Assessee is a  partnership concern and duly assessed under Income Tax Act. For A.Y 2013-14, assessee received notice u/s 148 on 20.05.2021. The assessee filed a Writ petition before High Court. In view of  the Supreme court decision in the case of Ashish Agarwal, the AO issued notice u/s 148A(b), the assessee has objected to the said issuance of notice and submitted that,

“In the light of the amended law, section 149 provides the time limit for re-opening assessment u/s 147 of Income Tax Act 1961. The amended provision of section allows reopening the assessment for a period of 3 years from the end of relevant assessment year except for cases covered under clause (b) where the assessment could be reopened for a period of 10 years where the income escaping assessment is 50 lakhs or more.

Further, attention is drawn to first proviso to the said section Provided that no notice under section 148 shall be issued at any time in a case for the relevant assessment year beginning on or before 1st day of April, 2021, if such notice could not have been issued at that time on account of being beyond the time limit specified under the provisions of clause (b) of sub-section (1) of this section, as they stood immediately before the commencement of the Finance Act, 2021.

Therefore, as per the said proviso, an assessment year i.e. 2013-14 prior to 01/04/2021 cannot be reopened, if notice u/s 148 could not be issued for such assessment year being beyond the time limit specified under provision of section 149(1)(b) of old law.”

However, the assessee officer has passed the order u/s 148A(d) by observing that,

proceedings u/s 148A of the Act is initiated in the case of assessee as per CBDT Instruction No. 01/2022(F.No.279/Misc./M-51/2022-ITJ) dated 11.05.2022. As per para 6.2 of CBDT Instruction No
1/2022:

“AY 2013-14, AY 2014-15 and AY 2015-16: Fresh notice u/s 148 can be issued in these cases, with the approval of the specified authority, only if the case fall under clause b of sub section 1 of section 149 as amended by the Finance Act, 2021 and reproduced in para 6.1 above. Specified Authority under section 151 of the new law in this case shall be the authority prescribed under clause (ii) of that section”.

For AY 2013-14, the reopening of case is mandated provided the income
escaping assessment represented in the form of asset is above Rs 50,00,000/-. In the facts of the assessee’s case, the issue involved is accommodation entries were taken which involves underlying cash transaction/cash in Bank for providing such accommodation entry of bogus purchases of more than Rs. 50,00,000/- from XYZ. Hence, the reopening of cases for A.Y. 2013-14 is on correct footing and same is not restricted.

Issues:

a) Whether the action of the AO is legally justified ?

b) Whether the assessee can file Writ Petition against the order u/s 148A(d) on this ground?