Deci Krishan Kedia v. Income Tax Offic Officer & Ors
Case Details
CWP-4789-202 2024(O&M) -1- IN THE HIGH COURT OF PUNJA IN TH AT CHANDIGAR UNJAB AND HARYANA IGARH -.- CWP-4789-2024 (O&M) CWP Decided on :- 10.03.2025 Deci Krishan Kedia ....Petitioner VERSUS Income Tax Offic Officer & Ors ....Respondents CORAM : HON HON’BLE MR. JUSTICE ARUN HON’BLE MRS. JUSTICE SUDE HON RUN PALLI SUDEEPTI SHARMA Present: Mr. Mr. Nitin Kanwar, Advocate for the or the petitioner. Ms. G Ms. Gauri Neo Rampal, Sr. Standing for the respondents. for th anding Counsel, -.- SUDEEPTI SHA I SHARMA, J. The challenge in the present writ pet The rit petition is to notice dated 27.07.202 07.2022 under Section 14 ion 148 of Income Tax Act, 1961 al 961 along with assessment order date er dated 21.03.2023 under under Section 147 read with Sections ctions 144 and 144B of the Income Ta me Tax Act, 1961, for the for the Assessment Year 2014-2015. CTS BRIEF FACTS 2. The case of the petitioner pertains to The ains to the Assessment Year 2014-20 2015. Brief facts of the of the present case as per pleadings i ings in the writ petition are that notic t notice dated 06.04.2021 .2021 under old Section 148 of the Inc the Income Tax Act, 1961 was issued ssued to the petitioner for er for the Assessment Year 2014-2015 2015, despite the fact that Section 14 tion 148 TRIPTI SAINI 2025.04.11 09:48 I attest to the accuracy and integrity of this document CWP-4789-202 2024(O&M) -2- of the Income Ta me Tax Act, 1961 was substituted w uted with new Sections 148 and 148 d 148A w.e.f. 01.04.2021 4.2021. Notice under Section 142(1) 142(1) of Income Tax Act, 1961 date 1 dated 27.11.2021 was was issued to the petitioner. Then Then the case was transferred fro from NeFAC to ReFA ReFAC on 08.12.2021. Therefore, again notice under Section 142( 142(1) dated 22.12.2021 2.2021 of the Income Tax Act, 196 ct, 1961 was issued to the petitione titioner. Thereafter, after f after following the procedure as laid s laid down under the Income Tax Ac ax Act, 1961, the assessm ssessment order dated 24.03.2022 und under Section 147 read with Sectio Section 144B of the Inc e Income Tax Act, 1961, for the A the Assessment Year 2014-2015 wa 15 was passed. The petit e petitioner filed appeal against the as t the assessment order dated 24.03.202 03.2022 before the Comm Commissioner of Income Tax (Appea Appeals), inter alia, on the ground th that reopening of the a f the assessment under old Section 14 ion 148 of the Income Tax Act, 1961 o 1961 on 06.04.2021 is bar is barred by limitation. On 27.05.20 .05.2022, notice under Section 148A(b 148A(b) in consequence to ence to judgment passed on 04.05.202 05.2022 by the Hon’ble Supreme Cou e Court in Union of Ind f India and Others Vs. Ashish Agg Aggarwal [2022] SCC ONLINE S E SC 543 was issued sued The petitioner filed reply to th to the same and after considering th ring the reply and after p fter proceeding under Section 148A( 148A(d), order dated 27.07.2022 und under Section 148A(d) 8A(d) in consequence to judgment dat nt dated 04.05.2022 passed by Hon’b Hon’ble Supreme Court in ourt in Union of India and Others V ers Vs. Ashish Aggarwal [2022] SC ] SCC ONLINE SC 54 543 was passed. Pursuant thereto thereto notice dated 27.07.2022 und under Section 148 of th 8 of the Income Tax Act, 1961 was is was issued to the petitioner. Thereafte ereafter, after following th ing the procedure as laid down unde n under the Income Tax Act, 1961 an and after considering idering the reply filed by the pet e petitioner, assessment order date r dated 21.03.2023 for th for the Assessment Year 2014-15 was 15 was passed. TRIPTI SAINI 2025.04.11 09:48 I attest to the accuracy and integrity of this document CWP-4789-202 2024(O&M) -3- 3. Hence the present petition challeng Henc allenging the notice dated 27.07.202 07.2022 under Section 14 ion 148 of Income Tax Act, 1961 al 961 along with assessment order date er dated 21.03.2023 under under Section 147 read with Sections ctions 144 and 144B of the Income Ta me Tax Act, 1961, for th for the Assessment Year 2014-2015 15 on the ground that the same a ame are barred by limitati imitation. IONS SUBMISSIONS 4. Learned counsel for the petitioner co Lear ner contends:- a) That since notice dated 27.07.202 a) Th 7.2022 issued under Section 148 of th 8 of the Income Tax Act, 1961 was barred by Incom rred by limitation in view of the comin ming into force of Finance Act, 2021, ther into 1, therefore, the assessment order und er under Section 147 read with Sections 144 a Secti s 144 and 144B of the Income Tax Ac ax Act, 1961 dated 21.03.2023 is also bad in 1961 bad in the eyes of law. b) Further, that controversy in th y in the present writ petition is alread already settled by the Hon’ble Supreme Cou settle e Court in the case of Union of Ind India Vs. Rajeev Bansal [2024] 469 Vs. 469 ITR 46 (SC) on 03.10.202 0.2024. Therefore, the present writ petition b Ther tition be allowed in terms of the settle e settled proposition of law in the case of Un prop Union of India Vs. Rajeev Bans ansal (Supra). (Sup 5. Lear earned counsel for the responde spondents could not rebut the leg e legal proposition of la of law as settled by Hon’ble Suprem Supreme Court in Union of India V ia Vs. Rajeev Bansal (Supra), by which the case of the of the petitioner is covered. 6. We have heard learned counsel for t We h el for the parties and perused the who e whole record of the pres present case. TRIPTI SAINI 2025.04.11 09:48 I attest to the accuracy and integrity of this document CWP-4789-202 2024(O&M) -4- JOINT READIN ADING OF JUDGMENTS OF HO HON’BLE SUPREME COURT I RT IN UNION OF IND INDIA AND OTHERS VS. ASH ASHISH AGGARWAL [2022] SC ] SCC ONLINE SC 543 543 AND UNION OF INDIA VS VS. RAJEEV BANSAL [2024] 46 4] 469 ITR 46 (SC) CON CONCLUDES AS UNDER:- 7. The Finance Act, 2021 substituted t The tuted the entire scheme of reassessme essment under Sections 1 ons 147 to 151 of the Income Tax Act x Act, 1961 w.e.f.01.04.2021. 8. Prior to the coming into force of Prior ce of Finance Act, 2021 initiation o ation of reassessment pro nt proceedings was governed by the y the following provisions of Incom Income - Tax Act, 1961:- Income escaping assessment "Inc 147. If the Assessing Officer has r 147 as reason to believe that any incom ncome chargeable to tax has escaped asses char ssessment for any assessment year, h ar, he may, subject to the provisions of may, of sections 148 to 153, assess ess or reassess such income and also any reas any other income chargeable to ta o tax which has escaped assessment a whic t and which comes to his noti notice subsequently in the course of the p subs he proceedings under this section, on, or recomputed the loss or the depre reco epreciation allowance or any oth other allowance, as the case may be, for allow , for the assessment year concerne erned (hereafter in this section and in sect (here sections 148 to 153 referred to as th as the relevant assessment year): relev Provided that where an assessment Prov ment under sub-section (3) of sectio ection 143 or this section has been made fo 143 e for the relevant assessment year, n ar, no action shall be taken under this sec actio section after the expiry of four yea years from the end of the relevant asse from assessment year, unless any incom ncome TRIPTI SAINI 2025.04.11 09:48 I attest to the accuracy and integrity of this document CWP-4789-202 2024(O&M) -5- chargeable to tax has escaped assess char ssessment for such assessment year b ear by reason of the failure on the part o reas art of the assessee to make a retu turn under section 139 or in response to unde e to a notice issued under sub-sectio ection (1) of section 142 or section 148 (1) o 48 or to disclose fully and truly a uly all material facts necessary for his asses mate assessment, for that assessment year year: Provided further that nothing con Pro
Legal Reasoning
contained in the first proviso sha shall apply in a case where any income i appl me in relation to any asset (includin luding financial interest in any entity) loca finan located outside India, chargeable ble to tax, has escaped assessment for any tax, any assessment year: Provided also that the Assessing Of Pro Officer may assess or reassess suc s such income, other than the income involv inco nvolving matters which are the subje ubject matters of any appeal, reference or matt e or revision, which is chargeable ble to tax and has escaped assessment. tax a Explanation 1.-Production before t Expl re the Assessing Officer of accou ccount books or other evidence from which book hich material evidence could with du th due diligence have been discovered by dilig d by the Assessing Officer will n ill not necessarily amount to disclosure wi nece e within the meaning of the foregoin egoing proviso. prov Explanation 2.-For the purposes of Expl es of this section, the following sha shall also be deemed to be cases wher also here income chargeable to tax h x has escaped assessment, namely :- esca TRIPTI SAINI 2025.04.11 09:48 I attest to the accuracy and integrity of this document CWP-4789-202 2024(O&M) -6- (a) where no return of inco income has been furnished by th by the assessee although his total in al income or the total income of an of any other person in respect of whi f which he is assessable under this A is Act during the previous year exce exceeded the maximum amount whic which is not chargeable to income-ta tax; (b) where a return of inco income has been furnished by th y the assessee but no assessment ha nt has been made and it is noticed b ced by the Assessing Officer that th at the assessee has understated th ed the income or has claimed excess cessive loss, deduction, allowance nce or relief in the return; (ba) where the assessee has fa as failed to furnish a report in respe espect of any international transa nsaction which he was so require quired under section 92E; (c) where an assessment has b as been made, but- (i) income chargeable to tax h ax has been underassessed; or (ii) such income has been asse assessed at too low a rate; or (iii) such income has been ma n made the subject of excessive reli relief under this Act; or (iv) excessive loss or depre epreciation allowance or any oth other allowance under this Act has b has been computed; (ca) where a return of incom ncome has not been furnished by th by the assessee or a return of incom come has been furnished by him an m and on the basis of information tion or document received from th m the TRIPTI SAINI 2025.04.11 09:48 I attest to the accuracy and integrity of this document prescribed income-tax autho authority, under sub-section (2) (2) of CWP-4789-202 2024(O&M) -7- section 133C, it is noticed b ed by the Assessing Officer that th at the income of the assessee ex exceeds the maximum amount n nt not chargeable to tax, or as the the case may be, the assessee h e has understated the income or or has claimed excessive loss, los deduction, allowance or relief elief in the return; (d) where a person is foun found to have any asset (includin luding financial interest in any entity ntity) located outside India. Explanation 3.-For the purpose of a Expl of assessment or reassessment und under this section, the Assessing Officer m this er may assess or reassess the incom ncome in respect of any issue, which has es in re as escaped assessment, and such issu issue come mes to his notice subsequently i tly in the course of the proceedin edings under this section, notwithstanding unde ding that the reasons for such issu issue have not been included in the reaso have easons recorded under subsection ( on (2) of section 148. of se Explanation 4.-For the removal of Expl l of doubts, it is hereby clarified th d that the provisions of this section, as am the p s amended by the Finance Act, 201 2012, shall also be applicable for any a shall ny assessment year beginning on on or before the 1st day of April, 2012. befo Issue of notice where income has es Issue as escaped assessment 148. 148. (1) Before making the assessment, the reassessment t or recomputation under section 147, th reco 7, the Assessing Officer shall serve o rve on the assessee a notice requiring him the a him to furnish within such period, od, as may be specified in the notice, a retu may return of his income or the income ome of any other person in respect of whic any which he is assessable under this A is Act TRIPTI SAINI 2025.04.11 09:48 I attest to the accuracy and integrity of this document CWP-4789-202 2024(O&M) -8- during the previous year correspon durin sponding to the relevant assessme ssment year, in the prescribed form and v year nd verified in the prescribed mann anner and setting forth such other particul and ticulars as may be prescribed; and th nd the provisions of this Act shall, so far a prov far as may be, apply accordingly as y as if such return were a return required to such ed to be furnished under section 139 139: Provided that in a case- Pro (a) where a return has been furnish (a) w nished during the period commencin encing on the 1st day of October, 1991 on t 991 and ending on the 30th day day of September, 2005 in response to a no Sept a notice served under this section, an n, and (b) subsequently a notice has been (b) s been served under sub-section (2) (2) of section 143 after the expiry of twelv secti welve months specified in the provi roviso to subsection (2) of section 143, as to su 3, as it stood immediately before th re the amendment of said sub-section by th amen by the Finance Act, 2002 (20 of 200 2002) but before the expiry of the time lim but b e limit for making the assessment, r nt, re- assessment or recomputation as spec asse specified in sub-section (2) of sectio ection 153, every such notice referred to in 153, to in this clause shall be deemed to b to be a valid notice: a val Provided further that in a case- Prov (a) where a return has been furnish (a) w nished during the period commencin encing on the 1st day of October, 1991 on t 991 and ending on the 30th day day of September, 2005, in response to a Sept o a notice served under this sectio ection, and and TRIPTI SAINI 2025.04.11 09:48 I attest to the accuracy and integrity of this document CWP-4789-202 2024(O&M) -9- (b) subsequently a notice has been (b) s been served under clause (ii) of su f sub- section (2) of section 143 after the secti the expiry of twelve months specifie ecified n the proviso to clause (ii) of sub in th f sub-section (2) of section 143, b 3, but before the expiry of the time lim befo e limit for making the assessmen sment, reassessment or recomputation as reas as specified in sub-section (2) (2) of section 153, every such notice ref secti referred to in this clause shall b all be deemed to be a valid notice. deem Explanation.-For the removal of d Expl of doubts, it is hereby declared th d that nothing contained in the first prov noth proviso or the second proviso sha shall apply to any return which has been appl been furnished on or after the 1st da st day of October, 2005 in response to a no of O a notice served under this section. (2) The Assessing Officer shall, bef (2) T , before issuing any notice under th er this section, record his reasons for doing secti oing so. Time limit for notice :- Time 149. (1) No notice under section 14 149 n 148 shall be issued for the relev levant assessment year- asse (a) if four years have elapsed from t (a) i om the end of the relevant assessme ssment year, unless the case falls under clau year clause (b) or clause (c); (b) if four years, but not more than (b) i than six years, have elapsed from th m the end of the relevant assessment year end ear unless the income chargeable ble to tax which has escaped assessment am tax w nt amounts to or is likely to amount unt to one lakh rupees or more for that yea one l t year; (c) if four years, but not more than (c) i than sixteen years, have elapsed fro d from the end of the relevant assessment y the e ent year unless the income in relatio lation TRIPTI SAINI 2025.04.11 09:48 I attest to the accuracy and integrity of this document CWP-4789-202 2024(O&M) -10- to any asset (including financial inte to an l interest in any entity) located outsid utside India, chargeable to tax, has escaped India aped assessment. Explanation.-In determining incom Expl come chargeable to tax which h h has escaped assessment for the purposes esca oses of this subsection, the provisio isions of Explanation 2 of section 147 sh of E 7 shall apply as they apply for th or the purposes of that section. purp (2) The provisions of sub-section (1) (2) T n (1) as to the issue of notice shall b all be subject to the provisions of section 1 subje on 151. (3) If the person on whom a notice u (3) I ice under section 148 is to be served rved is a person treated as the agent of a no a pe a non-resident under section 163 an 3 and the assessment, reassessment or the or recomputation to be made de in pursuance of the notice is to be made purs made on him as the agent of such no h non- resident, the notice shall not be issu resid issued after the expiry of a period iod of six years from the end of the relevan six y evant assessment year. Explanation.-For the removal of dou Expl f doubts, it is hereby clarified that th at the provisions of sub-sections (1) and (3 prov d (3), as amended by the Finance Ac ce Act, 2012, shall also be applicable for a 2012 for any assessment year beginning o ing on 12. or before the 1st day of April, 2012. or be Sanction for issue of notice :- Sanc 151. (1) No notice shall be issued u 151 ed under section 148 by an Assessin essing Officer, after the expiry of a period Offic riod of four years from the end of th of the relevant assessment year, unless the relev the Principal Chief Commissioner ner or Chief Commissioner or Principal C Chie al Commissioner or Commissioner ner is TRIPTI SAINI 2025.04.11 09:48 I attest to the accuracy and integrity of this document CWP-4789-202 2024(O&M) -11- satisfied, on the reasons recorded by satis ed by the Assessing Officer, that it is it is a ce. fit case for the issue of such notice. fit ca (2) In a case other than a case fallin (2) I alling under sub-section (1), no noti notice shall be issued under section 148 shall 148 by an Assessing Officer, who ho is below the rank of Joint Commission belo sioner, unless the Joint Commission sioner is satisfied, on the reasons recorded is sa rded by such Assessing Officer, that that it is a fit case for the issue of such noti is a f notice. (3) For the purposes of sub-secti (3) section (1) and sub-section (2), th ), the Principal Chief Commissioner or Prin or the Chief Commissioner or th or the Principal Commissioner or Prin the Commissioner or the the Joi Joint Commissioner, as the case may be Com y be, being satisfied on the reaso easons recorded by the Assessing Officer ab reco er about fitness of a case for the issu issue of notice under section 148, need not of no d not issue such notice himself." 3.1 In pursuance to the power vested 3.1 I ested under section 3 of the Relaxatio xation Act, 2020, the Central Governmen Act, nment issued following Notificatio ations inter-alia extending the time lines p inter nes prescribed under section 149 f 49 for issuance of reassessment notices und issua s under section 148 of the Income Ta e Tax Act, 1961: Act, Date ate of Notification 1.03.2020 31.03 4.06.2020 24.06 1.03.2021 31.03 7.04.2021 27.04 limitation lim Original issuance of n Section 148 of 20.03.2020 to 2 for of notice under 8 of the Act to 29.06.2020 Extended Limitation 30.06.2020 20.03.2020 to 3 to 31.12.2020 31.03.2021 31.03.2021 30.04.2021 30.04.2021 30.06.2021 TRIPTI SAINI 2025.04.11 09:48 I attest to the accuracy and integrity of this document CWP-4789-202 2024(O&M) -12- The Explanations to the Notificatio The cations dated 31st March, 2021 an 1 and 27th April, 2021 issued under secti 27th section 3 of the Relaxation Act, 202 , 2020 also stipulated that the provision also sions, as they existed prior to th to the amendment by the Finance Act, 202 amen 2021, shall apply to the reassessme ssment proceedings initiated thereunder. proc 3.2 The Parliament introduced refor 3.2 T eformative changes to sections 147 147 to 151 of the Income Tax Act, 1961 gov 151 1 governing reassessment proceedin edings by way of the Finance Act, 2021, w by w 1, which was passed on 28th Marc arch, 2021. The substituted sections 147 t 2021 47 to 149 and section 151 applicab licable w.e.f. 01.04.2021, passed in the Fina w.e.f Finance Act, 2021, are as under:- Income escaping assessment- Inco "147. If any income chargeable to ta "147 to tax, in the case of an assessee, h e, has escaped assessment for any assess esca sessment year, the Assessing Offic fficer may, subject to the provisions of may, of sections 148 to 153, assess ess or reassess such income or recompu reas mpute the loss or the depreciatio tion allowance or any other allowance o allow nce or deduction for such assessme ssment year (hereafter in this section and i year nd in sections 148 to 153 referred red to as the relevant assessment year). as th Explanation.-For the purposes of Expl of assessment or reassessment ent or recomputation under this section, th reco n, the Assessing Officer may assess ess or reassess the income in respect of reas t of any issue, which has escape caped assessment, and such issue comes asse es to his notice subsequently in th in the course of the proceedings under thi cour r this section, irrespective of the fa e fact hat the provisions of section 148A h that 8A have not been complied with". TRIPTI SAINI 2025.04.11 09:48 I attest to the accuracy and integrity of this document CWP-4789-202 2024(O&M) -13- Issue of notice where income has es Issue as escaped assessment:- 148. Before making the assessment 148 ment, reassessment or recomputatio tation under section 147, and subject to th unde to the provisions of section 148A, th A, the Assessing Officer shall serve on the Asse n the assessee a notice, along with with a copy of the order passed, if requi copy equired, under clause (d) of sectio ection 148A, requiring him to furnish within 148A ithin such period, as may be specifie ecified in such notice, a return of his inc in su income or the income of any oth other person in respect of which he is ass pers s assessable under this Act during th ng the previous year corresponding to the prev the relevant assessment year, in th in the prescribed form and verified in the pres n the prescribed manner and settin setting forth such other particulars as may forth may be prescribed; and the provisio isions of this Act shall, so far as may be, a of th e, apply accordingly as if such retu return were a return required to be furnishe were nished under section 139: Provided that no notice under this s Pro his section shall be issued unless the s there is information with the Assessing is in ing Officer which suggests that th at the income chargeable to tax has escap inco scaped assessment in the case of th of the assessee for the relevant assessmen asse sment year and the Assessing Offic fficer has obtained prior approval of the has the specified authority to issue suc e such notic tice. Explanation 1.-For the purposes of Expl s of this section and section 148A, th A, the information with the Assessing Offic infor fficer which suggests that the incom ncome chargeable to tax has escaped assess char ssessment means- TRIPTI SAINI 2025.04.11 09:48 I attest to the accuracy and integrity of this document CWP-4789-202 2024(O&M) -14- (i) any information flagged in the ca (i) a e case of the assessee for the releva levant assessment year in accordance wit asse with the risk management strateg rategy formulated by the Board from time to form me to time; (ii) any final objection raised by the (ii) a the Comptroller and Auditor-Gener eneral of India to the effect that the assessm of In essment in the case of the assessee f see for the relevant assessment year has no the r s not been made in accordance wi e with the provisions of this Act. the p Explanation 2.-For the purposes of t Expl of this section, where- (i) a search is initiated under sectio (i) a ection 132 or books of account, oth , other documents or any assets are requisi docu quisitioned under section 132A, on on or after the 1st day of April, 2021, in th after in the case of the assessee; or (ii) a survey is conducted under sec (ii) a r section 133A, other than under su r sub- section (2A) or sub-section (5) of th secti of that section, on or after the 1st da st day of Ap April, 2021, in the case of the asse assessee; or (iii) the Assessing Officer is satisfie (iii) tisfied, with the prior approval of th of the Principal Commissioner or Commi Prin mmissioner, that any money, bullio ullion, jewellery or other valuable article jewe icle or thing, seized or requisitione tioned unde der section 132 or under section tion 132A in case of any other perso person on or after the 1st day of April, 2021 on o 2021, belongs to the assessee; or (iv) the Assessing Officer is satisf (iv) atisfied, with the prior approval val of Principal Commissioner or Commis Prin missioner, that any books of accou ccount or documents, seized or requisition or d itioned under section 132 or sectio ection 132A in case of any other person 132A son on or after the 1st day of Apr April, 2021, pertains or pertain to, or an 2021 r any information contained therei erein, TRIPTI SAINI 2025.04.11 09:48 I attest to the accuracy and integrity of this document CWP-4789-202 2024(O&M) -15- relate to, the assessee, the Assessing relat ssing Officer shall be deemed to ha o have information which suggests that th infor t the income chargeable to tax h x has escaped assessment in the case esca ase of the assessee for the thr three assessment years immediately prece asse receding the assessment year releva levant to the previous year in which th to th the search is initiated or books oks of account, other documents or any ass acco y assets are requisitioned or survey rvey is conducted in the case of the assesse cond sessee or money, bullion, jewellery ery or other valuable article or thing or bo othe or books of account or documents a ts are seized or requisitioned in case of any seize f any other person. Explanation 3.-For the purposes of Expl es of this section, specified authori thority means the specified authority referre mean ferred to in section 151." Conducting inquiry, providing opp Cond opportunity before issue of notic notice under section 148 – unde "148A. The Assessing Officer shall "148 hall, before issuing any notice und under section 148- secti (a) conduct any enquiry, if requir (a) equired, with the prior approval val of specified authority, with respect to spec ct to the information which sugges ggests that the income chargeable to tax ha that x has escaped assessment; (b) provide an opportunity of being (b) p being heard to the assessee, with th ith the prior approval of specified authority prior ority, by serving upon him a notice tice to show cause within such time, as ma show may be specified in the notice, bein being not less than seven days and but no not l ut not exceeding thirty days from th m the date on which such notice is issued, date ued, or such time, as may be extende tended by him on the basis of an application by h ation in this behalf, as to why a noti notice TRIPTI SAINI 2025.04.11 09:48 I attest to the accuracy and integrity of this document CWP-4789-202 2024(O&M) -16- under section 148 should not be is unde e issued on the basis of informatio ation which suggests that income chargea whic rgeable to tax has escaped assessme ssment in his case for the relevant assessm in hi sessment year and results of enqui nquiry (a); conducted, if any, as per clause (a); cond (c) consider the reply of assessee fu (c) c e furnished, if any, in response to th to the show-cause notice referred to in clau show clause (b); (d) decide, on the basis of materia (d) d terial available on record includin luding reply of the assessee, whether or no reply r not it is a fit case to issue a noti notice under section 148, by passing an o unde an order, with the prior approval val of specified authority, within one mon spec month from the end of the month nth in which the reply referred to in clause whic lause (c) is received by him, or whe where no such reply is furnished, within no s thin one month from the end of th of the month in which time or extended ti mon ed time allowed to furnish a reply ply as per clause (b) expires: per c Provided that the provisions of this Prov this section shall not apply in a ca a case where- wher (a) a search is initiated under sectio (a) a ection 132 or books of account, oth , other documents or any assets are requisi docu quisitioned under section 132A in th in the case of the assessee on or after the 1 case the 1st day of April, 2021; or (b) the Assessing Officer is satisfie (b) t isfied, with the prior approval of th of the Principal Commissioner or Commi Prin mmissioner that any money, bullio ullion, jewellery or other valuable article o jewe cle or thing, seized in a search und under section 132 or requisitioned under secti der section 132A, in the case of an of any TRIPTI SAINI 2025.04.11 09:48 I attest to the accuracy and integrity of this document CWP-4789-202 2024(O&M) -17- other person on or after the 1st da othe st day of April, 2021, belongs to th to the assessee; or asse (c) the Assessing Officer is satisfied (c) t isfied, with the prior approval of th of the Principal Commissioner or Commis Prin missioner that any books of accou ccount or documents, seized in a search un or d h under section 132 or requisitione tioned under section 132A, in case of any o unde ny other person on or after the 1st da st day of April, 2021, pertains or pertain of A tain to, or any information containe tained therein, relate to, the assessee. there Explanation.-For the purposes of Expl of this section, specified authori thority means the specified authority referre mean ferred to in section 151." Time limit for notice – Time "149. (1) No notice under section 1 "14 on 148 shall be issued for the releva levant assessment year- asse (a) if three years have elapsed from (a) if rom the end of the relevant assessme ssment year, unless the case falls under clau year clause (b); (b) if three years, but not more than (b) i than ten years, have elapsed from th m the end of the relevant assessment year end year unless the Assessing Officer h er has in his possession books of account in hi ount or other documents or eviden idence which reveal that the income charg whic hargeable to tax, represented in th in the form of asset, which has escaped ass form d assessment amounts to or is likely kely to amount to fifty lakh rupees or more f amo ore for that year: Provided that no notice under sectio Prov ection 148 shall be issued at any tim y time in a case for the relevant assessmen in a sment year beginning on or before 1 re 1st TRIPTI SAINI 2025.04.11 09:48 I attest to the accuracy and integrity of this document CWP-4789-202 2024(O&M) -18- day of April, 2021, if such notice co day ce could not have been issued at th at that time on account of being beyond t time nd the time limit specified under th er the provisions of clause (b) of sub-sectio prov ection (1) of this section, as they stoo stood immediately before the commenceme imm cement of the Finance Act, 2021: Provided further that the provisions Prov ions of this sub-section shall not app apply in a case, where a notice under sec in a r section 153A, or section 153C rea read with section 153A, is required to b with to be issued in relation to a searc search initiated under section 132 or book initia ooks of account, other documents nts or any assets requisitioned under sectio any a ection 132A, on or before the 31st da st day of March, 2021: of M Provided also that for the purp Prov rposes of computing the period iod of limitation as per this section, the tim limit e time or extended time allowed to th to the assessee, as per show-cause notice asse tice issued under clause (b) of sectio ection 148A or the period during which th 148A h the proceeding under section 148 148A is stayed by an order or injunction o is sta d: on of any court, shall be excluded: Provided also that where immediatel Prov iately after the exclusion of the perio period referred to in the immediately pr refer y preceding proviso, the period iod of limitation available to the Assessin limit essing Officer for passing an ord
Decision
order under clause (d) of section 148A unde 48A is less than seven days, suc , such remaining period shall be extended rema nded to seven days and the period iod of limitation under this sub-section s limit on shall be deemed to be extende tended accordingly. acco TRIPTI SAINI 2025.04.11 09:48 I attest to the accuracy and integrity of this document CWP-4789-202 2024(O&M) -19- Explanation.-For the purposes of cla Expl f clause (b) of this subsection, "asse asset" shall include immovable property, shall rty, being land or building or bot both, shares and securities, loans and adv shar unt. advances, deposits in bank account. (2) The provisions of sub-section (1) (2) T n (1) as to the issue of notice shall b all be subject to the provisions of section 1 subje on 151.' Sanction for issue of notice- Sanc "151. Specified authority for the pu "151 e purposes of section 148 and sectio ection 148A shall be- 148A (i) Principal Commissioner or Princ (i) P rincipal Director or Commissioner ner or Director, if three years or less than Dire han three years have elapsed from th om the ear; end of the relevant assessment year; end o (ii) Principal Chief Commissioner o (ii) P ner or Principal Director General ral or where there is no Principal Chief Co wher f Commissioner or Principal Direct irector General, Chief Commissioner or Dir Gene r Director General, if more than thr three years have elapsed from the end of th year of the relevant assessment year." 9. Despite the substituted Sections 147 Desp ns 147 to 151 of the Income Tax Ac ax Act, 1961, by the Fin he Finance Act, 2021 which came came into force on 01.04.2021 man 1 many reassessment noti nt notices under Section 148 of the In the Income Tax Act, 1961 were issue e issued to the assessees a sees after coming into force of Financ Finance Act, 2021 i.e. after 01.04.202 4.2021, which were assai assailed before different High Court Courts on different grounds. Differe ifferent High Courts quas ts quashed the reassessment notices u tices under Section 148 of the Incom Income Tax Act, 1961. U 961. Union of India challenged the ju the judgments passed by different Hig nt High Courts setting as ing aside reassessment notices under under Section 148 of the unamende mended Income Tax Act, x Act, which were issued after 01.04.2 1.04.2021 i.e. after coming into force o force of TRIPTI SAINI 2025.04.11 09:48 I attest to the accuracy and integrity of this document CWP-4789-202 2024(O&M) -20- Finance Act, 202 t, 2021 before the Hon’ble Supreme reme Court of India in Union of Ind India and Others Vs. A s. Ashish Aggarwal [2022] SCC O C Online SC 543 . Hon’ble Suprem upreme Court partly allow y allowed the appeals filed by the Un he Union of India. Relevant portion o rtion of the judgment of H nt of Hon’ble Supreme Court in Union nion of India and Others Vs. Ashis shish Aggarwal [2022] 022] SCC Online SC 543 is reproduc produced as under:- “5. . We have heard Shri N. Venka enkataraman, learned ASG appearin earing on behalf of the Revenue and Shri C. on b ri C.A. Sundaram and Shri S. Ganes anesh, learned Senior Advocates and othe learn other learned counsel appearing o ing on behalf of the respective assessee. beha 6. It . It cannot be disputed that by subs substitution of sections 147 to 151 151 of the Income Tax Act (IT Act) by the the I y the Finance Act, 2021, radical an al and reformative changes are made refor ade governing e the procedure for f reassessment proceedings. Amended reas nded sections 147 to 149 and sect ection 151 of the IT Act prescribe the p 151 he procedure governing initiation ion of reassessment proceedings. Howeve reas ever, for several reasons, the sam same gave rise to numerous litigations an gave s and the reopening were challenge lenged inter alia, on the grounds such as (1 inter as (1) no valid "reason to believe" ( e" (2) no no tangible/reliable material/info /information f in possession of the th assessing officer leading to forma asse ormation of belief that income h e has escaped assessment, (3) no enquiry esca uiry being conducted by the assessin essing officer prior to the issuance of no offic f notice; and reopening is based o ed on change of opinion of the assessing of chan ng officer and (4) lastly the mandato datory procedure laid down by this Court proc ourt in the case of GKN Driveshaf shafts TRIPTI SAINI 2025.04.11 09:48 I attest to the accuracy and integrity of this document CWP-4789-202 2024(O&M) -21- (India) Ltd. v. Income Tax Officer (Ind ficer and ors; (2003) 1 SCC 72, h , has not been followed. not b 6.1 Further pre-Finance Act, 2021, 6.1 21, the reopening was permissible f ble for a maximum period up to six years a a ma rs and in some cases beyond even s en six years leading to uncertainty for year for a considerable time. Therefor refore, Parliament thought it fit to amend th Parl nd the Income Tax Act to simplify th ify the tax administration, ease compliances tax a nces and reduce litigation. Therefor refore, with a view to achieve the said ob with id object, by the Finance Act, 202 2021, sections 147 to 149 and section 151 secti 151 have been substituted. 6.2 Under the substituted provision 6.2 sions of the IT Act vide Finance Ac e Act, 2021, no notice under section 148 o 2021 48 of the IT Act can be issued witho ithout following the procedure prescribed follo bed under section 148A of the IT Ac T Act. Along with the notice under section Alon ction 148 of the IT Act, the assessin essing officer (AO) is required to serve the offic the order passed under section 148 148A of the IT Act. section 148A of the IT of th e IT Act is a new provision which is h is in the nature of a condition precedent the n dent. Introduction of section 148A 8A of the IT Act can thus be said to be the I be a game changer with an aim aim to achieve the ultimate object of simpli achi mplifying the tax administration, ea , ease compliance and reduce litigation. comp 6.3 But prior to pre-Finance A 6.3 e Act, 2021, while reopening a g an assessment, the procedure of giving asse ving the reasons for reopening and a nd an opportunity to the assessee and the oppo d the decision of the objectives we were TRIPTI SAINI 2025.04.11 09:48 I attest to the accuracy and integrity of this document CWP-4789-202 2024(O&M) -22- required to be followed as per the j requ the judgment of this Court in the ca e case of GKN Driveshafts (India) Ltd. (sup of G (supra). 6.4 However, by way of section 14 6.4 n 148A, the procedure has now bee been streamlined and simplified. It provid strea rovides that before issuing any noti notice under section 148, the assessing offi unde officer shall (i) conduct any enquir quiry, if required, with the approval of sp if re of specified authority, with respect ect to the information which suggests that the i that the income chargeable to tax h ax has escaped assessment; (ii) provide an esca e an opportunity of being heard to th to the assessee, with the prior approval of asse al of specified authority; (iii) consid nsider the reply of the assessee furnished, the r show- hed, if any, in response to the show cause notice referred to in clause (b caus se (b); and (iv) decide, on the basis asis of material available on record includ mate ncluding reply of the assessee, as as to whether or not it is a fit case to issue whet issue a notice under section 148 of th of the IT Act and (v) the AO is required to IT A ed to pass a specific order within th in the time stipulated. time 6.5 Therefore, all safeguards are pro 6.5 e provided before notice under sectio ection 148 of the IT Act is issued. At every 148 every stage, the prior approval of th of the specified authority is required, even spec ven for conducting the enquiry as p as per section 148A(a). Only in a case whe secti where, the assessing officer is of th of the opinion that before any notice is issu opin s issued under section 148A(b) and a nd an opportunity is to be given to the as oppo e assessee, there is a requirement ent of conducting any enquiry, the assessin cond essing officer may do so and condu onduct any enquiry. Thus if the assessing any ing officer is of the opinion that an at any TRIPTI SAINI 2025.04.11 09:48 I attest to the accuracy and integrity of this document CWP-4789-202 2024(O&M) -23- enquiry is required, the assessing of enqu g officer can do so, however, with th ith the prior approval of the specified prior ied authority, with respect to th to the information which suggests that th infor t the income chargeable to tax h x has escaped assessment. esca 6.6 Substituted section 149 is the p 6.6 he provision governing the time lim e limit for issuance of notice under section for i tion 148 of the IT Act. The substitute tituted section 149 of the IT Act has reduc secti educed the permissible time limit f it for issuance of such a notice to three y issua ee years and only in exceptional cas l cases ten years. It also provides further a ten y er additional safeguards which we were absent under the earlier regime pre abse pre-Finance Act, 2021. 7. Thus, the new provisions substi ubstituted by the Finance Act, 202 , 2021 being remedial and benevolent in bein in nature and substituted with ith a specific aim and object to protec spec otect the rights and interest of th of the assessee as well as and the sam asse same being in public interest, th t, the respective High Courts have right resp rightly held that the benefit of ne f new provisions shall be made available e prov ble even in respect of the proceedin edings relating to past assessment years, relat ars, provided section 148 notice h ce has been issued on or after 1st April, 202 been l, 2021. We are in complete agreeme ement with the view taken by the various H with us High Courts in holding so. 8. However, at the same time, the , the judgments of the several Hig High Courts would result in no reassessm Cour essment proceedings at all, even if th if the same are permissible under the same the Finance Act, 2021 and as p s per TRIPTI SAINI 2025.04.11 09:48 I attest to the accuracy and integrity of this document CWP-4789-202 2024(O&M) -24- substituted sections 147 to 151 of th subs of the IT Act. The Revenue cannot b not be made remediless and the object mad ject and purpose of reassessme ssment proceedings cannot be frustrated. I proc ed. It is true that due to a bonafid nafide mistake and in view of subsequen mista uent extension of time vide vario arious notifications, the Revenue issued the notif d the impugned notices under sectio ection 148 48 after the amendment was enfor enforced w.e.f. 01.04.2021, under th er the unamended section 148. In our view unam view the same ought not to have bee e been issued under the unamended Act and issue t and ought to have been issued und under the substituted provisions of section the s tions 147 to 151 of the IT Act as p as per the Finance Act, 2021. There appear the F pears to be genuine nonapplication tion of the amendments as the officers of the the a of the Revenue may have been under nder a bonafide belief that the amendments bona ents may not yet have been enforce orced. Therefore, we are of the opinion tha Ther n that some leeway must be shown wn in that regard which the High Courts that ourts could have done so. Therefor refore, instead of quashing and setting asid inste aside the reassessment notices issue issued under the unamended provision of unde of IT Act, the High Courts ought ght to have passed an order construing the have g the notices issued under unamende ended Act/unamended provision of the IT A Act/u IT Act as those deemed to have bee e been issued under section 148A of the I issue the IT Act as per the new provisio vision section 148A and the Revenue ou secti e ought to have been permitted ted to proceed further with the reasses proc ssessment proceedings as per th r the substituted provisions of sections 14 subs s 147 to 151 of the IT Act as per th er the Finance Act, 2021, subject to co Fina compliance of all the procedur edural requirements and the defences, w requ s, which may be available to th to the TRIPTI SAINI 2025.04.11 09:48 I attest to the accuracy and integrity of this document CWP-4789-202 2024(O&M) -25- assessee under the substituted provis asse rovisions of sections 147 to 151 of th of the IT Act and which may be available IT A ble under the Finance Act, 2021 an 1 and in law. Therefore, we propose to m in la to modify the judgments and orde orders passed by the respective High Courts pass ourts as under: - (i) The respective impugned ned section 148 notices issued to th to the respective assessees shall be d be deemed to have been issued und under section 148A of the IT Act a ct as substituted by the Finance Ac e Act, 2021 and treated to be show how-cause notices in terms of sectio ection 148A(b). The respective asse assessing officers shall within thir thirty days from today provide to t to the assessees the information an n and material relied upon by the R he Revenue so that the assessees ca es can reply to the notices within two two weeks thereafter; (ii) The requirement of condu onducting any enquiry with the pri prior approval of the specified aut authority under section 148A(a) b (a) be dispensed with as a one-time time measure vis-a-vis those notic otices which have been issued unde under Section 148 of the unamende ended Act from 01.04.2021 till date, ate, including those which have bee e been rts; quashed by the High Courts; (iii) The assessing officers s rs shall thereafter pass an order der in terms of section 148A(d) afte after following the due procedure ure as required under section 148A 148A(b) in respect of each of th of the concerned assessees; (iv) All the defences which m ch may be available to the assess sessee under section 149 and/or wh r which may be available under th er the TRIPTI SAINI 2025.04.11 09:48 I attest to the accuracy and integrity of this document CWP-4789-202 2024(O&M) -26- Finance Act, 2021 and in law law and whatever rights are availab ilable to the Assessing Officer unde under the Finance Act, 2021 are ke e kept open and/or shall continue to e to be available and; (v) The present order sh shall substitute/modify respecti ective judgments and orders passed assed by the respective High Cour Courts quashing the similar notices ices issued under unamended sectio ection 148 of the IT Act irrespect spective of whether they have bee been assailed before this Court or n or not. 9. There is a broad consensus on t on the aforesaid aspects amongst th gst the learned ASG appearing on behalf learn half of the Revenue and the learne arned Senior Advocates/learned counsel Seni nsel appearing on behalf of th f the respective assessees. We are also o resp so of the opinion that if the aforesa resaid order is passed, it will strike a ba orde a balance between the rights of th of the Revenue as well as the respective a Reve ive assesses as because of a bonafid nafide belief of the officers of the Revenue belie enue in issuing approximately 9000 90000 such notices, the Revenue may not s such not suffer as ultimately it is the publ public exchequer which would suffer. Ther exch Therefore, we have proposed to pa o pass the present order with a view avoidi the p oiding filing of further appeals befo before this Court and burden this Court w this urt with approximately 9000 appea ppeals against the similar judgments and o agai nd orders passed by the various Hig s High Courts, the particulars of some of w Cour of which are referred to hereinabov above. We have also proposed to pass the a We h the aforesaid order in exercise of o of our powers under Article 142 of the Con powe Constitution of India by holding th g that TRIPTI SAINI 2025.04.11 09:48 I attest to the accuracy and integrity of this document CWP-4789-202 2024(O&M) -27- the present order shall govern, not o the p not only the impugned judgments an ts and orders passed by the High Court of J orde t of Judicature at Allahabad, but sha t shall also be made applicable in respec also espect of the similar judgments an ts and orders passed by various High orde gh Courts across the country an y and there erefore the present order shall be a l be applicable to PAN INDIA. 10. In view of the above and for the 10. the reasons stated above, the prese resent Appeals are ALLOWED IN PART. T Appe T. The impugned common judgmen ments and orders passed by the High Cou and Court of Judicature at Allahabad bad in W.T. No. 524/2021 and other all W.T. allied tax appeals/petitions, is/a is/are hereby modified and substituted as u here as under: - (i) The impugned section 148 148 notices issued to the respecti ective assessees which were issued ued under unamended section 148 148 of the IT Act, which were the the subject matter of writ petitio titions before the various respective tive High Courts shall be deemed ed to have been issued under se r section 148A of the IT Act ct as substituted by the Finance Ac e Act, 2021 and construed or treate reated to be show cause notices in es in terms of section 148A(b). Th ). The assessing officer shall, within ithin thirty days from today provide vide to the respective assessees infor information and material relied upo upon by the Revenue, so that the show- the assesees can reply to the show cause notices within two week eeks thereafter; (ii) The requirement of cond conducting any enquiry, if require uired, with the prior approval of s of specified authority under sectio ection TRIPTI SAINI 2025.04.11 09:48 I attest to the accuracy and integrity of this document CWP-4789-202 2024(O&M) -28- 148A(a) is hereby dispensed sed with as a one-time measure vi re vis- avis those notices which have have been issued under section 148 148 of the unamended Act from 01.0 01.04.2021 till date, including tho those which have been quashed by by the High Courts. Even otherwi erwise as observed hereinabove hol holding any enquiry with the pri prior approval of specified authorit ority is not mandatory but it is for th for the concerned Assessing Officers ired; ers to hold any enquiry, if required; (iii) The assessing officers sha s shall thereafter pass orders in term terms of section 148A(d) in resp respect of each of the concerne cerned assessees; Thereafter after fol r following the procedure as require quired under section 148A may issu issue notice under section 148 ( 48 (as substituted); (iv) All defences which ma may be available to the assess sesses including those available und under section 149 of the IT Act an ct and all rights and contentions w ns which may be available to th to the concerned assessees and Reve Revenue under the Finance Act, 202 , 2021 and in law shall continue to be to be available. 11. . The present order shall be a be applicable PAN INDIA and a nd all judgments and orders passed by di judg y different High Courts on the issu issue and under which similar notices wh and s which were issued after 01.04.202 .2021 issued under section 148 of the issue the Act are set aside and shall b all be governed by the present order a gove r and shall stand modified to th to the aforesaid extent. The present order afore rder is passed in exercise of powe owers TRIPTI SAINI 2025.04.11 09:48 I attest to the accuracy and integrity of this document CWP-4789-202 2024(O&M) -29- under Article 142 of the Constitut unde titution of India so as to avoid an id any further appeals by the Revenue o furth e on the very issue by challengin enging similar judgments and orders, with simil with a view not to burden this Cou Court with approximately 9000 appeals. W with ls. We also observe that present ord order shall also govern the pending writ shall writ petitions, pending before vario arious High Courts in which similar notic High notices under Section 148 of the A he Act issued after 01.04.2021 are under ch issue er challenge. 12. T . The impugned common judgmen ments and orders passed by the Hig e High Court of Allahabad and the similar Cour ilar judgments and orders passed b sed by various High Courts, more particula vario icularly, the respective judgments an ts and orders passed by the various High orde igh Courts particulars of which a ch are mentioned hereinabove, shall sta ment stand modified/substituted to th o the aforesaid extent only. afore 10. Therefore, in above referred to judg Ther to judgment of Hon’ble Supreme Cou e Court in case of Union nion of India and Others Vs. Ashi Ashish Aggarwal [2022] SCC Onlin nline SC 543l, Hon’ble on’ble the Supreme Court held that th that the impugned notices under Sectio Section 148 issued to the to the respective assessees which were h were issued under unamended Sectio Section 148 of the Incom Income Tax Act and were subject m ject matter of writ petitions before th fore the various respective pective High Courts shall be deemed t emed to have been issued under Sectio Section 148-A of the Inc he Income Tax Act as substituted b uted by the Finance Act, 2021 and b and be construed or treat r treated to be show cause notices in ces in terms of Section 148A(b). It w . It was further held that d that the Assessing Officer shall, w hall, within 30 days from the date o date of passing of the j the judgment i.e. 04.05.2022, prov provide to the respective assessee ssessees TRIPTI SAINI 2025.04.11 09:48 I attest to the accuracy and integrity of this document CWP-4789-202 2024(O&M) -30- information and and material relied upon by the Re he Revenue, so that the Assessees ca sees can reply to the show e show cause notices within 2 weeks eeks thereafter. It was further held b held by the Hon’ble Sup e Supreme Court that the requireme irement of conducting any enquiry, quiry, if required, with the ith the prior approval of specified au fied authority under Section 148A(a) 8A(a) is dispensed with a with as one time measure viz-a-viz viz those notices which were issue e issued under Section 148 on 148 of the unamended Act from 01 rom 01.04.2021 (Finance Act, 2021) 021) till date i.e. 04.05.20 .05.2022 (Decision in Ashish Aggarw ggarwal). Further that the Assessin ssessing Officer shall ther ll thereafter pass orders in terms of Se s of Section 148A(d) in respect of eac of each of the concerned erned assessees and thereafter, after fo fter following the procedure as require required under Section 148 on 148A may issue notice(s) under Sec der Section 148 (as substituted). 11. On 11.05.2022 following the decisio On 1 decision in Union of India and Othe Others Vs. Ashish Aggar ggarwal, the Central Board of Direc Direct Taxes issued instructions for th s for the implementation o tion of the decision in Ashish Aggarw garwal’s case (supra), wherein it wa t was clarified that the at the judgment in Ashish Aggarwal w rwal would apply to all the cases whe s where extended reassess eassessment notices were issued, irres d, irrespective of the fact whether suc er such notices were chal e challenged or not. These instruction ructions further stated that reassessme essment notices would “tr “travel back in time to their origin original date when such notices were were to be issued and the nd then new Section 149 of the Incom Income Tax Act is to be applied at th d at that point.” The ins he instructions further elaborated the ed the mechanism for issuing notic notices under Section 14 148 of the new regime. The Ass he Assessing Officers accordingly aft ly after considering the r the replies furnished by the assess assessees passed orders under Sectio Section 148A(d) and sub nd subsequently notices under Sectio Section 148 of the new regime we e were issued to the ass he assessees by the Assessing Office Officers, between July and Septemb ptember 2022, for the Ass e Assessment Year 2013-2014, 2014 2014-2015, 2015-2016, 2016-2017 an 017 and TRIPTI SAINI 2025.04.11 09:48 I attest to the accuracy and integrity of this document CWP-4789-202 2024(O&M) -31- 2017-2018. The . These notices were challenged b ged before several High Courts, wh ts, who declared the notic e notices to be invalid being time bar me barred and being issued without th hout the appropriate sancti sanction of the specified authority. 12. In Ashish Aggarwal’s case (supra) pra) Hon’ble Supreme Court did not deal with the issu e issue as to whether or not reassessm sessment notices were issued within th ithin the time limits presc prescribed under the provisions of I s of Income Tax Act, 1961 read wi ad with relaxations provid provided under the Taxation and Ot Other Laws (Relaxation of Certa Certain Provisions) Act t, 2020 (TOLA). Different High C High Courts declared the notices und s under Section 148 of th 8 of the new regime issued to the ass the assessees by the Assessing Office Officers between July and ly and September 2022, for the Ass , 2014- e Assessment Year 2013-2014, 2014 2015, 2015-2016 2016, 2016-2017 and 2017-2018 to 18 to be invalid, being time barred an rred and being issued with d without appropriate sanction of spe of specified authority. The same we e were challenged by w by way of filing the appeals before before the Hon’ble Supreme Court ourt in Union of India a dia and Others Vs. Rajiv Bansal. T . The Hon’ble Supreme Court frame t framed the following issu ng issues in Union of India and Other thers Vs. Rajiv Bansal :- B. Issues 18. The present batch of appeals g 18. als gives rise to the following issues: sues:- a. Whether TOLA and not notification issued under it will al ll also apply to reassessment notices nd ices issued after 1 April 2021; and b. Whether the reassessm essment notices issued under Sectio ection 148 of the new regime betwe etween July and September 2022 a 22 are valid.” 13. Before proceeding further it would Befo would be appropriate to reproduce th uce the relevant portion o rtion of the judgment passed by the H the Hon’ble Supreme Court in the ca the case TRIPTI SAINI 2025.04.11 09:48 I attest to the accuracy and integrity of this document CWP-4789-202 2024(O&M) -32- of Union of In f India Vs. Rajeev Bansal [2024] 024] 469 ITR 46 (SC). The same same is reproduced as und as under :- “ii. T ii. TOLA 6. On 24 March 2020, the Cen 6. Central Government announced " ed "a complete lockdown for the entire comp tire nation" for twenty-one days ays to contain the spread of the COVID- cont -19 pandemic. (14) Following thi g this, the Central Government sought to i the C to implement various relief measur asures to redress the challenges faced b ed by the taxpayers in meeting th g the statutory requirements due to the pa statu e pandemic. (15) On 31 March 202 2020, the President of India promulgate the gated the Taxation and Other Law Laws (Relaxation of Certain Provisions) (Rela ons) Ordinance 2020 (16) to exten extend time limits for completion or co time r compliance of actions under th er the specified Acts falling for completion spec tion or compliance between 20 Marc March 2020 and 29 June 2020 till 30 Ju 2020 0 June 2020. On 24 June 2020, th 0, the Central Government issued a notifi Cent otification under Section 3(1) of the TOLA Ordinance to extend the TOL the time limit for completion on or compliance of actions under the spec comp specified Acts till 31 March 2021. 7. O On 29 September 2020, Parliam rliament enacted TOLA, which cam came into force with retrospective effect f into ect from 31 March 2020. (18) Sectio tion 2(1)(b) defines "specified Act" to m 2(1)( to mean and include the Income Ta e Tax Act. Section 3(1) of TOLA extended Act. nded the time limit for completion ion or compliance of actions under the comp the "specified Act", which fell f ll for completion or compliance during the comp g the period from 20 March 2020 an 0 and TRIPTI SAINI 2025.04.11 09:48 I attest to the accuracy and integrity of this document CWP-4789-202 2024(O&M) -33- 31 December 2020, to 31 March 20 31 D h 2021. The relevant part of Section tion 3 reads thus: read "3(1) Where, any time-limit has be "3(1 s been specified in, or prescribed bed or notified under, the specified Act whic notif which falls during the period from th om the 20th day of March, 2020 to the 31st 20th 31st day of December, 2020, or suc r such other date after the 31st day of D othe of December, 2020, as the Centr entral Government, may, by notification, Gove tion, specify in this behalf, for th or the completion or compliance of such ac comp h action as – (a) completion of any proceedings or (a) c gs or passing of any order or issuan uance of any notice, intimation, notificatio of an cation, sanction or approval, or suc r such other action, by whatever name call othe called, by any authority, commissio ission or tribunal, by whatever name cal or tr called, under the provisions of th of the specified Act; spec [...] [...] And where completion of complian And pliance of such action has not bee t been made within such time, then, th mad , the timelimit for completion on or compliance of such action shall, no comp l, notwithstanding anything containe tained in the specified Act, stand extended t in th ded to the 31st day of March, 2021, 21, or such other date after 31st day o such y of March, 2021, as the Centr entral Government may, by notification, sp Gove , specify in this behalf:" 8. Section 3(1) empowered the Centr 8. Se entral Government to extend the tim e time limit beyond 31 March 2021 by a limit y a notification. In pursuance of i of its powers, the Central Government iss powe t issued the following notifications ons to extend the period of relaxation till 3 exten till 30 June 2021: a. Notification N n No. TRIPTI SAINI 2025.04.11 09:48 I attest to the accuracy and integrity of this document CWP-4789-202 2024(O&M) -34- 93 of 2020 dated 31 December 20 93 o r 2020 extended the end date to 3 to 30 March 2021. Resultantly, TOLA Mar LA covered the period between 2 en 20 March 2020 to 30 March 2021; b. N Mar ; b. Notification No. 20 of 2021 date dated 31 March 2021 specified that 31 Ap 31 M 1 April 2021 shall be the end date ate of the time period covered by TOLA the OLA. It extended the time limit f it for completion or compliance of actions com tions under the Income Tax Act till 3 till 30 April 2021; and c. Notification No. Apri No. 38 of 2021 dated 27 April 202 l 2021 extended the time limit for completio exten letion or compliance of actions till 3 till 30 June 2021. June 9. The effect of TOLA and the 9. T the notifications issued under th er the legislation was that: (i) if the time pr legis e prescribed for passing of any ord order or issuance of any notice, sanction, or is ion, or approval fell for completion tion or compliance from 20 March 2020 to comp 20 to 31 March 2021; and (ii) if th if the completion or compliance of such a comp ch action could not be made durin during the stipulated period, then the time l the s me limit for completion or complian liance of such action was extended to 30 Ju of su 0 June 2021. xxx xxx xxx xxx xxx B. Issues 18. The present batch of appeals g 18. als gives rise to the following issue sues:- a. Whether TOLA and not notification issued under it will al ll also apply to reassessment notices nd ices issued after 1 April 2021; and b. Whether the reassessm essment notices issued under Sectio ection 148 of the new regime betwe etween July and September 2022 a 22 are TRIPTI SAINI 2025.04.11 09:48 I attest to the accuracy and integrity of this document valid. CWP-4789-202 2024(O&M) -35- C. Su Submissions 19. Mr N Venkataraman, learned 19. rned Additional Solicitor General ral of India, made the following submission India ssions on behalf of the Revenue: a. Parliament enacted TOLA LA as a free-standing legislation tion to provide relief and relaxatio ation to both the assesses and d the Revenue during the time of C of COVID- 19. TOLA seeks to rela relax actions and proceedings th s that could not be completed ed or complied with within the origi original time limits specified under th er the Income Tax Act; b. Section 149 of the new regi regime provides three crucial benefi enefits to the assesses: (i) the four- year time limit fo it for all situations has been reduce duced to three years; (ii) the first proviso to Sectio ction 149 ensures that re-assessme ssment for previous assessment years ears cannot be undertaken beyond s nd six years; and (iii) the monetary threshold o ld of Rupees fifty lakhs will apply ply to the reassessment for previous ious assessment years; c. The relaxations provided u ed under Section 3(1) of TOLA app apply "notwithstanding anything c g contained in the specified Act Act." Section 3(1), therefore, overr verrides the time limits for issuing uing a notice under Section 148 rea read with section 149 of the Incom ncome Tax Act; TRIPTI SAINI 2025.04.11 09:48 I attest to the accuracy and integrity of this document CWP-4789-202 2024(O&M) -36- d. TOLA does not extend the the life of the old regime. It mere merely provides a relaxation for th r the completion or compliance nce of actions following the proce rocedure laid down under the ne e new regime; e. The Finance Act 2021 su 1 substituted the old regime for r or re- assessment with a new regime gime. The first proviso to Section 14 n 149 does not expressly bar the ap e application of TOLA. Section 3 n 3 of TOLA applies to the entire In re Income Tax Act, including Sectio ctions 149 and 151 of the new re regime. Once the first proviso iso to Section 149(1)(b) is read with with TOLA, then all the notices issue issued between 1 April 2021 and and 30 June 2021 pertaining ng to assessment years 2013-2014 2014, 2014-2015, 2015-2016, 201 2016- 2017, and 2017-2018 will be l be within the period of limitation ion as explained in the tabulation bel n below: Assessment Year Expiry Within 3 years Expi Limitation Limi read read TOLA for TOL with of Within Years six 2013-2014 31.03.2017 T O L A not T O 31.03.2020 applicable appl of Expiry ion Limitation with w read for (4) TOLA for (5) 21 30.06.2021 2014-2015 31.03.2018 T O L A not T O 31.03.2021 21 30.06.2021 applicable appl 2015-2016 31.03.2019 T O L A not T O 31.03.2022 T O L A A not applicable appl applicable 2016-2017 31.03.2020 30.06.2021 30.0 31.03.2023 T O L A A not applicable 2017-2018 31.03.2021 30.06.2021 30.0 31.03.2024 T O L A A not applicable TRIPTI SAINI 2025.04.11 09:48 I attest to the accuracy and integrity of this document CWP-4789-202 2024(O&M) -37- f. The Revenue concedes that that for the assessment year 2015- -16, all notices issued on or afte after 1 April 2021 will have to b to be dropped as they will not fall fall for completion during the perio period prescribed under TOLA; g. Section 2 of TOLA defin efines "specified Act" to mean an n and include the Income Tax Act. T ct. The new regime, which came in e into effect on 1 April 2021, is n is now part of the Income Tax Ac x Act. Therefore, TOLA continues to es to apply to the Income Tax Act eve t even after 1 April 2021; and h. Ashish Agarwal (supra) trea ) treated Section 148 notices issued b ued by the Revenue between 1 April show- pril 2021 and 30 June 2021 as show cause notices in terms of S of Section 148A(b). Thereafter, th r, the Revenue issued notices under nder Section 148 of the new regim egime between July and August 202 2022. Invalidation of the Section 14 n 148 notices issued under the new new regime on the ground that th t they were issued beyond the time time limit specified under the Incom ncome Tax Act read with TOLA will will completely frustrate the judici dicial exercise undertaken by this Co ra). is Court in Ashish Agarwal (supra). 20. Mr Percy Pardiwalla, Mr V Sr 20. V Sridharan, Mr Tushar Hemani, M ni, Mr Saurabh Soparkar, and Mr K Shiv Saur Shivram, learned senior counsel, M el, Mr Manish Shah, Mr Darshan Patel Man atel, Mr Suhrith Parthasarthy, M y, Mr Dharan Gandhi, and Mr Ved Ja Dha d Jain, learned counsel, made th e the following submissions on behalf of th follo of the respondents: TRIPTI SAINI 2025.04.11 09:48 I attest to the accuracy and integrity of this document CWP-4789-202 2024(O&M) -38- a. TOLA applies only when hen the period of limitation expir xpires between 20 March 2020 and 3 nd 31 March 2021. Finance Act 202 t 2021 was enacted after TOLA. Co . Consequently, TOLA only held th ld the field till the new regime came ame into effect from 1 April 2021. Th 1. The Revenue had to issue Section ction 148 notices in terms of the ne e new regime without recourse to the o the extended timelines under TOLA OLA; b. TOLA did not amend the the erstwhile Section 149 but mere merely extended the specified time li e limits. The first proviso to Sectio ection 149(1)(b) only refers to the the period of limitation under th er the ); erstwhile Section 149(1)(b); c. Notification No. 38 of 2021 2021 was issued on 27 April 2021 021 to extend the time limits expirin piring under Section 149(1)(b) of th of the old regime till 30 June 2021. T 21. The notification was issued after after 1 April 2021, when the old reg regime was repealed and substitute tituted by a new regime. Therefore, fore, this notification cannot be rea e read into the new regime; d. The notices can be cate categorized into the following fo four categories: i. First category: for assessm essment years 2013-2014 and 201 2014- 2015, the six-year time limit i mit in terms of Section 149 expired o red on 31 March 2020 and 31 March arch 2021 respectively. However, th er, the reassessment notices were iss e issued after 1 April 2021 and wou would be barred by limitation; TRIPTI SAINI 2025.04.11 09:48 I attest to the accuracy and integrity of this document CWP-4789-202 2024(O&M) -39- ii. Second category: for the the assessment year 2015-2016, th 6, the issue pertains to whether t er the sanction of the appropria priate authority was obtained by the y the assessing officers before issuin ssuing reassessment notices under Se er Section 148 of the old regime. F e. For this category of cases, the the four-year period expired on 3 on 31 March 2020. However, notic notices were issued after 31 Marc March 2020 by obtaining sanction ion under Section 151(2) instead ead of Section 151(1) of the old regim regime; iii. Third category: for assess ssessment years 2016-2017 and 201 2017- 2018, the three-year period iod in terms of the amended regim egime expired on 31 March 2020 a 20 and 31 March 2021, respectivel tively. The notices under Section 14 n 148 were issued after the expiry iry of three years, that is, after 1 Ap 1 April 2021. However, the sanctio ctions were obtained under Section 1 ion 151(i) instead of Section 151(ii) (ii) of the new regime; and iv. The directions issued by d by this Court in Ashish Agarw arwal (supra) were not intended to d to apply to assesses who did n id not challenge the reassessment n nt notices before the High Courts rts or this Court. Therefore, reasses ssessment proceedings could not ha t have been initiated for such assesse esses. e. The applicability of the firs e first proviso to Section 149(1)(b) )(b) of the new regime has to be teste tested on the date of issuance of noti notice under Section 148 of the new new regime. Even if TOLA is read in d into TRIPTI SAINI 2025.04.11 09:48 I attest to the accuracy and integrity of this document the Income Tax Act, the the time limits for completion on or CWP-4789-202 2024(O&M) -40- compliance of actions can an be extended till 30 June 202 2021. However, the notices under Se er Section 148 of the new regime we e were issued by the Revenue from Ju m July to September 2022. The perio period of July to September 2022 is 2 is beyond the extended time limi limits stipulated under the Income T e Tax Act read with TOLA; f. Ashish Agarwal (supra) can ) cannot be interpreted in a manner ner to exclude the entire period from from April 2021 to September 202 2022. The directions issued by this this Court under Article 142 of th of the Constitution cannot contrav travene the substantive provisio isions contained in the Income Ta Tax Act. Moreover, this Court urt in Ashish Agarwal (supra) expr expressly left open all the defenc fences available to the assesses und under the new regime, including th ng the defence of limitation available lable under Section 149; and g. TOLA is only applicable to le to the provisions that specify tim y time limits. Section 151 does not not prescribe any time limit for th or the issuance of sanctions by the the specified authorities. Therefor refore, TOLA does not apply to Sectio ection 151. xxx xxx xxx xxx xxx 44. We now proceed to analyse the 44. W the issues given the broad legislati slative and judicial background discussed a and ed above. E. Reading TOLA into the Income T E. R me Tax Act i. First proviso to Section 149(1) of i. Fir ) of the new regime 45. The first proviso to Section 149(1 45. T 49(1)(b) provides thus: TRIPTI SAINI 2025.04.11 09:48 I attest to the accuracy and integrity of this document CWP-4789-202 2024(O&M) -41- "149. (1) No notice under section 1 "149 on 148 shall be issued for the releva levant assessment year, - asse (a) If three years have elaps elapsed from the end of the releva levant assessment year, unless the ca e case falls under clause (b); (b) If three years, but not m ot more than ten years, have elapse lapsed from the end of the releva elevant assessment year unless th ss the Assessing Officer has in pos possession of books of account unt or other documents or evidenc ence which reveal that the incom ncome chargeable to tax, represente ented in the form of asset, which h ch has escaped assessment amounts unts to or is likely to amount to fif to fifty lakh rupees or more for that y at year: Provided that no notice und under section 148 shall be issued ued at any time in a case for the rel e relevant assessment year beginnin inning on or before 1st day of April 2 ril 2021, if such notice could not ha t have been issued at that time on e on account of being immediate diately beyond the time limit specifie ified under the provisions of clau clause (b) of sub-section (1) of this s his section, as they stood immediate diately before the commencement of t t of the Finance Act, 2021:" (emphasis supplied) 46. T . The ingredients of the proviso c so could be broken down for analys alysis as follows: as f (i) no notice under Section 14 n 148 of the new regime can be issue issued at any time for an assessmen sment year beginning on or before fore 1 April 2021; (ii) if it is barre arred at the time when the notice tice is TRIPTI SAINI 2025.04.11 09:48 I attest to the accuracy and integrity of this document CWP-4789-202 2024(O&M) -42- sought to be issued because o se of the "time limits specified und nder the provisions of" 149(1)(b) o (b) of the old regime. Thus, a noti notice could be issued under Secti Section 148 of the new regime f e for assessment year 2021-2022 an 22 and before only if the time limit f mit for issuance of such notice co continued to exist under Sectio ection 149(1)(b) of the old regime. 47. . In CTO v. Biswanath Jhunjhu njhunwalla, (1996) 5 SCC 626 the Bengal Sales Tax Rules 1941 empow Beng powered the Commissioner to revi revise any assessment within four years any ears from the date of assessmen sment. Subsequently, the State Governmen Subs ment issued a notification followin lowing the law to extend the time limit from the l from four years to six years from th m the date of assessment. The extension of date on of the time limit was challenged b ged by the respondents on the ground t the d that the assessments which ha h had attained finality because of the ex attai e expiry of the period of four yea years could not be reassessed. This Cour coul Court observed that it was the cle clear intention of the notification to perm inten ermit the Commissioner to revise an se any assessment made or order passed, asse sed, provided the assessment had n ad not been made before six years. It was h been as held that if the legislative intentio ention is clear and the language is unambi is cle mbiguous, full effect must be given iven to the legislative intention by reading the l ding the notification as applying n ng not only to the incomplete assessments only ents but also to assessments that ha had reached finality because of lapse of reac e of the earlier prescribed period. Th d. The principle that emanates from Biswan princ swanath Jhunjhunwalla (supra) is th is that the courts should give full effect to th the c to the legislative intention of grantin anting TRIPTI SAINI 2025.04.11 09:48 I attest to the accuracy and integrity of this document CWP-4789-202 2024(O&M) -43- reassessment powers to assessing o reas ing officers unless the legislature, b re, by ise. express provision, states otherwise. expr 48. . Notices have to be judged acc d according to the law existing on th on the date the notice is issued. Section date ion 149 of the old regime primari marily provided two time limits: (i) four prov our years for all situations and ( nd (ii) beyond four years and within six yea beyo years if the income chargeable to ta to tax which escaped assessment amounte whic ounted to Rupees one lakh or mor more. After 1 April 2021, the time limits After its prescribed under the new regim egime came into force. The ordinary time came ime limit of four years was reduced ced to three years. Therefore, in all situatio three uations, reassessment notices could b uld be issued under the new regime if n issue if not more than three years ha have elapsed from the end of the relevan elap levant assessment year. For exampl ample, for assessment year 2018-2019, th for a 9, the four year period would ha have expired on 31 March 2023 under expir der the old regime. However, if th if the notice is issued after 1 April 2021, th notic 1, the three year time limit prescribe cribed under the new regime will be applica unde plicable. The three year time limit w it will expir pire on 31 March 2022. 49. The first proviso to Section 149 49. 149(1)(b) requires the determinatio nation of whether the time limit prescribed of wh bed under Section 149(1)(b) of the o he old regime continues to exist for the a regim the assessment year 2021- 2022 an 2 and before. Resultantly, a notice under befo nder Section 148 of the new regim egime cannot be issued if the period of six cann f six years from the end of the releva levant assessment year has expired at the ti asse the time of issuance of the notice. Th e. This also ensures that the new time lim also limit of ten years prescribed und under TRIPTI SAINI 2025.04.11 09:48 I attest to the accuracy and integrity of this document CWP-4789-202 2024(O&M) -44- Section 149(1) (b) of the new re Sec regime applies prospectively. F . For example, for the assessment year exam ear 2012-2013, the ten year perio period would have expired on 31 March woul rch 2023, while the six year perio period expired on 31 March 2019. Without expir thout the proviso to Section 149(1)( (1)(b) of th f the new regime, the Revenue cou could have had the power to reope eopen assessments for the year 2012- asse 2013 if the escaped assessme ssment amounted to Rupees fifty lakhs o amo hs or more. The proviso limits th ts the retrospective operation of Section 14 retro on 149(1)(b) to protect the interests sts of the assesses. the a 50. . Another important change und under Section 149(1)(b) of the ne e new regime is the increase in the mone regim monetary threshold from Rupees on es one lakh to Rupees fifty lakhs. The old lakh old regime prescribed a time limit imit of six years from the end of the relev six y elevant assessment year if the incom ncome chargeable to tax which escaped as char ed assessment was more than Rupe upees one lakh. In comparison, the new r one ew regime increases the time limit imit to ten years if the escaped assessment a ten y ent amounts to more than Rupees fif es fifty lakhs. This change could be summar lakh marized thus: Regime Time Limit Old regime New regime Four years but n more than six year Three years but n more than ten yea ut not years but not years Income chargeable to tax which escaped has assessment Rupees one lakh or more Rupees fifly lakhs or more 51. G . Given Section 149(1)(b) of the n the new regime, reassessment notic otices could be issued after three years on coul s only if the income chargeable to ta to tax which escaped assessment is mor whic more than Rupees fifty lakhs. Th s. The TRIPTI SAINI 2025.04.11 09:48 I attest to the accuracy and integrity of this document CWP-4789-202 2024(O&M) -45- proviso to Section 149(1)(b) limits th prov its the retrospectivity of that provisio vision with respect to the time limits specif with ecified under Section 149(1)(b) of th of the old regime. old r 52. I . In Ashish Agarwal (supra), this this Court held that the benefit of th of the new regime must be provided for th new or the reassessment conducted for th for the past periods. The increase of the mo past e monetary threshold from Rupees on es one lakh to Rupees fifty lakh is be lakh s beneficial for the assesses. M s. Mr Venkataraman has also conceded o Venk ed on behalf of the Revenue that a hat all notices issued under the new regim notic egime by invoking the six year tim r time limit prescribed under Section 149(1 limit 49(1)(b) of the old regime will have ave to be dropped if the income charge be d argeable to tax which has escape caped assessment is less than Rupees fifty l asse ifty lakhs. 53. The position of law which can 53. can be derived based on the abo above discussion may be summarized thu discu thus: (i) Section 149(1) of the ne e new regime is not prospective. It also app regim applies to past assessment years; ( rs; (ii) The time limit of four years is now The now reduced to three years for a for all situations. The Revenue can issue situa sue notices under Section 148 of th of the new regime only if three years or l new or less have elapsed from the end end of the relevant assessment year; (iii) th the r ii) the proviso to Section 149(1)(b) )(b) of the new regime stipulates that the the n the Revenue can issue reassessme ssment notices for past assessment years notic ears only if the time limit surviv rvives according to Section 149(1)(b) of t acco of the old regime, that is, six yea years from the end of the relevant asses from ssessment year; and (iv) all notic otices issued invoking the time limit und issue under Section 149(1)(b) of the o he old TRIPTI SAINI 2025.04.11 09:48 I attest to the accuracy and integrity of this document CWP-4789-202 2024(O&M) -46- regime will have to be dropped if th regim if the income chargeable to tax whic which has escaped assessment is less than R has e han Rupees fifty lakhs. ii. TOLA can extend the time limit t ii. TO mit till 31 June 2021 54. . The proviso to Section 149(1) 9(1)(b) of the new regime uses th es the expression "beyond the time limit s expr mit specified under the provisions ons of clause (b) of subsection (1) of this s clau his section, as they stood immediate diately before the commencement of the befo the Finance Act, 2021." Thus, th s, the proviso specifically refers to the tim prov e time limits specified under Sectio ection 149(1)(b) of the old regime. The 149( The Revenue accepts that witho ithout application of TOLA, the time lim appl limit for issuance of reassessme ssment notices after 1 April 2021 expires notic ires for assessment years 2013-201 2014, 2014-2015, 2015-2016, 2016-2017, 2014 017, and 2017-2018 in the followin lowing manner: man (i) for the assessment years 2013- (i) fo -2014 and 2014-2015, the six ye x year period expires on 31 March 2020 a perio 20 and 31 March 2021 respectivel tively; and and (ii) for the assessment years 2016-20 (ii) f 2017 and 2017-2018, the three ye year period expires on 31 March 2020 an perio 0 and 31 March 2021 respectively. a. Finance Act 2021 substituted the a. F d the old regime xxx xxx xxx xxx xxx 62. The purpose of Section 3(1) of 62. ) of TOLA is to provide relaxation tion of time limits prescribed under the time the specified Acts, which fell f ll for completion or compliance from 20 comp 20 March 2020 to 31 March 202 2021. TOLA was enacted in the backdr TOL ckdrop of the COVID-19 pandemi demic, TRIPTI SAINI 2025.04.11 09:48 I attest to the accuracy and integrity of this document CWP-4789-202 2024(O&M) -47- which impeded the functioning of t whic of the government at all levels. Th s. The imposition of national and local lock impo l lockdowns created difficulties for th for the common people, including litigants a comm nts and assesses, to comply with the h their legal obligations. The COVID19 pan lega pandemic and the ensuing lockdow downs required legislatures across the worl requ world to dynamically adapt their law r laws and policies to redress the difficulti and culties faced by persons, entities, an s, and governmental authorities. (122) T gove 2) The World Bank identified th d that persons and business entities fa pers s faced severe financial situatio ations characterised by a lack of cash or ea char or easily convertible-to-cash assets. sets. It suggested sugg that this would impact revenue collection becau impa ecause individuals and entities would not be indiv ot be in a position to pay the assesse sessed taxes. Therefore, the World Bank a taxes nk advised deferral of tax filings an s and payment deadlines to allow individu paym ividuals and business entities to cop cope with the crisis. (123) Many countrie with ntries across the world have extende tended deadlines for filing tax returns. dead 63. TOLA extended the time limits 63. mits for completion or compliance nce of certain actions under the specified certa ified Act, which fell for completio letion during the COVID-19 outbreak. Th durin . The use of the expression "any" ny" in Section 3(1) indicates that the relax Secti relaxation applies to "all" or "ever every" action whose time limit falls for com actio completion from 20 March 2020 to 3 to 31 March 2021. Section 3(1) is only co Mar ly concerned with the performance nce of actions contemplated under the p actio e provisions of the specified Act Acts. Consequently, the amendment or sub Cons r substitution of a provision under th er the specified Acts will not affect the app spec e application of TOLA, so long as th as the TRIPTI SAINI 2025.04.11 09:48 I attest to the accuracy and integrity of this document CWP-4789-202 2024(O&M) -48- action contemplated under the prov actio provision falls for completion durin during the period specified by TOLA, that the p that is, 20 March 2020 to 31 Marc March 2021. 2021 64. . When enacting a statute, the the legislature often endeavours urs to ensure that the provisions of one ensu one legislation do not conflict wi t with provisions of another legislation. ( prov n. (125) The purpose of the Incom ncome Tax Act is to levy tax on income and Tax and raise revenues for the functionin ioning of the Government. On the other h of th er hand, the purpose of TOLA is is to provide relaxation of the time fo prov e for completion of any actions ns or proceedings falling for completion proc tion within a particular period. Thu Thus, the two enactments operate in separ the t eparate and distinct fields. This Cou Court must ensure that the provisions of th must of the two enactments are interprete preted harmoniously unless there is an irrec harm them. irreconcilable conflict between them b. Reading TOLA into Section 149 b. Re 149 65. Section 3(1) of TOLA applies t 65. ies to the action of "issuance of an of any notice" under the Income Tax Act notic Act. The relaxation provided und under Section 3(1) of TOLA will apply to Secti ly to the issuance of a reassessme ssment notice under section 148 of the Inco notic Income Tax Act. TOLA did not amen amend the time limits of four years and six the t six years from the end of the releva evant assessment years as specified unde asse under the Income Tax Act. It mere merely provided a relaxation of the ti prov e time period for issuance of of a reassessment notice under Section 1 reas ion 148. TOLA has no application tion in situations where the time limit spe situa specified under Section 149 expire xpired before 20 March 2020. The effect befo ffect of TOLA is that at the time ime of TRIPTI SAINI 2025.04.11 09:48 I attest to the accuracy and integrity of this document CWP-4789-202 2024(O&M) -49- issuance of a reassessment notice un issua e under Section 148, the Revenue h ue has to determine two things: (i) the time to de time limit specified under Section 14 n 149; and (ii) the extent of relaxatio and ation provided by TOLA and i nd its notifications for issuance of notice notif otices. Thus, although TOLA did n id not amend section 149 of the Income amen me Tax Act, it has to be read wi d with Section 149 to determine the time li Secti e limit for issuance of a notice. Th . This was the legislative intent behind was hind the enactment of TOLA. F . For instance, the six year time limit for a insta for assessment year 2013- 2014 und under Section 149(1)(b) of the old regime e Secti ime expired on 31 March 2020. TOL TOLA extended the period for issuing noti exten notice until 30 June 2021, given th en the difficulties that arose because of the diffic f the COVID-19 pandemic. 66. S . Section 3(1) of TOLA allowed th ed the Central Government to speci pecify by notification "such other date afte by n after the 31st day of March, 2021" 21" as the time limit for completion or com the t r compliance of any action under th er the specified Acts. The provision spec on also empowered the Centr entral Government to specify different date Gove dates for completion or compliance nce of different actions. The notifications d diffe ns dated 31 March 2021 and 27 Apr April 2021 extend the operation of TOLA 2021 OLA by providing an extended tim d time limit for completing actions under limit der the Income Tax Act till 30 Jun June 2021. 2021 67. Section 2(1)(b)(ii) of TOLA defi 67. defines `specified Act' to include th de the Income Tax Act. After 1 April 2021 Inco 021, Section 2(1)(b)(ii) must be rea e read to mean the Income Tax Act as amen to m mended by the Finance Act 2021. Th 1. The substitution of Sections 147 to 15 subs 151 will not affect the purpose ose of TRIPTI SAINI 2025.04.11 09:48 I attest to the accuracy and integrity of this document CWP-4789-202 2024(O&M) -50- TOLA, which is, to provide relaxatio TOL xation of the time limit for completio letion or compliance of any actions fall or c falling for completion between 2 en 20 March 2020 and 31 March 2021. T Mar 1. TOLA will continue to apply to th to the Income Tax Act after 1 April 20 Inco l 2021 if any action or proceedin eeding pecified under the substituted provi spec provisions of the Income Tax Act fal t falls for completion between 20 March 20 for c h 2020 and 31 March 2021. 68. After 1 April 2021, the Income T 68. me Tax Act has to be read along wi g with the substituted provisions. The the The substituted provisions app apply retrospectively for past assessment retro ent years as well. On 1 April 202 2021, TOLA was still in existence, and the TOL d the Revenue could not have ignore nored the application of TOLA and its noti the a notifications. Therefore, for issuing uing a reassessment notice under Section reas ction 148 after 1 April 2021, th 1, the Revenue would still have to look at: Reve k at: (i) the time limit specified und under Section 149 of the new regime; and Secti and (ii) the time limit for issuance nce of notice as extended by TOLA and its notic its notifications. The Revenue cann cannot extend the operation of the old law exten law under TOLA, but it can certain rtainly benefit from the extended time limit bene limit for completion of actions fallin falling for completion between 20 March 20 for c h 2020 and 31 March 2021. x xxx xxx xxx xxx xxx G. Conclusions G. 114. In view of the above discussion, 114. sion, we conclude that: a. After 1 April 2021, the Inco Income Tax Act has to be read alon along with the substituted provisions sions; TRIPTI SAINI 2025.04.11 09:48 I attest to the accuracy and integrity of this document CWP-4789-202 2024(O&M) -51- b. TOLA will continue to app apply to the Income Tax Act after fter 1 April 2021 if any action or n or proceeding specified under th er the substituted provisions of t of the Income Tax Act ls falls for f completion between 20 March arch 2020 and 31 March 2021; c. Section 3(1) of TOLA ove overrides section 149 of the Incom ncome Tax Act only to the extent of r of relaxing the time limit for issuan uance of a reassessment notice under nder Section 148; d. TOLA will extend the time time limit for the grant of sanction b ion by the authority specified under S der Section 151. The test to determin rmine whether TOLA will apply to to Section 151 of the new regime ime is this: if the time limit of th of three years from the end of a of an assessment year falls between ween 20 March 2020 and 31 Marc March 2021, then the specified aut authority under Section 151(i) h i) has extended time till 30 June 202 2021 to grant approval; e. In the case of Section 151 o 51 of the old regime, the test is: if th : if the time limit of four years from th om the end of an assessment year fal r falls between 20 March 2020 and 3 nd 31 March 2021, then the specifie ecified authority under Section 151(2 51(2) has extended time till 31 Marc March 2021 to grant approval; f. The directions in Ashish A sh Agarwal (supra) will extend to a to all the ninety thousand reassessm sessment notices issued under the o he old regime during the period 1 Ap 1 April 2021 and 30 June 2021; g. The time during which the the show cause notices were deeme eemed to be stayed is from the date date of issuance of the deemed noti notice TRIPTI SAINI 2025.04.11 09:48 I attest to the accuracy and integrity of this document CWP-4789-202 2024(O&M) -52- between 1 April 2021 and 3 nd 30 June 2021 till the supply ply of relevant information and mat material by the assessing officers ers to the assesses in terms of the d the directions issued by this Court urt in Ashish Agarwal (supra), and t nd the period of two weeks allowed wed to the assesses to respond to the the show cause notices; and h. The assessing officers ers were required to e issue the th reassessment notice under Sec r Section 148 of the new regime with within the time limit surviving unde under the Income Tax Act read wi d with TOLA. All notices issued beyo beyond the surviving period are tim e time barred and liable to be set asi t aside; ION CONCLUSION 14. The present case pertains to the yea The he year 2014-2015. A perusal of tab able referred to in Par in Para 19(e) of the judgment of Hon f Hon’ble the Supreme Court in Unio Union of India Vs. Raje s. Rajeev Bansal (Supra), as referred t erred to above, shows that the time lim me limit for notice, as pres as prescribed under Section 149 of the of the Income Tax Act, 1961, which which is substituted by th by the Finance Act, 2021 w.e.f. 01. .f. 01.04.2021 for the assessment ye ent year 2014-2015 would would expire on 31.03.2018 if it is to it is to be issued within three years an ears and would expire on 3 re on 31.03.2021 if it is to be issued w sued within six years. Further, if expir f expiry of limitation rea on read with TOLA is taken, the n, then the period would expire o pire on 30.06.2021. If the f the period of three years is taken, taken, that would expire on 31.03.201 3.2018. And till 31.03.20 .03.2018, TOLA was not applicable si able since TOLA came into force w.e. ce w.e.f. 31.03.2020. Sect . Section 2 (1) (b) defines “Specified cified Act” to mean and include Incom Income Tax Act. Section Section 3 (1) of TOLA extended th ded the time limit for completion o etion or compliance of ac of action under the “Specified A d Act”, which fell for completion o etion or TRIPTI SAINI 2025.04.11 09:48 I attest to the accuracy and integrity of this document CWP-4789-202 2024(O&M) -53- compliance durin during the period from 20.03.2020 3.2020 and 31.12.2020 to 31.03.202 3.2021. Section 3 (1) emp 1) empowered the Central Governmen rnment to extend the time limit beyon beyond 31.03.2021 and th and the same was extended up to 30.0 to 30.06.2021. 15. In view of the judgment passed by In vi sed by Hon’ble the Supreme Court ourt in Union of India V ndia Vs. Rajeev Bansal (Supra), even , even if the notices for the assessme essment year 2014-2015 2015 were to be issued within six years x years, the same expired on 31.03.202 03.2021 and if after the ex the expiry of 31.03.2021, TOLA is to A is to be applied, it extended the tim the time limit till 30.06.20 .06.2021. Admittedly, in the present resent case, notice under Section 148 148 of the Income Tax e Tax Act, 1961 was issued on 27 on 27.07.2022, which is beyond th ond the extended period. eriod. Therefore, the notice dated 27 ted 27.07.2022 under Section 148 an 148 and subsequent asses assessment order dated 21.03.2023 3.2023 under Section 147 read wi ad with Sections 144 and 4 and 144B of the Income Tax Act, 19 Act, 1961 would be barred by limitatio mitation in view of the jud the judgment dated 03.10.2024 passed assed by Hon’ble the Supreme Court Court in Union of India v ndia vs. Rajeev Bansal (Supra). 16. In view of the above, the present w In vi sent writ petition is allowed and notic d notice dated 27.07.2022 .2022 under Section 148 along with a with assessment order dated 21.03.202 03.2023 under Section 147 on 147 of the Income Tax Act, 1961 f 1961 for the assessment year 2014-201 2015 are, hereby, set as , set aside. 17. Pending application(s), if any, also st Pend also stand disposed of. (ARUN PALL PALLI) JUDGE 2025 March 10, 2025 Tripti/pj (SUDEEPTI SHARMA) JUDGE g : Speaking Whether speaking/non-speaking : Sp Whe : Ye Whether reportable Whe : Yes TRIPTI SAINI 2025.04.11 09:48 I attest to the accuracy and integrity of this document CWP-4789-202 2024(O&M) -54- TRIPTI SAINI 2025.04.11 09:48 I attest to the accuracy and integrity of this document