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TMI Blog2024 (7) TMI 1224X X X X Extracts X X X X X X X X Extracts X X X X ..... t if in the erstwhile provisions, the notice is barred by limitation then, in the amended provision also, the said notice is barred by limitation. Thus, we hold that the impugned notice and the proceedings have been initiated beyond the time limit prescribed under the provisions of Section 149 of the Act making the impugned proceedings vitiated and liable to be quashed - Decided in favour of assessee. - Shri Narendra Kumar Billaiya, Hon ble Accountant Member And Shri Rahul Chaudhary, Hon ble Judicial Member For the Assessee : Shri Anish Thacker Shri Nishit Shah, A/R For the Revenue : Shri Nihar Ranjan Samal, Sr. D/R ORDER PER NARENDRA KUMAR BILLAIYA, AM: This appeal by the assessee is preferred against the order dt. 28/03/2024, framed u/s 147 r.w.s. 144C(13) of the Income Tax Act, 1961 ( the Act ), pertaining to Assessment Year 2014-15. 2. The grievance of the assessee reads as under:- Ground of Appeal No. 1: General 1. erred in assessing the Appellant's total income at Rs. 337,44,96,176 by making addition of Rs. 3,35,17,724 to the income of Rs. 3,34,09,78,452 assessed under section 143(3) read with section 144C(13) of the Act, as against the returned income of Rs. 3,26,88,17 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act and therefore, provisions of section 5(2) of the Act ought not to have been invoked; 8. failed to appreciate that the interest income is not chargeable to tax in India in view of the exception provided under section 9(1)v)(b) of the Act; Ground of Appeal No. 9: Erroneous computation of total income 9. erred in making double addition of INR 2,44,08,767 pertaining to interest income received from Ranbaxy Ltd as the said interest income was already considered in the assessed income as per the original assessment order passed under section 143(3) of the Act dated 3 October 2018. Ground of Appeal No. 10: Short grant of TDS credit 10. erred in granting credit of tax deducted at source amounting to only Rs. 32,05,04,420 as against Rs. 32,24,39,133 and thereby resulting in short credit amounting to Rs. 19,34,713; Ground of Appeal No. 11: Non-grant of advance tax credit 11. failed to grant credit of advance-tax paid amounting to Rs. 33,40,78,758; Ground of Appeal No. 12: Non-grant of credit for regular assessment tax paid 12. failed to grant credit of tax paid during regular assessment amounting to Rs. 1,59,91,956; Ground of Appeal No. 13: Levy of interest under section 234A of the Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urt in the case of Emcure Pharmaceuticals Limited vs. Assistant Commissioner of Income Tax Central Circle 2(1), Pune and Ors. in Writ Petition No.5293 OF 2022, the assessee s case was brought under the new re-assessment regime. Before us, the assessee strongly challenged the re-assessment proceedings on the ground that assessment for AY 2014-15 cannot be validly reopened in view of the limitation prescribed u/s 149 of the Act. 7. We have given a thoughtful consideration to the provisions of Section 149 of the Act which prescribed time limit for notice. The relevant provisions read as under:- [Time limit for notice. 149. (1) No notice under section 148 shall be issued for the relevant assessment year, (a) if three years have elapsed from the end of the relevant assessment year, unless the case falls under clause (b); 73 [(b) if three years, but not more than ten years, have elapsed from the end of the relevant assessment year unless the Assessing Officer has in his possession books of account or other documents or evidence which reveal that the income chargeable to tax, represented in the form of (i) an asset; (ii) expenditure in respect of a transaction or in relation to an event o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... esh Kumar, it will be useful to reproduce our findings in The New India Assurance Company Ltd. (supra) which read as under: 19. Section 148 of the Act reads as under : ** ** ** Section 148A of the Act reads as under : ** ** ** Section 149 of the Act read as under : ** ** ** 20. The validity of a notice issued under section 148 of the Act must be judged on the basis of the law existing on the date on which such notice is issued. A Division Bench of this Court in Siemens Financial (supra) followed what was held in Tata Communications (supra) to hold that the validity of a notice issued under section 148 of the Act must be judged on the basis of the law existing on the date on which such notice is issued. Paragraphs 34 and 35 of Tata Communications (supra) read as under: ** ** ** 21. The Apex Court in Ashish Agarwal (supra) did not disturb the findings of this Court in Tata Communications (supra). The Apex Court only modified the orders passed by the respective High Courts to the effect that the notices issued under section 148 of the Act, which were subject matter of writ petitions before various High Courts, shall be deemed to have been issued under section 148A(b) of the Act and th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on. The Hon'ble Calcutta High Court in Ved Prakash (supra) held By this writ petition, petitioner has challenged the impugned order under section 148 A(d) of the Income-tax Act, 1961 dated 29th July, 2022, relating to the assessment year 2014-2015 on the ground that the same being without jurisdiction and being barred by limitation since the initiation of re-opening of the assessment has been made admittedly after six years from the end of the expiry of the period of relevant assessment year. Mr. Roy chowdhury, learned Counsel appearing for the respondent is not in a position to contradict the aforesaid factual and legal position. Accordingly, this writ petition being WPO No. 2450 of 2022 is disposed of by quashing the aforesaid impugned order dated 29th July, 2022. Prior thereto, the Rajasthan High Court in Sudesh Taneja (supra), which was followed by this Court in Tata Communications (supra), in paragraph 37 held as under : ** ** ** In Sudesh Taneja (supra), the Court held that for any action of issuance of notice under section 148 after 1st April 2021 the newly introduced provisions under the Finance Act, 2021 would apply. Mere extension of time limits for issuing notice und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 149, as they stood as on the 31st March 2021, before the commencement of the Finance Act, 2021, shall apply. The date of the Notification is also relevant and it is 31st March 2021. 26. Another Notification dated 27th April 2021 being Notification S.O. 1703(E) [No. 38/2021/F. No. 370142/35/2020-TPL] came to be issued where a specific reference is made to Notification S.O. 1432(E) dated 31st March 2021 and it also says - the Central Government hereby specifies for the purpose of sub-section (1) of Section 3 of TOLA.' It is stated, where the specified Act is the Income-tax Act, 1961, the completion of any action, referred to in clause (a) of sub-section (1) of Section 3 of TOLA, relates to issuance of notice under section 148 as per time limit specified in Section 149 and 'the time limit for such action expires on 30th April 2021 due to its extension by the said Notifications', such time limit shall further stand extended to 30th June 2021. The Notification dated 27th April 2021 reads as under: ** ** ** Therefore, it only extends the time limit prescribed in Notification S.O. 1432(E) to 30th June 2021. When the Notification S.O. 1432(E) was not applicable to AY 2013-14, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fter 31st March 2021 will travel back to the original date. This very argument was urged in the challenge to the initial reassessment and was categorically rejected by this Court in Tata Communications (supra) as well as the Delhi High Court in Mon Mohan Kohli (supra). Paragraphs 37 and 38 of Tata Communications (supra) read as under : ** ** ** Both these judgments, i.e., Tata Communications (supra) and Mon Mohan Kohli (supra), have been affirmed in Ashish Agarwal (supra). 32. Further, in Siemens Financial (supra), this Court has held that the Instruction is erroneous in this regard, i.e., travel back to the original date. Paragraphs 28 to 31 of the said judgment read as under : ** ** ** 33. In Ganesh Dass Khanna (supra), the Delhi High Court has already declared paragraph 6.1 and 6.2(ii) of the Instructions as bad in law. Further, this Court in Group M Media India P. Ltd. (supra) has held that a declaration of a Board's instruction as ultra vires by a competent Court would be binding on all authorities administering the Act all over the country and accordingly, the officers implementing the Act were bound by the decision of the Delhi High Court. Paragraphs 44.4, 49, 51, 52 and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, on this ground as well, the impugned reopening notice dated 28th July 2022 issued for AY 2013-14 in petitioner's case is barred by limitation and deserves to be quashed and set aside. Alternatively, it is well settled that a notice under section 148 of the Act cannot be issued in order to reopen the assessment of an assessee in a case where the right to reopen the assessment was already barred under the pre-amended Act on the date when the new legislation came into force. In CIT v. Onkarmal Meghraj (HUF) the Hon'ble Apex Court held : .. 10. The Hon ble Bombay High Court in the case of Hexaware Technologies Ltd. v. Assistant Commissioner of Income-tax [2024] 162 taxmann.com 225 (Bombay), had the occasion to consider a similar issue and held as under:- 27. The interpretation as canvassed by the Revenue would render the first proviso to Section 149 of the Act redundant and otiose. The time limit to issue notice under section 148 of the Act had already expired on 1st April 2021 for Assessment Year 2013-2014 and 2014-2015, when Section 149 of the Act was amended. Therefore, reopening for Assessment Years 2013-2014 and 2014-2015 had already been barred by limitation on 1st Apr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... isions 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 . 28. Section has to be interpreted so as to give meaning to all the words/phrases used in the Section and it should not be interpreted in such a way so as to render any part or phrase in the Section otiose. As stated aforesaid, if the interpretation canvassed by the Revenue is to be accepted then, not only various parts of the Section would be rendered otiose, one would have to also substitute one phrase with another phrase in the said Section, which is clearly not permissible in law. Reliance in this regard is placed on the decision of the Hon'ble Apex Court in the case of CIT v. Sham L. Chellaram [2015] 54 taxmann.com 348/373 ITR 292 (Bom.). 29. It was submitted on behalf of Revenue that the period of limitation for the purposes of Section 149 of the Act has to be seen with respect to the original notice under section 148 of the Act, which was issued to petitioner on 8th April 2021 and as the said notice was issued within the period of six years from the end of the relevant assessment year, whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case may be. Fifth proviso or sixth proviso extend limitation for issuing notice under section 149 of the Act, however, the first proviso is an exception to the period of limitation and provides for a restriction on the notices under section 148 being issued for Assessment Years upto 2021-22 beyond a certain date. Therefore, the way the Section would operate, is first to decide whether a notice issued under section 148 of the Act is within the period of limitation in terms of Section 149(1)(a) or (b) of the Act. To decide whether the notice is within the period of limitation under section 149(1)(a) or (b) of the Act, the extension of time as per the fifth and/or sixth proviso would be considered. Once, the notice is otherwise within the period of limitation, thereafter one has to see whether the said time limit is within the restriction provided in the first proviso or not. If the notice is beyond the restriction period, the notice is invalid. The fifth and/or the sixth proviso cannot apply at this stage to extend the period of restriction as per the first proviso. Hence, if a notice is not within the time prescribed under the first proviso to Section 149(1) of the Act, then such p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the period to be excluded would be counted from 25th May 2022, i.e., the date on which the show cause notice was issued under section 148A(b) of the Act by respondent no. 1 subsequent to the decision of the Hon'ble Apex Court in the case of Ashish Agarwal (supra) and upto 10th June 2022, which is a period of 16 days. Further, the time period from 29th June 2022 upto 4th July 2022 cannot be excluded as the same was not based on any extension sought by petitioner, but at the behest of respondent no. 1. Even if the same was to be excluded, still it will mean further exclusion of 5 days. Considering the said excluded period as well, the impugned notice dated 27th August 2022 is still beyond limitation. The fact that the original notice dated 8th April, 2021 issued under section 148 of the Act, was stayed by this Court on 3rd August 2021, and its stay came to an end on 29th March 2022 on account of the decision of this Court, will not be relevant for providing extension as per the fifth proviso. The fifth proviso provides for extension for the period during which the proceeding under section 148A of the Act is stayed. The original stay granted by this Court was not with respect to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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