TaxTMI 
TaxTMI 
2021 (12) TMI 664
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....n Kumar Shukla, Ms. Hemlata Rawat, Advocates. Mr. Gaurav Gupta, Mr. Jaspal Singh Sethi, Mr. Gaurav Gupta & Ms. Sahiba Pantel, Advocates. Mr. T.M. Shivakumar, Advocate. Mr. Manibhadra Jain, Advocate. Dr. Rakesh Gupta, Mr. Somil Agarwal, Mr. Tani Malik, Mr. Anshul Mittal Advocates. Mr. Mayank Nagi, Advocate. Mr. Arvind Kumar & Ms. Devina Sharma, Advocates. Mr. Sunil K.Mukhi, Mr. Ishan Garg, Mr.T.S Nerwal, Advocates. Mr. P.C. Yadav, Advocate. Mr. Raghvendra Singh and Mr Satish kumar, Advocates. Mr. Rahul Chaudhary, Mr. Avesh Chaudhary, Mr. Abhay Shankar Dubey, Advocates. Mr. Navin Kumar with Mr. Deepak and Mr. Rohit Pal, Advs. Mr. Kamal Sawhney with Mr. Prashant Meharchandani, Mr. Nikhil Agarwal, Mr. Arun Bhaduria, Mr. Divyansh Singh, Advocates . Mr. Inder Paul Bansal and Mr. Vivek Bansal. Adv. Mr. Suresh Chandra Sati, Advocate. Mr.Sushil Tekriwal & Dr. Mamta Tekriwal, Advs. Mr. Piyush Singhal, Mr. Risabh Sharma, Advs. Mr. Rajiv Kumar Virmani, Mr. Abhinav Agrawal, Mr. Rishi Vohar, Ms. Swati Bhardwaj, Advs. Mr.Rishabh Ostwal, Adv. Mr. Rano Jain with Mr. Venketesh Chaurasia, Advs. Mr.Sourav Vig and Mr.Tushar Gupta, Advs. Mr. Virender Mehta Adv. Mr. Manish Paliwal, Mr. Vikas Kumar, Mr. V....
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....kit Verma, Advs. Mr. Ruchesh Sinha, Mr. Gautam Khaitan, Mr. AT Patra, Mr. Aditya Ghadge, Mr. Ramaditya Tiwari & Ms.Divya, Advs. Ms.Priamvada Surolia, Ms.Lakshita Arora & Mr. Abhishek Parmar, Advs. Mr. Shafiq Khan, Adv. Ms. Ranjana Roy Gawai, Mr. Ujjwal Jain & Mr. Shikher Upadhyay, Advs. Mr. P.R Rajhans, Mr. Ankur Vats & Mr. Vivek Singh, Advs. Mr. Sekhar Gupta & Mr. Mehendra Pratap, Advs. Mr. Deepanshu Jain & Mr. Shaantanu Jain, Advs. Mr. Gagan Kumar, Adv. Mr. Abhimanyu, Mr. Ankit Panwar, Mr. Parth Dixit & Mr. Abhishek Singh & Ms. Leena Kalra, AR of the Company. Mr. Hemant Shah and Saurabh Pal, Advs. Mr. R. K. Handoo, Mr.Yoginder Handoo, Mr.Ashwin Kataria, Mr.Aditya Chaudhary and Mr.Raghav Bhalla, Advs. Mr. Rahul Malhotra, Mr. Manas Tripathi and Ms. Diksha Singh Dhakre, Advocates. Mr. K.R. Manjani & Mr.Tarun Aswani, Advs. Mr. Vishal Kalra, Mr. S.S. Tomar and Mr. Ankit Sahni, Advs. Mr. Rajeev Sharma, Adv. Mr. Kapil Goel and Mr.Sandeep Goel, Advocates Mr. Rohit Bansal, Adv. Mr. Amit Kaushik, Adv. Mr. Vikas Arora, Ms. Radhika Arora and Mr. Mohit Dagar, Advocates Mr. Satyen Sethi & Mr. Arta Trana Panda, Advs. Mr. Rupesh Kumar with Ms. Neelam Sharma, Mr. Pankhuri Shrivastava, Mr. Pravesh....
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.... Counsel for UOI. Mr. Ranvir Singh, (CGSC) for UOI. Mr. D.S.Mehandru, Sr. Panel Counsel for UOI. Mr. Anil Dabas, Adv. for UOI. Mr. Praveen Kumar Jain, Adv. Ms. Richa Dhawan, Senior Panel counsel for UOI. Ms. Aakanksha Kaul, Mr. Manek Singh, Mr. Aman Sahani, Advs. Mr. Nitin Khanna, Advocate for R-4/UOI. Ms. Arti Bansal for Respondent No.3/ UOI. Mr. Prakash Kumar, Sr. Central Govt. Counsel. Mr. Narendra Kumar Srivastava Senior Panel Counsel for the respondent No. 3. Mr. Praveen Kumar Jain, Adv. Ms. Talish Ray, Adv. for UOI. Ms. Sunieta Ojha, Adv. for UOI. Mr. Neeraj, Mr. Sahaj Garg , Mr. Vedansh Anand, Mr. Rudra Paliwal and Mr. Sanjay Pal, Advs. Mr.Ajay Digpaul CGSC with Kamal R. Digpaul Adv. Mr. Ravi Prakash CGSC with Mr. Gurtejpal Singh, Ms. Shruti Shivkumar, Advs. Mr. Ashwani Kumar Sharma, CGSC. Mr.Sushil Kumar Pandey, Adv. with Mr. Rahul Mourya, Ms. Sweety Singh Chauhan & Ms. Anjum Kaur, Advs. Mr. Jitesh Vikram Srivastava, Mr. Prajesh Vikram Srivastava, Adv. Ms. Aakanksha Kaul, Mr. Manek Singh, Mr. Aman Sahani, Advs. Mr. Ajay Digpaul, Adv. Mr. Vivekanand Mishra, Senior Panel Counsel UOI. Mr. Ruchir Mishra and Mr. Mukesh Kumar Tiwari, Advs. Mr. Shankar Kumar Jha, Adv. Mr. Manoj Ku....
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....a Singh, Adv. Mr. Rahul Sharma, Central Government Counsel Panel and Mr. C.K.Bhatt, Adv. Mr.Virender Pratap Singh Charak with Ms.Shubhra Parashar, Mr. Pushpender Singh Charak, Mr. Kapil Gaur, Mr. Vaishnav Kirti Singh, Mr. Shubham Ahuja, Mr. Sanjay Singh Chauhan, Mr. Ram Pal Singh Tomar, Mr. Gyanwardhan Singh & Mr. Vivek Nagar, Advs. for UOI. Mr.Nirvikar Verma, Adv. for UOI. Mr.Rajesh Kumar, Adv. for UOI. Mr. Manish Mohan, CGSC with Ms. Manisha Saroha, Adv. Mr. Shyam Sundar Rai, Adv. W.P.(C) Nos. 6442/2021, 6443/2021, 6451/2021, 6465/2021, 6563/2021, 6531/2021, 6596/2021, 6607/2021, 6645/2021,6665/2021, 6667/2021, 6668/2021, 6705/2021, 6717/2021, 6718/2021, 6777/2021, 6799/2021, 6800/2021, 6801/2021, 6805/2021, 6822/2021, 6830/2021, 6832/2021, 6857/2021, 6877/2021, 6880/2021, 6888/2021, 6889/2021, 6890/2021, 6894/2021, 6896/2021, 6897/2021, 6898/2021, 6904/2021, 6905/2021, 6906/2021, 6910/2021, 6917/2021, 6918/2021, 6920/2021, 6922/2021, 6924/2021, 6931/2021, 6950/2021 6954/2021, 6955/2021, 6962/2021, 6963/2021, 6965/2021, 6966/2021, 6968/2021, 6972/2021, 6976/2021, 7015/2021, 7016/2021, 7018/2021, 7027/2021, 7028/2021, 7030/2021, 7031/2021, 7037/2021, 7038/2021, 7039/2021, ....
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....55/2021, 7556/2021, 7557/2021, 7561/2021, 7562/2021, 7563/2021, 7567/2021, 7568/2021, 7569/2021, 7570/2021, 7571/2021, 7573/2021, 7574/2021, 7576/2021, 7577/2021, 7582/2021, 7584/2021, 7585/2021, 7586/2021, 7588/2021, 7590/2021, 7591/2021, 7593/2021, 7594/2021, 7595/2021, 7596/2021, 7598/2021, 7599/2021, 7600/2021, 7603/2021, 7610/2021, 7622/2021, 7630/2021, 7631/2021, 7632/2021, 7636/2021, 7639/2021, 7643/2021, 7646/2021, 7647/2021, 7648/2021, 7650/2021, 7651/2021, 7654/2021, 7655/2021, 7656/2021, 7658/2021, 7659/2021, 7660/2021, 7661/2021, 7663/2021, 7664/2021, 7667/2021, 7668/2021, 7675/2021, 7677/2021, 7678/2021, 7679/2021, 7681/2021, 7682/2021, 7683/2021, 7684/2021, 7685/2021, 7686/2021, 7687/2021, 7688/2021, 7689/2021, 7690/2021, 7691/2021, 7692/2021, 7693/2021, 7694/2021, 7695/2021, 7696/2021, 7697/2021, 7698/2021, 7699/2021, 7730/2021, 7731/2021, 7732/2021, 7733/2021, 7734/2021, 7735/2021, 7736/2021, 7737/2021, 7738/2021, 7754/2021, 7763/2021, 7770/2021, 7771/2021, 7772/2021, 7773/2021, 7774/2021, 7775/2021, 7776/2021, 7777/2021, 7783/2021, 7786/2021, 7787/2021, 7789/2021, 7790/2021, 7791/2021, 7792/2021, 7793/2021, 7796/2021, 7797/2021, 7798/2021, 7801/2021, 7804/2021, 780....
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....2021, 8386/2021, 8387/2021, 8388/2021, 8389/2021, 8390/2021, 8416/2021, 8431/2021, 8436/2021, 8438/2021, 8441/2021, 8443/2021, 8444/2021, 8446/2021, 8448/2021, 8450/2021, 8462/2021, 8463/2021, 8464/2021, 8465/2021, 8466/2021, 8467/2021, 8468/2021, 8469/2021, 8475/2021, 8476/2021, 8478/2021, 8480/2021, 8492/2021, 8499/2021, 8501/2021, 8502/2021, 8503/2021, 8505/2021, 8506/2021, 8511/2021, 8512/2021, 8513/2021, 8514/2021, 8517/2021, 8518/2021, 8519/2021, 8523/2021, 8525/2021, 8526/2021, 8527/2021, 8530/2021, 8531/2021, 8533/2021, 8534/2021, 8535/2021, 8536/2021, 8537/2021, 8538/2021, 8539/2021, 8541/2021, 8542/2021, 8543/2021, 8544/2021, 8545/2021, 8546/2021, 8550/2021, 8574/2021, 8575/2021, 8583/2021, 8584/2021, 8585/2021, 8586/2021, 8589/2021, 8590/2021, 8591/2021, 8593/2021, 8594/2021, 8595/2021, 8596/2021, 8600/2021, 8604/2021, 8607/2021, 8608/2021, 8616/2021, 8619/2021, 8622/2021, 8627/2021, 8629/2021, 8631/2021, 8633/2021, 8634/2021, 8636/2021, 8637/2021, 8638/2021, 8639/2021, 8641/2021, 8642/2021, 8644/2021, 8646/2021, 8647/2021, 8648/2021, 8660/2021, 8661/2021, 8662/2021, 8667/2021, 8668/2021, 8671/2021, 8688/2021, 8690/2021, 8693/2021, 8694/2021, 8695/2021, 8698/2021, 8699/2....
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....1, 9323/2021, 9325/2021, 9327/2021, 9329/2021, 9330/2021, 9331/2021, 9332/2021, 9333/2021, 9334/2021, 9335/2021, 9337/2021, 9339/2021, 9340/2021, 9341/2021, 9342/2021, 9348/2021, 9350/2021, 9351/2021, 9353/2021, 9355/2021, 9356/2021, 9379/2021, 9391/2021, 9396/2021, 9397/2021, 9398/2021, 9399/2021, 9402/2021, 9403/2021, 9404/2021, 9406/2021, 9408/2021, 9414/2021, 9416/2021, 9422/2021, 9424/2021, 9431/2021, 9433/2021, 9434/2021, 9437/2021, 9439/2021, 9441/2021, 9443/2021, 9445/2021, 9446/2021, 9447/2021, 9449/2021, 9451/2021, 9453/2021, 9456/2021, 9458/2021, 9459/2021, 9488/2021, 9489/2021, 9490/2021, 9491/2021, 9492/2021, 9493/2021, 9494/2021, 9495/2021, 9497/2021, 9500/2021, 9501/2021, 9503/2021, 9506/2021, 9510/2021, 9513/2021, 9516/2021, 9517/2021, 9519/2021, 9520/2021, 9521/2021, 9524/2021, 9526/2021, 9527/2021, 9528/2021, 9532/2021, 9533/2021, 9534/2021, 9535/2021, 9536/2021, 9538/2021, 9542/2021, 9543/2021, 9544/2021, 9545/2021, 9546/2021, 9547/2021, 9548/2021, 9549/2021, 9550/2021, 9551/2021, 9552/2021, 9553/2021, 9554/2021, 9555/2021, 9557/2021, 9567/2021, 9569/2021, 9571/2021, 9572/2021, 9573/2021, 9599/2021, 9600/2021, 9601/2021, 9602/2021, 9603/2021, 9604/2021, 9605/2021....
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....8/2021, 10491/2021, 10512/2021, 10515/2021, 10516/2021, 10521/2021, 10526/2021, 10527/2021, 10541/2021, 10542/2021, 10544/2021, 10547/2021, 10548/2021, 10549/2021, 10550/2021, 10551/2021, 10553/2021, 10555/2021, 10557/2021, 10564/2021, 10568/2021, 10570/2021, 10572/2021, 10580/2021, 10581/2021, 10588/2021, 10626/2021, 10627/2021, 10628/2021, 10640/2021, 10643/2021, 10650/2021, 10653/2021, 6152/2021, 10396/2021, 10414/2021, 10533/2021, 10565/2021, 10587/2021, 10608/2021, 10609/2021, 10612/2021, 10613/2021, 10615/2021, 10618/2021, 10619/2021, 10620/2021, 10621/2021, 10642/2021, 10661/2021, 10662/2021, 10663/2021, 10683/2021, 10684/2021, 10685/2021, 10687/2021, 10688/2021, 10692/2021, 10693/2021, 10694/2021, 10695/2021, 10696/2021, 10697/2021, 10700/2021, 10702/2021, 10704/2021, 10706/2021, 10734/2021, 10735/2021, 10739/2021, 10741/2021, 10744/2021, 10748/2021, 10752/2021, 10756/2021, 10757/2021, 10761/2021, 10764/2021, 10766/2021, 10767/2021, 10783/2021, 10799/2021, 10802/2021, 10803/2021, 10811/2021, 10819/2021, 10820/2021, 10827/2021, 10829/2021, 10841/2021, 10843/2021 JUDGMENT MANMOHAN, J: 1. Various issues arise for consideration in the present batch of one thousand thr....
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...., unless any income chargeable to tax has escaped assessment for such assessment year by reason of the failure on the part of the assessee to make a return under section 139 or in response to a notice issued under sub-section (1) of section 142 or section 148 or to disclose fully and truly all material facts necessary for his assessment, for that assessment year: Provided further that nothing contained in the first proviso shall apply in a case where any income in relation to any asset (including financial interest in any entity) located outside India, chargeable to tax, has escaped assessment for any assessment year: Provided also that the Assessing Officer may assess or reassess such income, other than the income involving matters which are the subject matters of any appeal, reference or revision, which is chargeable to tax and has escaped assessment. Explanation 1.-Production before the Assessing Officer of account books or other evidence from which material evidence could with due diligence have been discovered by the Assessing Officer will not necessarily amount to disclosure within the meaning of the foregoing proviso. Explanation 2.-For the purposes of this section, ....
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....r beginning on or before the 1st day of April, 2012. Issue of notice where income has escaped assessment. 148.(1) Before making the assessment, reassessment or re-computation under section 147, the Assessing Officer shall serve on the assessee a notice requiring him to furnish within such period, as may be specified in the notice, a return of his income or the income of any other person in respect of which he is assessable under this Act during the previous year corresponding to the relevant assessment year, in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed; and the provisions of this Act shall, so far as may be, apply accordingly as if such return were a return required to be furnished under section 139: Provided that in a case- (a) where a return has been furnished during the period commencing on the 1st day of October, 1991 and ending on the 30th day of September, 2005 in response to a notice served under this section, and (b) subsequently a notice has been served under sub-section (2) of section 143 after the expiry of twelve months specified in the proviso to subsection (2) of section 143, as it....
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.... 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 nonresident under section 163 and the assessment, reassessment or recomputation to be made in pursuance of the notice is to be made on him as the agent of such non-resident, the notice shall not be issued after the expiry of a period of six years from 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 amended by the Finance Act, 2012, shall also be applicable for any assessment year beginning on or before the 1st day of April, 2012. Sanction for issue of notice. 151. (1) No notice shall be issued under section 148 by an Assessing Officer, after the expiry of a period of four years from the end of the relevant assessment year, unless the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner is satisfied, on the reasons recorded by the Assessing Officer, that it is a fit case for the issue of such notice. (2) In a case other than a cas....
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.... (2) Save as otherwise provided, it shall come into force at once. Definitions 2. (1) In this Ordinance, unless the context otherwise requires,- (a) "specified Act" means- (i) the Wealth-tax Act, 1957 (27 of 1957); (ii) the Income-tax Act, 1961 (43 of 1961); (iii) the Prohibition of Benami Property Transactions Act, 1988 (45 of 1988); (iv) Chapter VII of the Finance (No. 2) Act, 2004 (22 of 2004); (v) Chapter VII of the Finance Act, 2013 (17 of 2013); (vi) the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 (22 of 2015); (vii) Chapter VIII of the Finance Act, 2016; (28 of 2016) or (viii) the Direct Tax Vivad se Vishwas Act, 2020 (3 of 2020); (b) "notification" means the notification published in the Official Gazette. (2) The words and expressions used herein and not defined, but defined in the specified Act, the Central Excise Act, 1944 (1 of 1944), the Customs Act, 1962 (52 of 1962), the Customs Tariff Act, 1975 (51 of 1975) or the Finance Act, 1994 (32 of 1994), as the case may be, shall have the meaning respectively assigned to them in that Act. CHAPTER II RELAXATION OF CERTAIN PROVISIONS OF SPECIFIED ACT Relaxat....
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....tion shall not include payment of any amount as is referred to in sub-section (2)." 5. As the pandemic and problems arising therefrom did not show any sign of abatement, the Legislature enacted Relaxation Act, 2020 in September, 2020. By way of Relaxation Act, 2020, various due dates/time limits/limitations prescribed in different Central Acts, including the Income Tax Act, 1961, were relaxed. Additionally, Section 3 of Relaxation Act, 2020 enabled the Central Government to issue Notifications for further relaxing the time limits/limitations prescribed in the 'Specified Acts'. The Statement of Objects and Reasons as well as the relevant portion of the Relaxation Act, 2020 are reproduced herein below:- "STATEMENT OF OBJECTS AND REASONS The outbreak of Novel Corona Virus (COVID-19) pandemic across many countries of the world, including India, has caused immense loss to lives of people and given rise to unprecedented humanitarian and economic crisis in the country. Due to vagaries of pandemic, a national lockdown was imposed which had to be further extended. Due to very rapid spread of pandemic, social distancing had to be ensured immediately to prevent society at large from its d....
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....tain dates relating to filing of declaration and making of payment. 7. The Finance Act, 2020 is also proposed to be amended to clarify regarding capping of surcharge at 15 per cent on dividend income of the Foreign Portfolio Investor. 8. The Bill also proposes to empower the Central Government toremove any difficulty up to a period of two years and provide for repeal and savings of the Taxation and Other Laws (Relaxation of Certain Provisions) Ordinance, 2020. 9. The Bill seeks to achieve the aforesaid objectives. NEW DELHI; The 11th September, 2020. NIRMALA SITHARAMAN THE TAXATION AND OTHER LAWS (RELAXATION AND AMENDMENT OF CERTAIN PROVISIONS) ACT, 2020 NO. 38 OF 2020 [29th September, 2020.] AN ACT to provide for relaxation and amendment of provisions of certain Acts and for matters connected therewith or incidental thereto. BE it enacted by Parliament in the Seventy-first Year of the Republic of India as follows:- CHAPTER I PRELIMINARY 1. (1) This Act may be called the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020. (2) Save as otherwise provided, it shall be deemed to have come into force on the 31st day of March, 2020.....
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....ion, specify; or (ii) beginning of manufacture or production of articles or things or providing any services referred to in section 10AA of that Act, in a case where the letter of approval, required to be issued in accordance with the provisions of the Special Economic Zones Act, 2005, has been issued on or before the 31st day of March, 2020, and where completion or compliance of such action has not been made within such time, then, the time-limit for completion or compliance of such action shall, notwithstanding anything contained in the specified Act, stand extended to the 31st day of March, 2021, or such other date after the 31st day of March, 2021, as the Central Government may, by notification, specify in this behalf: Provided that the Central Government may specify different dates for completion or compliance of different actions: xxxx xxxx xxxx xxxx 10. (1) If any difficulty arises in giving effect to the provisions of this Act, the Central Government may, by order, not inconsistent with the provisions of this Act, remove the difficulty: Provided that no such order shall be made after the expiry of a period of two years from the end of the month in which this Act h....
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....xtraordinary, Part II, Section 3, Sub-section (ii), vide number S.O. 4805(E), dated the 31st December, 2020, the Central Government hereby specifies 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 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 provision....
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....ment hereby specifies 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, - (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 th....
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....sals Proposed Amendments in brief 1. xxx xxx 2. Reduction in Time Limits In order to reduce compliance burden, the time-limit for reopening of assessment is being reduced to 3 years from the current 6 years from the end of the relevant assessment year. Reopening up to 10 years is proposed to be allowed only if there is evidence of undisclosed income of Rs.50 lakh or more for a year. Further, it is proposed to completely remove discretion in re-opening and henceforth reopening shall be made only in cases flagged by system on the basis of data analytics, objection of C&AG and in search/survey cases. Further, in order to bring certainty in income tax proceedings at the earliest, it is also proposed to reduce the time limits for general assessment or processing of income tax return by three months and also for filing of returns. B. MEMORANDUM EXPLAINING THE PROVISIONS IN THE FINANCE BILL, 2021 Income escaping assessment and search assessments Under the Act, the provisions related to income escaping assessment provide that if the Assessing Officer has reason to believe that any income chargeable to tax has escaped assessment for any assessment year, he may assess or reasse....
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....) The provisions of section 153A and section 153C, of the Act are proposed to be made applicable to only search initiated under section 132 of the Act or books of accounts, other documents or any assets requisitioned under section 132A of the Act, on or before 31st March 2021. (ii) Assessments or reassessments or in re-computation in cases where search is initiated under section 132 or requisition is made under 132A, after 31st March 2021, shall be under the new procedure. (iii) Section 147 proposes to allow the Assessing Officer to assess or reassess or re-compute any income escaping assessment for any assessment year (called relevant assessment year). (iii) Before such assessment or reassessment or recomputation, a notice is required to be issued under section 148 of the Act, which can be issued only when there is information with the Assessing officer which suggests that the income chargeable to tax has escaped assessment in the case of the assessee for the relevant assessment year. Prior approval of specified authority is also required to be obtained before issuance of such notice by the Assessing Officer. (iv) It is proposed to provide that any information which hasbee....
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.... his possession evidence which reveal that the income escaping assessment, represented in the form of asset, amounts to or is likely to amount to fifty lakh rupees or more, notice can be issued beyond the period of three year but not beyond the period of ten years from the end of the relevant assessment year; * Another restriction has been provided that the notice under section 148 of the Act cannot 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 prescribed under the provisions of clause (b), as they stood immediately before the proposed amendment. * Since the assessment or reassessment or re-computation in search or requisition cases (where such search or requisition is initiated or made on or before 31st March 2021) are to be carried out as per the provision of section 153A, 153B, 153C and 153D of the Act, the aforesaid time limitation shall not apply to such cases. * It is also proposed that for the purposes of computing the period of limitation for issue of section 148 notice, the time or extended time allowed to ....
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....se 36 of the Bill seeks to amend section 148 of the Income-tax Act relating to issue of notice where income has escaped assessment. It is proposed to substitute the said section so as to provide that 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 order passed 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 he is assessable under this Act during the previous year corresponding to the relevant assessment year, in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed; and the provisions of this Act shall, so far as may be, apply accordingly as if such return were a return required to be furnished under section 139, provided that no notice under the said section shall be issued unless there is information with the Assessing Officer which suggests that the income chargeable to tax has escaped assessment in the case of the ....
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.... 151. This amendment will take effect from 1st April, 2021. Clause 37 of the Bill seeks to insert a new section 148A in the Income-tax Act relating to Conducting inquiry, providing opportunity before issue of notice under section 148. It is proposed to insert a new section 148A, which seeks to provide that the Assessing Officer shall, before issuing any notice under section 148, - (a) conduct any enquiry, if required, with the prior approval of specified authority, with respect to the information which suggests that income chargeable to tax has escaped assessment; (b) provide an opportunity of being heard to the assessee, with the prior approval of specified authority, by serving upon him a notice to show cause within such time, as may be specified in the notice, being not less than seven days but not exceeding thirty days from the date on which such notice is issued, or such time, as may be extended by him on the basis of an application in this behalf, as to why a notice under section 148 should not be issued on the basis of information which suggests that income chargeable to tax has escaped assessment in his case for the relevant assessment year and results of enquir....
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.... of accounts 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 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 prescribed under the provisions of clause (b), as they stood immediately before the commencement of the Finance Act, 2021. Further, the provisions of this section shall not apply to cases where a notice under section 153A or section 153C read with section 153A is required to be issued in relation to a search initiated under section 132 or books of account, other documents or any assets requisitioned under section 132A on or before the 31st day of March, 2021 and for the purposes of computing the period of limitation as per this section, the time or extended time allowed to the assessee, as per show-cause notice under clause (b) of section 148A; or the period during which the proceeding under section 1....
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.... income chargeable to tax, in the case of an assessee, has escaped assessment for any assessment year, the Assessing Officer may, subject to the provisions of sections 148 to 153, assess or reassess such income or recompute the loss or the depreciation allowance or any other allowance or 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.". 41. For section 148 of the Income-tax Act, the following section shall be substituted, namely:- "148. 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 1....
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....ner or Commissioner, that any books of account or documents, seized or requisitioned under section 132 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." 42. After section 148 of the Income-tax Act, the following section shall be inserted, namely:- "148A. The Assessing Officer shall, before issuing any notice under section 148,- (a) conduct any enquiry, if required, with th....
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....formation contained therein, relate to, the assessee. Explanation.-For the purposes of this section, specified authority means the specified authority referred to in section 151." 43. For section 149 of the Income-tax Act, the following section shall be substituted, namely:-- '149. (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 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-....
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....ies or issuance of show-cause notice or passing of order under section 148A" shall be inserted." 9. As, despite the substituted Sections 147 to 151 of the Income Tax Act, 1961 coming into force on 1st April, 2021, the respondents issued reassessment notices to the petitioners-assessees under the erstwhile Sections 148 to 151 of the Income Tax Act, 1961 relying on Explanations in the Notifications dated 31st March, 2021 and 27th April, 2021, the petitioners filed the present writ petitions challenging the legality and validity of the said Explanations as well as the reassessment notices issued pursuant thereto. 10. In the present batch of writ petitions, this Court passed interim stay orders. The relevant portion of one such interim order passed in W.P.(C) 6442/2021 is reproduced hereinbelow:- ".......Learned counsel for the petitioners states that the impugned notices are invalid in the eyes of law and void from inception as they were issued without following the process of issuance of prior notice under section 148A of the Act. He submits that the impugned notices are invalid as they have been issued under the pre-amended provisions of the Act, which were no longer in force on....
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....nterpretation, namely, that any action taken post the amendment of a procedural section would have to abide by the new procedures stipulated in the amended Act. Further, this Court is of the prima facie view that by virtue of a notification, which is a delegated legislation, the date for implementation of statutory provision, as stipulated in the Act, cannot be varied or changed. This Court is also of the prima facie opinion that Section 6 of the General Clauses Act, 1897 offers no assistance to the respondents as the new Section 148A demonstrates an intent 'to destroy' the old procedure. Consequently, following the interim orders passed by the learned predecessor Division Bench in Mon Mohan Kohli vs. Assistant Commissioner of Income Tax & Anr., W.P. (C) 6176/2021 dated 07th July, 2021 as well as similar interim order passed by the Bombay High Court, this Court directs that there shall be a stay of the operation of the impugned notices dated 09th June, 2021, 30th June, 2020 and 28th June, 2020 passed in W.P. (C) 6442/2021, 6443/2021 and 6451/2021 respectively..." ARGUMENTS ON BEHALF OF THE PETITIONERS 11. Mr. S. Ganesh and Mr. Percy Pardiwalla, learned Senior counsel as we....
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....n under Section 1(3), consequently, Section 121 in its amended form came into force with effect from 27-1-2004." 13. Learned counsel for petitioners pointed out that as per clause (a) of the new Section 149, reassessment proceedings could be initiated within three years from the end of relevant Assessment Year and as per clause (b), the reassessment proceedings, in exceptional circumstances, could be initiated within ten years from the end of relevant year; however, the extended time limit of ten years was fettered with preconditions, as under: a. The Assessing Officer has in his possession books of accounts or other documents or evidence; b. Such documents/evidence in possession of the Assessing Officer reveal escapement of income chargeable to tax in the form of an 'asset'; c. Such 'asset', as defined, amounts to Rs. 50 lakhs or more. 14. Learned counsel for petitioners pointed out that this Court in C.B. Richards Ellis Mauritius Ltd. vs. Assistant Director of Income-Tax: 208 Taxman 322 (Delhi), while interpreting the applicability of an earlier amendment to Section 149 of the Income Tax Act, 1961 vide Finance Act, 2001, (whereby the earlier existing time limit of ten yea....
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....Act would be of sufficient amplitude to cover cases of implied repeal. This Court stated: "The next question is whether the application of that principle could or ought to be limited to cases where a particular form of words is used to indicate that the earlier law has been repealed. The entire theory underlying implied repeals is that there is no need for the later enactment to state in express terms that an earlier enactment has been repealed by using any particular set of words or form of drafting but that if the legislative intent to supersede the earlier law is manifested by the enactment of provisions as to effect such supersession, then there is in law a repeal notwithstanding the absence of the word 'repeal' in the later statute." (at page 483) Similarly in Ratan Lal Adukia v. Union of India, [1989] 3 SCC 537, this Court held that the substituted Section 80 of the Code of Civil Procedure repealed by implication, insofar as the railways are concerned, Section 20 of the self-same code. In so holding, this Court stated:- "The doctrine of implied repeal is based on the postulate that the legislature which is presumed to know the existing state of the law did not i....
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....ce two different schemes governing the initiation of reassessment proceedings, which were substantially different from each other and thus could not co-exist at the same time. 20. Learned counsel for the petitioners submitted that the impugned reassessment notices issued between 1st April, 2021 and 30th June, 2021 had been issued in violation of the mandatory procedure prescribed under Section 148A of the Income Tax Act, 1961, as substituted by the Finance Act, 2021. They submitted that though the new Section 148A gave a legislative recognition to the procedure laid down in various judicial precedents such as GKN Driveshafts (India) Ltd. v. Income Tax Officer & Ors., 259 ITR 19 (SC) and created a vested right in favour of the assessee of being heard prior to issuance of notice under Section 148 as well as receipt of formal order considering the objections with inbuilt check in the form of mandatory sanction by the prescribed authority under Section 151 of the Income Tax Act, 1961, yet the impugned notices had been issued in violation of the same. 21. They emphasised that in the present batch of cases, the Revenue had not followed the procedure prescribed under Section 148A and no....
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.... be construed more liberally in favour of the State than peace time legislations. They stated that in State of Bombay vs. Virkumar Gulabchand Shah, AIR 1952 SC 335, the Supreme Court had held as under:- "16. It is also perhaps relevant to note that the term which was under consideration in those cases occurred in a war-time measure, namely, a Proclamation promulgated on the 4th of August, 1914, the day on which the first world war started. There is authority for the view that war-time measures, which often have to be enacted hastily to meet a grave pressing national emergency in which the very existence of the State is at stake, should be construed more liberally in favour of the Crown or the State than peace time legislation....." 25. Learned counsel for respondents submitted that Section 3(1) of Relaxation Act, 2020 was an example of conditional legislation and not delegated legislation. They emphasised that jurisprudentially, conditional legislation is treated at par with plenary legislation and therefore is immune from attack on grounds on which delegated legislation can be attacked. According to them, the petitioners had failed to keep the said distinction in mind in the in....
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....ss was to take effect.... 26. What is, however, relevant is that the power to bring anAct into force as well as the power to grant exemption are both treated, without a doubt, as belonging to the category of conditional legislation. Very often the legislature makes a law but leaves it to the executive to prescribe a date with effect from which date the Act shall come into force. As a matter of fact, such a course has been adopted even in the case of a constitutional amendment, to wit, the Constitution (Forty-fourth Amendment) Act, 1978, insofar as it pertains to amendment of Article 22 of the Constitution. The power given to the executive to bring an Act into force as also the power conferred upon the Government to exempt persons or properties from the operation of the enactment are both instances of conditional legislation and cannot be described as delegated legislation." 26. They further submitted that Section 3(1) of Relaxation Act, 2020 creates a legal fiction by virtue of which the Revenue was entitled to invoke Section 148 of the Income Tax Act, 1961, as it existed prior to 31st March, 2021 during the extended period between 1st April, 2021 and 30th June, 2021. They submi....
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....ion or compliance of 'such action' which would have otherwise expired between 20th March, 2020 and 31st March, 2021. In support of their submission, they relied upon the judgment passed by the Supreme Court in M. Venugopal vs. Divisional Manager, Life Insurance Corporation of India, Machilipatnam, A.P. & Anr., (1994) 2 SCC 323, wherein it has been held as under:- "11. The effect of a deeming clause is well-known. Legislature can introduce a statutory fiction and courts have to proceed on the assumption that such state of affairs exists on the relevant date. In this connection, one is often reminded of what was said by Lord Asquith in the case of East End Dwellings Co. Ltd. v. Finsbury Borough Council that when one is bidden to treat an imaginary state of affairs as real, he must surely, unless prohibited from doing so, also imagine as real the consequences and incidents which inevitably have flowed from it - one must not permit his "imagination to boggle" when it comes to the inevitable corollaries of that state of affairs. In view of the amendments aforesaid introduced in Section 48 it has to be held that Regulation 14 referred to above in respect of termination of the service o....
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.... it by Parliament, it shall not be controlled or overridden by any other provision unless specifically provided for. Out of the allowable deductions, the legislature consciously earmarked certain deductions from time to time and included them in the ambit of Section 43-B so as to subject such deductions to conditionality of actual payment. Such conditionality may have the inevitable effect of being different from the theme of mercantile system of accounting on accrual of liability basis qua the specific head of deduction covered therein and not to other heads. But that is a matter for the legislature and its wisdom in doing so." 32. Consequently, according to them, in case of conflict between the Relaxation Act, 2020 and the Income Tax Act, 1961, Relaxation Act, 2020 would prevail. 33. They submitted that even the Finance Act, 2021 did not apply to the substituted Sections 147 to 151 of the Income Tax Act, 1961 retrospectively and was applicable only with effect from 1st April, 2021. They further submitted that Section 147, being a right to assess, is a substantive right, while Sections 148 to 151 are the machinery provisions. According to them, Finance Act, 2021 had amended the ....
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....liations. Shortly before Puerto Rico's one-year statute of limitations would have expired, a class action was filed against petitioners on respondents' behalf under 42 U.S.C. § 1983. Subsequently class certification was denied because the class was not sufficiently numerous. The parties agree that the statute of limitations was tolled during the pendency of the § 1983 class action, but they disagree as to the effect of the tolling. [This opinion uses the word "tolling" to mean that, during the relevant period, the statute of limitations ceases to run. "Tolling effect" refers to the method of calculating the amount of time available to file suit after tolling has ended. The statute of limitations might merely be suspended; if so, the plaintiff must file within the amount of time left in the limitations period. If the limitations period is renewed, then the plaintiff has the benefit of a new period as long as the original. It is also possible to establish a fixed period such as six months or one year during which the plaintiff may file suit, without regard to the length of the original limitations period or the amount of time left when tolling began.] Did the one-ye....
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....would allow notices to be issued and proceedings to be instituted, since by operation of Section 3(1) of Relaxation Act, 2020, a right had accrued in favour of the Revenue to re-open the assessment within an extended time period in such cases where limitation to reopen under Section 148/149 expired on 31st March, 2021. They submitted that by virtue of Section 6(c) of the General Clauses Act, 1897, the mere substitution of the erstwhile Section 148 did not take away the aforesaid incurred right. According to them, by virtue of Section 6(c) of the General Clauses Act, 1897, in all such cases wherein the limitation for issuance of notice under Section 148 was expiring on 31st March, 2021, the Revenue could initiate proceedings for the re-opening of assessment under the erstwhile Section 148, as if the same had not been substituted. In support of their submission, learned counsel for the respondents relied upon the judgment passed by the Supreme Court in T.S. Baliah vs. T.S. Rangachari, Income Tax Officer, Central Circle VI, Madras, (1969) 3 SCR 65 wherein it has been held as under:- "....But when the repeal is followed by fresh legislation on the same subject the Court would undoubt....
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....ssessment, but did not otherwise touch or affect the applicable provisions which mandatorily had to be complied with in respect of such reassessment. SUR-REJOINDER 41. In sur-rejoinder, learned counsel for the respondents submitted that Allahabad High Court in Ashok Kumar Agarwal Vs. Union of India through its Revenue Secretary North Block (supra) had erroneously held that Section 3(1) of Relaxation Act, 2020 was meant to protect proceedings already underway or that may have become time-barred between 20th March, 2021 and 30th June, 2021. They pointed out that it was not the impugned Notifications but Section 3(1) of Relaxation Act, 2020 which permitted extension of time for compliance or completion of action which expired between 20th March, 2020 and 31st March, 2021 to be extended to a date beyond 31st March, 2021. Therefore, according to them, fixation of a date beyond 31st March, 2021 was, in fact, permitted by the principle legislation - the Relaxation Act, 2020 itself. COURT'S REASONING AS THE LEGISLATURE HAS PERMITTED RE-ASSESSMENT TO BE MADE ONLY IN ACCORDANCE WITH THE SUBSTITUTED PROVISIONS, IT CAN ONLY BE DONE IN THIS MANNER, OR NOT AT ALL. 42. Having heard learned co....
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....MAKE OR CHANGE LAW OF THE LAND NOR CAN IT IMPEDE THE IMPLEMENTATION OF LAW MADE BY THE PARLIAMENT. 46. Upon perusal of Section 3(1) of Relaxation Act, 2020, this Court is of the view that it extends only the time lines. Section 3(1) of the Relaxation Act, 2020 stipulates that where, any time limit has been stipulated in a specified Act which falls between the period 20th day of March, 2020 and 31st day of December, 2020 for the completion or compliance of such action as issuance of any notice under the provisions of the specified Acts and where completion or compliance of such action has not been made within such time, then the time limit for completion or compliance of such action shall, notwithstanding anything contained in the specified Acts, stand extended. It is important to bear in mind that Section 3(1) of the Relaxation Act, 2020 does not empower the Central Government to postpone the applicability of any provision which has been enacted from a particular date. There is a difference between extension of time of an action which is getting time barred and applicability of a provision which has been enacted and notified by the Legislature. Relaxation Act, 2020 nowhere delegat....
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.... cannot override the Act either by exceeding the authority or by making provisions inconsistent with the Act. The distinction between conditional legislation or delegated legislation is irrelevant to the controversy at hand, as the person to whom the power is entrusted in either situation can do nothing beyond the limits which circumscribe the power3. Subordinate legislation cannot be contrary to the parent statute4. Consequently, this Court is respectfully not in agreement with the finding of Chhattisgarh High Court in Palak Khatuja (supra) that the legislative delegation exercised by the Central Government by impugned Notifications to uphold the mechanism as prevailing prior to March, 2021 is not in conflict with any Act. To be fair to Chhattisgarh High Court, there was no challenge in the petitions filed before it to the legality and validity of the impugned Notifications dated 31st March, 2021 and 27th April, 2021. On the contrary, this Court is in agreement with the views of the Allahabad High Court and Rajasthan High Court (Bench at Jaipur) in Ashok Kumar Agarwal (supra) and Bpip Infra Private Limited vs. Income Tax Officer, Ward 4(1), S.B. Civil Writ Petition 13297/2021, res....
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....ction 149 of the Income Tax Act, 1961 vide Finance Act, 2001, whereby the earlier existing time limit of ten years was reduced to six years, has held that the reduced time limit applied with effect from the Finance Act coming into force. The relevant portion of the said judgment is reproduced hereinbelow:- "7. Having considered the contentions of the parties and the legal issues raised therein, we feel that the petitioner is entitled to succeed. Section 6 of General Clauses Act deals with effect of repeal of an enactment and stipulates that unless a different intention appears, the repeal will not affect the previous operation of any enactment so repealed or any right, privilege, obligation or liability acquired, accrued or affect any penalty, investigation, legal proceeding or remedy. The said Section deals with substantive rights and liabilities. It is also subject to intention to the contrary. Intention can be implied. The procedural law when it is repealed should be applied from the date the new provision or procedure comes into force. The reason is that no person has a vested right or an accrued right in the procedure. No obligation or liability is normally imposed by a proc....
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....question in the present case. The issue or question in the present case relates to assessment i.e. initiation of re-assessment proceedings and whether the time/limitation for initiation of the re-assessment proceedings specified by the Finance Act, 2001 is applicable. We are not determining/deciding the liability to tax but have to adjudicate and decide whether the reassessment notice is beyond the time period stipulated. This is a matter/issue of procedure i.e. the time period in which the assessment or re-assessment proceedings can be initiated. Thus the time period/limitation period prescribed on the date of issue of notice will apply. In our opinion, the answer is clear and has to be in affirmative, i.e. in favour of the assessee. 13. This question is not debatable or res integra and was examined and answered with lucid and clear reasoning in the opinion expressed by Hidayatullah, J. on behalf of himself and Raghubar Dayal, J. in S.C. Prashar v.Vasantsen Dwarkadas Hunger for Investment Trust Ltd. [1963] 49 ITR 1 (SC). The relevant portion reads:- "93. ....If the 1948 Amendment could be treated as enabling the Income Tax Officer to take action at any point of time in respect....
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....ement of a liability to the State which though existing remained to be enforced." 54. Consequently, in the present cases to ignore the legislative intent of Finance Act, 2021 would neither be legal nor reasonable. IT IS A PRINCIPLE OF LEGAL POLICY THAT CHANGES IN THE SUBSTANTIVE LAW SHOULD NORMALLY NOT TAKE EFFECT RETROSPECTIVELY EXCEPT IN RELATION TO PROCEDURAL MATTERS. 55. It is a cardinal principle of construction that every statute is prima facie prospective, unless it is expressly or by necessary implication made to have retrospective operation5. There is a presumption of prospectivity articulated in the legal maxim 'nova constitutio futuris formam imponere debet non praeteritis', i.e., 'a new law ought to regulate what is to follow, not the past', and this presumption operates unless shown to be contrary by express provision in the statute or is otherwise discernible by necessary implication6. 56. In contrast to statutes dealing with substantive rights, statutes dealing with merely matters of procedure are presumed to be retrospective, unless such a construction is textually inadmissible7. As stated by Lord Denning: "The rule that an Act of Parliament is not to be given r....
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....stantive in the context of retrospectivity needs to be considered by the reference to the facts of each particular case. 59. The same provision may be procedural in one context and substantive in another. Lord Brightman said in Yew Bon Tew v. Kenderaan Bas Mara. [1983] 1 AC 553 at 558, '....these expressions "retrospective" and "procedural," though useful in a particular context, are equivocal and therefore can be misleading ... and an Act which is procedural in one sense may in particular circumstances do far more than regulate the course of proceedings, because it may, on one interpretation, revive or destroy the cause of action itself....' Consequently, the Court will have to examine the intent, purpose and scope of the amendments. THE INTENT, PURPOSE AND SCOPE OF THE AMENDMENTS INTRODUCED BY THE FINANCE ACT, 2021 WAS TO PROTECT THE RIGHTS AND INTERESTS OF ASSESSEES AS WELL AS PROMOTE PUBLIC INTEREST. IT IS SETTLED LAW THAT IF LEGISLATION IS INTRODUCED TO REMEDY THE DEFECTIVE RULE AND NO ONE SUFFERS THEREBY, IT IS SENSIBLE TO APPLY IT TO PENDING PROCEEDINGS. 60. The Finance Minister in her Budget Speech clearly stated that the object behind the amendment to the Income Tax Act....
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....ement of income; (b) in absence of approval from the specified authority & (c) without following the procedure prescribed under Section 148A of the Income Tax Act, 1961. Moreover, the said notice issued under Section 148 was now required to be served along with order passed under Section 148A of the Income Tax Act, 1961; c. Section 148A: New provision was introduced in the Income Tax Act, 1961, inter alia prescribing, (a) Assessing Officer to conduct inquiry, if required, with prior approval; (b) opportunity of heard to be given to the assessee, with prior approval; (c) Assessing Officer to consider reply of assessee; and (d) order to be passed as to whether it was a fit case for issuance of notice under Section 148 of the Income Tax Act, 1961; d. Section 149: The provisions governing time limit for issuance of notice under Section 148 of the Income Tax Act, 1961 were replaced with new provisions, inter alia, reducing the permissible time limit for issuance of such notice to three years [and ten years only in exceptional cases] and further changing the earlier existing criteria governing such time limit; e. Section 151: The earlier existing provision prescribi....
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....Court in M.P. Steel Corporation v. CCE (2015) 7 SCC 58 has any application to the present batch of matters. 69. Admittedly, time limit to issue notices for re-assessment under the Income Tax Act, 1961 stood expired long time ago. The Legislature by virtue of the Relaxation Act, 2020 had extended the time limit till 31st December, 2020 and had given discretion to the executive to issue Notification to extend the timeline alone. However, extending the time limit or giving power to issue Notification to extend the time cannot be taken to be a vested right of the respondents. 70. Consequently, this Court is of the view that vested right in favour of the Revenue stood exhausted/expired long ago and no vested right of the respondents has been infringed leave alone violated. THE ARGUMENT OF THE RESPONDENT THAT THE SUBSTITUTIONS MADE BY THE FINANCE ACT, 2021 IS NOT APPLICABLE TO PAST ASSESSMENT YEARS, AS IT IS SUBSTANTIAL IN NATURE IS CONTRADICTED BY ITS OWN CIRCULAR 549 OF 1989 AND ITS OWN SUBMISSION THAT FROM 1ST JULY, 2021, THE SUBSTITUTIONS MADE BY THE FINANCE ACT, 2021 WILL BE APPLICABLE. 71. Circular 549 of 1989 issued by the CBDT explaining the provisions of the Direct Tax Laws ....
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....the escaped income was Rs. 50,000 or more in each year. These old provisions, however, have no application now from 1-4-1989 onwards)." 72. On the one hand, the Respondents are contending that the amendment made by the Finance Act, 2021 shall not be applicable to past assessment years, while on the other hand, they are contending that from 1st July, 2021, the amendments made by the Finance Act, 2021 will be applicable. This is contradictory inasmuch as for three months starting on or after 1st April, 2021, the amendment made by the Finance Act, 2021 shall be considered as substantive in nature and hence applicable prospectively, while from 1st July, 2021, the amendment made by the Finance Act, 2021 will be considered as procedural and hence will be applicable retrospectively for any assessment year including earlier years. 73. Keeping in view its own submission and past precedent to treat Sections 147 to 152 of the Income Tax Act, 1961 as procedural, the respondents are estopped from contending to the contrary. IF THE ARGUMENT OF THE RESPONDENTS THAT THE EXPLANATION IN NOTIFICATION NO. 20 DATED 31ST MARCH, 2021 EXTENDED THE APPLICABILITY OF OLD PROCEDURE OF REASSESSMENT BEYOND 3....
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....to apply from 1st April, 2021 to 30th June, 2021. The erstwhile law on reopening did not cover search/survey cases. Consequently, for the search/survey done from 1st April to 30th June, there can neither be an assessment under sections 153A/153C or under 147, which cannot be the case. Further, Sections 148, 148A and 149 specifically cover cases where search/survey is done after 1st April, 2021. If department's interpretation is accepted, this specific date in all three Sections will have to be changed and read as 1st July, 2021, which cannot be done. Moreover, as the new provisions seek to bring uniformity between regular reassessments and search/survey cases, it follows that the cut off date for initiation of reassessment proceedings even for regular reassessment is 1st April, 2021. REVENUE CANNOT RELY ON COVID-19 FOR CONTENDING THAT THE NEW PROVISIONS SHOULD NOT OPERATE DURING THE PERIOD 1st APRIL, 2021 TO 30th JUNE, 2021. 76. When Finance Minister moved the Finance Bill, 2021 in Parliament on 1st February, 2021 and the Finance Act, 2021 was enacted in March, 2021, COVID-19 was widely prevalent and Parliament was fully aware of the same. Nevertheless, with the objective of prom....
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....ed or overridden. This non-obstante clause cannot, therefore, possibly be relied upon by the Revenue to contend that a Notification issued under Section 3 of Relaxation Act, 2020 overrides any provision of the Income-tax Act, 1961 other than the applicable time-lines. Any Notification issued under Relaxation Act, 2020 cannot possibly have a reach and ambit wider than the Relaxation Act, 2020 itself for that would be contrary to the settled canons of construction of statutes. 79. It is also necessary to appreciate that the Relaxation Act, 2020 was enacted long before the Finance Act, 2021. Consequently, it cannot possibly be contended that any provision of Relaxation Act, much less of any Notification issued thereunder, can be so construed as amending or modifying or excluding the applicability of the yet to be enacted Finance Act, 2021. Further, as the Petitioners are not questioning any of the time extensions made by or under Relaxation Act, 2020, the said non-obstante clause is totally irrelevant to controversy at hand. THE REVENUE'S CHOOSING AND PICKING OF TWO TERMS VIZ. "SUCH ACTION" & "EXTENSION/EXTENDED" IS CONTRARY TO BASIC PRINCIPLES OF INTERPRETATIONS WHICH PROHIBITS SEL....
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....ntly, it cannot be contended that any provision of the Relaxation Act, 2020, much less of any Notification issued thereunder, should be so construed as amending or modifying or excluding the applicability of the yet to be enacted Finance Act, 2021. THE CONSEQUENCE OF NOT MENTIONING SUBSTITUTED SECTION 147 OF THE INCOME TAX ACT, 1961 IN THE IMPUGNED EXPLANATIONS. 84. Even if it is assumed that the impugned Explanations in the two Notifications are valid, still the impugned notices are bad in law, as the impugned Explanations only seek to effectuate the erstwhile Sections 148, 149 and 151 and they do not cover Section 147. However, the conditions provided for in the substituted Section 147 were not considered while issuing notices by the Assessing Officer. In fact, the said Section 147 is itself subject to Sections 148 to 153, which would include Section 148A. THE "LEGAL FICTION" ARGUMENT IS WITHOUT ANY FOUNDATION. THERE IS NO PROVISION IN RELAXATION ACT STATING THAT IF THE "ACTION" IS TAKEN WITHIN THE EXTENDED TIME LIMIT, IT WOULD BE DEEMED TO HAVE BEEN TAKEN BEFORE THE EXPIRY OF THE ORIGINAL (UN-EXTENDED) TIME LIMIT. 85. The "legal fiction" argument is without any foundation. A....
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....changed. The time period for both assessment as well as reassessment was extended under Notifications issued under Relaxation Act, 2020 itself. If the Respondent's stand is to be accepted that all such assessments had to be made under the unamended law, then assessments orders should not have been passed under the amended Section 144B of the Act. However, all the assessments after 31st March, 2021 have been made following the new procedure prescribed for the assessment after the amendment. In fact, it is pertinent to mention that CBDT itself vide its order No. 187/3/2020-ITA-1 dated 31st March, 2021 has directed that all pending assessments as on 31st March, 2021 are to be completed under Section 144 B i.e. the new procedure applicable w.e.f. 01st April, 2021. 89. Similar to assessment and reassessment, the time limit for levying penalty was also extended under Relaxation Act itself even up to 31st March, 2022. If the clock has stopped or fiction has been created as is being contended by the Respondents, then all the penalty orders passed under Section 274(2A) - Faceless Penalty Scheme till 31st March, 2022, following the new procedure will be bad in law. Consequently, it cannot b....
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....ION 6 OF THE GENERAL CLAUSES ACT SAVES NOTICES ISSUED UNDER SECTION 148 POST 1ST APRIL, 2021 IS UNTENABLE IN LAW, AS IN THE PRESENT CASE, THE REPEAL IS FOLLOWED BY A FRESH LEGISLATION ON THE SAME SUBJECT AND THE NEW ACT MANIFESTS AN INTENTION TO DESTROY THE OLD PROCEDURE. 93. The provisions of the Finance Act, 2021 have not only repealed the erstwhile provisions of Sections 147, 148, 149 and 151 of the Income Tax Act, 1961 but also "substituted" them by new provisions. The process of 'substitution' consists of two steps: first, the rule is made to cease and the next, the new rule is brought into existence in its place. 94. 'Substitution' has to be distinguished from 'suppression' or a mere repeal of an existing provision. Substitution of a provision results in repeal of the earlier provision and its replacement by the new provision17. 95. Consequently, the submission of the revenue that Section 6 of the General Clauses Act saves notices issued under Section 148 of the Income Tax Act, 1961 is untenable in law, as in the present case, the repeal is followed by a fresh legislation on the same subject and the new Act manifests an intention to destroy the old procedure18. APPRECIATI....
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....by a fresh legislation on the same subject and the new Act manifests an intention to destroy the old procedure. Consequently, if the Legislature has permitted reassessment to be made in a particular manner, it can only be in this manner, or not at all. 101. The argument of the respondents that the substitution made by the Finance Act, 2021 is not applicable to past Assessment Years, as it is substantial in nature is contradicted by Respondents' own Circular 549 of 1989 and its own submission that from 1st July, 2021, the substitution made by the Finance Act, 2021 will be applicable. 102. Revenue cannot rely on Covid-19 for contending that the new provisions Sections 147 to 151 of the Income Tax Act, 1961 should not operate during the period 1st April, 2021 to 30th June, 2021 as Parliament was fully aware of Covid-19 Pandemic when it passed the Finance Act, 2021. Also, the arguments of the respondents qua non-obstante clause in Section 3(1) of the Relaxation Act, 'legal fiction' and 'stop the clock provision' are contrary to facts and untenable in law. 103. Consequently, this Court is of the view that the Executive/Respondents/Revenue cannot use the administrative power to issue ....
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....i, (1964) 6. SCR 876; Arjan Singh v. State of Punjab, (1969) 2 SCR 347; Ex,-Capt. K.C. Arora and Another v. State of Haryana and Others, (1984) 3 SCC 281; Mithilesh Kumari and Another v. Prem Bahadur Khare, (1989) 2 SCC 95; State of Madhya Pradesh and Others v. Rameshwar Rathod, (1990) 4 SCC 21; Shyam Sunder and Others v. Ram Kumar and Another, (2001) 8 SCC 24; Zile Singh v. State of Haryana and Others, (2004) 8 SCC 1; Gem Granites v. Commr. of Income Tax, (2005) 1 SCC 229; C. Gupta v. Glaxo-Smithkline Pharmaceuticals Ltd., (2007) 7 SCC 171; J.S. Yadav v. State of Uttar Pradesh and Another, (2011) 6 SCC 570 6. Monnet Ispat & Energy Ltd. v. Union of India & Ors., (2012) 11 SCC 1 7. Gardner v. Lucas (1878) 3 AC 582 (HL); Delhi Cloth & General Mills Co. Ltd. v. CIT, Delhi, AIR 1927 PC 242; Jose De Costa v. Bascora Sadashiva Sinai Narcornim, (1976) 2 SCC 917; Gurbachan Singh v. Satpal Singh, (1990) 1 SCC 445 8. Blyth v. Blyth, (1966) 1 All ER 524 9. A.G. v. Vernazza, (1960) 3 All ER 97; K. Eapin Chako v. Provident Fund Investment Company (P) Ltd., (1977) 1 SCC 583 10. Athlumney, Re, ex p Wilson [1898] 2 QB 54 per R S Wright J at 551-552; Kensinghton International Ltd. v. Republic ....