AI Drafter 
TaxTMI 
TaxTMI 
2025 (4) TMI 923
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....er on 12.04.2021. 3. It was deemed to be a notice issued under Section148A(b) of the Income Tax Act, 1961 as in force with effect from 01.04.2021 in terms of the decision of the Hon'ble Supreme Court in "Union of India and others Vs. Ashish Agarwal, 2022 SCC Online SC 543" rendered on 04.05.2022. 4. The Hon'ble Supreme Court in "Union of India and others Vs. Ashish Agarwal, 2022 SCC Online SC 543", summarized the legal position as follows:- "24. There appears to be genuine non-application of the amendments as the officers of the Revenue may have been under a bona fide belief that the amendments may not yet have been enforced. Therefore, we are of the opinion that some leeway must be shown in that regard which the High Courts could have done so. Therefore, instead of quashing and setting aside the reassessment notices issued under the unamended provision of the IT Act, the High Courts ought to have passed an order construing the notices issued under the unamended Act/unamended provision of the IT Act as those deemed to have been issued under Section 148-A of the IT Act as per the new provision Section 148-A and the Revenue ought to have been permitted to proce....
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....inion that if the aforesaid order is passed, it will strike a balance between the rights of the Revenue as well as the respective assessee's as because of a bona fide belief of the officers of the Revenue in issuing approximately 90,000 such notices, the Revenue may not suffer as ultimately it is the public exchequer which would suffer. 27. Therefore, we have proposed to pass the present order with a view to avoiding filing of further appeals before this Court and burden this Court with approximately 9000 appeals against the similar judgments and orders passed by the various High Courts, the particulars of some of which are referred to hereinabove. We have also proposed to pass the aforesaid order in exercise of our powers under Article 142 of the Constitution of India by holding that the present order shall govern, not only the impugned judgments and orders passed by the High Court of Judicature at Allahabad, but shall also be made applicable in respect of the similar judgments and orders passed by various High Courts across the country and therefore the present order shall be applicable to PAN INDIA. 28. In view of the above and for the reasons stated above, the....
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....present order and shall stand modified to the aforesaid extent. The present order is passed in exercise of powers under Article 142 of the Constitution of India so as to avoid any further appeals by the Revenue on the very issue by challenging similar judgments and orders, with a view not to burden this Court with approximately 9000 appeals. We also observe that the present order shall also govern the pending writ petitions, pending before various the High Courts in which similar notices under Section 148 of the Act issued after 1-4-2021 are under challenge. 30. The impugned common judgments and orders [Ashok Kumar Agarwal v. Union of India, 2021 SCC OnLine All 799] passed by the High Court of Allahabad and the similar judgments and orders passed by various High Courts, more particularly, the respective judgments and orders passed by the various High Courts particulars of which are mentioned hereinabove, shall stand modified/substituted to the aforesaid extent only. 31. All these appeals are accordingly partly allowed to the aforesaid extent. In the facts of the case, there shall be no order as to costs." (emphasis added) 5. In fact, pursuant to the above direc....
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.... between April 1, 2021 and June 30, 2021 till the supply of relevant information and material by the Assessing Officers to the assessee's in terms of the directions issued by this court in Union of India v. Ashish Agarwal [(2022) 444 ITR 1 (SC); (2023) 1 SCC 617.], and the period of two weeks allowed to the assessee's to respond to the show-cause notices; and 8. The Assessing Officers were required to issue the reassessment notice under section 148 of the new regime within the time limit surviving under the Income-tax Act read with the Taxation and other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020. All notices issued beyond the surviving period are time barred and liable to be set aside." 12. The case of the petitioner is that the Impugned Order / Notice dated 30.07.2022 issued under Section 148-A(d) and Section 148 of the Income Tax Act, 1961 respectively were without jurisdiction in the light of the following observations of the Hon'ble Supreme Court in Paragraph 32 in "Union of India Vs. Rajeev Bansal, [2024] 167 taxmann.com 70 / 2024 SCC OnLine SC 2693", wherein it was observed as under:- "32. A statutory authority may lack jurisdiction ....
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.... Taxation and other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 applies to the entire Income-tax Act, including sections 149 and 151 of the new regime. Once the first proviso to section 149(1)(b) is read with Taxation and other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020, then all the notices issued between April 1, 2021 and June 30, 2021 pertaining to the assessment years 2013-2014, 2014-2015, 2015-2016, 2016-2017, and 2017-2018 will be within the period of limitation as explained in the tabulation below: Assessment Year Within 3 Years Expiry of Limitation read with TOLA for (2) Within Six Years Expiry of Limitation read with TOLA for (4) 1 2 3 4 5 2013-2014 31-3-2017 TOLA not applicable 31-3-2020 30-6-2021 2014-2015 31-3-2018 TOLA not applicable 31-3-2021 30-6-2021 2015-2016 31-3-2019 TOLA not applicable 31-3-2022 TOLA not applicable 2016-2017 31-3-2020 30-6-2021 31-3-2023 TOLA not applicable 2017-2018 31-3-2021 30-6-2021 31-3-2024 TOLA not applicable (f) The Revenue concedes that for the assessment year 2015-2016, all notices i....
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....ted in the Impugned Order dated 30.07.2022 under Section 148-A(d) of the Income Tax Act, 1961 and the Impugned Notice issued under Section 148 of the Income Tax Act, 1961 on 30.07.2022 as in force with effect from 01.04.2021 (under the new regime) and therefore it is in time. 20. Learned Senior Standing Counsel for the respondent submits that the conclusion in Paragraph 114(g) in Rajeev Bansal's case (cited supra), actually comes to the rescue of the Department and not to the petitioner. 21. It is submitted that the Notices issued under Section 148 of the Income Tax Act, 1961 under the old regime were deemed to have been stayed between 01.04.2021 and 30.06.2021, and was to be excluded for computation of limitation. It is further submitted that the time taken to respond to the aforesaid Section 148 Notice dated 31.03.2021 was also to be excluded. 22. It is therefore submitted that if the aforesaid period is excluded, the Impugned Section 148 Notice dated 30.07.2022 of the Income Tax Act, 1961 as in force with effect from 01.04.2021 will be within the time limit prescribed by the Hon'ble Supreme Court in Ashish Agarwal's case (cited supra) and Rajeev Bansal's....
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....ision of the Hon'ble Supreme Court in Ashish Agarwal's case (cited supra). 29. The Impugned Section 148 Notice dated 31.03.2021 was issued within 5 years from the end of the Financial Year 2015-2016 but before the expiry period (larger period of limitation) under the Proviso to Section 147 of the Income Tax Act, 1961 on 31.03.2022 as it stood prior to 31.03.2021. Thus, Section 148 Notice dated 31.03.2021 was issued in time. Therefore, the Impugned Section 148 Notice dated 31.03.2021 was in time as per the 1st Proviso to Section 149 of the Income Tax Act, 1961 as in force with effect from 01.04.2021. 30. The extended period of limitation for issuance of Notice under Section 148 of the Income Tax Act, 1961 under the old regime as it stood till 31.03.2021 would have expired on 31.03.2022. Both the period were during the period when the Country was still under both complete and intermittent lockdown due to outbreak of Covid-19 pandemic from March 2020. 31. The Parliament enacted the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) ('TOLA') Act, 2020, to ensure that both the interests of the Revenue and Assessee's were not defeated either because....
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....C 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 the purposes of computing the period of limitation as per this section, the time or extended time allowed to the assessee, as per show-cause notice issued under clause (b) of Section 148A or the period during which the proceeding under Section 148A is stayed by an order or injunction of any Court, shall be excluded. Provided also that where immediately after the exclusion of the period referred to in the immediately preceding proviso, the period of limitation available to the Assessing Officer for passing an order under clause (d) of Section 148A is less than seven days, such remaining period shall be extended to seven days and the period of limitation under this sub-section shall be deemed to be extended accordingly. Explanation.- For the purposes of clause (b) of this subsection, "asset" shall include immovable property, being land or building or both, shares and securities, loans and advances, deposits i....
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.... 1961 or the period during which the proceedings under Section 148A of the Income Tax Act, 1961 is stayed by an Order of Injunction of any Court is to be excluded. 37. The Division Bench of the Bombay High Court in Paragraph No.35 in "Hexaware Technologies Limited Vs. Assistant Commissioner of Income-tax, Circle 15(1)(2), [2024] 162 taxmann.com 225 (Bombay)", has also held that a case can be allocated randomly to any Officer who would then have jurisdiction to issue the notice under Section 148 of the Income Tax Act, 1961. Paragraph No.35 is reproduced below:- "35. Further, in our view, there is no question of concurrent jurisdiction of the JAO and the FAO for issuance of reassessment of notice under section 148 of the Act or even for passing assessment or reassessment order. When specific jurisdiction has been assigned to either the JAO or the FAO in the Scheme dated 29th March, 2022, then it is to the exclusion of the other. To take any other view in the matter, would not only result in chaos but also render the whole faceless proceedings redundant. If the argument of Revenue is to be accepted, then even when notices are issued by the FAO, it would be open to an asses....
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....TC 298 (SC); 1958 SCC OnLine SC 22.]. In the context of the issuance of a reassessment notice, the non obstante clause will override the provisions of the Income-tax Act in case of any direct conflict or inconsistency. Section 3(1) overrides section 149 only to the extent of relaxing the time limit for issuance of reassessment notice under section 148. The time limit for issuance of reassessment notices, which fall for completion between March 20, 2020 and March 31, 2021, has been extended till June 30, 2021. However, the non obstante clause under section 3(1) of the Taxation and other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 will operate neither to extend the time limit of three years from the end of the relevant assessment year under section 149(1)(a) of the new regime nor to extend the time limit of six years from the end of the relevant assessment years under section 149(1)(b) of the old regime. The non obstante clause ensures that the Revenue has additional time beyond the statutory stipulated time limit to complete or comply with the formalities given the administrative difficulties that arose due to the covid-19 pandemic. (iii) Sanction of the....
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....nhibited from acting in pursuance of the section 148A(b) notice till the relevant material was supplied to the assessee's. Therefore, the show-cause notices were deemed to have been stayed until the Assessing Officers provided the relevant information or material to the assessee's in terms of the direction issued in Union of India v. Ashish Agarwal [(2022) 444 ITR 1 (SC); (2023) 1 SCC 617.] . To summarize, the combined effect of the legal fiction and the directions issued by this court in Union of India v. Ashish Agarwal [(2022) 444 ITR 1 (SC); (2023) 1 SCC 617.] is that the show-cause notices that were deemed to have been issued during the period between April 1, 2021 and June 30, 2021 were stayed till the date of supply of the relevant information and material by the Assessing Officer to the assessee. After the supply of the relevant material and information to the assessee, time begins to run for the assessee's to respond to the show-cause notices. 107. The third proviso to section 149 allows the exclusion of time allowed for the assessee's to respond to the show cause notice under section 149A(b) to compute the period of limitation. The third proviso excludes "the time....
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....e as real the consequences and incidents which, if the putative state of affairs had in fact existed, must inevitably have flowed from or accompanied it.")]) Therefore, the logical effect of the creation of the legal fiction by Union of India v. Ashish Agarwal [(2022) 444 ITR 1 (SC); (2023) 1 SCC 617.] is that the time surviving under the Income-tax Act read with Taxation and other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 will be available to the Revenue to complete the remaining proceedings in furtherance of the deemed notices, including issuance of reassessment notices under section 148 of the new regime. The surviving or balance time limit can be calculated by computing the number of days between the date of issuance of the deemed notice and June 30, 2021. 109. If this court had not created the legal fiction and the original reassessment notices were validly issued according to the provisions of the new regime, the notices under section 148 of the new regime would have to be issued within the time limits extended by Taxation and other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020. As a corollary, the reassessment notices to be is....
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....nder Section 148 of the Income Tax Act, 1961 as in force with effect from 01.04.2021. 47. The Impugned Notice dated 31.03.2021 for the Assessment Year 2015-2016 under Section 148 of the Income Tax Act, 1961 as it stood till 31.03.2021 was issued within the extended period of limitation, as 5 years had already expired from the end of the said Assessment Year. If the said notice is pigeonholed as a notice under Section 149(1)(a) of the Income Tax Act, 1961 as in force with effect from 01.04.2021, for the purpose of computation of period of limitation, the entire proceedings initiated under Section 148 of the Income Tax Act, 1961 as it stood till 31.03.2021 for the purpose of Section 148 of the Income Tax Act, 1961 as in force with effect from 01.04.2021 will be a still-born i.e., at the time of its issuance. This is not what was intended by either of the decision of the Hon'ble Supreme Court. 48. Therefore, it has to be held that a Notice under Section 148 of the Income Tax Act, 1961 as in force with effect from 01.04.2021 was issued within the extended period of limitation prescribed under Section 149(1)(b) of the Income Tax Act, 1961, after the said Notice dated 31.03.2021 is....