Madras High Court
Rajesh Gupta … vs The ... on 6 April, 2022
W.P.No.8356 of 2022
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED : 06.04.2022
CORAM :
THE HONOURABLE MR.JUSTICE R.SURESH KUMAR
Writ Petition No.8356 of 2022
and
W.M.P.Nos.8325 & 8326 of 2022
Rajesh Gupta …. Petitioner
-Vs-
1. The Additional/Joint/Deputy/Assistant
Commissioner of Income Tax Income Tax Officer,
National Faceless Assessment Centre,
Delhi.
2. The Assistant Commissioner of Income Tax
Non Corporate Circle-12(1) CHE
BSNL Tower, No.16, Greams Road,
Chennai-600 006. …. Respondents
Prayer : Writ Petition under Article 226 of the Constitution of India praying for the
issuance of a Writ of Certiorari calling for the records on the file of the 1 st respondent
in Assessment Oder in PAN: AAZPG3706E, DIN. ITBA/AST/S/147/2021-
22/1039958965(1) u/s.147 r.w.s.144B of Income Tax Act for AY 2011-12 dated
21.02.2022 as illegal, barred by limitation, contrary to provisions of the Act, principles
laid down by the Apex Court.
For Petitioner : Mr.T.Pramod Kumar Chopda
For Respondents : Mr.D.Prabhu Mukunth Arunkumar,
Junior Standing Counsel
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ORDER
The prayer sought for herein is for a Writ of Certiorari calling for the records on
the file of the 1st respondent in Assessment Oder in PAN: AAZPG3706E, DIN.
ITBA/AST/S/147/2021-22/1039958965(1) u/s.147 r.w.s.144B of Income Tax Act for AY
2011-12 dated 21.02.2022.
2. The petitioner is an assessee under the respondent. For the Assessment Year
2011-12, in order to reopen the assessment under Section 147 of the Income Tax Act,
1961 (In short 'the Act'), notice under Section 148 of the Act was issued on
30.03.2018, the said notice was served on the petitioner assessee on 03.04.2018.
This is an admitted fact.
3. Challenging the said notice under Section 148 of the Act on the ground of
limitation that it is beyond the limitation contemplated under Section 149 of the Act,
the petitioner challenged the said notice issued under Section 148 of the Act by filing
a Writ Petition in W.P.No.13431 of 2018.
4. The said Writ Petition along with certain connected Writ Petitions were heard
by a learned Judge of this Court and disposed of on 26.04.2021.
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5. The learned Judge, while passing orders in the said Writ Petitions, including
the one filed by the petitioner challenging Section 148 notice, has held that the
limitation for the purpose of Section 149, is only the issuance of notice, therefore
when a notice is issued by signing the same by the competent authority that is
sufficient that the action was initiated as contemplated within the limitation under
Section 149 of the Act. The learned Judge has further held that, thereafter, the
delivery or receipt of the order or notice is irrelevant as far as the requirement
contemplated under the particular provisions of the Act.
6. Therefore, on that ground, the petitioner and others in the said batch of
cases, unsuccessfully challenged the Section 148 notice. However, accepting the said
decision, they cooperated with the Revenue for assessment proceedings under Section
147 of the Act. Thereafter, after completing the assessment, order of assessment has
been passed by the Revenue on 21.02.2022 under Section 147 of the Act read with
Section 144B of the Income Tax Act.
7. Challenging the said assessment order, the petitioner has filed the present
Writ Petition assailing the same on the main ground that the assessment order dated
21.02.2022 is beyond the limitation prescribed under Section 153(2) of the Act.
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8. In this context, Mr.T.Pramod Kumar Chopda, learned counsel for the
petitioner has stated that, the notice under Section 148 was issued on 30.03.2018. As
per the limitation prescribed under Section 153(2) of the Act, the assessment shall be
completed and assessment order be passed within nine months from the last date of
financial year, wherein notice had been issued. Therefore, since the notice under
Section 148 of the Act was issued on 30.03.2018 during the assessment year 2017-
18, the last date of the financial year 2017-18 was 31.03.2018 and therefore, the
limitation of nine months starts from 01.04.2018.
9. He would also submit that, the said Writ Petition challenging Section 148
notice was filed on 04.06.2018, where interim order of stay was granted on
06.06.2018 and the said Writ Petition was disposed of as stated supra only on
26.04.2021. Therefore, since during the said period from 06.06.2018 to 26.04.2021,
there was a stay granted by this Court, the entire period has to be excluded.
Therefore, the calculation of nine months limitation shall be made accordingly.
10. Elaborating further, the learned counsel would contend that, since,
limitation starts from 01.04.2018 upto 05.06.2018 since there was no stay, that period
can be calculated as part of the limitation exhausted. Once the stay was vacated and
Writ Petition was dismissed on 26.04.2021, again the remainder of the limitation of
nine months starts from 27.04.2021.
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11. In this regard, the earlier period from 01.04.2018 to 05.06.2018, according
to him was 66 days, the total period of limitation was 270 days therefore 270 – 66 the
remainder is 204 days, if these 204 days were taken into account from 27.04.2021
that would end on 20.11.2021 i.e., on or before 20.11.2021, the assessment under
Section 147 of the Act should have been completed and assessment order should
have been passed.
12. However, the present assessment order which is impugned herein has been
passed only in the year 2022, nearly after three months period of limitation and thus it
is barred of limitation, therefore, on that ground, the learned counsel would contend
that, the petitioner has challenged the impugned order of assessment in this Writ
Petition. Hence, he seeks the indulgence of this Court.
13. However, Mr.D.Prabhu Mukunth Arunkumar, learned Junior Standing
Counsel appearing for the respondents has pointed out that, no doubt, there was
limitation of nine months period, within which the assessment should have been
completed, however, the calculation given by the petitioner side that the limitation was
over by 20.11.2021 is not correct. He further submits that, the nine months limitation
shall start under Section 153(2) of the Act only from the last date of the financial year,
where the notice under Section 148 was served on the assessee. Here, admittedly, the
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notice under Section 148 was served on the petitioner assessee on 03.04.2018. When
that being so, the said date 03.04.2018 ie., serving date on the assessee falls in the
financial year 2018-19, if that being so, the last date of financial year 2018-19 would
be 31.03.2019, therefore the limitation would start only from 01.04.2019. If that being
so, very well within the limitation of nine months period, as contemplated under
Section 153(2) of the Act, since the assessment having been completed, and the
assessment order was issued which is impugned herein within that nine months
period the same is to be sustained and it cannot be assailed successfully on the
alleged ground of violation of the limitation or barred by limitation. Hence, the learned
standing counsel would submit that this Writ Petition is liable to be rejected.
14. I have considered the rival submissions made by the learned counsel
appearing for both sides and have given my anxious consideration to the legal point
raised by both sides.
15. The limitation prescribed for completing the assessment under Section 147
is at Section 153(2) of the Act, which reads thus,
“No order of assessment, re-assessment or re-computation shall
be made under Section 147 after the expiry of 9 months from the
end of the financial year in which the notice under Section 148
was served (emphasis supplied).”
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16. If we compare this with the limitation of Section 149 of the Act, the
language used in Section 149 reads thus,
“No notice under Section 148 shall be issued for the relevant
assessment year if four years have elapsed from the end of the
relevant assessment year unless the case falls under Clause (b) or
Clause (c).”
17. If we put the two limitation provisions in juxtaposition for consideration and
interpretation, it is to be noted that the language used in Section 149(1) of the Act is
that, no notice under Section 148 shall be “issued”.
18. Whereas, in Section 153(2), the language used is, after the expiry of nine
months from the end of the financial year in which notice under Section 148 was
“served”.
19. The dichotomy employed by the legislature in these two provisions for
calculating the limitation viz., one is for issuance of notice under Section 148 and
another is completion of assessment under Section 147 where the wisdom of the
legislature has been cautiously used.
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W.P.No.8356 of 2022
20. The word 'issued' is occurred in Section 149(1), whereas the word
'served' is occurred in Section 153(2).
21. In fact, before the learned Judge where the Section 148 notice was under
challenge, it was the argument on behalf of the assessees that the word “issued”
means, that the notice served or received by the assessee and not 'generated' or
'despatched' or 'sent' by the Revenue alone.
22. However, this argument having been considered, was rejected by the
learned Single Judge in the said order dated 26.04.2021 in the matter of “Sadhna
Tolasariya and Others -Vs- The Income Tax Officer, Corporate Ward-12,
Chennai-6 and Others” dated 26.04.2021 made in W.P.Nos.13425 of 2018 etc., In
the said judgment, the learned Judge has held as follows,
“19. Section 149 of the Act denotes 'no notice under Section 148 shall be
issued for the relevant assessment year if four years have lapsed, which 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
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W.P.No.8356 of 2022
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. (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.”
20. Section 149 of the Act unambiguously stipulates that a notice is to
be issued before four years from the end of the relevant assessment year. In
certain cases beyond four years and within six years. Therefore, two
circumstances are elaborated in the provisions. In certain cases, notices can
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be issued within four years and in certain other cases, notices can be issued
beyond four years but within six years.
21. The period of four years and six years as contemplated are
enumerated under the provisions of the Act. However, the point to be
considered is, whether the issuance of notice dispatched and the delivery of
notice to the assessee, which is to be taken into consideration for the purpose
of determining the period of limitation.
22. Section 149 of the Act contemplates that no notice under Section
148 shall be issued. Thus, it categorically enumerates the issuance of notice
by the Competent Authority to the assessee, within a period of four years and
six years, as the case may be. Thus, the language employed indicates
“issuance of notice”.
23. 'Issuance of Notice' means, the order of notice is signed by the
Competent Authority. Once the order of notice is signed by the Competent
Authority, that is sufficient that the actions are initiated. Thereafter, delivery
or receipt of the order is irrelevant as far as the requirements contemplated
under the provisions of the Income Tax Act is concerned. Thus, for the purpose
of issuance of notice under Section 149 of the Income Tax Act, it is sufficient
to establish that if such an order/notice is signed by the Authority Competent
and if this fact is established, then it is to be construed that the provisions of
the Act are complied with."
23. The learned Judge has made a clear distinction between issuing of notice
and delivery of notice or receipt of notice. Especially in Para 23 of the judgment
referred to above, the learned Judge has stated that, issuance of notice means the
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W.P.No.8356 of 2022
order or notice is signed by the competent authority and once the order or notice is
signed by the competent authority that is sufficient that the actions are initiated.
There may not be a different interpretation for the word 'issuance'. However, the
learned Judge has further stated that, thereafter delivery or receipt of the notice is
irrelevant as far as the requirement contemplated under the provisions of the Act,
that means Section 149 of the Act.
24. However in the present case, the limitation started from the last date of
financial year during which the notice under Section 148 was served on the
assessee. The word 'served' has been predominantly and unambiguously used by
the legislature, that means, the limitation starts only from the last date of the
financial year, wherein the notice was served on the assessee and not from the
notice was 'issued' or 'sent' by the Revenue.
25. In the case in hand, admittedly the notice dated 30.03.2018 has been
served on the assessee only on 03.04.2018. If that being so, 03.04.2018 is the date
of serving of notice. Therefore, if that date falls in a particular financial year, the
limitation starts only after the last date of that financial year. Here in the case in
hand, since the notice was served on 03.04.2018, since that falls in the financial year
2018-19, the last date of the financial year being 31.03.2019, the limitation of nine
months as contemplated under Section 153(2) of the Act would necessarily start only
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W.P.No.8356 of 2022
from 01.04.2019 and not from 01.04.2018 as projected by the learned counsel for
the assessee.
26. In this context, the submission made by the learned Standing Counsel for
the Revenue is to be accepted.
27. If that being the factual position, certainly the order impugned dated
21.02.2022 passed under Section 147 of the Act is well within the limitation of nine
months period and therefore it cannot be stated that it is beyond the period of
limitation and hence on that ground it can be assailed before this Court invoking the
extraordinary jurisdiction.
28. Hence, this Court has no hesitation to hold that the ground raised by the
petitioner on the basis of limitation as contemplated under Section 153(2) of the Act
is to be answered in favour of the Revenue and against the assessee.
29. Thus, this Court is inclined to pass the following order in this writ petition.
● The impugned order cannot be assailed successfully on the
ground of limitation within the meaning of Section 153(2) of
the Act. Hence, the challenge fails and the writ petition is
liable to be rejected. Accordingly, the writ petition is
dismissed. No costs. Consequently, connected miscellaneous
petitions are also dismissed.
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W.P.No.8356 of 2022
● However, the dismissal of this writ petition shall not stand in
the way of the petitioner assessee to prefer an appeal against
the assessment order in the manner known to law especially
under the provisions of the Act.
06.04.2022
Index : Yes
Internet : Yes
KST
To
1. The Additional/Joint/Deputy/Assistant
Commissioner of Income Tax Income Tax Officer,
National Faceless Assessment Centre,
Delhi.
2. The Assistant Commissioner of Income Tax
Non Corporate Circle-12(1) CHE
BSNL Tower, No.16, Greams Road,
Chennai-600 006.
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W.P.No.8356 of 2022
R. SURESH KUMAR, J.
KST
W.P.No.8356 of 2022
06.04.2022
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