TaxTMI 
TaxTMI 
2023 (3) TMI 1616
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....LPANAK RAVAL(1046) FOR THE RESPONDENT(S) NO. 1 JUDGMENT (PER : HONOURABLE MR. JUSTICE N.V.ANJARIA) All these Special Civil Applications seeking to challenge the notices issued for re-opening of the assessment for the assessment years concerned under Section 148 and the orders passed under Section 148A(d) of the Income Tax Act, 1961. 1.1 The petitions involve similar facts and identical issues, therefore, they were heard together to be treated for disposal by this common judgment and order. 1.2 In the facts and circumstances of the case, having regard to the issues involved and with consent and request of learned advocates for the parties, all these Special Civil Applications were taken up for final consideration today. 2. Rule returnable in each of the Special Civil Applications forthwith. Learned advocate Mrs.Kalpana Raval for the respondent Revenue waives service of Rule in all. 2.1 Heard learned advocate Mr.Darshan Patel for the petitioners and learned advocate for the respondent. 3. In the present petitions filed under Article 226 of the Constitution, the respective petitioners have called in question the notice issued by respondent - assessing officer u....
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....on 148A(d) of the Act issued by the department for assessment years 2013-14 and 2014-15 are barred on the ground of limitation, the notices having been issued after passage of six years from the end of the relevant assessment year. 4.1 It was submitted that in view of the decision of the Division Bench of this Court in Keenara Industries Pvt Ltd. vs. The Income Tax Officer being Special Civil Application No. 17321 of 2021 and allied petitions, decided on 07.02.2023, the question of legality of the notice issued in respect of Assessment Year 2013-14 and Assessment Year 2014-15 is covered and the impugned notice is without jurisdiction as it is beyond the time limit prescribed. 5. In order to properly understand the controversy and the applicable provisions in particular, prior to coming into force of Finance Act, 2021 called old regime as well as the provisions introduced in the Finance Act, 2021 described as new regime, the development of the law emanating from Keenara Industries Pvt. Ltd. (supra) in that regard may be revisited with, by noticing the aspects considered and decided in the said decision. 5.1 Section 147 of the Act empowers the assessing officer to reassess t....
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....e of notice for reopening of the assessment. The assessing officer thereunder could reopen the case of the assessee beyond four years, but within six years from the end of the relevant assesssment year in case the amount escaped the assessment is likely to exceed rupees one lakh. 5.2 In the Finance Act, 2021, passed on 28.03.2021, and made applicable with effect from 01.04.2021, Section 148A came to be brought into force under section 42 of the Finance Act. It relates to conducting of inquiry and providing opportunity to the assessee before notice under section 148 of the Act could be issued. Along with substitution of new section 148A, section 149 of the Act was also recast by the legislature. 5.2.1 Section 149 of the Act, as inducted by the Finance Act, 2021 in the statute book and made applicable with effect from 01.04.2021 is 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 rel....
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....year. What is contemplated is that the assessing officer could reopen the case of the assessee beyond three years, but within 10 years from the end of the relevant assessment year. This could be done by the assessing officer within 10 years provided he is in possession of the books of accounts or documents or evidence revealing that income escaped assessment represented in form of asset was likely to exceed Rs. 50 lakhs. Further condition needed to be satisfied is the approval of the competent authority of the Income Tax under section 151 of the Act, which enable the assessing officer to assume the jurisdiction. 5.2.3 What is to be noticed with relevance is that the First Proviso to section 149 of the Act as introduced in Finance Act, 2021, inter alia stipulated 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 limit specified under the provision as it stood immediately before the commencement of the Finance Act, 2021. 5.2.4 In other words, in respect of the notice under section 148 of th....
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.... brought into force under the new regime held that all notices issued under Section 148 of the Act between 01.04.2021 to 30.06.2021 shall be deemed to have been issued under section 148A of the Act to be treated as show-cause notices under section 148A(b) of the Act. The Supreme Court observed that new provisions substituted by the Finance Act, 2021 were remedial and benevolent in nature, came to be inserted with an object to protect the right and interests of the assessee as well to sub-serve the public interest. 5.4.2 While allowing various appeals in part, the Supreme Court in Ashish Agarwal (supra), modified the judgment and orders passed by the different High Courts from where the matters had travelled by issuing the following directions, extracting from SCC, "The impugned section 148 notices issued to the respective assessees which were issued under unamended section 148 of the IT Act, which were the subject matter of writ petitions before the various respective High Courts shall be deemed to have been issued under section 148A of the IT Act as substituted by the Finance Act, 2021 and construed or treated to be showcause notices in terms ofsection 148A(b). The ass....
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....the Finance Act, 2021" 5.4.6 In simple words, the notice which could not have been issued in the old regime period due to becoming time barred as per then operating provision, would also not be permissible to be issued post- 01.04.2021. 5.4.7 As already noticed, Section 149 as it stood immediately before commencement of Finance Act, 2021, that is before 01.04.2021 in the old regime inter alia provided for time limit for notice. It stated inter alia that no notice under section 148 shall be issued for the relevant assessment year, as per clause (b), if four years, but not more than six years, have elapsed from the end of the relevant assessment year unless the income chargeable to tax, which has escaped assessment, amounts to or is likely to amount to one lakh rupees or more for that year. 5.4.8 In other words, limitation of six years from the end of relevant assessment year operated as timeline in the old regime for issuance of notice under section 148 beyond which period, it was not competent for the assessing officer to issue notice for reassessment. This embargo is made to continue in the new regime also. 5.5 Now the reopening notices which related to the period prio....
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....er section 148 was barred. 5.6.2 Stating differently, as per the old regime, for issuance of notice under section 148, in relation to Assessment Year 2013-14, the outer time limit would expire on 31.03.2020 and for issuing such notice in relation with Assessment Year 2014-15, the time period would conclude on 31.03.2021. 5.7 As already noted, the department took shelter of the time limit extended by Notifications of the Central Board of Direct Taxes to treat the above class of notices to be within time. 5.8 In Keenara Industries Pvt. Ltd. (supra), this Court proceeded to hold that enacting the provisions in Taxation and Other Laws (Relaxation & Amendment of Certain Provisions) Act, 2020, was not the permissible device whereby the time limit could be legitimately extended for the purpose of issuing Notices under Section 148, which were otherwise barred in terms of Section 149, as it exists in the old regime. 5.8.1 The Taxation and Other Laws Act, 2020 was rightly viewed to be a secondary legislation. It was therefore held that secondary legislation would not override the principal legislation-the Finance Act, 2021. Also negatived by the Division Bench in Keenara Industri....
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.... if the period of six years from the end of relevant assessment year expired on 31.03.2021, then notice under section 148 of the Act could not have been issued under the new regime for the said assessment year. 20.2 The example given in para 2.18 has already been given for appreciating these legal provisions for the assessment year 2013-14 and 14-15. In case of assessment year 2013-14, the date of expiry of the assessment year is 31.03.2014 and therefore, six years from the end of assessment year would expire on 31.03.2020. Whereas for the assessment year 2014-15, the date of expiry of assessment year is 31.03.2015 and the six years would expire on 31.03.2021. The new provision introduce by Finance Act, 2021 came into force on 01.04.2021 therefore, the limitation for issuance of notice under section 148 of the Act prescribed under the old regime of reopening expired on 01.04.2021 for assessment year 2013-14 and 2014-15. 20.3 Therefore, in plain words, a notice which had become time barred prior to 01.04.2021 as per the then provisions cannot be revived under new regime by applying section 149 (1)(b) of the Act which came into effect from 01.04.2021." 6.1 Keenar....
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....issued between 01.04.2021 to 30.06.2021 would stand beyond the prescribed permissible timeline of six years from the end of Assessment Year 2013-14 and Assessment Year 2014-15. Therefore, all such notices when they would relate to Assessment Year 2013-14 or Assessment Year 2014-15 would be time barred as per the provisions of the Act as applicable in the old regime prior to 01.04.2021. Furthermore, these notices cannot be issued as per the amended provision of the Act. 6.5 Learned advocate for the Revenue was entirely at his receiving end, unable to dispute the position of law holding the field as above. 7. In view of the above, all the impugned notices in the respective petitions under section 148 of the Act relatable to Assessment year 2013-14 or the assessment year 2014-15, as the case may be, are beyond the permissible time limit, therefore, liable to be treated illegal and without jurisdiction. 8. Since the petitions deserve to be allowed on the aforesaid crisp legal ground alone, learned advocates for the parties submitted to agree that facts and other legal issues may not be gone into by the Court. Accordingly, they are neither delineated, nor are gone into in respe....
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.... dated 22.07.2022 under Section 148 and Order dated 22.07.2022 under Section 148A(d) of the Income Tax Act, 1961 passed by the Assessing Officer seeking to reopen the assessment for the Assessment Year 2014-15 impugned in Special Civil Applications No.5033 of 2023 are hereby set aside. (ix) Notice dated 30.07.2022 under Section 148 and Order dated 30.07.2022 under Section 148A(d) of the Income Tax Act, 1961 passed by the Assessing Officer seeking to reopen the assessment for the Assessment Year 2013-14 impugned in Special Civil Applications No.5040 of 2023 are hereby set aside. (x) Notice dated 22.07.2022 under Section 148 and Order dated 21.07.2022 under Section 148A(d) of the Income Tax Act, 1961 passed by the Assessing Officer seeking to reopen the assessment for the Assessment Year 2013-14 impugned in Special Civil Applications No.5041 of 2023 are hereby set aside. (xi) Notice dated 30.07.2022 under Section 148 and Order dated 29.07.2022 under Section 148A(d) of the Income Tax Act, 1961 passed by the Assessing Officer seeking to reopen the assessment for the Assessment Year 2014-15 impugned in Special Civil Applications No.5042 of 2023 are hereby set ....