Ankit Agarwal Son Of Shri Ganesh Agarwal, Presently v. The Principal Chief Commissioner Of Income Tax Bihar And Jharkhand,1Stfloor, C.r. Building, Beerchand Patel Marg, Patna.floor, C.r. Building, Beerchand Patel Ma

IN THE HIGH COURT OF JUDICATURE AT PATNACivil Writ Jurisdiction Case No.5202 of 2024 ====================================================== Ankit Agarwal son of Shri Ganesh Agarwal, presently residing at Flat No.413, Athena Apartment, Jai Singh Highway, P.S. Bani Park, District Jaipur(Rajasthan). ... ... Petitioner Versus 1.The Principal Chief Commissioner of Income Tax Bihar and Jharkhand,1stFloor, C.R. Building, Beerchand Patel Marg, Patna.Floor, C.R. Building, Beerchand Patel Marg, Patna. 2.The Chief Commissioner of Income Tax, Bihar and Jharkhand, 1st Floor,C.R. Building, Beerchand Patel Marg, Patna.C.R. Building, Beerchand Patel Marg, Patna. 3.The Commissioner of Income Tax, Muzaffarpur, Atithi Bhavan, Sahu Road,Muzaffarpur.Muzaffarpur. 4.The Additional/Joint Commissioner of Income Tax, Range-II, MuzaffarpurChandralok Bhavan, Chandralok Chowk, Naya Tola, Muzaffarpur.Chandralok Bhavan, Chandralok Chowk, Naya Tola, Muzaffarpur. 5.The Income Tax Officer, Ward 2(5) Sitamarhi, Chandrakala Bhavan,Bhawdevpur, Sitamarhi.Bhawdevpur, Sitamarhi. 6.The Assessing Authority, National Faceless Assessment Centre, Income TaxDepartment, New Delhi.Department, New Delhi. ... ... Respondents ====================================================== Appearance :For the Petitioner/s: Mr. Vishal Kumar, Advocate Mr. Akshat Agarwal, Advocate Mr. Lokesh Kumar, Advocate Mr. Vikash Khanna, Advocate For the Respondent/s: Mrs. Archana Sinha @ Archana Shahi, Sr. SC ====================================================== CORAM: HONOURABLE MR. JUSTICE RAJEEV RANJAN PRASAD and HONOURABLE MR. JUSTICE ASHOK KUMAR PANDEYORAL JUDGMENT(Per: HONOURABLE MR. JUSTICE RAJEEV RANJAN PRASAD) Date : 18-04-2025 Heard learned counsel for the petitioner and learnedSenior Standing Counsel for the Department of Income Tax (therespondents). 2. This writ application has been filed seeking thefollowing reliefs:- “(i) For quashing the Show Cause Notice dated29.02.2024 bearing DIN: ITBA/ AST/F/144(FCM)/2023-24/1061726288(1) issued by the Respondent Departmentfor being issued without jurisdiction as the very initiationof the impugned re-assessment proceeding was initiated onadmitted false premise by issuing false notice underSection 148A(b) of the Income Tax Act, 1961; (ii) For quashing the order dated 06.04.2022 bearing DINand ITBA/AFT/F/148A/2022-24/Notice No. 1042559776(1) passed under Section 148A(d) of the Income Tax Act,1961 as the same has been passed on false premise that thepetitioner is a non-filer of return and has escapedassessment of income for the Assessment Year 2015-16whereas in the impugned Show Cause Notice it has beenadmitted that the petitioner had filed its Income TaxReturn for the Assessment Year 2015-16; (iii) For setting aside the entire re-assessment proceedingand inquiry conducted under Section 142 of the IncomeTax Act, 1971 with respect to Assessment Year 2015-16 asthe same had been initiated on the basis of the impugnedorder dated 06.04.2022 passed under Section 148A(d) ofthe Income Tax Act, 1961 which is per se illegal, arbitraryand bad in law; (iv) For a declaration that if the impugned order dated06.04.2022 passed under Section 148A(d) of the IncomeTax Act, 1961 would not have been passed for being timebarred in terms of Section 149 of the Income Tax Act,1961 if the Respondent Department would had issuednotice alleging wrong claim of exempted income under thehead of long term capital gain of an amount of Rs.25,90,000/- as the limitation for issuing notice is suchmatters are 3 years; (v) For a declaration that the Respondent Departmentissued a notice under Section 148A(b) of the Income TaxAct, 1961 on false premise alleging the Petitioner to be a (iv) For a declaration that if the impugned order dated06.04.2022 passed under Section 148A(d) of the IncomeTax Act, 1961 would not have been passed for being timebarred in terms of Section 149 of the Income Tax Act,1961 if the Respondent Department would had issuednotice alleging wrong claim of exempted income under thehead of long term capital gain of an amount of Rs.25,90,000/- as the limitation for issuing notice is suchmatters are 3 years; (v) For a declaration that the Respondent Departmentissued a notice under Section 148A(b) of the Income TaxAct, 1961 on false premise alleging the Petitioner to be a non-filer of Return and further alleging escapedassessment for the Assessment Year 2015-16 and non-payment of tax on income of Rs. 1,04,90,899/- with soleintention to take benefit of the longer period of limitationprescribed for issuance of notice under Section 149 of theIncome Tax Act, 1961 as, if the Notice under Section148A(b) would have been issued for the alleged claim ofbogus Long Term Capital Gain to the tune of Rs.25,90,000/- after scrutinizing the Income Tax Return filedby the Petitioner for the Assessment Year 2015-16, thesame would had been hopelessly time barred as thelimitation for issuing Notice under Section 149 of theIncome Tax Act, 1961 with respect to amount belowRs.50,00,000/- is 3 years; and/or for any other order/ordersas your honour may deem fit in the facts and thecircumstances.” Brief facts of the case 3. Petitioner is a citizen of India who filed his IncomeTax Return before the respondent Income Tax Officer, Ward 2(4),Sitamarhi vide ΡΑΝ: ΑΙΤΡΑ 5484A for the assessment year 2015-16. He is running a proprietary concern in the name and style ofM/s Subhlaxmi Dal Mill situated at Hajarimal Road, Bairgania,Sitamarhi and M/s Agrawal Traders situated at Rajdhani KrishiUpaj Mandi, Sikkar Road, Kukarkheda, Jaipur, Kukarkheda. 4. It is the case of the petitioner that he filed his IncomeTax Return for the Assessment Year 2015-16 (Financial Year 2014-15) on 30.03.2016 wherein on the basis of the computation of itsreturn, the petitioner had disclosed the total income to the tune of Rs.7,99,950/- upon which he paid tax to the tune of Rs. 96,345/-.He had claimed exempted tax to the tune of Rs. 25,04,808/- under‘Other Head’ as Long-Term Capital Gain received from sale ofshares. 5. The Profit & Loss Account, Balance Sheet and Books of Accounts of the petitioner’s proprietaryship firm was audited bya Chartered Accountant who issued Audit Report under Section44AB of the Income Tax Act, 1961 (hereinafter referred to as the‘Act of 1961’). A copy of the Income Tax Return Acknowledgmentand the audit report are enclosed with the writ application asAnnexure ‘P/1’ and ‘P/2’ respectively. 6. The grievance of the petitioner is that aftercompletion of six years, the petitioner was served with impugnedorder purportedly passed under Section 148A(d) of the Act of 1961on 06.04.2022 with respect to Assessment Year 2015-16. A copy ofthe order dated 06.04.2022 is Annexure ‘P/3’ to the writapplication. Submissions on behalf of the Appellant 7. Learned counsel for the petitioner submits thatreading of the impugned order would show that the Notice underSection 148A (b) of the Act of 1961 dated 23.03.2022 was issuedupon the petitioner due to non-filing of return. According to the said notice, on the basis of the information received from InsightPortal under the Module “Non-filing of Return” the petitioner wasserved with a notice which wrongly alleged that he had not filedhis Income Tax Return for the Assessment Year 2015-16. Submissions on behalf of the Appellant 7. Learned counsel for the petitioner submits thatreading of the impugned order would show that the Notice underSection 148A (b) of the Act of 1961 dated 23.03.2022 was issuedupon the petitioner due to non-filing of return. According to the said notice, on the basis of the information received from InsightPortal under the Module “Non-filing of Return” the petitioner wasserved with a notice which wrongly alleged that he had not filedhis Income Tax Return for the Assessment Year 2015-16. 8. Learned counsel for the petitioner submits that as perthe notice (Annexure ‘P/3’) it is alleged in the impugned order thatin the relevant Assessment Year, the petitioner had deposited incash aggregating to Rs.60,92,995/- in the State Bank of India andhas further made transaction of Rs. 43,97,919/-. On the basis ofthese information, the Assessing Officer was of the view thatpetitioner being a non-filer of return had total income of Rs.1,04,90,899/- from different sources but he had failed to offer tax,thus, it is a case of escaped assessment. On these facts, theimpugned order dated 06.04.2022 passed under Section 148A(d)of the Act of 1961 and notice under Section 148 of the Act of 1961were directed to be issued against the petitioner. 9. Learned counsel for the petitioner submits that onreceipt of the letter dated 30.01.2023 from the Assessing Officer(Annexure ‘P’4’), he immediately filed a reply and brought it tothe notice of the Assessing Officer that the petitioner is a regularassessee of Income Tax, his books of accounts are audited annuallyand requested the Respondent-Department to drop the impugned proceeding initiated for assessment/reassessment of the return ofthe petitioner. It is submitted that despite the specific reply of thepetitioner, the Respondent-Department issued Notice forassessment under Section 142(1) of the Act of 1961 dated07.06.2023 whereby the petitioner was directed to submit certaindocuments detailed therein with respect to Assessment Year 2015-16. The petitioner complied with the said notice and submitted therequisite documents vide letter dated 19.06.2023 and 07.07.2023. 10. Learned counsel for the petitioner submits that thepetitioner submitted compliance of the two notices issued underSection 142(1), still the Respondent-Department issued a thirdnotice under Section 142(1) dated 30.10.2023. The petitionercomplied with the notice and submitted all the relevant documentswhich were best available with him. 11. It is submitted that it is apparent from the materialson the record that on false premise and on the basis of wronginformation, just in order to take benefit of longer period oflimitation, as prescribed under Section 149 of the Act of 1961, theimpugned order dated 06.04.2022 under Section 148A(d) of theAct of 1961 was passed. 12. It is submitted that the petitioner has been issuedimpugned Show Cause Notice dated 29.02.2024 under signature of the Assessment Unit, Income Tax Department whereby long termgain to the tune of Rs. 25,90,000/- on account of sale of shares hasbeen alleged to be bogus and the petitioner has been showcausedas to why the said variation be not implicated on the petitioner.The Department has doubted the sale proceeds of sale of 7000shares of Tarang Project by the petitioner which was purchased bythe petitioner on 13.06.2009 from M/s. Tushar (India) Pvt. Ltd.vide Contract No. 13 dated 13.06.2009 which was subsequentlysold by the petitioner through Hindustan Tradecom Pvt. Ltd. Thesale proceeds of said shares were received in the bank account ofthe petitioner and also duly accounted in its books of accounts. Itis submitted that the long term capital gain claimed as exemptedby the petitioner has been arbitrarily denied by the Respondent-Department. 13. During pendency of the writ application, theRespondent-Assessing Authority, Assessment Unit, Income Taxpassed assessment order under Section 144, 144(b) read withSection 147 of the Act of 1961 on 18.03.2024 and raised a noticeof demand under Section 156 of the Act on 18.03.2024. Thepetitioner has challenged the assessment order and notice ofdemand both dated 18.03.2024 by which the department has askedthe petitioner to pay a sum of Rs. 19,45,394/-. For this purpose, I.A. No. 1 of 2024 annexing the assessment order and notice ofdemand as Annexure ‘P/11’ has been filed and the writ applicationhas been amended by the said I.A. This Court allowed theamendment application vide order dated 10.02.2025 and thedepartment was given an opportunity to file a consolidated counteraffidavit answering all aspects of the matter. 14. Learned counsel for the petitioner has relied uponthe judgment of the Hon’ble Supreme Court in the case of Unionof India vs. Rajeev Bansal reported in [2024] 469 ITR 46 (SC) tosubmit that in the said case the Hon’ble Supreme Court has takennote of the reassessment notices issued between 1[st] April, 2021 and30[th] June, 2021 under the old regime on the ground that (i) sections147 to 151 stood substituted by Finance Act, 2021 from 1[st] April,2021; (ii) In the absence of any saving clause, the Revenue couldinitiate reassessment proceedings after 1[st] April, 2021 only inaccordance with the provisions of the new regime since they wereremedial, beneficial, and meant to protect the rights and interestsof the assessees and (iii) the Central Government could notexercise its delegated authority to reactivate the pre-existing law.The Hon’ble Supreme Court has held that the benefit of the newprovisions shall be madeavailable even in respect of the proceedings relating to past assessment years, provided section148 notice has been issued on or after 01.04.2021. 15. Learned counsel for the petitioners submits that inthis case the Assessing Officer proceeded to issue the order basedon “mere information” without there being any evidence ofpossession of books of accounts or other documents which wouldhave revealed that income chargeable to tax which amounts to Rs.50 lakhs or more has escaped assessment. Learned counsel hasrelied upon paragraph ‘7.8’ and ‘8.1’ of the CBDT Instruction No.01 of 2022 dated 11[th] May, 2022. 16. It is further submitted that the inflated amounts havebeen shown in the impugned order to initiate reassessment withoutany cogent evidence, to escape the threshold of Rs. 50 lakhs whichis a prerequisite to initiate reassessment and the ultimate postenquiry figure of income escaping assessment is only Rs. 29 lakhswhich admittedly could not have triggered the notice after sixyears of the end of the assessment year. The very premise of thenotice that assessee is a non-filer of return is flawed. 17. Learned counsel submits that lack of jurisdictiongoes to the root of the matter and in this case a jurisdictional errorhas been committed by the assessing authority which will vitiatethe whole reassessment proceedings. Learned counsel has relied upon the judgment of the Bombay High Court in the case ofInventors Industrial Corporation Ltd. v. CIT reported in 1991SCC OnLine Bom 655 : (1992) 194 ITR 548 : (1991) 96 CTR206. 18. Learned counsel further submits that the speech ofthe Finance Minister while introducing the amendment in theIncome Tax Laws may be found in the judgment of the Hon’bleDelhi High Court in the case of Ganesh Dass Khanna vs. IncomeTax Officer and Anr. reported in [2024] 460 ITR 546 (Delhi)wherein it is clearly stated that only in serious tax evasion caseswhere there is evidence of concealment of income of more thanRs. 50 lakhs, can the re-assessment be opened beyond theprescribed limitation period of three years. The approval for thesame has to be taken from the highest level of the Department. upon the judgment of the Bombay High Court in the case ofInventors Industrial Corporation Ltd. v. CIT reported in 1991SCC OnLine Bom 655 : (1992) 194 ITR 548 : (1991) 96 CTR206. 18. Learned counsel further submits that the speech ofthe Finance Minister while introducing the amendment in theIncome Tax Laws may be found in the judgment of the Hon’bleDelhi High Court in the case of Ganesh Dass Khanna vs. IncomeTax Officer and Anr. reported in [2024] 460 ITR 546 (Delhi)wherein it is clearly stated that only in serious tax evasion caseswhere there is evidence of concealment of income of more thanRs. 50 lakhs, can the re-assessment be opened beyond theprescribed limitation period of three years. The approval for thesame has to be taken from the highest level of the Department. 19. Learned counsel has further relied upon a judgmentof learned Division Bench of this Court in Salik Khan vs.Assessment Unit, Income Tax Department and Anr. (CWJC No.7568 of 2024) in which it has been held that while issuing a noticeunder Section 148A, the Revenue has to supply the informationand material relied upon within 30 days. It is submitted that in thepresent case while issuing notice under Section 148A(b), theassessing authority did not make available any material in support of the information furnished in the annexure to the notice underSection 148A. Learned counsel has relied upon paragraph ‘101’ ofthe judgment in the case of Rajeev Bansal (supra) to submit that itspecifically talks of supply of the relevant material to the assesseewhich forms basis of the deemed notice. Learned counsel hastaken this Court through the acknowledgment (Annexure ‘P/1’)and the copy of the audit report to submit that the petitioner hadfiled his return well in time and had claimed exempted income ofRs. 25,04,808/-. It is also pointed out that while in the notice underSection 148A, the assessing authority mentions that there were acash deposit of Rs. 20 lakhs in his bank account, during theproceeding there is no discussion of any cash deposit. This,according to the learned counsel for the petitioner would show thatwhile issuing notice under Section 148A, the assessing authorityhad inflated the amount. Stand of the Respondents 20. The writ application has been opposed by learnedSenior Standing Counsel for the Department. A counter affidavithas been filed on behalf of the Department in which it is stated thatthe assessee was served with a notice under Section 148A(b) of theAct of 1961 dated 23.03.2022 calling upon him to show cause asto why a notice under Section 148 of the Act be not issued to him. The assessee did not submit any reply to the show cause noticedated 23.03.2022, therefore, it was assumed that the assessee hashis total income of Rs. 1,04,90,914/- from different sources whichhad escaped assessment for the Assessment Year 2015-16 andaccordingly order under Section 148A(d) was passed on06.04.2022 after approval of the competent authority. Stand of the Respondents 20. The writ application has been opposed by learnedSenior Standing Counsel for the Department. A counter affidavithas been filed on behalf of the Department in which it is stated thatthe assessee was served with a notice under Section 148A(b) of theAct of 1961 dated 23.03.2022 calling upon him to show cause asto why a notice under Section 148 of the Act be not issued to him. The assessee did not submit any reply to the show cause noticedated 23.03.2022, therefore, it was assumed that the assessee hashis total income of Rs. 1,04,90,914/- from different sources whichhad escaped assessment for the Assessment Year 2015-16 andaccordingly order under Section 148A(d) was passed on06.04.2022 after approval of the competent authority. 21. The counter affidavit enlists the details of theopportunity given to the assessee from which it appears that oneshow cause notice was issued on 23.03.2022 under section 148A(b).It is stated that after receipt of the notice under Section 148 of theAct, the assessee did not file his return of income. Later on, the casewas transferred to Faceless Unit for assessment proceedings. It isadmitted that during assessment, the Faceless Assessing Officer(FAO) found that the assessee had filed its ITR on 30.03.2016declaring total income of Rs. 7,99,960/-. The FAO observed that theassessee had purchased 7000 Equity Shares of Tarang Project fromone M/s Tushar (India) Pvt. Ltd. on 13.06.2009 which was furthersold on 24.03.2015 through some other broker. When the assesseewas asked about this, he submitted his inability to provide the detailsof broker. The reason given by the assessee is that as the data was tooold to recover and also did not maintain any Demat or TradingAccount with the said broker. He was not having any share transferslip for transfer of shares in his name. He had not received any dividend from Tarang Project Scrip from the date of purchase i.e.13.06.2009 and upto 23.03.2015. The broker companies were issuedNotice under section 133(6) of the Act for information aboutpurchase and transfer of shares, but both of them failed to provide therequisite information. In these circumstances, treating it as anunexplained cash credit under Section 68 read with Section 115 BBEof the Act of 1961. The assessee replied on 04.03.2024 and statedthat documents in question are quite old and further sought extensionfor four weeks time. It is stated that as the case was going to bebarred by limitation on 31.03.2024, an adjournment letter was issuedby the FAO to the assessee on 05.03.2024 requesting the assessee tosubmit his response to the show cause notice by 08.03.2024. On08.03.2024, assessee submitted his response in which for the firsttime, he challenged the proceeding under Section 148A and Orderunder Section 148A(d) on the ground of false and wronginformation. 22. In these circumstances, the assessment proceeding hasbeen concluded. Submissions on behalf of the Respondent 23.Learned Senior Standing Counsel for theDepartment has produced the records and while going through thenotice under Section 148A when a query was made by this Courtwith regard to the contents of the annexure to the notice under clause (b) of Section 148A, learned Senior Standing Counsel forthe Department submits that the first paragraph of the annexure tothe said notice seems to be incorrect and maybe a result of a cutand paste practice while preparing the annexure to the notice.Learned Senior Standing Counsel, however, submits that so far asthe main content of the annexure is concerned, it is correct andbased on an information available on the Insight Portal of theDepartment which was showing a cash deposit aggregating to Rs.20 lakhs in the State Bank of India and a transaction of Rs.26,31,400/- and Rs. 43,97,919/- and further it was showing that theassessee had sold equity shares in a recognised stock exchange ofRs. 5,56,584/-. clause (b) of Section 148A, learned Senior Standing Counsel forthe Department submits that the first paragraph of the annexure tothe said notice seems to be incorrect and maybe a result of a cutand paste practice while preparing the annexure to the notice.Learned Senior Standing Counsel, however, submits that so far asthe main content of the annexure is concerned, it is correct andbased on an information available on the Insight Portal of theDepartment which was showing a cash deposit aggregating to Rs.20 lakhs in the State Bank of India and a transaction of Rs.26,31,400/- and Rs. 43,97,919/- and further it was showing that theassessee had sold equity shares in a recognised stock exchange ofRs. 5,56,584/-. 24. Learned Senior Counsel submits that the noticeunder Section 148A(b) has been issued with prior approval of thePC CIT, Bihar and Jharkhand. In this regard, the attention of thisCourt has been drawn towards paragraph ‘4’ of the notice(Annexure ‘A’ to the rejoinder). 25. Learned Senior Standing Counsel further submitsthat before issuance of Section 148 notice, the Department hasfollowed the procedures prescribed by law and the reassessmentproceeding had been opened only after giving an appropriateopportunity of hearing to the petitioner. Learned Senior Standing Counsel submits that under the old law, the Department had sixyears available for issuance of notice under Section 148 of the Act.The period of six years would have lapsed on 31.03.2022 but if thetime given to respond is excluded in counting the period oflimitation, the notice under Section 148 dated 06.04.2022 wouldbe found within time. 26. It is submitted that in the present case, despitereceipt of notice under Section 148 of the Act, the petitioner failedto file his return. Learned Senior Standing Counsel has relied uponthe judgment of the Hon’ble Supreme Court in the case of GKNDriveshafts (India) Ltd. vs. Income Tax Officer and Ors.reported in (2003) 1 SCC 72. 27. Learned Senior Standing Counsel further submitsthat at the stage of issuing notice under Section 148A, all that isrequired is to provide the information on the basis of which thenotice has been issued. In case of Chaturbhuj Gattani vs.Income-Tax Officer and Anr. reported in (2024) 468 ITR 295 :2024 SCC OnLine Raj 3142 : (2024) 336 CTR 369 (Raj), theHon’ble Rajasthan High Court has held that the concept ofreasonable opportunity appears to be inherent in the inquirycontemplated under section 148A. However, it has to be seenwhether this concept can be stretched to the extent of supplying of material/evidence in support of the opinion of the AssessingOfficer that certain income has escaped assessment. It is hersubmission that the Hon’ble Rajasthan High Court has held in caseof Chaturbhuj Gattani (supra) that on reading of section 148A itmay be found that it does not expressly provide for supply of anymaterial/evidence in support of the show-cause notice undersection 148A(b). Learned Senior Standing Counsel has furtherrelied upon a judgment of learned coordinate Bench of this Courtin the case of Chandra Shekhar vs. Principal Commissioner ofIncome Tax and Anr. (CWJC No. 8351 of 2024) to submit that inthe said case, the Assessing Officer had issued notice underSection 148A clause (b) on 28.03.2024 in respect of theAssessment Year 2020-2021. The petitioner was contending thatfor the purpose of limitation number of days is required to becounted from the date of notice dated 22.04.2024. The Hon’bleCourt found that the notice dated 22.04.2024 was issued pursuantto the petitioner’s reply to the notice dated 28.03.2024 i.e. replydated 31.03.2024. The Hon’ble Division Bench found that the 5[th]and 6[th ]proviso to Section 149 make it crystal clear that delay isrequired to be taken note of with reference to notice. Since in thesaid case notice means first notice issued on 28.03.2024 and it was found within the time-limit stipulated, it was held that theAssessing Officer had jurisdiction. 28. Learned Senior Standing Counsel submits that theimpugned orders are in accordance with law, hence no interferenceis required by this Court. Consideration 29. We have heard learned counsel for the parties. In thiscase, the first and foremost question which would arise forconsideration is altogether in terms of Section 149 of the Act of1961 as amended vide Finance Act 2021 with effect from01.04.2021, a notice under Section 148 or Section 148A couldhave been issued by the assessing authority in respect of theAssessment Year 2015-16. 30. Section 149 as amended by Finance Act, 2016 readsas under: Time limit for notice. 55“149. 56[(1) No notice under section 148 shall be issued57for the relevant assessment year,—for the relevant assessment year,— 55. For relevant case laws, see Taxmann’s Master Guide to Income-taxAct. 56. Substituted by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1989 57. For the meaning of the term “issued”, see Taxmann’s Direct TaxesManual, Vol.3. 58[(a) if four years have elapsed from the end of therelevant assessment year, unless the case falls under clause(b)[59] [or clause (c)]; (b) if four years, but not more than six years, have elapsedfrom the end of the relevant assessment year unless theincome chargeable to tax which has [60]escaped assessmentamounts to or is likely to amount to one lakh rupees ormore[60] for that year; 61[(c) if four years, but not more than sixteen years, haveelapsed from the end of the relevant assessment year unlessthe income in relation to any asset (including financialinterest in any entity) located outside India, chargeable totax, has escaped assessment.] Explanation.—In determining income chargeable to taxwhich has escaped assessment for the purposes of this sub-section, the provisions of Explanation 2 of section 147shall apply as they apply for the purposes of that section.(2) The provisions of sub-section (1) as to the issue ofnotice shall be subject to the provisions of section 151.(3) If the person on whom a notice under section 148 is tobe served is a person treated as the agent of a non-residentunder section 163 and the assessment, reassessment orrecomputation to be made in pursuance of the notice is tobe made on him as the agent of such non-resident, thenotice shall not be issued after the expiry of a period of62[six] years from the end of the relevant assessment year.” 58. Clauses (a) and (b) substituted by the Finance Act, 2001, wef. 1-6-2001. Prior to their substitution, clauses(a) and (b), as amended by the Direct Tax Laws (Second Amendment) Act, 1989, we.f. 1-4-1989, read as under:“(a) in a case where an assessment under sub-section (3) of section 143 or section 147 has been made for suchassessment year,- (i) if four years have elapsed from the end of the relevant assessment year, unless the case falls under sub-clause(ii) or sub-clause (iii); (ii) if four years, but not more than seven years, have elapsed from the end of the relevant assessment year unlessthe income chargeable to tax which has escaped assessment amounts to or is likely to amount to rupees fiftythousand or more for that year; (iii) if seven years, but not more than ten years, have elapsed from the end of the relevant assessment year, unlessthe income chargeable to tax which has escaped assessment amounts to or is likely to amount to rupees one lakhor more for that year; (b) in any other case,- (i) if four years have elapsed from the end of the relevant assessment year, unless the case falls under sub-clause(ii) or sub-clause (iii); (ii) if four years, but not more than seven years, have elapsed from the end of the relevant assessment year,unless the income chargeable to tax which has escaped assessment amounts to or is likely to amount to rupeestwenty-five thousand or more for that year; (iii) if seven years, but not more than ten years, have elapsed from the end of the relevant assessment year, unlessthe income chargeable to tax which has escaped assessment amounts to or is likely to amount to rupees one lakhor more for that year; (b) in any other case,- (i) if four years have elapsed from the end of the relevant assessment year, unless the case falls under sub-clause(ii) or sub-clause (iii); (ii) if four years, but not more than seven years, have elapsed from the end of the relevant assessment year,unless the income chargeable to tax which has escaped assessment amounts to or is likely to amount to rupeestwenty-five thousand or more for that year; (iii) if seven years, but not more than ten years, have elapsed from the end of the relevant assessment year, unlessthe income chargeable to tax which has escaped assessment amounts to or is likely to amount to rupees fiftythousand or more for that year.” 59. Inserted by the Finance Act, 2012, w.e.f. 1-7-2012. 60. For the meaning of the expressions “escaped assessment” and “likely to amount to one lakh rupees or more”,see Taxmann’s Direct Taxes Manual, Vol. 3. 61. Inserted by the Finance Act, 2012, w.e.f. 1-7-2012 62. Substituted for “two” by the Finance Act, 2012, w.e.f. 1-7-2012. 31. The Finance Act, 2021 inserted Section 148A with a heading “Conducting inquiry, providing opportunity beforeissue of notice under section 148. Section 148A as inserted by Finance Act, 2021 with effect from 01.04.2021 reads as under:- “148A. The Assessing Officer shall, before issuing anynotice under section 148,— (a) conduct any enquiry, if required, with the prior approvalof specified authority, with respect to the informationwhich suggests that the income chargeable to tax hasescaped assessment; (b) provide an opportunity of being heard to the assessee,with the prior approval of specified authority, by servingupon him a notice to show cause within such time, as maybe specified in the notice, being not less than seven daysand but not exceeding thirty days from the date on whichsuch notice is issued, or such time, as may be extended byhim on the basis of an application in this behalf, as to whya notice under section 148 should not be issued on the basisof information which suggests that income chargeable totax has escaped assessment in his case for the relevantassessment year and results of enquiry conducted, if any, asper clause (a); (c) consider the reply of assessee furnished, if any, inresponse to the show-cause notice referred to in clause (b); (d) decide, on the basis of material available on recordincluding reply of the assessee, whether or not it is a fitcase to issue a notice under section 148, by passing anorder, with the prior approval of specified authority, withinone month from the end of the month in which the replyreferred to in clause (c) is received by him, or where nosuch reply is furnished, within one month from the end ofthe month in which time or extended time allowed tofurnish a reply as per clause (b) expires: Provided that the provisions of this section shall not applyin a case where,— (a) a search is initiated under section 132 or books ofaccount, other documents or any assets are requisitionedunder section 132A in the case of the assessee on or afterthe 1st day of April, 2021; or (b) the Assessing Officer is satisfied, with the priorapproval of the Principal Commissioner or Commissionerthat any money, bullion, jewellery or other valuable articleor thing, seized in a search under section 132 orrequisitioned under section 132A, in the case of any otherperson on or after the 1st day of April, 2021, belongs to theassessee; or Provided that the provisions of this section shall not applyin a case where,— (a) a search is initiated under section 132 or books ofaccount, other documents or any assets are requisitionedunder section 132A in the case of the assessee on or afterthe 1st day of April, 2021; or (b) the Assessing Officer is satisfied, with the priorapproval of the Principal Commissioner or Commissionerthat any money, bullion, jewellery or other valuable articleor thing, seized in a search under section 132 orrequisitioned under section 132A, in the case of any otherperson on or after the 1st day of April, 2021, belongs to theassessee; or (c) the Assessing Officer is satisfied, with the priorapproval of the Principal Commissioner or Commissionerthat any books of account or documents, seized in a searchunder section 132 or requisitioned under section 132A, incase of any other person on or after the 1st day of April,2021, pertains or pertain to, or any information containedtherein, relate to, the assessee. Explanation.—For the purposes of this section, specifiedauthority means the specified authority referred to insection 151.]” 32. Further, vide Finance Act, 2021 with effect from 01.04.2021, the time limit for notice under section 148 of the Actwas changed. Section 149 as substituted with effect from01.04.2021 reads as under:- “[28-36][Time limit for notice. 149. (1) No notice under section 148 shall be issued for therelevant assessment year,— (a) if three years have elapsed from the end of the relevantassessment year, unless the case falls under clause (b); (b) if three years, but not more than ten years, have elapsedfrom the end of the relevant assessment year unless theAssessing Officer has in his possession books of account orother documents or evidence which reveal that the incomechargeable to tax, represented in the form of asset, whichhas escaped assessment amounts to or is likely to amount tofifty lakh rupees or more for that year: Provided that no notice under section 148 shall be issued atany time in a case for the relevant assessment yearbeginning on or before 1st day of April, 2021, if suchnotice could not have been issued at that time on account ofbeing beyond the time limit specified under the provisionsof clause (b) of sub-section (1) of this section, as they stoodimmediately before the commencement of the Finance Act, 2021: 28-36. Substituted by the Finance Act, 2021, w.e.f. 1-4-2021. Prior to its substitution, section 149, as amended by theDirect Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1989 Direct Tax Laws (Second Amendment) Act, 1989, w.e.f. 1-4-1989, Finance Act, 2001, w.e.f. 1-6-2001 and Finance Act, 2012, w.e.f. 1-7-2012, read as under:*149. Time limit for notice.-(1) No notice under section 148 shall be issued** for the relevant assessment year,-(a) if four years have elapsed from the end of the relevant assessment year, unless the case falls under clause (b) orclause (c);(b) if four years, but not more than six years, have elapsed from the end of the relevant assessment year unless theincome chargeable to tax which has †escaped assessment amounts to or is likely to amount to one lakh rupees or more†for that year;(c) if four years, but not more than sixteen years, have elapsed from the end of the relevant assessment year unless theincome in relation to any asset (including financial interest in any entity) located outside India, chargeable to tax, hasescaped assessment. Explanation.-In determining income chargeable to tax which has escaped assessment for the purposes of this sub-section, the provisions of Explanation 2 of section 147 shall apply as they apply for the purposes of that section.(2) The provisions of sub-section (1) as to the issue of notice shall be subject to the provisions of section 151.section, the provisions of Explanation 2 of section 147 shall apply as they apply for the purposes of that section.(2) The provisions of sub-section (1) as to the issue of notice shall be subject to the provisions of section 151. Explanation.-In determining income chargeable to tax which has escaped assessment for the purposes of this sub-section, the provisions of Explanation 2 of section 147 shall apply as they apply for the purposes of that section.(2) The provisions of sub-section (1) as to the issue of notice shall be subject to the provisions of section 151.section, the provisions of Explanation 2 of section 147 shall apply as they apply for the purposes of that section.(2) The provisions of sub-section (1) as to the issue of notice shall be subject to the provisions of section 151. (3) If the person on whom a notice under section 148 is to be served is a person treated as the agent of a non-residentunder section 163 and the assessment, reassessment or recomputation to be made in pursuance of the notice is to bemade on him as the agent of such non-resident, the notice shall not be issued after the expiry of a period of six yearsfrom the end of the relevant assessment year.Explanation. For the removal of doubts, it is hereby clarified that the provisions of sub-sections (1) and (3), as amendedby the Finance Act, 2012, shall also be applicable for any assessment year beginning on or before the 1[st] day of April,2012.” *For relevant case laws, see Taxmann’s Master Guide to Income-tax Act. **For the meaning of the term “issued”, see Taxmann’s Direct Taxes Manual, Vol. 3. †For the meaning of the expressions “escaped assessment” and “likely to amount to one lakh rupees or more”, seeTaxmann’s Direct Taxes Manual, Vol. 3. Provided further that the provisions of this sub-sectionshall not apply in a case, where a notice under section153A, or section 153C read with section 153A, is requiredto be issued in relation to a search initiated under section132 or books of account, other documents or any assetsrequisitioned under section 132A, on or before the 31st dayof March, 2021: Provided also that for the purposes of computing theperiod of limitation as per this section, the time or extendedtime allowed to the assessee, as per show-cause noticeissued under clause (b) of section 148A or the periodduring which the proceeding under section 148A is stayedby an order or injunction of any court, shall be excluded:Provided also that where immediately after the exclusionof the period referred to in the immediately precedingproviso, the period of limitation available to the AssessingOfficer for passing an order under clause (d) of section148A is less than seven days, such remaining period shallbe extended to seven days and the period of limitationunder this sub-section shall be deemed to be extendedaccordingly. Explanation.—For the purposes of clause (b) of this sub-section, "asset" shall include immovable property, beingland or building or both, shares and securities, loans andadvances, deposits in bank account. (2) The provisions of sub-section (1) as to the issue ofnotice shall be subject to the provisions of section 151.]” 33. In the present case, the assessing authority has issued notice under Section 148A clause (b) of the Act on 23.03.2022calling upon the petitioner to show cause as to why in view of thedetails contained in Annexure ‘A’, a notice under Section 148 of the Act should not be issued. It is important to reproduce annexureto the notice dated 23.03.2022 hereunder for a ready reference:- “An information in the case of Sri Ankit KumarAgarwal, PAN- , (hereby thereaftercalled as “assessee”), has been received under themodule of “Non Filing of Return (NMS)” from theINSIGHT portal. As per the data available on the e-filing portal, the assessee has not filed the ITR forAY under consideration. As per the information available on record, theassessee, in the FY 2014-15, relevant to the AY2015-16, has deposited in cash aggregating to Rs.2000000/- in the State Bank of India. Further, theassessee has also made transactions of Rs.2631400/- and Rs. 4397919/-. The Assessee has sale of equity share in a recognized stock exchange ofRs. 556584/-. “An information in the case of Sri Ankit KumarAgarwal, PAN- , (hereby thereaftercalled as “assessee”), has been received under themodule of “Non Filing of Return (NMS)” from theINSIGHT portal. As per the data available on the e-filing portal, the assessee has not filed the ITR forAY under consideration. As per the information available on record, theassessee, in the FY 2014-15, relevant to the AY2015-16, has deposited in cash aggregating to Rs.2000000/- in the State Bank of India. Further, theassessee has also made transactions of Rs.2631400/- and Rs. 4397919/-. The Assessee has sale of equity share in a recognized stock exchange ofRs. 556584/-. Thus, on perusal of the information received, it isobserved that, despite being a non filer of return, theassessee has income worth of Rs. 9269898/- fromdifferent sources, failed to offer tax for the same, ischargeable to tax, has escaped assessment for theAY 2015-16.” 34. It is evident from annexure to the notice dated 23.03.2022 that the Assessing Officer had an information under the module of non-filing of return from the Insight Portal which was apalpably incorrect information in his hand. He has stated that asper data available on the e-filing portal, the assessee had not filedthe ITR for the assessment year under consideration. Again, thisinformation is totally incorrect. Learned Senior Standing Counsel for the Department has submitted that this seems to be a mistakeand it may have been committed in course of cut and paste. ThisCourt is afraid that such submissions cannot be taken as anappropriate explanation from the respondents. The name of thepetitioner has been mentioned in the first paragraph of theannexure and then the authority issuing the notice has apparentlymentioned about a data available on the e-filing portal which is nota correct data. The fact remains that the petitioner has filed its ITRon 30.03.2016 and his audit report was also uploaded. 35. This Court further finds that in the second paragraphof the annexure, it is stated that the assessee had deposited in cashaggregating to Rs. 20 lakhs in the State Bank of India and had alsomade transactions of Rs.26,31,400/- and Rs.43,97,919/- but allthese transactions have not at all been discussed later on and whathas ultimately transpired is that the Assessing Officer hasdisallowed long term capital gain of Rs. 25,90,000/- which wasclaimed by the petitioner in his Income Tax Return. 36. The contention of learned counsel for the petitionerthat in the annexure to the notice issued under section 148A (b) ofthe Act, the amount of escaped assessment was inflated to bring itover and above Rs. 50 lakhs only to avoid the period of limitation, has much force and there is no reason as to why this submission ofthe petitioner be not accepted. 36. The contention of learned counsel for the petitionerthat in the annexure to the notice issued under section 148A (b) ofthe Act, the amount of escaped assessment was inflated to bring itover and above Rs. 50 lakhs only to avoid the period of limitation, has much force and there is no reason as to why this submission ofthe petitioner be not accepted. 37. This Court finds that under clause (b) of sub-section(1) of Section 149, the period of limitation under the old law i.e.prior to 01.04.2021 was 4 years unless the case falls under clause(b) or (c) if the Assessing Officer would have been in possessionof books of account or other documents or evidence whichrevealed that income chargeable to tax represented in form of (i)an asset (ii) expenditure in respect of a transaction or in relation toany event or occasion; or (iii) an entry or entries in the books ofacco