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Judgment
PER NAVEEN CHANDRA, ACCOUNTANT MEMBER:
This appeal is filed by the assessee against the order of Ld. CIT(A) 27, New Delhi dated 16.03.2026 arising from the assessment order dated 18.05.2023 passed by the DCIT/ACIT, National Faceless Assessment Unit (hereinafter referred as the 'AO') u/s 147 r.w.s 144B of Income Tax Act, 1961 (herein after referred as 'the Act') for the Assessment Year 2014-15.
The Assessee has raised the following grounds of appeal:
1.That Id CIT(A) without appreciating the correct and without giving proper opportunity of being heard and without perusing the case record is not justified in law and facts and circumstances of the case in dismissing the appeal of the assessee by way of ex-parte order.
2.That Id CIT (A) without appreciating the correct facts of the case is not justified in law and facts and circumstances of the case in confirming the proceedings initiated under section 148A read with section 148 based upon original notice issued under section 148 on 23/06/2021 by non-jurisdictional assessing officer is bad in law and assessment so completed on the basis of invalid notice is liable to be quashed.
3.Without prejudice to ground of appeal no. 2, that Id CIT(A) without appreciating the correct facts of the case is not justified in law and facts and circumstances of the case in confirming the notice issued under section 148 on 27/07/2022 alongwith order under section 148A(d) by ACIT Circle 22(2) New Delhi in the absence of any order under section 127 for transfer of case from ACIT Circle 70(1) New Delhi to his jurisdiction (both the officer in different PCIT Charge) as valid notice and assessment so completed on the basis of notice issued u/s 148 without any assumption of valid jurisdiction is bad in law and subsequent notices and assessment so completed on the basis of invalid notice is liable to be quashed.
4.Without prejudice to ground of appeal no 2 and 3, that id CIT(A) without appreciating the correct facts of the case is not justified in law and facts and circumstances of the case in confirming the time barring proceedings in view of first proviso of section 149(1) as valid and thus assessment so completed for time barred proceedings is bad in law and liable to be quashed
5.Without prejudice to ground of appeal no. 2 to 4, that Id CIT(A) without appreciating the correct facts of the case is not justified in law and facts and circumstances of the case in confirming the proceedings initiated u/s 147 r.w.s 148 for the income which has already been declared in the original return of income filed by the assessee and accepted by Id Assessing Officer.
6.Without prejudice to ground of appeal no. 2 to 5, that Id CIT (A) without appreciating the correct facts of the case in confirming the proceedings initiated under section 148 without complying with the provision of section 147 to 151 which suffers from various legal infirmities is bad in law and thus order so passed on the basis of invalid proceedings is bad in law and liable to be quashed.
7.That Id CIT (A) without appreciating the correct facts of the case is not justified in law and facts and circumstances of the case in confirming the order passed by Id Assessing Office (NFAC) without providing any opportunity of being heard through video conferencing and without complying with the provision of section 144B as valid.
8.That Id CIT (A) without appreciating the correct facts of the case is not justified in law and facts and circumstances of the case in confirming the addition of Rs. 5248057/- u/s 69A of the Income Tax Act on account of alleged bogus sale consideration received for sale of shares of Priti Mercantile Limited without bringing any adverse material and evidence against the documents and evidence filed by the appellant assessee under the circumstances when sale consideration was part of income short term capital gain declared by appellant assessee in his return of income and accepted by Id Assessing Officer (NFAC)
9.Without prejudice to ground of appeal no. 8, Id CIT(A) is not justified in law and facts and circumstances of the case is not justified in law and facts and circumstances of the case in confirming the addition of Rs. 5248057/- u/s 69A made by Id Assessing Officer (NFAC) on account of alleged bogus sale consideration received for sale of shares of Priri Mercantile Limited without reducing the cost of purchase of shares for a consideration of Rs. 3644754/- and against the short term capital gain of Rs. 1585559/- which was declared by the appellant assessee in his return of income and accepted by Id assessing officer (NFAC)
10.That Id CIT(A) without appreciating the correct facts of the case in confirming the order passed by Id Assessing Officer against the principle of natural justice without confronting any adverse material and evidence found against the assessee and without giving any opportunity to cross examine a person who has given a statement/report against the genuine transaction of the assessee as valid and order so passed against the principal of natural justice is liable to be quashed.
11.Appellant has every right to make, add, delete, modify or alter any grounds of appeal at the time of hearing.”
Brief facts of the case are that a search and seizure operation under Section 132 of the Act was conducted in the case of PMC Group. M/s PMC Fincorp Ltd. is a public limited company listed on BSE. It was found that M/s PMC Fincorp Ltd. is a penny stock company and the shares of this scrip were used for providing manipulated long term/short term capital gains. Information was received in the case of the assessee regarding beneficiaries of manipulated scrip of PMC Fincorp Ltd. relating to fictitious profits in equity/derivative trading of value Rs.52,48,057/- for the F.Y 2013-14 relevant to A.Y 2014-15.
Based on this information, notice under Section 148 was issued on 23rd June, 2021 to reopen the case for reassessment for A.Y 2014-15. In between the Hon'ble Supreme Court passed a judgment on 4th May, 2022 in the case of Union of India vs. Ashish Agarwal (2022 SCC Online SC 543) holding that notices under Section 148 issued between 1st April, 2021 and 30th June, 2021 shall be deemed to have been issued under Section 148A of the Act as substituted by the Finance Act, 2021 and to be treated as show-cause notices in terms of Section 148A(b) of the Act. After due supply of information and verification of data, order under Section 148A(d) of the Act was passed and notice under Section 148 of the Act dated 27th July, 2022 was issued and served to the assessee. The Assessing Officer, after considering the material on record and in the absence of any response to the show Cause Notice, passed the assessment order dated 18th May, 2023 making an addition of Rs.52,48,057/- under Section 69A of the Act treating the same as unexplained money.
Aggrieved, assessee was in appeal before the ld. CIT(A). The ld. CIT(A) dismissed the appeal of the assessee.
Aggrieved, assessee is now in appeal before us. Before us, ld. Counsel for the assessee submitted that the issue is covered by the decision of the hon’ble Supreme Court in the case of Union of India vs. Rajeev Bansal, [2024] 469 ITR 46 (SC) as the A.Y. 2014-15 is beyond the time prescribed.
Per contra, ld. DR relied on the order of the ld. CIT(A).
We have heard the rival submissions and perused the material available on record. We find that the original notice under section 148 was issued on 23.06.2021 which was treated as show-cause notice under section 148A of the Act. Accordingly, as per TOLA and decision of Supreme Court in the case of Rajeev Bansal, the surviving period was 8 days. The notice under section 148A(b), in consequent to the Hon’ble Supreme Court decision in the case of Rajeev Bansal was issued on 27.05.2022 and the reply to the said notice was filed by the assessee on 09.06.2022. Adding the surviving period of 8 days, the last date of issuing notice under section 148 was 17.06.2022. We find that the notice u/s 148 was issued on 27.07.2022 and therefore the said notice u/s 148 of the Act dated 27.07.2022, cannot but be considered as issued beyond the prescribed time period. Accordingly, the notice u/s 148 as well as the resultant reassessment order u/s 147/144B are therefore, quashed being barred by limitation and unsustainable in the eyes of law.
In the result, appeal of the assessee ITA No. 3502/Del/2026 is allowed.