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TMI Blog2012 (6) TMI 37X X X X Extracts X X X X X X X X Extracts X X X X ..... me limit of 6 years - Decided in favor of assessee. - W.P. (C) No. 8359/2010 - - - Dated:- 25-5-2012 - MR. JUSTICE SANJIV KHANNA, MR. JUSTICE R.V. EASWAR, JJ. For Appellant : Mr. Ajay Vohra, Ms.Kavita Jha and Mr. Somnath Shukla, Advocates. For Respondents: Mr. Anupam Tripathi, Sr. Standing Counsel and Ms. Anusha Singh, Advocate. SANJIV KHANNA, J. C.B. Richards Ellis Mauritius Limited has filed this writ petition challenging the re-assessment notice dated 30.3.2009 under Section 148 of the Income Tax Act, 1961 (hereinafter, referred to as the Act‟) in respect of the assessment year 1998-99. The petitioner has also prayed for quashing of the order dated 1.12.2010 passed by the Assistant Director of Income Tax, Circle 1(1), Directorate of International Taxation, New Delhi, dismissing their objections to the initiation of the re-assessment proceedings. 2. The petitioner had filed return of income for the assessment year 1998-99 on 20.11.1998 declaring total income of Rs.1,07,75,850/-. The return was taken up in scrutiny and an assessment order under Section 143(3) of the Act was passed on 28.2.2001. 3. As noticed above, the re-assessment notice under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... if seven years, but not more than ten years, have elasped 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 rupees fifty thousand or more for that year. 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 two years from the end of the relevant assessment year. 5. Section 149 of the Act, after the substitution of the Finance Act, 2001, reads as under:- 149. Time limit for notice.-- (1) No notice under section 148 shall be issued for the relevant assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent so repealed or any right, privilege, obligation or liability acquired, accrued or affect any penalty, investigation, legal proceeding or remedy. The said Section deals with substantive rights and liabilities. It is also subject to intention to the contrary. Intention can be implied. The procedural law when it is repealed should be applied from the date the new provision or procedure comes into force. The reason is that no person has a vested right or an accrued right in the procedure. No obligation or liability is normally imposed by a procedure. Sometime distinction is drawn between the right acquired or accrued and legal proceedings to acquire a right. In the latter case, there is only hope which is destroyed by the repeal. What is protected is the preserved right and privileges acquired and accrued and corresponding obligation and liability incurred on the other party. The legal process or the procedure for the enjoyment of the said right is not protected. Section 6, normally does not apply to procedural law. The procedural law when amended or substituted is generally retroactive and applies from the day of its enforcement and to this extent it can be retrospective. The ques ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s vested rights adversely is to be construed as prospective. XXX 30. Learned author in order to establish the above proposition referred to the decision of the Court of Appeal in The Ydun case [THE YDUN (1899) Probate Division at page 236 (The Court of Appeal) where the Court held that the amending legislation dealt with procedure only and therefore applied to all actions whether commenced before or after the passing of the Act and even in respect of previously accrued rights. The principle laid down in 'The Ydun' was applied in The King v. Chandra Dharma (1905) 2 KB 335 and it was held that if a statute shortening the time within which proceedings can be taken is retrospective then it is impossible to give good reason, why a statute extending the time within which proceedings be taken, should not be held to be retrospective. 11. Law of limitation, therefore, being procedural law has to be applied to the proceedings on the date of institution/filing. No person can have a vested right in the procedure. Therefore, the procedural law on the date when it was enforced is applied. Bennion Statutory interpretation (1st addition page 446 para 191) has elucidated:- Because a change ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at any point of time in respect of back assessment years within eight years of March 30, 1948 then such cases were within his power to tax. We have such a case here in CA No. 509 of 1958 where the notice was issued in 1949 to the lady whose husband had remitted Rs 9180 to her from Bangkok in the year relative to Assessment Year 1942-43. That lady was assessable in respect of this sum under Section 4(2) of the Income Tax Act. She did not file a return. If the case stood governed by the 1939 Amendment the period applicable would have been four years if she had not concealed the particulars of the income. She had of course not deliberately furnished inaccurate particulars thereof. If the case was governed by the 1948 Amendment she would come within the eight-year rule because she had failed to furnish a return. Now, we do not think that we can treat the different periods indicated under Section 34 as periods of limitation, the expiry of which grant prescriptive title to defaulting tax-payers It may be said that an assessment once made is final and conclusive except for the provisions of Sections 34 and 35 but it is quite a different matter to say that a vested right arises in the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... frequent changes made in the period in which re-assessment proceedings could be initiated under Section 34 of the income Tax Act, 1922 during the years 1939-59. Revalidation Act had also been enacted. This ratio was followed and applied in CIT v. Sardar Lakhmir Singh (1963) 49 ITR 70 (SC), CIT, Madras v. Janabha Muhammad Hussain Nachiar Ammal, AIR 1963 SC 1401 and in ITO, A-Ward, Sitapur v. Murlidhar Bhagwandas, Lakhimpur Kheri, (1964) 52 ITR 335 (SC). 15. Referring to this decision in Hussain Bhai and Ors. v. CIT, Madras (1971) 80 ITR 477 (SC), the Supreme Court examined whether Section 4 of the Income Tax (Amending) Act of 1959 saves a fresh notice under Section 34 from the bar of limitation. It was held that Section 4 of the Income Tax (Amending) Act, 1959 does not save the fresh notice. It was observed as under:- We are supported in the view we have taken by certain observations of Sarkar J., as he then was, in S. C. Prashar v. Vasantsen Dwarkadas (1). The court in that case was not concerned with assessment years in respect of which a notice could be issued under section 34(1)(a) of the Act, as amended by the Finance Act of 1956, but the present case was visualised by Sarka ..... X X X X Extracts X X X X X X X X Extracts X X X X
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