Deven Chachra vs ACIT, Circle 22 (2)

“1.

That the learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi has erred both in law and, on facts in upholding the determination of income made by the learned Assessment Unit, Income Tax Department of the appellant at Rs. 11,73,89,328/- as against declared income of Rs.4,10,24,650/- in an order of assessment dated 27.05.2023 u/s 147 of the Act read with section 144B of the Act.

2.

That the learned Commissioner of Income Tax (Appeals) has failed to appreciate that assessment framed u/s 147/144B of the Act is barred by limitation and therefore, deserve to be quashes as such.

3.

That the learned Commissioner of Income Tax (Appeals) has erred both in law and on facts in upholding the initiation of proceedings under section 147 of the Act and, completion of assessment under section 147144B of the Act without appreciating that the same were without jurisdiction and hence deserved to be quashed as such.

3.1

That the learned Commissioner of Income Tax (Appeals) has failed to appreciate that the notice issued u/s 148A(b) of the Act, under section 148 of the Act order u/s 148A(d) of the Act were also illegal, invalid and without jurisdiction and deserve to be quashed as such.

3.2

That the learned Commissioner of Income Tax (Appeals) has failed to appreciate that there was no tangible material on record in the form of specified information to suggest that income of the appellant had escaped assessment and in view thereof the proceedings initiated were illegal, untenable and therefore unsustainable.

3.3

That the learned Commissioner of Income Tax (Appeals) has failed to appreciate that non supply of information in accordance with clause (i) of Explanation 1 to section 148 of the Act even otherwise vitiated the notice u/s 148A(b) of the Act and order u/s 148A(d) of the Act.

3.4

That the learned Commissioner of Income Tax (Appeals) has failed to appreciate that initiation of proceedings was mechanical and without any application of mind much less independent application of mind, therefore the notices issued u/s 148A(b) of the Act; and u/s 148 of the Act were invalid notice; and also order u/s 148A(d) of the Act was an invalid order and thus assumption u/s 147 of the Act was without jurisdiction.

3.5

That the learned Commissioner of Income Tax (Appeals) has failed to appreciate that notice issued u/s 148 of the Act after three years have elapsed from the end of the relevant assessment year in absence of possession of books of account or other documents or evidence which reveal that the income chargeable to tax represent in the form of 'asset', which has escaped assessment amounting to or is likely to amount to fifty lakh rupees or more for that year in view of provisions of section 149(1)(b) of the Act.

3.6

That notice u/s 148A(b) of the Act was issued based on factually incorrect assumptions and presumptions and therefore such a notice being highly cryptic vague could not legally and logically be made a basis for assumption of jurisdiction and therefore deserves to be quashed as such.

3.7

That the learned Commissioner of Income Tax (Appeals) has failed to appreciate that notice u/s 148A(b) of the Act and, notice dated 30.7.2022 us 148 of the Act issued without validly complying section 151 of the Act were also without jurisdiction.

3.8

That the learned Commissioner of Income Tax (Appeals) has failed to appreciate that notice u's 148A(b) of the Act and order u/s 148A(d) of the Act were contrary to section 151A of the Act; and therefore the assumption of jurisdiction was not in accordance with law.

4.

That the learned Commissioner of Income Tax (Appeals) has also erred both asgo6hS in law and on facts in confirmation an addition of Rs. 7,59,23,658/- representing dividend received on units of mutual funds and exempt u/s 10(35) of the Act

4.1

That while confirming the above addition, the learned Commissioner of Income Tax (Appeals) has failed to appreciate that the factual substratum of the case, statutory provisions of law and as such, addition so sustained is highly misconceived, totally arbitrary, wholly unjustified and therefore, unsustainable.

4.2

That the learned Commissioner of Income Tax (Appeals) has failed to appreciate that since there was no adverse material brought on record by the learned Assessing Officer; the aforesaid addition made and sustained is illegal, invalid and unsustainable.

4.3

That the learned Commissioner of Income Tax (Appeals) has completely overlooked the fact that all the transactions of capital gain of the appellant has already been assessed and accepted in an order of assessment dated 27.12.2017 u/s 143(3) of the Act

4.4

That findings of the learned Commissioner of Income Tax (Appeals) that "the appellant has failed to rebut the findings of the Ld. AO with cogent evidence to establish that the transaction was driven by genuine investment considerations and not by tax mitigation objectives" is factually incorrect, legally misconceived and wholly untenable.

4.5

That the learned Commissioner of Income Tax (Appeals) has sustained the above and denied exemption without confronting the material to appellant and also providing cross examination and therefore order so made and sustained is in disregard of principles of natural justice and hence vitiated.

4.6

That the learned Commissioner of Income Tax (Appeals) has failed to appreciate that once M/s JM Financial Asset Management Ltd. has confirmed that no irregularities were committed by JM Financial Mutual funds and all the dividends were declared in line with the SEBI guidelines, then no adverse inference could be drawn against the appellant and therefore the conclusion arrived in the order of assessment was highly whimsical, arbitrary, illogical and wholly untenable.

4.7

That the learned Commissioner of Income Tax (Appeals) has erred both in law and on facts in recording various adverse inferences which are contrary to the facts on record, material placed on record and, are otherwise unsustainable in law and therefore, addition so sustained is absolutely unwarranted.

5.

That the learned Commissioner of Income Tax (Appeals) has grossly erred both in law and on facts in upholding the impugned order of assessment dated 19.2.2014 without granting the appellant fair, proper and reasonable opportunity, thereby violating the principles of natural justice.

6.

That the learned Commissioner of Income Tax (Appeals) has also erred both in law and on facts in upholding the levy of interest of Rs.2,52,90,272/- u/s 234B of the Act, interest of Rs.3,20,50,905/- u/s 234C of the Act and, interest of Rs.90,938/- u/s 234D of the Act which are not leviable on the facts of the instant case

It is therefore, prayed that, it be held that assessment made by the learned Assessing Officer and sustained by the learned Commissioner of Income Tax (Appeals) be quashed. It be further held that addition made and sustained by the learned Commissioner of Income Tax (Appeals) alongwith interest levied be deleted and appeal of the appellant be allowed.”

“(e)

The Finance Act, 2021 ((2021) 432 ITR (Stat) 52) substituted the old regime for reassessment with a new regime. The first proviso to section 149 does not expressly bar the application of Taxation and other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020. Section 3 of the Taxation and other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 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 Taxation and other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020, then all the notices issued between April 1, 2021 and June 30, 2021 pertaining to the 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:

Assessment Year	Within Years	Expiry of Limitation read with TOLA for (2) (3)	Within Six Years (4)	Expiry of Limitation read with TOLA
2013-2014	31.03.2017	TOLA not applicable	31.03.2020	30.06.2021
2014-2015	31.03.2018	TOLA not applicable	31.03.2021	30.06.2021
2015-16	31.03.2019	TOLA not applicable	31.03.2022	TOLA not applicable
2016-17	31.03.2020	30.06.2021	31.03.2023	TOLA not applicable
2017-18	30.06.2021	30.06.2021	31.03.2024	TOLA not applicable

(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.”

"3.

This batch of civil appeals comprising 103 cases is slightly different than those cases which came to be disposed of by a three Judge Bench of this Court, including both of us (Surya Kant, CJI. and Joymalya Bagchi, J), vide order dated l0.04,2026 passed in Civil Appeal No, 4716 of 2026 and connected matters. 4. The instant cases were segregated through the above- mentioned order on the premise that they may be pertaining to Assessment Year 2015-16. It is fairly conceded by Mr, N. Venkataraman, learned Additional Solicitor General of India, representing the Revenue, that in the assessment cases pertaining to the year 2015-16, the notices issued/proposed to be issued for reassessment would stand barred by time in light of the view taken by this Court in Union of India & Ors, v. Rajeev Bansal, 2024 SCC OnLine SC 2693. …...

5.

There is no quarrel that if the instant cases are found to pertain to Assessment Year 2015-16, then the impugned notices are liable to be struck down outrightly in terms of the concession on behalf of the Department recorded in paragraph 19) of Rajeev Bansal (supra) and reiterated before us by the learned Additional Solicitor General of India.

6.

However, if it is found that these cases pertain to an assessment year other than 2015-16, he respondent-assessees shall be entitled to raise all the contentions that have been permitted by this Court vide order dated 10.04.2026, Ordered accordingly,

7.

Consequently, keeping in mind the reasons set out in order dated 10.04,2026, the impugned judgment in each appeal is set aside and the instant appeals are disposed of by remitting the matters to the jurisdictional 1igh Courts for redetermination of the issues. As observed above, the High Courts shall firstly determine whether the matters pertain to Assessment Year 2015-16.If it is found to be so, no further adjudicatory exercise shall be required to be undertaken by the High Court, except to declare the notices as being time-barred in light of Rajeev Bansal (supra). However, if it is found that the case does not pertain to Assessment Year 2015 16, then all the issues shall be resolved in terms of the order dated 10.04.2026 passed in Civil Appeal No. 4716 of 2026.

8.

Pending application(s), if any, including application(s) for substitution and impleadment/intervention stand closed."

“2.

Having regard to the concession made by the petitioner-Department in the case of Union of India v. Rajeev [2024] 167 taxmann. com 70/469 ITR 46/301 Taxman 238 (SC)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.

3.

Hence, the Special Leave Petition is dismissed."