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TMI Blog2023 (3) TMI 1355X X X X Extracts X X X X X X X X Extracts X X X X ..... nt-assessing officer under Section 148 of the Income Tax Act, 1961 seeking to reopen the assessment in respect of assessment year 2014-15. Also challenged is the order dated 19.07.2022 passed under Section 148A(d) of the Income Tax Act, 1961 (hereinafter referred to as "the Act"). 3.1 While in the impugned order under section 148A(d) of the Act mentioned are the factual details and the reasons on the basis of which the assessing officer has found that the case is fit to be reopened for the assessment in respect of the year under consideration, it is inter alia stated that the notice under section 148 of the Act was originally issued on 25.06.2021 for the assessment year 2014-15. The said notice was treated as show-cause notice under section 148A(b) of the Act in light of the decision of the Supreme Court in Union of India vs. Ashish Agarwal[(2023) 1 SCC 617 : (2022) 444 ITR 1 (SC)], and that thereupon, the order under section 148A(d) was passed. 4. At the outset, learned senior advocate for the petitioner submitted that the notice issued under section 148 of the Act and the consequential order under section 148A(d) of the Act issued by the department for assessment year 201 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... planation.-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 nonresident under section 163 and the assessment, reassessment or recomputation to be made in pursuance of the notice is to be made on him as the agent of such non-resident, the notice shall not be issued after the expiry of a period of 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." 5.1.2 The above section deals with time limit for issuance of notice for reopening of the assessment. The assessing officer thereunder could reopen the case of the assessee beyond four years, but wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 subsection shall be deemed to be extended accordingly. Explanation.-For the 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." 5.2.2 As per the aforesaid amended section 149, notice under section 148 of the Act could be issued within three years from the end of the relevant assessment year. What is contemplated is that the assessing officer could reopen the case of the assessee beyond three years, but within 10 years from the end of the relevant assessment year. This could b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed innumerable notices during the period from 01.04.2021 to 30.06.2021 for reopening the assessment under the provisions of the old regime. The Department for issuing such notices, relied on explanation to the aforesaid notification whereby the time limit was extended as stated above. These notices became subject matter of challenge before different High Courts. The Notifications issued for extension of time were prayed to be declared ultra vires. 5.4 The Supreme Court had an occasion to consider such cases arrived before it from different High Courts, wherein the notices issued during the period from 01.04.2021 to 30.06.2021 in relation to the earlier assessment years were challenged. The provisions post-Finance Act, 2021, under the new regime had come into force. This controversy before the Apex Court culminated into decision in Ashish Agarwal (supra). 5.4.1 The Supreme Court striking balance between the notices issued by the Department under the old regime and the provisions brought into force under the new regime held that all notices issued under Section 148 of the Act between 01.04.2021 to 30.06.2021 shall be deemed to have been issued under section 148A of the Act to be tr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ue to be available. (para 28.5) 5.4.4 Thus, one of the direction and clarification in Ashish Agarwal (supra), is that all the defences that were available to the asessee under section 149 under the Finance Act, 2021 and in law whatever rights are available to the assessing officer under the Finance Act, 2021 are kept open to be continued to be available. 5.4.5 In light of above direction of the Supreme Court in para 28.5 of Ashish Agarwal (supra), the First Proviso to Section 149 after 01.04.2021 in the new regime may deservedly recapitulated, "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 such notice 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, as they stood immediately before the commencement of the Finance Act, 2021" 5.4.6 In simple words, the notice which could not have been issued in the old regime period due to becoming time barred as per then operating provision, would also not be permissible to be issued post-01.04.2021. 5.4.7 As alread ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from the end of the relevant assessment year unless the income chargeable to tax which has escaped assessment amounts to or is likely to amount to Rs.1 lakh or more for that assessment year. 2.16 It is, therefore, urged that 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. 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." 5.6.1 In other words, it was the contention that as per the provisions of Section 149 of the Act in the old regime, a notice under Section 148 could have been issued to the assesse, if four years had elapsed from the end of the Assessment Year, but not six years. After six years from the end of the Assessment Year, notice under section 148 was barred. 5.6.2 Stating differently, as per the old regime, for issuance of notice under section 148, in relation to Assessment Year 2013- 14, the outer time limit would expire on 31.03.2020 and for issuing such notice in relation with Assessment Year 2014-15, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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." 6. In Keenara Industries Pvt. Ltd. (supra), this Court laid down the proposition of law thus, "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, if the period of six years from the end of relevant assessment year expired on 31.03.2021, then notice under section 148 of the Act could not have been issued under the new regime for the said assessment year. 20.2 The example given in para 2.18 has already been given for appreciating these legal provisions fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to 30.03.2021, and the time limit prescribed in Section 149 (1)(b) (as substituted w.e.f. 01.04.2021) cannot be counted by giving such relaxation from 30.03.2020 onwards to the revenue. (ii) In respect of the proceedings where the first proviso to Section 149(1)(b) is attracted, the benefit of TOLA 2020 will not be available to the revenue, or in other words, the relaxation law under TOLA 2020 would not govern the time frame prescribed under the first proviso to Section 149 as inserted by the Finance Act' 2021, in such cases." 6.3 This Court is in agreement with the decision in Keenara Industries Pvt. Ltd. (supra), of this Court as well with Allahabad High Court decision in Rajeev Bansal (supra). 6.4 Therefore, the point is no more res integra that all original notices under section 148 of the Act referable to the old regime and issued between 01.04.2021 to 30.06.2021 would stand beyond the prescribed permissible timeline of six years from the end of Assessment Year 2013-14 and Assessment Year 2014-15. Therefore, all such notices when they would relate to Assessment Year 2013-14 or Assessment Year 2014-15 would be time barred as per the provisions of the Act as applicable in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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