IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘G’: NEW DELHI BEFORE SHRI ANUBHAV SHARMA, JUDICIAL MEMBER AND SHRI MANISH AGARWAL, ACCOUNTANT MEMBER ITA No.1899/Del/2024 (ASSESSMENT YEAR 2016-17)

The PCIT, SVR Creations Pvt. Ltd., Delhi-7, B-495, Sarita Vihar, Vs. New Delhi.

Delhi-110076.

PAN-AAJCS6326D (Appellant) (Respondent)

Assessee by Shri Sachin Jain, Adv.

Department by Ms. Jaya Chaudhary, CIT-DR Date of Hearing 13/02/2025 Date of Pronouncement 05/03/2025

O R D E R

PER MANISH AGARWAL, AM:

This is appeal filed by the Assessee against the order of Learned Principal Commissioner of Income Tax, Delhi-7, in Revision No. PCIT, Delhi-7/Revision-263/1000000637514/2023 dated 15/03/2024 for Assessment Year 2016-17.

2. The brief facts of the case are that assessee case was reopened by way of issue of notice and the reassessment order was passed vide order dated 30/03/2022 accepting the income declared by the assessee. Thereafter, the proceedings u/s 263 of the Act were initiated by Ld. PCIT and a direction was given to modifying the assessment order after making proper enquiries in particular with respect to the accommodation entry of Rs.30,00,000/- from M/s Upaj Leasing & Finance Co. (P) Ltd. Before us, the Ld. AR of the assessee submits that the assessee has not preferred any appeal against the re-assessment order as the income declared was accepted, however, it is the first opportunity with the assessee when the PCIT hold the reassessment order as erroneous and prejudicial to the interest of the Revenue, the assessee could challenge the validity of the initiation of proceedings u/s 148 of the Act. The Ld. AR submit that in the instant case, the notice u/s 148 of the Act for Asst. Year 2016-17 was issued on 31^st March, 2021, however, the said notice was received by the assessee only 1st April, 2021, through email received at12.22 AM of 1^st April, 2021. Ld. AR further submit that w.e.f 01.04.2021, law with regard to re-opening of assessment by way of issue of notice u/s 148 of the Act has been changed. According to the amended provisions, from 01/04/2021, the AO should issue notice u/s 148A(a) to the assessee proposing to initiate the re-assessment proceedings and as per 148A(b), AO should supply all the material relied upon. After considering the objections filed u/s 148A(c), AO should pass an order U/s 148A(d) disposing off the objections raised by assessee and thereafter, by obtaining the approval from the competent authority notice u/s 148 could be issued. Ld. AR further submit that such notice being issued on after 01/04/2021 has to be governed by amended provisions of section 148 which came into effect from 01^st April, 2021 and therefore, the notice issued in the case of the assessee on 01/04/2021 must be considered as show cause notice u/s 148A(b) as per the directions on the Hon’ble Apex Court in Union of India vs. Ashish Agarwal reported in [2022] SCC online SC 543.

3. He finally argued that in the instant case no proceedings under the amended provisions were initiated by passing the order u/s 148(A)(d) of the Act before issue of notice u/s 148 of the Act, therefore, the reassessment order completed u/s 147 of the Act is invalid and, therefore, the consequent order passed u/s 263 of the Act deserves to hold bad in law.

4. On the other hand, the Ld. CIT-DR vehemently supported the orders of the lower authorities and requested for confirmation of the same.

5. We have heard the rival submissions and perused the materials available on record. At the outset, the issue raised by the AR in additional ground of appeal is with regard to the validity of the initiation of reassessment proceedings and legality of consequent order passed u/s 147 r.w.s 144B of the Act dated 28/03/2022 from which the present revision proceedings u/s 263 of the Act originated. 6. It is true that before us, assessee has challenged the order passed by the ld. Pr. CIT u/s.263 of the Act, however, since the assessee has raised the issue of validity of reassessment