2021 (6) TMI 867 - HC - Income Tax

Assessment u/s 153A - relevant assessment year - tenth year calculated from the end of the assessment year - whether the assessing officer/respondent herein is possessed of the power to issue the notice? - HELD THAT - In the case on hand, the statute has prescribed one mode of computing the six years and another mode for computing the ten years. Section 153 A(1)(b) states that the assessing officer shall assess or reassess the total income of six years immediately preceding the assessment year relevant to the previous year in which search is conducted. Applying this yardstick, the six years would go up to 2013-14. The search assessment year, namely, 2019-20 has to be excluded. This is because, the statute talks of the six years preceding the search assessment year. But, while computing the ten assessment years, the starting point has to be the end of the search assessment year - search assessment year has to be including in the latter case. It is not for me to fathom the wisdom of the parliament. We cannot assume that the amendment introduced by the Finance Act, 2017 intended to bring in four more years over and above the six years already provided within the scope of the provision. When the law has prescribed a particular length, it is not for the court to stretch it. Plasticity is the new mantra in neuroscience, thanks to the teachings of Norman Doidge. It implies that contrary to settled wisdom, even brain structure can be changed. But not so when it comes to a provision in a taxing statute that is free of ambiguity. Such a provision cannot be elastically construed. One other contention urged by the standing counsel has to be dealt with. It is pointed out that the petitioner has invoked the writ jurisdiction at the notice stage. Since the petitioner has demonstrated that the subject assessment year lies beyond the ambit of the provision, the respondent has no jurisdiction to issue the impugned notice. Once lack of jurisdiction has been established, the maintainability of the writ petition cannot be in doubt.

Summary

Issues:
1. Interpretation of Explanation-I to Section 153 A of the Income Tax Act, 1961 regarding the power of the assessing officer to issue notices for assessment years.

Analysis:

Issue 1: Interpretation of Explanation-I to Section 153 A

The judgment delves into the interpretation of Explanation-I to Section 153 A of the Income Tax Act, 1961, focusing on the power of the assessing officer to issue notices for assessment years. The explanation defines the term "relevant assessment year" and sets the parameters for the assessing officer's authority to issue notices. It is established that the search conducted on 10.04.2018 falls under the assessment year 2019-20, with the previous year being 2018-19. The amendment made by the Finance Act, 2017 extended the period for issuing notices from six to ten assessment years preceding the relevant assessment year. The judgment discusses the computation of the ten years and the relevance of the search assessment year in this calculation. The court emphasizes the importance of strict interpretation in taxation statutes, favoring revenue in case of ambiguity. The judgment clarifies that the ten assessment years must be calculated from the end of the assessment year relevant to the previous year of the search. It concludes that the notice for the assessment year 2009-10 is beyond the ten-year limit and quashes the impugned notice, allowing the writ petition.

The judgment also addresses the contention regarding the petitioner invoking writ jurisdiction at the notice stage. It is highlighted that once lack of jurisdiction is established due to the assessment year falling beyond the statutory provision, the maintainability of the writ petition is justified. The court rules in favor of the petitioner, quashing the notice and allowing the writ petition, thereby closing the connected miscellaneous petitions.