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TMI Blog2023 (4) TMI 554X X X X Extracts X X X X X X X X Extracts X X X X ..... peals preferred by the revenue against the action of the Ld. CIT( 54, Mumbai dated 26.11.2019 for A.Y.1999-2000 for AY. 2004-05. 2. Both the parties agree that the issue involved in both the appeals are identical, therefore, we take the appeal of the assessee for AY. 1999-2000 as the lead case and the decision of which will be followed for AY. 2004-05. 3. The grounds of appeal of the revenue for AY. 1999-2000 is as under: - (i) On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in allowing assessee s appeal by ignoring the intention of the legislature behind amendment of sub-section (1) of Section 149, thereby inserting clause (c) under section 149(1) of the Income tax Act, 1961 by the Finance Act, 2012 and Explanation below Section 149, which clarifies that the provisions of sub-sections (1) (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. (ii) On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in not appreciating the relevant facts of the case in respect of addition made on account of undisclosed fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t mainly for the following reasons as under: - Smt Deval E Anthony who is having account in HSBC as Beneficial owner/ beneficiary of Chhaganlal Suchak Family. It was claimed by the assessee that the corpus of the fund of Chhaganlal Suchak Family Trust is from the maturity amount of RIB. There is evidence to show that the assessee is the account holder of bank account maintained in the name of Chhaganlal Suchak Family Trust in Geneva. Assessee has claimed that the RIB was invested by his grandfather Shri Chhaganlal Suchak. However, the same is made in the name of Shri Suryakant Suchak. Further the assessee Smt Deval E Anthony is the Beneficial owner/ Beneficiary of the Chhaganlal Suchak Family. However, she has not furnished the details of opening of account and income there from. Further, the assessee has Claimed receipt from Resurgent India Bonds (RIB) deposited in 1998 which got matured in 2003. However, no details regarding source of Investment was furnished. It was claimed by the assessee that the corpus of the fund of Chhaganlal Suchak Family Trust is from the maturity amount of RIB. There Is evidence to show that the assessee is the account holder of bank account maintai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the judgement of the Hon ble Delhi High Court in the case of Brahmdatt vs. ACIT Ors. wherein the Hon ble High Court held that the reassessment could not reopened beyond the period of 6 years in terms of the provisions of section 149 of the Act as applicable at the relevant time. It had also held that section 149(1)(c) has to be applied prospectively. According to the High Court, any change in law upsetting the position and imposing tax liability after that date, even if made during the currency of the assessment year, unless specifically made retrospective, does not apply to the assessment for that year. The Hon ble High Court has relied upon the judgements of the Hon ble Apex Court in the case of K.M.Sharma vs. ITO 254 ITR 772 (SC) and S.S. Gadgil vs. Lal Co 53 ITR 231. The relevant portion of the judgement of the Hon'ble Delhi High Court is reproduced below: 3. Search and seizure operation under Section 132 was carried out in the case of the Petitioner. During the course of search, his statement was recorded on 27.09.2011 under Section 132(4) of the Act. In the statement, the Petitioner was, inter-alia, asked to clarify if he maintained foreign bank account(s). In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ore for that year; (iii) if seven years, but not more than ten years, have elapsed 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 more than rupees one lakh or more for that year; (b) in any other case, (i) if four years have elapsed from the end of the relevant assessment year, unless the case falls under sub-clause (ii)or sub-clause (iii); (ii) if four years, but not more than seven years, have elapsed 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 rupees twenty-five thousand or more for that year; iii) if seven years, but not more than ten years, have elapsed 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 rupees fifty thousand or more for that year... It is stated that the outer period of limitation for reopening under section 147 of the Act ws prescribed to be ten years after the end of the relevant assessment year. 5. The petitioner next refers ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld not be reopened by merely taking resort to the subsequent amendment in law. In other words, the subsequent amendment cannot seek to enhance or extend limitation for reopening assessment for those assessment years in respect of which limitation had already expired lapsed before the date the amendment became effective. 8. Mr. Vohra relies on the decision of the Supreme Court, in K.M.Sharma versus Income Tax Officer254ITR 772(SC) as well as S.S. Gadgil v Lal Co. [1964] 53 ITR 231 and lastly the decision in C.B. Richards Ellis Moritius Ltd. v Additional Director Income Tax 208 Taxmann 322 to say that once the period of limitation ends, by virtue of the provisions of the Act, it is not open to the revenue, to revisit such issues that are final. It was submitted that the law of limitation confers certainty and finality to legal proceedings and seeks to avoid exposure to risk of litigation to litigant for indefinite period on future unforeseen events. Therefore, matters that attain finality under existing law due to bar of limitation cannot be reopened for revival unless the amended provision is clearly given retrospective operation so as to allow upsetting of proceedings, which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he did not disclose the asset during the relevant time, the reassessment notice is valid. 11. It is submitted that the intent and purpose behind the 2012 amendment of the Act was to empower the revenue to reopen assessments beyond a particular period: in this case, by 16 years, if it is revealed that the assessee held asset abroad. Given this relevant condition, the assessee could not complain that as regards matters that had not been disclosed, reassessment proceedings were validly instituted. 12. The relevant provisions of section 149 of the Act are reproduced below: 149.Time limit for notice. (1) No notice under section 148 shall be issued for the relevant assessment year, - (a) if four years have elapsed from the end of the relevant assessment year, unless the case fails under clause (b); (b) if four years, but not more than six years, have elapsed 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 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 un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e authorities to reopen assessments, which have become final and reassessment of which had become barred by time before1.4.1989 when section 150(1) was amended Reliance is placed on the decision in S.S. versus Lal Co. [1964] 53 ITR 231. 12. The learned counsel appearing on behalf of the department has made an effort to persuade this Court to accept his construction of the provisions of section 150(1) and (2). It is argued that it is for the specific purpose of assessing income, which might accrue on the basis of any decision of any Court in any proceeding in any other law, that the provision has been amended to lift bar of limitation for reassessment. 13. Fiscal statute, more particularly a provision such as the present one regulating period of limitation must receive strict construction. The law of limitation is intended to give certainty and finality to legal proceedings and to avoid exposure to risk of litigation to litigant for indefinite period on future unforeseen events. Proceedings, which have attained finality under existing law due to bar of limitation cannot be held to be open for revival unless the amended provision is clearly given retrospective operation s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reasoning of the High Court is sound. The plain language of sub-section (2) of Section150 clearly restricts application of subsection (1) to enable the Authority to reopen assessments which have not already become final on the expiry of prescribed period of limitation under Section 149, As is sought to be done by the High Court, sub-section (2) of Section 150 cannot be held applicable only to reassessments based on Orders in proceedings under the Act'and not to Orders of Court in proceedings under any other law'. Such an interpretation would make the whole provision under Section 150 discriminatory in its application to assessments sought to be reopened on the basis of Orders under the IT Act and other assessments proposed to be reopened on the basis of Orders under any other law. Interpretation, which creates such unjust and discriminatory situation, has to be avoided. We do not find that sub-section (2) of section 150 has that result. Sub-section (2) intends to insulate all proceedings of assessments, which have attained finality due to the then existing bar of limitation. To achieve the desired result it was not necessary to make any amendment in sub-section (2) corres ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s Court in the case of S.S. Gadgil (supra) accepted the contention of the assessee and held as under: The legislature has given to section 18 of the Finance Act, 1956, only a limited retrospective operation, I.e., up to April 1, 1956, only. That provision must be read subject to the rule that in the absence of an express provision or clear implication, the legislature does not intend to attribute to the amending provision a greater retrospectivity than is expressly mentioned, nor to authorise the Income-tax Officer to commence proceedings which before the new Act came into force had by the expiry of the period provided become barred. 20. On a proper construction of the provisions of Section150 (1) and the effect of its operation from 1.4.1989, we are clearly of the opinion that the provisions cannot be given retrospective effect prior to 1.4.1989 for assessments which have already become final due to bar of limitation prior to 1.4.1989. Taxing provision imposing a liability is governed by normal presumption that it is not retrospective and settled principle of law is that the law to be applied is that which is in force in the assessment year unless otherwise provided expressl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arming its authorities to re-open settled matters, in respect of issues where the citizen could genuinely be sanguine and had no obligation of the kind which the Revenue seeks to impose by the present amendment. All the more significant, is the fact that absent a clear indication, every statute is presumed to be prospective. The revenue had sought to contend that the amendment (to Section 149) is merely procedural and no one has a vested right to procedure; and that procedural amendments can be given effect any time, even in ongoing proceedings. 17. This court is of the opinion that there is no merit in the revenue $ contention. In Sri Prithvi Cotton Mills versus Broach Borough Municipality, AIR 1970 SC 192, examined the validity of the retrospective amendment of a statute in light of Article 19(1)(g) of the Constitution of India, i.e. a fundamental right to practice any profession, or to carry on any occupation, trade or business. The court said: In testing whether a retrospective imposition of a tax operates so harshly as to violate fundamental rights under article19(1)(g), the factors considered relevant include the context in which retroactivity was contemplated such ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... petition is allowed; however without order on costs. The Hon ble Supreme Court vide order dated 05.07.2019 dismissed the Special Leave Petition filed by the department on the judgment of the Delhi High Court in the case of Brahmdatt (supra), thus making the Delhi High Court judgement final. 6.5 In this case, the relevant assessment year is 1999-2000. Notice u/s 148 was issued on 27.03.2015. The AY. Being 1999-2000, the time limit for issue of notice u/s 148 will expire on 31.03.2006. However, it is seen that the notice u/s 148 was issued on 27.03.2015. Section 149(1) is reproduced hereunder for ready reference: 149. (1) No notice under section 148 shall be issued for the relevant assessment year, (a) if four years have elapsed from the end of the relevant assessment year, unless the case falls under clause (b) or clause (c); (b) if four years, but not more than six years, have elapsed 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 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... year under consideration was barred by limitation, without properly considering provision of section 149[1][c] of the Income Tax Act, 1961 ? ii) Whether on the facts and in the circumstances of the case, ITAT was erred in law in confirming the decision of Ld. CIT[A], wherein it was observed that as per Finance Act, 2012, section 149[1][c] of the Act was made effective prospectively from 01.07.2012 and there was nothing expressly provided by amending Act which indicated Legislative intent to make provision of section 149[1][c] applicable, to those proceedings which had become barred by limitation on 01.07.2012? We have heard Mr. Tilak Mitra, learned standing Counsel for the appellant/revenue and Mr. Pratyush Jhunjhunwala, learned Advocate appearing for the respondent. The short question falls for consideration is whether the proceeding initiated by the assessing officer under section 148 of the Act for the year under consideration, namely, AY 2005-06 is barred by limitation in terms of provision of section 149[1][c] of the Act. We have perused the order passed by the tribunal and we find that the tribunal rightly took note of the legal position and allowed the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X
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