TaxTMI 
TaxTMI 
TaxTMI 
2022 (10) TMI 83
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....has also prayed for relief that extension of time limit by the 2020 Act does not apply to notices issued under erstwhile Section 148 of the 1961 Act, after 01.04.2021. The petitioner also seeks a writ of certiorari for quashing the notice dated 30.06.2021 issued under Section 148 of the 1961 Act for the Assessment year 2016-17. In order to appreciate the petitioner's grievance, few relevant facts need mention, which are stated infra. 2. The petitioner filed the return of income for the assessment year 2016-17 on 30.07.2016 and declared a total income of Rs.7,84,730/-. The petitioner thereafter received notices dated 30.06.2021 under Section 148 of the 1961 Act for the assessment year 2016-17. 3. Section 147 of the 1961 Act as it stood prior to 01.04.2021 authorized the issuance of a notice under Section 148, if the Assessing officer had 'reason to believe' that income had escaped assessment. The existence of expression 'reason to believe' was sufficient to sustain a notice under Section 148 of the Act and it was necessary for any final determination to be made regarding escapement of income at that stage. 4. However, vide Finance Act, 2021, which came into force with effect from....
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....n clause (b); (d) decide, on the basis of material available on record including reply of the assessee, whether or not it is a fit case to issue a notice under section 148, by passing an order, with the prior approval of specified authority, within one month from the end of the month in which the reply referred to in clause (c) is received by him, or where no such reply is furnished, within one month from the end of the month in which time or extended time allowed to furnish a reply as per clause (b) expires: Provided that the provisions of this section shall not apply in a case where,- (a) a search is initiated under section 132 or books of account, other documents or any assets are requisitioned under section 132A in the case of the assessee on or after the 1st day of April, 2021; or (b) the Assessing Officer is satisfied, with the prior approval of the Principal Commissioner or Commissioner that any money, bullion, jewellery or other valuable article or thing, seized in a search under section 132 or requisitioned under section 132A, in the case of any other person on or after the 1st day of April, 2021, belongs to the assessee; or (c) the Assessing Officer is satisfied....
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....t, no notice under Section 148 of the 1961 Act could be issued beyond a period of four years from the end of relevant assessment year unless the income chargeable to tax had escaped assessment for the reason of the failure on the part of the assessee to disclose truly and fully all material facts necessary for assessment and in case, no such notice could be issued beyond a period of six years from the relevant assessment year. Section 151 of the Act mandates that where more than three years have lapsed from the end of relevant assessment year, the specified authority for the purposes of Section 148, 148A of the Act would be Principal Chief Commissioner or other Officers referred to in the provision. 9. Thus, on careful scrutiny of existing and substituted provisions, it is evident that major changes have been introduced. It is evident that for issuance of notice under Section 148 of the 1961 Act, fresh time lines have been prescribed. Under amended Section 147, the time limit is prescribed as 3 years unless income chargeable to tax, which has escaped assessment, amounts to or is likely to amount Rs.50 Lakhs or more in which time limits for issuance of notice under Section 148 is 1....
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.... 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 Act relates to passing of an order under sub-Section (13) of Section 144C for 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 At 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 subclause, the provisions of section 148, section 149 and section 151 of the Income-tax Act, as the case may be, as they stood as on the 31st day of March 2021, before the ....
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....stry of Finance, (Department of Revenue) No. 93/2020 dated the 31st December, 2020, No. 10/2021 dated the 27th February, 2021 and No. 20/2021 dated the 31st March, 2021, published in the Gazette of India, Extraordinary, Part-II, Section 3, Subsection (ii), vide number S.O. 4805(E), dated the 31st December, 2020, vide number S.O. 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 comple....
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....t is further submitted that amended provisions of the 1961 Act apply to every proceeding initiated after 01.04.2021 in which assessment / re-assessment is done. It is also urged that impugned notices are per se without jurisdiction as the procedure contemplated under Section 148A of the Act which is a condition precedent has not been fulfilled. It is also urged that notifications dated 31.03.2021 and 27.04.2021 only grant an extension of time and cannot possibly be construe to amend or modify any of the procedural requirements in respect of re assessment of income laid down under Sections 147, 148 and 148A of the Act. The impugned notice is therefore are liable to be quashed. 14. On the other hand, learned counsel for the revenue submitted that Section 3(1) of the 2020 Act creates a legal fiction and the expression 'such action' used in Section 3(1) relates back to the provision as it existed at the time of completion or compliance of such action. It is further submitted that the legal fiction must be given full effect and must be taken to its logical conclusion. It is contended that expression 'such action' means the power to issue notice under Section 148 of the 1961 Act prior t....
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....te of the two well settled legal propositions which are relevant for adjudication of the controversy involved in the instant petition. (i) It is cardinal principle of law that law which has to be applied is the law in force in the assessment year unless otherwise provided expressly or by necessary implication. (See: 'RELIANCE JUTE & INDUSTRIES LTD. Vs. COMMISSIONER OF INCOME TAX' AIR 1980 SC 251 AND 'COMMISSIONER OF INCOME TAX Vs. SARKAR BUILDERS' (2015) 7 SCC 579). (ii) When the statute vests certain power in an authority to be exercised in a particular manner, the said authority is required to exercise such power only in the manner provided therein. (See: 'COMMISSIONER OF INCOME TAX, CHANDIGARH Vs. PEARL MECHANICAL ENGINEERING AND FOUNDRY WORKS PVT.' (2004) 4 SCC 597 AND 'THE GOA FOUNDATION Vs. SESA STERLITE LTD. AND ORS.' (2018) 4 SCC 218. 17. On commencement of Finance Act, 2021 w.e.f. 01.04.2021, the 2020 Act was already in force. Even then, Parliament made the amended provisions of Section 147 to 151 of the Act effective from 01.04.2021. The said provisions have been substituted. It is well settled in law that substitution of a provision results in repeal of the earlier prov....