TaxTMI 
TaxTMI 
2022 (2) TMI 923
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....93, 25296, 25299, 25917, 25926, 26205, 26208, 26220, 26223, 26227, 26231, 26229, 26283, 26286, 26830, 26838, 26840, 26985, 27030, 27033, 27079, 27082, 27244, 27249, 27253, 27245, 27250, 27246, 27247, 27344, 27348, 27373, 27374, 27409, 27772, 27776, 27781, 27787, 27794, 27863, 27867, 27932, 27937, 28025, 28030, 28034, 28028, 28033, 28040, 28031, 28037, 28038, 28043, 28045, 28079, 28083, 28088, 28360, 28366, 28369, 28379, 28373, 23343 and 23345 of 2021, W.P.Nos.160, 163, 400, 603, 670, 672, 728, 729, 1058 and 1062 of 2022, W.P.(MD)Nos. 12919, 12927, 12928, 13813 to 13817, 13731, 13980 to 13985, 14258, 17371, 17372, 17669 to 17672, 17928 to 17931, 20909, 20910, 22454 and 22455 of 2021 and W.M.P.Nos. 15902, 15904, 15908, 15909, 22047, 16478, 16606, 16485, 16609, 16611, 16490, 16614, 22043, 16854, 16858, 16862, 16863, 16868, 16870, 16873, 16875, 16876, 16877, 16879, 16880, 16883, 16885, 23781, 23789, 23787, 23784, 23786, 17197, 17202, 17203, 17219, 17221, 17227, 17228, 17282, 17283, 17286, 17287, 17479, 17481, 17489, 17492, 23821, 17539, 17542, 17543, 22046, 17555, 17559, 17561, 17630, 17631, 17632, 22980, 17659, 17660, 17854, 17855, 17856, 22981, 18103, 18104, 18105, 18108, 18110, 1811....
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....Hon'ble Mr.Munishwar Nath Bhandari, Acting Chief Justice And The Hon'ble Mr.Justice P.D.Audikesavalu For the Petitioner : Mr. S.Ganesh, Senior Counsel assisted by Mr. Suhrith Parthasarathy For the Respondent 1 : Mr. R.Sankaranarayanan, Assistant Solicitor General of India assisted by Mrs. Hemamuralikrishnan, Senior Standing Counsel For the Respondent 2 : Mr. A.P.Srinivas, Senior Standing Counsel COMMON ORDER HON'BLE ACTING CHIEF JUSTICE By this batch of writ petitions a challenge is made to the Explanations A(a)(ii)/A(b) to the Notification No.20, dated 31.3.2021 and Notification No.38, dated 27.4.2021, inasmuch as they extend the applicability of the provisions of Sections 148, 149 and 151 of the Income Tax Act, 1961 (for brevity, "the Act of 1961") as it stood as on 31.3.2021, to the period beyond 31.3.2021. A challenge to the reassessment notices issued under Section 148 of the Act of 1961 has also been made referring to the amendment made in Sections 147 to 151 of the Act of 1961 with effect from 1.4.2021 by the Finance Act, 2021. 2. A challenge to Explanations A(a)(ii)/A(b) to the Notification No.20, dated 31.3.2021 and Notification No.38, date....
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....sment and which comes to his notice subsequently in the course of the proceedings under this section, or recomputed the loss or the depreciation allowance or any other allowance, as the case may be, for the assessment year concerned (hereafter in this section and in sections 148 to 153 referred to as the relevant assessment year): Provided that where an assessment under sub-section (3) of section 143 or this section has been made for the relevant assessment year, no action shall be taken under this section after the expiry of four years from the end of the relevant assessment year, 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 asses....
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.... asset (including financial interest in any entity) located outside India. Explanation 3.-For the purpose of assessment or reassessment 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, notwithstanding that the reasons for such issue have not been included in the reasons recorded under sub-section (2) of section 148. Explanation 4.-For the removal of doubts, it is hereby clarified that the provisions of this section, 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. 148. Issue of notice where income has escaped assessment (1) Before making the assessment, reassessment or recomputation 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 correspondi....
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.... (b) or clause (c); (b) if four years, but not more than six years, have elapsed from the end of the relevant assessment year unless the income chargeable to tax which has escaped assessment amounts to or is likely to amount to one lakh rupees or more for that year; (c) if four years, but not more than sixteen years, have elapsed from the end of the relevant assessment year unless the income in relation to any asset (including financial interest in any entity) located outside India, chargeable to tax, has escaped assessment. Explanation.-In determining income chargeable to tax which has escaped assessment for the purposes of this sub-section, the provisions of Explanation 2 of section 147 shall apply as they apply for the purposes of that section. (2) The provisions of 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, t....
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....ioner, as the case may be, being satisfied on the reasons recorded by the Assessing Officer about fitness of a case for the issue of notice under section 148, need not issue such notice himself." AMENDED PROVISIONS APPLICABLE ON AND FROM 1.4.2021: 147. Income escaping assessment. If any 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 purpose 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. 148. Issue of notice where income has escaped assessmen....
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....ner, that any money, bullion, jewellery or other valuable article or thing, seized or requisitioned under section 132 or section 132A in case of any other person on or after the 1st day of April, 2021, belongs to the assessee; or (iv) the Assessing Officer is satisfied, with the prior approval of Principal Commissioner 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.....
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....n or after the 1st day of April, 2021, belongs to the assessee; or (c) the Assessing Officer is satisfied, with the prior approval of the Principal Commissioner or Commissioner that any books of account or documents, seized in a search under section 132 or requisitioned under 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. Explanation.-For the purposes of this section, specified authority means the specified authority referred to in section 151. 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 am....
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...., reference or revision or by a Court in any proceeding under any other law. (2) The provisions of sub-section (1) shall not apply in any case where any such assessment, reassessment or recomputation as is referred to in that sub-section relates to an assessment year in respect of which an assessment, reassessment or recomputation could not have been made at the time the order which was the subject-matter of the appeal, reference or revision, as the case may be, was made by reason of any other provision limiting the time within which any action for assessment, reassessment or recomputation may be taken. 151. Sanction for issue of notice. Specified authority for the purposes of section 148 and section 148A shall be,- (i) Principal Commissioner or Principal Director or Commissioner or Director, if three years or less than three years have elapsed from the end of the relevant assessment year; (ii) Principal Chief Commissioner or Principal Director General or where there is no Principal Chief Commissioner or Principal Director General, Chief Commissioner or Director General, if more than three years have elapsed from the end of the relevant ....
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.... or the Finance Act,1994, as the case may be, shall have the same meaning respectively assigned to them in that Act. CHAPTER II RELAXATION OF CERTAIN PROVISIONS OF SPECIFIED ACT 3. (1) Where, any time-limit has been specified in, or prescribed or notified under, the specified Act which falls during the period from the 20th day of March, 2020 to the 31st day of December, 2020, or such other date after the 31st day of December, 2020, as the Central Government may, by notification, specify 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, dep....
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....rs conferred by subsection (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, 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 subsection (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 o....
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..... 966(E) dated the 27th February, 2021 and vide number S.O. 1432(E) dated the 31st March, 2021, respectively (hereinafter referred to as the said notifications), the Central Government 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 I....
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....reassessment notices issued under Section 148 of the Act of 1961 and the Notifications dated 31.3.2021 and 27.4.2021. 10. Learned counsel for the petitioners submit that the detailed judgment on the issue has been given by the Allahabad High Court, followed by the Delhi High Court and other High Courts. Thus, the prayer is to apply the ratio propounded by those High Courts for challenge to the reassessment notices under Section 148 of the Act of 1961 and even the Explanations A(a)(ii)/A(b) to the Notification No.20, dated 31.3.2021 and Notification No.38, dated 27.4.2021 by analyzing the provisions of TOLA Act, 2020. It is under the circumstance that the Delhi High Court had even taken into consideration the argument of "legal fiction" made before it. The prayer is, accordingly, to either examine the matter afresh or apply the ratio laid down by the various High Courts on the issue. 11. Learned Additional Solicitor General submitted that the issue of "legal fiction" has not been properly decided by the Delhi High Court and, therefore, the argument in reference to it needs to be appreciated afresh. It is, however, admitted that if the argument in reference to legal fiction is ....
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.... in the cases where limitation still subsists and otherwise the judgment of the Allahabad High Court has been challenged by the Revenue before the Apex Court without exercising the powers pursuant to the liberty given therein. It is further submitted that if liberty, as prayed, for causing fresh reassessment notices under Section 148 of the Act of 1961, pursuant to the amended provision, is given, the petitioners would be subjected to discrimination when compared to those whose matters were taken before the Apex Court in view of the challenge to the judgment of the Allahabad High Court without causing a fresh notice under Section 148 of the Act of 1961, as amended. 15. We have considered the submissions made by learned counsel for the petitioners and also the prayer of the learned Additional Solicitor General. 16. We find that the Allahabad High Court while delivering the judgment on the issue had given liberty to the revenue for initiation of reassessment proceedings in accordance with the provisions of the Act, as amended by the Finance Act, 2021, after making all compliances as required by law. Thus, the prayer made by the learned Additional Solicitor General otherwise exi....
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....ence, both of any express provision in itself or to delegate the function to save applicability of the provisions of Sections 147, 148, 149 or 151 of the Act, as they existed upto 31st March, 2021. Plainly, the Enabling Act is an enactment to extend timelines only. Consequently, it flows from the above 1st April, 2021 onwards, all references to issuance of notice contained in the Enabling Act must be read as reference to the substituted provisions only. Equally there is no difficulty in applying the preexisting provisions to pending proceedings. Looked in that manner, the laws are harmonized. 67. It may also be not forgotten, a reassessment proceeding is not just another proceeding emanating from a simple show cause notice. Both, under the pre-existing law as also under the law enforced from 1st April, 2021, that proceeding must arise only upon jurisdiction being validly assumed by the assessing authority. Till such time jurisdiction is validly assumed by assessing authority-evidenced by issuance of the jurisdictional notice under Section 148, no reassessment proceeding may ever be said to be pending before the assessing authority. The admission of the Revenue authorities ....
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....ime has been granted till 31st March, 2022. In absence of any specific delegation made, to allow the delegate of the Parliament, to indefinitely extend such limitation, would be to allow the validity of an enacted law i.e. the Finance Act, 2021 to be defeated by a purely colourable exercise of power, by the delegate of the Parliament. 71. Here, it may also be clarified, Section 3(1) of the Enabling Act does not itself speak of reassessment proceeding or of Section 147 or Section 148 of the Act as it existed prior to 1st April, 2021. It only provides a general relaxation of limitation granted on account of general hardship existing upon the spread of pandemic COVID-19. After enforcement of the Finance Act, 2021, it applies to the substituted provisions and not the preexisting provisions. 72. Reference to reassessment proceedings with respect to pre-existing and now substituted provisions of Sections 147 and 148 of the Act has been introduced only by the later Notifications issued under the Act. Therefore, the validity of those provisions is also required to be examined. We have concluded as above, that the provisions of Sections 147, 148, 148A, 149, 150 and 151 sub....
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....ssessment proceedings initiated from 1st April, 2021 onwards. 76. Upon the Finance Act, 2021 enforced w.e.f. 1st April, 2021 without any saving of the provisions substituted, there is no room to reach a conclusion as to conflict of laws. It was for the assessing authority to act according to the law as existed on and after 1st April, 2021. If the rule of limitation permitted, it could initiate, reassessment proceedings in accordance with the new law, after making adequate compliance of the same. That not done, the reassessment proceedings initiated against the petitioners are without jurisdiction. 77. Insofar as the decision of the Supreme Court in the case of Ramesh Kymal vs. Siemens Gamesa Renewable Power (P.) Ltd. (supra) is concerned, we opine, the same is wholly distinguishable. Therein The Insolvency and Bankruptcy Code, 2016 was amended by the Parliament and a new Section 10A, was introduced, apparently again on account of the difficulties arising from the spread of pandemic COVID-19. That section reads as under: '10A. Notwithstanding anything contained in ss. 7, 9 and 10, no application for initiation of corporate insolvency resolution process....
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....that stood obliterated from the statute w.e.f. 31st March, 2021. 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 would be de hors any statutory basis. In absence of any express saving of the pre-existing laws, the presumption drawn in favour of that saving, is plainly impermissible. Also, no presumption exists that by notification issued under the Enabling Act, the operation of the pre-existing provision of the Act had been extended and thereby provisions of s. 148A of the Act (introduced by Finance Act, 2021) and other provisions had been deferred. Such Notifications did not insulate or save, the pre- existing provisions pertaining to reassessment under the Act. 80. In view of the above, all the writ petitions must succeed and are allowed. It is declared that the Ordinance, the Enabling Act and Sections 2 to 88 of the Finance Act, 2021, as enforced w.e.f. 1st April, 2021, are not conflicted. Insofar as the Explanation appended to clause A(a), A(b), and the impugned Notifications dated....
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....mathy vs. ITO, (2020) 275 taxman 25/195 CTR 543 (Mad)(HC), RK Upadhyay v. Shanabhai, (1987) 166 ITR 163 (SC); CIT v. Rameshwar Prasad, (1991) 188 ITR 291 (All HC); Dr. Onkar Dutt Sharma v. CIT, MANU/UP/0247/1966 : (1967) 65 ITR 359 (All HC)]. 44. This Court is of the view that had the intention of the Legislature been to keep the erstwhile provisions alive, it would have introduced the new provisions with effect from 1st July, 2021, which has not been done. Accordingly, the notices relating to any assessment year issued under Section 148 on or after 1st April, 2021 have to comply with the provisions of Sections 147, 148, 148A, 149 and 151 of the Income Tax Act, 1961 as specifically substituted by the Finance Act, 2021 with effect from 1st April, 2021. 45. Consequently, this Court is of the opinion that as the Legislature has permitted re-assessment to be made in this manner only, it can be done in this manner, or not at all. ... 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 i....
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.... the Government, but also in conflict with the provisions of the Income Tax Act, 1961 which had specifically made the new reassessment scheme applicable from 1st April, 2021. It is settled law that the delegation of authority must be express. There is no scope for any implied delegation of authority. The delegated authority must act strictly within the parameters of the authority delegated to it. The delegated authority 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 power. Subordinate legislation cannot be contrary to the parent statute. 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 ....
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....9;s 2015-16 to 2017-18 [with limitation upto March, 22 to 24], in case of two identically placed taxpayers (say A & B) with "information" of having asset above Rs. 50 lakh, Assessing Officer shall have absolute discretion to choose either the old or the new mechanism; c. 'doctrine of election' normally confers two separate alternative statutory powers/ remedies (like Sections 154, 147, 263) for same/similar cause, but same provision (Section 147) with two opposite procedure for same cause can never be envisaged and shall necessarily lead to manifest arbitrariness and conflict. 75. Also, the new scheme of reassessment provides for a uniform manner of reassessment of two categories of cases, namely, regular reassessments and search/ survey cases. Insofar as search/survey cases are concerned, the provisions are clear that the new scheme is to apply where the proceedings are initiated after 1st April, 2021 as Explanation 2 to Section 148 states that the Assessing Officer will be deemed to have 'information' for the purposes of Section 148/148A when search/survey is initiated on or after 1st April, 2021 and the first proviso to Section 148A states that ....
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....wever, there is no assumption that the act in question is deemed to have been performed within the original time limit, as wrongly contended by the learned counsel for the Respondents. For achieving that result, clear and unequivocal language was required in the Relaxation Act, 2020-which is missing. In fact, there is no provision in Relaxation Act, 2020 laying down 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. ... 97. This Court is of the view that as the Legislature has introduced the new provisions, Sections 147 to 151 of the Income Tax Act, 1961 by way of the Finance Act, 2021 with effect from 1st April, 2021 and as the said Section 147 is not even mentioned in the impugned Explanations, the reassessment notices relating to any Assessment Year issued under Section 148 after 31st March, 2021 had to comply with the substituted Sections. 98. It is clarified that the power of reassessment that existed prior to 31st March, 2021 continued to exist till the extended period i.e. till 30th June, 2021; however, the Finance Act, 2021 has merely chang....