TaxTMI 
TaxTMI 
2023 (9) TMI 552
X X X X Extracts X X X X
X X X X Extracts X X X X
....r Section 143(2) of the Income Tax Act 1961 (the Act) was issued. This was followed by notice dated 5th December 2018 under Section 142(1) of the Act. Petitioner responded by its letter dated 6th December 2018 and submitted the transaction wise summary on expenditure on software consumables. Respondent no. 1 passed an assessment order dated 23rd December 2018 under Section 143(3) of the Act without making any adjustments to the total income as reported by petitioner in its revised return of income. 3. Almost three years later, petitioner received notice dated 25th June 2021 under Section 148 of the Act, stating that there was reason to believe, petitioner's income chargeable to tax for A.Y. 2016-2017 has escaped assessment within the meaning of Section 147 of the Act. The impugned notice mentioned that necessary satisfaction of Range 8(2), Mumbai has been obtained. Petitioner was also provided with the reasons recorded for reopening the assessment in response to the request made by petitioner. 4. Petitioner by its letter dated 22nd July 2021 replied to the notice issued under Section 148 of the Act and submitted that the notice has been issued as per the provisions of Sections 14....
X X X X Extracts X X X X
X X X X Extracts X X X X
....lleged that it resulted in under assessment of income of Rs. 2,56,75,172/-. The reasons recorded relied on the finding of respondent no. 1 to form the basis for reason to believe that income chargeable to tax of Rs. 2,56,75,172/- has escaped assessment within the meaning of section 147 of the Act. c) The reasons recorded alleged that the requisite material facts were embedded in such a manner that material evidence could not be discovered by respondent no. 1 and the issues were never examined by respondent no. 1 during the course of regular assessment. The reasons alleged that petitioner has failed to disclose fully and truly all material facts necessary for its assessment and therefore, it is a fit case for reopening the assessment within the meaning of section 147 of the Act. d) Respondent no. 1 alleged that CBDT vide Notification No. 20/2021 has revised the due date relating to issuing the notice under section 148 of the Act as per the time limit specified in section 149 or sanction under section 151 of the Act if it expires on March 31, 2021 to April 30, 2021. 7. Petitioner responded vide its communications dated 9th June 2022 and 7th July 2022. Various grounds were taken ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....as in his possession books of account or other documents or evidence which reveal that income chargeable to tax represented in the form of an asset which has escaped assessment amounts to or is more than Rs. 50 lakhs. b) There is no income chargeable to tax which is represented in the form of an "asset" which has escaped assessment as expenditure on computer software consumables cannot be the asset as per Section 149 of the Act. Hence, the extended period of time limits specified in Section 149 (1)(b) cannot apply to petitioner and hence notice issued on 31st July 2022 is bad-in-law. c) As per section 151 of the Act, the specified authority who has to grant his sanction for the purposes of section 148 and section 148A is the Principal Chief Commissioner or Principal Director General or where there is no Principal Chief Commissioner or Principal Director General, the Chief Commissioner or Director General if more than three years have elapsed from the end of the relevant assessment year. d) For A.Y.-2016-2017, three years elapsed on 31st March 2020 and hence the provisions of Section 151(i) and 151(ii) of the Act would have to be fulfilled, which have not been complied with. ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....l difference between power to review and power to reassess. If we accept revenue's submissions then in the garb of re-opening the assessment review would take place. The concept of change of opinion is an in-built test to check abuse of power by the Assessing Officer, as held in the judgment of the Apex Court in CIT Vs. Kelvinator of India Ltd 320 ITR 561 (SC). j) Even the recent judgment of Learned Single Judge of Madras High Court in Dr. Mathew Cherian Vs. Assistant Commissioner of Income Tax (2023) 151 taxmann.com 154 (Madras), the court has held that whether under old or new regime of reassessment, it is settled position that the issues decided categorically by judicial precedent should not be revisited in the guise of reassessment. 12. Mr. Suresh Kumar for revenue, at the outset, submitted that sanction of the authority has been taken in view of the instructions given by the Central Board of Direct Taxes on 11th May 2022. Mr. Suresh Kumar submitted that the instructions reads as under : "Hon'ble Supreme Court has upheld the views of High Courts that the benefit of new law shall be made available even in respect of proceedings relating to past assessment years Decision....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... by the Department after 1st April, 2021 is deemed to be a Notice under the amended Section 148A(b). This would mean that on 31st March 2020 the time period of 3 years would have expired and hence, TOLA would be and is squarely applicable. d) The judgments prior to TOLA are not applicable because the amended provisions were not considered at that stage. e) Under TOLA, time for issuing notice stood extended and hence the notice issued under Section 149(1)(b) was within time. The same principle would apply to a notice issued under Section 148A(d) or notice issued under Section 148 alongwith order passed under Section 148A(d). The main thrust, however, was on instructions dated 11th May 2022. 14. On the change of opinion, Mr. Suresh Kumar submitted:- a) In view of the change in the language of amended Section 147 of the Act, it would not be applicable. b) In any event, the material furnished expressly records that the income of the year under consideration has escaped assessment because of failure on the part of assessee to disclose fully and truly all material facts necessary for his assessment for the assessment year under consideration. The Assessing officer has noted tha....
X X X X Extracts X X X X
X X X X Extracts X X X X
..... Assistant Commissioner of Income Tax, Circle 3(2)(1) & ors (Order passed in Writ Petition No. 1050 of 2022 dated 4-4-2022) has held that for A.Y. 2015-2016, the six years limitation was expiring on 31st March 2022, TOLA will not be applicable and in any event, the time to issue notice may have been extended but that would not amount to amending the provisions of Section 151 of the Act. Mr. Pardiwalla emphasised on paragraphs 6 and 7 of the order in J.M. Financial (Supra) which read as under: 6. Even for a moment we agree with the view expressed by the Principal Commissioner of Income Tax, still it applies to only cases where the limitation was expiring on 31 st March 2020. In the case at hand, the assessment year is 2015-2016 and, therefore, the six years limitation will expire only on 31 st March 2022. Certainly, therefore, the Relaxation Act provisions may not be applicable. In any event, the time to issue notice may have been extended but that would not amount to amending the provisions of Section 151 of the Act. 7. In our view, since four years had expired from the end of the relevant assessment year, as provided under Section 151(1) of the Act, it is only the Principal....
X X X X Extracts X X X X
X X X X Extracts X X X X
....made in this regard by the assessee 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 this 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 assessee for the relevant assessment year and the Assessing Officer has obtained prior approval of the specified authority to issue such notice: Provided further that no such approval shall be required where the Assessing Officer, with the prior approval of the specified authority, has passed an order under clause (d) of section 148A to the effect that it is a fit case to issue a notice under this section: Provided also that any return of income, required to be furnished by an assessee under t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ted 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. 148A. Conducting inquiry, providing opportunity before issue of notice under section 148.-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 the 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 and 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 chargeabl....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... represented in the form of- (i) an asset; (ii) expenditure in respect of a transaction or in relation to an event or occasion; or (iii) an entry or entries in the books of account, which has escaped assessment amounts to or is likely to amount to fifty lakh rupees or more: 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, a notice under section 148 or section 153A or section 153C 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-section (1) of this section or section 153A or section 153C, as the case may be, as they stood immediately before the commencement of the Finance Act, 2021: Provided further that the provisions of this sub-section shall not apply in a case, 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: Provided also that for cases referred to....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ances, deposits in bank account. (1A) Notwithstanding anything contained in sub-section(1), where the income chargeable to tax represented in the form of an asset or expenditure in relation to an event or occasion of the value referred to in clause (b) of sub-section(1), has escaped the assessment and the investment in such asset or expenditure in relation to such event or occasion has been made or incurred, in more than one previous years relevant to the assessment years within the period referred to in clause (b) of sub-section(1), a notice under section 148 shall be issued for every such assessment year for assessment, reassessment or recomputation, as the case may be. (2) The provisions of sub-section(1) as to the issue of notice shall be subject to the provisions of section 151 . 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 Chief Commissioner or Director Gene....
X X X X Extracts X X X X
X X X X Extracts X X X X
....relevant to this case) which has escaped assessment amounts to or is likely to amount to fifty lakh rupees or more for that year. Explanation below 4th proviso says that for the purposes 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. 20. Under Section 151 "specified authority" for the purposes of Section 148 and Section 148A shall be, if three years or less than three years have elapsed from the end of the relevant assessment year, Principal Commissioner or Principal Director or Commissioner or Director. If more than three years have elapsed from the end of the relevant assessment year, then Principal Chief Commissioner or Principal Director General or Chief Commissioner or Director General. 21. Admittedly, in this case, the approval/sanction for order under Section 148A(d) of the Act has been granted by the Principal Commissioner of Income Tax-8. The entire controversy is, therefore, (a) whether the Principal Commissioner was the specified authority, who could have granted the approval / sanction ?, (b) if not, the effect thereof ? 22. In our view, t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....a relaxation of certain provisions of the Income-tax Act, 1961. Where any time limit for completion or compliance of an action such as completion of any proceedings or passing of any order or issuance of any notice fell between the period 20th March 2020 to 31st December 2020, the time limit for completion of such action stood extended to 31st March 2021. Thus, TOLA only seeks to extend the period of limitation and does not affect the scope of section 151. 26. The Assessing Officer cannot rely on the provisions of TOLA and the notifications issued thereunder as section 151 has been amended by Finance Act, 2021 and the provisions of the amended section would have to be complied with by the Assessing Officer, w.e.f., 1st April 2021. Hence, the Assessing Officer cannot seek to take the shelter of TOLA as a subordinate legislation cannot override any statute enacted by the Parliament. Further, the notification extending the dates from 31st March 2021 till 30th June 2021 cannot apply once the Finance Act, 2021 is in existence. The sanction of the specified authority has to be obtained in accordance with the law existing when the sanction is obtained and, therefore, the sanction is requ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....isions of Section 151(1) and Section 151(2), which were originally expiring on 31st March 2020 stand extended to 31st March 2021. According to the Income Tax Officer, in view of the above, Assessment Year 2015-2016 which falls under the category within four years as on 31st March 2020, the statutory approval for issuance of notice under Section 148 of the Act for the Assessment Year 2015-2016 may be given by the Range Head as per the said provisions. Mr. Sharma clarifies that the Income Tax Officer is only conveying the view of the Principal Commissioner of Income Tax because this letter has been issued on the letterhead of Principal Commissioner of Income Tax. 6. Even for a moment we agree with the view expressed by the Principal Commissioner of Income Tax, still it applies to only cases where the limitation was expiring on 31st March 2020. In the case at hand, the assessment year is 2015-2016 and, therefore, the six years limitation will expire only on 31st March 2022. Certainly, therefore, the Relaxation Act provisions may not be applicable. In any event, the time to issue notice may have been extended but that would not amount to amending the provisions of Section 151 of the ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e originally expiring on 31st March 2020 stand extended to 31st March 2021. According to the Income Tax Officer, in view of the above, Assessment Year 2015-2016 which falls under the category within four years as on 31st March 2020, the statutory approval for issuance of notice under Section 148 of the Act for the Assessment Year 2015-2016 may be given by the Range Head as per the said provisions. Mr. Sharma clarifies that the Income Tax Officer is only conveying the view of the Principal Commissioner of Income Tax because this letter has been issued on the letterhead of Principal Commissioner of Income Tax. 6 Even for a moment we agree with the view expressed by the Principal Commissioner of Income Tax, still it applies to only cases where the limitation was expiring on 31st March 2020. In the case at hand, the assessment year is 2015-2016 and, therefore, the six years limitation will expire only on 31st March 2022. Certainly, therefore, the Relaxation Act provisions may not be applicable. In any event, the time to issue notice may have been extended but that would not amount to amending the provisions of Section 151 of the Act." 6. In the present case, counsel for the respond....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... assessment year. As provided under sub-section (1) of section 151 of the Act only a Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner could grant the sanction. Since in this case, admittedly, sanction has been granted by an Additional Commissioner of Income Tax, it is not a valid sanction and therefore, notice issued based on an invalid sanction is also not valid and has to be quashed. ************************** (19) It is also petitioner's case that the approval obtained for issuing notice under section 148 of the Act is not in accordance with the mandate of Section 151 as the said approval is of Additional Commissioner of Income Tax instead of Principal Commissioner of Income Tax. It is petitioner's case that the reasons put up for approval on 26.03.2021, which is after the expiry of four years from the end of the relevant assessment year 2015-2016 and approval was granted on 30.03.2021. Therefore, Mr. Joshi submitted that as per Section 151 of the Act, as four years have elapsed at the time of reopening, the sanction is required to be obtained from the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....not the Additional Commissioner of Income Tax. On this ground alone, we will have to set aside the notice dated 31.03.2021 issued under Section 148 of the Act, which is impugned in this petition." Similarly in Johnson and Johnson v. DCIT [WP (L) No. 7733 of 2022 dated 4-5-2022], Equitable Financial Consultancy Services Pvt Ltd v. ITO (WP No. 43 of 2022 dt. 27-4-2022) and Asian Paints Ltd. v. ACIT [WP (L) No. 6385 of 2022 dated 26-4-2022]. 28. The interpretation placed by the CBDT in paragraph 6.1 of Instruction No. 1/ 2022 dated 11th May 2022 cannot be countenanced as it is not open to them to clarify that the law laid down by the Apex Court means that the extended reassessment notices will 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 as this is contrary to the judgment of this court in Tata Communications (supra) wherein it is held that TOLA does not envisage traveling back of any notice. However, even assuming that it is held that these notices travel back to the date of the original notice issued on 25th June 2021, even then the approval of the Principal Chief Commissioner of Income Ta....
X X X X Extracts X X X X
X X X X Extracts X X X X
....as no amendment to the provisions of Sections 147 to 151 of the Act. The court also observed that amendments to the substantive provisions of the Act were envisaged under Section 3 of TOLA, which was only a relaxation provision dealing with time limits under various enactments. The Assessing Officer could have assumed jurisdiction while issuing the impugned notices only after complying with the amended Section 147 which has not been done. In Tata Communications (Supra), this court also held that TOLA was not applicable for A.Y.-2015-2016 or any subsequent years. Hence question of applicability of notification issued under TOLA also would not arise. Paragraphs 34 to 49 of Tata Communications (Supra) read as under: 34. It is well settled that the validity of a notice issued under Section 148 of the Act must be judged on the basis of the law existing on the date on which such notice is issued. Even the Revenue accepts this well settled position. Further, the provisions of Sections 147 to 151 are procedural laws and accordingly, the provisions as existing on the date of the notice would be applicable. Even the revenue accepts this legal position and the CBDT Circular No. 549 of 1989,....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t are deemed to be issued on 31st March, 2021. The so-called legal fiction is directly contrary to the Revenue's own Circular No. 549 of 1989, which is binding on them as well as the well settled principle that the validity of a notice is to be judged on the basis of the law that prevails at the time of its issue. 39. Even though Relaxation Act was in existence when the Finance Act, 2021 was passed, the parliament has specifically made the amended provisions of Sections 147 to 151 of the Act as being applicable with effect from 1st April, 2021. Therefore, the intention of the legislature is clear that substituted provisions must apply to notices issued with effect from 1st April, 2021. No savings clause has been provided in the Act for saving the erstwhile provisions of Sections 147 to 151 of the Act, like in Section 297 of the Act where, the Parliament when it intended, has specifically provided the savings clause. 40. On a plain reading of Relaxation Act it is clear that the only powers granted to the Central Government by Relaxation Act is the power to notify the period during which actions are required to be taken that can fall within the ambit of Relaxation Act, and the po....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nitiate reassessment proceedings in accordance with the provisions of the amended Act, "if limitation for it survives". 44. As submitted by Mr. Mistri, with whom we agree, Chapter II of Relaxation Act provide for - "Relaxation of Certain Provisions of Specified Act" and Section 3 forms part of this Chapter. Further Chapter III provides for amendment to Income Tax Act, 1961 and various Sections of the Act have been amended in Chapter III. From this the following propositions emerge : (a) Wherever the Parliament thought fit, the Parliament has itself amended the provision of the Income Tax Act, 1961 and not left it for the CBDT to make the amendment. Therefore, it is clear that no power is given under Relaxation Act to postpone the applicability of provisions of the Income Tax Act. (b) Chapter II of Relaxation Act is only for 'Relaxation of Certain Provisions of Specified Act' and, therefore, there is no question of the Revenue relying on this Chapter and Section 3 to justify the postponement of applicability of certain provisions of the Income Tax Act. If the Parliament wanted to give some right to the CBDT, it would have formed part of Chapter III, however, there is no such p....
X X X X Extracts X X X X
X X X X Extracts X X X X
....I, which is titled 'Amendments to the Income Tax Act, 1961'. It will be apposite to notice that the amendments provided for in Section 4 were made by the Legislature itself in terms of the said Section and no such power to amend the Act was delegated to the Central Government. Therefore, we would agree with Mr. Pardiwalla that it is only Section 4 of Relaxation Act which amended the Act and no such amendments to the substantive provisions of the Act were envisaged under Section 3 of Relaxation Act, which was only a relaxation provision dealing with time limits under various enactments. 48. Mr. Pardiwalla submitted that even assuming for a moment that the primary contention of petitioners that the Explanations in the notifications are invalid is not accepted, still the impugned notices will be bad in law as the Explanation only seeks to effectuate the provisions of the erstwhile Sections 148, 149 and 151 of the Act. It does not cover the erstwhile Section 147 of the Act. As rightly submitted by Mr. Pardiwalla, the Assessing Officer could have assumed jurisdiction while issuing the impugned notices only after complying with the amended Section 147. The same has not been done by the....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the Act which were subject matter of writ petitions before various High Courts shall be deemed to have been issued under Section 148A(b) of the Act and the Assessing Officer was directed to provide within 30 days to the respective assessee the information and material relied upon by the Revenue so that the assessee could reply to the show cause notices within two weeks thereafter. The Apex Court held that the Assessing Officer shall thereafter pass orders in terms of Section 148A(d) in respect of each of the concerned assessees. Thereafter, after following the procedure as required under Section 148A may issue notice under Section 148 (as substituted). The Apex Court also expressly kept open all contentions which may be available to the assessee including those available under Section 149 of the Act and all rights and contentions which may be available to the concerned assessee and revenue under the Finance Act 2021 and in law, shall be continued to be available. 31. Notwithstanding this, the CBDT has issued instruction No. 1 of 2022 contrary to what the courts have held. Even by the finding of the Apex Court in Ashish Agarwal (Supra), only the original notice issued under Sectio....
X X X X Extracts X X X X
X X X X Extracts X X X X
....y and even if one of the numerous jurisdictional requirements necessary for issuing the notice under section 148 of the Act are not satisfied, the reopening of an assessment would fail. Hence, in the present facts also since the approval of the specified authority in terms of section 151(ii) of the Act is a jurisdictional requirement and in the absence of complying with this requirement, the reopening of assessment would fail. The Calcutta High Court in K K Agarwal and Sons HUF v. ITO (WPA No. 25770 of 2022) while dealing with the reopening of the assessment for AY 2016-17 held that the approval granted by the PCIT is not in accordance with section 151(ii) of the Act and such approval is not sustainable in law. Hence, the Court held that the show cause notice under section 148A(b) and all subsequent proceedings were not sustainable in law and were quashed. CHANGE OF OPINION :- 34. On the facts of this case, as regards change of opinion, the information made available is the same reason to believe. If one considers it clearly, it indicates change of opinion. Paragraphs 2 to 6 of the information read as under: "2. Brief details of information collected/ received by AO: On perusa....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ieve and details of escapement of income: In view of the finding of AO (as mentioned in para 5 above), I have a reason to believe that the Income chargeable to tax of Rs. 2,56,75,172/-, has escaped assessment under the meaning of section 147 of the Income tax Act, 1961. The AO has carefully applied his mind to the facts and circumstances of the case. The information in possession of the AO gives a substantial basis for the formation of a reason to believe to initiate re-assessment u/s. 147 of the Income Tax Act, 1961." 35. During the course of assessment proceedings, notice had been issued to petitioner. In reply to the notice under Section 143(2), petitioner had by its letter dated 6th December 2018 recorded, "......... based upon our discussion during the course of the hearing ..................". The transaction wise summary of the software consumable was made available. This was considered during the assessment proceedings and the assessment order accepting revised return came to be passed. 36. We would agree with the submissions of Mr. Pardiwalla that if change of opinion concept is given a go by, that would result in giving arbitrary powers to the Assessing Officer to reope....
X X X X Extracts X X X X
X X X X Extracts X X X X
....uestions raised and the satisfaction in respect thereof of the Assessing Officer. The only requirement is that the Assessing Officer ought to have considered the objection now raised in the grounds for issuing notice under Section 148 of the Act, during the original assessment proceedings. There can be no doubt in the present facts as evidenced by a letter dated 8 September 2012 the very issue of taxability of sale of shares under the head capital gain or the head profits and gains from business was a subject matter of consideration by the Assessing Officer during the original assessment proceedings leading to an order dated 12 October 2010. It would therefore, follow that the reopening of the assessment by impugned notice dated 28 March 2013 is merely on the basis of change of opinion of the Assessing Officer from that held earlier during the course of assessment proceeding leading to the order dated 12 October 2010. This change of opinion does not constitute justification and/or reasons to believe that income chargeable to tax has escaped assessment." 37. The Assessing Officer does not have any power to review his own assessment when during the original assessment petitioner pro....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... to check abuse of power by the Assessing Officer. Hence, after 1-4-1989 , Assessing Officer has power to reopen, provided there is "tangible material" to come to the conclusion that there is escapement of income from assessment. Reasons must have a live link with the formation of the belief. Our view gets support from the changes made to section 147 of the Act, as quoted hereinabove. Under the Direct Tax Laws (Amendment) Act, 1987 , Parliament not only deleted the words "reason to believe" but also inserted the word "opinion" in section 147 of the Act. However, on receipt of representations from the Companies against omission of the words "reason to believe", Parliament re-introduced the said expression and deleted the word "opinion" on the ground that it would vest arbitrary powers in the Assessing Officer............." 39. The Delhi High Court in Seema Gupta v. ITO (2022) 288 Taxman 519 (Del) held that the order under section 148A(d) and notice under section 148 of the Act should be set aside when the reassessment was initiated on a change of opinion where the same was discussed and verified by the Assessing Officer at the time of original assessment proceedings. 40. While con....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he tax payer escaping if the letter of the law fails to catch him on account of the legislature's failure to express itself clearly. A Constitution Bench in the case of Commissioner of Customs (Import), Mumbai Vs. Dilip Kumar And Company And Ors., (2018) 9 SCC 1, had reiterated these principles. It was a case where on a reference to the Larger Bench the Supreme Court was considering a question whether an ambiguity in a tax exemption provision or notification, the same must be interpreted so as to favour the assessee. Making a clear distinction between a charging provision of a taxing statute and exemption notification which waives a tax or a levy normally imposed, the Supreme Court observed as under:- "14. We may, here itself notice that the distinction in interpreting a taxing provision (charging provision) and in the matter of interpretation of exemption (98 of 113) [CW-969/2022] notification is too obvious to require any elaboration. Nonetheless, in a nutshell, we may mention that, as observed in Surendra Cotton Oil Mills Case, in the matter of interpretation of charging Section of a taxation statute, strict Rule of interpretation is mandatory and if there are two views ....