AI Drafter 
TaxTMI 
TaxTMI 
2023 (2) TMI 1081
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....AX/1293/2022,WTAX/1298/2022,WTAX/1148/2022, WTAX/1305/2022,WTAX/1303/2022,WTAX/1115/2022,WTAX/1079/2022,WTAX/1173/2022, WTAX/1235/2022 ORDER HON'BLE VIPIN CHANDRA DIXIT,J. 1. Heard Sri Abhinav Mehrotra, Sri Rahul Agarwal, Sri Ashish Bansal, Sri Shubham Agarwal, Sri Ankur Agarwal, Sri Suyash Agarwal, Sri V.K. Sabarwal, Sri R.B. Gupta and Sri Krishna Vyas learned counsels for the petitioners in the bunch cases; Sri Gaurav Mahajan, Sri Krishna Agarwal, Sri Ashish Agarwal, Sri Manu Ghildyal, learned counsels appearing for the respondent Revenue, Sri Anant Kumar Tiwari, Sri Gopal Verma and Sri N.C. Gupta, learned counsels for the Union of India. Introduction:- 2. The writ petitions in this bunch are directed against the orders passed by the Assessing Authority under Section 148-A(d) of the Income Tax Act' 1961 (hereinafter referred as Act' 1961) and the consequential notices issued under Section 148 of the Act' 1961. The dispute pertains to the assessment years 2013-14, 2014-15, 2015-16, 2016-17 and 2017-18. The disputed notices having been issued on or after 01.04.2021, the period concerned is between 01.04.2021 to 30.06.2021. 3. At the outset, learned....
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....e revenue as per Section 149(1)(b) and the first proviso to Section 149(1) inserted by the amendment under the Finance Act' 2021, wef 01.04.2021. 6. Before proceeding further, it may be noticed as a clarification at this stage itself, that there is no dispute about the fact that the notices issued under Section 148 after the amendment brought by the Finance Act' 2021 i.e. on or after 01.04.2021 be treated as notices under Section 148-A as per the amended provisions. It has also been agreed by the counsel for the parties that the date of issuance of notice under Section 148 of the Income Tax Act (as per pre-amended provisions) shall be treated as the date of issuance of notice under Section 148-A (post amendment) and all notices issued under Section 148 of the Income Tax Act after 01.04.2021 shall be treated to be the notices under Section 148-A of the Income Tax Act, inserted by the Finance Act 2021, w.e.f. 01.04.2021. The jurisdictional notice under Section 148 after the amendment brought by the Finance Act 2021 will have to be issued after conclusion of the preliminary enquiry required under Section 148-A. Legislative Scheme:- 7. To deal with the above noted issu....
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....subsection (5) of that section, on or after the 1st day of April, 2021, in the case of the assessee; or (iii) 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 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 con....
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....ed under section 132 or books of account, other documents or any assets are requisitioned under section 132A, on or after the 1st day of April, 2021, in the case of the assessee; or (ii) a survey is conducted under section 133A,other than under sub­section (2A) or subsection (5) of that section, on or after the 1st day of April, 2021, in the case of the assessee; or (iii) 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 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 orsection 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 char....
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....f 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: 11. The relevant notifications issued by Central Government dated 31.03.2021 and 27.04.2021 are quoted hereunder: MINISTRY OF FINANCE (Department of Revenue) (CENTRAL BOARD OF DIRECT TAXES) NOTIFICATION New Delhi, the 31st March, 2021 "S.O. 1432(E).-In exercise of the powers 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 modificati....
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....ch, 2021 shall be the end date of the period during which the time­ limit, specified in, or prescribed or notified under, the Finance Act falls for the completion of such action; and (ii) the 30th day of April, 2021 shall be the end date to which the time­limit for the completion of such action shall stand extended. [Notification No. 20/2021/F. No. 370142/35/2020TPL] SHEFALI SINGH, Under Secy., Tax Policy and Legislation Division Note: The principal notification was published in the Gazette of India, Extraordinary, Part II, Section 3, Sub­section (ii) vide S.O. No. 4805 dated 31" December, 2020." ................................................... "MINISTRY OF FINANCE (Department of Revenue) (CENTRAL BOARD OF DIRECT TAXES) NOTIFICATION New Delhi, the 27th April, 2021 S.O. 1703(E).­ In exercise of the powers 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 notifications of the Government of India in the Ministry of Finance, (Depar....
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....ion of any action, referred to in clause (a) of sub­section (1) of section 3 of the said Act, relates to sending an intimation under sub­section (1) of section 168 of the Finance Act, and the time limit for completion of such action expires on the 30th day of April, 2021 due to its extension by the said notifications, such time limit shall further stand extended to the 30th day of June, 2021. [Notification No. 38 /2021/ F. No. 370142/35/2020­TPL] RAJESH KUMAR BHOOT, Jt. Secy. Tax Policy & Legislation Division Note: The principal notification was published in the Gazette of India, Extraordinary, Part II, Section 3, Sub­section (ii) vide S.O. No. 4805 dated 31st December, 2020" 12. These petitions are offshoot of the decision of the Coordinate Bench of this High Court in Writ Tax No.524 of 2021 Ashok Kumar Agarwal Vs. Union of India [2021 ILR ALL 816], affirmed by the Apex Court in the judgement and order dated 04.05.2022 in Civil Appeal No.3005 to 3017, 3019-3020 of 2022 Union of India Vs. Ashish Agarwal [AIR 2022 SC 2781]. 13. Before proceeding further, we are, thus, require to note the history of litigation inter-se parties. History of Li....
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....t, since on the date of enactment of the Enabling Act, the Finance Act 2021 was not born. In absence of any saving clause in the Finance Act' 2021, there exists no power either under Section 3(1) of the Enabling Act or any other law as may validate the issuance of the impugned notification by the Central Government to apply pre-existing provisions in the reassessment proceeding initiated on or after 01.04.2021. The Enabling Act, therefore, became wholly unenforceable or unacceptable to the proceedings that would arise under the latter Act, i.e. the substituted provisions of Section 147 to 151 of the Income Tax Act' 1961, upon enactment of the Finance Act' 2021 on or after 01.04.2021. 17. The submissions advanced by the learned counsel for the petitioners therein to challenge the validity of the notice under Section 148 of the Act' 1961 after 01.04.2021, have been extracted pointwise in paragraph No.'63' as under:- "(i) By substituting the provisions of the Act by means of the Finance Act, 2021 with effect from 01.04.2021, the old provisions were omitted from the statute book and replaced by fresh provisions with effect from 01.04.2021. Relying on....
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....o force, on their own, on 01.04.2021, any exercise of the delegate under the Enabling Act, to defeat the plain enforcement of that law would be wholly unconstitutional. (v) It also appears to be the submission of learned counsel for the petitioners that the Parliament being aware of all realities, both as to the fact situation and the laws that were existing, it had consciously enacted the Enabling Act, to extend certain time limitations and to enforce only a partial change to the reassessment procedure, by enacting section 151­A to the Act. It then enacted the Finance Act, 2021 to change the substantive and procedural law governing the reassessment proceedings. That having been done, together with introduction of section 148­A to the Act, legislative field stood occupied, leaving the delegate with no room to manipulate the law except as to the time lines with respect to proceedings that may have been initiated under the Act (both prior to and after enforcement of the Finance Act, 2021). To bolster their submission, learned counsel for the petitioners also rely on the principle the delegated legislation can never defeat the principal legislation. (vi) Last....
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.... issued thereunder only protected certain proceedings that may have become time barred on 20.03.2020, upto the date 30.06.2021 or till 31.03.2022, in accordance with the Notification No.3814 dated 17.09.2021 issued under Section 3(1) of the Enabling Act. But to allow the Central Government to extend such limitation by virtue of the notifications after 31.03.2021 indefinitely, would be to allow the validity of an enacted law i.e. Finance Act' 2021 to be defeated by a purely colourable exercise of power, by the delegates of the Parliament (Central Government). Hence, no extension could be made under Section 3(1) of the Enabling Act read with the notifications thereunder. 21. It was, thus, concluded in paragraph Nos.72, 73, 75, 76, 79 and 80 by this Court as under:- 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 substituted the old/pre-exist....
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....diction. 79. As to the decision of the Chhattisgarh High Court, with all respect, we are unable to persuade ourselves to that view. According to us, it would be incorrect to look at the delegation legislation i.e. Notification dated 31.03.2021 issued under the Enabling Act, to interpret the principal legislation made by Parliament, being the Finance Act, 2021. A delegated legislation can never overreach any Act of the principal legislature. Second, it would be over simplistic to ignore the provisions of, either the Enabling Act or the Finance Act, 2021 and to read and interpret the provisions of Finance Act, 2021 as inoperative in view of the fact circumstances arising from the spread of the pandemic COVID­19. Practicality of life de hors statutory provisions, may never be a good guiding principle to interpret any taxation law. In absence of any specific clause in Finance Act, 2021, either to save the provisions of the Enabling Act or the Notifications issued thereunder, by no interpretative process can those Notifications be given an extended run of life, beyond 31 March 2020. They may also not infuse any life into a provision that stood obliterated from the statute w....
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....sing Authorities to initiate assessment proceedings in accordance with the provisions of the Act' 1961 as amended by the Finance Act' 2021 after making all compliances, as required by law. (ii) The Apex Court decision:- 23. The order passed by this Court in Writ Tax No.524 of 2021 connected with other writ petitions was challenged by the revenue before the Apex Court. The Apex Court had taken note of the fact that similar decisions and orders had been passed by various High Courts quashing the reassessment notices issued by the revenue under Section 148 of the Act' 1961, in view of the amendment by the Finance Act' 2021, and that approximately 90,000/- such reassessment notices were issued by the revenue under Section 148 of the unamended Income Tax Act' 1961 after 01.04.2021. It was held therein that the order passed in the said appeal, arising out of the common judgement and order passed by this High Court shall govern all other judgements and orders passed by various High Court on the similar issue. The revenue need not to file separate individual appeals which may be more than 90,000/- in number. 24. On the merits of the challenge, the Apex Court ha....
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....3 But prior to pre-Finance Act, 2021, while reopening an assessment, the procedure of giving the reasons for reopening and an opportunity to the assessee and the decision of the objectives were required to be followed as per the judgment of this Court in the case of GKN Driveshafts (India) Ltd. (supra). 6.4 However, by way of section 148A, the procedure has now been streamlined and simplified. It provides that before issuing any notice under section 148, the assessing officer shall (i) conduct any enquiry, if required, with the approval of specified authority, with respect to the information which suggests that the income chargeable to tax has escaped assessment; (ii) provide an opportunity of being heard to the assessee, with the prior approval of specified authority; (iii) consider the reply of the assessee furnished, if any, in response to the showcause notice referred to in clause (b); and (iv) decide, on the basis of material available on record including reply of the assessee, as to whether or not it is a fit case to issue a notice under section 148 of the IT Act and (v) the AO is required to pass a specific order within the time stipulated. 6.5 Therefore, a....
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....Apex Court as under:- 9. There is a broad consensus on the aforesaid aspects amongst the learned ASG appearing on behalf of the Revenue and the learned Senior Advocates/learned counsel appearing on behalf of the respective assessees. We are also of the opinion that if the aforesaid order is passed, it will strike a balance between the rights of the Revenue as well as the respective assesses as because of a bonafide belief of the officers of the Revenue in issuing approximately 90000 such notices, the Revenue may not suffer as ultimately it is the public exchequer which would suffer.................. ........................................ 10. In view of the above and for the reasons stated above, the present Appeals are ALLOWED IN PART. The impugned common judgments and orders passed by the High Court of Judicature at Allahabad in W.T. No. 524/2021 and other allied tax appeals/petitions, is/are hereby modified and substituted as under: (i) The impugned section 148 notices issued to the respective assessees which were issued under unamended section 148 of the IT Act, which were the subject matter of writ petitions before the various respective Hi....
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....ioned hereinabove, shall stand modified/substituted to the aforesaid extent only." The CBDT Instructions:- 28. It has been placed before us that Instructions regarding implementation of the judgement of the Apex Court dated 04.05.2022 (Union of India Vs. Ashish Agarwal) (supra), was issued in exercise of the power under Section 119 of the I.T. Act' 1961 by the Central Board of Direct Taxes, namely Instruction No. 1/2022 dated 11.05.2022 issued by the DCIT (OSD), ITJ-1. The Instructions purported to have been issued for implementation of the judgement of the Apex Court provided that the decision of the Apex Court would apply to all such cases where "extended reassessment notices" have been issued, irrespective of the fact whether such notices have been challenged or not. 29. In the opening paragraph of the said Instruction, it is noted that the reassessment notices issued by the Assessing Officers during the period beginning on 01.04.2021 and ending with 30.06.2021, within the time extended by TOLA 2020 and various notification issued thereunder, shall be referred as "extended reassessment notices". It was then directed in paragraph '6' of the Instruction that t....
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....: (i) AY 2013­14, AY 2014­15 and AY 2015­16:Fresh notice under section 148 of the Act can be issued in these cases, with the approval of the specified authority, only if the case falls under clause (b) of sub­section (1) of section 149 as amended by the Finance Act, 2021 and reproduced in paragraph 6.1 above. Specified authority under section 151 of the new law in this case shall be the authority prescribed under clause (ii) of that section. (ii) AY 16­17, AY 17­18: Fresh notice undersection 148 can be issued in these cases, with the approval of the specified authority, under clause (a) of sub­section (1) of new section 149 of the Act, since they are within the period of three years from the end of the relevant assessment year. Specified authority under section 151 of the new law in this case shall be the authority prescribed under clause (i) of that section." 30. In cases where the Assessing Officer is required to provide an information and material relied upon, it was directed in clause 7.1 therein as under:- "7.1 Hon'ble Supreme Court has directed that information and material is required to be provided in all cases withi....
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....her or not it is a fit case to issue a notice under section 148 of the Act. The Assessing Officer is required to pass an order under clause (d) of section 148A of the Act to that effect, with the prior approval of the specified authority of the new law. This order is required to be passed within one month from the end of the month in which the reply is received by him from the assessee. In case no such reply is furnished by the assessee, then the order is required to be passed within one month from the end of the month in which time or extended time allowed to furnish a reply expires. If it is a fit case to issue a notice under section 148 of the Act, the Assessing Officer shall serve on the assessee a notice under section 148 after obtaining the approval of the specified authority under section 151 of the new law. The copy of the order passed under clause (d) of section 148A of the Act shall also be served with the notice u/s 148. If it is not a fit case to issue a notice under section 148 of the Act, the order passed under clause (d) of section 148A to that effect shall be served on the assessee." 32. Before proceeding further, we may record that in some of t....
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....ctional notice under Section 148. The revenue has to meet higher threshold to discharge a positive burden because of the substantive changes made in the new regime. (ix) The pre-requisite conditions to issue notice under Section 148 in the pre and post amendment regime have been placed before us to demonstrate that for the reassessment notice after elapse of the period of three years but before 10 years from the end of the relevant assessment year, notice under Section 148 cannot be issued unless the Assessing Officer has in his possession books of accounts or other documents or evidence which reveal that the income chargeable to tax, represented in the form of assets, which has escaped assessment, amount to or is likely to amount to Rs.50 lacs rupees or more for that year. (x) It was submitted that the monetary threshold for opening of assessment after elapse of three years for the period upto ten years has, thus, been put in place. (xi) Further, first proviso to sub-section (1) of Section 149 has been placed to assert that the cases wherein notices were not issued within the period of six years as per clause (b) of sub-section (1) of Section 149 under the unamended provi....
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....021 have to be given their full effect. 35. It was vehemently urged that in any case, the Enabling Act 2020 cannot infuse life into the pre-existing law to provide extension of time to the revenue in the time limit therein, to reopen cases for the assessment years which have became time barred under the first proviso to Section 149. 36. As regards the Instruction issued under Section 119 of the I.T. Act' 1961, it was argued that the executive instructions cannot limit or extend the scope of the Act or cannot alter the provisions of the Act. The decision of the Apex Court in 1992 (2) SCC 231 has been placed to assert that an Instructions or Circular cannot impose burden on a tax payer higher than what the Act itself as a true interpretation envisages. However, the departmental circular/Instructions beneficial to the assessee and if it tone down the rigors of the law issued in exercise of the statutory powers under Section 119 of the Act or under corresponding provisions of the Act, are binding on the revenue in the administration of the Act. 37. The offending clauses of the Instruction dated 11.05.2022, have been placed before us to assert that the direction issued in (....
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....s a consequence, there can be no question of extending the period of limitation for such assessment years, where the revenue could have issued notice of reassessment by complying with the requirements of the unamended provisions. It was urged that in a case where the revenue did not initiate proceedings within the time limit under the unamended Income Tax Act extended by the Enabling Act, further extensions for inaction of the revenue cannot be granted by the notifications issued under the Enabling Act on 31.03.2021 or thereafter, once the amendments have been brought into place on 01.04.2021, to extend the time limit under the unamended provisions. 39. It was vehemently urged that from all angles, the revenue cannot be permitted to argue that after the decision of this Court affirmed by the Apex Court, it can issue notices under the amended section 148 without making compliances of the amended provisions of Section 149 of the I.T. Act. It cannot seek extension of the time limit for taking action under the unamended provision by seeking relaxation under TOLA 2020, in turn, for further extension of the time limit under the amended Section 149 brought by the Finance Act 2021. All ....
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....nue on after 01.04.2021, by applying the procedure under the amended provisions. The challenge to the validity of notices issued under Section 148, in the instant case, after rejection of the objections filed by the petitioners under Section 148-A, cannot be sustained. 42. It was argued that the Explanation attached to clause A(a) of the notification dated 31.03.2021 and the explanation clause A (b) of notification dated 27.04.2021 though have been read down by this Court in Ashok Kumar Agarwal (supra) holding that the said explanations must be read as applicable to reassessment proceedings as may have been in existence on 31.03.2021, i.e. before enforcement of Finance Act' 2021, but it was held that the notice to initiate reassessment proceedings after 01.04.2021 can be issued in accordance with the provisions of the I.T. Act as amended by Finance Act' 2021. It was argued that the notices issued on or after 01.04.2021 under Section 148 of the Income Tax Act, for reassessment were issued in accordance with the substituted laws and not as per the pre-existing laws and the Enabling Act (TOLA 2020) was only applied for extension in the timeline. The Enabling Act has overrid....
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....to 151-A of the Act' 1961, but the substantive provisions of extension of time for action/compliances/issuance of notice of the notifications dated 31.03.2021 and 27.04.2021, still survive. 44. The challenge in Ashok Kumar Agarwal (Supra) before the High Court was to the applicability of the pre-amendment provisions to the notices under Section 148 issued after 01.04.2021. The Explanations which provided that for the notices issued after 01.04.2021 the time line under the pre-existing provisions would apply, have been held to be offending provisions, but this Court had left it open to the respective assessing authorities to initiate reassessment proceedings in accordance with the amended provisions by Finance Act 2021. The extension in time uptil 31.06.2021 as granted by the notifications dated 31.03.2021 and 27.04.2021 would, thus, apply to the timeline provided under the amended provisions brought by the Finance Act 2021. 45. It is submitted that when two Parliamentary Acts are on the statute book, one providing substantive provisions and procedure for initiating reassessment proceeding and the other granting extension of time for action/compliances/issuance of notices ....
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....1 and the Notification No.38 dated 27.04.2021, which have not been quashed or held invalid by this Court or the Apex Court. The submission, thus, is that extension of three months uptil 30.06.2021 in the time limit provided under the Income Tax Act 1961, whether pre or post amendment, has to be granted. The time limit provided in the amended Section 149 of three years and 10 years has to be extended uptil 31.06.2021, by virtue of the notifications issued by the Central Government in exercise of power under Section 3(1) of the Enabling Act. The CBDT Instruction dated 11.05.2022 under Section 119 of the Income Tax Act 1961 only clarifies the above stated position of two provisions namely the Enabling Act and the Finance Act 2021, wherein it is provided in para 6.1 of the Instructions that the time extension provided by TOLA' 2020 will allow "extended reassessment notices" to travel back in time to their original date when such notices were to be issued and then the new Section 149 of the Act is to be applied at that point of time. 49. It was submitted that based on the said logic, the "extended reassessment notices" for the assessment year 2013-14, AY 2014-15 and AY 2015-16 ar....
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....t from 1st April, 2021" 52. It was, thus, noted in Touchstone (supra) that the Apex Court in Ashish Agarwal (supra) has simply held that Section 148 notice issued between 01.04.2021 to 30.06.2021 will be deemed to have been issued under Section 148-A of the Act and, therefore, Section 148 notice issued on 29.06.2021 therein, stood revived. The result is that the time period for issuance of reassessment notice for Assessment year 2013-14 stood extended until 30.06.2021 and the first proviso of Section 149 brought by the Finance Act' 2021 is not attracted in the facts of that case. 53. It was urged before us that taking note of the first proviso of Section 149 (amended), it was held by the Delhi High Court that the time limit for initiating assessment proceeding for assessment year 2013-14 stood extended till 30.06.2021. Consequently, the reassessment notice dated 29.06.2021 issued therein being well within the extended period of limitation was not time barred. The challenge to paragraph 6.2 (i) of CBDT Instruction No.1/2022 dated 11.05.2022, was turned down therein holding that with the declaration by the Apex Court that the reassessment notice issued on or after 01.04.202....
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....ce by this Court in exercise of the jurisdiction under Article 226 of the Constitution of India at this intermediary stage and, as such, are liable to be dismissed. 55. At this stage of arguments, a pointed query was made to the learned counsels for the revenue to answer the effect of the first proviso to sub-section (1) of Section 149 of the amended provisions inserted by the Finance Act' 2021 which prohibits issuance of notice under Section 148, in a case where it has become time barred under the unamended (pre-existing) Section 149 clause (b) of sub section (1) of Section 149, (as they stood before the commencement of the Finance Act' 2021). The unamended Section 149(1)(b) provided that no notice under Section 148 shall be issued, if 6 years have been elapsed from the end of the relevant assessment years, which has escaped the assessment amount to one lac rupees or more for that year. 56. The answer of the learned counsels for the revenue was that time limit of 6 years provided in clause (b) of sub section (1) of Section 149 stood extended by virtue of the Enabling Act uptil 31.03.2021, and further extensions in the time limit (of six years) are to be granted under....
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....imit for notice- Time limit for notice- 1. No notice under section 148 shall be issued for the relevant assessment year,- No notice under section 148 shall be issued for the relevant assessment year,- (a) if four years have elapsed from the end of the relevant assessment year, unless the case falls under sub- clause (b) or clause (c); (a) if three years have elapsed from the end of the relevant assessment year, unless the case falls under clause (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; (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: (c) if four years, but not more than sixteen years....
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....rovision of sub-section (1) as to the issue of notice shall be subject to the provisions of section 151. If the person on whom a notice under Section 148 is to be served is a person treated as the agent of a non-resident 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-section (1) and (3), as amended by the Finance Act, 2012 shall also be applicable for any assessment year beginning on or before the 1.4.2012. .......... Explanation- 1. For the purpose of clause (b) of this sub-section, "asset" shall include Immovable Property, being land or building or both shares and securities, loans and advances, deposits in bank account. ............... 2. The provision of sub-section (1) as to the issue of notice shall be subject to the provisions of section 151 ................... 59. We are ....
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....ings from being hit by the rule of limitation. That provision also does not speak of saving any proceeding from any law that may be enacted by the Parliament, in future. The non obstante clause of Section 3(1) of the Enabling Clause Act does not govern the entire scope of the said provision. It is confined to and may be employed only with reference to the second part of Section 3(1) of the Enabling Act, i.e to protect the proceedings already underway. The Act, thus, only protected certain proceedings that may have become time barred on 20.03.2021 upto the date 30.06.2021. Correspondingly, by delegated limitation incorporated by the Central Government (notifications), it may extend that time limit. That timeline alone stood extended upto 30.06.2021. (vii) 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 01.04.2021. 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 pre-existing provisions. ....
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....e Enabling Act that the operation of the pre-existing provisions of the Act had been extended and thereby provisions of Section 148A of the I.T. Act (introduced by the Finance Act' 2021) and other provisions had been deferred. 61. It was, thus, declared that the Explanations appended to Clauses A(a), A(b) of the impugned notifications dated 31.03.2021, and 27.4.2021; respectively, must be read applicable to reassessment proceedings as may have been in existence on 31.03.2021 or had been initiated till that date, i.e. before the substitution of Sections 147 to 151A of the Act. The Notifications have no applicability to the reassessment proceedings initiated from 01.04.2021 onwards. 62. With the above observations, all reassessment notices, subject matter of challenge therein were quashed. It was, however, left open to the respective assessing authorities to initiate 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. 63. In the challenge to the aforesaid decision of the Division Bench in Ashok Kumar Agarwal, the Apex Court in Ashish Agarwal (supra) has observed that:-....
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..... However, it was further noticed that :- I) The judgments of several High Courts would result in no assessment proceedings at all, even if the same are permissible under the Finance Act, 2021 as per substituted Sections 147 to 151 of the Income Tax Act. To remedy the situation where revenue became remediless, in order to achieve the object and purpose of reassessment proceedings, it was observed that the notices under Section 148 after the amendment was enforced w.e.f 01.04.2021, were issued under the unamended Section 148, due to bonafide mistake in view of the subsequent extension of time by various notifications under the Enabling Act (TOLA 2020). (II) The notices ought not to have been issued under the unamended Act and ought to have been issued under the substituted provisions of Sections 147 to 151 of the Income Tax Act as per the Finance Act, 2021. (III) There appears to be a genuine non application of the amendments as the officers of the revenue may have been under a bonafide belief that the amendments may not yet have been enforced. 67. It was, thus, concluded that:- 68. Instead of quashing and setting aside the reassessment noti....
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....uestion is as to whether the timeline provided in the unamended Section 149 would extend uptil 31.03.2021 under the Enabling Act, 2021, with further extensions by the notifications dated 31.03.2021 and 27.04.2021 issued under TOLA, in the timeline provided under the amended Section 149 of the Finance Act, 2021. The arguments of the learned counsels for the revenue is that the Enabling Act (TOLA' 2020) granted extension in the time limit provided in the pre-existing provisions of the Income Tax Act. The period of four years and six years provided in Clause (a) and (b) of the unamended Section 149 of the IT Act stood extended uptil 31.03.2021 by the extensions granted under TOLA 2020, as the reassessment notices, could have been issued, within the extended period of time uptil 31.03.2021. The amendment by the Finance Act, 2021 though have substituted the substantive and procedural amendment in the Income Tax Act 1961 and old provisions have been recasted and made applicable w.e.f 01.04.2021, but extensions already granted by the Enabling Act in the limitation prescribed under the unamended provisions of the Income Tax Act have not been curtailed. Further extensions in the limitat....
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....that it would be oversimplistic to ignore the provisions of either the Enabling Act or the Finance Act, 2021 and to read and interpret the provisions of Finance Act, 2021 as inoperative in view of the facts and circumstances arising from the spread of the pandemic COVID-19. Practicality of life dehors statutory provisions, may never be a good guiding principle to interpret any taxation law. It was, thus, held that in absence of any specific clause in the Finance Act, 2021 either to save the provisions of the Enabling Act or the Notifications issued thereunder, by no interpretative process, the notifications can be said to infuse life into a provision that stood obliterated from the Statute book w.e.f 31.03.2021. It was held that the Finance Act, 2021 does not enable the Central Government to issue any notification to reactivate the pre-existing law, the exercises made by the delegate/Central Government would be dehors any statutory basis. It was, thus, categorically held by the Division Bench that the notifications did not insulate or save the pre-existing provisions pertaining to reassessment under the Act or the operation of the pre-existing provisions of the Act cannot be extend....
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....ction (1). Not only monetary threshold has been substituted but the requirement of evidence to arrive at the opinion that the income escaped assessment has also been changed substantially. A heavy burden is cast upon the revenue to meet the requirements of clause (b) of sub-section (1) of Section 149 for initiation of reassessment proceedings after lapse of three years. Further four provisos have been inserted to sub-section (1) of Section 149. 80. The first proviso to sub-section (1) of Section 149 is relevant for our purposes, which provides that notice under Section 148, in a case for the relevant assessment year beginning on or before 1.4.2021, cannot be issued, if such notice could not have been issued at the relevant point of time, on account of being beyond the time limit specified under the unamended provisions of clause (b) of subsection (1) of Section 149, i.e., pre-amended Section 149 prior to the commencement of Finance Act, 2021. The time limit in clause (b) of sub-section (1) of unamended Section 149 of six years, thus, cannot be extended upto ten years under clause (b) of sub-section (1) of amended Section 149, to initiate reassessment proceeding in view of the fi....
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....ove, higher threshold to meet the requirement of reopening assessment proceedings by the revenue has been provided under clause (b) of sub-section (1) of Section 149 (amended by the Finance Act, 2021). 82. In case the arguments of the learned counsels for the revenue are accepted, the benefits provided to the assessee in the substantive provisions of clause (b) of sub-section (1) of Section 149 and the first proviso to Section 149 have to be ignored or deferred. The defences which may be available to the assessee under Section 149 and/or which may be available under Finance Act, 2021 have to be denied. The crux of the submission of the learned counsels for the revenue is that the applicability of the amended provisions of Finance Act, 2021 will have to be postponed uptill 31.6.2021 because of the extensions granted by the Enabling Act, 2020 upto 31.3.2021 and further extensions in the time limit by the Notifications dated 31.3.2021 and 27.4.2021 thereunder. 83. The submission is that the extensions in the time limit provided under the unamended Section 149(1)(b) upto 31.3.2021, will be applicable even in those cases where reassessment notices were issued under the amended Sec....
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....lity of the Enabling Act, 2020, which has not been declared invalid by any Court of law, it would be rendered otiose is found misconceived, inasmuch as, the extensions in the time limit under the unamended Sections of the Income Tax Act prior to the amendment by the Finance Act, 2021, would still be applicable to the reassessment proceedings as may have been in existence on 31.3.2021. By harmonious construction of two parliamentary legislation, the Enabling Act, 2020 and Finance Act, 2021, the Coordinate Bench has explained the scope and limit of the Enabling Act, the Finance Act, 2021 and the Notifications issued under the Enabling Act. We are bound by the decision of the Coordinate Bench as affirmed by the Apex Court in Ashish Agarwal (supra). 88. As noted above, the view taken by the Coordinate Bench in Ashok Kumar Agarwal (supra) of this Court has been upheld by the Apex Court with the only modification that the notices issued on or after 1.4.2021 under Section 148 shall be treated as notices under Section 148-A of the Income Tax Act as substituted by the Finance Act, 2021, treating them to be show cause notices in terms of Section 148(A)(b) of the Income Tax Act. 89. At ....
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....in time granted under the Enabling Act and further extensions by the notifications issued thereunder, the first proviso to Section 149 (as amended by the Finance Act, 2021) is not attracted for the assessment year 2013-14, with all due respect to the Judges holding the Bench, suffice it to say that the said view is in direct conflict with the view taken by this Court in Ashok Kumar Agarwal (supra) affirmed by the Apex Court in Ashish Agarwal (supra). In fact, the observation in Mon Mohan Kohli (supra) by the Delhi High Court in paragraph '98' that the power of reassessment that existed prior to 31.3.2021 continue to exist till the extended period, i.e. till 30.6.2021, and the Finance Act, 2021 has merely changed the procedure to be followed prior to issuance of notice w.e.f. 1.4.2021, has been misread and misapplied in Touchstone (supra) by the Division Bench of the Delhi High Court. 94. Relevant is to note that even in Mon Mohan Kohli (supra), the Delhi High Court had quashed the reassessment notices issued on or after 1.4.2021 on the ground that the Relaxation Act (Enabling Act) does not give power to the Central Government to extend the erstwhile Sections 147 to 151 beyond 31....
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....e Apex Court dated 4.5.2022 [in Ashish Agarwal (supra)] will have to be saved. 96. To strike a balance, the Apex Court kept all the defences available to the assessee under the amended provision open, while rights available to the assessing officer/revenue under the Finance Act, 2021 have been kept alive. The defect in the reassessment notices issued on or after 1.4.2021 had, thus, been removed. The directions issued by the Apex Court under Article 142 of the Constitution of India having a binding force PAN INDIA, will be violated if the extension in time for issuance of reassessment notices under Section 149 of the pre and post amended Income Tax Act, is not granted with the aid of the Enabling Act (TOLA 2020). 97. To deal with the said submission, we may note the decision of the Apex Court in Assistant Commissioner (CT) LTU, Kakinada & others vs. Glaxo Smith Kline Consumer Health Care Limited [AIR 2020 Supreme Court 2819], wherein the Apex Court was confronted with the exercise of writ jurisdiction under Article 226 of the Constitution of India in a case where the statutory remedy of appeal stood foreclosed by the law of limitation. While making comparison of the powers of ....
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....and contentions to the revenue under the Finance Act, 2021 and in law are also continued to be available. 99. The said observations of the Apex Court cannot be read to me that extensions in time under the unamended Section 149 has been granted by the Apex court by applying TOLA, 2020 to the reassessment notices in respect of the proceedings relating to the past assessment years, where such notices were not issued uptill 31.3.2021 and they can be treated as "extended reassessment notices" and allowed to travel back in time to their original date when such notices were to be issued and then to apply amended Section 149 as interpreted by the revenue in Para 6.1 of the CBDT Instructions dated 11.5.2022. 100. In case, this argument of the learned counsels for the revenue is accepted it will result in permitting the revenue to initiate reassessment proceedings in a manner which cannot otherwise be done under the Statute. 101. The last submission of the learned counsels for the revenue is based on the observations of the Division Bench in Ashok Kumar Agarwal (supra) in paragraph '71' as under:- "71. Here, it may also be clarified, Section 3(1) of the Enabling Act does no....