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TMI Blog2025 (2) TMI 242X X X X Extracts X X X X X X X X Extracts X X X X ..... pally, been unable to countenance a situation where the jurisdictional Assessing Officer stands completely deprived of the jurisdiction to evaluate data and material that may be placed in its hands. We, find ourselves unable to sustain the challenge as addressed. The contention that the impugned notices are liable be quashed merely on the ground of the same having been issued by the jurisdictional Assessing Officer is thus negated Issue of approval as contemplated under Section 151 - Any approvals if granted by a Joint Commissioner of Income Tax post 01 April 2021 would not sustain. Once reassessment is triggered by a search, it would be incumbent upon the respondents to proceed only in accordance with Sections 153A or 153C as the case may be and to the exclusion of Section 148 of the Act - This question too has come to be answered against the writ petitioners in light of the judgment rendered by a Division Bench of the Court in Pr. Commissioner of Income Tax-7 v. Naveen Kumar Gupta [2024 (11) TMI 1071 - DELHI HIGH COURT] as held that scheme of Sections 153C of the Act indicates that the said provision was enacted to simplify the procedure, while maintaining the necessary safegu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rch.
A similar exercise would have to be undertaken to examine the issue of surviving period in respect of each individual noticee under Section 148 and which would necessarily be guided by the judgments of Rajeev Bansal [2024 (10) TMI 264 - SUPREME COURT (LB)] and Ram Balram [2025 (2) TMI 55 - DELHI HIGH COURT]
The concerned AOs shall consequently pass a reasoned and speaking order dealing with the impact of the judgments referred to above upon the impugned reassessment notices. That decision shall thus render a finding on whether the impugned reassessment notices would survive or be liable to be recalled. It shall be open to the writ petitioners to assail any adverse orders that may come to be passed pursuant to the above in accordance with law. X X X X Extracts X X X X X X X X Extracts X X X X ..... C) 5975/2023, W.P.(C) 6008/2023, W.P.(C) 6038/2023, W.P.(C) 6041/2023, W.P.(C) 6042/2023, W.P.(C) 6046/2023, W.P.(C) 6053/2023, W.P.(C) 6148/2023, W.P.(C) 6150/2023, W.P.(C) 6151/2023, W.P.(C) 6152/2023, W.P.(C) 6156/2023, W.P.(C) 6158/2023, W.P.(C) 6161/2023, W.P.(C) 6163/2023, W.P.(C) 6166/2023, W.P.(C) 6168/2023 & CM APPL. 51069/2023 (Correction of O.D. 12-05-2023), W.P.(C) 6178/2023, W.P.(C) 6185/2023, W.P.(C) 6186/2023, W.P.(C) 6187/2023, W.P.(C) 6194/2023 & CM APPL. 24345/2023 (Interim Relief), W.P.(C) 6227/2023, W.P.(C) 6254/2023 & CM APPL. 24587/2023 (Interim Relief), W.P.(C) 6972/2023 & CM APPL. 27152/2023 (Interim Relief), W.P.(C) 6259/2023, W.P.(C) 6266/2023, W.P.(C) 6270/2023, W.P.(C) 6273/2023, W.P.(C) 6274/2023, W.P.(C) 6278/2023, W.P.(C) 6279/2023, W.P.(C) 6280/2023, W.P.(C) 6282/2023, W.P.(C) 6410/2023, W.P.(C) 6411/2023, W.P.(C) 6415/2023, CM APPL. 25285/2023 (Stay) & CM APPL. 39104/2023 (Stay), W.P.(C) 6416/2023, W.P.(C) 6417/2023 & CM APPL. 25292/2023 (Interim Stay), W.P.(C) 6422/2023, W.P.(C) 6423/2023, W.P.(C) 6424/2023, W.P.(C) 6427/2023 & CM APPL. 10806/2024 (Place on Record Assessment Order), W.P.(C) 6429/2023 & CM APPL. 25313/2023 (Stay), W.P.(C) 6432/2023, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Limited, ASP Developers Private Limited, Gamut Commercials Private Limited, Ajay Mittal, Shourya Infrastructure Private Limited, Israr Ali Khan, Duke Sponge And Iron Private Limited, Vintage Footwear Private Limited, Divine Softech Private Limited, Amit Jain, Pawansut Media Services Pvt. Ltd., Harjeet Singh Kandhari, Shanti Devi Charitable Trust, Sunita Sharma, Anchal Narangi, Seashell Buildspaces Private Limited, Gain Capital Private Limited, Gayatri Dhody, Sona Joshi, Subash Goyal HUF, Harshit Finvest Pvt Ltd, Vinod Goyal And Sons., Anuradha Khan, Veekay General Industries, Jeet Kaur, Harcharan Singh, Bonlon Industries Ltd., M/s. SAG Infrastructure Developers Pvt Ltd., Rupin Khandpura, Santosh Timber Trading Company Ltd., Himalaya Polytech Private Ltd., Lalit Gulati, Vivo Apparels Private Limited, Kamlesh Kumar Gupta, Best Infratech Private Limited, Mr Shubham Jain, Neeru Jain, Mouldcraft India Pvt Ltd, Alka Garg, Adycon Infrastructures Pvt. Ltd., Girish Kapur, Lalit Kumar Sapra, Vinay Jain HUF, Rajdhani Educational Charitable Trust, Sherul Insulation Private Limited, Sunita Kamra, Vaibhav Jain, Jaycee Housing Private Limited, Pradeep Kumar Jain, Rohit Sahai, Nitin Saxena, Shara ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rketing Pvt. Ltd., Ashlar Commodities Private Limited, Raj Laxmi Realtors Private Ltd., Garima Capital Pvt. Ltd., M/s. Chandramauli Buildcon Private Limited, Aglow Financial Services Private Limited, M/s. Chandramauli Buildcon Private Limited, Ashlar Commodities Private Limited, Chrishmatic Developers Private Limited, Raj Nandini Buildtech Ltd., Khetterpal Hotels Private Limited, Aman Traders Private Limited, Mangal Kalas Services Private Limited, Novell Buildwell LLP., Praleen Chopra, Luv Bhardwaj, Shubhra Mittal, Pooja Praveen Wadhwa, Ritu Jain, Synergy Petro Products Private Limited, Madhu Goyal, Sushil Kumar Aggarwal, Japna Estates Pvt. Ltd., Dignity Merchants Private Limited, Subhash Chander Kathuria, BK Khullar and Sons., Premium Infracon Private Limited., Pratishtha Garg, Mohinderjit Singh Kochhar, PCG Finvest Limited (Formerly Known as Subhra Finvest (India) Ltd)., Dolphin Mart Private Limited, Chandramauli Estates Pvt. Ltd., Sunstar Builders Pvt. Ltd., Pawan Goyal, Richfield Industries Private Limited, Rangoli International Pvt. Ltd., Sh. Dinesh Kumar, Brij Mohan Goyal (HUF), Chhavi Agarwal, Carissa Investments Pvt. Ltd., Kawal Kumar, Amish Agarwal HUF, Piush Gupta, Ankit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dv., Mr. Bharat Beriwal, Adv., Mr. Nitin Gulati & Ms. Reena Gandhi, Advs., Mr. Sumit K. Batra, Mr. Manish Khurana, Ms. Priyanka Jindal & Mr. Siddharth Sarwal, Advs., Ms. Smriti Sahay and Ms. Pragati Singh, Advs., Mr. Prashant Shukla, Adv., Mr. Manibhadra Jain, Mr. A. Sharma, Mr. Dipesh Jain & Mr. Sachin Jain, Advs., Mr. Manuj Sabharwal, Mr. Devvrat Tiwari & Mr. Drona Negi, Advs., Mr. Satyen Sethi, Mr. Arta Trana Panda & Mr. Gargi Sethee, Advs., Mr. Imran Khan, Adv., Mr. Jaspal Singh Sethi, Mr. Gaurav Gupta, Mr. Manoj Khanna & Mr. Piyush Jain, Advs., Mr. Gautam Jain, Mr. Shaantanu Jain, Mr. Deepanshu Jain & Mr. Manish Yadav, Advs., Mr. Rohit Jain, Mr. Aniket D. Agrawal and Mr. Samarth Chaudhari, Advs., Mr. A.K. Babbar & Mr. Surinder Kumar, Advs., Mr. Amol Sinha & Mr. Rahul Kochan, Advs., Mr. Shekhar Gupta & Mr. Shashank Upadhyay, Advs., Mr. Gaurav jain, Mr. Shubham Gupta & Ms. Shalini Advs., Ms. Kavita Jha, Sr. Adv. with Mr. Vaibhav Kulkarni & Mr. Himanshu Aggarwal, Advs., Mr. Amit Kaushik, Adv., Mr. Rahul Malhotra & Mr. Chirag Goyal, Advs., Mr. Rajeev Sharma, Adv., Ms. Vibhooti Malhotra and Mr. Udit Sharma, Advs., Mr. Govind Javeri, Mr. Saurav Sharma, Mr. Harikesh Anirudhan and Ms. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted 22 May 2022 allowing the issuance of notice being contrary to the decision of Supreme Court in the case of Union of India vs Ashish Agarwal [(2023) 1 SCC 617] and Section 119 of the Act. C. Notice under Section 148 issued by the jurisdictional Assessing Officer being rendered invalid and contrary to the procedure of faceless assessment as contemplated under Section 151A and the e-Assessment of Income Escaping Assessment Scheme, 2022 which mandates that such notices be issued only by an authority selected through an automated process and by the National Faceless Assessment Centre under Section 144B. D. Absence of approval under Section 151 of the Act from the prescribed authority. E. Section 148 notices having been issued without a DIN as mandated by Circular No. 19/2019 issued by the CBDT dated 14 August 2019 and thus being liable to be quashed. F. Scope and applicability of Explanation 1 to Section 148 and the expression "information" as introduced by Finance Act, 2021. G. Whether an assessment predicated by a search must invariably follow the procedure prescribed under Section 153A/153C and to the exclusion of Section 148 of the Act." 3. Suffice it to note that ins ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sk management strategy. It would, therefore, in our considered opinion, be erroneous to view section 144B as constituting the solitary basis for initiation of reassessment. We also, in this regard, bear in consideration the indubitable fact that section 144B is primarily procedural and is principally concerned with prescribing the manner in which a faceless assessment may be conducted as opposed to constituting a source of power to assess or reassess in itself. 77. Consequently, to ascribe substantive value to section 144B as the primary basis for reassessment would be to misinterpret its intended meaning. Section 144B is not intended to establish a substantive basis for the exercise of reassessment powers; rather, it is inherently procedural. Its function is confined to outlining the processes through which faceless assessments are to be conducted, ensuring efficiency and consistency in the manner of assessment rather than determining the substantive grounds upon which reassessment is founded. Therefore, section 144B must be rightly and necessarily conceived as procedural, forming part of the broader legislative framework aimed at structuring the assessment process without encro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ive of minimising direct human interaction in the assessment process. 81. Additionally, provisions within sub-sections (7) and (8) of section 144B authorise the Principal Chief Commissioner or the Principal Director General to transfer cases back to the jurisdictional Assessing Officer (JAO) when appropriate. This flexibility further emphasises that section 144B cannot be viewed as the exclusive basis for all assessment and reassessment procedures. The randomised allocation, reinforced by tools such as artificial intelligence and machine learning, is intended to reduce direct human interface for reasons of integrity and to prevent individual arbitrariness. Nevertheless, it would be incorrect to interpret section 144B as the sole pathway envisioned by the Act for conducting assessments or initiating reassessments. Instead, it should be recognized as one component within a broader statutory framework that provides multiple avenues for the lawful assessment and reassessment of returns. 82. As was noticed by us hereinbefore, the conferred jurisdiction upon authorities for the purposes of faceless assessment itself uses the expression "concurrently". That word would mean contemporan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rate in tandem to achieve fairness and procedural integrity. 85. The issue of the jurisdictional Assessing Officer having concurrent jurisdiction arose directly for the consideration of this court in Sanjay Gandhi Memorial Trust v. CIT (Exemptions) [(2023) 455 ITR 164 (Delhi); (2023) 3 HCC (Del) 396.]. One of the arguments which appears to have been addressed before the court in that case was of the jurisdictional Assessing Officer having no authority or jurisdiction to assess. Dealing with the aforesaid, our court held (page 192 of 455 ITR): "48. This court is of the view that though in the year 2019, the concept of e-assessment and in 2020, the concept of faceless assessment were introduced, yet the jurisdictional Assessing Officer continues to exercise concurrent jurisdiction with Faceless Assessing Officer. In fact, pursuant to exercise of power under section 120 (5) of the Act which empowers Central Board of Direct Taxes to confer concurrent jurisdiction on two or more Assessing Officers for proper management of the work, the Central Board of Direct Taxes has vide Notification No. 64 of 2020 dated August 13, 2020 conferred power upon the Income-tax authorities of the Natio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessment Centre is limited to facilitating the conduct of e-assessment. 52. Consequently, this court is of the view that the two notifications dated September 12, 2019 enlarge and supplement the power of transfer by authorising the National e-Assessment Centre to transfer at any stage of assessment the case of the assessee to the assessing officer having jurisdiction over such case, i.e. from faceless Assessing Officer to jurisdictional Assessing Officer (an Assessing Officer always having concurrent jurisdiction). 53. To the same effect are the notifications dated August 13, 2020, which clarify, 'The provisions of… section 127 of the Act shall apply to the assessment made in accordance the said scheme subject to the following exceptions, modifications and adaptations…'. Clause (2) of Notification Nos. 60 ((2020) 426 ITR (Stat) 18) and 61 of 2020 ((2020) 426 ITR (Stat) 25) dated August 13, 2020 enable the Principal Chief Commissioner or Principal Director General in charge of National e-Assessment Centre, at any stage of the assessment, i.e., during assessment, to send back the case to the assessing officer having jurisdiction over such case, with prior approval o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... trality and efficiency. The Faceless Assessment Scheme centralises processes under the Faceless Assessing Officer (FAO) to reduce direct interaction. However, this structure does not diminish the jurisdictional Assessing Officer's authority. Instead, the jurisdictional Assessing Officer's retained jurisdiction is vital for ensuring continuity and accountability, acting as a complementary element to the faceless assessment framework. Even beyond this concurrent jurisdiction, the jurisdictional Assessing Officer independently wields powers under various provisions, is granted access to distinct sources of information that may substantiate grounds for reassessment. Accepting the position advocated by the petitioners--that the jurisdictional Assessing Officer's role is entirely overridden by the faceless system--would effectively nullify these provisions, rendering such information inaccessible and unactionable. The Act specifically channels this information to the jurisdictional Assessing Officer, who is then statutorily responsible for the initial assessment and evaluation of this data. 88. Therefore, the jurisdictional Assessing Officer's powers should be understoo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nts remain grounded in thorough investigation. 91. The decisions of various High Courts which have taken a contrary view, have proceeded on the basis that consequent to faceless assessment coming into force by virtue of section 144B, the jurisdictional Assessing Officer stands completely deprived of jurisdiction. This becomes apparent from the conclusions which the Telangana High Court came to record in Kankanala Ravindra Reddy v. ITO [(2023) 22 ITR-OL 728 (Telangana).] when it held that after the introduction of the scheme on March 29, 2022, it becomes mandatory for the Revenue to conduct proceedings of reassessment in a faceless manner. It was this line of reasoning which appears to have been adopted by the High Courts in the various decisions cited for our consideration by Mr. Goel. 92. The principal judgment which most of the High Courts have chosen to follow and reiterate is of Hexaware Technologies Ltd. v. Asst. CIT [(2024) 464 ITR 430 (Bom); 2024 SCC OnLine Bom 1249.]. In Hexaware Technologies Ltd. v. Asst. CIT [(2024) 464 ITR 430 (Bom); 2024 SCC OnLine Bom 1249.], a specific issue with respect to the validity of the notice came to be raised with it being argued that onc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s to advert or allude to the notifications in terms of which authorities forming part of the various assessing units of National Faceless Assessment Centre were conferred concurrent jurisdiction. 94. The High Court of Gauhati in Ram Narayan Sah v. Union of India [(2024) 471 ITR 228 (Gau); 2024 SCC OnLine Gau 1424.] has essentially followed the view taken by the Bombay High Court in Hexaware Technologies Ltd. v. Asst. CIT [(2024) 464 ITR 430 (Bom); 2024 SCC OnLine Bom 1249.]. Although the decision of our court in Sanjay Gandhi Memorial Trust v. CIT (Exemptions) [(2023) 455 ITR 164 (Delhi); (2023) 3 HCC (Del) 396.] appears to have been cited, the judgment neither enters any reservation nor does it record any reasons which may have assisted us in discerning what weighed with that High Court to brush aside the aspect of concurrent jurisdiction. In Jatinder Singh Bhangu v. Union of India [(2024) 466 ITR 474 (P&H); 2024 SCC OnLine P&H 9337.], the Punjab and Haryana High Court too does not appear to have had the advantage of reviewing and analysing the material that has been placed by the respondents in these proceedings. Here too, the court was constrained to proceed merely on the basi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt ways. For the purpose of section 148, where section 148A is applicable, Explanation 1 provides:… 23. The provisions contained in Explanation 1 shows that the information with the Assessing Officer for the purpose of section 148, which suggests that the income chargeable to tax has escaped assessment under the Explanation would mean: (i) any information in the case of the assessee, for the relevant assessment year, in accordance with the risk management strategy formulated by the Board from time to time; or (ii) any audit objection to the effect that the assessment in the case of the assessee for the relevant assessment year has not been made in accordance with the provisions of this Act; or (iii) any information received under an agreement referred to in section 90 or section 90A of the Act; or (iv) any information made available to the Assessing Officer under the scheme notified under section 135A; or (v) any information which requires action in consequence of the order of a Tribunal or a court. On the contrary, Explanation 2 which deals with the information received during search and seizure operations under section 132 requires fulfilment of pre-requisite ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 28. From the above, by reading all the relevant provisions of the Income-tax Act, 1961 as also the notification dated March 29, 2022 issued by the Central Government framing scheme for 'e-Assessment of Income Escaping Assessment' under sub-sections (1) and (2) of section 151A of the Act, 1961, we reach at an irresistible conclusion that the challenge to the notice under section 148 dated March 22, 2024 for the assessment year 2021-2022 on the sole premise that the said notice could have been issued only through automated allocation in faceless manner and not by jurisdictional Assessing Officer (JAO), cannot be sustained." 98. Proceeding further to notice the scheme of faceless reassessment itself, the High Court in Talati and Talati LLP v. Office of Assistant CIT [(2024) 469 ITR 643 (Guj); 2024 : GUJHC : 54567-DB.] further observed (page 656 of 469 ITR): "30. Moreover, section 151A contemplates framing of the scheme by the Central Government by notification in the Official Gazette, even for the purpose of issuance of notice under section 148 in the case of reassessment or sanction for issue of such notice under section 151, with the aim to impart greater efficiency, transpare ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al presented by the respondents, bolsters the clear intent underlying each phase of the faceless assessment process. 101. As we had noticed in the preceding parts of this decision, the risk management strategy and the Insight Portal pushes information to the jurisdictional Assessing Officer and is principally not concerned with faceless assessment at all. The risk management strategy essentially enables the jurisdictional Assessing Officer to firstly examine the veracity of disclosures made and examine the return against various parameters and information which has been collated by the Directorate of Systems. It thus provides the jurisdictional Assessing Officer with an insight in respect of various transactions to which the assessee may be connected as well as data pertaining to that assessee which has otherwise been aggregated and mapped on the basis of material existing on the system of the respondents. The respondents would, therefore, appear to be correct in their submission that when material comes to be placed in the hands of the jurisdictional Assessing Officer by the risk management strategy, it would consequently be entitled to initiate the process of reassessment by fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essment into two stages and when viewed in that light it is manifest that it strikes a just balance between the obligation of the jurisdictional Assessing Officer to scrutinise information and the conduct of assessment itself through a faceless allocation. The distribution of functions between the jurisdictional Assessing Officer and National Faceless Assessment Centre is complimentary and concurrent as contemplated under the various schemes and the statutory provisions. This balanced distribution underscores the legislative intent to create a seamless integration of traditional and faceless assessment mechanisms within a unified statutory framework. This we so hold and observe since we have, principally, been unable to countenance a situation where the jurisdictional Assessing Officer stands completely deprived of the jurisdiction to evaluate data and material that may be placed in its hands. 104. We, accordingly and for all the aforesaid reasons find ourselves unable to sustain the challenge as addressed. The contention that the impugned notices are liable be quashed merely on the ground of the same having been issued by the jurisdictional Assessing Officer is thus negated." Q ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xation and Other Laws (Relaxation and Amendment of Certain Provisions) Act. The period for issuance of notice for the assessment year 2015-2016, thus and principally speaking, stood extended up to June 30, 2021. 35. However, the key to answering the argument which was canvassed on behalf of the respondents is contained in section 3 itself and which purported to extend the period for completion of proceedings, passing of an order, issuance of a notice, intimation, notification, sanction or approval. The provision extended the time limit for such action, notwithstanding anything contained in the specified Act, initially up to March 31, 2021 and which date was extended subsequently to April 30, 2021 and lastly up to June 31, 2021. 36. Section 3 thus essentially extended the time period statutorily prescribed for initiation and compliance up to the dates notified by the Union Government from time to time. The extension of these timelines was intended to apply to all statutes which were included in the expression "specified Act" as defined in section 2(b) of the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act. 37. The Taxation and Other Laws (Relaxatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act timelines, and thus after the period of four years, section 151 incorporated adequate measures to deal with such a contingency and in unambiguous terms identified the authority which was to be moved for the purposes of sanction and approval. Section 151 distributed the powers of approval amongst a set of specified authorities based upon the lapse of time between the end of the relevant assessment year and the date when reassessment was proposed. Thus even if the reassessment was proposed to be initiated with the aid of the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act after the expiry of four years from the end of the relevant assessment year, the authority statutorily empowered to confer approval would be the Principal Chief Commissioner/Chief Commissioner/Principal Commissioner / Commissioner. It would only be in a case where the reassessment was proposed to be initiated before the expiry of four years from the end of the relevant assessment year that approval could have been accorded by the Joint Commissioner of Income-tax. Similar would be the position which would emerge ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rselves unable to sustain the impugned action of reassessment. The impugned notices which rest on a sanction obtained from the Joint Commissioner of Income-tax would thus be liable to be quashed." It is thus apparent that any approvals if granted by a Joint Commissioner of Income Tax post 01 April 2021 would not sustain. 5. Similarly, question 'G' relates to a contention canvassed by and at the behest of the writ petitioners that once reassessment is triggered by a search, it would be incumbent upon the respondents to proceed only in accordance with Sections 153A or 153C as the case may be and to the exclusion of Section 148 of the Act. 6. This question too has come to be answered against the writ petitioners in light of the judgment rendered by a Division Bench of the Court in Pr. Commissioner of Income Tax-7 v. Naveen Kumar Gupta 2024 SCC OnLine Del 8140 and where the legal position was enunciated in the following terms:- "38. The question whether reassessment under Section 147 of the Act can be initiated in cases of material seized or information emanating from a search conducted under Section 132 of the Act or any assets or documents requisitioned under Section 132A of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 42. The Assessee's contention is founded essentially on two grounds. First, that Section 153C of the Act commences with a non obstante provision. And second, that the scheme under Sections 153A and 153C of the Act is a special scheme for assessment in cases where the same is premised on a search conducted under Section 132 or under Section 132A of the Act. Therefore, the special scheme would override the other provisions for assessment/reassessment of tax including Sections 143(3) and 147 of the Act. 43. It would thus be relevant to examine the import of the non obstante provision of Section 153C of the Act. Section 153C of the Act commences with the words "notwithstanding anything contained in Section 139, Section 147, Section 148, Section 149, Section 151 and Section 153 of the Act". There is no cavil that the import of the said words is that it would not be necessary to follow the procedure or the rigours of the aforesaid provisions of Section 153C of the Act as applicable. However, according to the Assessee, the import of the said clause extends further to exclude the applicability of the said provisions altogether. The Assessee contends that the provisions of Section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd was taxable at normal rate. Therefore, Section 153-A came to be inserted and brought on the statute. Under Section 153-A regime, the intention of the legislation was to do away with the scheme of two parallel assessments and tax the "undisclosed" income too at the normal rate of tax as against any special rate. Thus, after introduction of Section 153-A and in case of search, there shall be block assessment for six years. Search assessments/Block assessments under Section 153-A are triggered by conducting of a valid search under Section 132 of the 1961 Act. The very purpose of search, which is a prerequisite/trigger for invoking the provisions of Sections 153-A/153-C is detection of undisclosed income by undertaking extraordinary power of search and seizure i.e. the income which cannot be detected in ordinary course of regular assessment. Thus, the foundation for making search assessments under Sections 153-A/153-C can be said to be the existence of incriminating material showing undisclosed income detected as a result of search." 49. In Amar Jewellers Ltd. v. Assistant Commissioner of Income Tax, the Gujarat High Court had examined the contentions as advanced before this Court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or the returns of income for six assessment years (ii) to assess or reassess total income of each of the six assessment years and (iii) not to proceed with any pending assessment or reassessment as on the date of initiation of search as the same would abate. Since some of the provisions contained in the enacting part may come into conflict with the provisions contained in the non obstante clause, these impediments are removed by means of the non obstante clause. Thus, by enacting the non obstante clause in the section, the formalities of issuing notice under section 139, application of the provisions of section 147, 148, 149 or 151 for reopening a case for escaped assessment, taking of approval from the concerned authorities for reopening the assessment and the time limit for completion of regular assessment have been done away with. Thus, assumption of jurisdiction by the Assessing Officer under section 153A has been made simple and easy. 50. Section 153A is a self-contained code for each assessments. The section states that on initiation of search, the Assessing Officer can issue a notice calling for the returns of income for six assessment years preceding the previous ye ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the year relevant to the previous year in which the search was conducted under Section 132 of the Act or requisition made under Section 132A of the Act is also required to be completed within the aforesaid period. xxxx xxxx xxxx 57. The aforesaid authorities clearly indicate that the purpose of a non obstante clause is to provide primacy to certain provisions of the enactment in case of conflict with the statutory provisions as mentioned in the clause. The non obstante clause indicates the provisions/enactments, which are overridden and the main enactment that overrides those provisions. Thus, if a non obstante clause sets out an enabling provision or one that confers jurisdiction, as the main enactment, which is to override other provisions, it stands to reason that the overriding effect of that enactment will become operative only when the enabling provisions are used or the jurisdiction is assumed. In relation to an enabling provision, the non obstante clause can be construed to only mean that recourse to those provisions is available inspite of other provisions that are overridden. The non obstante provision, in such circumstances, cannot be construed to mean that recourse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... allel assessment proceedings. Where the AO is satisfied that the assets, material and documents forwarded by the AO of the searched person under Section 153C of the Act has a bearing on determination of the income of the assessee for any of the years, the AO shall proceed to issue a notice under Section 153C of the Act. By virtue of non obstante clause, the AO is not required to follow the procedural rigours of Section 148 of the Act. Subject to obtaining the approval under Section 153D of the Act, if necessary, the AO is not required to seek any approval from the specified authority, as required under Section 148/151 of the Act for issuing a notice under Section 153C of the Act and can proceed to assess/reassess income for the concerned assessment years. 60. However, if the AO does not take recourse to Section 153C of the Act but proceeds under Section 147 of the Act he would necessarily have to follow the due procedure as specified for initiating such proceedings. 61. The assumption that provisions of Section 153C of the Act precludes any proceeding under Section 147 of the Act by virtue of the non obstante clause, is unpersuasive. The scheme of Sections 153C of the Act indic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... asons do not find it expedient or necessary to answer questions 'E' and 'F'. 10. Learned counsels for respective sides were also ad idem that the challenge to the Central Board of Direct Taxes [CBDT] Instruction No. 1/2022 dated 22 May 2022 would no longer survive in light of the subsequent decision handed down by the Supreme Court in Union of India and Ors. v. Rajeev Bansal 2024 SCC OnLine SC 2693. 11. That only leaves us to evaluate the issues which emanate from question 'A' and which now and for all practical purposes stands concluded by the judgment handed down by the Supreme Court in Rajeev Bansal and following that decision the judgment rendered by a Division Bench of our Court in Ram Balram Buildhome Pvt. Ltd. v. Income Tax Officer and Anr 2025:DHC:547-DB. 12. The argument addressed on the anvil of the First Proviso to Section 149 (1) had principally been canvassed with the writ petitioners contending that a reassessment action commenced in violation of the time frames which stood enumerated in Section 149 prior to the amendments introduced by Finance Act, 2021 would be liable to be struck down on that score. This since, according to the writ petitioners, the First Provis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d be said to be barred by the timelines as prescribed by Section 149 of the Act. 18. The surviving period with which Question 'A' is concerned, was lucidly explained by the Supreme Court in Rajeev Bansal, and we thus deem it apposite to extract the following passages from that decision:- "110. The effect of the creation of the legal fiction in Union of India v. Ashish Agarwal [(2022) 444 ITR 1 (SC); (2023) 1 SCC 617.] 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 assessees in terms of the directions issued by this court in Union of India v. Ashish Agarwal [(2022) 444 ITR 1 (SC); (2023) 1 SCC 617.] has to be excluded from the computation of the period of limitation. Moreover, the period of two weeks granted to the assessees to reply to the show-cause notices must also be excluded in terms of the third proviso to section 149. 111. The cloc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... isions) Act, 2020; 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 Taxation and other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020. A reassessment notice issued beyond the surviving time limit will be time-barred." 19. The Division Bench of the Court in Ram Balram was called upon to deal with a live case and where it was directly called upon to answer whether the reassessment notice could be said to be sustainable when tested on the principles enunciated in Rajeev Bansal. The Division Bench of the Court in Ram Balram upon application of the salient principles propounded by the Supreme Court in Rajeev Bansal came to hold as follows:- "65. Thus, in the facts of the present case, the last date for issuance of notice under Section 148 of the Act for AY 2013-14 under the statutory framework, as w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ice on 30.07.2022. The said is squarely beyond the period of limitation." 20. The Court in Ram Balram was concerned with a notice for reassessment which had come to be issued on 01 June 2021 and thus falling within the broad Section 3 (1) TOLA period of 20 March 2020 to 30 June 2021. The Court thus firstly proceeded to exclude the 29 days period falling between 01 June 2021 to 30 June 2021. 21. It proceeded further to then factor in the period commencing from 01 June 2021 upto 04 May 2022 with the latter being the date when the judgment in Ashish Agarwal came to be pronounced, and which period too was liable to be excluded in light of what the Supreme Court had held in Rajeev Bansal. In Ram Balram, following the decision in Ashish Agarwal, the AO is stated to have issued a notice under Section 148A (b) on 30 May 2022. Thus, the Division Bench in Ram Balram correctly proceeded to recognize the period between 04 May 2022 to 30 May 2022 as being liable to be removed from consideration for purposes of computation of limitation. 22. It then proceeded further to factor in the period of two weeks within which the assessee was called upon to respond to the notice under Section 148A (b) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ving identified the broad principles which would now govern the question of surviving time, we are of the considered opinion that rather than this Court undertaking the gargantuan exercise of examining individual facts, it would appear to be expedient to frame directions requiring the AOs to frame an order with respect to the individual reassessment notices in light of the judgment of the Supreme Court in Rajeev Bansal and of this Court in Ram Balram, T.K.S Builders, Abhinav Jindal and Naveen Kumar Gupta. 27. We accordingly dispose of this batch of writ petitions by directing the concerned AOs to evaluate the individual SCNs' under Section 148 of the Act bearing in mind our judgments in T.K.S. Builders, Abhinav Jindal and Naveen Kumar Gupta. These decisions have conclusively settled issues pertaining to the accordal of sanction under Section 151 as well as the authority of the jurisdictional AO to commence and undertake reassessment. Those decisions also lay at rest the challenge which the writ petitioners had raised that an AO is bound to adhere to the procedure prescribed by Section 153C in cases emanating from a search. 28. A similar exercise would have to be undertaken to exa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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