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TMI Blog2024 (8) TMI 1084X X X X Extracts X X X X X X X X Extracts X X X X ..... petition in favour of assessee. - G. S. KULKARNI SOMASEKHAR SUNDARESAN, JJ. For the Petitioner : Mr. Sham Walve a/w. Ms. Sweta Upadhyay i/b India Law Alliance,. For the Respondents-Revenue : Mr. Vipul Bajpayee,. PC : 1. Rule. Rule made returnable forthwith. Learned Counsel for the Respondents waives service. By consent of the parties, heard finally. 2. This Writ Petition under Article 226 of the Constitution of India has been filed to challenge a notice dated 19 April 2024 ( impugned notice ) issued to the Petitioner under Section 148 of the Income Tax Act, 1961 ( the Act ), and also the underlying prior notice and order under Section 148A (b) and Section 148A (d) of the Act, respectively. The reassessment under Section 148 of the Act has been initiated in respect of returns filed by the Petitioner-Assessee for the Assessment Year 2017-18. 3. On perusal of the record, it is apparent that the impugned notice dated 14th March 2024 issued under Section 148A (b), the order passed thereon under Section 148A (d) dated 19 April 2024 and the consequent notice dated 19 April 2024 issued under Section 148 of the Act are all issued by the Jurisdictional Assessing Officer ( JAO ) and not by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... can be allocated randomly to any officer who would then have jurisdiction to issue the notice under Section 148 of the Act. It is not the case of respondent no. 1 that respondent no. 1 was the random officer who had been allocated jurisdiction. 36. With respect to the arguments of the Revenue, i.e., the notification dated 29th March 2022 provides that the Scheme so framed is applicable only to the extent provided in Section 144B of the Act and Section 144B of the Act does not refer to issuance of notice under Section 148 of the Act and hence, the notice cannot be issued by the FAO as per the said Scheme, we express our view as follows:- Section 151A of the Act itself contemplates formulation of Scheme for both assessment, reassessment or recomputation under Section 147 as well as for issuance of notice under Section 148 of the Act. Therefore, the Scheme framed by the CBDT, which covers both the aforesaid aspect of the provisions of Section 151A of the Act cannot be said to be applicable only for one aspect, i.e., proceedings post the issue of notice under Section 148 of the Act being assessment, reassessment or recomputation under Section 147 of the Act and inapplicable to the issu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the notice under Section 148 was issued on 19 April, 2014. By this time, the time limit for issuance of the notice as stipulated under Section 149 had expired, i.e., three year period under Section 149 expired on 31 March, 2021. Therefore, on this ground too, the reassessment proceedings had called for interference. For felicity, paragraphs 26, 27 and 30 in Hexaware are extracted below : 26. The purpose of the first proviso to Section 149 of the Act is consistent with the stated object of the government to make prospective amendments in the Act. Accordingly, the proviso provides that up to Assessment Year 2021-2022 (period before the amendment), the period of limitation as prescribed in the erstwhile provisions of Section 149(1) (b) of the Act would be applicable and only from Assessment Year 2022-2023, the period of ten years as provided in Section 149 (1) (b) of the Act, would be applicable . The submission of the Revenue to interpret the first proviso to Section 149 of the Act to be applicable only for Assessment Years 2013-2014 and 2014-2015, i.e., for assessment years where the period of limitation had already expired on 1st April 2021 is not sustainable. The interpretation c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er Section 148 or Section 153A or Section 153C could not have been issued at that time [on 1st day of April, 2021] on account of being beyond the time limit specified under the provisions of clause (b) of sub-section (1) of this Section or Section 153A or Section 153C, as the case may be, as they stood immediately before the commencement of the Finance Act, 2021; OR Provided that no notice under Section 148 shall be issued at any time in a case for the relevant assessment year beginning on or before 1st day of April, 2021, if a notice under Section 148 or Section 153A or Section 153C could not have been issued at that time [on 1st day of April, 2021] on account of being beyond the time limit specified under the provisions of clause (b) of sub-section (1) of this Section or Section 153A or Section 153C, as the case may be, as they stood immediately before the commencement of the Finance Act, 2021. 30 With respect to applicability of the fifth proviso and the sixth proviso to Section 149 (1) (b) of the Act for extension of limitation for issuing the notice under Section 148 of the Act, fifth and sixth provisos are only applicable with respect to the period of limitation prescribed in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of time from 8th June 2022 to 28th June 2022 cannot be excluded as per the fifth proviso. This is because petitioner on 8th June 2022 did not request for any further time and furnished its response to the show cause notice under Section 148A (b) of the Act. It is the Assessing Officer who has suo moto issued another letter on 28th June 2022 asking petitioner to furnish further details by 8th July 2022. Therefore, even assuming a period of 27 days (i.e., 16 days from 24th May to 8th June and 11 days from 28th June to 8th July) are excluded from the date of the impugned notice under Section 148 of the Act issued on 31st July 2022, the impugned notice would yet be barred by limitation and could not have been issued by virtue of the first proviso to Section 149 of the Act. Even if the fifth and sixth provisos are held to be applicable, the impugned notice would still be beyond the period of limitation. The fifth proviso extends limitation with respect to the time or extended time allowed to an assessee as per the show cause notice issued under Section 148A (b) of the Act or the period, during which the proceeding under Section 148A of the Act are stayed by an order of injunction by an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd too, the Petition deserves to be allowed. 7. In the present case, it is apparent that the Respondent-Revenue has not complied with the Scheme notified by the Central Government pursuant to Section 151A (2) of the Act. The Scheme has also been tabled in Parliament and is in the character of subordinate legislation, which governs the conduct of proceedings under Section 148A as well as Section 148 of the Act. In view of the explicit declaration of the law in Hexaware, the grievance of the Petitioner-Assessee insofar as it relates to an invalid issuance of a notice is sustainable and consequently, the very manner in which the proceedings have been initiated, vitiates the proceedings. 8. Learned Counsel for both the parties agree that the proceedings initiated under Section 148 of the Act would not be sustainable in view of the judgment rendered in Hexaware. Learned Counsel for the Petitioner-Assessee has also drawn our attention to a recent decision of this Court in Nainraj Enterprises Pvt. Ltd. Vs. The Deputy Commissioner of Income Tax, Circle-4(3)(1), Mumbai Ors Writ Petition (L.) No. 16918 of 2024 dt. 2-07-2024, whereby in similar circumstances, this Court has allowed the petiti ..... X X X X Extracts X X X X X X X X Extracts X X X X
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