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2022 (5) TMI 1494 - HC - Income TaxReopening of assessment u/s 147 - applicability of the provisions of sections 148 and 148 A - the new provisions which have been inserted by Finance Act 2021 with effect from 01.04.2021 - constitutional validity and vires of the explanation contained in Notification No. 20/2021 dated 31.03.2021 as well as Notification No. 38/2021 dated 27.04.2021 and further challenges the consequential notices u/s 148 as is existed and was applicable upto 31.03.2021 HELD THAT - In wake of the pronouncement of the Apex Court in case of Union of India and Others vs. Ashish Agarwal 2022 (5) TMI 240 - SUPREME COURT All the captioned writ petitions are ordered to be disposed of out any requirement of adjudication on merit. 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 of section 148A(b). The assessing officer shall, in 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 show-cause notices in two weeks thereafter. The requirement of conducting any enquiry, if required, the prior approval of specified authority under section 148A(a) is hereby dispensed as a onetime measure vis- -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 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). 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. The present order shall be applicable PAN INDIA and all judgments and orders passed by different High Courts on the issue and under which similar notices which were issued after 01.04.2021 issued under section 148 of the Act are set aside and shall be governed by the present order and shall stand modified to the aforesaid extent. The present order is passed in exercise of powers under Article 142 of the Constitution of India so as to avoid any further appeals by the Revenue on the very issue by challenging similar judgments and orders, a view not to burden this Court approximately 9000 appeals.
Issues Involved:
1. Constitutional validity and vires of Notification No. 20/2021 dated 31.03.2021 and Notification No. 38/2021 dated 27.04.2021. 2. Applicability of unamended provisions of Section 148 of the Income Tax Act post 01.04.2021. 3. Jurisdiction and legality of notices issued under Section 148 of the IT Act based on unamended provisions. 4. Simultaneous operation of two different laws for the same situation. Issue-Wise Detailed Analysis: 1. Constitutional Validity and Vires of Notification No. 20/2021 and Notification No. 38/2021: The petitions challenge the constitutional validity and vires of the explanation contained in Notification No. 20/2021 dated 31.03.2021 and Notification No. 38/2021 dated 27.04.2021. The contention is that these notifications are ultra-vires Section 3(1) of the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 (TOL Act). The argument is that Section 3(1) of the TOL Act only allows for the extension of time limits for completion or compliance of actions mentioned therein and does not extend the applicability of laws. 2. Applicability of Unamended Provisions Post 01.04.2021: The explanation in the impugned notifications mandates the application of unamended provisions of Section 148 of the IT Act even after 01.04.2021. The petitioners argue that this is in excess of the powers delegated by the TOL Act. They assert that the law enacted by the Parliament, effective from 01.04.2021, should apply to notices issued under Section 148 of the IT Act on or after this date. 3. Jurisdiction and Legality of Notices Issued Under Section 148: The petitions claim that the notices issued under Section 148 of the IT Act based on unamended provisions are out of jurisdiction and bad in law. They argue that these notices should be declared illegal, barred by limitation, and out of jurisdiction because they are based on provisions that were no longer applicable after 01.04.2021. 4. Simultaneous Operation of Two Different Laws: The petitioners contend that two different laws dealing with a common situation cannot operate simultaneously. They argue that the law enacted with effect from 01.04.2021 and the law as per the explanation contained in the said notifications cannot coexist. Court's Observations and Order: The court extensively heard arguments from both sides and noted the pronouncement of the Apex Court in the case of Union of India and Others vs. Ashish Agarwal [Civil Appeal No. 3005/2022 and allied matters, decided on 04.05.2022]. Based on the Apex Court's findings and observations, the court ordered the disposal of all the captioned writ petitions without adjudication on merit. The Apex Court's order included the following key points: - The impugned Section 148 notices issued under the unamended Section 148 of the IT Act shall be deemed to have been issued under Section 148A of the IT Act as substituted by the Finance Act, 2021. - The assessing officer must provide the respective assessees with the information and material relied upon by the Revenue within thirty days, allowing the assessees to reply to the show-cause notices within two weeks thereafter. - The requirement of conducting any enquiry with prior approval of the specified authority under Section 148A(a) is dispensed with as a one-time measure. - The assessing officers shall pass orders in terms of Section 148A(d) and may issue notices under Section 148 (as substituted) after following the required procedure. - All defences and rights available to the assessees and Revenue under the Finance Act, 2021, and in law shall continue to be available. The court clarified that if there exist any other issues apart from Section 148 of the Income Tax Act, 1961, the liberty is reserved for the particular writ petitioner to file a fresh petition in accordance with the law. Conclusion: All petitions were disposed of in terms of the Apex Court's order, with no order as to costs.
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