TaxTMI 
TaxTMI 
2021 (10) TMI 517
X X X X Extracts X X X X
X X X X Extracts X X X X
.... and Ms. Rupal Agarwal, learned counsel for the petitioners; Sri Shashi Prakash Singh, learned Additional Solicitor General of India assisted by Sri Gopal Verma, Sri Dinesh Kumar Mishra, Sri Gaya Prasad Singh, Sri Sudarshan Singh, Sri Santosh Kumar Singh Paliwal, Sri Ajai Singh, Sri Gaurav Kumar Chand and Sri Krishna Agarwal, learned counsel appearing for the Union of India; Sri Gaurav Mahajan, Sri Praveen Kumar, Sri Krishna Agarwal, Sri Ashish Agarwal and Sri Manu Ghildyal, learned Standing Counsel for the revenue authorities. 2. This writ petition along with the other petitions mentioned in paragraph 4 below, have been filed by individual petitioners, to challenge initiation of re-assessment proceedings under Section 148 of the Income Tax Act, 1961 for different assessment years. All reassessment proceedings have been initiated upon notices issued after the date 01.04.2021. 3. These petitions had been entertained and interim protection granted. Pursuant to earlier orders passed in the leading petitions - Writ Tax Nos. 524 of 2021 and 521 of 2021 and other matters, the revenue and the Union of India were required to file counter affidavits in those cases. Copies of such coun....
X X X X Extracts X X X X
X X X X Extracts X X X X
....2021 GSR MOVIES 2013-14 28.06.2021 28.09.2013 18. 615-2021 PAWANPUTRA HOTELS AND RESORTS PVT. LTD. 2013-14 30.06.2021 27.09.2013 19. 623/2021 HIRA LAL JAIN 2013-14 27.04.2021 29.07.2013 20. 624-2021 DEVOY BENARA 2013-14 27.04.2021 -- 21. 625-2021 JAI JAGDAMBA METALLOYS LIMITED 2017-18 14.04.2021 31.10.2017 22. 636-2021 STAR CORPORATION 2014-15 30.06.2021 29.09.2014 23. 640-2021 STAR CORPORATION 2013-14 29.06.2021 29.09.2013 24. 641-2021 STAR ASSOCIATES 2013-14 29.06.2021 28.09.2013 25. 642-2021 NAMAN GOVIL 2013-14 19.04.2021 30.11.2013 26. 643-2021 RUPA GOYAL 2017-18 25.05.2021 28.10.2018 27. 655-2021 NAMAN GOVIL 2014-15 19.04.2021 22.09.2014 28. 665-2021 RAJEEV BANSAL 2016-17 16.06.2021 08.10.2016 29. 667-2021 MOHD SHAKIR 2017-18 10.06.2021 31.10.2017 30. 668-2021 AMIT SONI 2016-17 30.06.2021 22.07.2016 31. 669-2021 AMIT SONI 2015-16 30.06.2021 16.07.2015 32. 670-2021 ARUN KUMAR 2013-14 25.06.2021 05.09.....
X X X X Extracts X X X X
X X X X Extracts X X X X
....1 01.02.2014 63. 778-2021 EXOTIC BUILDMART PVT. LTD 2014-15 30.06.2021 25.03.2015 64. 779-2021 KIRTI SINGH 2014-15 30.06.2021 14.03.2015 65. 780-2021 SUSHIL JOSHI 2013-14 30.06.2021 31.03.2014 66. 781-2021 SHIV SHAKTI CONSTRUCTIONS 2014-15 30.06.2021 29.11.2014 67. 782-2021 MUKESH KUMAR 2014-15 30.06.2021 14.03.2015 68. 795-2021 AMBIKA ENCLAVE PRIVATE LIMITED 2015-16 28.06.2021 30.03.2016 69. 796-2021 KUSUM ENCLAVE PRIVATE LIMITED 2015-16 28.06.2021 20.09.2015 70. 797-2021 AMBIKA ENCLAVE PRIVATE LIMITED 2017-18 28.06.2021 27.11.2017 71. 801-2021 KANTA DEVI 2015-16 10.06.2021 19.03.2017 72. 810-2021 MRITUNJAY KUMAR 2013-14 06.04.2021 -- 73. 811-2021 VINITA KEJRIWAL 2014-15 28.06.2021 31.07.2014 74. 813-2021 MRITUNJAY KUMAR 2014-15 06.04.2021 - 5. As to the exact challenge raised, it may be noted, the petitioners have challenged the validity of the re-assessment notices issued to them, under Section 148 of the Act. Another challenge has been raised to the validity o....
X X X X Extracts X X X X
X X X X Extracts X X X X
....after, life is yet to normalise. The pandemic severely impacted the normal functioning of the Government as also all other institutions and it obstructed the normal life of the citizens as well. In such facts, judicial intervention had been made by the Supreme Court as also by this Court, to relax the rules of limitation - to institute various proceedings. The Central Government also recognized that difficulty and promulgated the Ordinance No. 2 of 2020 dated 31.03.2020 titled Taxation and Other Laws (Relaxation of Certain Provisions) Ordinance, 2020 (hereinafter referred to as the 'Ordinance'). Relevant to our discussion, the introductory text of the said Ordinance together with provisions of Sections 1, 2 and 3 of the Ordinance are quoted below: "TAXATION AND OTHER LAWS (RELAXATION OF CERTAIN PROVISIONS) ORDINANCE, 2020 NO.2 OF 2020, DATED 31-3-2020 Promulgated by the President in the Seventy-first Year of the Republic of India. An Ordinance to provide relaxation in the provisions of certain Acts and for matters connected therewith or incidental thereto. WHEREAS, in view of the spread of pandemic COVID-19 across many countries of the world....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s behalf, for the completion or compliance of such action as- (a) completion of any proceeding or passing of any order or 'issuance of any notice', intimation, notification, sanction or approval or such other action, by whatever name called, by any authority, commission or tribunal, by whatever name called, under the provisions of the specified Act; or b) filing of any appeal, reply or application or furnishing of any report, document, return statement or such other record, by whatever name called, under the provisions of the specified Act; or (c) in case where the specified Act is the Income-tax Act, 1961 (43 of 1961), - (i) making of investment, deposit, payment, acquisition, purchase, construction or such other action, by whatever name called, for the purposes of claiming any deduction, exemption or allowance under the provisions contained in - (I) sections 54 to 54GB or under any provisions of Chapter VI-A under the heading "B.-Deductions in respect of certain payments" thereof; or (II) such other provisions of that Act, subject to fulfillment of such conditions, as the Central Government may, by notification, specif....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... THE INCOME-TAX ACT, 1961 Amendment of sections 10 and 80G of Act 43 of 1961 4. In the Income-tax Act, 1961, with effect from the 1st day of April, 2020 (43 of 1961), - (i) in section 10, in clause (23C), in sub-clause (i), after the word "Fund", the words and brackets "or the Prime Minister's Citizen Assistance and Relief in Emergency Situations Fund (PM CARES FUND)" shall be inserted; (ii) in section 80G, in sub-section (2), in clause (a), in sub-clause (iiia), after the word "fund", the words and brackets "or the Prime Minister's Citizen Assistance and Relief in Emergency Situations Fund (PM CARES FUND)" shall be inserted." 9. Acting in exercise of powers vested under the Ordinance, the Central Government then issued Notification Nos. 35 of 2020, 39 of 2020 and 56 of 2020, dated 24.06.2020, 29.06.2020 and 29.07.2020, respectively. Briefly, by those Notifications, general time extension was granted under the Act for certain purposes. Since, the present dispute does not arise in the context of those Notifications, no useful purpose would be served in extracting their contents. 10. The aforesaid Ordinance was succeeded by the Enabling Act....
X X X X Extracts X X X X
X X X X Extracts X X X X
....y in this behalf, for the completion or compliance of such action as- (a) completion of any proceeding or passing of any order or issuance of any notice, intimation, notification, sanction or approval, or such other action, by whatever name called, by any authority, commission or tribunal, by whatever name called, under the provisions of the specified Act; or (b) filing of any appeal, reply or application or furnishing of any report, document, return or statement or such other record, by whatever name called, under the provisions of the specified Act; or (c) in case where the specified Act is the Income-tax Act, 1961,- (i) making of investment, deposit, payment, acquisition, purchase, construction or such other action, by whatever name called, for the purposes of claiming any deduction, exemption or allowance under the provisions contained in- (I) sections 54 to 54GB, or under any provisions of Chapter VI-A under the heading "B.-Deductions in respect of certain payments" thereof; or (II) such other provisions of that Act, subject to fulfilment of such conditions, as the Central Government may, by notification, specify; or ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....of section 206C thereof for the month of February or March, 2020, or for the quarter ending on the 31st day of March, 2020, as the case may be, the provision of this sub-section shall have the effect as if for the figures, letters and words "31st day of March, 2021", the figures, letters and words "31st day of July, 2020" had been substituted; (iv) furnishing of certificate under section 203 of that Act in respect of deduction or payment of tax under section 192 thereof for the financial year commencing on the 1st day of April, 2019, the provision of this sub-section shall have the effect as if for the figures, letters and words "31st day of March, 2021", the figures, letters and words "15th day of August, 2020" had been substituted; (v) sections 54 to 54GB of that Act, referred to in item (I) of subclause (i) of clause (c), or sub-clause (ii) of the said clause, the provision of this sub-section shall have the effect as if - (a) for the figures, letters and words "31st day of December, 2020", the figures, letters and words "29th day of September, 2020" had been substituted for the time-limit for the completion or compliance; and (b) for the figures, lett....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ad been substituted for making such completion or compliance. (2) Where any due date has been specified in, or prescribed or notified under the specified Act for payment of any amount towards tax or levy, by whatever name called, which falls during the period from the 20th day of March, 2020 to the 29th day of June, 2020 or such other date after the 29th day of June, 2020 as the Central Government may, by notification, specify in this behalf, and if such amount has not been paid within such date, but has been paid on or before the 30th day of June, 2020, or such other date after the 30th day of June, 2020, as the Central Government may, by notification, specify in this behalf, then, notwithstanding anything contained in the specified Act,- (a) the rate of interest payable, if any, in respect of such amount for the period of delay shall not exceed three-fourth per cent. for every month or part thereof; (b) no penalty shall be levied and no prosecution shall be sanctioned in respect of such amount for the period of delay. Explanation.-For the purposes of this sub-section, "the period of delay" means the period between the due date and the date on w....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n 133C 01.11.2020 36. Insertion of Section 135 01.11.2020 37. Insertion of Section 142A 01.11.2020 38. Substitution of Proviso to Section 143(3B) 01.04.2021 39. Insertion of Section 144A 01.04.2021 40. Insertion of Section 144C(14A) 01.11.2020 41. Insertion of Section 151A 01.11.2020 42. Insertion of Section 157A 01.11.2020 43. Insertion of Section 196D(1) 01.11.2020 44. Insertion of Section 197B 14.05.2020 45. Insertion of Section 206C(10) 14.05.2020 46. Insertion of Section 231 01.11.2020 47. Substitution in Section 253(1)(c) 01.06.2020 & 01.04.2021 48. Insertion of Section 253(8), (9) and (10) 01.11.2020 49. Section 263(1) 01.11.2020 50. Section 264(1, 2, 3 and 4) 01.11.2020 51. Insertion of Section 264A & 264B 01.11.2020 52. Omission of Section 271K 01.06.2020 53. Insertion of Section 271K 01.04.2021 54. Substitution in Section 274(2A)(a) 01.04.2021 55. Insertion of Section 279 (4, 5 and 6) 01.11.2020 56. Insertion of Section 293D 01.11.2020 12. On 29.10.2020, Notification No. 88 of 202....
X X X X Extracts X X X X
X X X X Extracts X X X X
....f the Government of India in the Ministry of Finance, (Department of Revenue) No. 88/2020 dated the 29th October, 2020, published in the Gazette of India, Extraordinary, Part-II, Section 3, Subsection (ii), vide number S.O. 3906(E), dated the 29th October, 2020, except as respects things done or omitted to be done before such supersession, the Central Government hereby specifies, for the completion or compliance of action referred to in- (A) clause (a) of sub-section (1) of section 3 of the Act, - (i) the 30th day of March, 2021 shall be the end date of the period during which the time limit specified in, or prescribed or notified under, the specified Act falls for the completion or compliance of such action as specified under the said subsection; and (ii) the 31st day of March, 2021 shall be the end date to which the time limit for completion or compliance of such action shall stand extended: Provided that where the specified Act is the Direct Tax Vivad Se Vishwas Act, 2020 (3 of 2020), the provision of this clause shall have the effect as if- (a) for the figures, letters and words "30th day of March, 2021", the figures, letters and wor....
X X X X Extracts X X X X
X X X X Extracts X X X X
....20-TPL], DATED 27-2-2021 In exercise of the powers conferred by sub-section (1) of section 3 of the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 (38 of 2020) (hereinafter referred to as the said Act) and in partial modification of the notification of the Government of India in the Ministry of Finance, (Department of Revenue) No. 93/2020 dated the 31st December, 2020, published in the Gazette of India, Extraordinary, Part-II, Section 3, Subsection (i), vide number S.O. 4805(E), dated the 31st December, 2020 (hereinafter referred to as the said notification), the Central Government hereby specifics, for the purpose of sub-section (1) of section 3 of the said Act, that - (A) where the specified Act is the Income-tax Act, 1961 (43 of 1961) (hereinafter referred to as the Income-tax Act) and the completion of any action, as referred to in clause (a) of sub-section (1) of section 3 of the said Act, relates to passing of any order- (a) for imposition of penalty under Chapter XXI of the Income-tax Act, - (i) the 29th day of June, 2021 shall be the end date of the period during which the time limit specified in or pre....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ection 3, Subsection (ii), vide number S.O. 4805(E), dated the 31st December, the Central Government hereby specifies that,- (A) where the specified Act is the Income-tax Act, 1961 (43 Income-tax Act) and, - (a) the completion of any action referred to in clause (a) of subsection (1) of section 3 of the Act relates to passing of an order under sub-section (13) of section 144C or issuance of notice under section 148 as per time-limit specified in section 149 or sanction under section 151 of the Income-tax Act, - (i) the 31st day of March, 2021 shall be the end date of the period during which the time limit, specified in, or prescribed or notified under, the Income-tax Act falls for the completion of such action; and (ii) the 30th day of April, 2021 shall be the end date to which the time-limit for the completion of such action shall stand extended. Explanation. For the removal of doubts, it is hereby clarified that for the purposes of issuance of notice under section 148 as per time-limit specified in section 149 or sanction under section 151 of the Income-tax Act, under this sub-clause, the provisions of section 148, section 149 and sect....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ion (1) of section 3 of the said Act that, - (A) where the specified Act is the Income-tax Act, 1961 (43 of 1961) (hereinafter referred to as the Income-tax Act) and, - (a) the completion of any action, referred to in clause (a) of sub-section (1) of section 3 of the said Act, relates to passing of any order for assessment or reassessment under the Income-tax Act, and the time limit for completion of such action under section 153 or section 153B thereof, expires on the 30th day of April, 2021 due to its extension by the said notifications, such time limit shall further stand extended to the 30th day of June, 2021; (b) the completion of any action, referred to in clause (a) of sub-section (1) of section 3 of the said Act, relates to passing of an order under sub-section (13) of section 144C of the Income-tax Act or issuance of notice under section 148 as per time-limit specified in section 149 or sanction under section 151 of the Income-tax Act, and the time limit for completion of such action expires on the 30th day of April, 2021 due to its extension by the said notifications, such time limit shall further stand extended to the 30th day of June, 2021. ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....r deduction for such assessment year (hereafter in this section and in sections 148 to 153 referred to as the relevant assessment year). Explanation.-For the purposes of assessment or reassessment or recomputation under this section, the Assessing Officer may assess or reassess the income in respect of any issue, which has escaped assessment, and such issue comes to his notice subsequently in the course of the proceedings under this section, irrespective of the fact that the provisions of section 148A have not been complied with. Substitution of new section for section 148. 41. For section 148 of the Income-tax Act, the following section shall be substituted, namely:- 148. Issue of notice where income has escaped assessment.-Before making the assessment, reassessment or recomputation under section 147, and subject to the provisions of section 148A, the Assessing Officer shall serve on the assessee a notice, along with a copy of the order passed, if required, under clause (d) of section 148A, requiring him to furnish within such period, as may be specified in such notice, a return of his income or the income of any other person in respect of which....
X X X X Extracts X X X X
X X X X Extracts X X X X
....or section 132A in case of any other person on or after the 1st day of April, 2021, pertains or pertain to, or any information contained therein, relate to, the assessee, the Assessing Officer shall be deemed to have information which suggests that the income chargeable to tax has escaped assessment in the case of the assessee for the three assessment years immediately preceding the assessment year relevant to the previous year in which the search is initiated or books of account, other documents or any assets are requisitioned or survey is conducted in the case of the assessee or money, bullion, jewellery or other valuable article or thing or books of account or documents are seized or requisitioned in case of any other person. Explanation 3. - For the purposes of this section, specified authority means the specified authority referred to in section 151. Insertion of new section 148A. 42. After section 148 of the Income-tax Act, the following section shall be inserted, namely:- "148A. Conducting inquiry, providing opportunity before issue of notice under section 148.- The Assessing Officer shall, before issuing any notice under section ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ion 132A, in case of any other person on or after the 1st day of April, 2021, pertains or pertain to, or any information contained therein, relate to, the assessee. Explanation.-For the purposes of this section, specified authority means the specified authority referred to in section 151." Substitution of new section for section 149. 43. For section 149 of the Income-tax Act, the following section shall be substituted, namely:- 149. Time limit for notice.-(1) No notice under section 148 shall be issued for the relevant assessment year,- (a) if three years have elapsed from the end of the relevant assessment year, unless the case falls under clause (b); (b) if three years, but not more than ten years, have elapsed from the end of the relevant assessment year unless the Assessing Officer has in his possession books of account or other documents or evidence which reveal that the income chargeable to tax, represented in the form of asset, which has escaped assessment amounts to or is likely to amount to fifty lakh rupees or more for that year: Provided that no notice under section 148 shall be issued at any time in a case f....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ssioner or Principal Director General, Chief Commissioner or Director General, if more than three years have elapsed from the end of the relevant assessment year Amendment of section 151A. 45. In section 151A of the Income-tax Act, in sub-section (1), in the opening portion, after the words and figures "issuance of notice under section 148", the words, figures and letter "or conducting of enquiries or issuance of show-cause notice or passing of order under section 148A" shall be inserted." 18. In the above statutory context and reference, submissions have been advanced by learned counsel for the petitioners and have been responded to by the learned Additional Solicitor General of India representing the Union and the CBDT and learned counsel for the revenue. 19. Shri Rakesh Ranjan Agarwal, learned Senior Advocate has first submitted, upon enforcement of the Finance Act, 2021, the pre-existing Sections 147 to 151 of the Act stood repealed and replaced by the above noted provisions. The entire statutory scheme of initiating, inquiring, conducting, and concluding the reassessment proceedings underwent a sea change. The act of substitution of the old provision ob....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... of substitution consists of two steps: first, the old rule is made to cease to exist and, next, the new rule is brought into existence in its place. The rule is that when a subsequent Act amends an earlier one in such a way as to incorporate itself, or a part of itself, into the earlier, then the earlier Act must thereafter be read and construed as if the altered words had been written into the earlier Act with pen and ink and the old words scored out so that thereafter there is no need to refer to the amending Act at all. No doubt, in certain situations, the Court having regard to the purport and object sought to be achieved by the Legislature may construe the word "substitution" as an "amendment" having a prospective effect. Therefore, we do not think that it is a universal rule that the word 'substitution' necessarily or always connotes two severable steps, that is to say, one of repeal and another of a fresh enactment even if it implies two steps. However, the aforesaid general meaning is to be given effect to, unless it is found that legislature intended otherwise. Insofar as present case is concerned, as discussed hereinafter, the legislative intent was also to give effect t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he Supreme Court in Assam Company Ltd. & Anr. Vs. State of Assam & Ors. , (2001) 248 ITR 567 (SC) . Therein, it was held as below: "We will now consider the effect of Rule 5 of the State Rules. As noticed hereinabove, Rule 5 of the Rules in its proviso has in unequivocal terms empowered the State authorities in given cases to refuse to accept the computation of agricultural income made by the Central Officers after examining the books already examined by such Central Officers. The appellants contend that this provision is beyond the rule-making power under the Act, hence, is in excess of the power delegated under the State Act. They also contend that assuming that such rule-making power has entrusted the delegation under Section 50 of the State Act, same would be ultra vires the Constitution. We see force in the above contention. A perusal of Section 50 of the Act shows that the State Government has been empowered to make such Rules as are necessary for the purpose of carrying out the purposes of the Act. We have already noticed that the object and the scheme of the Act do not contemplate the State authorities being empowered to recompute the agricultural income c....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... apposite to state about the rule making powers of a delegating authority. If a rule goes beyond the rule making power conferred by the statute, the same has to be declared ultra vires. If a rule supplants any provision for which power has not been conferred, it becomes ultra vires. The basic test is to determine and consider the source of power which is relatable to the rule. Similarly, a rule must be in accord with the parent statute as it cannot travel beyond it. 22. In this context, we may refer with profit to the decision in General Officer Commanding-in-Chief v. Dr. Subhash Chandra Yadav, (1988) 2 SCC 351, wherein it has been held as follows:- "14......Before a rule can have the effect of a statutory provision, two conditions must be fulfilled, namely (1) it must conform to the provisions of the statute under which it is framed; and (2) it must also come within the scope and purview of the rule making power of the authority framing the rule. If either of these two conditions is not fulfilled, the rule so framed would be void." 23. In Additional District Magistrate (Rev.) Delhi Administration v. Shri Ram, (2000) 5 SCC 451, it has been ruled that it i....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ific clause in Finance Act, 2021, either to save the provisions of the Enabling Act or the Notifications issued thereunder, by no interpretative process can those Notifications be given an extended run of life, beyond 31 March 2020. In fact, any notification issued under the Enabling Act, after the date 31.03.2021 is plainly in conflict with the law as enforced by the Finance Act 2021. It would remain a dead letter of law. It may also not infuse any life into a provision that stood obliterated from the statute with effect from 31.03.2021. Such an exercise made by the delegate would be plainly unconstitutional. No discretion may arise in the executive authority as may be impliedly or expressly barred by statutory law. Inasmuch as the Finance Act, 2021 does not enable the Central Government to issue any notification to reactivate the pre-existing law (which that principal legislature had substituted), the exercise made by the delegate/Central Government is de hors any statutory basis. It is ultra vires. A completely wrong principle has been applied by the Chhattisgarh High Court while relying on the decision of the Supreme Court in A.K. Roy Etc. Vs. Union of India & Anr., AIR 1982 SC....
X X X X Extracts X X X X
X X X X Extracts X X X X
....one. Elaborating his submissions, Shri Chopra would state, the impugned Notifications read together only provide for an extension of time, limited to the permissions contained in the Enabling Act. Since the Enabling Act does not, in any way, seek to save the pre-existing provisions of the Act, notwithstanding any change of legislation, that intent cannot be created by those Notifications. 32. Next, it has been submitted by Sri Chopra, cassus omisus cannot be supplied, either by the delegated legislation or by Courts. Reliance has been placed on the decision of the Supreme Court in Parle Biscuits (P) Ltd. Vs State of Bihar And Ors. (2005) 9 SCC 669. 33. He would further submit, the delegate cannot override the principal legislation as has been sought to be done in the present case. Reliance has been placed on two decisions of the Supreme Court in Chairman and Managing Director, Food Corporation of India & Ors. Vs. Jagdish Balaram Bahira & Ors., (2017) 8 SCC 670 and Dilip Kumar Ghosh & Ors. Vs Chairman & Ors., (2005) 7 SCC 567 , wherein it was clearly recognized that a Circular cannot override the Rules. In Jagdish Balaram Bahira (supra) , it was recognized that the administrat....
X X X X Extracts X X X X
X X X X Extracts X X X X
....tifications issued thereunder must be seen as they confronted the Act as amended by the Finance Act, 2021, on the date of issuance of the impugned re-assessment notices. Upon enforcement of the Finance Act 2021, the entire situation and dynamics of statutory law underwent a change. While the Enabling Act did not undergo any statutory amendment or change upon enactment of the Finance Act, the latter Act substituted the provisions of Sections-147, 148, 149, 150 and 151 of the Act, w.e.f. 01.04.2021. Therefore, the Enabling Act became wholly unenforceable or incapable to the proceedings that would now arise under those provisions, after 01.04.2021. 38. Sri Mehrotra, has then referred to certain provisions under Chapter II of the Enabling Act to contend, even under that Act, different dates had been specified for different provisions introduced to the Act. We have already taken note of such changes in the earlier part of this order. Referring to those, it has been submitted, there is nothing in the Enabling Act and in fact there could never be any provision in that Act as may have put in abeyance the provisions of the Finance Act, 2021, that was yet to be born/enacted. Inasmuch as t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....tiable Instruments Act since the Civil Code ought to be read as one instrument and cause of action arising therefrom ought only to be governed thereunder and not otherwise. The entire Civil Code ought to be treated as a local law or special law including the provisions pertaining to the question of limitation for enforcement of the right arising under that particular Civil Code and not dehors the same and in this respect the observations of the High Court in Cadar Constructions [AIR 1984 Bom 258 : 1984 Mah LJ 603] that the Portuguese Civil Code could not provide for a period of limitation for a cause of action which arose outside the provisions of that Code, stands approved. A contra approach to the issue will not only yield to an absurdity but render the law of the land wholly inappropriate. There would also be repugnancy insofar as application of the Limitation Act in various States of the country is concerned: Whereas in Goa, Daman and Diu, the period of limitation will be for a much larger period than the State of Maharashtra - the situation even conceptually cannot be sustained having due regard to the rule of law and the jurisprudential aspect of the Limitation Act." 41. N....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nancy between the two. Both enactments operate in different time spaces. While the Enabling Act takes care of the law as it pre-existed i.e. before the enactment of the Finance Act 2021, the latter Act operates w.e.f. 01.04.2021. Since the old provisions did not exist beyond 31.03.2021 and since the provisions of the Finance Act 2021 have not been given retrospective effect, there is no occasion for any conflict between the two laws. 44. Then, neither the Enabling Act nor any other law, delegates to the Central Government any power to create any law except with respect to time extensions under the pre-existing law. In fact, it is only if the delegated legislation enforced under the Enabling Act is applied after 01.04.2021, that a situation of conflict of laws may arise. Relying on another decision of the Supreme Court in State of M.P. Vs. Kedia Leather & Liquor Ltd. & Ors., (2003) 7 SCC 389, he submits, the repeal is inferred by necessary implication if the provisions of the later Act are so repugnant to the provisions of the earlier Act that the two cannot stand together. Here, though, principally, there is no repugnancy between the Act as amended by the Finance Act 2021 and th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nd, therefore, when the court applies the doctrine, it does no more than give effect to the intention of the legislature by examining the scope and the object of the two enactments and by a comparison of their provisions. The matter in each case is one of the construction and comparison of the two statutes. The court leans against implying a repeal, unless two Acts are so plainly repugnant to each other that effect cannot be given to both at the same time, a repeal will not be implied, or that there is a necessary inconsistency in the two Acts standing together. To determine whether a later statute repeals by implication an earlier statute, it is necessary to scrutinize the terms and consider the true meaning and effect of the earlier Act. Until this is done, it is impossible to ascertain whether any inconsistency exists between the two enactments. The area of operation in the Code and the pollution laws in question are different with wholly different aims and objects, and though they alleviate nuisance, that is not of identical nature. They operate in their respective fields and there is no impediment for their existence side by side." 45. Last, relying on another decision of t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nce under the pre-existing laws. That procedure having been transformed completely, by the Finance Act, 2021, w.e.f. 01.04.2021 before any reassessment proceeding came into existence, there survives no room to rely on the pre-existing provisions of law. Thus, it has been emphasized by Sri Bansal, the scope of Section 3(1) of the Enabling Act is limited to extend the time qua reassessment proceedings, validly initiated under the unamended Income Tax Act, up to 31.03.2021. It neither creates any jurisdiction nor it confers validity on any reassessment proceedings instituted under the unamended law, after the enforcement of the Finance Act, 2021. 48. As to the non-obstante clause appearing in the latter part of Section 3(1) of the Enabling Act, it has been vehemently urged by Shri Bansal that that non-obstante clause cannot be given any applicability and it cannot be read into the first part of Section 3(1), which alone pertains to issuance of any notice under the Act as it existed upto 31.03.2021. A non-obstante clause has to be read in a manner as to allow for a overriding effect viz-a-viz other laws or such laws as may be specified in that non-obstante clause. However, its effec....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... of a statute must, where it is clear, be taken to control the non obstante clause where both cannot be read harmoniously;" In Madhav Rao Scindia v. Union of India [(1971) 1 SCC 85] (SCC at p. 139) Hidayatullah, C.J. observed that the non obstante clause is no doubt a very potent clause intended to exclude every consideration arising from other provisions of the same statute or other statute but "for that reason alone we must determine the scope" of that provision strictly. When the section containing the said clause does not refer to any particular provisions which it intends to override but refers to the provisions of the statute generally, it is not permissible to hold that it excludes the whole Act and stands all alone by itself. "A search has, therefore, to be made with a view to determining which provision answers the description and which does not." 50. Sri Divyanshu Agarwal, learned counsel also appearing for the petitioners has adopted the submissions advanced by other learned counsel for the petitioners, as noted above. He has further emphasized; Section 3(1) of the Enabling Act only seeks to enlarge the time limit specified in or prescribed under the Act betw....
X X X X Extracts X X X X
X X X X Extracts X X X X
....accordance therewith after October 22, 1956, even though the claim may have arisen before the amended section was inserted in the Act. It is well settled that procedural amendments to a law apply, in the absence of anything to the contrary, retrospectively in the sense that they apply to all actions after the date they come into force even though the actions may have begun earlier or the claim on which the action may be based may be of an anterior date. Therefore, when the Assistant Custodian issued notice to the appellant on January 22, 1958 claiming the amount from him, the recovery could be dealt with under sub-section (1) and (2) of the amended Section 48, as they are merely procedural provisions. But it is urged on behalf of the appellant that sub-section (1) in terms does not apply to the present case, and if so, subsection (2) would also not apply. The argument is that under sub-section (1) it is only any sum payable to the Government or to the Custodian in respect of any evacuee property which can be recovered as arrears of land revenue." 52. Sri Salil Kapoor alongwith Sri Anuj Srivastava and Ms. Saumya Singh, learned counsel for the petitioners, besides adopting the sub....
X X X X Extracts X X X X
X X X X Extracts X X X X
....c COVID-19, which largely disabled normal human activity and prevented statutory authorities from discharging their statutory obligations in accordance with law and obstructed and/or prevented the assessees from making compliances and pursing their rights. 55. Relying on the decision of the Supreme Court in Union of India & Ors. Vs. Exide Industries Limited & Anr., (2020) 5 SCC 274 , it has been vehemently urged, the constitutional validity of a law may be challenged on only two grounds - either, it may be shown that there was legislative incompetence in enacting the law or that the law impinges on any of the fundamental rights enshrined in Part III of the Constitution of India. He would further submit, there always exists a presumption in favour of the constitutionality of the law and that no enacted law may be struck down on a simple reasoning of it being arbitrary or unreasonable. Strict application of that rule must be ensured while dealing with taxation legislation. Thus, he has placed reliance on paragraphs 15 and 16 of the aforesaid report, which read as below: "15. The approach of the Court in testing the constitutional validity of a provision is well settled an....
X X X X Extracts X X X X
X X X X Extracts X X X X
....elevant in pronouncing on the constitutional validity of a fiscal statute or economic law, and (v) in the field of taxation, the legislature enjoys greater latitude for classification....." (emphasis supplied)" 56. It has been further submitted, no ground has been raised in any of the petitions to test the validity of the law and, in fact, no such ground exists. The Enabling Act had become necessary to be enacted, considering the hardships arising from the spread of the pandemic COVID-19, affecting both the assessees as also the statutory authorities and their functioning. Once limitation had been extended in favour of the assessee, to submit replies and to make other compliances, correspondingly, extension of time was granted to the statutory authorities to initiate, amongst others, reassessment proceedings, beyond the normal limitation of time. 57. Placing further reliance on the aforesaid decision of the Supreme Court, the learned ASGI would submit, Section 3(1) of the Enabling Act contains a non-obstante clause which clearly overrides any period of limitation or any disability arising from such period of limitation as may have been prescribed under the Act. That ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ard, reliance has been placed on paragraph 26 of the decision in Union of India & Ors. Vs. Exide Industries Limited & Anr. (supra), which is quoted below: "26. Be it noted that the interpretation of a statute cannot be unrelated to the nature of the statute. In line with other clauses under Section 43- B, clause (f) was enacted to remedy a particular mischief and the concerns of public good, employees' welfare and prevention of fraud upon Revenue is writ large in the said clause. In our view, such statutes are to be viewed through the prism of the mischief they seek to suppress, that is, the Heydon's case, (1584) 3 Co Rep 7a: 76 ER 637, principle. In Crawford Statutory Construction, it has been gainfully delineated that "an enactment designed to prevent fraud upon the Revenue is more properly a statute against fraud rather than a taxing statute, and hence should receive a liberal construction in the government's favour." 60. Applying the above principle, it has been further submitted, the time limitation existing under the Act had been extended under the Ordinance as also the Enabling Act, much prior to the introduction of the Finance Act, 2021. It is only that extensio....
X X X X Extracts X X X X
X X X X Extracts X X X X
....dinance or the Enabling Act or the Finance Act 2021, there exists no presumption in favour of the old provision continuing to operate for any purpose, beyond 31.03.2021. (ii) The Act is a dynamic enactment that sustains through enactment of the Finance Act every year. Therefore, on 1st April every year, it is the Act as amended by the Finance Act, for that year which is applied. In the present case, it is the Act as amended by the Finance Act 2021, that confronted the Enabling Act as was pre-existing. In absence of any legislative intent expressed either under the Finance Act, 2021 or under the Enabling Act, to preserve any part of the pre-existing Act, plainly, reference to provisions of Sections 147 and 148 of the Act and the words 'assessment' and 'reassessment' appearing in the Notifications issued under the Enabling Act may be read to be indicating only at proceedings already commenced prior to 01.04.2021, under the Act (before amendment by the Finance Act, 2021). The delegated action performed under the Enabling Act cannot, itself create an overriding effect in favour of the Enabling Act. (iii) The Enabling Act read with its Notifications doe....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n a wider meaning or application as may defeat the other laws. 64. As to the first line of reasoning applied by the learned counsel for the petitioner, as noted above, there can be no exception to the principle - an Act of legislative substitution is a composite act. Thereby, the legislature chooses to put in place another or, replace an existing provision of law. It involves simultaneous omission and re-enactment. By its very nature, once a new provision has been put in place of a pre-existing provision, the earlier provision cannot survive, except for things done or already undertaken to be done or things expressly saved to be done. In absence of any express saving clause and, since no reassessment proceeding had been initiated prior to the Act of legislative substitution, the second aspect of the matter does not require any further examination. 65. Therefore, other things apart, undeniably, on 01.04.2021, by virtue of plain/unexcepted effect of Section 1(2)(a) of the Finance Act, 2021, the provisions of Sections 147, 148, 149, 151 (as those provisions existed upto 31.03.2021), stood substituted, along with a new provision enacted by way of Section 148A of that Act. In abse....
X X X X Extracts X X X X
X X X X Extracts X X X X
..... That saving could arise only if jurisdiction had been validly assumed before the date 01.04.2021. In the first place Section 3(1) of the Enabling Act does not speak of saving any provision of law. It only speaks of saving or protecting certain proceedings from being hit by the rule of limitation. That provision also does not speak of saving any proceeding from any law that may be enacted by the Parliament, in future. For both reasons, the submission advanced by learned Additional Solicitor General of India is unacceptable. 69. Even otherwise the word 'notwithstanding' creating the non obstante clause, does not govern the entire scope of Section 3(1) of the Enabling Act. It is confined to and may be employed only with reference to the second part of Section 3(1) of the Enabling Act i.e. to protect proceedings already under way. There is nothing in the language of that provision to admit a wider or sweeping application to be given to that clause - to serve a purpose not contemplated under that provision and the enactment, wherein it appears. 70. The upshot of the above reasoning is, the Enabling Act only protected certain proceedings that may have become time barred o....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ceedings be protected. Practicality, if any, may lead to legislation. Once the matter reaches Court, it is the legislation and its language, and the interpretation offered to that language as may primarily be decisive to govern the outcome of the proceeding. To read practicality into enacted law is dangerous. Also, it would involve legislation by the Court, an idea and exercise we carefully tread away from. 74. Similarly, the mischief rule has limited application in the present case. Only in case of any doubt existing as to which of the two interpretations may apply or to clear a doubt as to the true interpretation of a provision, the Court may look at the mischief rule to find the correct law. However, where plain legislative action exists, as in the present case (whereunder the Parliament has substituted the old provisions regarding reassessment with new provisions w.e.f. 01.04.2021), the mischief rule has no application. 75. As we see there is no conflict in the application and enforcement of the Enabling Act and the Finance Act, 2021. Juxtaposed, if the Finance Act, 2021 had not made the substitution to the reassessment procedure, the revenue authorities would have been w....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... no proceeding be instituted for any default arising after 21.3.2020, for a period of six months or such period not exceeding one year, as may be notified. Thus, in that case, by virtue of amendment made, delegated power created, could be exercised to relax the otherwise stringent provisions of the Act, in cases, wherein difficulties arose from the spread of the pandemic COVID-19. Thus, that ratio is plainly distinguishable. 79. As to the decision of the Chhattisgarh High Court, with all respect, we are unable to persuade ourselves to that view. According to us, it would be incorrect to look at the delegation legislation i.e. Notification dated 31.03.2021 issued under the Enabling Act, to interpret the principal legislation made by Parliament, being the Finance Act, 2021. A delegated legislation can never overreach any Act of the principal legislature. Second, it would be over simplistic to ignore the provisions of, either the Enabling Act or the Finance Act, 2021 and to read and interpret the provisions of Finance Act, 2021 as inoperative in view of the fact circumstances arising from the spread of the pandemic COVID-19. Practicality of life de hors statutory provisions, may ne....