(2) The Assessing Officer shall, before issuing any notice under this
section, record his reasons for doing so.
149. (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.
(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
Xxxxxxxx
151. Sanction for issue of notice. (1) No notice shall be issued
under section 148 by an Assessing Officer, after the expiry of a period of
four years from the end of the relevant assessment year, unless the
Principal Chief Commissioner or Chief Commissioner or Principal
Commissioner or Commissioner is satisfied, on the reasons recorded by
the Assessing Officer, that it is a fit case for the issue of such notice.
(2) In a case other than a case falling under sub-section (1), no notice
shall be issued under section 148 by an Assessing Officer, who is below
the rank of Joint Commissioner, unless the Joint Commissioner is
satisfied, on the reasons recorded by such Assessing Officer, that it is a fit
case for the issue of such notice.
(3) For the purposes of sub-section (1) and sub-section (2), the Principal
Chief Commissioner or the Chief Commissioner or the Principal
Commissioner or the Commissioner or the Joint Commissioner, as the
case may be, being satisfied on the reasons recorded by the Assessing
Officer about fitness of a case for the issue of notice under section 148,
need not issue such notice himself."
[22] The existing provision under Section 147 at the relevant point
of time provided that if the Assessing Officer has reason to believe that any
income chargeable to tax has escaped assessment for any assessment year,
he may assess or reassess such income and such other income which has
escaped assessment and which comes to his notice subsequently in the
course of proceedings under Section 147. Section 148 says that before
making an assessment, reassessment etc. under Section 147, the Assessing
Officer is required to issue and serve a notice on the assessee calling upon
the assessee to file return of his income in the prescribed form i.e. setting
forth such particulars as may be called upon. Such a notice is subject to the
time limit prescribed under Section 149. Under sub-section 1(b) of Section
149, no notice under section 148 shall be issued in a case 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.
Section 151 provides that no notice shall be issued under Section 148 by an
Assessing Officer, after the expiry of a period for four years from the end of
the relevant assessment year, unless the Principal Chief Commissioner or
Chief Commissioner or Principal Commissioner or Commissioner is
satisfied on the reasons recorded by the Assessing Officer that it is a fit case
for the issue of such notice.
[23] On the introduction of the amended Section 147 with effect
from 01.04.1989 the only one condition that remained for the Assessing
Officer to reopen assessment proceedings was where the Assessing Officer
had reason to believe that income has escaped assessment. The Apex Court,
however, cautioned that it needs to be given a schematic interpretation to the
words "reason to believe", otherwise Section 147 would give arbitrary
powers to the Assessing Officer to reopen assessment on the basis of "mere
change of opinion" which cannot be per se reason to reopen.
[24] The Apex Court in case of Commissioner of Income Tax,
Delhi versus Kelvinator of India Limited, reported in (2010) 2 SCC 723 at
paragraphs No.6 and 7 has explained the change in the law as regards the
basis to reopen the concluded assessment only on the basis of „reason to
believe‟ and not on the basis of „change in opinion‟ after the amendment
made with effect from 01.04.1989 which reads as under:
"6. We must also keep in mind the conceptual difference between power to
review and power to reassess. The assessing officer has no power to review;
he has the power to reassess. But reassessment has to be based on fulfillment
of certain precondition and if the concept of "change of opinion" is removed,
as contended on behalf of the Department, then, in the garb of reopening the
assessment, review would take place.
7. One must treat the concept of "change of opinion" as an in-built test to
check abuse of power by the assessing officer. Hence, after 1-4-1989, the
assessing officer has power to reopen, provided there is "tangible material" to
come to the conclusion that there is escapement of income from assessment.
Reasons must have a live link with the formation of the belief. Our view gets
support from the changes made to Section 147 of the Act, as quoted
hereinabove. Under the Direct Tax Laws (Amendment) Act, 1987, Parliament
not only deleted the words "reason to believe" but also inserted the word
"opinion" in Section 147 of the Act. However, on receipt of representations
from the companies against omission of the words "reason to believe",
Parliament reintroduced the said expression and deleted the word "opinion" on
the ground that it would vest arbitrary powers in the assessing officer."
[25] It would also be relevant to go back a bit further on the
expatiation of the interpretation of Section 147 of the Act as laid down by
the Apex Court in case of M/S Phool Chand Bajrang Lal and another
versus Income Tax Officer and another, reported in (1993) 4 SCC 77 and
in the case of Sri Krishna Private Limited and others versus I.T.O.
Calcutta and others, reported in (1996) 9 SCC 534. The Apex Court in the
case of Phool Chand Bajrang Lal (supra) examined the purport of Section
147 of the Act and observed that the object of section 147 is to ensure that a
party cannot get away by willfully making a false or untrue statement at the
time of original assessment and when that falsity comes to notice, to turn
around and say "you accept my lie, now your hands are tied and you can do
nothing". The Apex Court opined that it would be a travesty of justice to
allow an assessee such latitude. After adverting to various previous
decisions, it held that an Income Tax Officer acquires jurisdiction to reopen
an assessment under Section 147(a) read with Section 148 of the Income
Tax Act, 1961 only if on the basis of specific, reliable and relevant
information coming to his possession subsequently, he has reasons, which he
must record, to believe that due to omission or failure on the part of the
assessee to make a true and full disclosure of all material facts necessary for
his assessment during the concluded assessment proceedings, any part of his
income, profit or gains chargeable to income tax has escaped assessment.
Paragraph 25 of the judgment rendered in this context is quoted hereunder:
"25. From a combined review of the judgments of this Court, it follows that an
Income Tax Officer acquires jurisdiction to reopen assessment under Section
147(a) read with Section 148 of the Income Tax Act, 1961 only if on the basis
of specific, reliable and relevant information coming to his possession
subsequently, he has reasons which he must record, to believe that by reason
of omission or failure on the part of the assessee to make a true and full
disclosure of all material facts necessary for his assessment during the
concluded assessment proceedings, any part of his income, profit or gains
chargeable to income tax has escaped assessment. He may start reassessment
proceedings either because some fresh facts come to light which were not
previously disclosed or some information with regard to the facts previously
disclosed comes into his possession which tends to expose the untruthfulness
of those facts. In such situations it is not a case of mere change of opinion or
the drawing of a different inference from the same facts as were earlier
available but acting on fresh information. Since, the belief is that of the
Income Tax Officer, the sufficiency of reasons for forming the belief, is not
for the Court to judge b but it is open to an assessee to establish that there in
fact existed no belief or that the belief was not at all a bona fide one or was
based on vague, irrelevant and non-specific information. To that limited
extent, the Court may look into the conclusion arrived at by the Income Tax
Officer and examine whether there was any material available on the record
from which the requisite belief could be formed by the Income Tax Officer
and further whether that material had any rational connection or a live link for
the formation of the requisite belief. It would be immaterial whether the
Income Tax Officer at the time of making the original assessment could or,
could not have found by further enquiry or investigation, whether the
transaction was genuine or not, if on the basis of subsequent information, the
Income Tax Officer arrives at a conclusion, after satisfying the twin conditions
prescribed in Section 147(a) of the Act, that the assessee had not made a full
and true disclosure of the material facts at the time of original assessment and
therefore income chargeable to tax had escaped assessment. The High Courts
which have interpreted Burlop Dealer case as laying down law to the contrary
fell in error and did not appreciate the import of that judgment correctly."
[26] Again in the case of Sri Krishna Private Limited (supra), the
Apex Court emphasized that what is required of an assessee in the course of
assessment proceedings is a full and true disclosure of all material facts
necessary for making assessment for that year. It was emphasized that it is the
obligation of the assessee to disclose the material facts or what are called primary
facts. It is not a mere disclosure but a disclosure which is full and true. Referring
to a decision in the case of Phool Chand Bajrang Lal (supra), it was highlighted
that a false disclosure is not a true disclosure and would not satisfy the
requirement of making a full and true disclosure. The obligation of the assessee
to disclose the primary facts necessary for his assessment fully and truly can
neither be ignored or watered down. All the requirements stipulated by
Section 147 must be given due and equal weight.
[27] In a recent judgment rendered by the Apex Court in case of M/S
Mangalam Publications Kottayam, versus Commissioner of Income Tax,
Kottayam, reported in (2024) 10 SCC 433, the Apex Court had the occasion to
once again examine the perennial question which arises in income tax
jurisprudence i.e. whether reopening of a concluded assessment i.e.
reassessment under Section 147 of the Income Tax Act, 1961 following
issuance of notice under Section 148 of the Act is legally sustainable or is bad
in law. The Apex Court in Mangalam Publication (supra) extensively
dealt with the position in law as it existed prior to the amendment to Section
147 and post amendment introduced by Direct Tax Laws (Amendment) Act,
1989 and also the decisions rendered by the Apex Court in case of
Kelvinator of India Limited (supra); Phool Chand Bajrang Lal (supra) and
Sri Krishna Private Limited (supra).
[28] The Apex Court also dealt with the Constitution Bench
judgment rendered in case of Calcutta Discount Company Limited versus
Income Tax Officer, Companies District Calcutta & another, reported in
AIR 1961 SC 372. It was a case under Section 34 of the Income Tax Act
which is pari materia to Section 147 of the Act. The Apex Court in the case
of Mangalam Publication (supra) once again reiterated the salient principles
as regards reopening of assessment by invocation of power under Section
147 of the Act.
[29] In the background of the position in law as above, the issues
which fall for consideration in the present writ petition inter alia are as
under:
(i) Whether reopening of assessment for the assessment year 2014-
2015 by the impugned notice dated 31.03.2021 issued under Section
148 of the Income Tax Act, 1961 is proper in the eye of law.
(ii) Whether the impugned notice is barred by limitation as per
Section 149(1)(b) of the Act of 1961.
(iii) Whether the Principal Commissioner of Income Tax was the
competent authority to grant permission for invoking the extended
period of limitation beyond four years as per Section 149(1)(b) to the
Assessing Officer to reopen the assessment for the assessment year
2014-2015.
(iv) Whether the notice issued under Section 148 of the Act of 1961
on 01.04.2021 is permissible in law as the period of limitation
expired on 31.03.2021 itself.
[30] In order to deal with the issues in controversy hereinabove, we
proceed to dilate on the relevant materials placed from record in the same
succession. The assessment order dated 29.03.2016 is at (Annexure-1)
concerning the assessment year 2014-2015. Consequent to notice issued
under Section 142(1) upon the assessee, he submitted his return of income of
Rs.64,17,120/-. Thereafter notices under Section 143(2) were issued on him
on 11.12.2015 and again on 31.12.2015 a notice under Section 142(1) was
issued fixing the case for hearing on 15.01.2016. On 15.01.2016, the
authorized representative of the assessee appeared and submitted reply but
failed to submit any documents or books of accounts etc. On 24.02.2016
another notice under Section 143(2)/142(1) was issued upon the assessee
fixing the case for hearing on 02.03.2016. On that date, the authorized
representative of the assessee appeared but failed to produce any books of
accounts, ledgers, bills, vouchers and any other supporting evidence
substantiating his case. The Assessing Officer thereafter undertook the
assessment on the basis of the materials which were procured during the
search and seizure operation which included the ledger/cash book of
different years in the tally data of the petitioner. It showed huge amount of
undisclosed investment, negative cash and undisclosed withdrawal. The
assessee failed to explain the difference and was also unable to produce any
counter documentary evidence during the hearing. Therefore, the amount of
difference of Rs.9,62,33,682/- was added back into the income of the
assessee under Section 68 as undisclosed investment. Penalty proceedings
under Section 271(i)(c) were initiated for furnishing inaccurate details and
concealment of income. Further, on the basis of loose sheets which are
statements showing the details of pendency with FCI towards different
dispatching point in respect of amount receivable by Abhijit Paul and
Subhajit Paul as on 17.04.2013 and 13.04.2013 and also the details of
liability against such receivable, the assessee could not explain the surplus of
Rs.2,72,33,682/- by producing any counter documentary evidence.
Therefore, the difference of Rs.2,72,33,682/- after considering depreciation
of Rs.35,36,591/- was added back into the income of the assessee as
undisclosed investment. Penalty proceedings were separately initiated
Section 271(i)(c). As a result, the additions were Rs.9,62,33,682.00 + Rs.
2,72,33,682.00 totaling Rs.12,98,56,202.00.
[31] The tally data as contained under paragraph 5 of the assessment
order is extracted hereunder as it may have a bearing on the answer to the
issue.
Tally data with path F.Y/Date Ledger/nature of Amount Remarks
account
Ramkrishna
4729255
CN-8/D 2013- Enterprise
Drive/Tally/data/0005 22.08.2013 Namita Paul 13205126
Subhajit Paul 16458109
Rajarshi Motors 56313098 Liability
Pvt. Ltd.
Drawings 5499812
[32] Petitioner being aggrieved went in appeal before the
Commissioner of Income Tax (Appeals) under Section 143(3) of the Income
Tax Act. The Commissioner (Appeals), however, after hearing the petitioner
the revenue was pleased to delete both the additions. The appellate order
dated 22.03.2018 is at (Annexure-2). Thereafter, the revenue has gone in
appeal before the Income Tax Appellate Tribunal, Guwahati bearing ITAT
113/GTY/2018 which is still pending. In the meantime, notice under Section
148 of the Income Tax Act, 1961 was issued on 31.03.2021 by the
DCIT/ACIT Circle, Silchar (Annexure-4) stating that he had reason to
believe that the assessess‟s income chargeable to tax for the assessment year
2014-2015 had escaped assessment within the meaning of Section 147 of the
Income Tax Act, 1961. He was asked to file his return in the prescribed form
for the relevant assessment year. It also recorded that the notice has been
issued after obtaining the necessary satisfaction of the PCIT, Shillong.
[33] Petitioner made a request for grant of reasons recorded for
issuing notice under Section 148 and the copy of the approval of the superior
officer under Section 151 of the Act vide letter dated 14.05.2021 (Annexure-
6). The reasons recorded were communicated to the petitioner and are
extracted hereunder:
"In this case the assessment order was passed u/s 143(3) On examination of the
record it was found that as per page 32 of Appraisal report there is a net profit for
the period 01.04.2013 to 22.08.2013 is 96,89,209/- on the basis of P&L account
found in the tally data of Abhijit Paul. The net profit disclosed in the Return of
Income filed in response to notice u/s 142(1) was Rs.50.65,358. Therefore the
amount of Rs.46,23,851/- being the difference in net profit should have been
added as undisclosed income of the assessee. This resulted in underassessment of
income of Rs.46,23,851/-
In this context, you are, required to submit in writing as to why the above amount
of Rs.46.23.851/- should not be added back to your income and taxed
accordingly.
Note. Please provide the necessary documents/evidences in support of the details
furnished by you in response to the above questionnaire."
[34] The approval under Section 151 of the Income Tax Act by the
PCIT, Shillong is at (Annexure-11). Thereafter, petitioner filed his objection
against initiation of proceedings on 30.01.2022 (Annexure-19). The same
has been rejected by the order dated 21.02.2022 (Annexure-20) which is also
impugned in the present writ petition. It holds that the assessee had not
disclosed the material facts truly and fully and therefore income chargeable
to tax had escaped assessment. Therefore, the provisions of Section 147 and
148 of the Act are correctly invoked. The objection as to the authority of the
PCIT to grant permission was also rejected as untenable.
[35] During course of hearing of this case, the revenue relied upon
the appraisal report which formed the basis of the audit objection on which
the notice under Section 148 was issued for reopening assessment under
Section 147 of the Act of 1961. Since the appraisal report was being relied
upon to justify the reopening of the assessment and they were not part of the
pleadings, the respondent-revenue was asked to make a categorical
statement on affidavit as to whether the appraisal report was available before
the assessing authority while making the initial assessment. A categorical
statement has been made at paragraph 4 of the second additional affidavit to
the following effect:
"That based on such information gathered from the 'Appraisal Report' as well
as the disclosure of Shri Swapan Kumar Paul and also after considering the
return filed by the Petitioner pursuant to the Notice issued under Section
142(1) of the Act, the Assessing Authority completed the assessment of the
Petitioner after complying with all the required provisions of law and passed
the Assessment Order vide dated 29.03.2016 whereby the total income of the
Petitioner was assessed at Rs.12,98,56,202.00. In the said Assessment Order
dated 29.03.2016, the Assessing Authority made certain additions on two
heads i.e. addition of Rs.9,62,33,682.00 on account of 'Undisclosed
Investment' and addition of Rs.2,72,33,682.00 on account of 'Undisclosed
Income'. Therefore the said 'Appraisal Report' was available with the
Assessing Authority who completed the original assessment of the petitioner
after initiating a proceedings based on the said 'Appraisal Report' as well as
the disclosure made by Sri Swapan Kumar Paul. Since the said 'Appraisal
Report' contains information of nine different assesses including the said Sri
Swapan Kumar Paul in whose residence the search operation was conducted,
the complete 'Appraisal Report' was not furnished to the Petitioner and only
the relevant portion was furnished which was annexed as Annexure with the
writ petition filed by the Petitioner. The Respondents further states that since
the 'Appraisal Report' discloses confidential information of other assesses also
the same could not be shared with the present Petitioner except the relevant
portion so far as the present Petitioner is concerned. However the Respondents
crave leave of this Hon'ble Court to produce the complete 'Appraisal Report'
before this Hon'ble Court on the next date of hearing."
[36] The appraisal report is also enclosed at page 75 and 87 to 92 of
the writ petition concerning the petitioner as supplied by the revenue.
Perusal of the appraisal report shows that undisclosed income was found
during search and seizure operation in the tally data of Abhijit Paul on the
basis of profit and loss account. It showed difference in the different
financial year in net profit when compared to the net profit shown in the
audit report or P&L so prepared. For the relevant year 2013 it showed net
profit of Rs.96,89,209/-. It is not in dispute that this appraisal report was
available before the Assessing Officer during the assessment. The
assessment order was passed based on the materials seized during search and
seizure operation including ledger, cash book of different years found in the
tally data of the petitioner and in the wake of the fact that the assessee had
failed to produce any books of accounts, ledgers, bills, vouchers and any
other supporting evidence substantiating his cause. Evidently, the materials
were present before the Assessing Officer when undertook the assessment
on the basis of the materials seized during search and seizure operation.
[37] Perusal of the reasons for issuance of the notice for reopening
assessment as extracted in the foregoing paragraph also indicates that as per
page 32 of the appraisal report there was a net profit for the period
01.04.2013 to 22.08.2013 to the tune of Rs.96,89,209/- on the basis of profit
and loss account found in the tally data of Abhijit Paul whereas the net profit
disclosed in his return of income filed in response to the notice under
Section 142(1) was Rs.50,65,358/-. Therefore, the Assessing Officer while
reopening assessment stated that an amount of Rs.46,23,851/- was found to
have escaped assessment and should be added as undisclosed income of the
assessee.
[38] From these material facts culled out from the records in the
light of the settled principles for invocation of power under Section 147 of
the Income Tax Act, as discussed above, it is but apparent that the initiation
of proceedings for reassessment is not based on discovery of new materials
which were not available before the Assessing Officer during the initial
assessment proceedings and which has subsequently come to the notice of
the Assessing Officer. The audit objection dated 07.03.2017 is based upon
the same appraisal report.
[39] The Apex Court in the decisions referred to hereinabove and
reiterated in case of Mangalam Publication (supra) has in very categorical
terms held that the Assessing Officer may start reassessment proceedings
either because some fresh facts have come to light which were not
previously disclosed or some information with regard to the facts previously
disclosed comes into possession which tends to expose the untruthfulness of
those facts. In such situation, it is not a case of mere change of opinion or
the drawing of a different inference from the same set of facts as were earlier
available but acting on fresh information. Since the belief is that of the
Income Tax Officer, the sufficiency of reasons for forming the belief, is not
for the Court to judge but it is open to an assessee to establish that there in
fact existed no belief or that the belief was not at all a bona fide one or was
based on vague, irrelevant and non-specific information. To that limited
extent, the Court may look into the conclusion arrived at by the Income Tax
Officer and examine whether there was any material available on the record
from which the requisite belief could be formed by the Income Tax Officer
and further whether that material had any rational connection or a live link
for the formation of the requisite belief. It would be immaterial whether the
Income Tax Officer at the time of making the original assessment could or
could not have found by further enquiry or investigation, whether the
transaction was genuine or not, if on the basis of subsequent information, the
Income Tax Officer arrives at a conclusion, after satisfying the twin
conditions prescribed in Section 147(a) of the Act, that the assessee had not
made a full and true disclosure of the material facts at the time of original
assessment and, therefore, income chargeable to tax had escaped assessment.
[40] In the facts of the present case, the assessment was carried out
at the first instance on the basis of the materials collected during search and
seizure operation including the ledgers/cash book of different years found in
the tally data of the petitioner and also the appraisal report based thereupon.
The Appraisal report was placed before the Assessing Officer to examine the
claim. If the same material formed the basis of the Assessing Officer to pass
the original assessment order, the reopening of the assessment by issuance of
notice under Section 148 of the Act would be a mere change of opinion of
the Assessing Officer and not a case of reason to believe on basis of the
material which has subsequently come to his notice and/or which the
assessee failed to truly and fully disclose during assessment proceedings.
This is a case where the assessee had not submitted any books of account,
ledgers, bills, vouchers or supporting evidence and the Assessing Officer
proceeded to assess his returns on the basis of the materials collected during
search and seizure operation including the appraisal report based upon that.
Therefore, reopening of assessment on the ground that the income liable to
tax has escaped assessment as per the ingredients of Section 147 of the Act
either on account of failure to truly and fully disclose the full details of the
income derived by the petitioner or on the basis of materials subsequently
coming to the notice of the Assessing Officer are not satisfied. Therefore,
the initiation of the reassessment proceedings by issuance of notice under
Section 148 following the provisions of Section 147 of the Act is bad in law.
The first issue is answered accordingly.
[41] In answer to the second issue as to whether initiation of the
proceedings was barred by limitation as provided under Section 149(1)(b) of
the Act, we are satisfied that as per the existing provisions of Section
149(1)(b) which stood amended by the Finance Act of 2021 with effect from
01.04.2021, the reassessment proceedings could be initiated beyond the
period of four years up to six years counted from the end of the concerned
assessment year i.e. 31.03.2015 up to 31.03.2021. Petitioner has wrongly
interpreted the provisions of Section 149(1)(b) in that regard as the relevant
provisions of the Act quoted above do squarely indicate otherwise. As such,
the notice under Section 148 was not barred by limitation.
[42] Coming to the third issue as to whether the PCIT was
competent to grant permission for initiation of reassessment proceedings, we
are once again clear in our mind that as per the provisions of Section 151 of
the Income Tax Act which stood before its amendment by the Finance Act
of 2021 with effect from 01.04.2021, the Principal Commissioner of Income
Tax was fully competent to accord permission for reopening of assessment
beyond the period of four years as prescribed under Section 149(1)(b).
Petitioner has laboured under a misconception of law in that regard.
Therefore, the issue is answered in favour of the revenue.
[43] Now coming to the last question as to whether the notice under
Section 148 uploaded on the portal on 01.04.2021 was beyond the period of
limitation as the Assessing Officer was bound to issue notice for reopening
assessment till 31.03.2021 and as such the same is bad in law, we may
usefully refer to a decision on this point rendered by a Division Bench of the
Jharkhand High Court in which one of us (Aparesh Kumar Singh, CJ) was a
party. The matter relates to the period of limitation prescribed under Section
153 in case of Prakash Lal Khandelwal versus Commissioner of Income
Tax and another in WP(T) No.1901 of 2022. The issue involved in the said
case was whether if the DIN number was generated on 01.04.2022 and the
order was uploaded on 03.04.2022, was it barred in time as the limitation to
initiate proceedings expired on 31.03.2022.
[44] In the present case, the revenue in its first additional affidavit
has made a categorical statement at paragraph 9 to the effect that the
respondent No.4 i.e. the Assessing Officer issued notice under Section 148
of the Act by digitally signing the notice on 31.03.2021 at 7.01 p.m. The
moment the respondent No.4 put his digital signature on the said notice in
the specified online portal of the department, it went out of the hands of
respondent No.4 to the centralized online application unit of the Income Tax
Department and therefore it was beyond the control of the respondent No.4
to do anything. It is the software on the online portal which automatically
delivers the notice at the email address of the assessee/petitioner. The
operation and maintenance of the online portal and the software used by the
Income Tax Department is awarded on contract to a third party. The
department has no access to its operation and maintenance of the web-portal
and the programmed software except the regular working process which are
controlled by the programmed software maintained by a third party.
Therefore, notice under Section 148 was issued by the respondent No.4 on
31.03.2021 at 7.01 p.m. within the prescribed time limit of six years as
provided under Section 149(1)(b) of the Act. Therefore, it is not a case
where initiation of proceedings by issuance of notice under Section 148 was
done after expiry of the limitation period on 31.03.2021 by the Assessing
Officer. It is only the generation of the DIN number by the online portal that
has been done on 01.04.2021. On facts, the statement remains un-rebutted by
the petitioner.
[45] So far as the legal issue is concerned, the learned Division
Bench of the Jharkhand High Court in case of Prakash Lal Khandelwal
(supra) had the occasion to examine the use of the expressions in different
provisions of the Income Tax Act in the context of the language used in Section
153(3). It was held that „making of order‟, „issue of order‟ and „uploading of
order on web portal‟ or „communication of order‟ are all different acts or
things. In the facts of the said case, it was held that Section 153(3) regulates
only making of order. There is no restriction or limitation period prescribed
under Section 153(3) for „issue of order‟, „uploading of order on web portal‟
or „communication of order‟. The opinion of the Apex Court as laid down in
the case of CIT versus Mohammed Meeran Shahul Hameed, reported in
(2022) 1 SCC 12 while interpreting Section 263 of the Income Tax Act,
1961 which uses similar expression like Section 153(3) was also referred to
and relied upon. The learned Court after going through the provisions of the
Act, the opinion of the Apex Court, dispelled the contention of the petitioner
that though the assessment order was dated 31.03.2021 but since it was
uploaded on the next day i.e. 01.04.2022 the same was barred by limitation.
It opined that different expression used by the Legislature at different places
has certainly a different objective. Making of the order and communication
of the order are two different things. Even the circular No.19 of 2019 dated
14.08.2019 relevant to the issue in the said case and relied upon by the
assessee stipulated communication of the order and not making of the order
as it said that every communication relating to assessment, appeal, order, etc.
shall have a DIN on the body of the order. On facts, in the present case, it is
undisputed that the Assessing Officer had digitally signed the notice under
Section 148 of the Act on 31.03.2021 at 7.01 p.m. As such, it was not barred
by limitation though it may have been uploaded on the portal on 01.04.2021.
The instant issue is, therefore, answered against the assessee in favour of the
revenue.
[46] On consideration of the entire conspectus of facts and
circumstances narrated above and the principles of law as regards the
reopening of assessment under Section 147 read with Section 148 of the Act
of 1961 and the findings recorded in respect of the issue No.(i) hereinabove,
in conclusion, we are of the considered opinion that the reopening of the
assessment of the petitioner for the assessment year 2014-2015 as per the
impugned notice dated 31.03.2021 under Section 148 following the
provisions of Section 147 of the Act was bad in law. The materials relied
upon by the Assessing Officer were not such which had subsequently come
to his notice rather they were very much part of the assessment proceedings
i.e. the appraisal report based on the search and seizure operation. The
impugned notice dated 31.03.2021 and the order rejecting his objection
dated 21.02.2022 are accordingly set aside.
[47] The writ petition is accordingly allowed in the aforesaid terms.
Pending application(s), if any, also stands disposed of.
(BISWAJIT PALIT), J (APARESH KUMAR SINGH), CJ
DIPESH DEB Date: 2025.01.28 16:49:46
