TBEA Shandong Luneng Taishan Cable Co. Ltd. vs ACIT

PER BENCH

These three appeals are filed by the assessee against the final assessment orders passed u/s.147 r.w. 144C(13) of the Act pursuant to the directions of the DRP u/s.144C of the Act for the A.Ys. 2013-14, 2016-17 and 2017-18.

The Ld. Counsel for the assessee at the outset referring to ground No.1 of grounds of appeal for the A.Y.2013-14, submitted that for the A.Y.2013-14 the AO has erred in assuming the jurisdiction u/s.147 of the Act, passing order u/s.148A(d) of the Act and issuing notice for reopening u/s.148 of the Act, as bad in law and barred by limitation.

The Ld. Counsel for the assessee submitted that the following sequence of events right from issue of original notice u/s.148 of the Act under old regime and till the issuance of notices u/s.148 of the Act under new regime pursuant to the direction of the Hon’ble Supreme Court Ashish Aggarwal are as under :-

Referring to the above table the ld. Counsel for the assessee submitted that the limitation period for issue of notice u/s.148 of the Act pursuant to the decision of the Hon’ble Supreme Court in the case of Union of India Vs. Rajeev Bansal (167 taxmann.com 70) expired on 12.07.2022 and whereas in this case the notice u/s.148 of the Act was issued on 30.07.2022 rendering the notice u/s. 148 of the Act as time barred and consequently the reassessment framed pursuant to such notice is bad in law and void-ab-initio.

On the other hand the Ld. DR submitted that notices issued u/s.148 of the Act are within the time period permissible.

Head rival contentions. When a notice issued under old regime was validated by virtue of the decision of the Hon’ble Supreme Court in the case of Ashish Aggarwal, the Hon’ble Supreme Court in the case of Union of India Vs. Rajeev Bansal (supra) specified time limit for issue of notice u/s.148 of the Act under new regime i.e., 7 days from the date of submission of the reply by the assessee plus the surviving period left over.

In the case of the assessee since the original notice was issued u/s.148 of the Act on 30.06.2021, the surviving period left over will be one day. The assessee filed reply in response to notice u/s.148A(b) of the Act on 05.07.2022 and therefore, the time available to the AO to issue notice u/s.148 of the Act under new regime is 7 days as per 4^th proviso to section 149 of the Act plus the surviving period of one day which ends on 06.07.2022. However, notice u/s.148 of the Act in new regime was issued on 13.07.2022 rendering the notice as barred by limitation.

In this circumstances we hold that the assessment framed pursuant to notice issued u/s.148 of the Act dated 30.07.2022 for the A.Y. 2013-14 is bad in law and void-ab-initio and the same is hereby quashed.

Coming to the assessments framed for A.Ys 2016-17 and 2017-18, it is the submission of the Ld. Counsel for the assessee that the notices issued u/s.148 of the Act which were issued beyond a period of 3 years from the end of the relevant assessment year so the approval should have been obtained from Principle Chief Commissioner or Chief Commissioner but not from Principle Commissioner. Ld. Counsel submitted that since approval in this case was obtained from CIT (International Taxation-3) the said approval is in violation of the provisions of section 151(ii) of the Act and consequently the notices issued u/s.148 of the Act the reassessments framed are bad in law.

Heard rival contentions and perused the orders of the authorities below. We have gone through the notices issued u/s.148 of the Act dated 29.07.2022 for the A.Y. 2016-17 and 2017-18 and observed that the said notices were issued after obtaining prior approval from Commissioner of Income Tax, (International Taxation -3), New Delhi. As per the provision of section 151(ii) of the Act when an assessment was reopened beyond a period of 3 years from the end of the relevant assessment year the AO is mandated to obtain approval from PCCIT/PCIT. Since the AO sought reopening of assessment for the A.Ys 2016-17 and 2017-18 which fall beyond the period of 3 years from the end of the relevant assessment years as the notices were issued on 29.07.2022, the AO should have obtained permission from PCCIT or PCIT and not from CIT, (International Taxation-3), New Delhi. Thus, the approval obtained by the AO for issue of notice u/s.148 of the Act is not from appropriate authority, such notices issued u/s.148 of the Act are bad in law. The Ld. Counsel placed reliance on the decision of the Bhushan Gupta Vs. ITO in ITA Nos. 1112 and 1113/Del/2025 in support of the above contentions.

On perusal of the order of the Tribunal we observed that on identical circumstances the Tribunal held notice issued u/s.148 of the Act is bad in law and consequently the assessment framed pursuant to such notice was also held to be bad in law. Following the said decision we hold the reassessments framed for the A.Y2016-17 and 2017-18 pursuant to the notices u/s.148 of the Act dated 29.07.2022 are bad in law and void-ab-initio and we hereby quash the reassessments.

Since we have quashed the final assessment orders for the A.Y. 2013-14, 2016-17 and 2017-18 on legal issues all other grounds on merits need not be adjudicated at this stage as they become academic in nature and therefore, they are left open.

In the result, the appeals of the assessee are partly allowed as indicated above.