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TMI Blog2024 (10) TMI 264X X X X Extracts X X X X X X X X Extracts X X X X ..... ate v. Kalyan Singh [ 2017 (4) TMI 1564 - SUPREME COURT] this Court observed that a judgment has two components: (a) declaration of law; and (b) directions. In Bir Singh v. Mukesh Kumar [ 2019 (2) TMI 547 - SUPREME COURT] it was held that what is binding on all courts under Article 141 is the declaration of law, and not the directions issued under Article 142. This Court has exercised its jurisdiction under Article 142 in tax matters where the actions of the Revenue are not in accordance with the law. In Whirlpool of India Ltd. v. CIT [ 2000 (2) TMI 15 - SUPREME COURT] this Court directed the Income Tax Officer to give effect to the order of the Income Tax Appellate Tribunal by disallowing a particular deduction. In CIT v. Greenworld Corporation [ 2009 (5) TMI 14 - SUPREME COURT] the issue before this Court was whether a Commissioner of Income Tax appropriately issued directions under Section 263 of the Income Tax Act to an assessing officer to reopen assessments. It was held that the facts of the case did not merit the CIT to issue directions to the assessing officer. Consequently, this Court termed the reassessment notice issued by the assessing officer to be illegal and exercise ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he attendant consequences.154 The effect of a legal fiction is that a position which otherwise would not obtain is deemed to obtain under the circumstances. Under Section 148A(b), the assessing officer has to comply with two requirements: (i) issuance of a show cause notice; and (ii) supply of all the relevant information which forms the basis of the show cause notice. The supply of the relevant material and information allows the assessee to respond to the show cause notice. The deemed notices were effectively incomplete because the other requirement of supplying the relevant material or information to the assesses was not fulfilled. The second requirement could only have been fulfilled by the Revenue by an actual supply of the relevant material or information that formed the basis of the deemed notice. While creating the legal fiction in Ashish Agarwal (supra), this Court was cognizant of the fact that the assessing officers were effectively inhibited from performing their responsibility under Section 148A until the requirement of supply of relevant material and information to the assesses was fulfilled. This Court lifted the inhibition by directing the assessing officers to supp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this Court allowed the assesses to avail all the defences, including the defence of expiry of the time limit specified under Section 149(1). In the instant appeals, the reassessment notices pertain to the assessment years 2013-2014, 2014-2015, 2015-2016, 2016-2017, and 2017-2018. To assume jurisdiction to issue notices under Section 148 with respect to the relevant assessment years, an assessing officer has to: (i) issue the notices within the period prescribed under Section 149(1) of the new regime read with TOLA; and (ii) obtain the previous approval of the authority specified under Section 151. A notice issued without complying with the preconditions is invalid as it affects the jurisdiction of the assessing officer. Therefore, the reassessment notices issued under Section 148 of the new regime, which are in pursuance of the deemed notices, ought to be issued within the time limit surviving under the Income Tax Act read with TOLA. A reassessment notice issued beyond the surviving time limit will be time barred. Thus, we conclude that: a. After 1 April 2021, the Income Tax Act has to be read along with the substituted provisions; b. TOLA will continue to apply to the Income Tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ambika Iron and Steel Pvt Ltd v. PCIT [ 2022 (1) TMI 1291 - ORISSA HIGH COURT] , Twylight Infrastructure Pvt Ltd v. ITO [ 2024 (1) TMI 759 - DELHI HIGH COURT] , Ganesh Dass Khanna v. ITO [ 2023 (11) TMI 763 - DELHI HIGH COURT] and other judgments of the High Courts which relied on these judgments, are set aside to the extent of the observations made in this judgment. - WITH C.A. No. 8631/2024 C.A. No. 9270/2024 C.A. No. 8632/2024 C.A. No. 10238/2024 C.A. No. 8640/2024 C.A. No. 10239/2024 C.A. No. 10240/2024 C.A. No. 8644/2024 C.A. No. 8641/2024 C.A. No. 8650/2024 C.A. No. 8645/2024 C.A. No. 8643/2024 C.A. No. 8649/2024 C.A. No. 8652/2024 C.A. No. 8642/2024 C.A. No. 8647/2024 C.A. No. 8636/2024 C.A. No. 8646/2024 C.A. No. 8639/2024 C.A. No. 8648/2024 C.A. No. 8634/2024 C.A. No. 8651/2024 C.A. No. 8653/2024 C.A. No. 8637/2024 C.A. No. 8654/2024 C.A. No. 8658/2024 C.A. No. 8661/2024 C.A. No. 8638/2024 C.A. No. 8659/2024 C.A. No. 8660/2024 C.A. No. 8662/2024 C.A. No. 8655/2024 C.A. No. 8664/2024 T.P.(C) No. 767/2023 C.A. No. 9253/2024 C.A. No. 8702/2024 C.A. No. 8667/2024 C.A. No. 8666/2024 C.A. No. 8843-8844/2024 C.A. No. 8668/2024 C.A. No. 8678/2024 C.A. No. 8680/2024 C.A. No. 8679 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 956/2024 C.A. No. 9056/2024 C.A. No. 8826/2024 C.A. No. 8958/2024 C.A. No. 8957/2024 C.A. No. 8827/2024 C.A. No. 8959/2024 C.A. No. 8962/2024 C.A. No. 9044/2024 C.A. No. 8967/2024 C.A. No. 8963/2024 T.P.(C) No. 2942/2023 T.P.(C) No. 2937/2023 C.A. No. 9052/2024 C.A. No. 9170/2024 C.A. No. 9048/2024 C.A. No. 9180/2024 C.A. No. 9186/2024 C.A. No. 9043/2024 C.A. No. 9046/2024 C.A. No. 8960/2024 C.A. No. 9231/2024 C.A. No. 8964/2024 C.A. No. 9042/2024 C.A. No. 9228/2024 C.A. No. 8961/2024 C.A. No. 9202/2024 C.A. No. 9205/2024 C.A. No. 9184/2024 C.A. No. 9172/2024 C.A. No. 9177/2024 C.A. No. 8896/2024 C.A. No. 9225/2024 C.A. No. 9619/2024 C.A. No. 9238/2024 C.A. No. 9208/2024 C.A. No. 9189/2024 C.A. No. 9220/2024 C.A. No. 8897/2024 C.A. No. 8905/2024 C.A. No. 8930/2024 C.A. No. 9223/2024 C.A. No. 8898/2024 C.A. No. 8926/2024 C.A. No. 8899/2024 C.A. No. 9240/2024 C.A. No. 8900/2024 C.A. No. 8895/2024 C.A. No. 8906/2024 C.A. No. 8901/2024 C.A. No. 9503/2024 C.A. No. 8907/2024 C.A. No. 8908/2024 C.A. No. 8909/2024 C.A. No. 8902/2024 C.A. No. 8903/2024 C.A. No. 8904/2024 C.A. No. 9280/2024 C.A. No. 8910/2024 C.A. No. 9282/2024 C.A. No. 9285/2024 C.A. No. 9287/2024 C.A. No. 9296/2024 C.A. No ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o. 9243/2024 C.A. No. 9245/2024 C.A. No. 9252/2024 C.A. No. 9216/2024 C.A. No. 9295/2024 C.A. No. 9057/2024 C.A. No. 9269/2024 C.A. No. 9254/2024 C.A. No. 9058/2024 C.A. No. 9271/2024 C.A. No. 9272/2024 C.A. No. 9255/2024 C.A. No. 9256/2024 C.A. No. 9258/2024 C.A. No. 9275/2024 C.A. No. 9260/2024 C.A. No. 9806/2024 C.A. No. 9188/2024 C.A. No. 9192/2024 C.A. No. 9211/2024 C.A. No. 9200/2024 C.A. No. 9213/2024 C.A. No. 9218/2024 C.A. No. 9222/2024 C.A. No. 9229/2024 C.A. No. 9234/2024 C.A. No. 9824/2024 C.A. No. 9825/2024 C.A. No. 9235/2024 C.A. No. 9241/2024 C.A. No. 9364/2024 C.A. No. 9602/2024 C.A. No. 9330/2024 C.A. No. 9204/2024 C.A. No. 9206/2024 C.A. No. 9246/2024 C.A. No. 9331/2024 C.A. No. 9257/2024 C.A. No. 9259/2024 C.A. No. 9263/2024 C.A. No. 9332/2024 C.A. No. 9333/2024 C.A. No. 9264/2024 C.A. No. 9265/2024 C.A. No. 9334/2024 C.A. No. 9267/2024 C.A. No. 9335/2024 C.A. No. 9365/2024 C.A. No. 9336/2024 C.A. No. 9268/2024 C.A. No. 9288/2024 C.A. No. 9290/2024 C.A. No. 9291/2024 C.A. No. 9292/2024 C.A. No. 9293/2024 C.A. No. 9337/2024 C.A. No. 9801/2024 C.A. No. 9803/2024 C.A. No. 9294/2024 C.A. No. 9338/2024 C.A. No. 9348/2024 C.A. No. 9799/2024 C.A. No. 9321/2024 C.A. No. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 024 C.A. No. 9536/2024 C.A. No. 8808/2024 C.A. No. 9456/2024 C.A. No. 9384/2024 C.A. No. 9383/2024 C.A. No. 9371/2024 C.A. No. 9457/2024 C.A. No. 9393/2024 C.A. No. 9561/2024 C.A. No. 9518/2024 C.A. No. 9568/2024 C.A. No. 9519/2024 C.A. No. 9520/2024 C.A. No. 9537/2024 C.A. No. 9562/2024 C.A. No. 9538/2024 C.A. No. 9563/2024 C.A. No. 9407/2024 C.A. No. 9397/2024 C.A. No. 8814/2024 C.A. No. 9564/2024 C.A. No. 9408/2024 C.A. No. 9539/2024 C.A. No. 9436/2024 C.A. No. 8811/2024 C.A. No. 9446/2024 C.A. No. 9460/2024 C.A. No. 9540/2024 C.A. No. 8806/2024 C.A. No. 9541/2024 C.A. No. 9542/2024 C.A. No. 9543/2024 C.A. No. 9544/2024 C.A. No. 9521/2024 C.A. No. 9400/2024 C.A. No. 9545/2024 C.A. No. 9522/2024 C.A. No. 9438/2024 C.A. No. 8836-8837/2024 C.A. No. 9441/2024 C.A. No. 9468/2024 C.A. No. 9546/2024 C.A. No. 9547/2024 C.A. No. 9523/2024 C.A. No. 9571/2024 C.A. No. 9548/2024 C.A. No. 9319/2024 C.A. No. 9401/2024 C.A. No. 9355/2024 C.A. No. 9361/2024 C.A. No. 9471/2024 C.A. No. 9472/2024 C.A. No. 9362/2024 C.A. No. 9549/2024 C.A. No. 9467/2024 C.A. No. 9550/2024 C.A. No. 9448/2024 C.A. No. 9551/2024 C.A. No. 9445/2024 C.A. No. 9552/2024 C.A. No. 9443/2024 C.A. No. 8945/2024 C.A. No. 8813 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... No. 9424/2024 C.A. No. 8830/2024 And With C.A. No. 9425/2024 CJI [ Dr Dhananjaya Y Chandrachud ] , Justice [ J B Pardiwala ] And Justice [ Manoj Misra ] For the Appellant : Mr. N Venkataraman, A.S.G. Mr. Rupesh Kumar, Sr. Adv. Mr. Raj Bahadur Yadav, AOR Mr. Shashank Bajpai, Adv. Mr. Venkataraman Chandrashekhara Bharathi, Adv. Mrs. Alka Agarawal, Adv. Mr. Ishaan Sharma, Adv. Mr. Annirudh Sharma Ii, Adv. Mr. Alka Aggarwal, Adv. Mrs. Anamika Agarwal, Adv. Mr. Praneet Pranab, Adv. Mrs. Anamika Aggarwal, Adv. Mr. Santosh Kumar, Adv. Mrs. A Deepa, Adv. Mr. Rajesh Kumar Singh, Adv. Mr. Amrish Kumar, AOR Mr. Mahesh Agarwal, Adv. Mr. Alok Yadav, Adv. Mr. M.S. Ananth, Adv. Mr. Abhinabh Garg, Adv. Ms. Sayaree Basu Mallik, Adv. Mr. E. C. Agrawala, AOR Mr. Tushar Thareja, Adv. Mr. Rishabh Ostwal, Adv. Mr. Bhakti Vardhan Singh, AOR Mr. Ajay Kumar, AOR For the Respondent : Mr. Ved Jain, Adv. Mr. Nischay Kantoor, Adv. Ms. Soniya Dodeja, Adv. Mr. Divyansh Dubey, Adv. Mr. Subodh S. Patil, AOR Mr. Sonal Jain, AOR Mr. Ruchesh Sinha, Adv. Mr. Pankaj Agarwal, Adv. Ms. Yashvi Aswani, Adv. Dr. Prashant Pratap, Adv. Ms. Anupriya Dixit, Adv. Mr. Amjid Maqbool, Adv. Ms. Pallavi Pratap, AOR Mr. Harish Pandey, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r. Prashanth Undurti, Adv. Ms. Deepanwita Priyanka, AOR Ms. Prerana Mohapatra, Adv. Mr. Saswat Kumar Acharya, Adv. Mr. Dhananjay Bhaskar Ray, AOR Mr. Abhijeet Agarwal, Adv. Mr. Siddharth Ranka, Adv. Mr. A. Karthik, AOR Mr. Jasdeep Singh Dhillon, AOR Ms. Amanat Kaur Chahal, Adv. Mr. Yutangar Singh Chauhan, Adv. Mr. Hds Bains, Adv. Ms. R. K. Batra, Adv. Mr. Abhay Singh Mann, Adv. Mr. Jas Sanghavi, Adv. Mr. Sandeep Yadav, Adv. Mr. Raj Bahadur Yadav, AOR Mr. Kumar Kale, Adv. Mr. Dharan Gandhi, Adv. Mr. Devendra Jain, Adv. Ms. Gunjan Kakad, Adv. Mr. Rajat Mittal, AOR Mr. Suprateek Neogi, Adv. Mr. Shubhranshu Padhi, AOR Mr. Prabodha Ch. Nayak, Adv. Mr. D. Girish Kumar, Adv. Mr. Jay Nirupam, Adv. Mr. Pranav Giri, Adv. Mr. Ekansh Sisodia, Adv. Ms. A. M. Harsavardhini, Adv. Mr. Dhiraj Kumar Sammi, AOR Mr. Sanjay Prakash Goyatan, Adv. Dr. Chandrakant S.sarkar, Adv. Mr. Kapil Goel, Adv. Mr. Sougat Sinha, Adv. Mr. Sandeep Goel, Adv. Mr. Dhananjay Garg, AOR Mr. Abhishek Garg, Adv. Mr. Dinesh Kumar Garg, Adv. Mr. Tanuj Gulati, Adv. Ms. Gayathri R. Manasa, Adv. Mr. Gaurav Choudhary, Adv. Ms. Anu Kushwaha, Adv. Mr. R.p. Bansal, Adv. Mr. Percy Pardiwala, Sr. Adv. Mr. Sukhsagar Syal, Adv. Mr. C. Geo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .............................................................. 50 C. Submissions ...................................................................................................... 51 D. Legal Background ............................................................................................. 55 i. Assessment as a quasi-judicial function ..................................................... 55 ii. Assessment as an issue of jurisdiction ....................................................... 59 iii. Principles of strict interpretation and workability ....................................... 63 iv. Principle of harmonious construction.......................................................... 66 E. Reading TOLA into the Income Tax Act ........................................................... 70 i. First proviso to Section 149(1) of the new regime ...................................... 70 ii. TOLA can extend the time limit till 31 June 2021 ........................................ 75 a. Finance Act 2021 substituted the old regime ................................................ 75 b. Reading TOLA into Section 149 ................................................................. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 148 for an assessment year: (i) four years from the end of the relevant assessment year ; (ii) four years but not more than six years from the end of the relevant assessment year if the income chargeable to tax which has escaped assessment amounted to or was likely to amount to Rupees one lakh or more for that year ; and (iii) four years but not more than sixteen years from the end of the relevant assessment year if the income in relation to any asset ( including financial interest in any entity ) located outside India and chargeable to tax has escaped assessment. 4. Section 151 required the assessing officer to obtain the sanction of the specified authority before issuing a notice under Section 148.8 In case the notice was issued within four years, the sanctioning authority was the Joint Commissioner.9 In case the notice was issued after the expiry of four years, the sanctioning authority was the Principal Chief Commissioner,10 Chief Commissioner,11 Principal Commissioner or Commissioner.12 The authorities have a distinct meaning under the Income Tax Act. Following a decision of this Court in GKN Driveshafts (India) Ltd v. Income Tax Officer,13 the assessing officer was als ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2020 to the 31st day of December, 2020, or such other date after the 31st day of December, 2020, as the Central Government, may, by notification, specify in this behalf, for the completion or compliance of such action as (a) completion of any proceedings or passing of any order or issuance of any notice, intimation, notification, sanction or approval, or such other action, by whatever name called, by any authority, commission or tribunal, by whatever name called, under the provisions of the specified Act; [ ] And where completion of compliance of such action has not been made within such time, then, the timelimit 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 31st day of March, 2021, as the Central Government may, by notification, specify in this behalf: 8. Section 3(1) empowered the Central Government to extend the time limit beyond 31 March 2021 by a notification. In pursuance of its powers, the Central Government issued the following notifications to extend the period of relaxation till 30 June 2021: a. Notification No. 93 of 2020 dated 31 December ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble to tax which has escaped assessment amounts to or is likely to amount to Rupees fifty lakhs or more. However, the first proviso to Section 149 prohibits the issuance of a reassessment notice under the new regime if such notices have become time-barred under the old regime; and (iv) The sanctioning authorities specified under Section 151 of the new regime are different from those specified under the old regime.22 Section 151 of the new regime specifies the following authorities for Section 148 and 148A: (i) Principal Commissioner or Principal Director23 or Commissioner or Director if three years or less have elapsed from the end of the relevant assessment year; and (ii) Principal Chief Commissioner or Principal Director General or Chief Commissioner or Director General if more than three years have elapsed from the end of the relevant assessment year. 11. The notifications dated 31 March 2021 and 27 April 2021 issued by the Central Government under Section 3(1) of TOLA contained an explanation declaring that the provisions under the old regime shall apply to the reassessment proceedings initiated under them.24 Thus, the notifications directed the assessing officers to apply the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the IT Act as substituted by the Finance Act, 2021 and construed or treated to be show-cause notices in terms of Section 148-A(b). The assessing officer shall, within thirty days from today provide to the respective assessees information and material relied upon by the Revenue, so that the assessees can reply to the show-cause notices within two weeks thereafter. 28.2. The requirement of conducting any enquiry, if required, with the prior approval of specified authority under Section 148-A(a) is hereby dispensed with as a one-time measure vis- -vis those notices which have been issued under Section 148 of the unamended Act from 1-4-2021 till date, including those which have been quashed by the High Courts. 28.3. Even otherwise as observed hereinabove holding any enquiry with the prior approval of specified authority is not mandatory but it is for the assessing officers concerned to hold any enquiry, if required. 28.4. The assessing officers shall thereafter pass orders in terms of Section 148-A(d) in respect of each of the assessees concerned; Thereafter after following the procedure as required under Section 148-A may issue notice under Section 148 (as substituted). 28.5. All defe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uly and September 2022 for the assessment years 2013-2014, 2014-2015, 2015-2016, 2016-2017, and 2017-2018. These notices were challenged before several High Courts. The High Courts declared the notices to be invalid on the ground that they were: (i) time-barred; and (ii) issued without the appropriate sanction of the specified authority. 17. In Ashish Agarwal (supra), this Court was called upon to decide whether the Revenue was correct in issuing the reassessment notices under the old regime when the new regime, which was beneficial to the assesses, was already in force. This Court resolved the issue by holding that all reassessment notices issued after 1 April 2021 should have been issued in accordance with the new regime. However, the Court construed the notices issued under Section 148 of the old regime by deeming them to be notices issued under Section 148A(b) of the new regime. In Ashish Agarwal (supra), this Court did not deal with the issue of whether or not the reassessment notices were issued within the time limits prescribed under the provisions of the Income Tax Act read with the relaxations provided under TOLA. This is the primary issue that comes up for our considerati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 14 31.03.2017 TOLA not applicable 31.03.2020 30.06.2021 2014-2015 31.03.2018 TOLA not applicable 31.03.2021 30.06.2021 2015-2016 31.03.2019 TOLA not applicable 31.03.2022 TOLA not applicable 2016-2017 31.03.2020 30.06.2021 31.03.2023 TOLA not applicable 2017-2018 31.03.2021 30.06.2021 31.03.2024 TOLA not applicable f. The Revenue concedes that for the assessment year 2015-16, all notices issued on or after 1 April 2021 will have to be dropped as they will not fall for completion during the period prescribed under TOLA; g. Section 2 of TOLA defines specified Act to mean and include the Income Tax Act. The new regime, which came into effect on 1 April 2021, is now part of the Income Tax Act. Therefore, TOLA continues to apply to the Income Tax Act even after 1 April 2021; and h. Ashish Agarwal (supra) treated Section 148 notices issued by the Revenue between 1 April 2021 and 30 June 2021 as show-cause notices in terms of Section 148A(b). Thereafter, the Revenue issued notices under Section 148 of the new regime between July and August 2022. Invalidation of the Section 148 notices issued under the new regime on the ground that they were issued beyond the time limit specified under the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ril 2021. However, the sanctions were obtained under Section 151(i) instead of Section 151(ii) of the new regime; and iv. The directions issued by this Court in Ashish Agarwal (supra) were not intended to apply to assesses who did not challenge the reassessment notices before the High Courts or this Court. Therefore, reassessment proceedings could not have been initiated for such assesses. e. The applicability of the first proviso to Section 149(1)(b) of the new regime has to be tested on the date of issuance of notice under Section 148 of the new regime. Even if TOLA is read into the Income Tax Act, the time limits for completion or compliance of actions can be extended till 30 June 2021. However, the notices under Section 148 of the new regime were issued by the Revenue from July to September 2022. The period of July to September 2022 is beyond the extended time limits stipulated under the Income Tax Act read with TOLA; f. Ashish Agarwal (supra) cannot be interpreted in a manner to exclude the entire period from April 2021 to September 2022. The directions issued by this Court under Article 142 of the Constitution cannot contravene the substantive provisions contained in the Inco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... remedied by a curative statute. On the other hand, no assessment is necessary where the statute itself prescribes the amount to be paid, and this can be recovered by suit. For instance, where a statute imposes a tax at a specified rate upon bank deposits, no other assessment other than that made by the statute itself is necessary. 38 24. The expression assessment comprehends the entire procedure for ascertaining and imposing liability upon taxpayers.39 The process of assessment involves computation of the income of the assessees, determination of tax payable by them, and the procedure for collecting or recovering tax.40 An assessing officer is concerned with the assessment and collection of revenue. An assessing officer must administer the provisions of the Income Tax Act in the interests of the public revenue and to prevent evasion or escapement of tax legitimately due to the State.41 25. In Province of Bombay v. Khushaldas S Advani,42 Justice S R Das (as the learned Chief Justice then was), in his concurring opinion observed that if a statutory authority has the power to perform any act that will prejudicially affect the subject, then although there are no two parties apart from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al, or authority to hear and determine a cause or exercise any judicial power concerning such cause.53 The Revenue officers must have requisite jurisdiction to perform their functions and responsibilities following the provisions of the Income Tax Act. Under the Income Tax Act 1922,54 Section 34 allowed an Income Tax Officer to reassess income that escaped assessment for a relevant assessment year. Section 34 provided that a reassessment notice could not be issued beyond the prescribed time limit (which was generally within eight years from the end of the relevant assessment year). Thus, Section 34 conferred jurisdiction on Income Tax Officers to reopen an assessment subject to the issuance of notice within the prescribed time limits.55 In Ahmedabad Manufacturing and Calico Printing Co. Ltd. v. S G Mehta, ITO,56 Justice M Hidayatullah (as the learned Chief Justice then was), writing for himself and Justice Raghubar Dayal, observed: It must be remembered that if the Income-tax Act prescribes a period during which the tax due in any particular assessment year may be assessed, then on the expiry of that period the department cannot make an assessment. Where no period is prescribed tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y, then such power or duty must be exercised or performed by that authority itself.61 Further, when a statute vests certain power in an authority to be exercised in a particular manner, then that authority has to exercise its power following the prescribed manner.62 Any exercise of power by statutory authorities inconsistent with the statutory prescription is invalid.63 Section 34 of the Income Tax Act 1922 prescribed a duty on Income Tax Officers to seek prior approval of the Commissioner before issuing a reassessment notice. In CIT v. Maharaja Pratapsingh Bahadur of Gidhaur,64 a three-Judge Bench of this Court held that a notice issued under Section 34 without prior approval of the Commissioner was invalid. 31. The Income Tax Act 1961 also mandates assessing officers to fulfil certain pre-conditions before issuing a notice of reassessment. Section 149 requires assessing officers to issue a notice of reassessment under Section 148 within the prescribed time limits. Further, Section 151 requires assessing officers to obtain sanction of the specified authority before issuing notice under Section 148. In Chhugamal Rajpal v. S P Chaliha, a three-Judge Bench of this Court held that Sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on account of the legislature s failure to express itself clearly.80 36. In a taxing statute, the charging section has to be construed strictly, but the machinery provisions must be interpreted in accordance with the ordinary rules of statutory interpretation.81 The purpose is to give effect to the clear intention of the legislature. In Murarilal Mahabir Prasad v. B R Vad,82 this Court held that: 29. [ ] There is no equity about a tax in the sense that a provision by which a tax is imposed has to be construed strictly, regardless of the hardship that such a construction may cause either to the treasury or to the taxpayer. If the subject falls squarely within the letter of law he must be taxed, howsoever inequitable the consequences may appear to the judicial mind. If the Revenue seeking to tax cannot bring the subject within the letter of law, the subject is free no matter that such a construction may cause serious prejudice to the Revenue. In other words, though what is called equitable construction may be admissible in relation to other statutes or other provisions of a taxing statute, such a construction is not admissible in the interpretation of a charging or taxing provision o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed at gathering the escaped income of an assessee, the same cannot be allowed to be converted as revisional or review proceedings at the instance of the assessee, thereby making the machinery unworkable. iv. Principle of harmonious construction 39. The legislature is presumed to enact a consistent and harmonious body of laws in deference to the rule of law.90 In case of any apparent conflict within a provision or between two provisions of the same statute, the courts must read the provisions harmoniously.91 The principle of harmonious construction requires courts to bring about a reconciliation between seemingly conflicting provisions to give effect to both. An interpretation which reduces one of the provisions to a dead letter is not a harmonious construction. The principle of harmonious construction also applies to reconcile two seemingly conflicting provisions of different statutes.92 40. A legislature often appends a non obstante clause to a provision to give it an overriding effect over provisions contained in the same statute or a separate statute.93 The purpose of incorporating a non obstante clause in a provision is to prohibit the operation and effect of all contrary provi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons are so plainly repugnant to each other that they cannot stand together and it is not possible on any reasonable hypothesis to give effect to both at the same time; c. It is necessary to closely scrutinise and consider the true meaning and effect of both the earlier and the later statute; and d. If the objects of the two statutory provisions are different and the language of each statute is restricted to its objects or subject, then they are generally intended to rule in parallel lines without meeting and there would be no real conflict. 43. The principle on which the rule of implied repeal rests is that if the subjectmatter of a later legislation is identical to that of an earlier legislation so that they both cannot stand together, then the earlier legislation is impliedly repealed by the later legislation.101 The courts have to determine whether the legislature intended the two sets of provisions to be applied simultaneously.102 The presumption against implied repeal is based on the theory that the legislature knows the existing laws and does not intend to create any confusion by retaining two conflicting provisions or statutes.103 The test to be applied for the construction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... year 2021-2022 and before only if the time limit for issuance of such notice continued to exist under Section 149(1)(b) of the old regime. 47. In CTO v. Biswanath Jhunjhunwalla,107 the Bengal Sales Tax Rules 1941 empowered the Commissioner to revise any assessment within four years from the date of assessment. Subsequently, the State Government issued a notification following the law to extend the time limit from four years to six years from the date of assessment. The extension of the time limit was challenged by the respondents on the ground that the assessments which had attained finality because of the expiry of the period of four years could not be reassessed. This Court observed that it was the clear intention of the notification to permit the Commissioner to revise any assessment made or order passed, provided the assessment had not been made before six years. It was held that if the legislative intention is clear and the language is unambiguous, full effect must be given to the legislative intention by reading the notification as applying not only to the incomplete assessments but also to assessments that had reached finality because of lapse of the earlier prescribed perio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lakhs. The old regime prescribed a time limit of six years from the end of the relevant assessment year if the income chargeable to tax which escaped assessment was more than Rupees one lakh. In comparison, the new regime increases the time limit to ten years if the escaped assessment amounts to more than Rupees fifty lakhs. This change could be summarized thus : Regime Time limit Income chargeable to tax which has escaped assessment Old regime Four years but not more than six years Rupees one lakh or more New regime Three years but not more than ten years Rupees fifty lakhs or more 51. Given Section 149(1)(b) of the new regime, reassessment notices could be issued after three years only if the income chargeable to tax which escaped assessment is more than Rupees fifty lakhs. The proviso to Section 149(1)(b) limits the retrospectivity of that provision with respect to the time limits specified under Section 149(1)(b) of the old regime. 52. In Ashish Agarwal (supra), this Court held that the benefit of the new regime must be provided for the reassessment conducted for the past periods. The increase of the monetary threshold from Rupees one lakh to Rupees fifty lakh is beneficial for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under the Preventive Detention Amendment Act 1950.109 The Detention Act 1950 was due to expire on 1 April 1951, but the legislation was amended to prolong its life by another year till 1 April 1952. The petitioner was detained on 15 November 1951 and his detention would have expired on 1 April 1952 with the expiration of the enactment. However, the Detention Act 1950 was amended in 1952, further prolonging its application for six months till 1 October 1952. The issue before this Court was whether the prolonging of the Detention Act 1950 also prolonged the detention of the petitioner. 56. Justice Vivian Bose, writing for the Constitution Bench, held that the detention continued until the expiry of the Detention Act 1950 on 1 October 1952. The learned Judge further observed: 7. The rule is that when a subsequent Act amends an earlier one in such a way as to incorporate itself, or a part of itself, into the earlier, then the earlier Act must thereafter be read and construed (except where that would lead to a repugnancy, inconsistency or absurdity) as if the altered words had been written into the earlier Act with pen and ink and the old words scored out so that thereafter there is no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cessary intendment. 116 This Court held that the language used by the legislature indicated that it was introduced with prospective effect and could not affect the accrued rights of the co-sharers. The decision of this Court in Shyam Sunder (supra) is an authority for the proposition that an amendment by substitution can have a retrospective effect and affect the vested rights of the parties if the provision is made retrospective either expressly or by necessary intendment. 59. Parliament has often used the legislative process of amendment by substitution in the context of reassessment provisions under the Income Tax Act. In S C Prashar v. Vasantsen Dwarkadas,117 a Constitution Bench of this Court had to decide on the validity of the notices issued under Section 34 of the Income Tax Act 1922. In 1948, Section 34 of the Income Tax Act 1922 was substituted by a new provision which provided the following time limits: (i) eight years from the end of the year if there was omission or failure on the part of an assessee to make a return or disclose fully and truly all material facts necessary for assessment; and (ii) four years for all other cases. Justice M Hidayatullah (as the learned C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wns required legislatures across the world to dynamically adapt their laws and policies to redress the difficulties faced by persons, entities, and governmental authorities.122 The World Bank identified that persons and business entities faced severe financial situations characterised by a lack of cash or easily convertible-to-cash assets. It suggested that this would impact revenue collection because individuals and entities would not be in a position to pay the assessed taxes. Therefore, the World Bank advised deferral of tax filings and payment deadlines to allow individuals and business entities to cope with the crisis.123 Many countries across the world have extended deadlines for filing tax returns.124 63. TOLA extended the time limits for completion or compliance of certain actions under the specified Act, which fell for completion during the COVID-19 outbreak. The use of the expression any in Section 3(1) indicates that the relaxation applies to all or every action whose time limit falls for completion from 20 March 2020 to 31 March 2021. Section 3(1) is only concerned with the performance of actions contemplated under the provisions of the specified Acts. Consequently, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l Government to specify by notification such other date after the 31st day of March, 2021 as the time limit for completion or compliance of any action under the specified Acts. The provision also empowered the Central Government to specify different dates for completion or compliance of different actions. The notifications dated 31 March 2021 and 27 April 2021 extend the operation of TOLA by providing an extended time limit for completing actions under the Income Tax Act till 30 June 2021. 67. Section 2(1)(b)(ii) of TOLA defines specified Act to include the Income Tax Act. After 1 April 2021, Section 2(1)(b)(ii) must be read to mean the Income Tax Act as amended by the Finance Act 2021. The substitution of Sections 147 to 151 will not affect the purpose of TOLA, which is, to provide relaxation of the time limit for completion or compliance of any actions falling for completion between 20 March 2020 and 31 March 2021. TOLA will continue to apply to the Income Tax Act after 1 April 2021 if any action or proceeding specified under the substituted provisions of the Income Tax Act falls for completion between 20 March 2020 and 31 March 2021. 68. After 1 April 2021, the Income Tax Act ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ante clause is to remove any obstacles which may come in the way of the operation of the extension of the time limit till 31 March 2021 or such other date after 31 March 2021 specified by the Central Government. The purpose is to ensure that the full benefit of the relaxation should be provided to both the assesses and the Revenue to tide over the difficulties caused by the COVID-19 pandemic. 72. The non obstante clause in Section 3(1) has to be read as controlling the provisions of the specified Acts, including the provisions of the Income Tax Act.127 In the context of the issuance of a reassessment notice, the non obstante clause will override the provisions of the Income Tax Act in case of any direct conflict or inconsistency. Section 3(1) overrides Section 149 only to the extent of relaxing the time limit for issuance of reassessment notice under Section 148. The time limit for issuance of a reassessment notices, which fall for completion between 20 March 2020 and 31 March 2021, has been extended till 30 June 2021. However, the non obstante clause under Section 3(1) of TOLA will operate neither to extend the time limit of three years from the end of the relevant assessment year ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sioner or Chief Commissioner or Principal Commissioner or Commissioner. 75. After 1 April 2021, the new regime has specified different authorities for granting sanctions under Section 151. The new regime is beneficial to the assesse because it specifies a higher level of authority for the grant of sanctions in comparison to the old regime. Therefore, in terms of Ashish Agarwal (supra), after 1 April 2021, the prior approval must be obtained from the appropriate authorities specified under Section 151 of the new regime. The effect of Section 151 of the new regime is thus : (i) If income escaping assessment is less than Rupees fifty lakhs: (a) a reassessment notice could be issued within three years after obtaining the prior approval of the Principal Commissioner, or Principal Director or Commissioner or Director; and (b) no notice could be issued after the expiry of three years; and (ii) If income escaping assessment is more than Rupees fifty lakhs: (a) a reassessment notice could be issued within three years after obtaining the prior approval of the Principal Commissioner, or Principal Director or Commissioner or Director; and (b) after three years after obtaining the prior approva ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to obtain prior approval or sanction of the specified authorities at four stages: a. Section 148A(a) to conduct any enquiry, if required, with respect to the information which suggests that the income chargeable to tax has escaped assessment; b. Section 148A(b) to provide an opportunity of hearing to the assessee by serving upon them a show cause notice as to why a notice under Section 148 should not be issued based on the information that suggests that income chargeable to tax has escaped assessment. It must be noted that this requirement has been deleted by the Finance Act 2022;129 c. Section 148A(d) to pass an order deciding whether or not it is a fit case for issuing a notice under Section 148; and d. Section 148 to issue a reassessment notice. 80. In Ashish Agarwal (supra), this Court directed that Section 148 notices which were challenged before various High Courts shall be deemed to have been issued under Section 148-A of the Income Tax Act as substituted by the Finance Act, 2021 and construed or treated to be show-cause notices in terms of Section 148-A(b). Further, this Court dispensed with the requirement of conducting any enquiry with the prior approval of the specifie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Justice P B Gajendragadkar (as the learned Chief Justice then was), speaking for the majority, observed that the order made by this Court under Article 142 must not only be consistent with the fundamental rights guaranteed by the Constitution, but it cannot even be inconsistent with the substantive provisions of the relevant statutory laws. However, in Union Carbide Corpn. Ltd. v. Union of India,137 Justice Venkatachaliah (as the learned Chief Justice then was), speaking for the majority, clarified Prem Chand Garg (supra) by observing that ordinary laws cannot limit the constitutional powers of this Court under Article 142. The learned Judge further observed that in exercising its jurisdiction under Article 142, this Court will take note of the express prohibitions in any substantive statutory provision based on some fundamental principles of public policy and regulate the exercise of its power and discretion accordingly. 84. In Supreme Court Bar Association v. Union of India,138 a Constitution Bench held that the powers under Article 142 cannot be exercised to supplant substantive law applicable to the matter pending before this Court. In Allahabad High Court Bar Association v. S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oth the notion of justice, equity and good conscience as well as a supplementary power to the Court to effect complete justice. ( emphasis supplied ) 86. The exercise of the jurisdiction under Article 142 is meant to supplement the existing legal framework to do complete justice between the parties.141 In a given circumstance, this Court can supplement a legal framework to craft a just outcome when strict adherence to a source of law and exclusive rulebased theories create inequitable results.142 87. The directions issued by this Court under Article 142 cannot be considered as a ratio because they are issued based on the peculiar facts and circumstances of the cause or matter before this Court.143 In State v. Kalyan Singh,144 this Court observed that a judgment has two components: (a) declaration of law; and (b) directions. In Bir Singh v. Mukesh Kumar,145 it was held that what is binding on all courts under Article 141146 is the declaration of law, and not the directions issued under Article 142.147 88. This Court has exercised its jurisdiction under Article 142 in tax matters where the actions of the Revenue are not in accordance with the law.148 In Whirlpool of India Ltd. v. CIT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ected that its directions shall be applicable PAN INDIA : 29. The present order shall be applicable PAN INDIA and all judgments and orders passed by the different High Courts on the issue and under which similar notices which were issued after 1-4-2021 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 the present order shall also govern the pending writ petitions, pending before various the High Courts in which similar notices under Section 148 of the Act issued after 1-4-2021 are under challenge. ( emphasis supplied ) The purpose of this Court in deeming the reassessment notices issued under the old regime as show cause notices under the new regime was two-fold: (i) to strike a balance between the rights of the assesses and the Revenue which issued approximately ninety thousand reassessment not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s under the old regime as Section 148 notices under the new regime. Hence, it deemed the reassessment notices issued under the old regime as show cause notices under Section 148A(b) of the new regime. Further, the Court directed the Revenue to provide all the relevant material or information to the assesses and thereafter allowed the assesses to respond to the show cause notice by availing all the defences, including those available under Section 149. Thus, the Court balanced the equities between the Revenue and the assesses by giving effect to the legislative scheme of reassessment as contained under the new regime. It supplemented the existing legal framework of the procedure of reassessment under the Income Tax Act with a remedy grounded in equitable standards. iii. Effect of the legal fiction 94. Before we proceed, we need to bear in mind three important periods: i. The period up to 30 June 2021 this period is covered by the provisions of the Income Tax Act read with TOLA; ii. The period from 1 July 2021 to 3 May 2022 the period before the decision of this Court in Ashish Agarwal (supra); and iii. The period after 4 May 2022 the period after the decision of this Court in Ashish ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that follow the creation of the legal fiction have got to be worked out to their logical extent. 158 The court has to assume all the facts and consequences that are incidental or inevitable corollaries to giving effect to the fiction.159 99. In Ashish Agarwal (supra), this Court created a legal fiction by deeming the Section 148 notices issued under the old regime as show cause notices under Section 148A(b) of the new regime. The purpose of the legal fiction was to enable the Revenue to proceed further with the reassessment proceedings as per the substituted provisions of the Income Tax Act. Accordingly, all the reassessment notices issued under the old regime were deemed to always have been show cause notices issued under Section 148A(b) of the new regime. The fiction replaced Section 148 notices with Section 148A(b) notices with effect from the date when the notices under Section 148 of the old regime were issued between 1 April 2021 and 30 June 2021, as the case may be. This ensured the continuance of the reassessment process initiated by the Revenue from 1 April 2021 to 30 June 2021 under the old regime. 100. Importantly, this Court in Ashish Agarwal (supra) did not quash the r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Limited v. Commissioner of Income Tax,161 a two-Judge Bench of this Court was called upon to interpret Explanation 1 to Section 158BE of the Income Tax Act. Section 158BE provides the time limit for completion of block assessments. Explanation 1 to the provision excludes period during which the assessment proceedings is stayed by an order or injunction of any court from the period of limitation. This Court held that the exclusion of the period of limitation has to be computed rationally and practically in the following terms: 18. As a general rule, therefore, when there is no stay of the assessment proceedings passed by the court, Explanation 1 to Section 158-BE of the Act may not be attracted. However, this general statement of legal principle has to be read subject to an exception in order to interpret it rationally and practically. In those cases where stay of some other nature is granted than the stay of the assessment proceedings but the effect of such stay is to prevent the assessing officer from effectively passing assessment order, even that kind of stay order may be treated as stay of the assessment proceedings because of the reason that such stay order becomes an obstacl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sing officers provided the relevant information or material to the assesses in terms of the direction issued in Ashish Agarwal (supra). To summarize, the combined effect of the legal fiction and the directions issued by this Court in Ashish Agarwal (supra) is that the show cause notices that were deemed to have been issued during the period between 1 April 2021 and 30 June 2021 were stayed till the date of supply of the relevant information and material by the assessing officer to the assessee. After the supply of the relevant material and information to the assessee, time begins to run for the assesses to respond to the show cause notices. 107. The third proviso to Section 149 allows the exclusion of time allowed for the assesses to respond to the show cause notice under Section 149A(b) to compute the period of limitation. The third proviso excludes the time or extended time allowed to the assessee. Resultantly, the entire time allowed to the assessee to respond to the show cause notice has to be excluded for computing the period of limitation. In Ashish Agarwal (supra), this Court provided two weeks to the assesses to reply to the show cause notices. This period of two weeks is a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evenue to obtain the benefit of all consequences flowing from the fiction.164 110. The effect of the creation of the legal fiction in Ashish Agarwal (supra) was that it stopped the clock of limitation with effect from the date of issuance of Section 148 notices under the old regime [which is also the date of issuance of the deemed notices]. As discussed in the preceding segments of this judgment, the period from the date of the issuance of the deemed notices till the supply of relevant information and material by the assessing officers to the assesses in terms of the directions issued by this Court in Ashish Agarwal (supra) has to be excluded from the computation of the period of limitation. Moreover, the period of two weeks granted to the assesses to reply to the show cause notices must also be excluded in terms of the third proviso to Section 149. 111. The clock started ticking for the Revenue only after it received the response of the assesses to the show causes notices. After the receipt of the reply, the assessing officer had to perform the following responsibilities: (i) consider the reply of the assessee under Section 149A(c); (ii) take a decision under Section 149A(d) based ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve discussion, we conclude that: a. After 1 April 2021, the Income Tax Act has to be read along with the substituted provisions; b. TOLA will continue to apply to the Income Tax Act after 1 April 2021 if any action or proceeding specified under the substituted provisions of the Income Tax Act falls for completion between 20 March 2020 and 31 March 2021; c. Section 3(1) of TOLA overrides Section 149 of the Income Tax Act only to the extent of relaxing the time limit for issuance of a reassessment notice under Section 148; d. TOLA will extend the time limit for the grant of sanction by the authority specified under Section 151. The test to determine whether TOLA will apply to Section 151 of the new regime is this: if the time limit of three years from the end of an assessment year falls between 20 March 2020 and 31 March 2021, then the specified authority under Section 151(i) has extended time till 30 June 2021 to grant approval; e. In the case of Section 151 of the old regime, the test is: if the time limit of four years from the end of an assessment year falls between 20 March 2020 and 31 March 2021, then the specified authority under Section 151(2) has extended time till 31 March ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ] 4 Section 2(7A), Income Tax Act. [It defines an assessing officer to mean the Assistant Commissioner or Deputy Commissioner or Assistant Director or Deputy Director or the Income-tax Officer who is vested with the relevant jurisdiction by virtue of directions or orders issued under sub-section (1) or sub-section (2) of section 120 or any other provision of this Act, and the Additional Commissioner or Additional Director or Joint Commissioner or Joint Director who is directed under clause (b) of sub-section (4) of that section to exercise or perform all or any of the powers or functions conferred on, or assigned to, an Assessing Officer under this Act. ] 5 Section 147, Income Tax Act 6 Section 148, Income Tax Act. [It read: 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 man ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 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 unless the income in relation to any asset (including financial interest in any entity) located outside India, chargeable to tax, has escaped assessment. Explanation. 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 non-resident 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 relevan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Income tax under sub-section (1) of section 117. 13 (2003) 1 SCC 72 [5]. It reads: 5. [ ] However, we clarify that when a notice under Section 148 of the Income Tax Act is issued, the proper course of action for the noticee is to file return and if he so desires, to seek reasons for issuing notices. The assessing officer is bound to furnish reasons within a reasonable time. On receipt of reasons, the noticee is entitled to file objections to issuance of notice and the assessing officer is bound to dispose of the same by passing a speaking order. In the instant case, as the reasons have been disclosed in these proceedings, the assessing officer has to dispose of the objections, if filed, by passing a speaking order, before proceeding with the assessment in respect of the abovesaid five assessment years. ] 14 Press Information Bureau, PM calls for complete lockdown of entire nation for 21 days (24 March 2020) https://pib.gov.in/Pressreleaseshare.aspx?PRID=1608009 15 Press Information Bureau, Finance Minister announces several relief measures relating to Statutory and Regulatory compliance matters across Sectors in view of COVID-19 outbreak (24 March 2020) available at: https://pi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 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, that any books of account or documents, seized or requisitioned under section 132 or section 132A in case of any other person on or after the 1st day of April, 2021, pertains or pertain to, or any information contained therein, relate to, the assessee, the Assessing Officer shall be deemed to have information which suggests that the income chargeable to tax has escaped assessment in the case of the assessee for the three assessment years immediately preceding the assessment year relevant to the previous year in which the search is initiated or books of account, oth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A, on or before the 31st day of March, 2021: Provided also that for the purposes of computing the period of limitation as per this section, the time or extended time allowed to the assessee, as per show-cause notice issued under clause (b) of section 148A or the period during which the proceeding under section 148A 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 sub- section shall be deemed to be extended accordingly. Explanation. For the purposes 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. (2) The provisions of sub-section (1) as to the issue of notice shall be subject to the provisions of section 151.] than seven days and but not exceeding thirty days from the date on which such not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve 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. ] 23 Section 2(21) of the Income Tax Act defines Principal Director General or Director General or Principal Director or Director to mean a person appointed to be a Principal Director General or Director General of Income tax or a Principal Director General or Director General of Income tax or, as the case may be, a Principal Director or Director of Income tax or Principal Director of Income tax, under sub-section (1) of Section 117, and includes a person appointed under that sub-section to be an Additional Director of Income tax or a Joint Director of Income tax or as Assistant Director or Deputy Director of Income tax. 24 Notification No. 20 of 2021 dt. 31 March 2021; Notification No. 38 of 2021 dt. 27 April 2021. [The explanation reads: Explanation For the removal of doubts, it is hereby clarified that for the purposes of issuance of notice under section 148 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 80]; Also see Express Newspaper (P) Ltd. v. Union of India, 1958 SCC OnLine SC 23 [111] 43 Gullapalli Nageswara Rao v. State of A P, 1959 SCC OnLine SC 53 [6] 44 Indian Eastern Newspaper Society v. CIT, (1979) 4 SCC 248 [5]; K T Moopil Nair v. State of Kerala, 1960 SCC OnLine SC 7 [9] 45 CED v. M A Merchant, 1989 Supp (1) SCC 499 [8] 46 CST v. H M Esufali, H M Abdali, (1973) 2 SCC 137 [17] 47 Deputy Commissioner of Commercial Taxes v. H R Sri Ramulu, (1977) 1 SCC 703 [7] 48 See Income Tax Officer v. S K Habibullah, 1962 SCC OnLine SC 58 [7] 49 (1976) 4 SCC 435 50 Supdt. of Taxes v. Onkarmal Nathmal Trust, (1976) 1 SCC 766 [37]; 51 S Narayanappa v. CIT, 1966 SCC OnLine SC 173 [4] [ 4. [ ] The proceedings for assessment or reassessment under Section 34(1)(a) of the Income Tax Act start with the issue of a notice and it is only after the service of the notice that the assessee, whose income in sought to be assessed or re-assessed, becomes a party to those proceedings. The earlier stage of the proceeding for recording the reasons of the Income Tax Officer and for obtaining the sanction of the Commissioner are administrative in character and are not quasi-judicial.] 52 K T Moopil Nair v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed Salim v. CIT, (2008) 11 SCC 573 [14]; 84 Mohan Kumar Singhania v. Union of India, 1992 Supp (1) SCC 594 [52]; CIT v. Hindustan Bulk Carriers, (2003) 3 SCC 57 [17] 85 (1994) 4 SCC 276 86 Gursahai Saigal v. CIT, (1963) 48 ITR (SC) 1 [9] 87 CIT v. Mahaliram Ramjidas, AIR 1940 PC 124; 88 Gursahai Saigal (supra) [13] 89 (1992) 4 SCC 363 [40] 90 MCD v. Shiv Shanker, (1971) 1 SCC 442 [5] 91 Sultana Begum v. Prem Chand Jain, (1997) 1 SCC 373 [15] 92 In re: Interplay between Arbitration Agreements under the Arbitration and Conciliation Act 1996 and the Indian Stamp Act 1899, 2023 INSC 1066 [165] 93 State of Bihar v. Bihar Rajya MSESKK Mahasangh, (2005) 9 SCC 129 [45] 94 Union of India v. G M Kokil, 1984 Supp SCC 196 [11] 95 (1986) 4 SCC 447 96 ICICI Bank Ltd v. SIDCO Leathers Ltd, (2006) 10 SCC 452 [37] 97 SIDCO Leathers Ltd (supra) [34]; Geeta v. State of U P, (2010) 13 SCC 678 [45] 98 A G Varadarajulu v. State of Tamil Nadu, (1998) 4 SCC 231 [16] 99 State of Orissa v. M A Tulloch, 1963 SCC OnLine SC 18 [20] 100 (1971) 1 SCC 442 [5] 101 Zaverbhai Amaidas v. State of Bombay, (1954) 2 SCC 345 [16] 102 Ratan Lal Adukia v. Union of India, (1989) 3 SCC 537 [18] 103 Pradeep S Wodeyar v. State ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 23 INSC 1066 [159] 126 (2023) 453 ITR 417 127 M P V Sundararamier v. State of Andhra Pradesh, 1958 SCC OnLine SC 22 128 Srikrishna Private Ltd v. ITO, (1996) 9 SCC 534 [4] 129 Section 45, Finance Act 2022 130 Allahabad High Court Bar Association v. State of U P, (2024) 6 SCC 267 [27.3] 131 Article 142, Constitution. [It reads: 142(1) The Supreme Court in the exercise of its jurisdiction may pass such decree or make such order as is necessary for doing complete justice in any cause or matter pending before it, and any decree so passed or order so made shall be enforceable throughout the territory of India in such manner as may be prescribed by or under any law made by Parliament and, until provision in that behalf is so made, in such manner as President may by order prescribe. 132 Jose Da Costa v. Bascora Sadasiva Sinai Narcornim, (1976) 2 SCC 917 [37] 133 Ganga Bishan v. Jai Narain, (1986) 1 SCC 75 [5] 134 Delhi Judicial Service Association v. State of Gujarat, (1991) 4 SCC 406 [50] 135 Shilpa Sailesh v. Varun Sreenivasan, 2023 SCC OnLine SC 544 [12] 136 1962 SCC OnLine SC 37 137 (1991) 4 SCC 584 [83] 138 (1998) 4 SCC 409 [47. [ ] It, however, needs to be remembered that the powers ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... irection of the Court that changes its complexion with the peculiarity in the facts and circumstances of the case. ] 148 See Prashanti Medical Services Research Foundation v. Union of India, (2020) 14 SCC 785 [30] 149 (2000) 9 SCC 62 150 (2009) 7 SCC 69 151 CIT 152 Ashish Agarwal (supra) [27] and [29] 153 Gajraj Singh v. STAT, (1997) 1 SCC 650 [22] 154 CIT v. Calcutta Stock Exchange, 1959 SCC OnLine SC 126 [5]; Sudha Rani Garg v. Jagdish Kumar, (2004) 8 SCC 329 [11] 155 Gajraj Singh (supra) [22] 156 (2005) 1 SCC 754 157 State of Maharashtra v. Laljit Rajshi Shah, (2000) 2 SCC 699 [6]. 158 Bengal Immunity Company Ltd v. State of Bihar, 1955 SCC OnLine SC 2 159 Industrial Supplies (P) Ltd. v. Union of India, (1980) 4 SCC 341 [25] 160 (1992) 3 SCC 1 161 (2016) 12 SCC 32 162 Abhey Ram v. Union of India, (1997) 5 SCC 421 [9]; Indore Development Authority v. Manoharlal, (2020) 4 SCC (Civ) 496 [301]; Maharashtra Vidarbha Irrigation Development Corporation v. Mahesh, (2022) 2 SCC 772 [39]. 163 East End Dwellings Co. Ltd. v. Finsbury Borough Council, [1952] AC 109. [Lord Asquith, in his concurring opinion, observed: If you are bidden to treat an imaginary state of affairs as real, you must ..... X X X X Extracts X X X X X X X X Extracts X X X X
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