DCIT, Rohtak Circle vs Ravi Prakash Aggarwal

PER S. RIFAUR RAHMAN, ACCOUNTANT MEMBER :

This appeal filed by the Revenue and Cross Objections by the Assessee are directed against the order dated 21.12.2023 passed by the Ld. Commissioner of Income-tax (Appeals)/National Faceless Appeal Centre (NFAC), Delhi for the assessment year 2013-14.

Since the appeal and Cross Objection are inter-connected, hence, the same were heard together and disposed of by this common order for the sake of convenience.

At the time of hearing, ld. AR of the assessee submitted that assessee has filed the cross objections with a delay due to a combination of multiple unforeseen and unavoidable reasons. He submitted that the grounds of appeal from the Department did not receive in a timely manner, which delayed the preparation and filing of the cross objections. He further submitted that the delay was further exacerbated by a medical emergency concerning the AR handling the case. He also submitted that the assessee had to travel outside during this critical period further impacted the timely filing of the cross objections. He accordingly prayed that the delay in filing the cross objections may be condoned.

On the other hand, ld. DR of the Revenue objected to the above facts on record.

We have heard both the counsels on the issue of condonation of delay. In our considered opinion, there was a reasonable cause for the delay in filing the cross objections. Therefore, we condone the delay in filing the cross objections before the Tribunal.

First we deal with Assessee’s Cross Objection No.250/Del/2025.

At the outset, ld. AR for the assessee stated that the assessee has raised jurisdictional issue in the cross objection by stating that the notice issued u/s 148 of the Income-tax Act, 1961 (for short ‘the Act’) on 31.03.2021 is barred by limitation as per Section 149 of the Act, and therefore, the reassessment proceedings deserve to be quashed as void ab initio.

Brief facts of the case are that the assessee had filed its return of income for the relevant assessment year 2013-14 on 24.9.2013 declaring total income at Rs.1,19,83,270/-. Subsequently, the case was reopened for verification under the Special Pilot Project on reversal trades in BSE Stock Options as credible information under Project Falcon was received from the office of the DGIT (Inv.), Mumbai through the Insight Portal under the High risk CRIU/VRU information regarding coordinated and pre-meditated trading on the BSE by engaging in reversal trades in illiquid stock options resulting in non-genuine business loss / gains to the beneficiary assessees and the present assessee was a party to such manipulation and the assessee had incurred a loss of Rs.4,75,56,600/- due to reversal trades in BSE Stock options as per SEBI. Accordingly, notice u/s. 148 of the Act was issued and served upon the assessee on 31.3.2021. During the reassessment proceedings, the AO disallowed of derivative loss of Rs.4,75,56,500/- and issued re-assessment order on 30.3.2022 determining total income at Rs.5,98,14,550/-.

Aggrieved, assessee preferred an appeal before the Ld. CIT(A). In appeal, Ld. CIT(A) partly allowed the appeal of the assessee.

Aggrieved, Revenue has filed the Appeal and Assessee has filed its Cross Objection before us.

At the time of hearing, ld. AR for the assessee submitted that in this case notice u/s. 148 of the Act was issued on 31.03.2021. Ld. AR further stated that this notice is barred by limitation, in view of the provisions of section 149 and the decision of the Hon’ble Supreme Court in the case of UOI vs. Rajeev Bansal (Civil Appeal No. 8629 of 2024), the time limitation for issuance of notice u/s. 148 is not more than 6 years. In the present case, the relevant assessment year is 2013-14 and notice u/s. 148 of the Act is dated 31.3.2021 which is clearly beyond the period of 6 years. Ld. Counsel for the assessee drew our attention to the relevant para in the case of UOI vs. Rajeev Bansal (supra). When these facts were confronted, ld. Sr. DR stated that the notice is a valid notice in view of the decision of the Hon’ble Supreme Court in Civil Appeal No. 3055/2022 in the case of Union of India & others vs. Ashish Agarwal and others. When it was confronted to ld. Sr. DR that this issue has already been adjudicated by the Hon’ble Supreme Court finally in the case of Rajiv Bansal (supra), he has not controverted the same. The Hon’ble Supreme Court in the case of UOI vs. Rajeev Bansal (Supra) has observed as under:-

Considered the rival submissions and material placed on record. We find from the above that it is abundantly clear that notice u/s. 148 dated 31.03.2021 is beyond the limitation period of 6 years, hence, this issue is squarely covered by the decision of the Hon’ble Supreme Court of India in the case of UOI vs. Rajeev Bansal (supra). Accordingly, we hold that consequent reassessment and the order of the CIT(A) both are bad in law and therefore, the same are hereby quashed on this legal issue itself.

In the result, the cross objection filed by the assessee stands allowed.

With regard to Revenue’s appeal being ITA No.776/Del/2024 is concerned, since we have already decided the Assessee’s cross objection on the legal issue in favour of the Assessee by quashing the reassessment order and the consequent appellate order, as a result thereof, the issues raised in the Revenue’s appeal have become academic, hence, need not be adjudicated.

In the result, Assessee’s cross objection is allowed and Revenue’s appeal is dismissed as indicated above.