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TMI Blog2021 (10) TMI 517X X X X Extracts X X X X X X X X Extracts X X X X ..... Enabling Act or the Notifications issued - as submitted procedural amendments cannot recreate a non-existing substantive law - HELD THAT:- Enabling Act only protected certain proceedings that may have become time barred on 20.03.2021, upto the date 30.06.2021. Correspondingly, by delegated legislation incorporated by the Central Government, it may extend that time limit. That time limit alone stood extended upto 30 June, 2021. Additional Solicitor General of India may not be entirely correct in stating that no extension of time was granted beyond 30.06.2021. Vide Notification No. 3814 dated 17.09.2021, issued under section 3(1) of the Enabling Act, further extension of time has been granted till 31.03.2022. In absence of any specific delegation made, to allow the delegate of the Parliament, to indefinitely extend such limitation, would be to allow the validity of an enacted law i.e. the Finance Act, 2021 to be defeated by a purely colourable exercise of power, by the delegate of the Parliament. Here, it may also be clarified, Section 3(1) of the Enabling Act does not itself speak of reassessment proceeding or of Section 147 or Section 148 of the Act as it existed prior to 01.04. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct, 2021. Juxtaposed, if the Finance Act, 2021 had not made the substitution to the reassessment procedure, the revenue authorities would have been within their rights to claim extension of time, under the Enabling Act. However, upon that sweeping amendment made the Parliament, by necessary implication or implied force, it limited the applicability of the Enabling Act and the power to grant time extensions thereunder, to only such reassessment proceedings as had been initiated till 31.03.2021. Consequently, the impugned Notifications have no applicability to the reassessment proceedings initiated from 01.04.2021 onwards. Upon the Finance Act 2021 enforced w.e.f. 1.4.2021 without any saving of the provisions substituted, there is no room to reach a conclusion as to conflict of laws. It was for the assessing authority to act according to the law as existed on and after 1.4.2021. If the rule of limitation permitted, it could initiate, reassessment proceedings in accordance with the new law, after making adequate compliance of the same. That not done, the reassessment proceedings initiated against the petitioners are without jurisdiction. According to us, it would be incorrect to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Act as amended by Finance Act, 2021, after making all compliances, as required by law. Reassessment notice issued to the present petitioner is quashed. - Writ Tax No. - 524 of 2021 - - - Dated:- 30-9-2021 - Hon'ble Naheed Ara Moonis And Hon'ble Saumitra Dayal Singh JJ. For the Petitioner : Suyash Agarwal For the Respondents : Gaurav Mahajan, Ashish Agrawal, Gopal Verma ORDER Heard Sri Rakesh Ranjan Agarwal, learned Senior Advocate, assisted by Sri Suyash Agarwal, Sri Shambhu Chopra, learned Senior Advocate, assisted by Ms. Mahima Jaiswal, Sri Abhinav Mehrotra, Sri Akhilesh Kumar along with Sri Ashish Bansal, Sri Divyanshu Agarwal along with Sri Ankit Saran, Sri Deepak Kapoor along with Sri Shubham Agarwal, Sri V.K. Sabarwal and Shri R.B. Gupta along with Sri Rishi Raj Kapoor, Sri Shakeel Ahmad, Sri Parv Agarwal, Sri Salil Kapoor along with Sri Anuj Srivastava Ms Soumya Singh alongwith Sri Satya Vrat Mehrotra, Sri Ankur Agarwal, Sri Krishna Deo Vyas, Sri Ashok Shankar Bhatnagar Sri Harshul Bhatnagar, Sri Pranchal Agarwal, Sri V.K. Sabharwal, Sri R.B. Gupta, Ms. Shalini Goel and Ms. Rupal Agarwal, learned counsel for the petitioners; Sri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2015-16 29.06.2021 29.12.2017 2. 524-2021 ASHOK KUMAR AGARWAL 2017-18 09.04.2021 08.03.2018 3. 531-2021 M/S ARIHANT PUBLICATIONS (INDIA) LTD. 2015-16 30.06.2021 30.09.2015 4. 540-2021 BAJAJ STEELS AND INDUSTRIES LTD. 2017-18 29.06.2021 07.11.2017 5. 549-2021 BAJAJ STEELS AND INDUSTRIES LTD. 2016-17 29.06.2021 17.10.2016 6. 554-2021 SMT. NEERAJ AGARWAL 2016-17 09.04.2021 21.03.20217 7. 559-2021 FIROZ AHMED ZAHIR AHMED SHAIKH 2015-16 29.06.2021 20.07.2015 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7-18 14.04.2021 31.10.2017 22. 636-2021 STAR CORPORATION 2014-15 30.06.2021 29.09.2014 23. 640-2021 STAR CORPORATION 2013-14 29.06.2021 29.09.2013 24. 641-2021 STAR ASSOCIATES 2013-14 29.06.2021 28.09.2013 25. 642-2021 NAMAN GOVIL 2013-14 19.04.2021 30.11.2013 26. 643-2021 RUPA GOYAL 2017-18 25.05.2021 28.10.2018 27. 655-2021 NAMAN GOVIL 2014-15 19.04.2021 22.09.2014 28. 665-2021 RAJEEV BANSAL ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 31.03.2016 42. 697-2021 NITIN AGGARWAL HUF 2013-14 30.06.2021 29.07.2013 43. 707-2021 SUNITA AGARWAL 2013-14 30.06.2021 -- 44. 724-2021 NIRMAL KUMAR GOYAL 2014-15 06.04.2021 26.07.2014 45. 727-2021 MADHUR MITTAL 2013-14 22.06.2021 24.07.2013 46. 728-2021 SUMIT MITTAL 2013-14 26.06.2021 25.07.2013 47. 732-2021 NAVDEEP VARSHNEYA 2013-14 06.04.2021 16.08.2013 48. 735-2021 MADHU AGARWAL 2013-14 06 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 13-14 30.06.2021 01.02.2014 63. 778-2021 EXOTIC BUILDMART PVT. LTD 2014-15 30.06.2021 25.03.2015 64. 779-2021 KIRTI SINGH 2014-15 30.06.2021 14.03.2015 65. 780-2021 SUSHIL JOSHI 2013-14 30.06.2021 31.03.2014 66. 781-2021 SHIV SHAKTI CONSTRUCTIONS 2014-15 30.06.2021 29.11.2014 67. 782-2021 MUKESH KUMAR 2014-15 30.06.2021 14.03.2015 68. 795-2021 AMBIKA ENCLAVE PRIVATE LIMITED 2015-16 28.06.2021 30.03.2016 69. 796-2021 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to reassess such an assessee, by issuing a notice under Section 148 of the Act. 7. As to the challenge procedure available to that assessee, the Supreme Court, in the case of GKN Driveshafts (India) Ltd. Vs. Income-tax Officer, (2003) 259 ITR 19 (SC), had observed as below: We see no justifiable reason to interfere with the order under challenge. However, we clarify that when a notice under section 148 of the Income Tax Act is issued, the proper course of action for the noticee is to file return and if he so desires, to seek reasons for issuing notices. The Assessing Officer is bound to furnish reasons within a reasonable time. On receipt of reasons, the noticee is entitled to file objections to issuance of notice and the Assessing Officer is bound to dispose of the same by passing a speaking order. In the instant case, as the reasons have been disclosed in these proceedings, the Assessing Officer has to dispose of the objections, if filed, by passing a speaking order, before proceeding with the assessment in respect of the abovesaid five assessment years. 8. Around March, 2020, the pandemic COVID-19 reached our shores and spread all over country. It led to enfor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2004); (v) Chapter VII of the Finance Act, 2013 (17 of 2013); (vi) the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 (22 of 2015); (vii) Chapter VIII of the Finance Act, 2016 (28 of 2016); or (viii) the Direct Tax Vivad se Vishwas Act, 2020 (3 of 2020). b) notification means the notification published in the Official Gazette. (2) The words and expressions used herein and not defined, but defined in the specified Act, the Central Excise Act, 1944 (1 of 1944), the Customs Act, 1962 (52 of 1962), the Customs Tariff Act, 1975 (51 of 1975) or the Finance Act, 1994 (32 of 1994), as the case may be, shall have the meaning respectively assigned to them in that Act. CHAPTER II RELAXATION OF CERTAIN PROVISIONS OF SPECIFIED ACT Relaxation of certain provision of specified Act. 3. (1) Where, 'any time-limit' has been specified in, or prescribed or notified under, the specified Act which falls during the period from the 20th day of March, 2020 to the 29th day of June, 2020, or such other date after the 29th day of June, 2020, as the Central Government may, by notification, speci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... om the 20th day of March, 2020 to the 29th day of June, 2020 or such other date after the 29th day of June, 2020 as the Central Government may, by notification, specify in this behalf, and such amount has not been paid within such date, but has been paid on or before the 30th day of June, 2020, or such other date after the 30th day of June, 2020, as the Central Government may, by notification, specify in this behalf, then, notwithstanding anything contained in the specified Act, - (a) the rate of interest payable, if any, in respect of such amount for the period of delay shall not exceed three-fourth per cent for every month or part thereof; (b) no penalty shall be levied and no prosecution shall be sanctioned in respect of such amount for the period of delay. Explanation.- For the purposes of this sub-section, the period of delay means the period between the due date and the date on which the amount has been paid. Further, in view of the submissions as have been received, it would be fruitful to also quote the provisions of Chapter III of the Ordinance - containing the amendments made to the Act. It reads: CHAPTER III AMENDMENT TO THE IN ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (b) specified Act means- (i) the Wealth-tax Act, 1957; (ii) the Income-tax Act, 1961; (iii) the Prohibition of Benami Property Transactions Act, 1988; (iv) Chapter VII of the Finance (No. 2) Act, 2004; (v) Chapter VII of the Finance Act, 2013; (vi) the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015; (vii) Chapter VIII of the Finance Act, 2016; or (viii) the Direct Tax Vivad se Vishwas Act, 2020. (2) The words and expressions used herein and not defined, but defined in the specified Act, the Central Excise Act, 1944, the Customs Act, 1962, the Customs Tariff Act, 1975 or the Finance Act, 1994, as the case may be, shall have the same meaning respectively assigned to them in that Act. CHAPTER II RELAXATION OF CERTAIN PROVISIONS OF SPECIFIED ACT 3. (1) Where, any time-limit has been specified in, or prescribed or notified under, the specified Act which falls during the period from the 20th day of March, 2020 to the 31st day of December, 2020, or such other date after the 31st day of December, 2020, as the Central Government may, by notification, specify in this b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of this sub-section shall have the effect as if for the figures, letters and words 31st day of March, 2021 , the figures, letters and words 30th day of September, 2020 had been substituted; (b) 1st day of April, 2020, the provision of this sub-section shall have the effect as if for the figures, letters and words 31st day of March, 2021 , the figures, letters and words 30th day of November, 2020 had been substituted; (ii) delivering of statement of deduction of tax at source under subsection (2A) of section 200 of that Act or statement of collection of tax at source under sub-section (3A) of section 206C thereof for the month of February or March, 2020, or for the quarter ending on the 31st day of March, 2020, as the case may be, the provision of this sub-section shall have the effect as if for the figures, letters and words 31st day of March, 2021 , the figures, letters and words 15th day of July, 2020 had been substituted; (iii) delivering of statement of deduction of tax at source under subsection (3) of section 200 of that Act or statement of collection of tax at source under proviso to sub-section (3) of section 206C thereof for the month of Fe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the third proviso shall not apply to Explanation 1 to section 234A of the Income-tax Act, 1961 in cases where the amount of tax on the total income as reduced by the amount as specified in clauses (i) to (vi) of sub-section (1) of the said section exceeds one lakh rupees: Provided also that for the purposes of the fourth proviso, in case of an individual resident in India referred to in sub-section (2) of section 207 of the Income-tax Act, 1961, the tax paid by him under section 140A of that Act within the due date (before extension) provided in that Act, shall be deemed to be the advance tax: Provided also that where the specified Act is the Direct Tax Vivad Se Vishwas Act, 2020, the provision of this sub-section shall have the effect as if- (a) for the figures, letters and words 31st day of December, 2020 , the figures, letters and words 30th day of December, 2020 had been substituted for the time limit for the completion or compliance of the action; and (b) for the figures, letters and words 31st day of March, 2021 , the figures, letters and words 31st day of December, 2020 had been substituted for making such completion or compliance. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Explanation II to Section 11(1) 01.04.2021 8. Section 11(7) 01.06.2020 9. Second Proviso to Section 11 01.06.2020 and 01.04.2021 10. Omission of Section 12A(1)(ac) 01.06.2020 11. Insertion of Section 12A(1)(ac) 01.04.2021 12. Section 12A(2) 01.06.2020 13. Proviso to Section 12A 01.04.2021 14. Omission of Section 12AA(5) 01.06.2020 15. Insertion of Section 12AA(5) 01.04.2021 16. Omission of Section 12AB 01.06.2020 17. Insertion of Section 12AB 01.04.2021 18. Explanation I to Section 13 01.04.2021 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rtion of Section 151A 01.11.2020 42. Insertion of Section 157A 01.11.2020 43. Insertion of Section 196D(1) 01.11.2020 44. Insertion of Section 197B 14.05.2020 45. Insertion of Section 206C(10) 14.05.2020 46. Insertion of Section 231 01.11.2020 47. Substitution in Section 253(1)(c) 01.06.2020 01.04.2021 48. Insertion of Section 253(8), (9) and (10) 01.11.2020 49. Section 263(1) 01.11.2020 50. Section 264(1, 2, 3 and 4) 01.11.2020 51. Insertion of Section 264A 264B 01.11.2020 52. Omission of Section 271K ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ling Act. Without making any specific reference to reassessment proceedings under the Act, time extensions were granted. For ready reference, that provision reads as below: NOTIFICATION S.O. 4805 (E) [NO. 93/2020/F. No. 370142/35/2020-TPL], DATED 31.12.2020 In exercise of the powers conferred by sub-section (1) of section 3 of the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 (38 of 2020) (hereinafter referred to the Act) and in supersession of the notification of the Government of India in the Ministry of Finance, (Department of Revenue) No. 88/2020 dated the 29th October, 2020, published in the Gazette of India, Extraordinary, Part-II, Section 3, Subsection (ii), vide number S.O. 3906(E), dated the 29th October, 2020, except as respects things done or omitted to be done before such supersession, the Central Government hereby specifies, for the completion or compliance of action referred to in- (A) clause (a) of sub-section (1) of section 3 of the Act, - (i) the 30th day of March, 2021 shall be the end date of the period during which the time limit specified in, or prescribed or notified under, the specified Act fall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nded to the 15th day of January, 2021. 2. This notification shall come into force from the date of its publication in the Official Gazette. 14. On 27.02.2021, Notification No. 966E was issued under Section 3(1) of the Enabling Act. It, for the first time, made specific reference to reassessment proceedings under Section 153 or Section 153B of the Act. For ready reference, the said provisions read as below: NOTIFICATION NO. S.O. 966(E) [NO. 10/2021/F. NO. 370142/35/2020-TPL], DATED 27-2-2021 In exercise of the powers conferred by sub-section (1) of section 3 of the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 (38 of 2020) (hereinafter referred to as the said Act) and in partial modification of the notification of the Government of India in the Ministry of Finance, (Department of Revenue) No. 93/2020 dated the 31st December, 2020, published in the Gazette of India, Extraordinary, Part-II, Section 3, Subsection (i), vide number S.O. 4805(E), dated the 31st December, 2020 (hereinafter referred to as the said notification), the Central Government hereby specifics, for the purpose of sub-section (1) of section 3 of the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 35/2020-TPL), DATED 31-3-2021 In exercise of the powers conferred by sub-section (1) of section 3 of the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 (38 of 2020) (hereinafter referred to as the said Act), and in partial modification of the notification of the Government of India in the Ministry of Finance, (Department of Revenue) No. 93/2020 dated the 31st December, 2020, published in the Gazette of India, Extraordinary, Part II, Section 3, Subsection (ii), vide number S.O. 4805(E), dated the 31st December, the Central Government hereby specifies that,- (A) where the specified Act is the Income-tax Act, 1961 (43 Income-tax Act) and, - (a) the completion of any action referred to in clause (a) of subsection (1) of section 3 of the Act relates to passing of an order under sub-section (13) of section 144C or issuance of notice under section 148 as per time-limit specified in section 149 or sanction under section 151 of the Income-tax Act, - (i) the 31st day of March, 2021 shall be the end date of the period during which the time limit, specified in, or prescribed or notified under, the Income-tax Act falls for the com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 10/2021 dated the 27th February, 2021 and No. 20/2021 dated the 31st March, 2021, published in the Gazette of India, Extraordinary, Part-II, Section 3, Subsection (ii), vide number S.O. 4805(E), dated the 31st December, 2020, vide number S.O. 966(E) dated the 27th February, 2021 and vide number S.O. 1432(E) dated the 31st March, 2021, respectively (hereinafter referred to as the said notifications), the Central Government hereby specifies for the purpose of sub-section (1) of section 3 of the said Act that, - (A) where the specified Act is the Income-tax Act, 1961 (43 of 1961) (hereinafter referred to as the Income-tax Act) and, - (a) the completion of any action, referred to in clause (a) of sub-section (1) of section 3 of the said Act, relates to passing of any order for assessment or reassessment under the Income-tax Act, and the time limit for completion of such action under section 153 or section 153B thereof, expires on the 30th day of April, 2021 due to its extension by the said notifications, such time limit shall further stand extended to the 30th day of June, 2021; (b) the completion of any action, referred to in clause (a) of sub-section (1) of sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... new section for section 147. 40. For section 147 of the Income-tax Act, the following section shall be substituted, namely:- 147. Income escaping assessment.-If any income chargeable to tax, in the case of an assessee, has escaped assessment for any assessment year, the Assessing Officer may, subject to the provisions of sections 148 to 153, assess or reassess such income or recompute the loss or the depreciation allowance or any other allowance or deduction for such assessment year (hereafter in this section and in sections 148 to 153 referred to as the relevant assessment year). Explanation.-For the purposes of assessment or reassessment or recomputation under this section, the Assessing Officer may assess or reassess the income in respect of any issue, which has escaped assessment, and such issue comes to his notice subsequently in the course of the proceedings under this section, irrespective of the fact that the provisions of section 148A have not been complied with. Substitution of new section for section 148. 41. For section 148 of the Income-tax Act, the following section shall be substituted, namely:- 148. Issue of notice where in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or Commissioner, that any money, bullion, jewellery or other valuable article or thing, seized or requisitioned under section 132 or section 132A in case of any other person on or after the 1st day of April, 2021, belongs to the assessee; or (iv) the Assessing Officer is satisfied, with the prior approval of Principal Commissioner or Commissioner, that any books of account or documents, seized or requisitioned under section 132 or section 132A in case of any other person on or after the 1st day of April, 2021, pertains or pertain to, or any information contained therein, relate to, the assessee, the Assessing Officer shall be deemed to have information which suggests that the income chargeable to tax has escaped assessment in the case of the assessee for the three assessment years immediately preceding the assessment year relevant to the previous year in which the search is initiated or books of account, other documents or any assets are requisitioned or survey is conducted in the case of the assessee or money, bullion, jewellery or other valuable article or thing or books of account or documents are seized or requisitioned in case of any other person. Explana ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... article or thing, seized in a search under section 132 or requisitioned under section 132A, in the case of any other person on or after the 1st day of April, 2021, belongs to the assessee; or (c) the Assessing Officer is satisfied, with the prior approval of the Principal Commissioner or Commissioner that any books of account or documents, seized in a search under section 132 or requisitioned under section 132A, in case of any other person on or after the 1st day of April, 2021, pertains or pertain to, or any information contained therein, relate to, the assessee. Explanation.-For the purposes of this section, specified authority means the specified authority referred to in section 151. Substitution of new section for section 149. 43. For section 149 of the Income-tax Act, the following section shall be substituted, namely:- 149. Time limit for notice.-(1) No notice under section 148 shall be issued for the relevant assessment year,- (a) if three years have elapsed from the end of the relevant assessment year, unless the case falls under clause (b); (b) if three years, but not more than ten years, have elapsed from the end of the r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e.-Specified authority for the purposes of section 148 and section 148A shall be,- (i) Principal Commissioner or Principal Director or Commissioner or Director, if three years or less than three years have elapsed from the end of the relevant assessment year; (ii) Principal Chief Commissioner or Principal Director General or where there is no Principal Chief Commissioner or Principal Director General, Chief Commissioner or Director General, if more than three years have elapsed from the end of the relevant assessment year Amendment of section 151A. 45. In section 151A of the Income-tax Act, in sub-section (1), in the opening portion, after the words and figures issuance of notice under section 148 , the words, figures and letter or conducting of enquiries or issuance of show-cause notice or passing of order under section 148A shall be inserted. 18. In the above statutory context and reference, submissions have been advanced by learned counsel for the petitioners and have been responded to by the learned Additional Solicitor General of India representing the Union and the CBDT and learned counsel for the revenue. 19. Shri Rakesh Ranjan Agar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he known and well-recognised practices employed in legislative drafting. Substitution has to be distinguished from supersession or a mere repeal of an existing provision. 14. Ordinarily wherever the word substitute or substitution is used by the legislature, it has the effect of deleting the old provision and make the new provision operative. The process of substitution consists of two steps: first, the old rule is made to cease to exist and, next, the new rule is brought into existence in its place. The rule is that when a subsequent Act amends an earlier one in such a way as to incorporate itself, or a part of itself, into the earlier, then the earlier Act must thereafter be read and construed as if the altered words had been written into the earlier Act with pen and ink and the old words scored out so that thereafter there is no need to refer to the amending Act at all. No doubt, in certain situations, the Court having regard to the purport and object sought to be achieved by the Legislature may construe the word substitution as an amendment having a prospective effect. Therefore, we do not think that it is a universal rule that the word substitution necess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion. 25. To validate such Notification, would be to resurrect and enforce a dead law, contrary to the statutory law in force, on the date of issuance of impugned Notification dated 27.04.2021. Clearly, that would be a legislative overreach by the delegate and therefore, ultra vires the Constitution of India. In that regard, reliance has been placed on another decision of the Supreme Court in Assam Company Ltd. Anr. Vs. State of Assam Ors. , (2001) 248 ITR 567 (SC) . Therein, it was held as below: We will now consider the effect of Rule 5 of the State Rules. As noticed hereinabove, Rule 5 of the Rules in its proviso has in unequivocal terms empowered the State authorities in given cases to refuse to accept the computation of agricultural income made by the Central Officers after examining the books already examined by such Central Officers. The appellants contend that this provision is beyond the rule-making power under the Act, hence, is in excess of the power delegated under the State Act. They also contend that assuming that such rule-making power has entrusted the delegation under Section 50 of the State Act, same would be ultra vires the Constitution. We ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gation could not be exercised to resurrect the provision of law that stood omitted from the statute book by virtue of its substitution made by the Finance Act, 2021, w.e.f. 01.04.2021. 27. Shri Agarwal has further relied on Union of India Ors. Vs. S. Srinivasan, (2012) 7 SCC 683, wherein that principle was clearly recognized and applied: 21. At this stage, it is apposite to state about the rule making powers of a delegating authority. If a rule goes beyond the rule making power conferred by the statute, the same has to be declared ultra vires. If a rule supplants any provision for which power has not been conferred, it becomes ultra vires. The basic test is to determine and consider the source of power which is relatable to the rule. Similarly, a rule must be in accord with the parent statute as it cannot travel beyond it. 22. In this context, we may refer with profit to the decision in General Officer Commanding-in-Chief v. Dr. Subhash Chandra Yadav, (1988) 2 SCC 351, wherein it has been held as follows:- 14......Before a rule can have the effect of a statutory provision, two conditions must be fulfilled, namely (1) it must conform to the provisions of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rovisions of, either the Enabling Act or the Finance Act, 2021 and to read and interpret the provisions of Finance Act, 2021 as inoperative in view of those circumstances. Similarly, practicality of life may never be a good guiding principle to interpret any law less so taxation laws which must be interpreted of their own language and scheme. In absence of any specific clause in Finance Act, 2021, either to save the provisions of the Enabling Act or the Notifications issued thereunder, by no interpretative process can those Notifications be given an extended run of life, beyond 31 March 2020. In fact, any notification issued under the Enabling Act, after the date 31.03.2021 is plainly in conflict with the law as enforced by the Finance Act 2021. It would remain a dead letter of law. It may also not infuse any life into a provision that stood obliterated from the statute with effect from 31.03.2021. Such an exercise made by the delegate would be plainly unconstitutional. No discretion may arise in the executive authority as may be impliedly or expressly barred by statutory law. Inasmuch as the Finance Act, 2021 does not enable the Central Government to issue any notification to reac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ance Act, 2021 are completely mandatory. There can be no exception to the same. If the impugned Notifications were to be held to be valid after 01.04.2021, it would create a conflict of laws wherein solely on account of that delegated legislation, the mandatory provision of the principal legislature would have been rendered ineffective or inoperative. That may never be done. Elaborating his submissions, Shri Chopra would state, the impugned Notifications read together only provide for an extension of time, limited to the permissions contained in the Enabling Act. Since the Enabling Act does not, in any way, seek to save the pre-existing provisions of the Act, notwithstanding any change of legislation, that intent cannot be created by those Notifications. 32. Next, it has been submitted by Sri Chopra, cassus omisus cannot be supplied, either by the delegated legislation or by Courts. Reliance has been placed on the decision of the Supreme Court in Parle Biscuits (P) Ltd. Vs State of Bihar And Ors. (2005) 9 SCC 669. 33. He would further submit, the delegate cannot override the principal legislation as has been sought to be done in the present case. Reliance has been placed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tax laws suffer a process of continuous change and there is no inherent logic or principle embedded in that law, to save a pre-existing provision despite enactment of another law in the subsequent year. Such changes are suffered, both by substantive law as also procedural law. 37. Relying on the above, he vehemently urged, the provisions of the Enabling Act together with the Notifications issued thereunder must be seen as they confronted the Act as amended by the Finance Act, 2021, on the date of issuance of the impugned re-assessment notices. Upon enforcement of the Finance Act 2021, the entire situation and dynamics of statutory law underwent a change. While the Enabling Act did not undergo any statutory amendment or change upon enactment of the Finance Act, the latter Act substituted the provisions of Sections-147, 148, 149, 150 and 151 of the Act, w.e.f. 01.04.2021. Therefore, the Enabling Act became wholly unenforceable or incapable to the proceedings that would now arise under those provisions, after 01.04.2021. 38. Sri Mehrotra, has then referred to certain provisions under Chapter II of the Enabling Act to contend, even under that Act, different dates had been spe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion only, there would have been an express exclusion and in the absence of which no contra intention can be deduced, neither any contra inference can be drawn. In any event, as noticed above, the Portuguese Civil Code, in our view, could not be read to be providing a distinct and separate period of limitation for a cause of action arising under the Indian Contract Act or under the Negotiable Instruments Act since the Civil Code ought to be read as one instrument and cause of action arising therefrom ought only to be governed thereunder and not otherwise. The entire Civil Code ought to be treated as a local law or special law including the provisions pertaining to the question of limitation for enforcement of the right arising under that particular Civil Code and not dehors the same and in this respect the observations of the High Court in Cadar Constructions [AIR 1984 Bom 258 : 1984 Mah LJ 603] that the Portuguese Civil Code could not provide for a period of limitation for a cause of action which arose outside the provisions of that Code, stands approved. A contra approach to the issue will not only yield to an absurdity but render the law of the land wholly inappropriate. There wo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly displaced on the principle of doctrine of occupied field . If, however, any matter is not touched by that enactment, it will be competent for the Executive to either issue executive instructions or to make a rule under Article 309 in respect of that matter. 43. Next, it has been submitted, the Enabling Act and the Finance Act 2021 do not conflict and, therefore, there is no repugnancy between the two. Both enactments operate in different time spaces. While the Enabling Act takes care of the law as it pre-existed i.e. before the enactment of the Finance Act 2021, the latter Act operates w.e.f. 01.04.2021. Since the old provisions did not exist beyond 31.03.2021 and since the provisions of the Finance Act 2021 have not been given retrospective effect, there is no occasion for any conflict between the two laws. 44. Then, neither the Enabling Act nor any other law, delegates to the Central Government any power to create any law except with respect to time extensions under the pre-existing law. In fact, it is only if the delegated legislation enforced under the Enabling Act is applied after 01.04.2021, that a situation of conflict of laws may arise. Relying on another de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her the legislature intended to lay down an exhaustive Code in respect of the subject-matter replacing the earlier law. (3) Whether the two laws occupy the same field. 15. The doctrine of implied repeal is based on the theory that the legislature, which is presumed to know the existing law, did not intend to create any confusion by retaining conflicting provisions and, therefore, when the court applies the doctrine, it does no more than give effect to the intention of the legislature by examining the scope and the object of the two enactments and by a comparison of their provisions. The matter in each case is one of the construction and comparison of the two statutes. The court leans against implying a repeal, unless two Acts are so plainly repugnant to each other that effect cannot be given to both at the same time, a repeal will not be implied, or that there is a necessary inconsistency in the two Acts standing together. To determine whether a later statute repeals by implication an earlier statute, it is necessary to scrutinize the terms and consider the true meaning and effect of the earlier Act. Until this is done, it is impossible to ascertain whether any incons ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Enabling Act w.e.f. 01.11.2020. Otherwise, the Enabling Act does not touch upon re-assessment proceedings in any way. Therefore, it is preposterous on part of the revenue authorities to rely on the Enabling Act for any other purpose. Only upon assumption of jurisdiction and issuance of jurisdictional notice under Section 148 of the Act, a proceeding could come into existence under the pre-existing laws. That procedure having been transformed completely, by the Finance Act, 2021, w.e.f. 01.04.2021 before any reassessment proceeding came into existence, there survives no room to rely on the pre-existing provisions of law. Thus, it has been emphasized by Sri Bansal, the scope of Section 3(1) of the Enabling Act is limited to extend the time qua reassessment proceedings, validly initiated under the unamended Income Tax Act, up to 31.03.2021. It neither creates any jurisdiction nor it confers validity on any reassessment proceedings instituted under the unamended law, after the enforcement of the Finance Act, 2021. 48. As to the non-obstante clause appearing in the latter part of Section 3(1) of the Enabling Act, it has been vehemently urged by Shri Bansal that that non-obstante c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... must try to find out the extent to which the legislature had intended to give one provision overriding effect over another provision. Such intention of the legislature in this behalf is to be gathered from the enacting part of the section. In Aswini Kumar Ghose v. Arabinda Bose [AIR 1952 SC 369 : 1953 SCR 1] , Patanjali Sastri, J. observed: The enacting part of a statute must, where it is clear, be taken to control the non obstante clause where both cannot be read harmoniously; In Madhav Rao Scindia v. Union of India [(1971) 1 SCC 85] (SCC at p. 139) Hidayatullah, C.J. observed that the non obstante clause is no doubt a very potent clause intended to exclude every consideration arising from other provisions of the same statute or other statute but for that reason alone we must determine the scope of that provision strictly. When the section containing the said clause does not refer to any particular provisions which it intends to override but refers to the provisions of the statute generally, it is not permissible to hold that it excludes the whole Act and stands all alone by itself. A search has, therefore, to be made with a view to determining which provision a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... other authority. Lastly the section provides that the sum shall be deemed to be payable to the Custodian notwithstanding that its recovery is barred by the Indian Limitation Act or any other law for the time being in force relating to limitation of action. Sub-sections (1) and (2) are clearly procedural and would apply to all cases which have to be investigated in accordance therewith after October 22, 1956, even though the claim may have arisen before the amended section was inserted in the Act. It is well settled that procedural amendments to a law apply, in the absence of anything to the contrary, retrospectively in the sense that they apply to all actions after the date they come into force even though the actions may have begun earlier or the claim on which the action may be based may be of an anterior date. Therefore, when the Assistant Custodian issued notice to the appellant on January 22, 1958 claiming the amount from him, the recovery could be dealt with under sub-section (1) and (2) of the amended Section 48, as they are merely procedural provisions. But it is urged on behalf of the appellant that sub-section (1) in terms does not apply to the present case, and if so, s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oned solely by the circumstances arising from the spread of the pandemic COVID-19. The extension of limitation granted or, the strict rule of limitation relaxed by the Ordinance was for the benefit of the assessees as also the statutory authorities. These extensions were granted by way of legislative acceptance of the hard realities obtaining from the spread of the pandemic COVID-19, which largely disabled normal human activity and prevented statutory authorities from discharging their statutory obligations in accordance with law and obstructed and/or prevented the assessees from making compliances and pursing their rights. 55. Relying on the decision of the Supreme Court in Union of India Ors. Vs. Exide Industries Limited Anr., (2020) 5 SCC 274 , it has been vehemently urged, the constitutional validity of a law may be challenged on only two grounds either, it may be shown that there was legislative incompetence in enacting the law or that the law impinges on any of the fundamental rights enshrined in Part III of the Constitution of India. He would further submit, there always exists a presumption in favour of the constitutionality of the law and that no enacted law may ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nfirmity has to be found, (iii) the court is not concerned with the wisdom or unwisdom, the justice or injustice of the law as Parliament and State Legislatures are supposed to be alive to the needs of the people whom they represent and they are the best judge of the community by whose suffrage they come into existence, (iv) hardship is not relevant in pronouncing on the constitutional validity of a fiscal statute or economic law, and (v) in the field of taxation, the legislature enjoys greater latitude for classification .. (emphasis supplied) 56. It has been further submitted, no ground has been raised in any of the petitions to test the validity of the law and, in fact, no such ground exists. The Enabling Act had become necessary to be enacted, considering the hardships arising from the spread of the pandemic COVID-19, affecting both the assessees as also the statutory authorities and their functioning. Once limitation had been extended in favour of the assessee, to submit replies and to make other compliances, correspondingly, extension of time was granted to the statutory authorities to initiate, amongst others, reassessment proceedings, beyond the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Section 3(1) of the Enabling Act read with the Notifications issued thereunder, a wholly lop-sided situation would arise whereby the assessee would remain saved from adverse consequences despite non-compliance shown but the statutory authorities would be handtied and restrained from taking any corrective action, solely on account of force majeure. In that regard, reliance has been placed on paragraph 26 of the decision in Union of India Ors. Vs. Exide Industries Limited Anr. (supra), which is quoted below: 26. Be it noted that the interpretation of a statute cannot be unrelated to the nature of the statute. In line with other clauses under Section 43- B, clause (f) was enacted to remedy a particular mischief and the concerns of public good, employees welfare and prevention of fraud upon Revenue is writ large in the said clause. In our view, such statutes are to be viewed through the prism of the mischief they seek to suppress, that is, the Heydon s case, (1584) 3 Co Rep 7a: 76 ER 637, principle. In Crawford Statutory Construction, it has been gainfully delineated that an enactment designed to prevent fraud upon the Revenue is more properly a statute against fraud rat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns of the Finance Act, 2021 with effect from 01.04.2021, the old provisions were omitted from the statute book and replaced by fresh provisions with effect from 01.04.2021. Relying on the principle - substitution omits and thus obliterates the pre-existing provision, it has been further submitted, in absence of any saving clause shown to exist either under the Ordinance or the Enabling Act or the Finance Act 2021, there exists no presumption in favour of the old provision continuing to operate for any purpose, beyond 31.03.2021. (ii) The Act is a dynamic enactment that sustains through enactment of the Finance Act every year. Therefore, on 1st April every year, it is the Act as amended by the Finance Act, for that year which is applied. In the present case, it is the Act as amended by the Finance Act 2021, that confronted the Enabling Act as was pre-existing. In absence of any legislative intent expressed either under the Finance Act, 2021 or under the Enabling Act, to preserve any part of the pre-existing Act, plainly, reference to provisions of Sections 147 and 148 of the Act and the words 'assessment' and 'reassessment' appearing in the Notifications issued ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned counsel for the petitioners also rely on the principle - the delegated legislation can never defeat the principal legislation. (vi) Last, it has also been asserted, the non-obstante clause created under section 3(1) of the Enabling Act must be read in the context and for the purpose or intent for which it is created. It cannot be given a wider meaning or application as may defeat the other laws. 64. As to the first line of reasoning applied by the learned counsel for the petitioner, as noted above, there can be no exception to the principle - an Act of legislative substitution is a composite act. Thereby, the legislature chooses to put in place another or, replace an existing provision of law. It involves simultaneous omission and re-enactment. By its very nature, once a new provision has been put in place of a pre-existing provision, the earlier provision cannot survive, except for things done or already undertaken to be done or things expressly saved to be done. In absence of any express saving clause and, since no reassessment proceeding had been initiated prior to the Act of legislative substitution, the second aspect of the matter does not require any further exa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ade under section 3(1) of the Enabling Act, read with the Notifications issued thereunder. 68. The submission of the learned Additional Solicitor General of India that the provision of Section 3(1) of the Enabling Act gave an overriding effect to that Act and therefore saved the provisions as existed under the unamended law, also cannot be accepted. That saving could arise only if jurisdiction had been validly assumed before the date 01.04.2021. In the first place Section 3(1) of the Enabling Act does not speak of saving any provision of law. It only speaks of saving or protecting certain proceedings from being hit by the rule of limitation. That provision also does not speak of saving any proceeding from any law that may be enacted by the Parliament, in future. For both reasons, the submission advanced by learned Additional Solicitor General of India is unacceptable. 69. Even otherwise the word 'notwithstanding' creating the non obstante clause, does not govern the entire scope of Section 3(1) of the Enabling Act. It is confined to and may be employed only with reference to the second part of Section 3(1) of the Enabling Act i.e. to protect proceedings already un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncipal legislation. Unless harmonized as above, those Notifications would remain invalid. 73. Unless specifically enabled under any law and unless that burden had been discharged by the respondents, we are unable to accept the further submission advanced by the learned Additional Solicitor General of India that practicality dictates that the reassessment proceedings be protected. Practicality, if any, may lead to legislation. Once the matter reaches Court, it is the legislation and its language, and the interpretation offered to that language as may primarily be decisive to govern the outcome of the proceeding. To read practicality into enacted law is dangerous. Also, it would involve legislation by the Court, an idea and exercise we carefully tread away from. 74. Similarly, the mischief rule has limited application in the present case. Only in case of any doubt existing as to which of the two interpretations may apply or to clear a doubt as to the true interpretation of a provision, the Court may look at the mischief rule to find the correct law. However, where plain legislative action exists, as in the present case (whereunder the Parliament has substituted the old prov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the removal of doubts, it is hereby clarified that the provisions of this section shall not apply to any default committed under the said sections before 25th March, 2020.] 78. Plainly, in that case, the earlier provisions were not substituted rather they continued to exist. The parliamentary intervention by introducing Section 10A of that Act only provided - no proceeding be instituted for any default arising after 21.3.2020, for a period of six months or such period not exceeding one year, as may be notified. Thus, in that case, by virtue of amendment made, delegated power created, could be exercised to relax the otherwise stringent provisions of the Act, in cases, wherein difficulties arose from the spread of the pandemic COVID-19. Thus, that ratio is plainly distinguishable. 79. As to the decision of the Chhattisgarh High Court, with all respect, we are unable to persuade ourselves to that view. According to us, it would be incorrect to look at the delegation legislation i.e. Notification dated 31.03.2021 issued under the Enabling Act, to interpret the principal legislation made by Parliament, being the Finance Act, 2021. A delegated legislation can never overreach ..... X X X X Extracts X X X X X X X X Extracts X X X X
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