Gujarat High Court
Seven Star vs The Income Tax Officer, Ward ... on 27 March, 2023
Bench: Niral R. Mehta
C/SCA/4043/2023 JUDGMENT DATED: 27/03/2023
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CIVIL APPLICATION NO. 4043 of 2023
With
R/SPECIAL CIVIL APPLICATION NO. 4794 of 2023
With
R/SPECIAL CIVIL APPLICATION NO. 4795 of 2023
With
R/SPECIAL CIVIL APPLICATION NO. 4797 of 2023
With
R/SPECIAL CIVIL APPLICATION NO. 4799 of 2023
With
R/SPECIAL CIVIL APPLICATION NO. 4801 of 2023
With
R/SPECIAL CIVIL APPLICATION NO. 4802 of 2023
With
R/SPECIAL CIVIL APPLICATION NO. 4804 of 2023
With
R/SPECIAL CIVIL APPLICATION NO. 4805 of 2023
With
R/SPECIAL CIVIL APPLICATION NO. 4806 of 2023
With
R/SPECIAL CIVIL APPLICATION NO. 4810 of 2023
With
R/SPECIAL CIVIL APPLICATION NO. 4812 of 2023
With
R/SPECIAL CIVIL APPLICATION NO. 4816 of 2023
With
R/SPECIAL CIVIL APPLICATION NO. 4818 of 2023
With
R/SPECIAL CIVIL APPLICATION NO. 4841 of 2023
With
R/SPECIAL CIVIL APPLICATION NO. 4842 of 2023
With
R/SPECIAL CIVIL APPLICATION NO. 4843 of 2023
With
R/SPECIAL CIVIL APPLICATION NO. 4844 of 2023
With
R/SPECIAL CIVIL APPLICATION NO. 5052 of 2023
With
R/SPECIAL CIVIL APPLICATION NO. 5054 of 2023
With
R/SPECIAL CIVIL APPLICATION NO. 5061 of 2023
With
R/SPECIAL CIVIL APPLICATION NO. 5066 of 2023
Page 1 of 26
Downloaded on : Sat Apr 01 20:33:56 IST 2023
C/SCA/4043/2023 JUDGMENT DATED: 27/03/2023
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR. JUSTICE N.V.ANJARIA Sd/-
and
HONOURABLE MR. JUSTICE NIRAL R. MEHTA Sd/-
==========================================================
1 Whether Reporters of Local Papers may be allowed No
to see the judgment ?
2 To be referred to the Reporter or not ? No
3 Whether their Lordships wish to see the fair copy No
of the judgment ?
4 Whether this case involves a substantial question No
of law as to the interpretation of the Constitution
of India or any order made thereunder ?
==========================================================
SEVEN STAR
Versus
THE INCOME TAX OFFICER, WARD 3(3)(1), SURAT
==========================================================
Appearance:
JAIMIN A GANDHI(8065) for the Petitioner(s) No. 1
MR VIRESH I RUDALAL(13206) for the Petitioner(s) No. 1
MRS KALPANAK RAVAL WITH MR KARAN SANGHANI, (1046) for the
Respondent(s) No. 1
==========================================================
CORAM:HONOURABLE MR. JUSTICE N.V.ANJARIA
and
HONOURABLE MR. JUSTICE NIRAL R. MEHTA
Date : 27/03/2023
COMMON ORAL 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
C/SCA/4043/2023 JUDGMENT DATED: 27/03/2023
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 K. Raval for the
respondent Revenue waives service of Rule in all.
2.1 Heard learned advocate Mr. Jaimin A. Gandhi for the
petitioners and learned advocate for the respondent in each
petition.
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 under
Section 148 of the Income Tax Act, 1961 seeking to reopen the
assessment in respect of assessment year 2013-14 or
assessment year 2014-15, as the case may be. Also
challenged are the orders passed under Section 148A(d) of the
Income Tax Act, 1961 (hereinafter referred to as "the Act").
3.1 The details of date of notice, date of order under Section
148A(d) of the Act, assessment year, etc., in respect of all the
C/SCA/4043/2023 JUDGMENT DATED: 27/03/2023
petitioners are given in the table below,
Sr. Special Civil Date of Date of Order under Assessme
No. Application original Section nt Year
No. Notice 148A(d)/Date of New
under Notice under
Section Section 148 of the
148 Act
1. 4043 of 2023 25.06.2021 30.07.2022 2014-15
----------------
30.07.2022
2. 4794 of 2023 24.06.2021 21.07.2022 2013-14
---------------
21.07.2022
3. 4795 of 2023 30.06.2021 29.07.2022 2013-14
----------------
29.07.2022
4. 4797 of 2023 30.06.2021 20.07.2022 2014-15
----------------
20.07.2022
5. 4799 of 2023 24.06.2021 21.07.2022 2014-15
----------------
21.07.2022
6. 4801 of 2023 10.05.2021 30.07.2022 2013-14
----------------
30.07.2022
7. 4802 of 2023 10.05.2021 30.07.2022 2014-15
----------------
30.07.2022
8. 4804 of 2023 10.05.2021 21.07.2022 2013-14
----------------
22.07.2022
9. 4805 of 2023 10.05.2021 21.07.2022 2014-15
----------------
22.07.2022
10. 4806 of 2023 28.06.2021 27.07.2022 2014-15
----------------
27.07.2022
11. 4810 of 2023 30.06.2021 29.07.2022 2014-15
----------------
29.07.2022
12. 4812 of 2023 30.06.2021 29.07.2022 2013-14
----------------
C/SCA/4043/2023 JUDGMENT DATED: 27/03/2023
29.07.2022
13. 4816 of 2023 30.06.2021 30.07.2022 2013-14
----------------
30.07.2022
14. 4818 of 2023 30.06.2021 30.07.2022 2014-15
----------------
30.07.2022
15. 4841 of 2023 30.06.2021 31.07.2022 2014-15
----------------
31.07.2022
16. 4842 of 2023 22.06.2021 29.07.2022 2014-15
----------------
29.07.2022
17. 4843 of 2023 21.05.2021 27.07.2022 2014-15
----------------
27.07.2022
18. 4844 of 2023 21.05.2021 27.07.2022 2014-15
----------------
27.07.2022
19. 5052 of 2023 30.06.2021 30.06.2022 2013-14
----------------
30.06.2022
20. 5054 of 2023 21.05.2021 27.07.2022 2014-15
----------------
27.07.2022
21. 5061 of 2023 30.06.2021 30.07.2022 2014-15
----------------
30.07.2022
22. 5066 of 2023 29.06.2021 28.07.2022 2014-15
----------------
28.07.2022
3.2 While in the respective impugned orders under section
148A(d) of the Act mentioned are the factual details and the
reasons on the basis of which the assessing officer has found
that the cases are fit to be reopened for the assessment in
respect of the year under consideration, it is inter alia stated
that the notice under section 148 of the Act was originally
issued for the assessment year 2013-14. All the said notices
were treated as show-cause notice under section 148A(b) of
C/SCA/4043/2023 JUDGMENT DATED: 27/03/2023
the Act in light of the decision of the Supreme Court in Union
of India vs. Ashish Agarwal[(2023) 1 SCC 617 : (2022)
444 ITR 1 (SC)], and that thereupon, the order under section
148A(d) was passed.
4. At the outset, learned advocate for the petitioners
submitted that the notice issued under section 148 of the Act
and the consequential order under section 148A(d) of the Act
issued by the department for assessment year 2013-14 and
assessment year 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.
C/SCA/4043/2023 JUDGMENT DATED: 27/03/2023
5.1 Section 147 of the Act empowers the assessing officer to
reassess the income of the assessee subject to the provisions
of Sections 148 to 151 of the Act in case any income
chargeable to tax has escaped assessment.
5.1.1 Prior to the applicability of Finance Act, 2021 with
effect from 01.04.2021, for the provisions of section 149 then
existed, notice under section 148 could be issued for the
relevant assessment year within four/six years from the end of
the relevant assessment year concerned. Section 149 as
operated in the old regime prior to the Finance Act, 2021,
reads as under,
"149. Time limit for notice.-(1) No notice under section
148 shall be issued" for the relevant assessment year,-
a) if four years have elapsed from the end of the relevant
assessment year, unless the case falls under clause (b) or
clause (c):
(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;
(c) if four years, but not more than sixteen years, have
elapsed from the end of the relevant assessment year
unless the income in relation to any asset (including
financial interest in any entity) located outside India,
chargeable to tax, has escaped assessment.
Explanation.-In determining income chargeable to tax
which has escaped assessment for the purposes of this
sub-section, the provisions of Explanation 2 of section
147 shall apply as they apply for the purposes of that
section.
C/SCA/4043/2023 JUDGMENT DATED: 27/03/2023
(2) The provisions of sub-section (1) as to the issue of
notice shall be subject to the provisions of section 151.
(3) If the person on whom a notice under section 148 is to
be served is a person treated as the agent of a non-
resident under section 163 and the assessment,
reassessment or recomputation to be made in pursuance
of the notice is to be made on him as the agent of such
non-resident, the notice shall not be issued after the
expiry of a period of six years from the end of the
relevant assessment year.
Explanation-For the removal of doubts, it is hereby
clarified that the provisions of sub- sections (1) and (3),
as amended by the Finance Act, 2012, shall also be
applicable for any assessment year beginning on or
before the 1st day of April, 2012."
5.1.2 The above section deals with time limit for issuance 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,
C/SCA/4043/2023 JUDGMENT DATED: 27/03/2023
"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 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 limit specified under
the provisions of clause (b) of sub-section (1) of this
section, as they stood immediately before the
commencement of the Finance Act, 2021:
Provided further that the provisions of this sub-section
shall not apply in a case, where a notice under section
153A, or section 153C read with section 153A, is required
to be issued in relation to a search initiated under section
132 or books of account, other documents or any assets
requisitioned under section 132A, on or before the 31st
day of March, 2021:
Provided also that for 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 148Aor
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
C/SCA/4043/2023 JUDGMENT DATED: 27/03/2023
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 in bank account.
(2) The provisions of sub-section (1) as to the issue of
notice shall be subject to the provisions of section 151.'
Sanction for issue of notice- "151."
5.2.2 As per the aforesaid amended section 149, notice under
section 148 of the Act could be issued within three years from
the end of the relevant assessment 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
C/SCA/4043/2023 JUDGMENT DATED: 27/03/2023
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 the Act relating to the assessment year beginning on or
before 01.04.2021, the operational conditions in the provision
as they stood before 01.04.2021 were maintained. It thus
included the factor of prescription of time limit-the limitation.
5.3 It may be mentioned that in wake of spread of pandemic
of Covid-19 around March 2020 and onwards, leading to the
lockdown resulting into societal affairs coming to a standstill,
Ordinance No. 2/20 dated 31.03.2020 was promulgated by the
Central Government, titled as the Taxation and Other Laws
(Relaxation and Amendment Of Certain Provisions) Ordinance,
2020, which became the Act subsequently, to be applied
retrospectively from 31.03.2020, being the date of ordinance.
Under section 3 of the Taxation and Other Laws (Relaxation
and Amendment Of Certain Provisions) Act, 2020, (hereinafter
referred to as 'the Taxation and other Laws Act, 2020') various
notifications were issued from time to time extending the time
line prescribed under section 149 of the Act for issuance of
reassessment notice under Section 148 of the Act. The latest
amongst the notification was the Notification No.38 of 2021
dated 27.04.2021 whereby the time limit was extended till
30.06.2021.
5.3.1 Notwithstanding that the amended sections 147 to 151
in the Act came into force with effect from 01.04.2021 under
C/SCA/4043/2023 JUDGMENT DATED: 27/03/2023
the Finance Act, 2021, the Income Tax Department issued
innumerable notices during the period from 01.04.2021 to
30.06.2021 for reopening the assessment under the provisions
of the old regime. The Department for issuing such notices,
relied on explanation to the aforesaid notification whereby the
time limit was extended as stated above. These notices
became subject matter of challenge before different High
Courts. The Notifications issued for extension of time were
prayed to be declared ultra vires.
5.4 The Supreme Court had an occasion to consider such
cases arrived before it from different High Courts, wherein the
notices issued during the period from 01.04.2021 to
30.06.2021 in relation to the earlier assessment years were
challenged. The provisions post-Finance Act, 2021, under the
new regime had come into force. This controversy before the
Apex Court culminated into decision in Ashish Agarwal
(supra).
5.4.1 The Supreme Court striking balance between the notices
issued by the Department under the old regime and the
provisions 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.
C/SCA/4043/2023 JUDGMENT DATED: 27/03/2023
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
show-cause notices in terms ofsection 148A(b). The
assessing officer shall, within thirty days from today
provide to the respective assessees information and
material relied upon by the Revenue, so that the
assesees can reply to the showcause notices within two
weeks thereafter;
The requirement of conducting any enquiry, if required,
with the prior approval of specified authority under
section 148A(a) is hereby dispensed with as a one time
measure vis-à-vis those notices which have been issued
under section 148 of the unamended Act from
01.04.2021 till date, including those which have been
quashed by the High Courts.
Even otherwise as observed hereinabove holding any
enquiry with the prior approval of specified authority is
not mandatory but it is for the concerned Assessing
Officers to hold any enquiry, if required;
The assessing officers shall thereafter pass orders in
terms of section 148A(d) in respect of each of the
concerned assessees; Thereafter after following the
procedure as required under section 148A may issue
notice under section 148 (as substituted).
(paras 28.1 to 28.5)
5.4.3 The following direction is material to assume significance
in the controversy on hand,
C/SCA/4043/2023 JUDGMENT DATED: 27/03/2023
28.5 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.
(para 28.5)
5.4.4 Thus, one of the direction and clarification in Ashish
Agarwal (supra), is that all the defences that were available
to the asessee under section 149 under the Finance Act, 2021
and in law whatever rights are available to the assessing
officer under the Finance Act, 2021 are kept open to be
continued to be available.
5.4.5 In light of above direction of the Supreme Court in para
28.5 of Ashish Agarwal (supra), the First Proviso to Section
149 after 01.04.2021 in the new regime may deservedly
recapitulated,
"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 limit specified under
the provisions of clause (b) of sub-section (1) of this
section, as they stood immediately before the
commencement of 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
C/SCA/4043/2023 JUDGMENT DATED: 27/03/2023
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
prior to 01.04.2021, but issued between 01.04.2021 to
30.06.2021 came to be challenged before the Division Bench
of this Court in Keenara Industries Pvt. Ltd. (supra), by
placing reliance on directions in paragraph 28.5 of Ashish
Agarwal (supra:SCC), and thus by contending that since
they were issued after six years from the end of the relevant
assessment year, they were barred and were without
jurisdiction.
5.6 In Keenara Industries Pvt. Ltd. (supra), the Division
Bench noticed the crux of the contents on that count raised by
the petitioners in the following paragraphs,
C/SCA/4043/2023 JUDGMENT DATED: 27/03/2023
"2.14 According to the petitioner, the impugned notice is
barred by limitation where attention of this Court has
been drawn to the legal provision. As per first proviso to
sub-section (1) of section 149(1), no notice under section
148 of the Act shall be issued at any time in a case for
the relevant assessment year beginning on or before 1 st
day of 2021, is such notice could not have been issued at
that time on account of being beyond the time limit
specified under clause (b) of sub-section (1) of section
149, as they stood immediately before the
commencement of the Finance Act, 2021.
2.15 As per clause (b) of sub-section (1) of section 149 of
the Act, as they stood immediately before the
commencement of the Finance Act, 2021, no notice
under section 148 of the Act shall be issued for the
relevant assessment year 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 Rs.1 lakh or more for that assessment year.
2.16 It is, therefore, urged that the notice under Section
148 of the Act can be issued on or after 01.04.2021 only
if the limitation for issuing such notice under old regime
of reopening had not expired prior to Finance Act, 2021
coming into force. It is clarified that the new provisions
relating to reopening introduced by the Finance Act, 2021
came into force with effect from 01.04.2021."
5.6.1 In other words, it was the contention that as per the
provisions of Section 149 of the Act in the old regime, a notice
under Section 148 could have been issued to the assesse, if
four years had elapsed from the end of the Assessment Year,
but not six years. After six years from the end of the
Assessment Year, notice under 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-
C/SCA/4043/2023 JUDGMENT DATED: 27/03/2023
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 Industries Pvt. Ltd. (supra) as
per observations in paragraph 36 of the judgment, the concept
of freezing the time limit. It was held that it was not
permissible in law for the Revenue to travel back in time. Nor
does the Taxation and Other Laws Act endorse to such
concept. It was held as per paragraphs 38 and 39 of the
Keenara Industries Pvt. Ltd. (supra) that Notifications
extending the due dates under the old provisions could not
breath any more after the repeal of the old provisions.
C/SCA/4043/2023 JUDGMENT DATED: 27/03/2023
5.8.2 In paragraph 21, it was observed that the Taxation Laws
Relaxation Act, 2020, did not elongate the erstwhile scheme,
21. It is to be noted that while enacting the Finance Act,
2021, Parliament was aware of the existing statutory
laws both under the Act as amended by the Finance Act,
2021 as also the ordinance and the TLA Act and
Notification issued there under. However, the new
scheme for reassessment which was made effective from
01.04.2021 does not have any saving clause. This brings
an end to the possibility of any fresh proceedings being
initiated under the unamended reassessment provisions
after 01.04.2021. Finance Act, 2021 also did not contain
savings clause and since the legislature through Finance
Act, 2021 and TLA Act did not include any intention to
protect and extend the erstwhile scheme of section 148
of the Act. The life of erstwhile scheme of 148 cannot be
elongated. The principle that would also employ is that
the substitution for omit and obliterate the pre-existing
provision and in absence of any saving clause either
under the ordinance or the TLA Act the Finance Act, 2021
the presumption is available for the old provision to
continue beyond 31.03.2021."
6. In Keenara Industries Pvt. Ltd. (supra), this Court
laid down the proposition of law thus,
"20. Thus, the notice under section 148 of the Act
can be issued on or after 01.04.2021 only if the limitation
for issuing such notice under old regime of reopening had
not expired prior to Finance Act, 2021 coming into force,
which means w.e.f. 01.04.2021. As per the old regime of
reopening, the reopening notice under section 148 of the
Act could have been issued before the expiry of six years
from the end of relevant assessment year. In other
words, no notice could have been issued after expiry of
period of six years from the end of the relevant
assessment year.
20.1. In other words, if the period of six years from the
end of relevant assessment year expired on 31.03.2021,
C/SCA/4043/2023 JUDGMENT DATED: 27/03/2023
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 Keenara Industries Pvt. Ltd. (supra) thus considered
the question of limitation vis-a-vis notices for reopening of the
assessment issued for the Assessment Year 2013-14 and
Assessment Year 2014-15. The final statement of law could be
said to be contained in para 52 of Keenara Industries Pvt.
Ltd. (supra),
"A conjoint reading of section 149(1) proviso w.e.f.
01.04.2021 along with section 149(1)(b) prior to
01.04.2021. The case of the petitioner for assessment
years 2013-14 and 2014-15 cannot be reopened. The
assessment year is 2013-14 (01.04.2012 to 31.03.2013)
and assessment year 2014-15 (01.04.2013 to
31.03.2014). The end of assessment year is 31.03.2014
and 31.03.2015 respectively. Therefore, the last date for
C/SCA/4043/2023 JUDGMENT DATED: 27/03/2023
issuance of notice under section 148 of the Act would be
31.03.2020 or 31.03.2021 (being six years from the end
of relevant assessment year) whereas the impugned
notices under section 148 is issued beyond that period
and hence, the same are clearly time barred."
6.2 It may also be mentioned that the Allahabad High Court
also dealt with similar issues in Rajeev Bansal vs. Union of
India [Writ Tax No. 1086 of 2022] and held to answer the
questions posed before it thus,
"(i) The reassessment proceedings initiated with the
notice under Section 148 (deemed to be a notice under
Section 148-A), issued between 01.04.2021 and
30.06.2021, cannot be conducted by giving the benefit of
relaxation/extension under the Taxation and Other Laws
(Relaxation And Amendment of Certain Provisions) Act'
(TOLA) 2020 up to 30.03.2021, and the time limit
prescribed in Section 149 (1)(b) (as substituted w.e.f.
01.04.2021) cannot be counted by giving such relaxation
from 30.03.2020 onwards to the revenue.
(ii) In respect of the proceedings where the first proviso
to Section 149(1)(b) is attracted, the benefit of TOLA
2020 will not be available to the revenue, or in other
words, the relaxation law under TOLA 2020 would not
govern the time frame prescribed under the first proviso
to Section 149 as inserted by the Finance Act' 2021, in
such cases."
6.3 This Court is in agreement with the decision in Keenara
Industries Pvt. Ltd. (supra), of this Court as well with
Allahabad High Court decision in Rajeev Bansal (supra).
6.4 Therefore, the point is no more res integra that all
original notices under section 148 of the Act referable to the
old regime and issued between 01.04.2021 to 30.06.2021
C/SCA/4043/2023 JUDGMENT DATED: 27/03/2023
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 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 respect of the above
petitions.
9. All other questions on facts involved in the reasons
weighed with Assessing Officer seeking to reopen the
assessment are kept open in all cases.
C/SCA/4043/2023 JUDGMENT DATED: 27/03/2023
10. As a result, the following order is passed,
(i) 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 2014-15 impugned in
Special Civil Application No.4043 of 2023 are hereby set aside.
(ii) Notice dated 21.07.2022 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 Application No.4794 of 2023 are hereby set aside.
(iii) Notice dated 29.07.2022 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 2013-14 impugned in
Special Civil Application No.4795 of 2023 are hereby set aside.
(iv) Notice dated 20.07.2022 under Section 148 and Order
dated 20.07.2022 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 Application No.4797 of 2023 are hereby set aside.
(v) Notice dated 21.07.2022 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 2014-15 impugned in
C/SCA/4043/2023 JUDGMENT DATED: 27/03/2023
Special Civil Application No.4799 of 2023 are hereby set aside.
(vi) 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 Application No.4801 of 2023 are hereby set aside.
(vii) 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 2014-15 impugned in
Special Civil Application No.4802 of 2023 are hereby set aside.
(viii) 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 Application No.4804 of 2023 are hereby set aside.
(ix) 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 2014-15 impugned in
Special Civil Application No.4805 of 2023 are hereby set aside.
(x) Notice dated 27.07.2022 under Section 148 and Order
dated 27.07.2022 under Section 148A(d) of the Income Tax
Act, 1961 passed by the Assessing Officer seeking to reopen
C/SCA/4043/2023 JUDGMENT DATED: 27/03/2023
the assessment for the Assessment Year 2014-15 impugned in
Special Civil Application No.4806 of 2023 are hereby set aside.
(xi) Notice dated 29.07.2022 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 Application No.4810 of 2023 are hereby set aside.
(xii) Notice dated 29.07.2022 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 2013-14 impugned in
Special Civil Application No.4812 of 2023 are hereby set aside.
(xiii) 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 Application No.4816 of 2023 are hereby set aside.
(xiv) 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 2014-15 impugned in
Special Civil Application No.4818 of 2023 are hereby set aside.
(xv) Notice dated 31.07.2022 under Section 148 and Order
dated 31.07.2022 under Section 148A(d) of the Income Tax
C/SCA/4043/2023 JUDGMENT DATED: 27/03/2023
Act, 1961 passed by the Assessing Officer seeking to reopen
the assessment for the Assessment Year 2014-15 impugned in
Special Civil Application No.4841 of 2023 are hereby set aside.
(xvi) Notice dated 29.07.2022 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 Application No.4842 of 2023 are hereby set aside.
(xvii) Notice dated 27.07.2022 under Section 148 and Order
dated 27.07.2022 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 Application No.4843 of 2023 are hereby set aside.
(xviii) Notice dated 27.07.2022 under Section 148 and Order
dated 27.07.2022 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 Application No.4844 of 2023 are hereby set aside.
(xix) Notice dated 30.06.2022 under Section 148 and Order
dated 30.06.2022 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 Application No.5052 of 2023 are hereby set aside.
(xx) Notice dated 27.07.2022 under Section 148 and Order
C/SCA/4043/2023 JUDGMENT DATED: 27/03/2023
dated 27.07.2022 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 Application No.5054 of 2023 are hereby set aside.
(xxi) 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 2014-15 impugned in
Special Civil Application No.5061 of 2023 are hereby set aside.
(xxii) Notice dated 28.07.2022 under Section 148 and Order
dated 28.07.2022 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 Application No.5066 of 2023 are hereby set aside.
11. All the petitions stand allowed. Rule is made absolute in
each petition.
Sd/-
(N.V.ANJARIA, J)
Sd/-
(NIRAL R. MEHTA,J)
TAUSIF SAIYED
