Nimitaya Promoters Private Limited vs Deputy Commissioner Of Income Tax Circle 16(1), Delhi

1.

That in view of the facts and circumstances of the case, the order passed by the Assessment Unit, Income Tax Department ("Assessing Officer"/ "AO") under section 147 r.w.s 144B of the Income tax Act, 1961 ("the Act") dated 22.02.2024 and upheld by the National Faceless Appeal Centre, Delhi ("NFAC") vide order dated 25.02.2026 and the disallowance/addition made therein are illegal, bad in law, without jurisdiction, barred by time limitation and void ab-initio. The disallowance/addition made is erroneous, unjustified, illegal and bad in law.

2.

That the order passed under section l 48A(d) of the Act and the notice issued under Section 148 of the Act is illegal, bad in law, barred by time limitation and without jurisdiction.

3.

That the notice issued under section 148 of the Act is illegal as the mandatory pre-conditions for initiating reassessment proceedings as prescribed under Section 147 to Section 151A of the Act are not satisfied.

4.

That there is no formation of any belief that income chargeable to tax has escaped assessment to assume valid jurisdiction for reopening of assessment under Section 147 of the Act and the information is vague and generic and hence the reopening is invalid.

5.

That the alleged approval under Section 151 of the Act is illegal and bad in law as same is given without application of mind and is also against the mandatory requirements of law as stated under Section 151 of the Act and thus in the absence of any valid approval, the assumption of jurisdiction is illegal and bad in law.

6.

That in view of the facts and circumstances of the case and in law, the reassessment proceedings initiated for A.Y. 2015-16 are invalid, time barred and without jurisdiction, being contrary to the law laid down by the Hon'ble Supreme Court in Union of India v. Rajeev Bansal. (Civil Appeal Nos. 8629, 8631 of 2024 & Ors.)

7.

That in view of the facts and circumstances of the case and in law, the AO has erred in law and on facts in assessing income at Rs. 4,19,44,281/- as against income declared by the appellant of Rs. 1,87,50,860/-

8.

That the CIT(A) has erred, both on facts and in law, in upholding the disallowance of Rs. 2,31,93,421/- made by the AO on account of denial of indexed cost of improvement which is illegal and bad in law. As such the disallowance/addition is liable to be deleted.

9.

That the AO/CIT(A) has erred in law and on facts in wrongly calculating the Long-Term Capital Gain in respect of sale of land, whereas the cost of improvement is denied to the Appellant. In any case, the capital gain is wrongly and illegally worked out.

10.

That the AO has erred in relying solely on third-party information and investigation reports without conducting independent enquiry, without providing opportunity of cross-examination, and without appreciating the books of account and business transactions of the Appellant.

11.

That the AO has made addition on the basis of material collected at the back of the Appellant without even confronting the same to the Appellant.

12.

That in view of the facts and circumstances of the case, the AO/CIT(A) has passed the order without giving reasonable opportunity to the Appellant to file all the documents and evidences in support of its claim. This is clear violation of the principles of natural justice.

13.

That the AO has erred in initiating penalty proceedings under sections 27l(l)(b) and 271(l)(c) of the Act.

14.

That the AO has further erred in levying interest u/s 234B and u/s 234C of the Act, which are not leviable on the facts of the instant case.

“4.

We have heard rival submissions in the light of material placed on record. We have noted that the Revenue has indeed conceded before the Hon’ble Apex Court in the case of Shri Rajeev Bansal that it would not be pursuing cases reopened AY 2015-16 in which notice u/s 148 have been issued after 01.04.2021. Relevant part of the judgement of Hon’ble Apex Court in the case of Shri Rajeev Bansal in Civil Appeal No. Civil Appeal No 8629 of 2024 dated 03^rd October, 2024 are 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 assesses 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: Assessment Within 3 Years Expiry of Limitation read Within six Expiry of Limitation Year with TOLA for (2) Years read with TOLA for (4) (1) (2) (3) (4) (5) 2013-2014 31-3-2017 TOLA not applicable 31-3-2020 30-6-2021 2014-2015 31-3-2018 TOLA not applicable 31-3-2021 30-6-2021 2015-2016 31-3-2019 TOLA not applicable 31-3-2022 TOLA not applicable 2016-2017 31-3-2020 30-6-2021 31-3-2023 TOLA not applicable 2017-2018 31-3-2021 30-6-2021 31-3-2024 TOLA not applicable

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….”

5.

We have further noted that the impugned decision of Hon’ble Apex Court have been followed by few Co-ordinate Benches of this Tribunal, Hon’ble jurisdictional High Court in its decision in the case of, Make Mytrip India Pvt. Ltd., Pratishtha Garg and IBIBO Group Pvt. Ltd., Hon’ble Bombay High Court in the case of Hemant Dwarkanath Zemse, etc. We have noted from order of Ld. AO u/s 147/144 dated 24.03.2023 on page-2 that notice u/s 148 was issued to the appellant on 29.03.2022. Accordingly, as the facts of the case are identical to decision of Hon’ble Apex Court in the case of Rajiv Bansal(supra) and therefore in respectful compliance to the impugned decision, we quash the notice u/s 148 dated 29.03.2022 and consequent assessment order u/s 147 r.w.s. 144 dated 24.03.2022.

6.

In the result, the appeal of the assessee is allowed.”