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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 ..... PLICATION 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 CIVIL APPLICATION NO. 19088 of 2022 With R/SPECIAL CIVIL APPLICATION NO. 19117 of 2022 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th 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 2022 With R/SPECIAL CIVIL APPLICATION NO. 21374 of 2022 With R/SPECIAL CIVIL APPLICAT ..... 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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 APPLICATION NO. 23188 of 2022 With R/SPECIAL CIVIL APPLICATION NO. 23189 of 2022 With R/S ..... 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IAL 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/SPECIAL CIVIL APPLICATION NO. 25925 of 2022 With R/SPECIAL CIVIL APPLICATION NO. 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gh 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 Anup Majee alias Lala has acquired certain paper companies including Starlight Devcon Pvt. Ltd. 2.4 On analysis of Bank ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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, but, an outcome of mere change of opinion which is not permissible in the eyes of law. 2.11 Again, it is the say of the petitioner that tr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d 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 Date of expiry of six years from the end of the Assessment year 31.03.2020 31.03.2021 Date of new provisions introduced by Finance Act, 2021 coming into force 01.04.2021 01.04.2021 Whether limitation for issuing notice under section 148 prescribed under old reg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l 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 (b) of sub-section (1) of section 149 of the Act have not been satisfied. 2.24 According to the petitioner, there is no information, as prescribed under the Act, which suggests that any income chargeable to tax has escaped assessment. The petitioner invited the attention of this Court to the first proviso to section 148 of the Act, no notice under section 148 of the Act shall be issued unless there is an information with the Assessing Officer which suggests that income chargeable to tax has escaped assessment in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entions 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 explanation as under: "Explanation-For the purpose of clause (b) of this sub-section, "asset" shall include immovable property, being land or building or both, shares and securities, loans and advances, deposits in bank account." The very reading of Explanation makes it clear that it is inclusive in nature and not exclusive. 4.2 The assessee has received an amount of Rs.1,25,00,000/- which is proved to be a shell company and the same is received from Starlight Devcon Pvt. Ltd., which is represented in the form of asset. Therefore, this contenti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 Supreme Court has declared that the said re-assessment notice be deemed as a notice issued under section 148A of the Act and permitted Revenue to complete the said proceedings. In this case the income alleged to have escaped assessment is more than 50 Lakhs and therefore, the rigor of section 149(1)(b) of the Act (as amended by the finance act, 2021) has been satisfied. Accordingly, the present petition alongwith the pending application is dismissed." 4.9 Affidavit-in-rejoinder is filed, which may not be necessary to be dilated at this stage. 5. With regard to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l 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 would cease to operate the moment the underlying provisions are deleted from the statute book. Extension of the provision cannot operate in vacuum without the main provision. In view of the same, the first proviso would limit the rights of the revenue to issue reopening notices beyond the period of six years to be counted without any extension. The TLA Act and subsequent notifications did not extend any limitation provided under the new Act, which came into force with effect from 01.04.2021. 8. This Court extensively heard the learned senior counsels, Mr. Tushar Hemani assisted by the l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 before various High Courts and some of the High Courts set aside the reassessment notices, on the ground that they were issued after 01.04.2021 and they cannot be governed by the provisions of sections 148 to 151 of erstwhile provisions as they stood on 31.03.2021 and would be instead governed by substituted sections 148 to 151 which came into effect vide Finance Act, 2021. 13. Profitably it would be to refer to some of the decisions of the High Courts of Allahbad, Rajasthan, Delhi and Bombay. 13.1 We can notice that High Court of Allahabad in case of Ashok Kumar Agarwal vs. Union of India, reported in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng 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 151 of the Act as they stood as on 31.03.2021 before commencement of Finance Act, 2021 beyond the period of 31.03.2021 were unconstitutional and were to be declared invalid. 13.4 The Delhi High Court in case of Mon Mohan Kohli vs. Assistant Commissioner of Income-tax, reported in 2021 133 taxmann.com 166 (Delhi) also considered section 3(1) of the TLA Act, which enable the Central Government to issue Notification for extending time limit for completion or compliance of the action laid down in specified act, but did not empower the government to postpone the applicability of any provision which has been enacted from a p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 settled law that when the words of a statute are clear and unambiguous, it is not permissible for the Court to read words into the statute. In fact, the principle of interpretation of taxing statutes was best enunciated by Rowlatt J. in his classic statement in Cape Brandy Syndicate v I.R.C. (1 KB 64, 71), "In a taxing statute one has to look merely at what is clearly said. There is no room for any intendment. There is no equity about a tax. There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied. One can look fairly at the language used." 82. The Judiciary cannot transgress into the domain of policy making by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1 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 ORIGINAL (UN-EXTENDED) TIME LIMIT. 85. The "legal fiction" argument is without any foundation. A statute can be said to enact a legal fiction when it assumes the existence of something which is known not to exist. The extension of time for completing an assessment or issuing a Section 148 notice has no element of legal fiction in it. The only effect and consequence of this extension of the time limit is that if the act in question is performed within the extended time limit, it will be considered to be legally compliant. However, there is no assumption that the act in question is deemed to have been performed within the original time limit, as wrongly contended by the learned c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... visions 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. Mistri rightly submitted, makes it clear that Section 3(1) of Relaxation Act merely extends the limitation provided in the specified Acts (including Income-tax Act) for doing certain Acts but such Acts must be performed in accordance with the provisions of the specified Acts. Therefore, if there is an amendment in the specified Act, the amended provision of the specified Act would apply to such actions of the Revenue. The Delhi High Court has considered and rejected the contention of the Revenue that the notice issued after 1st April 2021 relates back to an earlier period. 38 The Delhi High Court has considered and rejected this argument of the Revenue that Relaxation Act creates a legal fiction such that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l. 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 of amended provisions of a Specified Act. Though Relaxation Act was in existence when the Finance Act, 2021 was passed, the Parliament has specifically enacted the new, (amended) provisions of Section 147 to 151 of the Act and made them applicable with effect form 1st April, 2021. Therefore, it is clear that amendment is to be applied from 1 st April, 2021. Further, when there is no ambiguity on the applicability of the provision, there is no question of resorting to purpose test." 13. This had been challenged before the Apex Court in case of Ashish Agarwal (supra) questioning the very issuance of notice. The Apex Court held that the reassessment notice if issued on or after 01.04.2021 under unamemded section 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 under section 148 after the amendment was enforced w.e.f. 01.04.2021, under the unamended section 148. In our view the same ought not to have been issued under the unamended Act and ought to have been issued under the substituted provisions of sections 147 to 151 of the IT Act as per the Finance Act, 2021. There appears to be genuine non−application of the amendments as the officers of the Revenue may have been under a bonafide belief that the amendments may not yet have been enforced. Therefore, we are of the opinion that some leeway must be shown in that regard which the High Courts could have done so. Therefore, instead of quashing and setting aside the reassessment notices issued under the unamended provision of IT A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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 90000 such notices, the Revenue may not suffer as ultimately it is the public exchequer which would suffer. Therefore, we have proposed to pass the present order with a view avoiding filing of further appeals before this Court and burden this Court with approximately 9000 appeals against the similar judgments and orders passed by the various High Courts, the particulars of some of which are referred to hereinabove. We have also proposed to pass the aforesaid order in exercise of our powers under Article 142 of the Constitution of India by holding that the present order shall govern, not only the impugned judgments and orders passed by the High Court of Judicature at Allahabad, but shall also be made appl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hich 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 present order shall also govern the pending writ petitions, pending before various High Courts in which similar notices under Section 148 of the Act issued after 01.04.2021 are under challenge." 13.4 It is to be noted here that the Apex Court has get all defences, which were available to the assesses including those available under section 149 of the Act kept open for both assess and the revenue. In this background, the respondent issued show cause notice under clause (b) of section 148A of the Act and the petitioner was supplied the relevant material on the basis of which, for the assessment year 2014-15, the petitioner was called upon to show cause as to why the notice under section 148( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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: Provided also that the Assessing Officer may assess or reassess such income, other than the income involving matters which are the subject matters of any appeal, reference or revision, which is chargeable to tax and has escaped assessment. Explanation 1.-Production before the Assessing Officer of account books or other evidence from which material evidence could with due diligence have been discovered by the Assessing Officer will not necessarily amount to disclosure within the meaning of the foregoing proviso. Explanation 2.-For the purposes of this section, the following shall also be deemed to be cases where income chargeable to tax has escaped assessment, namely :- (a) where no return of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 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 in a case- (a) where a return has been furnished during the period commencing on the 1st day of October, 1991 and ending on the 30th day of September, 2005 in response to a notice served under this section, and (b). subsequently a notice has been served under sub−section (2) of section 143 after the expiry of twelve months specified in the proviso to subsection (2) of section 143, as it stood immediately before the amendment of said sub−section by the Finance Act, 2002 (20 of 200 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 relevant assessment year. Explanation.-For the removal of doubts, it is hereby clarified that the provisions of sub−sections (1) and (3), 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. Sanction for issue of notice- 151. (1) No notice shall be issued under section 148 by an Assessing Officer, after the expiry of a period of four years from the end of the relevant assessment year, unless the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner is satisfied, on the reasons recorded by the Assessing Officer, that it is a fit case for the issue of such notice. (2) In a case other than a case falling unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... overnment 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 has not been made within such time, then, the time-limit for completion or compliance of such action shall, notwithstanding anything contained in the specified Act, stand extended to the 31st day of March, 2021, or such other date after the 31st day of March, 2021, as the Central Government may, by notification, specify in this behalf: Provided that the Central Government may specify different dates for completion or compliance of different actions: Provided further that such action shall not include payment of any amount as is referred to in sub-section (2): Provided also that where the specified Act is the Income-tax Act, 1961 and the compliance relates to- (i) furnishing of return under section 139 thereof, for the assessment year commencing on the- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , 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 figures, letters and words "31st day of December, 2020", the figures, letters and words "30th day of July, 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 "31st day of July, 2020" had been substituted for making such completion or compliance; (vii) furnishing of report of audit under any provision thereof for the assessment year commencing on the 1st day of April, 2020, the provision of this sub-section shall have the effect as if for the figures, letters and words "31st day of March, 2021", the figures, letters and words "31st day of October, 2020" had been substituted: Provided also that the extension of the date as referred to in sub-clause (b) of clause (i) of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 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 24.06.2020 20.03.2020 to 31.12.2020 31.03.2021 31.03.2021 31.03.2021 30.04.2021 27.04.2021 30.04.2021 30.06.2021 15. By way of Finance Act, 2021 which was passed on 28.03.2021, the Parliament introduced the reformatting changes to sections 147 to 151 of the Act w.e.f. 01.04.2021, which are as under: "3.2 The Parliament introduced reformative changes to Sections 147 to 151 of the Income Tax Act, 1961 governing reassessment proceedings by way of the Finance Act, 2021, which was passed on 28 th March, 2021. The substituted sections 147 to 149 and section 151 applicable w.e.f. 01.04.2021, passed in the Finance Act, 2021, are as under: − Income escaping assessment− "147. If any income chargea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rom time to time; (ii) any final objection raised by the Comptroller and Auditor− General of India to the effect that the assessment in the case of the assessee for the relevant assessment year has not been made in accordance with the provisions of this Act. Explanation 2.-For the purposes of this section, where,- (i) a search is initiated under section 132 or books of account, other documents or any assets are requisitioned under section 132A, on or after the 1st day of April, 2021, in the case of the assessee; or (ii) a survey is conducted under section 133A, other than under sub−section (2A) or sub−section (5) of that section, on or after the 1st day of April, 2021, in the case of the assessee; or (iii) the Assessing Officer is satisfied, with the prior approval of the Principal Commissioner or Commissioner, that any money, bullion, jewellery or other valuable article or thing, seized or requisitioned under section 132 or under section 132A in case of any other person on or after the 1st day of April, 2021, belongs to the assessee; or (iv) the Assessing Officer is satisfied, with the prior approval of Principal Commissioner or Commissioner, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... referred to in clause (c) is received by him, or where no such reply is furnished, within one month from the end of the month in which time or extended time allowed to furnish a reply as per clause (b) expires: Provided that the provisions of this section shall not apply in a case where,- (a) a search is initiated under section 132 or books of account, other documents or any assets are requisitioned under section 132A in the case of the assessee on or after the 1st day of April, 2021; or (b) the Assessing Officer is satisfied, with the prior approval of the Principal Commissioner or Commissioner that any money, bullion, jewellery or other valuable article or thing, seized in a search under section 132 or requisitioned under section 132A, in the case of any other person on or after the 1st day of April, 2021, belongs to the assessee; or (c) the Assessing Officer is satisfied, with the prior approval of the Principal Commissioner or Commissioner that any books of account or documents, seized in a search under section 132 or requisitioned under section 132A, in case of any other person on or after the 1st day of April, 2021, pertains or pertain to, or any information cont ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... purposes of clause (b) of this subsection, "asset" shall include immovable property, being land or building or both, shares and securities, loans and advances, deposits in bank account. (2) The provisions of sub−section (1) as to the issue of notice shall be subject to the provisions of section 151.' Sanction for issue of notice− "151. Specified authority for the purposes of section 148 and section 148A shall be- (i) Principal Commissioner or Principal Director or Commissioner or Director, if three years or less than three years have elapsed from the end of the relevant assessment year; (ii) Principal Chief Commissioner or Principal Director General or where there is no Principal Chief Commissioner or Principal Director General, Chief Commissioner or Director General, if more than three years have elapsed from the end of the relevant assessment year." The Explanations in the Notifications dated 31.03.2021 and 27.04.2021 were the reasons for the revenue to issue the notices under the erstwhile provisions, although sections 147 to 151 of the Act by the Finance Act, 2021 had already come into force on 01.04.2021. Those reassessment notices after 01.04.2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessing Officers of revenue in issuing approximately these 90,000 notices and the revenue may not suffer ultimately as it is a public exchequer which would suffer. All the judgments and orders passed by the different High Courts on this issue and under similar notices issued after 01.04.2021 under section 148 of the Act have been set aside as the order was made applicable PAN INDIA by holding that the same shall be governed by this order and shall stand modify to that extent. 17.2. As the rights of both the sides have been kept open by the Apex Court while striking a balance between rights of the revenue and those of the respective assesses, the challenge on the part of the assessee with regard to the issue of limitation and other challenge as permissible under the Finance Act, 2021 cannot go away. It is by virtue of the Apex Court's decision and direction that such a challenge lies and therefore, the arguments of the respondents-revenue cannot be countenance that in wake of the decision of the Ashish Agarwal (supra) and the notice issued under section 148 of the Act earlier as was deemed to have been issued under section 148A of the IT Act and substituted by the Finance Act, 2021 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 148 of the Act after 01.04.2021 shall need to essentially as provided under the Amended Act. As per first proviso to sub-section (1) of section 149(1) of the Act, plain meaning when given to the said provision, 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 limits specified under clause (b) of sub-section (1) of section 149 of the Act as they stood immediately before the commencement of Finance Act, 2021. 20. Thus, the notice under section 148 of the Act can be issued on or after 01.04.2021 only if the limitation for issuing such notice under old regime of reopening had not expired prior to Finance Act, 2021 coming into force, which means w.e.f. 01.04.2021. As per the old regime of reopening, the reopening notice under section 148 of the Act could have been issued before the expiry of six years from the end of relevant assessment year. In other words, no notice could have been issued after expiry of period of six years from the end of the relevant assessment year. 20.1. In other words, i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n case of State of Madhya Pradesh vs. Kedia Leather and Liquor Ltd.(supra) had held and observed that the repeal is inferred by necessary implication, if the provisions of the later Act are so repugnant to the provisons of the earlier Act that the two cannot stand together. 23. Again, the Notification under the law can surely overriding the enactment particularly when the Finance Act, 2021 was passed after the TLA Act under which the Notifications were issued. Various High Courts had already held the TLA Act ultra vires. The Apex Court has, of course, modified these judgments to the extent that it directed the issuance of notice under section 148 under the new regime. The TLA Act extended the limitation upto 31.03.2021 for doing certain things, however, in post 31.03.2021 period it would be the Finance Act, 2021 which would be applicable and therefore, the law made by the Parliament by way of Finance Act, 2021 shall need to be impleaded. Even otherwise, the Notifications being an outcome of delegation power, they cannot overreach the principal legislature. 24. The Apex Court has up held the decisions and judgments of various High Courts by applying the benefits furthered by Finan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in all cases for the assessment year 2013-14 and 2014-15 where the original notices are issued between 01.04.2021 and 30.06.2021 and the fresh notices under section 148 are issued in post Ashish Agarwal's judgment, the due date for completing the reassessment would be 31.03.2024. The department itself has accepted that the due date for passing of the reassessment order is 12 month from the end of financial year 2022-23 i.e. the fresh notice under section 148 dated 15.08.2022 is 31.03.2024 which is a contradiction of the Board Circular proposing the travel back theory and the actual application of amended law. 26.1 The theory of time travell in the Notification is not tenable as discussed hereinabove. The notices originally issued under section 148 of the Act would be converted into show cause notice under section 148A(b) and thereafter, while issuing the fresh notice under section 148 read with order under section 148A(d) of the Act would relate back to the date of original notice issued under section 148 A of the Act. The new law would apply retrospectively to the notices from such original date. The amendement is not retrospective and therefore, the time travell would not be p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion. Reference of the decision of "KP Varghese vs. ITO, reported in [1981] 131 ITR 597 (SC) would need a reference here. "8 But the scope of sub-section (1) of section 52 is extremely restricted because it applies only where the transferee is a person directly or indirectly connected with the assessee and the object of the under-statement is to avoid or reduce the income-tax liability of the assessee to tax on capital gains. There may be cases where the consideration for the transfer is shown at a lesser figure than that actually received by the assessee but the transferee is not a person directly or indirectly connected with the assessee or the object of understatement of the consideration is unconnected with tax on capital gains. Such cases would not be within the reach of sub section (1) and the assessee, though dishonest, would escape the rigour of the provision enacted in that sub-section. Parliament therefore enacted sub-section (2) with a view to extending the coverage of the provision in sub-section (I) to other cases of under statement of consideration. This becomes clear if we have regard to the object and purpose of the introduction of sub-section (2) as appearing fro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ese classes of sales that this amendment has been drafted-It does not aim at perfectly bona fide transactions.. but essentially relates to the day-to-day occurrences that are happening before our eyes in regard to the transfer of property. I think, this is one of the key sections that should help us to defeat the free play of unaccounted money and cheating of the Government." Now it is true that the speeches made by the Members of the Legislature on the floor of the House when a Bill for enacting a statutory provision is being debated are inadmissible for the purpose of interpreting the statutory provision but the speech made by the Mover of the Bill explaining the reason for the introduction of the Bill can certainly be referred t o for the purpose of ascertaining the mischief sought to be remedied by the legislation and the object and purpose for which the legislation is enacted. This is in accord with the recent trend in juristic thought not only in Western countries but also in India that interpretation of a statute being an exercise in the ascertainment of meaning, everything which is logically relevant should be admissible. In fact there are at least three decisions of thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... igure than that actually received." 30. It would not be out of place to make a reference at the stage that while exercising the powers under Article 142 of the Constitution of India. In case of Union of India vs. Ashish Agarwal(supra) the erstwhile notices under section 148 of the Act could have been straightway converted into notices under section 148 of the Act (issued under the amended provision) however, the Apex Court converted the notices under section 148 of the Act into the show cause notice under section 148A(b) of the Act with a rider that all defences under section 149 of the Act would be available to the assessee as well as the revenue. This is also a very strong indication and the reasonings given by this Court can be further validated that the notice under section 148 of the Act could not have been issued on or after 01.04.2021 without following the procedure prescribed under section 148A of the Act as applicable w.e.f. 01.04.2021. 31. We had demonstrated applying first proviso to section 149(1) of the Act as applicable w.e.f. 01.04.2021 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 o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the revenue to travell back in time, the TLA Act does not endorse the said concept nor is it available in the case of Union of India vs. Ashish Agarwal (supra). The first proviso of TLA Act provides that the extension of date as referred to in sub-clause (b) of clause (i) of the 3rd proviso shall not apply to Explanation 1 to section 234 A of the Act in cases where the amount of tax of the total income has reduced by the amount and specified in clause (i) to (vi) of subsection (1) of said section exceeds Rs.1 Lakh. 37. The petitioner has rightly submitted that had it been a case that time had frozen and even liability to discharge any financial burden would have shifted to any later date, the question of charging any interest for discharging financial burden would not arise the freezing of time and payment of interest as rightly and emphatically urged by the petitioner do not go together. The very fact that the revenue has charged the interest for belated discharge on financial burden would go to prove that time had not frozen. When the Finance Act, 2021 was enacted, the TLA Act was very much in existence and Parliament could have taken the cognizance of the same while prescribin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The Apex Court had laid down the ratio in case of Vasu Dev Singh and Ors.vs. Union of India and Ors., reported in (2006) 12 SCC 753 is as follow: "19. The nature of delegated legislation can be broadly classified as: (i) the rule-making power; (ii) grant of exemption from the operation of a statute. 20. In the latter category, the scope of judicial review would be wider as the statutory authority while exercising its statutory power must show that the same had not only been done within the four-corners thereof but otherwise fulfils the criteria laid down therefor as was held by this Court, inter alia, in P.J. Irani vs. State of Madras & Anr. *** 26. The law, which, therefore, has been laid down is that if by a notification, the Act itself stands effaced; the notification may be struck down. But that may not be the only factor. 31. In Indian Express Newspapers (Bombay) Pvt. Ltd. & Ors. etc. vs. Union of India & Ors. etc. [(1985) 1 SCC 641], the question which arose for consideration therein was as to whether the exemption notification issued under Section 25 of the Customs Act, 1962 was beyond the reach of the Administrative Law. Venkataramiah, J. speaking for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orities 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 from that scheme of the Act, it could have in clear terms provided for a power being vested with its officers in any given case to recompute the income keeping in mind the revenue of the State but the Legislature has not thought it necessary to do so. Even under Section 50, we do not see any provision which specifically authorises the State Government to make any such rules in the nature of the proviso to Rule 5 of the State Rules. It is a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... annot be exercised to nullify the commencement of the act. The legislature, therefore, could not under the TLA Act revived the specified act, which had been repealed or substituted. Therefore, extension of the life of the repealed provisions also would amount to a repealed of the amended provisions therefore, by virtue of Notification, if the act though repealed continuous in operation for extending the limitation from 01.04.2021 to 30.06.2021, it is impermissible under the law. 43. In relation to the Instruction No.1 of 2022 dated 11.05.2022 issued by the CBDT after the decision of the Union of India vs. Ashish Agarwal (supra), it is decided by the Apex Court in case of Navnit Singh Lal Jhaveri vs. CCIT that the Instructions issued by the CBDT are binding on the officer of the department. They are not binding on the Court nor to the assesses, these instructions would have persuasive value. 44. All the notices issued between 01.04.2021 to 30.06.2021 shall need to pass the test of new law including the limitation test as laid down in the first proviso to section 149 of the Act. The Apex Court had permitted all issues to be kept open therefore, the question of limitation also canno ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2022 to furnish the reply in response to the show cause notice in response to the show cause notice under section 148A(b) dated 27.05.2022 and assessee furnished the reply on 01.06.2022. 50. 3rd proviso to section 149(1) of the Act provides that for the purpose of computing the period of limitation, the time or extended time allowed to the assessee as per show cause notice issued under clause (d) of section 148 A. The period during which the proceedings under section 148A of the Act is stayed by an order or injunction of any Court shall be excluded. Since the assessee was granted the time till 10.06.2022 and to furnish the reply to show cause notice dated 27.05.2022 issued under section 148A(b) of the Act therefore, the following time period had to be excluded for the purpose of limitation. In view of the 3rd proviso to section 149 of the Act, it is from 27.05.2022 for the notice under section 148A(b) and till 10.06.2022 time granted to furnish the reply. 51. The notice under section 148 of the Act had been issued on 27.07.2022, the department took about 47 days for issuing the notice under section 148 of the Act when these period is added to the original notice under section 148 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 149(1) proviso w.e.f. 01.04.2021 along with section 149(1)(b) prior to 01.04.2021. The case of the petitioner for assessment years 2013-14 and 2014-15 cannot be reopened. The assessment year is 2013-14 (01.04.2012 to 31.03.2013) and assessment year 2014-15 (01.04.2013 to 31.03.2014). The end of assessment year is 31.03.2014 and 31.03.2015 respectively. Therefore, the last date for issuance of notice under section 148 of the Act would be 31.03.2020 or 31.03.2021 (being six years from the end of relevant assessment year) whereas the impugned notices under section 148 is issued beyond that period and hence, the same are clearly time barred. 53. Along with this, it is necessary to also once again referred to the Instructions No.1 of 2022 issued by the CBDT wherein the Assessing Officers have been instructed to issue notices under section 148A(b) of the Act in pursuance of directions of the Apex Court for the assessment years 2013-14 to 2014-15, wherein income likely to escape assessment is Rs.50 Lakh or more. This view of CBDT is based on interpretation of the judgment of the Apex Court and the provisions of TLA Act, 2020. Instructions of the CBDT read the decision of the Apex Court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntioned hereinabove the extension under the TLA Act would not mean that it can extend the time limit provided under section 149(1)(b) of the Act as it stood immediately before the commencement of Finance Act, 2021, which remained six years from the end of assessment year. It is apposite to take notice of the language used by the legislature while drafting first proviso to section 149 which contains reference to the time limit specified under clause (b) of the unamended section 149 of the Act being six years from the end of relevant assessment years. This time limit is since not being altered by TLA therefore, extension of time limit for taking the action cannot be said to have been altered. 56. Extension of Limitation from time to time in relation to all the proceedings by the Apex Court led to the enactment of TOLA Act, 2020, which extends time period for various enactments. Circular of CBDT extending time limit for the issuance of notice under section 148 of the IT Act upto 30.06.2021 met with a serious challenge. In wake of coming into effect the new Act of 2021 w.e.f. 01.04.2021 to give an overriding effect over legislation by issuance of notification for issuance of notice un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... disposing of objections under Section 148A(d) of the Income Tax Act, 1961 (the 'Act' for short) as also notice for reassessment issued under Section 148 of the Act. In all these petitions, the notice under Section 148 of the Act is issued for assessment year 2013-2014 or for assessment year 2014-2015. For the sake of convenience and for the purposes of this judgment, the reassessment notices issued under Section 148 for A.Y.2013-2014, shall be treated as batch I petitions and the reassessment notices issued under Section 148, for A.Y.2014- 2015 shall be treated as batch II petitions. 3. The relevant dates and events of the reassessment notices issued under Section 148 for A.Y.2013-2014 (Batch I petitions), are taken from Special Civil Application No.23234 of 2022. Date Event 24.6.2021 Original notice was issued under section 148 of the Act. 04.05.2022 Decision rendered by Hon'ble Apex Court in the case of UOI v/s Ashish Agarwal reported in [2022] 444 ITR 1] (SC) treating such notices as having been issued under Section 148A(b). 27.05.2022 Show cause notice under section 148A(b) was issued in accordance with the decision in case of Ashish Agarwal (supra) & assessee wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xtended by Taxation and Other Laws (Regulation and Amendment of Certain Provisions) Act, 2020 [hereinafter referred to as "TOLA"], and the same were issued under old provisions i.e the provision prevalent prior to 1.4.2021. 6. Aggrieved by the notices issued under Section 148 of the Act (between the period from 1.4.2021 to 30.6.2021), the assessee challenged the said notices before various High Courts. It was case of the assessees in the said petitions that by virtue of amendments in the Finance Act 2021, new provisions of Section 147 to Section 151 are introduced w.e.f. 1.4.2021, despite which notices came to be issued under old provisions (the provisions prevalent prior to 1.4.2021) and therefore, they are illegal and deserved to be quashed and set aside. In the decisions rendered, majority High Courts had held that no such notices could have been issued because when the notices were issued, substituted provisions of sections 147 to 151 had come into existence. Such decisions of various high courts were subject matter of challenge 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nded section 148 of the IT Act irrespective of whether they have been assailed before this Court or not." 8. Thereafter, to implement the decision of Hon'ble Supreme Court in the case of Ashish Agarwal (supra), the CBDT issued instructions No.1/2022 (F.No. 279/Misc./M.-51/2022(ITJ DATED 11.5.2022) and consequently, reassessment notices issued (between the period 01.04.2021 to 30.06.2021) under Section 148 of the Act, were treated as deemed to be show cause notices under Section 148A(b) of the Act. The decision in case of Ashish Agarwal (Supra) was delivered on 4.5.2022, and therefore the respective Assessing Officers were directed to provide information relied upon by the revenue within 30 days from 4.5.2022, so as to get response from the assessee. For e.g In SCA 23234 of 2022, the reassessment notices under Section 148, for A.Y. 2013-14 was issued on 24.06.2021. Vide order dated 27.05.2022, the said notice was treated as show-cause notice under Section 148A(b) of the Act, calling for reply of the assessee. 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. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... He relied upon the findings of Hon'ble SC in the case of K.P. Varghese (Supra), in para 11 that "It is wellsettled principle of interpretation that courts is construing a statute will give much weight to the interpretation put upon it, at the time of its enactment and since, by those whose duty it has been to construe, execute and apply it" 10.2 Application of decision of Hon'ble Supreme Court in case of Ashish Agarwal: Referring to decision of Hon'ble Supreme Court in the case of Union of India vs. Ashish Agarwal (2022) 444 ITR 1 (SC), he submitted that: (a) Hon'ble Supreme Court in exercise of powers under Article 142 of Constitution of India has passed an order governing judgments and orders of various High Courts on similar issues and therefore, the said decision would not be applicable in the cases where no such notice under Section 148 has been issued. (b) As held by Hon'ble Supreme Court, by way of substitution of sections 147 to 151 of the Act, by Finance 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 proce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... were amended. Amendment was such that if the language thereof is to be seen, certain sections were practically re-written. One such example is Section 3(1)(a) of TOLA which prescribes a time limit for issuance of notice under section 148 of the Act. Section 3 (1)(a) of TOLA states that, if the time limit for issuance of notice falls during the period from 20.03.2020 to 31.12.2020 or such other date after 31.12.2020, as the Central Government may, by notification, specify in this behalf, and such notice has not been issued within such time then the time limit for issuance of such notice shall stand extended to 31.03.2021 or such other date after 31.03.2021 as the Central Government may by notification specify in this behalf. Chapter-II of TOLA, provides for extension of time limit for issuance of such notices (notices under Section 148 of the Act). However, there was no corresponding amendment in Section 149 of the Act and therefore, something which 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 provi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... refore, even Notification dated 27.04.2021 (issued after 01.04.2021) cannot be made applicable after 01.04.2021. Presuming for a moment that the Notification dated 27.04.2021 is applicable to the "amended provisions of reopening", then also no time limit was expiring on 30.04.2021, which ought to have been extended to 30.06.2021 and therefore also, extension of time limit pursuant to the Notifications, has no application with regard to time limit prescribed under section 149 of the Act. (c) Most importantly, "Delegate" does not have the power to rewrite the law, which has been enacted by parliament. Even the Hon'ble Supreme Court in the case of Ashish Agarwal (supra) has not disturbed the findings of various High Courts holding the Notification in question as ultra vires. Thus, time limit prescribed under such repealed Act cannot be permitted to be extended through notification. 10.5. Executives in exercise of delegated powers, cannot 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion is not legally tenable. Interpretation of the Revenue that notices originally issued under section 148 of the Act would be converted into show cause notice under section 148A(b) of the Act and thereafter, while issuing fresh notice under section 148 of the Act read with order under section 148A(d) of the Act would relate back to date of the original notice issued under 148 of the Act, is bad in law. (b) The new law, according to the Revenue, would apply retrospectively to the notices from such original date. The amendment is admittedly not retrospective, therefore, "time travel" is not permissible. Assuming while denying that such an action is permissible, the notices would relate back to dates between 01.04.2021 to 30.06.2021, when the new law was in operation. Therefore, all those notices would have to pass the tests of new law including limitation test, as laid down 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 m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... He thus submitted that the notices under section 148 of the Act for A.Y. 2013-14 and 2014-15 are without jurisdiction and barred by limitation and therefore, the same deserves to be quashed and set aside. Thus, he submitted to allow the petition accordingly. 11. Further submissions on behalf of the petitioners, in addition to the aforesaid, were advanced by Mr. Saurabh Soparkar, learned Senior Advocate assisted by Mr. B.S. Soparkar, learned Advocate. His submissions were as under: 11.1 Decision of Hon'ble Supreme Court in case of Ashish Agarwal: (a) In all the petitions the notices under section 148, for A.Y.2013-14 and A.Y. 2014-15 were issued between the period 1.4.2021 to 30.6.2021. Pursuant to the decision of the Hon'ble Supreme Court, the said notices were treated as notices under Section 148 A (b) of the Act, wherein in all cases the notice 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 o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o be tested on individual basis and cannot be construed as blanket proposition as to validate all notices issued between 01.04.2021 to 30.06.2021 on all counts. The Supreme Court has not stated that the notices issued under Section 148 once converted into 148A(b) notices could not be challenged on the ground of not having become time barred. Now, it is not open for the revenue to contend that the said notices are issued pursuant to the decision of the Hon'ble Supreme Court. Hon'ble Supreme Court has consciously not held the notices issued under Section.148 after 01.04.2021 under old provisions as valid notices nor have stated that they are not time barred but has kept all the legal requirements to test the validity of subsequent notice under Section 148 open. Therefore, the time limit prescribed under section 149 cannot be ignored and only the 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 no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee had approached the respective High Courts challenging the notices under Section 148 after 01.04.2021 to 30.06.2021 and stay against proceedings were granted by the respective High Courts. Because of the stay granted the limitation gets extended and the revenue would be in a position to take out fresh proceedings by issuing a fresh Notice under Section 148 of the new regime (after complying with section 148A requirements) and that might be the reason that the Hon'ble Supreme Court had not deliberated for these 2 years. He therefore submitted that the notices for A.Y.2013-14 and A.Y. 2014-15, being barred by limitation, deserve to be quashed. 12. Learned Senior Advocate Mr. R.K. Patel assisted by learned advocate Mr. Darshan Patel submitted the following: (a) TOLA only sought to extend the limitation period for the 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9 ITR 1); [para 65] (ii) Hon'ble Delhi High Court in case of Mon Mohan Kohli vs. ACIT (441 ITR 1); [para 42] (iii) Hon'ble Rajasthan High Court in case of Sudesh Taneja vs. ITO (442 ITR 289); [para 37] (iv) Hon'ble Bombay High Court in case of Tata Communications Transformation Services Ltd. vs. ITO (443 ITR 49); [para 34 and 35] (c) Reiterating the provisions of TOLA, he submitted that the said provisions cannot be applied to interpret Finance Act, 2021. Further, the subordinate legislation cannot override any statute enacted by the Parliament. The notification extending the dates from 31.03.2021 to 30.06.2021 runs contrary to express provision contained in the first proviso to Section 149(1) of the Act, and therefore, the same cannot be made applicable. (d) Even 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 bee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... given to the Assessing Officer to initiate the proceedings. The show-cause notice therefore cannot be treated as notice under Section 148 of the Act. Further the Finance Act, 2021 came into force w.e.f. 01.04.2021 and at that time, TOLA, 2020 was very much available however, no reference has been made to the extension of time limit under Section 149. Moreover, when the definition of asset was enlarged w.e.f. 01.04.2022, at that time also, nothing was done for extension of time limit beyond six years and therefore, the notice under Section 148 issued is only to be taken as show-cause notice and cannot be stated to be within the limitation. 16. Learned counsel Mr.Nishith Gandhi for the petitioner further submitted that in SCA 24777 of 2022, the directions given by 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arkar and Mr. Hemani and submitted to allow the petitions. 19. Submissions on behalf of respondents: Appearing for the revenue, learned Senior Standing Counsel Mr. Varun Patel for the Department submitted the following: (a) Recapitulating the facts, he submitted that in all the writ petitions of Batch-I and Batch-II, the notices under Section 148 of the Act for A.Y. 2013-14 and 2014-15, were issued by the department between the period 01.04.2021 to 30.06.2021. The notices were issued under the pre-amended provision and pursuant to the decision of Hon'ble Supreme Court in the case of Union of India Vs. Ashish Agarwal (Supra) , all the notices issued under Section 148 have been treated as notices issued under Section 148A(b) of the Act (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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act which they did not do. The consent given by the assessee's counsel therefore cannot be ignored and the same cannot be subject matter of challenge on the ground that the same are barred by limitation. Learned Senior Standing Counsel Mr. Patel, therefore, submitted that the said challenge would be contrary to the decision in the case of Ashish Agarwal (Supra) and it would also be inconsistent with the intention of the Hon'ble Supreme Court while exercising powers under Article 142 of the Constitution of India. (d) He further submitted that, in view of the decision of Hon'ble Supreme Court in the case Ashish Agarwal (Supra), if the original notice under Section 148 was issued within the time limit, now, it is not open for 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 ext ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, no other fiction or interpretation contrary to the intention of saving 90,000 reassessment proceedings could be read into the directions of Hon'ble Supreme Court. Learned counsel placed reliance on the decision of Hon'ble Supreme Court in the case of Rajkumar Agarwal Vs. State of Madhya Pradesh reported in 2002 (3) SCC 732 to submit that nothing could be read contrary to the intention of the decision of the Hon'ble Supreme Court. In response to the contention of petitioners that the decision of Hon'ble Supreme Court would be applicable only in the cases, where the assessee has challenged the notices issued under Section. 148 of unamended provisions, referring to para- 2 of the decision of Ashish Agarwal (Supra), 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ubmitted that the notices were issued under Section. 148 for A.Y. 2013-14 and 2014-15 cannot be termed as time barred as canvased by the assessee, and therefore, the Assessing Officer has correctly exercised his jurisdiction, and the petitions may be dismissed. (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 2nd 2016-17 3rd 2017-18 4th 2018-19 5th 2019-20 Limitation expired on 31.03.2020, which was extended upto 30.06.2021 under TOLA. 6th 2020-21 20. Mr. Nikunt Raval, learned senior standing counsel for the department adopted the arguments made by M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eking 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 learned Advocates for the respective parties, I deem it appropriate to first consider the issues, which are common and argued by Counsel for the petitioners: (a) It was contended that decision in the case of Ashish Agarwal (supra) shall apply only to those notices, which were challenged before different high courts: The Hon'ble Supreme Court in the case of Ashish Agarwal (supra) has adjudicated on the validity of reassessment notices issued by the Assessing Officers during the period 01.04.2021 to 30.06.2021 i.e.; the time extended by TOLA and various notifications issued thereunder. As new law came in to force w.e.f 01.04.2021, it h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , 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 consequential second Notification also ceases to apply. Various High Courts for the precise reason have held the said Notifications to be bad in Law and these findings have been upheld by the Hon'ble Supreme Court. It was further submitted that the two Notifications issued by the CBDT, dated 31.03.2021 and 27.04.2021, respectively amounts to extension of legislation or rewriting of legislation, not permitted under Law. Learned counsel have relied upon a series of decisions referred in their submissions. In the case of Vasu Dev Singh and Ors. vs. Union of India and Ors. reported in (2006) 12 SCC 753, the Hon'ble Supreme Court while examining ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... powering 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 from that scheme of the Act, it could have in clear terms provided for a power being vested with its officers in any given case to recompute the income keeping in mind the revenue of the State but the Legislature has not thought it necessary to do so. Even under Section 50, we do not see any provision which specifically authorises the State Government to make any such rules in the nature of the proviso to Rule 5 of the State Rules. It is an established principle that the power to make rules under an Act is derived from the enabling provision found in such Act. Therefore, it is fundamental that a delegate on whom such power is conferred has to act within t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1, 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 Ashish Agarwal (surpa), it is submitted that the Board circular issued is binding to the departmental authority and not to the assessee. In support of above submissions, learned counsel relied upon the decision of Hon'ble Supreme Court in the case of Keshavji Ravji and Co. and others Vs. Commissioner of Income Tax reported in 1990(2) SCC 231, in which, Hon'ble Supreme Court has held as under: "32. This contention and the proposition on which it rests, namely, that all circulars issued by the Board have a binding legal quality incurs, quite obviously, the criticism of being too broadly stated. The Board cannot pre-empt a judicial interpretation of the scope and ambit of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 subject matter to be adjudicated by us and as rightly contended by counsel for the revenue, the circulars cannot detract from the Act." (b) The settled legal position is to the effect that board circular/ instructions are binding to the departmental authorities and not to the court or to the assessee. 21.4. (a) To consider the submission that in view of express language of proviso to section 149(1), the Notices issued between 01.04.2021 to 30.06.2021 under section 148 of the Act, are barred by limitation, following aspects are to be noticed. (i) The substituted provisions of Sections 147 to 151 of the Act introduced w.e.f. 01.04.2021, have been elaborately discussed by Hon'ble ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 prior to 01.04.2021, shall be applicable. As per unamended provision prescribing limitation, no notice can be issued under section 148, if six years have elapsed from the end of the relevant assessment year. For assessment year 2013-14, six years had ended on 31.03.2020 and for assessment year 2014-15, six years had ended on 31.03.2021. Had there been no amendment in Section 149, TOLA and through its delegated legislation by way of Notifications could have extended the time for 'issuance of notice'. However in view of express language of 1st proviso to Section 149(1), legislative mandate required that no notice could be issued under the new provision, if such notice could not be issued at that time on account of being beyond the time sp ..... X X X X Extracts X X X X X X X X Extracts X X X X
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