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TMI Blog2023 (3) TMI 104X X X X Extracts X X X X X X X X Extracts X X X X ..... time barred. There is an erroneous interpretation of the Apex Court s decision which did not say that the extension provided by TLA Act would get extended for issuance of reassessment notices to travel back in time to the original date when such notices were to be issued. While so interpreting, the CBDT overlooked the fact that in para 10(iv) in case of Union of India vs. Ashish Agarwal [ 2022 (5) TMI 240 - SUPREME COURT] the Apex Court kept all the defences available to the petitioner including those available under section 149 of the Act open. Accordingly, the petitioner has raised the defence under the first proviso to section 149 of the Act before issuance of notice under section 148 of the Act. The legal effect of enactment of Finance Act, 2021 and substitution of provisions contained in sections 147 to 151 of Finance Act, 2021 when regarded, it is to be appreciated that the TLA Act has extended the last date under unamended section for initiating the actions under sections 147/148 of the Act which is prescribed under unamended section 149. TLA Act is a subsidiary legislation, whereas the unamended sections 147 to 151 being the principal legislation, substitution of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ave no power to extend the time period under the first proviso to section 149(1) of the Act. Resultant outcome would be to negate the submissions of Revenue that these two notifications would extend time period provided under the proviso to section 149(1) of the IT Act. The time limit as per unamended section 149(1)(b) rendered six years from the end of assessment year. TOLA has not altered time limit provided in clause (b) of unamended section 149 of the IT Act. As needed to be clarified that we have since held the notices to be barred by the ground of limitation, other legal and factual aspects are not deal with in any of the petitions and all these petitions are allowed on the issue of limitation. Resultantly, these petitions are allowed. Notices under section 148 of the IT Act and impugned orders under section 148A(d) of the IT Act are quashed and set aside on the ground of limitation. MAUNA M. BHATT,J - Supplementing View - As substituted provisions of sections 147 to 151 shall be applicable w.e.f. 01.04.2021, and as per First Proviso to Section 149, limitation as specified under unamended provision as it stood prior to 01.04.2021, shall be applicable. As per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of 2022 With R/SPECIAL CIVIL APPLICATION NO. 17492 of 2022 With R/SPECIAL CIVIL APPLICATION NO. 17501 of 2022 With R/SPECIAL CIVIL APPLICATION NO. 17503 of 2022 With R/SPECIAL CIVIL APPLICATION NO. 17603 of 2022 With R/SPECIAL CIVIL APPLICATION NO. 17641 of 2022 With R/SPECIAL CIVIL APPLICATION NO. 17653 of 2022 With R/SPECIAL CIVIL APPLICATION NO. 17707 of 2022 With R/SPECIAL CIVIL APPLICATION NO. 17750 of 2022 With R/SPECIAL CIVIL APPLICATION NO. 17817 of 2022 With R/SPECIAL CIVIL APPLICATION NO. 17953 of 2022 With R/SPECIAL CIVIL APPLICATION NO. 17984 of 2022 With R/SPECIAL CIVIL APPLICATION NO. 17965 of 2022 With R/SPECIAL CIVIL APPLICATION NO. 17968 of 2022 With R/SPECIAL CIVIL APPLICATION NO. 18253 of 2022 With R/SPECIAL CIVIL APPLICATION NO. 18523 of 2022 With R/SPECIAL CIVIL APPLICATION NO. 18549 of 2022 With R/SPECIAL CIVIL APPLICATION NO. 18552 of 2022 With R/SPECIAL CIVIL APPLICATION NO. 18578 of 2022 With R/SPECIAL CIVIL APPLICATION NO. 18591 of 2022 With R/SPECIAL CIVIL APPLICATION NO. 18713 of 2022 With R/SPECIAL CIVIL APPLICATION NO. 18785 of 2022 With R/SPECIAL CIVIL APPLICATION NO. 18884 of 2022 With R/SPECIAL CIVIL APPLICATION NO. 18949 of 2022 With R/SPECIAL CIVI ..... 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PPLICATION NO. 20353 of 2022 With R/SPECIAL CIVIL APPLICATION NO. 20355 of 2022 With R/SPECIAL CIVIL APPLICATION NO. 20362 of 2022 With R/SPECIAL CIVIL APPLICATION NO. 20364 of 2022 With R/SPECIAL CIVIL APPLICATION NO. 20430 of 2022 With R/SPECIAL CIVIL APPLICATION NO. 20490 of 2022 With R/SPECIAL CIVIL APPLICATION NO. 20521 of 2022 With R/SPECIAL CIVIL APPLICATION NO. 20533 of 2022 With R/SPECIAL CIVIL APPLICATION NO. 20613 of 2022 With R/SPECIAL CIVIL APPLICATION NO. 20752 of 2022 With R/SPECIAL CIVIL APPLICATION NO. 20761 of 2022 With R/SPECIAL CIVIL APPLICATION NO. 20770 of 2022 With R/SPECIAL CIVIL APPLICATION NO. 20775 of 2022 With R/SPECIAL CIVIL APPLICATION NO. 20786 of 2022 With R/SPECIAL CIVIL APPLICATION NO. 20919 of 2022 With R/SPECIAL CIVIL APPLICATION NO. 20984 of 2022 With R/SPECIAL CIVIL APPLICATION NO. 20985 of 2022 With R/SPECIAL CIVIL APPLICATION NO. 21018 of 2022 With R/SPECIAL CIVIL APPLICATION NO. 21061 of 2022 With R/SPECIAL CIVIL APPLICATION NO. 21097 of 2022 With R/SPECIAL CIVIL APPLICATION NO. 21118 of 2022 With R/SPECIAL CIVIL APPLICATION NO. 21151 of 2022 With R/SPECIAL CIVIL APPLICATION NO. 21239 of 2022 With R/SPECIAL CIVIL APPLICATION NO. 21286 of 202 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ith R/SPECIAL CIVIL APPLICATION NO. 22868 of 2022 With R/SPECIAL CIVIL APPLICATION NO. 22871 of 2022 With R/SPECIAL CIVIL APPLICATION NO. 22876 of 2022 With R/SPECIAL CIVIL APPLICATION NO. 22877 of 2022 With R/SPECIAL CIVIL APPLICATION NO. 22880 of 2022 With R/SPECIAL CIVIL APPLICATION NO. 22882 of 2022 With R/SPECIAL CIVIL APPLICATION NO. 22895 of 2022 With R/SPECIAL CIVIL APPLICATION NO. 22949 of 2022 With R/SPECIAL CIVIL APPLICATION NO. 22960 of 2022 With R/SPECIAL CIVIL APPLICATION NO. 22963 of 2022 With R/SPECIAL CIVIL APPLICATION NO. 22971 of 2022 With R/SPECIAL CIVIL APPLICATION NO. 22973 of 2022 With R/SPECIAL CIVIL APPLICATION NO. 22974 of 2022 With R/SPECIAL CIVIL APPLICATION NO. 23000 of 2022 With R/SPECIAL CIVIL APPLICATION NO. 23018 of 2022 With R/SPECIAL CIVIL APPLICATION NO. 23105 of 2022 With R/SPECIAL CIVIL APPLICATION NO. 23133 of 2022 With R/SPECIAL CIVIL APPLICATION NO. 23134 of 2022 With R/SPECIAL CIVIL APPLICATION NO. 23136 of 2022 With R/SPECIAL CIVIL APPLICATION NO. 23139 of 2022 With R/SPECIAL CIVIL APPLICATION NO. 23140 of 2022 With R/SPECIAL CIVIL APPLICATION NO. 23142 of 2022 With R/SPECIAL CIVIL APPLICATION NO. 23143 of 2022 With R/SPECIAL CIVIL APPLICA ..... 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N NO. 24777 of 2022 With R/SPECIAL CIVIL APPLICATION NO. 24938 of 2022 With R/SPECIAL CIVIL APPLICATION NO. 24941 of 2022 With R/SPECIAL CIVIL APPLICATION NO. 25319 of 2022 With R/SPECIAL CIVIL APPLICATION NO. 25321 of 2022 With R/SPECIAL CIVIL APPLICATION NO. 25330 of 2022 With R/SPECIAL CIVIL APPLICATION NO. 25339 of 2022 With R/SPECIAL CIVIL APPLICATION NO. 25348 of 2022 With R/SPECIAL CIVIL APPLICATION NO. 25352 of 2022 With R/SPECIAL CIVIL APPLICATION NO. 25367 of 2022 With R/SPECIAL CIVIL APPLICATION NO. 25502 of 2022 With R/SPECIAL CIVIL APPLICATION NO. 25506 of 2022 With R/SPECIAL CIVIL APPLICATION NO. 25510 of 2022 With R/SPECIAL CIVIL APPLICATION NO. 25521 of 2022 With R/SPECIAL CIVIL APPLICATION NO. 25523 of 2022 With R/SPECIAL CIVIL APPLICATION NO. 25524 of 2022 With R/SPECIAL CIVIL APPLICATION NO. 25528 of 2022 With R/SPECIAL CIVIL APPLICATION NO. 25535 of 2022 With R/SPECIAL CIVIL APPLICATION NO. 25536 of 2022 With R/SPECIAL CIVIL APPLICATION NO. 25605 of 2022 With R/SPECIAL CIVIL APPLICATION NO. 25617 of 2022 With R/SPECIAL CIVIL APPLICATION NO. 25914 of 2022 With R/SPECIAL CIVIL APPLICATION NO. 25916 of 2022 With R/SPECIAL CIVIL APPLICATION NO. 25922 of 2022 With R/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gime of reopening provisions had come into force. This was challenged and the matter eventually from various High Courts had travelled to the Apex Court, which vide its judgment dated 04.05.2022 in case of Union of India vs. Ashish Agarwal, reported in (2022) 444 ITR 1 (SC) adjudicated the issue as to the validity of such reopening notices issued across the Nation and gave certain directions to the department. 2.2 Consequent to the aforesaid decision, the reassessment proceedings for the year under consideration have been initiated and the respondent issued a show cause notice dated 28.05.2022 under clause (b) of section 148A of the Act, whereby the petitioner was supplied the relevant material, on the basis of which the case for the year under consideration is sought to be reopened. The petitioner was called upon to show cause as to why, in view of such material, notice under section 148 of the Act should not be issued for the year under consideration. 2.3 The information has been received from the Investigation Wing, Kolkata, to the effect that during the course of search action carried out in the case of Maji Group (i.e. third party) on 05.11.2020, it was found that An ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere carried out through Banking channels. Confirmation, Bank Statements, Balance Sheet and Profit and Loss Account of Starlight Devcon Pvt.Ltd. were attached. Various notices were issued during the original assessment stage and reply furnished in response thereto were tabulated. Details of unexplained loans received during the year under consideration were duly furnished at the original assessment stage, as is evident from the details and at the time of original assessment stage in support of genuineness of the loans (i) audited Balance Sheet of the petitioner, (ii) confirmation of lender, (iii) audited Balance Sheet of lender and (iv) Bank statement of lender have been furnished and after threadbare examination of all such details and evidences, the then Assessing Officer consciously chose not to make any addition in respect of the unsecured loans received from Starlight Devcon Pvt. Ltd. while framing the assessment under Section 143(3) of the Act vide order dated 06.12.2017. 2.10 It is further averred that the issue on hand was threadbare examined at the original assessment stage, as is evident from the peculiar facts of the case narrated. Hence, action of reopening is nothing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... regime of reopening had not expired prior to Finance Act, 2021 coming into force. It is clarified that the new provisions relating to reopening introduced by the Finance Act, 2021 came into force with effect from 01.04.2021. 2.17 It is also the say of the petitioner that as per the old regime of reopening, reopening notice under Section 148 of the Act could have been issued before the expiry of six years from the end of the relevant assessment year i.e. no notice could have been issued after the expiry of the period of six years from the end of the relevant assessment year and if the period of six years from the end of the relevant assessment year expired on or before 31.03.2021, then notice under section 148 of the Act could not have been issued under the new regime for the said assessment years. 2.18 Following are the example given for appreciation of the above referred legal provisions pertaining to reopening under the new regime: Particulars Assessment Year 2013-14 Assessment Year 2014-15 Date of expiry of the Assessment Year 31.03.2014 30.03.2015 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... om the end of the relevant assessment year have expired, then reopening notice can be issued in case there is an escapement of income chargeable to tax subject to fulfillment of following conditions: 1. Assessing Officer has in his possession books of accounts or other documents or evidence which reveal that the income chargeable to tax, represented in the form of asset; and 2. Income which has escaped assessment amounts to or is likely to amount to Rs.50 Lakh or more for that years. 2.22 The asset shall include for the purpose of clause (b) of sub-section (1) of section 149 of the Act the immovable property, being land or building or both, shares and securities, loans and advances, deposits in Bank account. 2.23 The impugned notice, since, has been issued by the respondent after expiry of three years from the end of the relevant assessment year, according to the petitioner, there is no income chargeable to tax represented in the form of asset which has escaped assessment. The case has been reopened on the count that certain unsecured loans taken by the petitioner are fictitious. The issue in question would fall within the ambit of asset. Thus, requirement of clause ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the admission, hearing and final disposal of this petition, stay the implementation and operation of the impugned notice as well as impugned order at ANNEXURE A (Colly.) to this petition and stay further proceedings for Assessment Year 2014-15; (c) any other and further relief deemed just and proper be granted in the interest of justice; (d) provide for the cost of this petition. 4. This Court issued the notice and the affidavit-in-reply has been filed on behalf of the respondent denying all allegations made and the contentions raised in the memo of the petition. 4.1 According to the respondent, the petitioner s challenge to the issue of notice under section 148 of the Act is on the ground that it is barred by limitation. The case has been reopened on the basis and directions of the Apex Court in its judgment dated 04.05.2022 in case of Union of India vs. Ashish Agarwal (supra) therefore, the question of the case being barred by limitation does not arise. The assessee has referred to the Explanation to section 149(1)(b) of the Act to say that no income chargeable to tax in the form of asset had escaped assessment. Section 149(1)(b) of the Act gives an exp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2022, the CBDT has issued instruction No.1/2022 dated 11.05.2022 for implementation of the judgment dated 04.05.2022 in case of Union of India vs. Ashish Agarwal (supra) has been quoted and according to such instruction, the Jurisdictional Assessing Officer has power to issue notice under section 148 of the Act. The ground of alternative efficacious remedy also has been seriously raised. 4.7 It is mentioned that the case has been reopened by issuance of notices under new provision of section 148A of the Act and the notices were issued under section 148A(b) of the Act providing assessee an opportunity of furnishing relevant evidences and explanation. The order under section1 48A(d) of the Act has been passed and the notice under section 148 has been issued after obtaining the approval of specified authority. 4.8 Reliance is placed on the decision of the Delhi High Court in WPC No.13102 of 2022 in case of Touchstone Holdings Pvt. Ltd. dated 02.09.2022, where the Court has held thus: The time period for assessment stood extended till 30.06.2021. The initial re-assessment notice for A.Y.2013-14 was issued to the petitioner within the said extended period of limitation. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. Ashish Agarwal (supra) categorically held that notices originally issued under section 148 of the Act are to be treated as notices having been issued under section 148A(b) of the Act. Under the new scheme, show cause notices under section 148A(d) are not the jurisdictional notices, therefore, issuance of such notices would make the notices under section 148A(b) notices as jurisdictional notices, even assuming without admitting that the revenue is correct in its submission that the extension provided under the TLA Act would enable the revenue to travel back in time to the original date. Under the new scheme, notices under section 148A(b) only for the period of initiation of the proceedings and such notices by themselves do not confer jurisdiction to reopen. 7. It is reiteratively emphasized that the first proviso to section 149(1) of the Act would not enable the revenue to issue notices beyond the period of six years, which was the limitation period under the old regime. More than six years have elapsed from the end of the assessment year in the present case and therefore, the action is barred by limitation. The extension provided under the TLA Act read with notifications wo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issued under the new reassessment scheme. 10. The detailed hearing has also taken place on the ground of limitation i.e. whether fresh notices notices issued under section 148 of Act for the Assessment Years 2013-14 2014-15 after decision of the Apex Court in case of Union of India vs. Ashish Agarwal (supra) are barred by limitation in view of the first proviso to section 149(1) of the Act in the context of developments which took place after the notices having been issued under section 148 of the old Act in the context of developments which took place after the notices having been issued under section1 48 of the old Act. 11. From the material on the record, at the outset, it is required to be noted that the Assessing Officer had issued the reassessment notices on or after 01.04.2021 under the erstwhile sections 148 to 151 of the Act by relying on Notification No.20/2021 dated 31.03.2021 and Notification No.38/2021 dated 27.04.2021, which extended the applicability of those provisions as they stood on 31.03.2021 before the commencement of Finance Act, 2021 beyond the period of 31.03.2021. 12. These reassessment notices under section 148 of the Act were challenged be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ter 01.04.2021 complying with pre-existing sections 147 and 148 of the Act which otherwise stood replaced from 01.04.2021. The Court held that since no indications were found in scheme of statutory provisions of reassessment containing Finance Act, 2021, which would suggest that past provisions would continue to apply even after substitution for assessment period prior to substitution, issuance of notice under section 148 of the Act on or after 01.04.2021 shall need to be in accordance with newly introduced provisions under Finance Act, 2021. Therefore, reassessment notices issued on or after 01.04.2021 without complying with substituted provision of section 148A was held to be illegal and was quashed. 13.3.1 The Rajasthan High Court also held that section 3(1) of the TLA Act vested power to Central Government to extend time limits for taking actions and making compliances in specified Acts upto 31.12.2020 by issuing notification, however any Explanation touching provisions of Income-tax Act was not part of the delegation. Therefore, Explanation to Notifications dated 31.03.2021 and 27.04.2021 issued by the CBDT which extended applicability of provisions of sections 148, 149 and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e extensions made by or under Relaxation Act, 2020, the said non-obstante clause is totally irrelevant to controversy at hand. THE REVENUE'S CHOOSING AND PICKING OF TWO TERMS VIZ. SUCH ACTION EXTENSION/EXTENDED IS CONTRARY TO BASIC PRINCIPLES OF INTERPRETATIONS WHICH PROHIBITS SELECTIVELY CHOOSING/IGNORING WORDS FROM THE STATUTORY LANGUAGE AS WELL AS THE FACT THAT THE RELAXATION ACT, 2020 WAS ENACTED LONG BEFORE FINANCE ACT, 2021. 80. To substantiate its stand that the impugned notices are not barred by limitation, the Revenue without even considering the pre-condition prescribed by Section 3 of Relaxation Act, 2020 has selectively chosen and picked up two terms viz. such action stand extended to put forward an interpretation which could not have been contemplated by the Legislature at the time of enactment of the said provision, namely, that notices under Section 148 will relate back and be governed by old law. In the opinion of this Court, the submission of the Revenue is completely flawed, as the same is contrary to basic principles of interpretations, which prohibits selectively choosing/ignoring words from the statutory language. 81. It is set ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... process of law, it is for the legislature to amend, modify or repeal it, if deemed necessary..... 16 Saregama India Ltd. vs. Next Radio Limited Ors., 2021 SCC OnLine SC 817 there under, should be so construed as amending or modifying or excluding the applicability of the yet to be enacted Finance Act, 2021. THE CONSEQUENCE OF NOT MENTIONING SUBSTITUTED SECTION 147 OF THE INCOME TAX ACT, 1961 IN THE IMPUGNED EXPLANATIONS. 84. Even if it is assumed that the impugned Explanations in the two Notifications are valid, still the impugned notices are bad in law, as the impugned Explanations only seek to effectuate the erstwhile Sections 148, 149 and 151 and they do not cover Section 147. However, the conditions provided for in the substituted Section 147 were not considered while issuing notices by the Assessing Officer. In fact, the said Section 147 is itself subject to Sections 148 to 153, which would include Section 148A. THE LEGAL FICTION ARGUMENT IS WITHOUT ANY FOUNDATION. THERE IS NO PROVISION IN RELAXATION ACT STATING THAT IF THE ACTION IS TAKEN WITHIN THE EXTENDED TIME LIMIT, IT WOULD BE DEEMED TO HAVE BEEN TAKEN BEFORE THE EXPIRY OF THE ORIGINA ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty of Amended Provisions of the Specified Act. Therefore, the impugned Explanation to Notifications No.20/21 and 30/2021 which sought to extend the applicability of erstwhile sections 148, 149 and 151 as they stood as on 31.03.2021 before commencement of Finance Act, 2021 beyond the period of 31.03.2021 were declared ultra vires TLA Act, 2020. 13.5.2 The Bombay High Court in case of Tata Communications Transformation Ltd. (supra) in paragraphs 36,37,38,39,40,41 and 42 has held thus: 36. In order to uphold the arguments of the Revenue in this regard, either a savings clause, or a specific legislative enactment deferring applicability of the amended provisions and the repeal of the old provisions of the Act, would be required. Plainly no such savings clause or enactment is available. 37 Section 3(1) of Relaxation Act does not provide that any notice issued under Section 148 of the Act, after 31st March 2021 will relate back to the original date or that the clock is stopped on 31 st March, 2021 such that the provision as existing on such date will be applicable to notices issued relying on the provision of Relaxation Act. A plain reading of Relaxation Act, as Mr. Mistr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t. 41. In our view, the reopening notices issued after 1 st April, 2021 are unsustainable and bad in law even if one was to apply the Explanations to the Notification Nos.20 of 2021 and 38 of 2021. The Explanation seeks to extend the applicability of erstwhile Sections 148, 149 and 151. The impugned Explanation does not cover Section 147, which (as amended) empowers the revenue to reopen an assessment subject to Sections 148 to 153, which includes Section 148A. Thus, even if Explanations are valid, the mandatory procedure laid down by Section 148A has not been followed and hence, without anything further, the notices under Section 148 of the Act are invalid and must be struck down for this reason as well. This proposition has also been upheld by the Delhi High Court. 42. As regards Revenue's arguments that Relaxation Act being a beneficial legislation must be given purposive interpretation', the purpose of Section 3(1) of Relaxation Act is to extend limitation periods as provided in Gauri Gaekwad 65/71 1377.WP-1334-2021 AND ORS.doc a specified Act (including the Income-tax Act). The purpose of Section 3(1) of Relaxation Act is not to postpone the applicability o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he proceedings relating to the past assessment year provided under section 148 of the Act notice has been issued on or after 01.04.2021. 13.3. The Apex Court was in complete agreement with the view taken by the various High Courts in holding so. At the same time, being concerned about the revenue being remediless as this judgment would result into absence of reassessment proceedings. The Apex Court permitted the respective notices under section 148 of the Act to be deemed to have been issued under section 148 A of the Act as substituted by the Finance Act, 2021 and to be treated as the show cause notice in terms of section 148 A (b) of the Act in the following manner: 8. However, at the same time, the judgments of the several High Courts would result in no reassessment proceedings at all, even if the same are permissible under the Finance Act, 2021 and as per substituted sections 147 to 151 of the IT Act. The Revenue cannot be made remediless and the object and purpose of reassessment proceedings cannot be frustrated. It is true that due to a bonafide mistake and in view of subsequent extension of time vide various notifications, the Revenue issued the impugned notices unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er pass an order in terms of section 148A(d) after following the due procedure as required under section 148A(b) in respect of each of the concerned assessees; (iv) All the defences which may be available to the assessee under section 149 and/or which may be available under the Finance Act, 2021 and in law and whatever rights are available to the Assessing Officer under the Finance Act, 2021 are kept open and/or shall continue to be available and; (v) The present order shall substitute/modify respective judgments and orders passed by the respective High Courts quashing the similar notices issued under unamended section 148 of the IT Act irrespective of whether they have been assailed before this Court or not. 9. There is a broad consensus on the aforesaid aspects amongst the learned ASG appearing on behalf of the Revenue and the learned Senior Advocates/learned counsel appearing on behalf of the respective assessees. We are also of the opinion that if the aforesaid order is passed, it will strike a balance between the rights of the Revenue as well as the respective assesses as because of a bonafide belief of the officers of the Revenue in issuing approximately 900 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uired; (iii) 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); (iv) 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. 11. 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, with a view not to burden this Court with approximately 9000 appeals. We also observe that p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is notice subsequently in the course of the proceedings under this section, or recomputed the loss or the depreciation allowance or any other allowance, as the case may be, for the assessment year concerned (hereafter in this section and in sections 148 to 153 referred to as the relevant assessment year): Provided that where an assessment under sub section (3) of section 143 or this section has been made for the relevant assessment year, no action shall be taken under this section after the expiry of four years from the end of the relevant assessment year, unless any income chargeable to tax has escaped assessment for such assessment year by reason of the failure on the part of the assessee to make a return under section 139 or in response to a notice issued under sub section (1) of section 142 or section 148 or to disclose fully and truly all material facts necessary for his assessment, for that assessment year: Provided further that nothing contained in the first proviso shall apply in a case where any income in relation to any asset (including financial interest in any entity) located outside India, chargeable to tax, has escaped assessment for any assessment year: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Explanation 3. For the purpose of assessment or reassessment 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, notwithstanding that the reasons for such issue have not been included in the reasons recorded under sub section (2) of section 148. Explanation 4. For the removal of doubts, it is hereby clarified that the provisions of this section, as amended by the Finance Act, 2012, shall also be applicable for any assessment year beginning on or before the 1st day of April, 2012. Issue of notice where income has escaped assessment- 148.(1) Before making the assessment, reassessment or recomputation under section 147, the Assessing Officer shall serve on the assessee a notice requiring him to furnish within such period, as may be specified in the notice, a return of his income or the income of any other person in respect of which he is assessable under this Act during the previous year corresponding to the relevant assessment year, in the prescribed form and verified in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m 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 one lakh rupees or more for that year; (c) if four years, but not more than sixteen years, have elapsed from the end of the relevant assessment year unless the income in relation to any asset (including financial interest in any entity) located outside India, chargeable to tax, has escaped assessment. 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 re-computation 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 six years from the end of the releva ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ; or (b) filing of any appeal, reply or application or furnishing of any report, document, return or statement or such other record, by whatever name called, under the provisions of the specified Act; or (c) in case where the specified Act is the Income-tax Act, 1961, (i) making of investment, deposit, payment, acquisition, purchase, construction or such other action, by whatever name called, for the purposes of claiming any deduction, exemption or allowance under the provisions contained in (I) sections 54 to 54GB, or under any provisions of Chapter VI-A under the heading B. Deductions in respect of certain payments thereof; or (II) such other provisions of that Act, subject to fulfilment of such conditions, as the Central Government may, by notification, specify; or (ii) beginning of manufacture or production of articles or things or providing any services referred to in section 10AA of that Act, in a case where the letter of approval, required to be issued in accordance with the provisions of the Special Economic Zones Act, 2005, has been issued on or before the 31st day of March, 2020, and where completion or compliance of such action ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct of deduction or payment of tax under section 192 thereof for the financial year commencing on the 1st day of April, 2019, 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 August, 2020 had been substituted; (v) sections 54 to 54GB of that Act, referred to in item (I) of subclause (i) of clause (c), or sub-clause (ii) of the said clause, the provision of this subsection shall have the effect as if (a) for the figures, letters and words 31st day of December, 2020 , the figures, letters and words 29th day of September, 2020 had been substituted for the time-limit for the completion or compliance; and (b) for the figures, letters and words 31st day of March, 2021 , the figures, letters and words 30th day of September, 2020 had been substituted for making such completion or compliance; (vi) any provisions of Chapter VI-A under the heading B. Deductions in respect of certain payments of that Act, referred to in item (I) of sub-clause (i) of clause (c), the provision of this sub-section shall have the effect as if (a) for the fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and if 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. 14.2 The Central Government issued the Notifications extending the timelines prescribed under section 149 of the Act for issuance of reassessment notice under section 148 of the Act pursuant to the powers vested under section 3 of the TLA Act Act. 14.3 The Apex Court has tabulated these Notifications and extension of time in case of Ashish Agarwal (supra) in the following manner: Date of Notifica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urn of his income or the income of any other person in respect of which he is assessable under this Act during the previous year corresponding to the relevant assessment year, in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed; and the provisions of this Act shall, so far as may be, apply accordingly as if such return were a return required to be furnished under section 139: Provided that no notice under this section shall be issued unless there is information with the Assessing Officer which suggests that the income chargeable to tax has escaped assessment in the case of the assessee for the relevant assessment year and the Assessing Officer has obtained prior approval of the specified authority to issue such notice. Explanation 1. For the purposes of this section and section 148A, the information with the Assessing Officer which suggests that the income chargeable to tax has escaped assessment means, (i) any information flagged in the case of the assessee for the relevant assessment year in accordance with the risk management strategy formulated by the Board from time to time; (ii ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ority, with respect to the information which suggests that the income chargeable to tax has escaped assessment; (b) provide an opportunity of being heard to the assessee, with the prior approval of specified authority, by serving upon him a notice to show cause within such time, as may be specified in the notice, being not less than seven days and but not exceeding thirty days from the date on which such notice is issued, or such time, as may be extended by him on the basis of an application in this behalf, as to why a notice under section 148 should not be issued on the basis of information which suggests that income chargeable to tax has escaped assessment in his case for the relevant assessment year and results of enquiry conducted, if any, as per clause (a); (c) consider the reply of assessee furnished, if any, in response to the show cause notice referred to in clause (b); (d) decide, on the basis of material available on record including reply of the assessee, whether or not it is a fit case to issue a notice under section 148, by passing an order, with the prior approval of specified authority, within one month from the end of the month in which the reply r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ediately before the commencement of the Finance Act, 2021: Provided further that the provisions of this sub section shall not apply in a case, where a notice under section 153A, or section 153C read with section 153A, is required to be issued in relation to a search initiated under section 132 or books of account, other documents or any assets requisitioned under section 132A, on or before the 31st day of March, 2021: Provided also that for the purposes of computing the period of limitation as per this section, the time or extended time allowed to the assessee, as per show cause notice issued under clause (b) of section 148A or the period during which the proceeding under section 148A is stayed by an order or injunction of any court, shall be excluded: Provided also that where immediately after the exclusion of the period referred to in the immediately preceding proviso, the period of limitation available to the Assessing Officer for passing an order under clause (d) of section 148A is less than seven days, such remaining period shall be extended to seven days and the period of limitation under this sub section shall be deemed to be extended accordingly. Ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ispensed with the requirement of conducting any inquiry with the prior approval of the specified authority under section 148A(a) as a onetime major. 17.1 It also further directed the officers to pass an order in terms of section 148A(d) after following the due procedure as required under section 148A(b) in respect of each of the assesses. While so doing, the Court has kept all the defence available to the assessee under section 149 of the Act and which may be availed under the Finance Act, 2021 open. The Court has also kept the right of Assessing Officer under the Finance Act, 2021 open and to continue to be available. This judgment of the Apex Court substituted and modified the respective judgments and orders passed by the respective High Courts quashing the similar notices issued under the unamended section 148 of the Act regardless of whether they have been assailed before the Court or not. This was done on a broad consensus expressed by the learned ASG appearing on behalf of the revenue and learned senior advocates/counsels appearing on behalf of the assesses. The Court struck a balance between the rights of the revenue and of the respective assesses on the ground that it wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ether the case false under clause (a) or clause (b). In that context, if the first proviso to section 149(1) of the Finance Act, 2021 is examined, it clearly provides that no notice under section 148 of the Act shall be issued at any time in a case for the relevant assessment year beginning on or before 01.04.2021, if such notice could not have been issued at that time on account of being beyond the time limit specified under the provision of clause (b) of sub-section(1) of section 149 of the Act as they stood immediately before the commencement of the Finance Act, 2022. This proviso, thus, does not permit the issuance of notice under section 148 of the Act for the past assessment years by taking a recourse of larger period of limitation prescribed in newly substituted clause (b) of section 149(1) of the Act. Therefore, the notice issued after 01.04.2021 shall need to confirm to the requirement of section 149(1) of the Act where the upper time limit provided in the substituted provision shall need to be adhered to. 19. It is quite clear from the memorandum explaining the proposed provision in the financement as well as the provisions as contained in the Finance Act, 2021 that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m 01.04.2021. 21. It is to be noted that while enacting the Finance Act, 2021, Parliament was aware of the existing statutory laws both under the Act as amended by the Finance Act, 2021 as also the ordinance and the TLA Act and Notification issued there under. However, the new scheme for reassessment which was made effective from 01.04.2021 does not have any saving clause. This brings an end to the possibility of any fresh proceedings being initiated under the unamended reassessment provisions after 01.04.2021. Finance Act, 2021 also did not contain savings clause and since the legislature through Finance Act, 2021 and TLA Act did not include any intention to protect and extend the erstwhile scheme of section 148 of the Act. The life of erstwhile scheme of 148 cannot be elongated. The principle that would also employ is that the substitution for omit and obliterate the pre-existing provision and in absence of any saving clause either under the ordinance or the TLA Act the Finance Act, 2021 the presumption is available for the old provision to continue beyond 31.03.2021. 22. The real interpretation of statute provides that later statute would prevail in case of conflict with p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... avel back in time to their original date when such notices were to be issued and then new section 149 of the Act is to be applied at that point. 25. On the basis of the Apex Court s decisions, if these notices to be treated as show cause notice under section 148A(d) of the Act, the fresh information if is supplied by the department as per the direction of the Apex Court and a fresh notice under section 148 of the Act is issued after the order under section 148A(d) of the Amended Act. The Board Circular if is applied, the fresh notice would travel back to the date on which the original notice was to be issued. It would result into the following aspects: (i) as per Amended Law, notice under section 148 of the Act is required to be issued along with the order under section 148A(d) of the Act therefore, the notice earlier issued in pre Ashish Agarwal period, could be issued before 148A(d) order; (ii) section 153(2) of the Amended Act provides that the reassessment proceedings needs to be completed within 12 months from the end of financial year in which the notice under section 148 is issued. 26. In the CBDT Circular, travelled back theory is applied, the due date ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... TJ Section New Delhi dated 11.05.2022 surely cannot override the provisions of law or the decision of the Apex Court. 28. This Court needs to firstly take note of the budget speech of the Finance Minister for 2021-2022, which noted that at the time the assessment could be reopened upto six and ten years and therefore, the tax payers have to remain under uncertainty for a long time. Hence, the time limit is reduced to 3 years from 6 years. 29. Likewise, the memorandum explaining the provision, the Finance Bill 2021 under the head rationalization of various provisions provides for a completely reforms system of assessment/reassessment and re-competition . A new procedure of assessment of cases has been proposed by the bill, which would result in less litigation and the same would provide the ease of doing business to tax payers due to reduction in time limit for notice. Therefore, despite the Act having come into force at the time of issuance of notice, if the revenue is allowed to choose and apply the repealed and substituted provisions, the entire objective of the legislature would be defeated. The Apex Court applying mischief rule of interpretation of statute and ascertai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Statute in question, it is not only legitimate but highly convenient to refer both to the former Act and to the ascertained evils to which the former Act had given rise, and to the later Act which provided the remedy. These three being A compared I cannot doubt the conclusion. This Rule being a Rule of construction has been repeatedly applied in India in interpreting statutory provisions. It would therefore be legitimate in interpreting sub-section (2) to consider that was the mischief and defect for which section 52 as it then stood did not provide and which was sought to be remedied by the enactment of sub-section (2) or in other words, what was the object and purpose of enacting that sub-section. Now in this connection the speech made by the Finance Minister while moving the amendment introducing sub-section (2) is extremely relevant, as it throws considerable light on the object and purpose of the enactment or sub-section (2). The Finance Minister explained the reason for introducing sub-section (2) in the following words: Today, particularly every transaction of the sale of property is for a much lower figure than what is actually received. The deed of registrat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it differently, the actual consideration received for the transfer was 'considerably more' than that declared or shown by the assessee, but which were not covered by sub- section (1) because the transferee was not directly or indirectly connected with the assessee. The object and purpose of sub-section (2), as explicated from the speech of the Finance Minister, was not to strike at honest and bonafide transactions where the consideration for the transfer was correctly 13: disclosed by the assessee but to bring within the net of taxation those transactions where the consideration in respect of the transfer was shown at a lesser figure than that actually received by the assessee, so that they do not escape the charge of tax on capital gains by under-statement of the consideration. This was real object and purpose of the enactment of sub-section (2) and the interpretation of this sub-section must fall in line with the advancement of that object and purpose. We must therefore accept as the underlying assumption of sub-section (2) that there is under-statement of consideration in respect of the transfer and sub-section (2) applies only where the actual consideration received by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0. In section 2(1) (b) of this Act, the specified Act includes the Income Tax Act. As per section 3(1)(b) of the TLA, the time limit for issuance of notice under section 148 of the Act falls during the period from 20.03.2020 to 31.12.2020 or such other date after 31.12.2020 as the Central Government made by Notification specified in this behalf and such notice has not been issued within time limit, this time limit for issuance of such notices shall stand extended to 31.03.2021 or such other date after 31.03.2021 as the Central Government made by Notification specified in this behalf. 34. Chapter III of the TLA Act provides for various amendments to the IT Act by virtue of such provisions, some of the provisions of the Income Tax Act, 1961 has been amended. 35. The overall consideration of the TLA Act would provide that time limit for issuance of notice under section 148 of the Act would be governed by Chapter II of the TLA Act, which provides for relaxation of certain provisions of the specified Act. It provided for certain extension for issuance of such notice without corresponding the amendment in section 149 of the Act as applicable upto 31.03.2021. The TLA Act cannot rewr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was extended from 31.03.2021 to 30.04.2021 and by virtue of 27.04.2021 Notification, the time limit for issuance of notice under section 148 of the Act was extended from 30.04.2021 to 30.06.2021. Therefore, what can be seen is that the Notification dated 31.03.2021 came to be issued before the amended provision of reopening came into force and thus, the Notification was applicable to the unamended provision of reopening. The unamended provisions of reopening since ceased to exist from 01.04.2021, the extension of Notification could have no applicability. The Notification dated 27.04.2021 was in continuity of earlier Notification dated 31.03.2021 as the unamended provisions of reopening itself ceased to exist on 01.04.2021. The Notifications cannot extend the time limit. 39. It is a trite law that no Notification can extend the limitation of the repealed Act. The Apex Court in case of Union of India vs. Ashish Agarwal (supra) had not disturbed the findings of various High Courts to the effect that Notifications in question were ultra vires. Therefore, once the act had been repealed, there cannot be extension of the time limit prescribed under the repealed act by virtue of No ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... legislation may be struck down as arbitrary or contrary to statute if it fails to take into account very vital facts which either expressly or by necessary implication are required to be taken into consideration by the statue or, say, the Constitution. This can only be done on the ground that it does not conform to the statutory or constitutional requirements or that it offends Article 14 or Article 19(1)(a) of the Constitution. It cannot, no doubt, be done merely on the ground that it is not reasonable or that it has not taken into account relevant circumstances which the Court considers relevant. It was categorically held that a subordinate legislation would not enjoy the same degree of immunity as a legislative act would. The Apex Court held that delegate must act within limit of authority and cannot go beyond the Act. If a rule was beyond the power delegated under the Act, it becomes the ultra vires. 41. In case of Assam Co. Ltd. and Anr vs. State of Assam and ors, reported in (2001) 248 ITR 567 (SC), the Apex Court held thus: 10. We see force in the above contention. A perusal of Section 50 of the Act shows that the State Government has been empowered t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ute the agricultural income from tea different from that which is computed by the Central officers under the Central Act. Thus, it is seen that this Rule is not only made beyond the rule-making power of the State under Section 50 of the Act but also runs counter to the object of the Act itself, and enlarges the scope of the Act. The same also suffers from the other vices pointed out by us hereinabove, hence such a Rule, in our opinion, is ultra vires of the Act. Therefore, proviso to Rule 5 of the State Rules to the extent it empowers the State Officers to recompute the agricultural income already computed by the Central Officers is ultra vires of the State Act. The Apex Court has held that a delegate must act within the limit of authority conferred by act and cannot go beyond what the Act contemplates. 42. The Notification that imposed condition for deduction not arising from the section was held to be impermissible. In case of CIT vs. Sirpur Paper Mills, reported in (1988) 172 ITR 762 the Apex Court held that the asset it is a settled position of law that when it conflict the rule must give way to the act. In case of CIT vs. S. Chennaippa Mudaliar, reported in (196 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of issuance of notice under the old scheme. Therefore, we respectfully do not endorse to the view of the Delhi High Court, which goes on a premise that earlier notice was legal, valid and within the time frame. 47. Once the act itself is repealed and operation of the said act is not extended by any savings clause, the Notification could not extend the operation of such a repealed act. The Delhi High Court has gone on a premise that by virtue of Notification in case of Mon Mohan Kohli (supra) the extension to time limit would survive. 48. Resultantly, it could be held that the time limit for issuance of the notice under the old regime for assessment years 2013-14 and 2014-15 since distinguished on 31.03.2021, no extension of such time period when the act itself was repealed would arise. The alter contention raised by the petitioner in relation to the limitation tabulated for ready reference this wise: Date of Notification Original limitation for issuance of notice under section 148 of the Act Extended Limitation 31.03.2020 20.03.2020 to 29.06.2020 30.06.2020 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e the case was under clause(b). Section 149(1)(b) of the Act would permit to open the case if, three years, but, not more than 10 years have elapsed from the end of the relevant assessment year unless the Assessing Officer has in his possession the books of accounts or other documents or evidence which reveal that income chargeable to tax represented in form of assets which is escaped the assessment amounts to or is likely to amount of Rs.50 Lakh or more for that year. Thus, as per first proviso to section 149 of the Act, no notice under section 148 of the Act shall be issued at any time in a case for the relevant assessment year beginning on or before 1st day of April 2021. Such notice could not have been issued at that time on account of being beyond the time limit specified under the provision of clause(b) of sub-section 1 of this section as they stood immediately before the commencement of Finance Act, 2021. 51.2 Therefore, as per the first proviso if a notice could not have been issued under the old provision of section 149 prior to its substitution w.e.f. 01.04.2021, notice could not have been issued under the new provisions. Prior to substitution w.e.f. 01.04.2021, the ti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... all the defences available to the petitioner including those available under section 149 of the Act open. Accordingly, the petitioner has raised the defence under the first proviso to section 149 of the Act before issuance of notice under section 148 of the Act. 54. We also cannot be oblivious of the fact that the Apex Court had in no uncertain terms expressed that it is in compete agreement with the view taken by various High Courts and thus had affirmed the views of the High Courts which held that after enactment of Finance Act, 2021, no notice under section 148 of the Act can be issued on the basis of provisions contained in TLA Act. Therefore, the CBDT s interpretation for issuance of directions to the Assessing Officers by relying on the TLA Act is contrary to the ratio of the Apex Court. The legal effect of enactment of Finance Act, 2021 and substitution of provisions contained in sections 147 to 151 of Finance Act, 2021 when regarded, it is to be appreciated that the TLA Act has extended the last date under unamended section for initiating the actions under sections 147/148 of the Act which is prescribed under unamended section 149. TLA Act is a subsidiary legislation, w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Resultantly, even though CBDT issued both the notifications of 31.03.2021 and 27.04.2021, they could have no power to extend the time period under the first proviso to section 149(1) of the Act. Resultant outcome would be to negate the submissions of Revenue that these two notifications would extend time period provided under the proviso to section 149(1) of the IT Act. 56.2 The time limit as per unamended section 149(1)(b) rendered six years from the end of assessment year. TOLA has not altered time limit provided in clause (b) of unamended section 149 of the IT Act. 57. It is needed to be clarified that we have since held the notices to be barred by the ground of limitation, other legal and factual aspects are not deal with in any of the petitions and all these petitions are allowed on the issue of limitation. 58. Resultantly, these petitions are allowed. Notices under section 148 of the IT Act and impugned orders under section 148A(d) of the IT Act are quashed and set aside on the ground of limitation. 59. All these petitions are accordingly disposed of. (SONIA GOKANI, J) (MAUNA M. BHATT,J) Supplementing View: 1. I ve had the benefit of readin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... levant dates and events for the reassessment notices issued under Section 148 for A.Y.2014-15 (Batch II petitions), are taken from Special Civil Application No. 17321 of 2022. Date Event 2014-2015 Assessment year under consideration 21.04.2021 Notice under Section 148 (old provision) issued upon the petitioner. 14.09.2021 Special Civil Application No.13433 of 2021 filed by the petitioner 17.09.2021 Stay order granted by this Court in Special Civil Application No.13433 of 2021 and allied matters 04.05.2022 Order of the Hon ble Supreme Court in the case of Union of India vs. Ashish Agarwal 06.05.2022 Special Civil Application No.13433 of 2021 and allied matters disposed of by this Court following the judgment of the Hon ble Supreme Court in the case of Ashish Agarwal (supra) 28.05.2022 Show cause notice under Section 148A(b) was issued i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... before the Hon ble Supreme Court in the case of Union of India vs. Ashish Agarwal reported in (2022) 444 ITR 1 (SC), wherein the Hon ble Supreme Court in relation to decisions of various High Courts in para 7 has held that, 7. Thus, the new provisions substituted by the Finance Act,2021, being remedial and benevolent in nature and substituted with a specific aim and object to protect the rights and interest of assessee as well as and the same being in public interest, the respective High Courts have rightly held that the benefits of new provisions shall be made available even in respect of the proceedings relating to past assessment years, provided section 148 notice has been issued on or after 1.4.2021. We are in complete agreement with the view taken by the various High Courts in holding so. 7. However, considering the object and purpose of reassessment and treating the notices issued under section 148, as bonafide mistake, the Hon ble Supreme Court modified the judgements and orders passed by the respective High Courts as under: - (i) The respective impugned section 148 notices issued to the respective assessees shall be deemed to have been issued under secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee. After considering the reply of the assessee, an order under Section 148A(d) was passed on 27.07.2022 and notice under Section 148 of the Act was also issued on 27.07.2022. Thus, in all these petitions of Batch-I, the date of show-cause under Section 148A(b) and the date of notice under Section 148 would be after 4.5.2022. Similar is the situation in relation to notice issued under Section 148 for Assessment Year 2014-15. For Batch -II petitions also, the date of show-cause under Section 148A(b) and the date of notice under Section 148 would be after 04.05.2022. 9. The challenge in both (Batch-I petitions for A.Y. 2013-14 and Batch-II petitions for A.Y.2014-15), thus is in relation to the notices issued under Section 148 of the Act, for A.Y.2013- 2014 and for A.Y.2014-15. Along with the ground of limitation, several other grounds like change of opinion, no fresh information available to the revenue, escapement is not represented in the form of asset etc. are raised. However, these petitions are heard only on the ground of limitation i.e. whether fresh notice issued under Section 148 of the Act for A.Y.2013-2014 and for A.Y. 2014-15, after decision of Supreme Court in the ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Act 2021, radical and reformative changes are made governing the procedure for reassessment proceedings. Further, under substituted provisions, no notice under section 148 can be issued without following the procedure and therefore any notice without following procedure is void. (c) The Hon ble Supreme Court taking note of insertion of new provisions w.e.f 01.04.2021, treated the notice issued by A.O. under old provision as bonafide mistake and considering the case of revenue, it held that the impugned notices under Section 148 shall be deemed to be notice issued under Section 148 A of the act as substituted by Finance Act 2021, and treated to be show cause notice under Section 148A(b) of the Act. (d) Most importantly the Hon ble Supreme Court had merely converted the notice issued under Section 148 of the Act into Show-Cause notice under Section 148A(b) of the Act with the rider that all the defenses available under Section 149 of the Act shall be available to the assessee as well as revenue. Therefore, first proviso to section 149(1), applicable w.e.f. 1.4.2021 cannot be ignored. As per first proviso to section 149(1) of the Act, applicable w.e.f. 1.4.2021, no notic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is not expressly provided, cannot be considered. (b) Referring to certain other time limits prescribed under TOLA, he submitted that the same is governed by Chapter-III of TOLA and there is no reference to the time limit expressly provided under section 149 of the Act in Chapter-III of TOLA. (c) Referring to the affidavit of the revenue as also Notifications issued by the Government pursuant to TOLA dated 31.03.2021 and 27.04.2021, he submitted that there is no concept of freezing of time or permitting the revenue to travel back in time as sought to be canvassed. TOLA does not provide the concept of freezing of time limit . By giving an example of section 234A of the act, he submitted that if the freezing of time concept is made applicable, then interest payable under section 234A of the act, shall have no harmonious application and thus, the scheme of the Act will fail. He thus, submitted that the time limit extended by TOLA does not read into amendment of Section 149 of the Act, particularly when the erstwhile Section 149, to which the TOLA was made applicable ceases to exist. He thus submitted that TOLA has no role to play in so far as reopening provisions are concern ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nnot go beyond the Principal Acts i.e. Income Tax Act, 1961 and TOLA, nor can the excutives exercise legislative power: (a) Mr.Tushar Hemani, learned senior counsel submitted that two Notifications dated 31.03.2021 and 27.04.2021 pursuant to TOLA, has extended the operation of a repealed statute. Since the said notification has extended the powers given under TOLA, the Notifications are ultra vires. In support of his submission, he has relied upon the following decisions: (i) In the case of Vasu Dev Singh and others vs. Union of India and others reported in (2006)12 SCC 753; (ii) In the case of Assam Co vs. State of Assam reported in (2001)248 ITR 567 (SC); (iii) In the case of The Chamber of Tax Consultants Anr. vs. Union of India reported in (2018)400 ITR 178 (Delhi); (iv) In the case of CIT vs. Sirpur Paper Mills reported in (1999)237 ITR 41 (SC); (v) In the case of Union of India vs. S.Srinivasan reported in (2012)7 SCC 683; (vi) In the case of Kunj Behari Lal Butail vs. State of H.P. reported in (2000)3 SCC 40; Therefore, the executives, in exercise of delegated powers, cannot go beyond the principal Acts i.e. Income Ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in 1st proviso to section 149 of the Act. Hon ble the Apex Court has never exempted such a scrutiny of the notices from the point of view of limitation. It is, therefore, submitted that even if notice relates back to the earlier date, the hurdle of limitation cannot be given a go-by. Hon ble the Apex Court has merely converted notices under section 148 into show-cause notices issued under section 148A(b) and kept all defenses open to the assessee. Hence, the Instruction No.1/2022 deserves to be ignored. 10.7. Decision Of Hon ble Delhi High Court in the case of TOUCHSTONE HOLDINGS P. LTD. vs. ITO : (a) Referring to the decision of Delhi High Court in the case of Touchstone Holdings Private Limited vs. ITO reported in WPC 13102 of 2022 dated 09.09.2022, he submitted that the said judgment does not lay down the correct law for the following reasons: (i) The said judgment proceeds on the footing that the original notice issued between time period 01.04.2021 to 30.06.2021 was issued within the permissible extended time by virtue of operation of TOLA and Notifications issued thereunder. (ii) This fundamental premise of issuance of notices under section 148 of the Act bet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e under Section 148A(b) was after 4.5.2022. Thus, the process for reassessment started after the 4th May, 2022, and the orders under Section 148A (d) of the Act were passed somewhere in the month of June to August 2022, and immediately the notices under Section 148 of the Act came to be issued under new provision. If the contention of the revenue of travel back in time is taken into consideration then the notice under Section 148 issued between June to August 2022, have to be treated as notices issued as original notice under Section 148 of the Act, and permitting that would amount to order under Section 148A (d) of the Act being subsequent to the date of original notice under Section 148 of the Act. Therefore, under no circumstances the original notices issued under Section 148 of the Act for A.Y. 2013-2014 and 2014-2015 can be treated as notices issued under section 148 of the Act under new provision. (b) On merits, he submitted that High Courts of Bombay, Delhi, Allahabad and Rajasthan (among others) had held that explanation in the Notifications dated 31.03.2021 and 27.04.2021 is illegal. Consequently, notices issued between 01.04.2021 to 30.06.2021 under section 148 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... requirement of section 148A(a) is dispensed with. (e) Further, under the provisions of TOLA, legislature has never extended time limit prescribed under section 149 of the Act because it never intended the application of old provisions for notices to be issued after 01.04.2021 and that is the precise reason for which, various courts have not validated the explanation given by various notifications for extension of time. Reiterating the arguments canvassed by learned senior counsel Mr.Hemani, he submitted that the decision of the Hon ble Supreme Court is applicable to those notices, which were challenged before different High Courts having similar issue and therefore, it has no applications where notices under Section.148 was not subject matter of challenge. Therefore, in the cases where notice under Section 148 of the Act was not subject matter of challenge, no show cause u/ 148A(b) could be issued. 11.2. Notice issued under Section 148 is time barred under Proviso to Section 149: (a) Learned Senior Counsel Mr. Soparkar submitted that law applicable on the date of issuance of notice under Section 148 is to be seen and therefore, when notice under Section 148 was i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he existing provisions. The Finance Act, 2021 does not contain any saving clause to give effect to the applicability of the provisions prior to 01.04.2021 beyond 31.03.2021. Further at no point of time, the new scheme of reopening of assessment effective from 01.04.2021 was kept in abeyance so as to avoid overlapping of old provision viz-a-viz new provision w.e.f. 01.04.2021. (b) As Finance Act, 2021 and TOLA operate in different time periods, there is no conflict because TOLA governs the provision up to 31.03.2021, where Finance Act, 2021 governs the provisions w.e.f. 01.04.2021. Therefore, they cannot coexist as canvased by the revenue. (c) The non-obstante clause provided in TOLA only seeks to protect the completion or compliance of proceedings initiated prior to 31.03.2021, and therefore, it would not apply after enactment of the Finance Act, 2021. (d) The notifications issued by CBDT dated 31.03.2020 and 27.05.2021 were only operative till 30.06.2021. (e) The decision of Delhi High Court in the case of Touchstone Holdings (supra) is erroneous because it upheld the notice on the wrong premise that the original notice issued under Section. 148 stands revived. He, thu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... if the TOLA and notifications apply, still the notice issued under Section 148 for A.Y. 2013-14 is barred by limitation because assuming that TOLA applies then the last date to issue notice under Section 148 was 30.06.2021, and in all the petitions the first notice under Section 148 of the Act was issued between 01.04.2021 to 30.06.2021. By virtue of the Hon ble Supreme Court decision they have been treated as notice under Section. 148A(b) of the Act however, the final notice under Section 148 were issued in the month of July/August, 2022, and therefore, also the same are time barred. (e) The instructions No.1 of 2022 dated 11.05.2022 is of no consequence because the same would not apply after 31.03.2021. He, thus, submitted that by any stretch of imagination the impugned notice issued under Section. 148 cannot be stated to be within the limitation prescribed under the provisions of the Act including TOLA. (f) Moreover, without withdrawal of the first notice under Section. 148 of the Act, the second notice cannot be issued. In support of his submissions, he replied upon the decision of this Court in the case of Aditya Medisales Limited Vs. Deputy Commissioner of Income Tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the Hon ble Supreme Court in case of Ashish Agarwal (Supra), would not apply as in this case the notice issued under Section 148 of the Act was not challenged before any High Court and was not sub-judice. The directions contained in the said decision would be applicable to the proceedings which were subject matter of challenge before High Courts. He also submitted that provisions of TOLA would not apply in the cases where the notices under section 148, have been issued between 01.04.2021 to 30.06.2021. The instructions issued by the CBDT, being beyond the scope of Hon ble Supreme Court decision, is not binding. Therefore, the present proceedings for A.Y. 2013-14, being time barred, the notices issued under section 148 of the Act are without jurisdiction and deserve to be quashed and set aside. 17. Learned advocate Mr. Dhinal Shah, in addition, submitted the following: (a) No notice under Section. 148 of the Act can be issued beyond the first proviso to Section 149 of the Act. (b) The Finance Act, 2021 which came into force w.e.f. 01.04.2021, wherein provisions of Sections 147 to 151 were amended/substituted after enactment of TOLA. Despite that no corresponding amend ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct (substituted provision). Referring to para-3.1 of the decision in the case of Ashish Agarwal (Supra), he submitted that as observed by the Hon ble Supreme Court in pursuance to the power vested under Section 2 of the Relaxation Act, 2020, the Central Government issued notifications inter alia extending the timelines prescribed under Section 149 for issuance of reassessment notices under Section 148 of the Act. Thus, the Hon ble Supreme Court was aware about the TOLA and subsequent notifications issued by the Central Government pursuant to TOLA extending the timelines prescribed under Section. 149 of the Act and therefore, now it is not open for the petitioners assessee to submit that there is no extension of time under Section 149, which will not permit issuance of notice. (b) The Hon ble Supreme Court in case of Ashish Agarwal (Supra), in exercise of its power under Article 142, has directed to treat the notices issued under section 148 of the act, to be treated as notices issued under Section.148A(b) of the Act. As the said decision was made applicable to PAN India, it is applicable to the proceedings where notices under Section 148 were issued between the period 01. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee to contend that the new notice post Hon ble Supreme Court s decision after following due procedure contemplated under Section 148A of the Act is barred by limitation. Further, the limitation prescribed for issuance of aforesaid notices under Section 148 (unamended law) was extended by provisions of TOLA and notification issued thereunder from time to time. The Hon ble Supreme Court in para-3.1 of the order has recorded the details of the said extension and therefore, pursuant to TOLA and notifications, the limitation for issuance of notice under Section 148 for A.Y. 2013-14 to 2017-18 which was expiring on 31.03.2020 as per Section 148 of the unamended Act was extended up to 30.06.2021. Moreover, Section 3 of TOLA starts with a non-obstante clause which gives overriding effect over limitation prescribed under Section 149 of the unamended Act. In all the cases, admittedly, the notices were issued for A.Y. 2013-14 to 2017-18 between 01.04.2021 to 30.06.2021 which were within the limitation as per extension provided under TOLA, 2020 and therefore, now it is not open for the assessee to rely on first proviso to Section 149 of the Act to submit that the notices under Sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ), he submitted that the Hon ble Supreme Court has categorically noted about 90,000 reassessment notices being issued and thereby giving a clear direction to make the aforesaid decision applicable PAN India. (h) The CBDT s instruction No.1 of 2022 particularly para-6.1 and 6.2 provides for guidelines with respect to application of new section of 149 pursuant to decision in case of Ashish Agarwal (Supra). Referring to para-6.1, he submitted that the last sentence reads as Decision of Hon ble Supreme Court read with time extension provided by TOLA will allow extended reassessment notices to travel back in time to their original date when such notices were to be issued and then new section 149 of the Act is to be applied at that point. The aforesaid sentence provides for mechanism for deciding the number of assessment years i.e. whether first, second, third, fourth or fifth for end of the relevant assessment year for the purpose of applying new Section 149 therefore, the theory of travel back in time as canvased is not contrary to the provisions of the Act. By giving illustrations, he has submitted the following: In simple terms, it provides the mechanism for deciding ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (j) Mr. Patel, further submitted that the re-assessment notice issued pursuant to the decision of Ashish Agarwal (supra) would fall within the period of 6 years in the following manner, under the new provisions. 2013- 14 End of Relevant A.Y. Nos. of A.Y. A.Y. Remarks 31.03.2014 1st 2014-15 2nd 2015-16 3rd 2016-17 4th 2017-18 5th 2018-19 6th 2019-20 Limitation expired on 31.03.2020, which was extended upto 30.06.2021 under TOLA. 2014-15 End of Relevant A.Y. Nos. Of A.Y. A.Y. Remarks 31.03.2015 1st 2015-16 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ovisions, the proceedings as initiated admittedly between the period 1.4.2021 to 30.6.2021 were not quashed and were in fact allowed to be proceeded further. Therefore, once the Hon ble Supreme Court was pleased to recognize the streamlining of process carried out under the amended provisions and the said notices were not specifically quashed and permitted to continue now it is not open for the assessee to once again raise the point of limitation on the spacious ground of Hon ble Supreme Court not barring the assessee from raising such grounds. It is open for the assessee to contest claims on merits in a given case, but seeking reinterpretation of the judgment of the Hon ble Supreme Court in the case of Ashish Agarwal (supra) is not permissible. He further submitted that it would be highly improper to seek an interpretation once again of the decision of the Hon ble Supreme Court on the issue of limitation particularly when the Hon ble Supreme Court has already provided clarification/judgment on the issue. He thus submitted that therefore, the preliminary ground of the notice being barred by limitation may not be entertained. 21. Concurring View: 21.1. Having heard learne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 30.06.2021. 21.2. (a) It was contended that there cannot be any Notification when the provision itself was repealed. Further, by issuing notification, the executive cannot expand legislative power because it would amount to re-writing the law. By Notification, the subordinate legislation cannot override any statute enacted by Parliament. On the aforesaid issue it is submitted by all counsel that by virtue of notification Nos. 20 of 2021 and 38 of 2021 dated 31.03.2021 and 27.04.2021 respectively, the time limit for issuing notice under Section 148 has been extended up to 30.6.2021. By Notification No. 20 of 2021 dated 31.03.2021, the time limit to issue notice was extended up to 31.04.2021. When the Notification No 20 of 2021, was issued on 31.03.2021, the old law was in existence, and it ceases to exist w.e.f 01.04.2021. When the law itself ceases to exist w.e.f.01.04.2021, the Notification will die a natural death and therefore there cannot be any Notification in respect of the repealed Act. Moreover, as the Notification No 38 of 2021 dated 27.04.2021, was in continuation of the earlier Notification dated 31.03.2021 and once earlier notification ceases to apply, the conse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... come with regard to tea, to call for any papers before the authority administering the Central Act has held as under : 10. We see force in the above contention. A perusal of Section 50 of the Act shows that the State Government has been empowered to make such Rules as are necessary for the purpose of carrying out the purposes of the Act. We have already noticed that the object and the scheme of the Act do not contemplate the State authorities being empowered to recompute the agricultural income contrary to the computation made by the Central Officers, nor do the subjects specified in sub-sections 2(a) to (m) of Section 50 provide for making such rules empowering the State Officers to make computation of agricultural income contrary to what is computed by the Central Officers under the Central Act. We have noticed that by virtue of the provisions made by the legislature in explanation to Section 2(a)(2), proviso to Section 8 and Section 20D, it is clear that the State Legislature intended to adopt the computation of agricultural income made under the provisions of the Central Act. Having specifically said so in the above Sections of the Act, if the Legislature wanted to deviate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er section 3(1) of TOLA -2020, the Legislature has permitted the Government to issue notification extending the time limit for issuance of notice under section 148. Hence, the power of the CBDT to issue the two notifications dated 31.03.2021 and 27.04.2021 pursuant to TOLA-2020 cannot be questioned. However, in my opinion the said two notifications extending the time limit prescribed under first proviso to section 149(1), cannot be read so as to enlarge the scope of the amended first proviso to section 149(1). Therefore, I am not in agreement with the submission of the revenue that as time limit to issue notice under Section 148 was extended by TOLA up to 30.06.2021, the proviso to amended section 149(1) would not be applicable. Therefore, though two Notifications dated 31.03.2021 and 27.04.2021 came to be issued by the CBDT, in pursuance to the power vested under section 3 of TOLA 2020, which came into force on 31.03.2020, they cannot be treated to have extended the time limit provided under the amended first proviso to section 149(1). 21.3. (a) In relation to the CBDT instruction No 1 of 2022, which was issued to implement the decision of Hon ble Supreme Court in case of Ashis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ake their submissions and taken them into consideration. It was urged that the instructions contained in these circulars noted before were in consonance with the accepted principles of accountancy and these instructions have held the field for over 53 years. It was also submitted that as such claims have been allowed to be exempted for more than half a century, and the practice had transformed itself into law, this position should not have been deviated from. This submission, of course, cannot be accepted. The question of how far the concept or real income enters into the question of taxability in the facts and circumstances of this case and how far and to what extent the concept of real income should intermingle with the accrual of income will have to be judged in the light of the provisions of the Act, the principles of accountancy recognised and followed and the feasibility. The earlier circulars being executive in character cannot alter the provisions of the Act. These were in the nature of concessions and could always be prospectively withdrawn. However, on what lines the rights of the parties should be adjusted in consonance with justice in view of these circulars is not a su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sing Officer has in his possession books of account or other documents or evidence which reveal that the income chargeable to tax, represented in the form of- (i) an asset; (ii) expenditure in respect of a transaction or in relation to an event or occasions; or (iii) an entry or entries in the books of account, Which has escaped assessment amounts to or is likely to amount to fifty lakh rupees or more:] Provided that no notice under Section 148 shall be issued at any time in a case for the relevant assessment year beginning on or before 1st day of April, 2021, if [a notice under section 148 or section 153A or section 153C could not have been issued at that time on account of being beyond the time limit specified under the provisions of clause (b) of sub-section (1) of this section or section 153A or section 153C, as the case may be], as they stood immediately before the commencement of the Finance Act, 2021. xxxx xxxx xxxx (b) Therefore, substituted provisions of sections 147 to 151 shall be applicable w.e.f. 01.04.2021, and as per First Proviso to Section 149, limitation as specified under unamended provision as it stood ..... 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