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TMI Blog2021 (12) TMI 568X X X X Extracts X X X X X X X X Extracts X X X X ..... sessment notice issued to the petitioners under Section 148 of the Income Tax Act is quashed. - S.B. Civil Writ Petition No. 14006/2021 - - - Dated:- 3-12-2021 - Manish Kumar Bansal S/o Amarchand Agarwal Versus Office Of The Income Tax Officer, Ito Ward 4(2), Income Tax Department, AC Agarwal Commodities Private Limited Versus Office Of The Income Tax Officer, Ito Wd 4(2), Income Tax Department, Lotus Ashiana Towenship Private Limited Versus Income Tax Officer, Ward 4(1), Jaipur , Amit Tak S/o Shri Anil Tak Versus Income Tax Officer, Wd 7(1), Jaipur, Rajasthan, Sheikh Naseem S/o Shri M D Moizuddin Versus Income Tax Officer, Circle-4, Jaipur, Rajasthan., Shivani Sheikh D/o Subhash Chandra Agarwal Versus Income Tax Officer, Acit/dcit Cir-6, Jaipur, Rajasthan, Prakhar Gupta S/o Vinod Kumar Gupta Versus Registrar General, Rajasthan High Court, Jaipur (Rajasthan) And Nagar Mal Agarwal Versus Assistant Commissioner Of Income Tax, Ito Ward 5(2), Central Revenue Building, Statue Circle, Jaipur. S.B. Civil Writ Petition No. 14006/2021 S.B. Civil Writ Petition No. 14008/2021 S.B. Civil Writ Petition No. 14009/2021 S.B. Civil Writ Petition No. 14010/2021 S.B. Civil Writ Petition No. 139 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o 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 preexisting. 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 under the Enabling Act may be read to be indicating only at proceedings already commenced prior to 01.04.2021, under the Act (before amendment by the Finance Act, 2021). The delegated action performed under the Enabling Act cannot, itself create an overriding effect in favour of the Enabling Act. (iii) The Enabling Act read with its Notifications does not validate the initiation of any proceeding that may otherwise be incompetent under the law. That law only af ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 examination. 65. Therefore, other things apart, undeniably, on 01.04.2021, by virtue of plain/unexcepted effect of Section 1(2)(a) of the Finance Act, 2021, the provisions of Sections 147, 148, 149, 151 (as those provisions existed upto 31.03.2021), stood substituted, along with a new provision enacted by way of Section 148A of that Act. In absence of any saving clause, to save the pre-existing (and now substituted) provisions, the revenue authorities could o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... irst 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 under way. There is nothing in the language of that provision to admit a wider or sweeping application to be given to that clause to serve a purpose not contemplated under that provision and the enactment, wherein it appears. 70. The upshot of the above reasoning is, the Enabling Act only protected certain proceedings that may have become time barred on 20.03.2020, upto the date 30.06.2021. Correspondingly, by delegated legislation incorporated by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aches 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 provisions regarding reassessment with new provisions w.e.f. 01.04.2021), the mischief rule has no application. 75. As we see there is no conflict in the application and enforcement of the Enabling Act and the Finance Act, 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, up ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... x 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 any Act of the principal legislature. Second, it would be over simplistic to ignore the provisions 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 the fact circumstances arising from the spread of the pandemic COVID-19. Practicality of life de hors statutory provisions, may never be a good guiding principle to interpret any taxation law. In absence of any spe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... spondents opposed the writ petitions and relied upon the judgment passed by the learned Single Judge of Chhattisgarh High Court in the matter of Palak Khatuja Vs. Union of India Ors. (W.P. (T) No.149 of 2021) in favour of the Department, however, not disputed the judgment passed by the Division Bench of the Allahabad High Court in the matter of Ashok Kumar (supra) on the question of law involved in these writ petitions. Heard counsel for the parties and perused the record. I find that the issue involved in the present writ petitions is squarely covered by the decision of the Allahabad High Court in the matter of Ashok Kumar (supra), which in my view is a correct view and has been taken after considering the judgment passed by the Single Bench of Chhatisgarh High Court in the matter of Palak Khatuja (supra) which has been relied upon by respondents counsel and therefore in my considered view the present petitions deserve to succeed. Accordingly, the writ petitions are allowed. The reassessment notice issued to the petitioners under Section 148 of the Income Tax Act is quashed. However, it is left open to the assessing authority to initiate re-assessment proceedings in accor ..... X X X X Extracts X X X X X X X X Extracts X X X X
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