and with the prior approval of the specified authority; (ii) Section 148A requires the A.O to provide an opportunity of being heard to the assessee before deciding to issue a reassessment notice u/s. 148 of the Act; (iii) Section 148A requires the A.O to, viz. (a) conduct any enquiry, if required, with the prior approval of the specified authority; (b) provide an opportunity of being heard to the assessee, with the prior approval of the specified authority; (c) consider the reply furnished by assessee, if any, in response to the show-cause notice; and (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 u/s.148 of the Act by passing an order; (iv) Further, 13 M/s. Kachrulal JItendra Kumar Parboiling Plant Vs. ITO, Ward-2(1), Raipur ITA Nos. 307 & 350/RPR/2024 the time limit under Section 149 has been reduced from four years to three years from the end of the relevant assessment year for all situations. However, an exception has been carved out, as per which, an assessment can be reopened beyond three years but within ten years from the end of the relevant assessment year if the income chargeable to tax which has escaped assessment amounts to or is likely to amount to Rupees fifty lakhs or more; (v) The “1st proviso” to Section 149 prohibits the issuance of a reassessment notice under the new regime if such notice have become time-barred under the old regime; and (vi) the sanctioning authorities specified under Section 151 of the new regime are different from those specified under the old regime. 17. Also, Section 151 of the new regime specifies the following authorities for Sections 148 and 148A of the Act, viz. (i) Principal Commissioner or Principal Director or Commissioner or Director if three years or less have elapsed from the end of the relevant assessment year; and (ii) Principal Chief Commissioner or Principal Director General or Chief Commissioner or Director General if more than three years have elapsed from the end of the relevant assessment year. 18. The Taxation and Other Laws (Relaxation of Certain Provisions) Ordinance Act, 2020 [for short “TOLA], had come into force with retrospective effect from March 31, 2020. Section 3(1) of TOLA extended 14 M/s. Kachrulal JItendra Kumar Parboiling Plant Vs. ITO, Ward-2(1), Raipur ITA Nos. 307 & 350/RPR/2024 the time limit for completion of actions or compliances under the “Specified Act”, which fell for completion or compliance during the period from March 20, 2020 to March 31 2021. Section 3(1) of the TOLA empowered the Central Government to extend the time limit beyond 31st March, 2021 by a notification. In pursuance of its powers, the Central Government issued notifications to extend the period of relaxation till June 30, 2021. The effect of TOLA, 2020 and the notifications issued under the legislation was that, viz. (i) if the time prescribed for passing of any order or issuance of any notice, sanction, or approval fell for completion or compliance from March 20, 2020 to March 31, 2021; and (ii) if the completion or compliance of such action could not be made during the stipulated period, then, the time limit for completion or compliance of such action was extended to June 30, 2021. Accordingly, the TOLA, 2020 provided for a relaxation of the time limit for issuing reassessment notice u/s.148 of the Act. 19. As the notifications dated March 31, 2021 and April 27, 2021 issued by the Central Government under Section 3(1) of TOLA, 2020 contained an explanation declaring that the provisions under the old regime shall apply to the reassessment proceedings initiated under them, therefore, the A.Os had accordingly issued reassessment notices between April 1, 2021 and June 30, 2021 by relying on the provisions under Section 148 of the old regime. These reassessment notices issued between April 1 2021 and June 15 M/s. Kachrulal JItendra Kumar Parboiling Plant Vs. ITO, Ward-2(1), Raipur ITA Nos. 307 & 350/RPR/2024 30, 2021 under the old regime were challenged by the assessee’s before various High Courts, which quashed the same for the reasons, viz. (i) Sections 147 to 151 stood substituted by the Finance Act, 2021 from April 1, 2021; (ii) that in the absence of any saving clause, the department could initiate reassessment proceedings after April 1, 2021 only in accordance with the provisions of the new regime since they were remedial, beneficial, and meant to protect the rights and interests of the assessees; and (iii) the Central Government could not exercise its delegated authority to re-activate the pre-existing law. 20. Thereafter, the Hon’ble Apex Court in the case of Union of India & Ors Vs. Ashish Agrawal, (2022) 444 ITR 1 (SC), to resolve the multi-facet controversies that had cropped up inter-se the assessees and the department, had held, that it was in complete agreement with the view taken by the various High Courts in holding that the benefit of the new provisions shall be made available even in respect of proceedings relating to the past assessment years, provided Section 148 notice was issued on or after 01-4-2021. However, the Court in order to balance the interests of the Revenue and the assessee exercised its discretionary jurisdiction under Article 142 of the Constitution of India and directed that the reassessment notices issued under the old regime shall be deemed to have been issued under Section 148A(b) of the new regime. Further, it was provided that the A.O shall within 30 days provide to the respective 16 M/s. Kachrulal JItendra Kumar Parboiling Plant Vs. ITO, Ward-2(1), Raipur ITA Nos. 307 & 350/RPR/2024 assessees, the information and material relied upon by the department, so that the assessee’s could reply to the show-cause notices within two weeks thereafter. The requirement of conducting any enquiry, if required, with the prior approval of specified authority u/s.148A(a) was hereby dispensed with as a one-time measure vis-à-vis those notices which had been issued u/s. 148 of the un-amended Act from 01-4-2021 till date, including those which was quashed by the High Courts. It was directed that the A.Os shall thereafter pass orders in terms of Section 148A(d) in respect of each of the assessees concerned and, thereafter, following the procedure as required u/s.148A of the Act, they may issue notice u/s.148 of the Act. For the sake of clarity, the observations of the Hon’ble Apex Court in the case of Union of India Vs. Ashish Agrawal (supra), wherein the notices issued by the department u/s. 148 of the Act, as per the old regime were to be treated as “Show Cause Notices” issued u/s. 148A(b) of the Act, are culled out as under: “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 17 M/s. Kachrulal JItendra Kumar Parboiling Plant Vs. ITO, Ward-2(1), Raipur ITA Nos. 307 & 350/RPR/2024 per the Finance Act, 2021. There appears to be genuine non-- application 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 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 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 18 M/s. Kachrulal JItendra Kumar Parboiling Plant Vs. ITO, Ward-2(1), Raipur ITA Nos. 307 & 350/RPR/2024 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.” Accordingly, the Hon’ble Apex Court in the case of Union of India & Ors Vs. Ashish Agrawal (supra), had held as under: (i) the notices issued u/s. 148 of the Act to the respective assessees under the old regime during the period 01.04.2021 to 30.06.2021 shall be deemed to have been issued u/s.148A of the Income Tax Act as substituted by the Finance Act, 2021 and treated to be show cause notices in terms of Section 148A(b) of the Act; (ii) the A.O shall within thirty days from the date of order of the Hon’ble Apex Court in the case of Union of India & Ors Vs. Ashish Agrawal (supra) i.e. 04.05.2022 provide to the assessee information/material that was relied upon by the department which suggested that his income chargeable to tax had escapement; (iii) that a period of two weeks shall thereafter be allowed to the assessee’s to file reply in response to the notice issued u/s. 148A(b) of the Act; 19 M/s. Kachrulal JItendra Kumar Parboiling Plant Vs. ITO, Ward-2(1), Raipur ITA Nos. 307 & 350/RPR/2024 (iv) the A.O shall, thereafter, pass an order u/s. 148A(d) of the Act with the prior approval of the specified authority, within one month from the end of the month, in which, the assessee’s reply 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 the aforesaid reply expires. 21. Thereafter, the Hon’ble Apex Court in the case of Union of India and Ors. Vs. Rajeev Bansal (2024) 469 ITR 46 (SC) had, inter alia, further clarified as under: (i) The A.O is required to obtain prior approval of the specified authority according to section 151 of the new regime before passing an order under section 148A(d) or issuing a notice under section 148 of the Act which were required to be issued within the time limit specified under section 151 of the new regime r.w. TOLA, 2020, where applicable; (ii) that the directions issued by the Hon’ble Apex Court in the case of Union of India & Ors Vs. Ashish Agrawal (supra) applied PAN-India including all the 90,000 reassessment notices issued under section 148 of the old regime during the period April 1, 2021 to June 30, 2021. (iii) the department was directed to provide all the relevant material or information to the assessee’s and thereafter, allow the assessee’s to 20 M/s. Kachrulal JItendra Kumar Parboiling Plant Vs. ITO, Ward-2(1), Raipur ITA Nos. 307 & 350/RPR/2024 respond to the “Show cause notices” by availing all the defences including those available under Section 149 of the Act. (iv) that as per Section 148A(b) of the Act, the A.O. had to comply with two requirements, viz. (i) issuance of a show cause notice; and (ii) supply of all the relevant information which formed the basis of the show-cause notice. (v) the total time that was excluded for computation of limitation for the deemed notices is, viz. (i) the time during which the show-cause notices were effectively stayed, that is, from the date of issuance of the deemed notice between 1st April, 2021 and 30th June, 2021 till the supply of relevant information or material by the assessing officers to the assesses in terms of the directions in Union of India & Ors Vs. Ashish Agarwal (supra); and (ii) two weeks allowed to the assesses to respond to the show-cause notices. (vi) that the time surviving under the Act read with TOLA, 2020 that would be available to the department to complete the remaining proceedings in furtherance of the deemed notices, including issuance of reassessment notices u/s. 148 of the new regime could be calculated by computing the number of days between the date of issuance of the deemed notice and June 30, 2021. For the sake of clarity, the observations of the Hon’ble 21 M/s. Kachrulal JItendra Kumar Parboiling Plant Vs. ITO, Ward-2(1), Raipur ITA Nos. 307 & 350/RPR/2024 Apex Court in the case of Union of India & Ors. Vs. Rajeev Bansal (supra) are culled out as under: “114. In view of the above discussion, we conclude that: a. After 1 April 2021, the Income Tax Act has to be read along with the substituted provisions; b. TOLA will continue to apply to the Income Tax Act after 1 April 2021 if any action or proceeding specified under the substituted provisions of the Income Tax Act falls for completion between 20 March 2020 and 31 March 2021; c. Section 3(1) of TOLA overrides Section 149 of the Income Tax Act only to the extent of relaxing the time limit for issuance of a reassessment notice under Section 148; d. TOLA will extend the time limit for the grant of sanction by the authority specified under Section 151. The test to determine whether TOLA will apply to Section 151 of the new regime is this: if the time limit of three years from the end of an assessment year falls between 20 March 2020 and 31 March 2021, then the specified authority under Section 151(i) has extended time till 30 June 2021 to grant approval; e. In the case of Section 151 of the old regime, the test is: if the time limit of four years from the end of an assessment year falls between 20 March 2020 and 31 March 2021, then the specified authority under Section 151(2) has extended time till 31 March 2021 to grant approval; f. The directions in Ashish Agarwal (supra) will extend to all the ninety thousand reassessment notices issued under the old regime during the period 1 April 2021 and 30 June 2021; g. The time during which the show cause notices were deemed to be stayed is from the date of issuance of the deemed notice between 1 April 2021 and 30 June 2021 till the supply of relevant information and material by the assessing officers to the assesses in terms of the directions issued by this Court in Ashish Agarwal (supra), and the period of two weeks allowed to the assesses to respond to the show cause notices; and h. The 22 M/s. Kachrulal JItendra Kumar Parboiling Plant Vs. ITO, Ward-2(1), Raipur ITA Nos. 307 & 350/RPR/2024 assessing officers were required to issue the reassessment notice under Section 148 of the new regime within the time limit surviving under the Income Tax Act read with TOLA. All notices issued beyond the surviving period are time barred and liable to be set aside;” 22. Shri Ravi Agrawal, Ld. AR for the assessee, after referring to the post-amended Section 148 r.w.s. 148A r.w.s. 149 of the Act (as had been made available on the statute vide the Finance Act, 2021 w.e.f. 01.04.2021) read in the backdrop of the aforesaid judicial pronouncements of the Hon’ble Apex Court, submitted that as the notice u/s. 148 of the Act, dated 25.07.2022 had been issued beyond the surviving/balance period that was available with the A.O, therefore, the same was barred by limitation. Elaborating further on his contention, the Ld. AR submitted that the A.O pursuant to the judgment of the Hon’ble Apex Court in the case of Union of India & Ors Vs. Ashish Agarwal (supra), had issued show- cause notice u/s. 148A(b) of the Act, dated 25.05.2022, Page 1 & 2 of APB, wherein the assessee firm was called upon to furnish its reply within two weeks from the date of receipt of the said letter. In compliance, the assessee firm which though was allowed a time period of two weeks to furnish its reply, had filed/uploaded the same on 30.05.2022, Page 3 to 7 of APB. The Ld. AR submitted that the period of two weeks allowed to the assessee firm to file its reply to the show-cause notice issued u/s. 148A(b) of the Act lapsed as on 07.06.2022. Carrying his contention further, the 23 M/s. Kachrulal JItendra Kumar Parboiling Plant Vs. ITO, Ward-2(1), Raipur ITA Nos. 307 & 350/RPR/2024 Ld. AR submitted, that as observed by the Hon’ble Apex Court in the case of Union of India & Ors Vs. Rajeev Bansal (supra), the clock started ticking for the department to issue notice u/s. 148 of the Act from 07.06.2022 (supra) i.e. after considering the balance/surviving period that was available with it. The Ld. AR submitted that as the A.O had issued the deemed notice u/s.148A of the Act on 30.06.2021, therefore, after accounting for all the exclusions, the A.O had one day [between June 30, 2021(date on which deemed notice u/s. 148A was issued) to June, 30, 2021 (extended time period as per TOLA, 2020)] to issue notice u/s. 148 of the Act under the new regime. The Ld. AR submitted that as per the “4th proviso” to Section 149 of the Act, where the balance/surviving period available with the A.O for passing an order under clause (d) of Section 148A of the Act was less than 7 days, then such remaining period shall be extended to seven days and the period limitation shall be deemed to be extended accordingly. Elaborating further on his contention, the Ld. AR submitted that the time started ticking for the A.O to issue notice u/s. 148 of the Act within the time period of 7 days from the lapse of period of two weeks (14 days) to respond to the SCN issued to the assessee firm u/s. 148A(b) of the Act, dated 25.05.2022, which, thus, lapsed on 16.06.2022. The Ld. AR submitted that as the A.O in the present case had issued notice u/s. 148 of the Act, dated 25.07.2022 i.e. much beyond the period 24 M/s. Kachrulal JItendra Kumar Parboiling Plant Vs. ITO, Ward-2(1), Raipur ITA Nos. 307 & 350/RPR/2024 of limitation which expires on 16.06.2022, therefore, the same was barred by limitation. 23. We have thoughtfully considered the contentions advanced by the Ld. Authorized Representatives of both the parties. Admittedly, the following facts are discernible from the record:- ● Notice u/s. 148 of the Act under the old regime (deemed notice u/s. 148A) was issued by the A.O to the assessee firm on 30.06.2021; ● show-cause notice u/s 148A(b) of the Act was issued by the A.O to the assessee firm on 25.05.2022; ● the time period of two weeks (14 days) from the date of issuing of notice u/s. 148A(b) dated 25.05.2022 [as per the judgment of the Hon’ble Apex Court in the case of Union of India & Ors Vs. Ashish Agrawal (supra)] lapsed on 07.06.2022; ● the balance/surviving period available with the A.O to issue notice u/s. 148 of the Act (under new regime) was 1 day [time between 30.06.2021 (the date of issuance of notice u/s.148A of the Act) AND 30.06.2021 i.e. (extended time period under TOLA, 2020); ● as the balance/surviving period available with the A.O for passing an order under clause (d) of 148A of the Act was 1 day i.e. less than 7 days, 25 M/s. Kachrulal JItendra Kumar Parboiling Plant Vs. ITO, Ward-2(1), Raipur ITA Nos. 307 & 350/RPR/2024 therefore, as per the “fourth proviso” to Section 148A of the Act, the period of limitation so available would stand extended to 7 days; ● the A.O could have validly issued notice u/s. 148 of the Act (under the new regime) latest by 13.06.2022; 24. As the A.O in the present case had issued notice u/s. 148 of the Act, dated 25.07.2022 i.e. much subsequent to lapse of the period of limitation as was available with him upto 13.06.2022, therefore, as stated by the Ld. AR (subject to correction of the date by the Ld. AR as 16.06.2022), and rightly so, the same is found to be barred by limitation. Accordingly, the assessment order passed by the A.O u/s. 147 r.w.s. 144B of the Act, dated 29.04.2013 in absence of a valid notice issued u/s. 148 of the Act cannot be sustained and, is quashed. 25. As we have quashed the assessment for want of valid assumption of jurisdiction by the A.O, therefore, we refrain from adverting to and dealing with the other contentions, based on which, the impugned addition has been assailed before us which, thus, are left open. 26 M/s. Kachrulal JItendra Kumar Parboiling Plant Vs. ITO, Ward-2(1), Raipur ITA Nos. 307 & 350/RPR/2024 26. In the result, while for the appeal filed by the assessee firm in ITA No.307/RPR/2024 is allowed, the appeal filed by the revenue in ITA No.350/RPR/2024 having been rendered as infructuous is dismissed in terms of our aforesaid observations. Order pronounced in open court on 05th day of February, 2025. Sd/- Sd/- ARUN KHODPIA RAVISH SOOD (ACCOUNTANT MEMBER) (JUDICIAL MEMBER) रायपुर/ RAIPUR ; Ǒदनांक / Dated : 05th February, 2025. **##SB, Sr. PS आदेश कȧ ĤǓतͧलͪप अĒेͪषत / Copy of the Order forwarded to : 1. अपीलाथȸ / The Appellant. 2. Ĥ×यथȸ / The Respondent. 3. The Pr. CIT, Raipur-1 (C.G) 4. ͪवभागीय ĤǓतǓनͬध, आयकर अपीलȣय अͬधकरण, रायपुर बɅच, रायपुर / DR, ITAT, Raipur Bench, Raipur. 5. गाड[ फ़ाइल / Guard File. आदेशानुसार / BY ORDER, // True Copy // Senior Private Secretary आयकर अपीलȣय अͬधकरण, रायपुर / ITAT, Raipur. "