WARASGAON LAKE VIEW HOTELS LTD,MUMBAI V. ITO-15(3)(1), MUMBAI

CO 141/MUM/2025

AI Insights

The case involves an appeal by the Income Tax Officer against Warasgaon Lake View Hotels Ltd., concerning the deletion of an addition of Rs. 4 Crores on account of share premium money by the CIT(A). The primary legal contention was the validity of the reopening of the assessment under Sections 147 to 151 of the Income Tax Act, which the assessee argued was not fulfilled, rendering the reopening bad in law. The tribunal first addressed the cross-objection regarding the jurisdictional conditions for reopening the assessment, referencing the Supreme Court's decision in Union of India v. Rajeev Bansal, which influenced the outcome by setting aside the notice issued for the assessment year 2015-16 due to non-compliance with TOLA's provisions.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 669006 (ITAT-MUMBAI)
• Appeal Type: Cross Objection
• Pronouncement Date: 23-06-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Assessment Year: 2015-2016
• Other Referred Cases: Union of India v. Rajeev Bansal, Deepak Steel and Power Limited vs. CBDT, ACIT vs. Nehal Ashit Shah
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SWAPNIL CHOUDHARY; DR
• Assessee Lawyers: NITESH JOSHI; ARS
• Keywords: Period of limitation
• Section: 147; 148; 68

Judgement Text

" | आयकर अपीलीय अिधकरण ा यपीठ, मुंबई | IN THE INCOME TAX APPELLATE TRIBUNAL “G” BENCH, MUMBAI BEFORE SHRI SAKTIJIT DEY, HON’BLE VICE PRESIDENT & SHRI NARENDRA KUMAR BILLAIYA, HON’BLE ACCOUNTANT MEMBER I.T.A. No. 2788/Mum/2025 Assessment Year: 2015-16 Income Tax Officer – 15(3)(1) Vs Warasgaon Lake View Hotels Ltd. Hincon House Lal Bahadur Shastri Marg Vikhroli (W) Mumbai - 400083 [PAN: AABCL3822B] अपीला थ\u0016/ (Appellant) \u0017\u0018 यथ\u0016/ (Respondent) C.O. No. 141/Mum/2025 Assessment Year: 2015-16 Warasgaon Lake View Hotels Ltd. Hincon House Lal Bahadur Shastri Marg Vikhroli (W) Mumbai - 400083 [PAN: AABCL3822B] Vs Income Tax Officer – 15(3)(1) अपीला थ\u0016/ (Appellant) \u0017\u0018 यथ\u0016/ (Respondent) Assessee by : Shri Nitesh Joshi, A/Rs Revenue by : Shri Swapnil Choudhary, Sr. D/R सुनवाई की तारीख/Date of Hearing : 18/06/2025 घोषणा की तारीख /Date of Pronouncement: 20/06/2025 आदेश/O R D E R PER NARENDRA KUMAR BILLAIYA, AM: I.T.A. No. 2788/Mum/2025 & C.O. No. 141/Mum/2025 are appeal by the revenue and cross objection by the assessee preferred against the order of the NFAC, Delhi [hereinafter “the ld. CIT(A)”] dt. 07/02/2025 pertaining to AY 2015-16. I.T.A. No. 2788/Mum/2025 C.O. No. 141/Mum/2025 2 2. The grievance of the revenue is that the ld. CIT(A) erred in deleting the addition of Rs. 4 Crores on account of share premium money added by the AO u/s 68 of the Act and in the cross objection the assessee had claimed that the jurisdictional conditions of Section 147 to 151 of the Act have not been fulfilled, therefore, the reopening of the assessment is bad in law. 3. Since the issues raised in the cross objection go to the root of the matter, we adjudicate it first. 4. The notice dated 31/07/2022 issued u/s 148 of the Act, reads as under:- I.T.A. No. 2788/Mum/2025 C.O. No. 141/Mum/2025 3 5. The entire quarrel revolves around the aforementioned notice. 6. At the outset, we find that this issue has been settled in the case of Union of India v. Rajeev Bansal [2024] 167 taxmann.com 70 (SC) wherein reference is made to the submissions made on behalf of the Revenue vide para 19 which is relevant and the same is reproduced hereunder:- \"19. Mr N Venkataraman, learned Additional Solicitor General of India, made the following submissions on behalf of the Revenue: a. Parliament enacted TOLA as a free-standing legislation to provide relief and relaxation to both the assessees and the Revenue during the time of COVID- 19. TOLA seeks to relax actions and proceedings that could not be completed or complied with within the original time limits specified under the Income Tax Act, b. Section 149 of the new regime provides three crucial benefits to the assesses: (i) the four-year time limit for all situations has been reduced to three years, (ii) the first proviso to Section 149 ensures that re-assessment for previous assessment years cannot be undertaken beyond six years, and (iii) the monetary threshold of Rupees fifty lakhs will apply to the re- assessment for previous assessment years, c. The relaxations provided under Section 3(1) of TOLA apply \"notwithstanding anything contained in the specified Act.\" Section 3(1), therefore, overrides the time limits for issuing a notice under Section 148 read with Section 149 of the Income Tax Act; d. TOLA does not extend the life of the old regime. It merely provides a relaxation for the completion or compliance of actions following the procedure laid down under the new regime; e. The Finance Act 2021 substituted the old regime for re-assessment with a new regime. The first proviso to Section 149 does not expressly bar the application of TOLA. Section 3 of TOLA applies to the entire Income Tax Act including Sections 149 and 151 of the new regime. Once the first proviso to Section 149(1)(b) is read with TOLA, then all the notices issued between 1 April 2021 and 30 June 2021 pertaining to assessment years 2013-2014, 2014-2015, 2015-2016, 2016-2017 and 2017-2018 will be within the period of limitation as explained in the tabulation below: I.T.A. No. 2788/Mum/2025 C.O. No. 141/Mum/2025 4 Assessment Year (1) Within 3 Years (2) Expiry of Limitation read Within six Years (4) Expiry of Limitation read with TOLA for (4) (5) 2013- 2014 31.03.2017 TOLA not 31.03.2020 30.06.2021 2014-2015 31.03.2018 TOLA not 31.03.2021 30.06.2021 2015-2016 3103.2019 TOLA not 31.03.2022 TOLA not 2016-2017 31.03.2020 30.06.2021 31.03.2023 TOLA not 2017-2018 31.03.2021 30.06.2021 31.03.2024 TOLA not f. The Revenue concedes that for the assessment year 2015-16, all notices issued on or after 1 April 2021 will have to be dropped as they will not fall for completion during the period prescribed under TOLA; g. Section 2 of TOLA defines \"specified Act\" to mean and include the Income Tax Act. The new regime, which came into effect on 1 April 2021, is now part of the Income Tax Act. Therefore, TOLA continues to apply to the Income Tax Act even after 1 April 2021; and h. Ashish Agarwal (supra) treated Section 148 notices issued by the Revenue between 1 April 2021 and 30 June 2021 as show-cause notices in terms of Section 148A(b). Thereafter, the Revenue issued notices under Section 148 of the new regime between July and August 2022. Invalidation of the Section 148 notices issued under the new regime on the ground that they were issued beyond the time limit specified under the Income Tax Act read with TOLA will completely frustrate the judicial exercise undertaken by this Court in Ashish Agarwal (supra).” 6.1. Thus, it can be seen that Revenue conceded before the Hon'ble Supreme Court in para 19(f) for dropping all the notices issued on or after 01.04.2021 for A.Y. 2015-16 as they will not fall for completion during the period prescribed under TOLA. 7. Again the Hon’ble Supreme Court in the case of Deepak Steel and Power Limited vs. CBDT in Civil Appeal Nos. 5177 of 2025, 5178 of 2025 & I.T.A. No. 2788/Mum/2025 C.O. No. 141/Mum/2025 5 5179 of 2025, had the occasion to consider an identical grievance and held as under:- “The learned counsel appearing for the revenue with his usual fairness invited the attention of this Court to a three judge bench decision of this Court in Union of India and Ors. v. Rajeev Bansal, reported in 2024 SCC OnLine SC 2693, more particularly, paragraph 19(f) which reads thus: - \"19. (f) The Revenue concedes that for the assessment year 2015- 2016, all notices issued on or after April 1, 2021 will have to be dropped as they will not fall for completion during the period prescribed under the Taxation and other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020.\" 5. As the revenue made a concession in the aforesaid decision that is for the assessment year 2015-2016, all notices issued on or after 1st April, 2021 will have to be dropped as they would not fall for completion during the period prescribed under the taxation and other laws (Relaxation and Amendment of certain Provisions Act, 2020). Nothing further is required to be adjudicated in this matter as the notices so far as the present litigation is concerned is dated 25.6.2021. 6. In view of the aforesaid, in such circumstances referred to above the original writ petition nos.2446 of 2023, 2543 of 2023 and 2544 of 2023 respectively filed before the High Court of Orissa at cuttack stands allowed.” 8. Once again, the Hon’ble Supreme Court had the occasion to decide a similar issue in the case of ACIT vs. Nehal Ashit Shah in IA No. 66386/2025 & IA No. 66387/2025 by order dated 04/04/2025. The relevant findings read as under :- “It has been submitted at the bar that this Special Leave Petition could be disposed of by following the order dated 17.01.2025 passed in the case of the Income Tax officer Ward 1(2) Jaipur vs. R.K.Build Creations Private Limited (Special Leave Petition (Civil) Diary No(s) .59625 of 2024). For ease of reference the aforesaid order reads as under: \"Delay condoned. Having regard to the concession made by the petitioner-Department in the case of Union of India vs. Rajeev Bansal, Civil Appeal No. 8629 of 2024 on 03.10.2024 (2024 SCC ONLINE 754), this Special Leave Petition would not survive for further consideration. Hence, the Special Leave Petition is dismissed. Pending applications), if any, shall stand disposed of.\" 4. Consequently, following the aforesaid order, this Special Leave Petition is dismissed as it does not survive for further consideration. I.T.A. No. 2788/Mum/2025 C.O. No. 141/Mum/2025 6 5. In this regard, reference could also be made to paragraph 19(e) and (f) in the case of Union of India vs. Rajeev Bansal, Civil Appeal No.8629 of 2024 on 03.10.2024 under which the learned Additional Solicitor General for India has made a concession insofar as the assessment year 2015-16 is concerned. Pending application(s), if any, shall stand disposed of.” 9. In light of the aforementioned decisions of the Hon’ble Supreme Court, the impugned notice mentioned hereinabove is set-aside and the resultant order is quashed. Since we have quashed the assessment order, we do not find it necessary to delve into the merits of the case. Accordingly, the grounds raised by the assessee in the cross-objections are allowed and the appeal of the revenue becomes infructuous. 10. In the result, appeal of the revenue is dismissed and cross- objections of the assessee is allowed. Order pronounced in the Court on 20th June, 2025 at Mumbai. Sd/- Sd/- (SAKTIJIT DEY) (NARENDRA KUMAR BILLAIYA) VICE PRESIDENT ACCOUNTANT MEMBER Mumbai, Dated 20/06/2025 *SC SrPs *SC SrPs *SC SrPs *SC SrPs आदेश की \u0014ितिलिप अ\u0019ेिषत /Copy of the Order forwarded to : 1. अपीलाथ\u001b / The Appellant 2. \u0014 थ\u001b / The Respondent 3. संबंिधत आयकर आयु! / Concerned Pr. CIT 4. आयकर आयु! ) अपील ( / The CIT(A)- 5. िवभागीय \u0014ितिनिध ,आयकर अपीलीय अिधकरण, मुंबई /DR,ITAT, Mumbai, 6. गाड% फाई/ Guard file. आदेशानुसार/ BY ORDER TRUE COPY Assistant Registrar आयकर अपीलीय अिधकरण ITAT, Mumbai "