TaxTMI Login
Just a moment...
Press 'Enter' to add multiple search terms. Rules for Better Search
When case Id is present, search is done only for this
of 
of 
No Folders have been created
Are you sure you want to delete "My most important" ?
NOTE:
of of 
All Case Laws
of of All Case Laws
Note
Bookmark
Share
Don't have an account? Register Here
of <h1>Court Rules Section 201(3) Not Retrospective; Invalid Notices Quashed</h1> <h3>TATA TELESERVICES Versus UNION OF INDIA & 1</h3> TATA TELESERVICES Versus UNION OF INDIA & 1 - [2016] 385 ITR 497 Issues Involved:1. Whether the notices issued under Section 201(1) of the Income Tax Act are barred by the proviso to Section 201(3) of the Act.2. Whether Section 201 of the Act, as amended by the Finance Act, 2014, is prospective or retrospective.3. Whether the petitions against the Show Cause Notices are maintainable.Detailed Analysis:1. Barred by Proviso to Section 201(3):The petitioners contended that the notices issued under Section 201(1) for the assessment years 2008-09 and 2009-10 were barred by the limitation period specified in the proviso to Section 201(3) of the Income Tax Act. The limitation period for passing orders under Section 201(3) for the financial years 2007-08 and 2008-09 had expired on 31/03/2011 and 31/03/2012, respectively. Therefore, the issuance of notices in December 2014 was beyond the permissible period, rendering them invalid.2. Prospective or Retrospective Application of Section 201:The petitioners argued that the amendment to Section 201(3) by the Finance Act, 2014, which extended the limitation period to seven years, should not apply retrospectively. They asserted that the amendment was explicitly stated to be effective from 01/10/2014 and did not cover periods where the limitation had already expired. The court agreed, noting that the legislature did not intend for the amendment to have retrospective effect, as it was not expressly provided. The court referenced several Supreme Court decisions, including *S.S. Gadgil v. Lal & Co.*, *J.P. Jani v. Induprasad Devshanker Bhatt*, and *K.M. Sharma v. ITO*, which held that amendments to limitation periods should not revive rights that had already lapsed.3. Maintainability of Petitions Against Show Cause Notices:The revenue argued that the petitions should not be entertained as they were against Show Cause Notices, and the petitioners had adequate statutory remedies under the Income Tax Act. However, the court overruled this objection, stating that the issue involved a pure question of law regarding the applicability of Section 201(3) as amended by the Finance Act, 2014. The court cited the Supreme Court decisions in *Harbanslal Sahnia v. Indian Oil Corpn.* and *Filterco v. Commissioner of Sales Tax*, which allowed for judicial review when pure questions of law were involved.Conclusion:The court held that Section 201(3), as amended by the Finance Act, 2014, was not applicable retrospectively. Therefore, the notices issued under Section 201(1) for the financial years 2007-08 and 2008-09, where the limitation period had already expired, were invalid. The court quashed the impugned notices and granted a writ of prohibition restraining the respondents from proceeding with the invalid notices.
TaxTMI 