TaxTMI 
TaxTMI 
2025 (2) TMI 242
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 3172/2023, W.P.(C) 3278/2023, W.P.(C) 3281/2023, W.P.(C) 3408/2023, W.P.(C) 3470/2023, W.P.(C) 3513/2023, W.P.(C) 3533/2023, W.P.(C) 3572/2023, W.P.(C) 3573/2023, W.P.(C) 3618/2023, W.P.(C) 3668/2023, W.P.(C) 3672/2023 & CM APPL. 10804/2024 (Interim Stay), W.P.(C) 3728/2023, W.P.(C) 3733/2023, W.P.(C) 3875/2023, W.P.(C) 3878/2023, W.P.(C) 3895/2023 & CM APPL. 5818/2025 (365 Days Delay in C.A.), W.P.(C) 3940/2023, W.P.(C) 3945/2023, W.P.(C) 4027/2023, W.P.(C) 4038/2023, W.P.(C) 4150/2023, W.P.(C) 4257/2023, W.P.(C) 4258/2023, W.P.(C) 4326/2023, W.P.(C) 4375/2023, W.P.(C) 4376/2023, W.P.(C) 4378/2023, W.P.(C) 4405/2023, W.P.(C) 4423/2023, W.P.(C) 4574/2023, W.P.(C) 4584/2023, W.P.(C) 4658/2023 & CM APPL. 39117/2023 (Direction), W.P.(C) 4659/2023 & CM APPL. 17933/2023 (Stay), W.P.(C) 6426/2023, W.P.(C) 7997/2023 & CM APPL. 30759/2023 (Interim Stay), W.P.(C) 4684/2023, W.P.(C) 4786/2023, W.P.(C) 4880/2023, W.P.(C) 4899/2023, W.P.(C) 4915/2023, W.P.(C) 4941/2023, W.P.(C) 5123/2023, W.P.(C) 5186/2023, W.P.(C) 5187/2023, W.P.(C) 5210/2023, W.P.(C) 5219/2023, W.P.(C) 5237/2023, W.P.(C) 5238/2023, W.P.(C) 5239/2023, W.P.(C) 5251/2023, W.P.(C) 5265/2023, W.P.(C) 5272/2023, W.P.(C) 5298/2023....
X X X X Extracts X X X X
X X X X Extracts X X X X
.....P.(C) 6665/2023, W.P.(C) 6675/2023, W.P.(C) 6691/2023, W.P.(C) 6752/2023, W.P.(C) 6753/2023, W.P.(C) 6754/2023, W.P.(C) 6758/2023, W.P.(C) 6762/2023, W.P.(C) 6766/2023, W.P.(C) 6767/2023, W.P.(C) 6770/2023, W.P.(C) 6771/2023 & CM APPL. 26462/2023 (Interim Relief), W.P.(C) 6781/2023, W.P.(C) 6792/2023, W.P.(C) 6795/2023, W.P.(C) 6801/2023, W.P.(C) 6807/2023, W.P.(C) 6849/2023, W.P.(C) 6885/2023 & CM APPL. 26862/2023 (Interim Relief), W.P.(C) 6945/2023, W.P.(C) 6959/2023, W.P.(C) 6971/2023, W.P.(C) 6973/2023, W.P.(C) 6975/2023, W.P.(C) 6994/2023, W.P.(C) 7011/2023, W.P.(C) 7030/2023, W.P.(C) 7051/2023, W.P.(C) 7060/2023, W.P.(C) 7061/2023, W.P.(C) 7073/2023, W.P.(C) 7076/2023, W.P.(C) 7078/2023, W.P.(C) 7161/2023, W.P.(C) 7161/2023, W.P.(C) 7164/2023, W.P.(C) 7166/2023, W.P.(C) 7172/2023, W.P.(C) 7258/2023, W.P.(C) 7263/2023, W.P.(C) 7264/2023, W.P.(C) 7273/2023, W.P.(C) 7296/2023, W.P.(C) 7329/2023, W.P.(C) 7381/2023, W.P.(C) 7383/2023, W.P.(C) 7388/2023, W.P.(C) 7519/2023, W.P.(C) 7579/2023, W.P.(C) 7601/2023, CM APPL. 54593/2024 (239 Days Delay in C.A.) & CM APPL. 54641/2024 (360 days Delay in C.A.), W.P.(C) 7834/2023 & CM APPL. 30207/2023 (Stay), W.P.(C) 8564/2023, W.P.(C) 8894/....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Limited, Yogen Khosla, Raj Kumar Sabharwal, Gourav Batra, Ramayana Ispat Pvt Ltd., One Point Realty Private Limited, Udgam Education Institute Pvt. Ltd., Mr. Arvind Kumar, Adv., Mr. Arjun Kakkar & Mr. A. Sharma, Advs., Abhinav Goel., Public Clothing Pvt. Ltd., Sadhna Rani, Atul Kumar Saxena, Ravi Dhingra (HUF), Brij Bhushan Gupta, Pavel Garg Sons HUF, B.C. Enterprises, Sunil Kumar, GSM Auto Spares Private Limited, Saurav Bansal, Vijay Garg, Agsons Agencies India Private Limited, Ritika Garg, Meena Chawla, Mahesh Kumar Mani, Himank Garg, Asha Garg, Aruna Aneja, Madhur Kabra, Bharat Bhushan HUF, Raj Polybags Private Limited, Aditya Loomba, SE Finvest Private Limited, Jindal Financial And Investments Services, Mukesh Gupta, Naresh Kumar HUF, Ajay And Sons HUF, Sunayana Malhotra, Artistic Finance Pvt. Ltd., Pret Study By Janak Fashions Pvt. Ltd., Ram Kali, Rajesh Loomba, Harish Kumar Aneja HUF, Visual Technologies India Pvt Ltd., Nouvelle Securities Pvt Ltd., Pranay Aneja, Anupama Haribansh Choudhary, B.L. Health And Safety Pvt Ltd., Yogen Khosla, Mohan Singh Chauhan, Vipin Kumar Jain, Babita Jain, Kaushal Kumar HUF, Sunny Aggarwal, Bhanu Dogra, Welcome Shoes Pvt. Ltd., Triple Ess Infr....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ncome Tax & Anr., Assessing Officer, Income Tax Department, Ward No. 30(5), Delhi, National Faceless Assessment Centre, Delhi, ITO Ward 43(6) Delhi & Anr. ACIT, Cir 25(1), Delhi & Anr., Central Board Of Direct Tax & Ors., The Income Tax Department, Assessment Unit, National Faceless Assessment Centre New Delhi And Anr., For the Petitioner Through: Mr. Kunal Tandon, Sr. Adv. with Mr. Saurabh D. Karan Singh, Ms. Kanika Jain, Mr. Akash Kumar, Ms. Natasha & Mr. Sanjay Shisodia, Advs., Mr. Piyush Kaushik & Mr. Tanveer Zaki, Advs., Ms. Priyanka Goel, Adv., Mr. Naresh Jain, Mr. Ankit Daga, Ms. Arti Agarwal, Ms. Rosy Banerjee, Mr. Alok Kumar & Mr. Rishabh Jain, Advs. Dr. Aseem Chawla, Sr. Adv./ Amicus Curiae with Ms. Pratishtha & Ms. Poshali, Advs. Mr. Salil Kapoor, Mr. Sumit Lalchandani, Ms. Ananya Kapoor, Mr. Tarun Chanana, Mr. Sanat Kapoor, Mr. Shivam Yadav & Mr. Utkarsa Kr. Gupta, Mr. Kamal Sawhney, Mr. Nikhil Agarwal and Mr. Nishank Vashistha, Advs., Mr. Vipul Agrawal, SSC with Mr. Gaoraang Ranjan, Adv., Mr. Anand Shankar, Mr. Amit Kumar & Mr. Debashish Mukherjee, Advs., Mr. Paritosh Jain, Mr. Divyansh Jain & Mr. Vidhan Jain, Advs., Mr. Nagesh Kumar Behl and Mr. Mayank Pachauri, Ad....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Singh, Mr. Bhanukaran Singh Jodha, Ms. Muskaan Goel, Mr. Kamakshraj Singh & Mr. Himanshu Gaur, Advs., Mr. Gaurav Gupta, SSC with Mr. Shivendra Singh, Mr. Yojit Prattek, JSCs & Ms. Prakriti Rastogi, Adv., Mr. Sunil Agarwal, SSC with Mr. Shivansh B. Pandya, Mr. Viplav Acharya, Ms. Priya Sarkar, JSCs & Mr. Utkarsh Tiwari, Adv., Mr. Indruj Singh Rai, SSC with Mr. Sanjeev Menon, JSCs, Mr. Anmol Jagga & Mr. Gaurav Kumar, Advs., Mr. T.P. Singh, Sr. Govt. Counsel for R-2, Ms. Bakshi Vinita, SPC for R-6, Mr. Hemant Kumar Yadav, SPC for R-2., Mr. Shlok Chandra, SSC with Ms. Naincy Jain & Ms. Madhavi Shukla, JSCs., Ms. Richa Dhawan & Ms. Harshita Maheshwari, Advs., Mr. Kamal Kant Jha, SPC,GOI with Mr. Avinash Singh, Mr. Vinish Phoghat, CGSPC., Ms. Anju Bhushan Gupta, SPC with Mr. Aditya Goel & Mr. Sanyam Gupta, Advs., Mr. Balendu Shekhar, CGSC with Mr. Rajkumar Maurya and Mr. Krishna Chaitanya, Advs., Mr. Himanshu Pathak, SPC and Mr. Amit Singh, Adv., ORDER YASHWANT VARMA, J. 1. This batch of writ petitions had called in question the reassessment action initiated by the respondents for different Assessment Years [AYs]. Although learned counsels for respective sides had placed detaile....
X X X X Extracts X X X X
X X X X Extracts X X X X
....assessment. The aforesaid challenge, however, was negated by us while examining a batch of writ petitions in T.K.S. Builders (P) Ltd. v. Income Tax Officer 2024 SCC OnLine Del 7508 and where we came to render the following conclusions: - "75. It is important, at the outset, to note that a reassessment need not and in all conceivable contingencies be triggered by a return that an assessee may choose to lodge electronically. Reassessment, as contemplated within the framework of the Act, is a complex process driven by multiple factors that extend far beyond the initial filing of a return. As is manifest from a reading of Explanations 1 and 2 of section 148, reassessment may be commenced on the basis of information that may otherwise come to be placed in the hands of the jurisdictional Assessing Officer. A reassessment may also be considered being initiated if an audit objection were to be flagged and placed for the consideration of the jurisdictional Assessing Officer. In terms of Explanation 2, and post section 153A/153C fading into the sunset, we could also conceive of material unearthed in the course of a search or material, books of account or documents requisitioned unde....
X X X X Extracts X X X X
X X X X Extracts X X X X
....on as being the singular and exclusive repository of the power to assess as contemplated under the Act. This would appeal to reason additionally in light of the provisions contained in sub-sections (7) and (8) of section 144B and which enable the Principal Chief Commissioner or the Principal Director General to relegate assessment back to the jurisdictional Assessing Officer. The randomised allocation of cases based on the adopted algorithm and the use of technological tools including artificial intelligence and machine learning would appear to be primarily aimed at subserving the primary objective of faceless assessment, namely, of reducing a direct interface, for reasons of probity and to obviate allegations of individual arbitrariness. However, it would be wholly incorrect to view the faceless assessment scheme as introduced by virtue of section 144B as being the solitary route which the Act contemplates being tread for the purposes of assessment and reassessment. 79. The core attributes of the faceless assessment system revolve around the principle of randomised allocation, where "random" in its literal sense means that case assignments are made without any predetermin....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e concept of concurrent jurisdiction, it is essential to recognise that the retention of a human element within the broader framework of the National Faceless Assessment Centre (NFAC) does not conflict with the powers held by the jurisdictional Assessing Officer. Rather, this setup must be viewed as complementary, reinforcing both accountability and adaptability within the assessment process. 83. In Sanjay Gandhi Memorial Trust v. CIT (Exemptions) [(2023) 455 ITR 164 (Delhi); (2023) 3 HCC (Del) 396.], the court directly addressed whether the jurisdictional Assessing Officer could exercise assessment authority alongside the faceless assessment system. The court concluded that, while the faceless system centralises case handling through the National Faceless Assessment Centre, this framework does not completely replace or nullify the jurisdictional Assessing Officer's role. The Central Board of Direct Taxes notifications further affirm this shared responsibility, specifying that the National Faceless Assessment Centre and the jurisdictional Assessing Officer hold concurrent jurisdiction, thereby allowing the faceless system to conduct assessments without stripping the ju....
X X X X Extracts X X X X
X X X X Extracts X X X X
....(E).-In pursuance of the powers conferred by sub-sections (1), (2) and (5) of section 120 of the Income-tax Act, 1961 (43 of 1961) (hereinafter referred to as "the said Act"), the Central Board of Direct Taxes hereby directs that the Income-tax authorities of the National e-Assessment Centre (hereinafter referred to as "the NeAC") specified in column (2) of the Schedule below, having its headquarters at the place mentioned in column (3) of the said Schedule, shall exercise the powers and functions of Assessing Officer concurrently, to facilitate the conduct of faceless assessment proceedings...' (emphasis supplied). 49. It is clarified in the e-assessment and faceless assessment scheme that once a case is selected for scrutiny, for the limited purpose of passing assessment order for a particular assessment year, the case is assigned to National e-Assessment Centre and after assessment, the electronic records of the case are to be transferred back to the jurisdictional Assessing Officer. 50. Further, the e-Assessment Scheme, 2019 and Faceless Assessment Scheme issued vide two notifications each dated September 12, 2019 and August 13, 2020 under sections 14....
X X X X Extracts X X X X
X X X X Extracts X X X X
....the faceless Assessing Officer having concurrent jurisdiction. Consequently, clause (2) of the Scheme only retransfers the function of assessment to the jurisdictional Assessing Officer holding concurrent jurisdiction. Further, the said clause confers power of transfer upon Principal Chief Commissioner or Principal Director General of National e-Assessment Centre and not upon any other Principal Director General or Director General or Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner." As is evident from the above, the court came to the firm conclusion that irrespective of the system of faceless assessment that had come to be introduced and adopted, it would be wholly incorrect to hold or construe the provisions of the Act as denuding the jurisdictional Assessing Officer of the authority to undertake an assessment or of the said authority being completely deprived of authority and jurisdiction. The judgment in Sanjay Gandhi Memorial Trust v. CIT (Exemptions) [(2023) 455 ITR 164 (Delhi); (2023) 3 HCC (Del) 396.] is thus a resounding answer to the challenge as raised by the writ petitioners. That decision reinforces our conclusion o....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ependent, credible sources of information. This concurrent authority of the jurisdictional Assessing Officer reinforces the integrity and adaptability of the faceless system, ensuring that both centralised and jurisdictional assessments operate cohesively within the larger statutory framework. 89. Regard must also be had to the fact that an assessing unit of the National Faceless Assessment Centre derives no authority or jurisdiction till such time as a case is randomly allocated to it and which triggers the assessment process in accordance with the procedure prescribed by section 144B. The evaluation of data and information would indubitably precede the actual process of assessment. If the interpretation which is advocated by the writ petitioners were to be countenanced, the appraisal and analysis of information and data functions which the Act entrusts upon the jurisdictional Assessing Officer would be rendered wholly unworkable and clearly be contrary to the purpose and intent of the assessment power as constructed under the Act. 90. The notion of entirely ousting the jurisdictional Assessing Officer from the assessment process is both impractical and misaligne....
X X X X Extracts X X X X
X X X X Extracts X X X X
....art from the Faceless Reassessment Scheme, 2022 itself and the instructions which were provided to counsel appearing for the Revenue, most of the High Courts do not appear to have had the benefit of reviewing the copious material which Mr. Chawla has so painstakingly assimilated and placed for our consideration. They also do not appear to have had the advantage of a principled stand of the respondents having been placed on the record of those proceedings. 93. In Hexaware Technologies Ltd. v. Asst. CIT [(2024) 464 ITR 430 (Bom); 2024 SCC OnLine Bom 1249.], the Bombay High Court ultimately came to conclude that there could be no question of a concurrent jurisdiction of the jurisdictional Assessing Officer's and the Faceless Assessing Officer for issuance of notice under section 148. From a reading of the record, it is unclear whether the notifications conferring jurisdiction on authorities of the National Faceless Assessment Centre for the purposes of conducting faceless assessment was placed before the High Court. At least the decision makes no reference to the notification of August 13, 2020 which has been produced in these proceedings and which in clear and unambiguou....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ts ultimately observed that in the absence of any ambiguity in the language of the scheme, instructions and circulars can neither supplement nor supplant the statutory provisions. 95. The comprehensive material presented on the record by the respondents has afforded a holistic understanding of the nuanced aspects of the faceless assessment scheme enabling us to appreciate its intent and purpose in greater depth. Unlike prior cases where certain High Courts, including in Hexaware Technologies Ltd. v. Asst. CIT [(2024) 464 ITR 430 (Bom); 2024 SCC OnLine Bom 1249.], were not provided with the full spectrum of relevant notifications and contextual information, the extensive documentation in this matter has helped clarify ambiguities in both law and fact. This record has allowed for a deeper analysis, addressing key points left unexamined in previous judgments, and has illuminated the legislative and procedural intentions behind the faceless assessment scheme, particularly the concurrent jurisdiction between the jurisdictional Assessing Officer and Faceless Assessing Officer. 96. Although we had reserved judgment on this batch of writ petitions on October 4, 2024, we f....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Revenue. 24. The concept of risk management strategy formulated by the Board is incorporated in clause (i) of Explanation 1, as also specified in clause 3 of the notification dated March 29, 2022 ((2022) 442 ITR (Stat) 198) issued by the Central Government in accordance with the provisions of Explanation 1 clause (i) to section 148, which is not applicable in the case of information received during the course of search and seizure under section 132. 25. From the language employed in Explanation 1 and Explanation 2 to section 148 of the Act, 1961, we reach at an opinion that the method of automated allocation, i.e., for random allocation of cases through algorithm, or by using suitable technological tools, including artificial intelligence and machine learning, in accordance with risk management strategy formulated by the Board, as referred to in Explanation 1 clause (i) to section 148 of the Act, for issuance of notice under section 148 in a faceless manner, as per the scheme framed vide the notification dated March 29, 2022 ((2022) 442 ITR (Stat) 198), cannot be applied to the case of search and seizure under section 132, where the jurisdictional Assessing Office....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nterface between the Income-tax authority and the assessee or any other person to the extent technologically feasible. 31. The feasibility of implying technology for the process, therefore, would be relevant. There may be a situation, where a scheme may be framed by the Central Government for issuance of the notice under section 148 even in the case of search and seizure under section 132 of the Act, 1961, so as to meet out the expectations of the Legislature under section 151A, to impart greater efficiency, transparency and accountability by applying artificial intelligence, technological innovations, etc., but as of now, from a careful reading of the notification dated March 29, 2022 ((2022) 442 ITR (Stat) 198), along with the statutory provisions, we find that the aforesaid notification does not cover a case where notice under section 148 is issued by the jurisdictional Assessing Officer (JAO) based on the information received by him in the matter of search and seizure under section 132 of the Act, 1961, or requisitioned under section 132A." 99. Returning then to the Faceless Reassessment Scheme, 2022 itself, we find sufficient merit in the interpretation of it....
X X X X Extracts X X X X
X X X X Extracts X X X X
....cedure prescribed under section 148A. If after consideration of the objections that are preferred, it stands firm in its opinion that income was likely to have escaped assessment, it would transmit the relevant record to the National Faceless Assessment Centre. It is at that stage and on receipt of the said material by National Faceless Assessment Centre that the concepts of automated allocation and faceless distribution would come into play. The actual assessment would thus be conducted in a faceless manner and in accordance with an allocation that the National Faceless Assessment Centre would make. This, in our considered opinion, would be the only legally sustainable construction liable to be accorded to the scheme. Our conclusion would thus strike a harmonious balance between the evaluation of information made available to an Assessing Officer, the preliminary consideration of information for the purposes of formation of opinion and its ultimate assessment in a faceless manner. 102. We are also, in this regard, guided by the principles of beneficial construction and thus avoiding an interpretation that would render portions of the Act or the Faceless Assessment Scheme ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d." Question 'C' in light of the above is thus liable to be answered against the writ petitioners. 4. We also had an occasion to examine the issue of approval as contemplated under Section 151 of the Act in Abhinav Jindal HUF v. Commissioner of Income Tax and Ors 2024 SCC OnLine Del 6585. The challenge in Abhinav Jindal was essentially premised on approvals having been granted by Joint Commissioners of Income Tax as opposed to authorities which came to be identified and designated pursuant to amendments which were introduced in that provision by Finance Act, 2021. The Court in Abhinav Jindal had ultimately held as follows: - "30. Tested on the principles which were enunciated in Suman Jeet Agarwal v. ITO [(2022) 449 ITR 517 (Delhi); 2022 SCC OnLine Del 3141.], the petitioners would appear to be correct in their submission of the date liable to be ascribed to the impugned notices and those being viewed as having been issued and dispatched after April 1, 2021. However, and in our considered opinion, the same would be of little relevance or significance when one bears in mind the indubitable fact that all the notices were approved by the Joint Commissioner of Income-tax....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s) Act. 37. The Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act was thus concerned with overcoming the statutory closure and eclipse which would have otherwise descended upon the authority to act and take action under the specified statutes. It was essentially concerned with tiding over the insurmountable hurdles which arose due to the pandemic and the disruption that followed in its wake. The Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, viewed in that light, was neither aimed at nor designed or intended to confer a new jurisdiction or authority upon an officer under a specified enactment. On a fundamental plane, it was a remedial measure aimed at overcoming a position of irretrievable and irreversible consequences which were likely to befall during the nationwide lockdown. It was principally aimed at enabling authorities to take and commence action within the extended timelines that the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act introduced. However, it neither altered nor modified or amended the distribution of functions, the command structure or the distribution of powers unde....
X X X X Extracts X X X X
X X X X Extracts X X X X
....issioner of Income-tax. Similar would be the position which would emerge if the actions were tested on the basis of the amended section 151 and which divides the power of sanction amongst two sets of authorities based on whether reassessment is commenced within three years or thereafter. 40. What we seek to emphasise is that the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act authorisation merely enables the competent authority to take action within the extended time period and irrespective of the closure which would have ordinarily come about by virtue of the provisions contained in the Act. It does not alter or amend the structure for approval and sanction which stands erected by virtue of section 151. The Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act merely extended the period within which action could have been initiated and which would have otherwise and ordinarily been governed and regulated by sections 148 and 149 of the Act. If the contention of the respondents were to be accepted it would amount to us virtually ignoring the date when reassessment is proposed to be initiated and the same being indelibly ti....
X X X X Extracts X X X X
X X X X Extracts X X X X
....cted under Section 132 of the Act or any assets or documents requisitioned under Section 132A of the Act, where the conditions for initiating the assessment under Sections 153A and 153C of the Act are not satisfied, is no longer res integra. 39. In Principal Commissioner of Income-tax, Central-3 v. Abhisar Buildwell (P) Ltd. the Supreme Court had authoritatively held that even in cases where assessment under Section 153A of the Act cannot be initiated on account of the conditions for initiation of assessment/reassessment under the said Section not being satisfied, it is open for the Revenue to make the assessment/reassessment under Section 147 of the Act. This is of course subject to all conditions for such initiation being fully satisfied. 40. The remaining aspect to be examined is whether in cases where incriminating assets, documents or material are found during the search conducted under Section 132 of the Act or requisitioned under Section 132A of the Act, proceedings under Section 147 of the Act for reassessment can be initiated for assessment/reassessment of income notwithstanding that proceedings under Section 153C of the Act could have been initiated. The....
X X X X Extracts X X X X
X X X X Extracts X X X X
....see, the import of the said clause extends further to exclude the applicability of the said provisions altogether. The Assessee contends that the provisions of Section 147 of the Act are completely inapplicable or overridden by the provisions of Section 153C of the Act in cases where the assessment/reassessment can be premised on information or material found during the search under Section 132 of the Act or the requisition made under Section 132A of the Act. xxxx xxxx xxxx 47. Under the erstwhile scheme of block assessment in search cases, as was in force prior to the enactment of Sections 153A, 153B and 153C of the Act, the AO was required to make an assessment of the undisclosed income for the block period. Thus, there were two parallel assessments, one in respect of disclosed income and the other in respect of undisclosed income. The implementation of the said scheme, instead of simplifying the procedure in search cases, further complicated the same. One of the issues that became the focal point in several cases was whether income is required to be assessed as undisclosed income for the block period or whether it was to be considered as covered under the regul....
X X X X Extracts X X X X
X X X X Extracts X X X X
....owing undisclosed income detected as a result of search." 49. In Amar Jewellers Ltd. v. Assistant Commissioner of Income Tax, the Gujarat High Court had examined the contentions as advanced before this Court and considered the import of the non obstante clause under Section 153C of the Act. In its decision, the Gujarat High Court had observed as under: "46. A non obstante clause is generally appended to a section with a view to give the enacting part of the section, in case of conflict, an overriding effect over the provision in the same or other Act mentioned in the non obstante clause. It is equivalent to saying that in spite of the provisions or Act mentioned in the non obstante clause, the provision following it will have its full operation or the provisions embraced in the non obstante clause will not be an impediment for the operation of the enactment or the provision in which the non obstante clause occurs. (see : Principles of Statutory Interpretation, 9th Edition by Justice G.P. Singh Chapter V, Synopsis IV at pages 318 and 319). 47. Normally the use of the phrase by the Legislature in a statutory provision like notwithstanding anything to the co....
X X X X Extracts X X X X
X X X X Extracts X X X X
....made simple and easy. 50. Section 153A is a self-contained code for each assessments. The section states that on initiation of search, the Assessing Officer can issue a notice calling for the returns of income for six assessment years preceding the previous year in which the search has taken place. The non obstante clause obviates the need to comply with the requirement of the regular provisions. *** *** *** 55. Thus, having regard to the aforesaid discussion, we have reached to the conclusion that the argument of Mr. Hemani as regards the non obstante clause contained in section 153A and its effect is without any merit. It is difficult for us to take the view that the non obstanteclause in section 153A excludes the very applicability of sections 147 and 148 respectively of the Act. We are in agreement with the submission of Mr. Bhatt, the learned senior counsel appearing for the Revenue that the non obstante clause in section 153A should be understood as merely dispensing with the procedural aspect of section 147 of the Act." 50. The aforesaid decision was rendered in the contest of Section 153A of the Act. Although, the rationale as set out in ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....urisdiction is assumed. In relation to an enabling provision, the non obstante clause can be construed to only mean that recourse to those provisions is available inspite of other provisions that are overridden. The non obstante provision, in such circumstances, cannot be construed to mean that recourse to a provision, which by nature is an enabling provision, is necessary and by implication, the other provisions in respect of which, the main enactment is accorded primacy are inoperative and nugatory. Re-assessments under Section 153C of the Act and under Section 147/148 of the Act provide a machinery provision for reassessments in given circumstances. 58. In a case where pursuant to search conducted under Section 132 of the Act or requisition made under Section 132A of the Act in respect of another person (searched person), assets, documents or books of account, which either belong to the assessee or contain information pertaining to the said assessee, are found. And, the same are handed over to the AO of the assessee; he would subject to satisfaction of the other jurisdictional conditions stipulated under Section 153C of the Act, having the jurisdiction to make a reasses....
X X X X Extracts X X X X
X X X X Extracts X X X X
....the Act he would necessarily have to follow the due procedure as specified for initiating such proceedings. 61. The assumption that provisions of Section 153C of the Act precludes any proceeding under Section 147 of the Act by virtue of the non obstante clause, is unpersuasive. The scheme of Sections 153C of the Act indicates that the said provision was enacted to simplify the procedure, while maintaining the necessary safeguards, for assessment/reassessment in cases where assets belonging to the assessee or books of account or documents, which contain information pertaining to the assessee are found pursuant to a search conducted under Section 132 of the Act or requisition made under Section 132A of the Act, in respect of a person other than the assessee. This is subject to the same having a bearing on the determination of income of the assessee. The AO is neither require to record reasons for his belief that the income of the assessee for the concerned assessment year has escaped assessment nor does he require to seek further approvals as required under Section 148 of the Act. However, he must be satisfied that the assets seized or requisitioned or the documents, books o....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... had principally been canvassed with the writ petitioners contending that a reassessment action commenced in violation of the time frames which stood enumerated in Section 149 prior to the amendments introduced by Finance Act, 2021 would be liable to be struck down on that score. This since, according to the writ petitioners, the First Proviso to Section 149 (1) compels the respondents to bear in consideration the stipulations of time which governed the commencement of reassessment action basis the limitation prescribed in that provision as it existed prior to its amendment in 2021. 13. The various writ petitions and which principally relate to reassessment actions commenced with respect to AYs 2013-14 and 2014-15, however, would also have to be examined and the challenge assessed in light of the provisions of Section 3 of Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 [TOLA] as well as the judgment of the Supreme Court in Rajeev Bansal and which had not only examined the impact of its decision in Union of India and Ors. v. Ashish Agarwal (2023) 1 SCC 617 as well as the fallout of the curative steps which the respondents had taken in complianc....
X X X X Extracts X X X X
X X X X Extracts X X X X
....f the directions issued by this court in Union of India v. Ashish Agarwal [(2022) 444 ITR 1 (SC); (2023) 1 SCC 617.] has to be excluded from the computation of the period of limitation. Moreover, the period of two weeks granted to the assessees to reply to the show-cause notices must also be excluded in terms of the third proviso to section 149. 111. The clock started ticking for the Revenue only after it received the response of the assessees to the show-causes notices. After the receipt of the reply, the Assessing Officer had to perform the following responsibilities : (i) consider the reply of the assessee under section 149A (c); (ii) take a decision under section 149A (d) based on the available material and the reply of the assessee; and (iii) issue a notice under section 148 if it was a fit case for reassessment. Once the clock started ticking, the Assessing Officer was required to complete these procedures within the surviving time limit. The surviving time limit, as prescribed under the Income-tax Act read with Taxation and other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020, was available to the Assessing Officers to iss....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... could be said to be sustainable when tested on the principles enunciated in Rajeev Bansal. The Division Bench of the Court in Ram Balram upon application of the salient principles propounded by the Supreme Court in Rajeev Bansal came to hold as follows:- "65. Thus, in the facts of the present case, the last date for issuance of notice under Section 148 of the Act for AY 2013-14 under the statutory framework, as was existing prior to 01.04.2021 was 31.03.2020, that is, six years from the end of the relevant assessment year. 66. By virtue of Section 3 (1) of TOLA time for completion of specified acts, which fell during the period 20.03.2020 to 31.12.2020 were extended till 30.06.20218 . Thus, the notice dated 01.06.2021 was issued twenty-nine days prior to the expiry of period of limitation for issuing a notice under Section 148 of the Act as was extended by TOLA. As noted above, the period from 01.06.2021, the date of issuance of notice, and 04.05.2022, being the date of decision of the Supreme Court in Union of India & Ors. v. Ashish Agarwal is required to be excluded by virtue of the third proviso to Section 149 (1) of the Act. 67. Additionally, the per....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Ashish Agarwal, the AO is stated to have issued a notice under Section 148A (b) on 30 May 2022. Thus, the Division Bench in Ram Balram correctly proceeded to recognize the period between 04 May 2022 to 30 May 2022 as being liable to be removed from consideration for purposes of computation of limitation. 22. It then proceeded further to factor in the period of two weeks within which the assessee was called upon to respond to the notice under Section 148A (b) and which period is statutory liable to be excluded by virtue of the Third Proviso to Section 149 (1) of the Act. 23. The commencement point computed in accordance with the aforesaid was thus identified to be 13 June 2022, when the assessee had ultimately furnished a reply to the notice under Section 148A (b). The Court ultimately found that the period of limitation for issuance of a notice for reassessment would have expired on 12 July 2022 and consequently the reassessment notice dated 30 July 2022 being liable to be quashed and set aside. 24. A similar factual position emerges from the disclosures which appear in W.P.(C) 6849/2023 and where it was fairly conceded that the reassessment notice would be liable to be r....
X X X X Extracts X X X X
X X X X Extracts X X X X
....f writ petitions by directing the concerned AOs to evaluate the individual SCNs' under Section 148 of the Act bearing in mind our judgments in T.K.S. Builders, Abhinav Jindal and Naveen Kumar Gupta. These decisions have conclusively settled issues pertaining to the accordal of sanction under Section 151 as well as the authority of the jurisdictional AO to commence and undertake reassessment. Those decisions also lay at rest the challenge which the writ petitioners had raised that an AO is bound to adhere to the procedure prescribed by Section 153C in cases emanating from a search. 28. A similar exercise would have to be undertaken to examine the issue of surviving period in respect of each individual noticee under Section 148 and which would necessarily be guided by the judgments of Rajeev Bansal and Ram Balram. 29. The concerned AOs shall consequently pass a reasoned and speaking order dealing with the impact of the judgments referred to above upon the impugned reassessment notices and in the manner indicated in paras 27 and 28 of this order. That decision shall thus render a finding on whether the impugned reassessment notices would survive or be liable to be recalled. It s....