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Judgment
PER SUDHIR KUMAR, JUDICIAL MEMBER:
This appeal by the assessee is directed against the order of National Faceless Appeal Centre Delhi [hereinafter referred to as (“Ld. NFAC”] dated 23-02-2026 arising out the assessment order dated 12-05-2023 under section 147 r.w.s.144B of the Income Tax Act 1961 (in short “the Act”) pertaining to A.Y. 2017-18.
The assessee has moved an application to raise the additional grounds. Reliance is placed on the judgement of national Thermal Power Co. Ltd. v CIT (1998)229 ITR 283. We have heard the parties. In the light of the above judgement the additional grounds raised by the assessee is admitted.
The assessee has raised the following additional legal ground no 7 in the appeal:
1.The assessment is bad in law and on facts as assessment order dated 29-05-2023 is time barred. Hence the assessment as such may be quashed.
The brief facts of the case are that the department download the information from INSIGHT portal that Chairman of India bulls Housing Finance Ltd. Sh. Sameer Gehlaut and Sh. Harish Fabiani a Spain based NRI including others is accused of siphoning off the public money which was further invested back amounting to Rs. 44,00,00,000/-. The assessee has received a sum of Rs.44 crore from M/s Joindre Finance Pvt. Ltd. in form of optionally convertible debentures. As per department the transaction was non-genuine and accordingly, it was concluded that the sum of Rs.44 crores has escaped assessment for the A.Y.2017-18. Notice dated 30-06-2021 under section 148 of the Act was issued to the assessee. Again, notice under section 148A(b) of the Act dated 16-05-2022 was issued to the assessee. The assessee filed the reply and stated that Rs.33 crore was received during the year under consideration. The Assessing Officer passed the order under section 148A(d) of the Act and notice dated 29-06-2022 under section 148 of the Act was issued. The assessment order dated 12-05-2023 was completed by the Assessing Officer after making the addition of Rs.33,00,00,000/-under section 68 of the Act.
Aggrieved by the order of the Assessing Officer, the assessee preferred the appeal before Ld. CIT(A), who vide order dated 23-02-2026 dismissed the appeal. Being aggrieved the order of the Ld. CIT(A) the assessee is in appeal before the tribunal.
The ld. AR of the assessee raised the legal ground and stated that the assessment order is time barred. He further submitted that the first notice under section 148 of the Act was issued on 30-06-2021 and the assessment should be completed within twelve months from the end of the financial year in which such notice under section 148 was served. He further submitted that assessment should be completed at the end of the financial year 2021-2022, i.e 31-03-2023, while the assessment made by order dated 12-05-2023 which is time barred. He drew our attention on the section 153(2) of the Act. The relevant portion of the section 153 of the Act reproduced as under;
153 Time limit for completion of assessment reassessment and recomputation
(1)No order of assessment shall be made under section 143 or section 144 at any time after the expiry of twenty-one months from the end of the assessment year in which the income was first assessable: Provided that in respect of an order of assessment relating to the assessment year commencing on the 1st day of April, 2018, the provisions of this sub-section shall have effect, as if for the words "twenty-one months", the words "eighteen months" had been substituted: [Provided further that in respect of an order of assessment relating to the assessment year commencing on the— (i)1st day of April, 2019, the provisions of this sub-section shall have effect, as if for the words "twenty-one months", the words "twelve months" had been substituted; (ii)1st day of April, 2020, the provisions of this sub-section shall have effect, as if for the words "twenty-one months", the words "eighteen months" had been substituted:] [Provided also that in respect of an order of assessment relating to the assessment year commencing on or after the 1st day of April, 2021, the provisions of this sub-section shall have effect, as if for the words "twenty-one months", the words "nine months" had been substituted.]
[(1A) Notwithstanding anything contained in sub-section (1), where a return under sub-section (8A) of section 139 is furnished, an order of assessment under section 143 or section 144 may be made at any time before the expiry of nine months from the end of the financial year in which such return was furnished.]
(2)No order of assessment, reassessment or recomputation shall be made under section 147 after the expiry of nine months from the end of the financial year in which the notice under section 148 was served: Provided that where the notice under section 148 is served on or after the 1st day of April, 2019, the provisions of this sub-section shall have effect, as if for the words "nine months", the words "twelve months" had been substituted.
(3)Notwithstanding anything contained in sub-sections (1) and (2), an order of fresh assessment [or fresh order under section 92CA, as the case may be,] in pursuance of an order under section 254 or section 263 or section 264, setting aside or cancelling an assessment, [or an order under section 92CA, as the case may be], may be made at any time before the expiry of nine months from the end of the financial year in which the order under section 254 is received by the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner or, as the case may be, the order under section 263 or section 264 is passed by the Principal Commissioner or Commissioner: Xxxxx
The Ld. Departmental Representative relied upon the order of the lower authorities and stated that notice under section 148 of the Act was issued after passing the order under section 148A(d) of the Act on 29-06-2022. The assessment was framed within time by the Ld. Assessing Officer.
We have heard both the parties and perused the material available on record. In the instant case we, find that the first notice under section 148 of the Act was issued on 30-06-2021(P.B.page -3) by which 30 days was granted to file the reply to the assessee. The Assessing Officer again issued the notice under section 148A(b) of the Act on 16-05-2022 and order under section 148A(b) of the Act was passed on 30-5-2022. Again, notice under section 148 of the Act was issued on 29-06-2022. As per the section 153(2) of the Act no assessment reassessment or recomputation shall be made under section 147 after the expiry of nine month from the end of the financial year in which the notice under section 148 was received. This section also provided that if the notice is served on or after the 1st day of April 2019 the provisions of this sub section shall have effect that the twelve months. In the present case the first notice under section 148 of the Act was issued on 30-06-2021 and the reassessment under section147 of the Act was completed by order dated 12-5-2023, which is the time barred assessment. Because the first notice under section 148 of the Act was issued on 30-06-2021 than the reassessment should be completed within twelve months at the end of financial year in which the notice was issued i.e. 31-03-2023, but the reassessment order was completed on 12-05-2023 which is time barred. Accordingly, the assessment proceedings liable to be quashed and quashed accordingly.
Since we, have decided the legal ground in favour of the assessee the other grounds have become academic and keep them open for adjudication.
In the result, the appeal of the assessee is allowed.