TaxTMI 
TaxTMI 
2024 (1) TMI 803
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....in violation of principles of natural justice, ultra vires the provisions of the Act and hence deserve to be set aside. 2. Petitioner is a Public Sector Undertaking operating under the control of Ministry of Finance, Government of India, viz., respondent no. 3. Petitioner is engaged in the business of General Insurance in India and outside India. It is also a 'Public Finance Institution' under Section 4A of the erstwhile Companies Act, 1956. For AY 2013-14, petitioner filed on 28th November 2013 its original return of income under Section 139(1) of the Act declaring total income of Rs.NIL. On 9th June 2014, petitioner filed revised return of income for the said assessment year, declaring a total loss of Rs. 94,06,18,248/-. Petitioner's return of income was picked up for scrutiny by respondent No. 1 by issuing notice under Section 143(2) of the Act. During the assessment proceedings, various details/information/documents were sought, which petitioner furnished from time to time. After considering all submissions, details and evidences furnished by petitioner, respondent No. 1 completed the assessment and passed the assessment order dated 29th February 2016 under Sectio....
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....had escaped assessment and proposed to reassess the income of petitioner. According to petitioner's respondent No. 1 had sought to reopen the assessment of petitioner by following the unamended provisions of Sections 147 and 148 of the Act that existed prior to 1st April 2021. By a communication dated 26th July 2021, petitioner filed its objections to the reopening notice dated 29th June 2021. Petitioner also requested for a copy of the reasons recorded with necessary documents/evidence. Respondent No. 1 did not respond and in view thereof, petitioner filed a Writ Petition in this Court being Writ Petition No. 3119 of 2021 on the ground that reopening notice dated 29th June 2021 issued by respondent No. 1 was illegal and without jurisdiction. 7. The said writ petition came to be finally disposed by a common judgment dated 29th March 2022 passed by this Court in Tata Communications Transformation Services Ltd. V/s. Assistant Commissioner of Income Tax (2022) 443 ITR 49 (Bombay) wherein the reopening notice dated 29th June 2021 was also quashed and set aside. Similar judgments inter alia quashing reopening notices issued after 1st April 2021 under the unamended provision of Sectio....
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....s 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); (iv) All defences which may be available to the assesses including those available under section 149 of the IT Act and all rights and contentions which may be available to the concerned assessees and Revenue under the Finance Act, 2021 and in law shall continue to be available." The Apex Court held that the modifications/substitution would apply to all judgments and orders passed by different High Courts where similar notices issued after 1st April 2021 under Section 148 of the Act are set aside. 8. Subsequently, respondent no. 3, through CBDT, on 11th May 2022 issued Instruction No. 1 of 2022 titled Implementation of Judgment of Hon'ble Supreme Court, dated 4th May 2022 Union of India V/s. Ashish Agarwal, Instructions Regarding. Pursuant to the judgment in Ashish Agarwal (Supra) respondent No. 1, in petitioner's case, re-initiated the assessment proceedings by issuing a notice on 30th May 2022. In the said notice the allegations were made regarding peti....
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....d the alleged tax evasion by claiming tax exemption as to why the reopening proceedings in respect of both the issues was incorrect and that no income had escaped assessment as contemplated under Section 147 of the Act. These objections were disposed by respondent No. 1 by order dated 27th July 2022 passed under Section 148A(d) of the Act. Respondent No. 1 accepted petitioner's explanation with regard to Renuka Mata Co-op. Society and the issue of tax evasion due to tax exemption alleged and has dropped the proceedings/proposed not to issue any reopening notice under Section 148 of the Act in that regard. 12. In so far as purported recorded reasoned dated 8th February 2021, that were communicated to petitioner for the first time on 14th June 2022, respondent No. 1 held that petitioner had not raised any objections and hence he would presume that petitioner had nothing to argue in respect of all the three issues raised therein. Respondent No. 1, therefore, concluded that the income had escaped assessment warranting a notice under Section 148 of the Act for AY 2013-14 and issued the impugned notice dated 27th July 2022. 13. Therefore, petitioner has approached this Court, on, i....
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....e the reassessment proceedings by following the new procedure for reassessment. At the same time also specifically granted liberty to the assessees to raise all defences available to them including the defence under Section 149 of the Act; (b) It is now a settled position in law 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. This principle has been confirmed by this Court in Siemens Financial Services Private Limited V/s. Deputy Commissioner of Income Tax & Ors. (2023) 457 ITR 647 (BOM) and in Tata Communications (Supra), where at paragraph 34 the Court has held that "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, that Mr. Mistri relied upon, expl....
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....asthan High Court in Sudesh Taneja V/s. Income Tax Officer, Ward 1(3), Jaipur (2022) 442 ITR 289, and by this Court in Tata Communications (Supra). In Ashish Agarwal (Supra), the Apex Court categorically affirmed the view taken by various High Courts including the Rajasthan High Court and in Tata Communications (Supra) by this Court; (g) Taxation and other laws (Relaxation and Amendment of certain provisions) Act, 2020 (TOLA) has no application in the present case which pertains to AY 2013-14. (h) The Apex Court in Ashish Agarwal (Supra) while enabling the Revenue to restart the reassessment proceedings held that the old Section 148 notices were to be treated as show cause notices in terms of Section 148A(b) and not notice under Section 148 of the Act and, therefore, the mandatory procedure stipulated in Section 148A was to be followed. Thereafter, the Assessing Officers were authorised to issue the notice under the amended Section 148 of the Act; (i) The first proviso to Section 149(1) of the Act puts a fetter on issuing of a notice under Section 148 and not Section 148A(b) of the Act beyond the stipulated period. The impugned notice under Section 148 of....
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....cribed if no days are excluded from the limitation period; (b) Section 3 of TOLA merely provides exclusion of Covid period while computing the 4 years or the 6 years, as the case may be, under Section 149 of the Act. Hence, after excluding the Covid period, if the notice under Section 148 of the Act is within 6 years, it has to be deemed as within limitation period of 6 years. The relaxation has to be deemed to be an integral part of Section 149 in so far as days are excluded under Section 149 of the Act for computing 4 years and 6 years; (c) After exclusion of the Covid period, the notice under Section 148 of the Act for AY 2013-14 will be deemed as within limitation of 6 years. The expression in the TOLA Act and Notification issued thereunder that the end date to which the time limit for the completion of such action shall stand extended refers to the extension so arrived at after excluding the number of days/Covid period. The Notification No. 20 of 2021 dated 31st March 2021 seeks to extend the limitation which expires on 31st March 2021 under the Act. Petitioner's argument that Notification No. 20 of 2021 dated 31st March 2021 has to be construed as extending ....
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.... the facts of the lead case Ashish Agrawal (Supra) which pertain to AY 2013-14. It is preposterous to say that Apex Court order in Ashish Agrawal (Supra) does not assist Ashish Agrawal (Supra) as an assessee. The meaning of the Apex Court order in Ashish Agrawal (Supra) has to be found in respect of its observation : (i) 'strike a balance between the rights of the Revenue as well as the respective assessees as because of a bona fide belief of the officers of the Revenue in issuing approximately 90000 such notices'; and, (ii) Appeals are ALLOWED IN PART [Emphasis by upper case in Original]." (g) The true meaning of Apex Court order in Ashish Agrawal (Supra) passed in exercise of power under Article 142 of the Constitution are as under : (i) The Notices u/s 148 irrespective of the Assessment Year, of the unamended Act issued during 01-04-2021 to 30-06-2021 are to be treated as Show-Cause Notice under the amended Income-tax Act 1961 without being hit by limitation, if issued on or before 30-06-2021. (ii) There is no necessity to issue fresh notice u/s 148A of the Act in lieu of / in substitution of old notice u/s 148 issued during 01-04-202....
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.... be expected to do impossible. 18. In rejoinder, Mr. Pardiwalla submitted as under : (a) The issue of limitation raised under the Limitation Act, 1963 would not apply to the provisions of the Income Tax Act and in particular to the case at hand in view of the specific period provided under the TOLA. Further this defence has not been raised either in the order passed under Section 148A(d) of the Act nor in the affidavit in reply; (b) Exclusion of Covid period while computing the 4 years or the 6 years, as the case may be, is in effect, nothing but the theory of travel back in time which has been rejected by this Court in Tata Communications (Supra). So also in Siemens Financials (Supra). In Ganesh Dass Khanna (Supra) the Delhi High Court has declared paragraph 6.1 of the Instructions as bad in law; (c) As regards the Notification No. 20 of 2021 dated 31st March 2021, which extends the limitation expiring on 31st March 2021 to 30th April 2021, the Notification itself says "where the time limit specified in or prescribed or notified under the Income Tax Act falls for completion on 31st March 2021". Since the limitation under the erstwhile Section 149 of the Act for reopeni....
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....ply as they came into force, w.e.f., 1st April 2021; (e) Touchstone Holdings (P.) Ltd. V/s. Income Tax Officer (2022) 142 taxmann.com 336 (Delhi) relied upon by Mr. Sharma can be distinguished in as much as in that case, without going into other details, petitioner accepted that the notice issued on 29th June 2021 under Section 148 of the Act was within limitation. In the case at hand it is petitioner's case that any notice issued after 31st March 2021 for AY 2013-14 was barred by limitation. As regards Salil Gulati V/s. Assistant Commissioner of Income Tax (2023) 150 taxmann.com 50(SC) it only followed Touchstone Holdings (Supra). FINDINGS : 19. Section 148 of the Act reads as under : 148. Issue of notice where income has escaped assessment.- Before making the assessment, reassessment or recomputation under section 147, and subject to the provisions of section 148A, the Assessing Officer shall serve on the assessee a notice, along with a copy of the order passed, if required, under clause (d) of section 148A, requiring him to furnish within such period, as may be specified in such notice, a return of his income or the income of any other person in respect of whic....
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....on 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 preceeding the assessment year relevant to the previous year in which the search is initiated or books of account, other documents or any assets are requisitioned or survey is conducted in the case of the assessee or money, bullion, jewellery or other valuable article or thing or books of account or documents are seized or requisitioned in case of any other person. Explanation 3. - For the purposes of this section, specified authority means the specified authority referred to in section 151. Section 148A of the Act reads as under : 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 auth....
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....ain 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. Section 149 of the Act read as under : 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 an asset, which has escaped assessment amounts to or is likely to amount to fifty lakh rupees or more for that year: Provided that no notice under section 148 shall be issued at any time in a case for the relevant assessment year beginning on or before 1st day of April, 2021, if such notice could not have been issued at that time on account of being beyond the time specified under the provisions of cla....
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....ocedural 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, that Mr. Mistri relied upon, explaining the provisions of the Finance Act, 1989 specifically sets out that any notices issued by Revenue after the amendment made by the Finance Act, 1989 must comply with the amended provision of the law. Therefore, any notice issued after 1st April, 2021 must comply with the amended provisions of the Act which was amended with effect from 1st April, 2021. This contention has also been considered and upheld by the Delhi High Court and the Allahabad High Court. 35. We have to also note the well settled proposition that when the Act specifies that something is to be done in a particular manner, then, that thing must be done in that specified manner alone, and any other method/(s) of performance cannot be upheld. Hence, notices issued under Section 148 of the Act after 1st April, 2021 must comply with the amended provisions of law and cannot be sustained on the basis of the erstwhile provision. 21. The Apex Court in Ashish Agarwal (Supra) did not disturb ....
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....with respect to the notice issued under Section 148A(b) or the order passed under Section 148A(d) of the Act. 23. In the present case, as for AY 2013-14, the 6 years period expired on 31st March 2021, extended under Section 3(1) of TOLA. Therefore, the impugned notice dated 28th July 2022, which is under challenge in the petition, is barred by limitation. The Hon'ble Calcutta High Court in Ved Prakash (Supra) held "By this writ petition, petitioner has challenged the impugned order under Section 148 A(d) of the Income Tax Act, 1961 dated 29th July, 2022, relating to the assessment year 2014-2015 on the ground that the same being without jurisdiction and being barred by limitation since the initiation of re-opening of the assessment has been made admittedly after six years from the end of the expiry of the period of relevant assessment year. Mr. Roychowdhury, learned Counsel appearing for the respondent is not in a position to contradict the aforesaid factual and legal position. Accordingly, this writ petition being WPO No. 2450 of 2022 is disposed of by quashing the aforesaid impugned order dated 29th July, 2022." Prior thereto, the Rajasthan High Court in Sudesh Taneja (Supra),....
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....hat no notice under Section 148 shall be issued at any time in a case for the relevant assessment year beginning on or before 01.04.2021 if such notice could not have been issued at that time on account of being beyond the time limit specified under the provisions of clause (b) of sub-section (1) of Section 149 as they stood immediately before the commencement of the Finance Act, 2021. As per this proviso thus no notice under Section 148 would be issued for the past assessment years by resorting to the larger period of limitation prescribed in newly substituted clause (b) of Section 149(1). This would indicate that the notice that would be issued after 01.04.2021 would be in terms of the substituted Section 149(1) but without breaching the upper time limit provided in the original Section 149(1) which stood substituted. This aspect has also been highlighted in the memorandum explaining the proposed provisions in the Finance Bill. If according to the revenue for past period provisions of section 149 before amendment were applicable, this first proviso to section 149(1) was wholly unnecessary. Looked from both angles, namely, no indication of surviving the past provisions after the s....
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....ate 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, deposit, payment, acquisition, purchase, construction or such other action, by whatever name called, for the purposes of claiming any deduction, exemption or allowance under the provisions contained in - (I) sections 54 to 54GB, or under any provisions of Chapter VI-A under the heading "B.-Deductions in respect of certain payments" thereof; or (II) such other provisions of that Act, subject to....
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.... (ii) the 30th day of April, 2021 shall be the end date to which the time-limit for the completion of such action shall stand extended. Explanation. - For the removal of doubts, it is hereby clarified that for the purposes of issuance of notice under section 148 as per time-limit specified in section 149 or sanction under section 151 of the Income-tax Act, under this sub-clause, the 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 commencement of the Finance Act, 2021, shall apply. (b) the compliance of any action referred to in clause (b) of sub- section (1) of section 3 of the said Act relates to intimation of Aadhaar number to the prescribed authority under sub-section (2) of section 139AA of the Income-tax Act, the time-limit for compliance of such action shall stand extended to the 30th day of June, 2021. xxxxxxxxxxxxxxxxxxx This Notification, therefore, says that where the specified Act is the Income Tax Act, 1961 and the completion of any action referred to in clause (a) of sub-section (1) of Section 3 of TOLA relates to issuance o....
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.... of the Government of India in the Ministry 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 ex....
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.... of the Act and, therefore, the mandatory procedure stipulated in Section 148A was to be followed. Thereafter, the Assessing Officers were authorised to issue the notice under the amended Section 148 of the Act. The first proviso to Section 149(1) of the Act puts a fetter on issuing of a notice under Section 148 and not Section 148A(b) of the Act beyond the stipulated period. The impugned notice under Section 148 of the Act is issued on 28th July 2022. Hence, TOLA has no application. 29. This Court in Siemens Financial (Supra), in paragraph 26, has held as under : 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 ....
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.... 148 of the Act, after 31 st March 2021 will relate back to the original date or that the clock is stopped on 31 st March, 2021 such that the provision as existing on such date will be applicable to notices issued relying on the provision of Relaxation Act. A plain reading of Relaxation Act, as Mr. Mistri rightly submitted, makes it clear that Section 3(1) of Relaxation Act merely extends the limitation provided in the specified Acts (including Income-tax Act) for doing certain Acts but such Acts must be performed in accordance with the provisions of the specified Acts. Therefore, if there is an amendment in the specified Act, the amended provision of the specified Act would apply to such actions of the Revenue. The Delhi High Court has considered and rejected the contention of the Revenue that the notice issued after 1st April 2021 relates back to an earlier period. 38. The Delhi High Court has considered and rejected this argument of the Revenue that Relaxation Act creates a legal fiction such that the notices issued under Section 148 of the Act are deemed to be issued on 31st March, 2021. The so-called legal fiction is directly contrary to the Revenue's own Circular....
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....at argument of the Revenue on the issue of travel back. This court in paragraph 37 of Tata Communications (Supra) has held that Section 3(1) of TOLA does not provide that any notice issued under Section 148 of the Act, after 31st March 2021 will relate back to the original date or that the clock is stopped on 31st March, 2021 such that the provision as existing on such date will be applicable to notices issued relying on the provision of TOLA. The court held that Section 3(1) of TOLA merely extends the limitation provided in the specified Acts including Income-tax Act for doing certain Acts but such Acts must be performed in accordance with the provisions of the specified Acts. The court had also recorded that the Delhi High Court had considered and rejected the contention of the Revenue that the notice issued after 1st April 2021 relates back to an earlier period. The Delhi High Court had considered and rejected the argument of the Revenue that TOLA creates a legal fiction such that the notices issued under Section 148 of the Act are deemed to be issued on 31st March, 2021. TOLA only granted power to the Central Government to notify the period during which actions are required to ....
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....a specific legislative enactment deferring applicability of the amended provisions and the repeal of the old provisions of the Act, would be required. Plainly no such savings clause or enactment is available. 37. Section 3(1) of Relaxation Act does not provide that any notice issued under Section 148 of the Act, after 31st March 2021 will relate back to the original date or that the clock is stopped on 31st March, 2021 such that the provision as existing on such date will be applicable to notices issued relying on the provision of Relaxation Act. A plain reading of Relaxation Act, as Mr. Mistri rightly submitted, makes it clear that Section 3(1) of Relaxation Act merely extends the limitation provided in the specified Acts (including Income-tax Act) for doing certain Acts but such Acts must be performed in accordance with the provisions of the specified Acts. Therefore, if there is an amendment in the specified Act, the amended provision of the specified Act would apply to such actions of the Revenue. The Delhi High Court has considered and rejected the contention of the Revenue that the notice issued after 1st April 2021 relates back to an earlier period. 38. The....
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....notices under Section 148 of the Act are invalid and must be struck down for this reason as well. This proposition has also been upheld by the Delhi High Court. 42. As regards Revenue's arguments that Relaxation Act being a beneficial legislation must be given purposive interpretation', the purpose of Section 3(1) of Relaxation Act is to extend limitation periods as provided in a specified Act (including the Income-tax Act). The purpose of Section 3(1) of Relaxation Act is not to postpone the applicability of amended provisions of a Specified Act. Though Relaxation Act was in existence when the Finance Act, 2021 was passed, the Parliament has specifically enacted the new, (amended) provisions of Section 147 to 151 of the Act and made them applicable with effect form 1st April, 2021. Therefore, it is clear that amendment is to be applied from 1st April, 2021. Further, when there is no ambiguity on the applicability of the provision, there is no question of resorting to purpose test. 43. As regards liberty granted by the Allahabad High Court, certainly, if the law permits issuance of notices under Section 148 of the Act (as amended), afresh, then no liberty is requi....
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....the first proviso will be substituted by the words 'one hundred and twenty percent' if the transfer of residential units takes place during the period beginning from 12th day of November, 2020 and ending on the 30th day of June, 2021. Therefore, had the intention of the legislature, while amending Sections 147 to 153, was to give it effect from 1st July, 2021, a similar savings clause could have been inserted, which has not been done. 46. Mr. Pardiwalla submitted that 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. 47. As noted earlier, it is Revenue's case that Section 3 of Relaxation Act enabled the Central Government to issue notifications which would permit the Assessing Officers to issue notices under Section 148 of the Act after 1st April, 2021 in terms of the erstwhile provisions of Sections 147 to section 151, even though the said provisions were repealed with effect from 1st April, 2021 by the Finance Act, 2021. It is, however, pertinent to note tha....
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....bsence of such a saving clause for applicability of erstwhile Sections 147 to 151 of the Act, the amended provision of the Act would apply from 1st April, 2021. (b) Moreover, the reopening notices issued after 1st April, 2021 are bad in law even if one was to apply the Explanations to the Notification Nos. 20 and 38. The Explanations seek to extend the applicability of erstwhile Sections 148, 149 and 151. They do not cover Section 147, which empowers revenue to reopen subject to Section 148 to 153, which includes Section 148A. Thus, even if Explanation are valid, procedure of Section 148A is not followed and hence, notices are invalid. (c) In any case, Relaxation Act is not applicable for Assessment Years 2015-2016 or any subsequent year and, hence, the question of applicability of the Notification Nos.20 and 38 of 2021 does not arise. The time limit to issue notice under Section 148 of the Act for the Assessment Years 2015-2016 onwards was not expiring within the period for which Section 3(1) of Relaxation Act was applicable and, hence, Relaxation Act could never apply for these assessment years. As a consequence, there can be no question of extending the period ....
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....on all authorities administering the Act all over the country and accordingly, the officers implementing the Act were bound by the decision of the Delhi High Court. Paragraphs 44.4, 49, 51, 52 and 55 of Ganesh Dass Khanna (Supra) read as under : 44.4. In our opinion, the observations of the coordinate bench make it amply clear that Section 149 of the amended 1961 Act continued to operate despite attempts to the contrary made by the introduction of the aforementioned explanations in Notifications dated 31.03.2021 and 27.04.2021. This is evident upon perusal of the following observations made by the coordinate bench in Mon Mohan Kohli's case : "...100. This Court is of the opinion that Section 3(1) of [the] Relaxation Act empowers the Government/Executive to extend only the time limits and it does not delegate the power to legislate on provisions to be followed for initiation of reassessment proceedings. In fact, the Relaxation Act does not give power to [the] Government to extend the erstwhile Sections 147 to 151 beyond 31st March, 2021 and/or defer the operation of substituted provisions enacted by the Finance Act, 2021. Consequently, the impugned Explanations in ....
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....poning their effectual operation..." xxxxxxxxxxxxxxxxx 49. The arguments advanced on behalf of the revenue that since time limits have been extended by the Central Government by virtue of the Notifications issued under Section 3(1) of TOLA and, therefore, the impugned actions which were taken much before the end date, i.e., 30.06.2021 were valid in the eyes of the law, is misconceived for the following reasons : (i) First, there was no power invested under TOLA, and that too via Notifications, to amend the statute, which had the imprimatur of the Legislature. Since, with effect from 01.04.2021, when FA 2021 came into force, the Notifications dated 31.03.2021 and 27.04.2021, which are sought to be portrayed by the revenue as extending the period of limitation, were contrary to the provisions of Section 149(1)(a) of the Act, in our opinion, they lost their legal efficacy. (ii) Second, the extension of the end date for completion of proceedings and compliances, a power which was conferred on the Central Government under Section 3(1) of TOLA, cannot be construed as one which could extend the period of limitation provided under Section 149(1)(a) of th....
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....extended reassessment notices to travel back in time to their original date when such notices were to be issued and then new section 149 of the Act is to be applied at that point. 6.2 Based on [the] above, the extended reassessment notices are to be dealt with as under : (i) AY 2013-14, AY 2014-15 and AY 2015-16: 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 sub-section (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 16-17, AY 17-18: Fresh notice under section 148 can be issued in these cases, with the approval of the specified authority, under clause (a) of sub-section (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..." 52. A careful per....
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....fund under Section 143(1D) of the Act. The petitioner before the Delhi High Court was not granted refund, pending scrutiny assessment in view of Instruction No. 1/2015 dated 13th January, 2015. The Delhi High Court held that the instruction issued is without jurisdiction. This for the reason that although Section 119 of the Act does empower the CBDT to issue instructions for the proper administration of the Act, this power is hedged in by limitations as provided in the proviso to Sections 119(1) and also 119(2) of the Act, i.e. the CBDT cannot direct an Assessing Officer to dispose of a case in a particular manner nor can the instructions be prejudicial to the assessee. Therefore, the circulars / orders / instructions issued by the CBDT under Section 119 of the Act would be binding upon the Revenue only to the extent they are beneficial to the assessee. Such Instructions, if not beneficial to the assessee, cannot prevail over the Act. In the above view, the Delhi High Court held that Instruction No. 1 of 2015 dated 13 th January, 2015 issued by the CBDT is unsustainable in law and, therefore, set it aside. It must also be pointed out that the Revenue is not disputing the decision o....
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....not apply to the facts of the present case, viz., reopening notice for the AY 2013-14. Therefore, the Revenue could not issue any notice under Section 148 beyond 31st March 2021 and hence, even the relate back theory of the Revenue could not safeguard the reassessment proceedings initiated after 1st April 2021 for AY 2013-14 36. Therefore, in the present case, as the foundation of the entire reassessment proceeding, viz., the notice issued in June 2021 itself was barred by limitation in view of non-applicability of Notification No. 20/2021, the superstructure sitting thereon, viz., the reassessment proceedings initiated pursuant to judgment in Ashish Agarwal will also be regarded as beyond time limit. Therefore, on this ground as well, the impugned reopening notice dated 28th July 2022 issued for AY 2013-14 in petitioner's case is barred by limitation and deserves to be quashed and set aside. Alternatively, it is well settled that a notice under Section 148 of the Act cannot be issued in order to reopen the assessment of an assessee in a case where the right to reopen the assessment was already barred under the pre-amended Act on the date when the new legislation came into force....
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.... travel back in time which was urged by the Revenue to support the reopening notices issued between 1st April 2021 to 30th June 2021 before this Court, as well as other High Courts [and which eventually led to the judgment in Ashish Agarwal (Supra)]. As noted earlier, this Court and other Courts have already snubbed the relate back/travel back in time theory and also the Instruction No. 1 of 2022; (c) As regards applicability of Notifications No. 20 of 2021 dated 31st March 2021 and No. 38 of 2021 dated 27th April 2021 extending the time limit even for AY 2014-15 and it is extended till 30th June 2021, respondent, in other words, argues that the Notification No. 20 of 2021 seeks to extend the time limit inter alia for issuing notice under Section 148 which was expiring on 31st March 2021 not only under the provisions of the Act, but would also include the time extension in the Act by virtue of TOLA. To put in another way, the time limit expiring on 31st March 2021 specified in Notification No. 20 of 2021, according to respondents, would have to be read to include limitation under the Act read with TOLA. As noted earlier, this contention is flawed inasmuch as it expands the....
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.... to achieve something indirectly which cannot be achieved directly. In the present case, Revenue's argument, if accepted, would be in conflict with the above law as despite the express language of 1st proviso to Section 149, reopening notice for the AY 2013-14 would be permitted to be issued beyond 6 years on the pretext that the Hon'ble Supreme Court in exercise of its powers under Article 142 permitted them to do so and otherwise, they would be remediless. On the contrary, while permitting the Revenue to re- initiate the reassessment proceedings, the Apex Court also granted liberty to assessees to raise all defences available to the assessee including the defences under Section 149 of the Act. The Apex Court observed that its order will strike a balance between the rights of the Revenue as well as the respective assessees. Moreover, in Siemens Financial (Supra), this Court has already considered a similar contention of the Revenue and held that equity has no place in taxation or while interpreting taxing statute such intendment would have any place and that taxation statute has to be interpreted strictly. The Revenue also fails to appreciate that no particular case was consid....
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....ex Court, in exercise of power under Article 142 of the Constitution, has deemed the notices issued between 1st April 2021 to 30th June 2021 under Section 148A(b) of the Act issued within limitation and by following the manner of computation of limitation provided in TOLA, the days from 1st April 2021 to 30th June 2021 would stand excluded and, therefore, the notices could be deemed to be issued on 31st March 2021, we find it to be rather fallacious. The fallacy of this contention of Revenue is conspicuous inasmuch as if the notices issued under Section 148 between 1st April 2021 and 30th June 2021, which according to them, are deemed to be issued on 31st March 2021, then it is obvious that the provisions of the new reassessment law introduced by the Finance Act, 2021 cannot apply as they came into force w.e.f. 1st April 2021 and onwards. Ashish Agarwal (Supra) in no uncertain words stated that the new provisions have to apply to all such notices. Therefore, the argument urged is completely contrary to law as well as the binding directions of the Hon'ble Supreme Court; (g) As regards reliance on Touchstone Holdings (Supra), the Hon'ble Delhi High Court held that the in....