Krishan Kedia v. Income Tax Officer and Others

IN T

Krishan Kedia

Income Tax Off

CORAM : HO HO

Present: Mr

Ms

for

(thr

SUDEEPTI SH

The under Section 1 along with reas

26.05.2023 for t BRIEF FACTS

2.

The 2015-2016. Bri that the petition Assessment Yea force of Finance 1961 were subst THE HIGH COURT OF PUNJ AT CHANDIGA -.-

CW De

VERSUS ficer & Others

ON'BLE MR. JUSTICE ARUN ON'BLE MRS. JUSTICE SUD r. Nitin Kanwar, Advocate for the s. Gauri Neo Rampal, Sr. Standin the respondents. rough Video Conferencing) -.-

HARMA, J. e challenge in the present writ pe 148 of Income Tax Act, 1961 fo ssessment under Section 147 of the Assessment Year 2015-2016 S e present case of the petitioner ief facts of the present case as p ner was issued notice under S ar 2015-2016 i.e. after 01.04.202 e Act, 2021 whereby Sections 1 tituted. Notice under Section 14 JAB AND HARYANA ARH WP-4112-2024 (O&M) cided on :- 10.03.2025

....Petitioner

....Respondents N PALLI EEPTI SHARMA e petitioner. ng Counsel, etition is to notice dated 27.07.20 or the Assessment Year 2015-20 f the Income Tax Act, 1961, da . r pertains to the Assessment Y er pleadings in the writ petition ection 148 on 06.04.2021 for 21, which is the date of coming i 147 to 151 of the Income Tax A 42(1) of the Income Tax, 1961 w

ated Year are into Act,

issued on 27.11 was transferred under Section 1 Another show served to the p

23.03.2022. Th under Section 1 2015-2016 in v Supreme Court ONLINE SC 5 Tax Act, 1961 w the judgment of Others Vs. Ashi notice under Se 2015-2016 was

02.11.2022, inti accordance with Notice dated 27 issued to the p under the Inco Assessment Yea bank account o unexplained and 1961 to be taxed .2021 for the Assessment Year to NeFAC and to ReFAC on 0 142(1) of the Income Tax Act, cause notice dated 19.03.2022 etitioner. Reply to the same w hereafter the petitioner was ser 148A(b) of the Income Tax A view of the judgment dated 0 in Union of India and Others

¶543On 27.07.2022, notice und was issued for the Assessment Y f Hon'ble Supreme Court dated ish Aggarwal [2022] SCC ONL ection 148 of the Income Tax A issued to the petitioner. Petit imation was sent to the assesse h the procedure under Section 1

7.01.2023 under Section 142(1) etitioner. Thereafter, after follo me Tax Act, 1961, assessmen ar 2015-2016 was passed vide w of the assessee to the tune of d added to his income under Se d as per Section 115BBE of Inco 2015-2016 and thereafter, the c

08.12.2021. Therefore again not , 1961 was issued on 22.12.20 with draft assessment order w was submitted by the petitioner rved with notice dated 26.05.20 ct, 1961 for the Assessment Y

4.05.2022 passed by the Hon' Vs. Ashish Aggarwal [2022] S er Section 148A(d) of the Inco Year 2015-2016 in consequence

04.05.2022 in Union of India a LINE SC 543. On 27.07.2022 it Act, 1961 for the Assessment Y tioner filed reply to the same. ee for completion of assessment 44B of the Income Tax Act, 19 of the Income Tax Act, 1961 w owing the procedure as laid do nt order dated 26.05.2023 for which the total credited entries in f Rs.2,18,60,116/- were treated ection 69A of the Income Tax A ome Tax Act, 1961.

case tice

¶021was r on Year 'ble SCC ome e to and self Year On t in

¶961was own d as Act,

3.

Hen under Section 14 i.e. order under Act, 1961 for t barred by limita SUBMISSIONS

4.

Lea a) T Inc into Sec in t b) sett Vs. The pro (Su

5.

Lea proposition of l Rajeev Bansal

6.

We record of the pre nce the present petition challeng 48 of the Income Tax Act, 1961 Section 147 read with Sections the Assessment Year 2015-2016 ation. S arned counsel for the petitioner c That since notice dated 27.07.20 come Tax Act, 1961 was barred b o force of Finance Act, 2021, th ction 147 of the Income Tax Act the eyes of law. Further, that controversy in tled by the Hon'ble Supreme C Rajeev Bansal [2024] 469 erefore, the present writ petition oposition of law in the case of U upra). arned counsel for the respon law as settled by Hon'ble Supr (Supra), by which the case of th e have heard learned counsel for esent case. ging notice dated 27.07.2022 issu along with order dated 26.05.20 s 144 and 144B of the Income T 6 on the ground that the same contends:- 022 issued under Section 148 of by limitation in view of the com herefore the assessment order un t, 1961 dated 26.05.2023 is also b the present writ petition is alre ourt in the case of Union of In 9 ITR 46 (SC) on 03.10.20 n be allowed in terms of the sett Union of India Vs. Rajeev Ban ndents could not rebut the le reme Court in Union of India he petitioner is covered. r the parties and perused the wh

ued Tax are ming nder bad ady ndia

¶024tled nsal egal Vs.

JOINT READI UNION OF IN ONLINE SC 54 ITR 46 (SC) CO

7.

The under Sections 1

8.

Prio reassessment pr Tax Act, 1961:-

"In cha may rea wh sub rec allo (he rele Pro act from ING OF JUDGMENTS OF HO NDIA AND OTHERS VS. AS 43 AND UNION OF INDIA V ONCLUDES AS UNDER:- e Finance Act, 2021 substituted 147 to 151 of the Income Tax Ac or to the coming into force o roceedings was governed by th

ncome escaping assessment

¶7If the Assessing Officer has argeable to tax has escaped asse y, subject to the provisions of assess such income and also an ich has escaped assessment bsequently in the course of the p computed the loss or the depr owance, as the case may be, f ereafter in this section and in sec evant assessment year): ovided that where an assessmen 3 or this section has been made f tion shall be taken under this se m the end of the relevant ass ON'BLE SUPREME COURT SHISH AGGARWAL [2022] S VS. RAJEEV BANSAL [2024] 4 d the entire scheme of reassessm ct, 1961 w.e.f.01.04.2021. of Finance Act, 2021 initiation he following provisions of Inco reason to believe that any inco essment for any assessment year, of sections 148 to 153, assess ny other income chargeable to and which comes to his no proceedings under this section, reciation allowance or any ot for the assessment year concern ctions 148 to 153 referred to as nt under sub-section (3) of sect for the relevant assessment year, ection after the expiry of four ye sessment year, unless any inco

IN SCC ment n of ome ome , he or tax tice , or ther ned , no ears

cha rea und

(1) ma

Pr app fina tax

Pr inc ma tax

Exp boo dili nec pro Exp also esc argeable to tax has escaped asse ason of the failure on the part der section 139 or in response to of section 142 or section 148 terial facts necessary for his ass rovided further that nothing co ply in a case where any income ancial interest in any entity) lo x, has escaped assessment for any rovided also that the Assessing O come, other than the income invo tters of any appeal, reference o x and has escaped assessment. planation 1.-Production before oks or other evidence from whic igence have been discovered b cessarily amount to disclosure w oviso. planation 2.-For the purposes o o be deemed to be cases whe caped assessment, namely :-

(a) where no return of in assessee although his total essment for such assessment year of the assessee to make a ret o a notice issued under sub-sect 8 or to disclose fully and truly sessment, for that assessment yea ontained in the first proviso sh in relation to any asset (includ cated outside India, chargeable y assessment year: Officer may assess or reassess su olving matters which are the subj or revision, which is chargeable the Assessing Officer of acco ch material evidence could with d by the Assessing Officer will within the meaning of the forego of this section, the following sh ere income chargeable to tax ncome has been furnished by income or the total income of a

r by turn all ar: hall ding e to uch ject e to ount due not oing hall has

other person in respect of wh during the previous year exc is not chargeable to income-

(b) where a return of inc assessee but no assessment h the Assessing Officer that income or has claimed exces relief in the return;

(ba) where the assessee has f of any international transa under section 92E;

(c) where an assessment has

(i) income chargeable to tax

(ii) such income has been ass

(iii) such income has been m under this Act; or

(iv) excessive loss or depr allowance under this Act has

(ca) where a return of inco assessee or a return of inco on the basis of information prescribed income-tax auth section 133C, it is noticed income of the assessee ex hich he is assessable under this ceeded the maximum amount wh tax; come has been furnished by has been made and it is noticed the assessee has understated ssive loss, deduction, allowance failed to furnish a report in resp action which he was so requi been made, but-has been underassessed; or sessed at too low a rate; or made the subject of excessive re reciation allowance or any ot s been computed; ome has not been furnished by me has been furnished by him a n or document received from hority, under sub-section (2) by the Assessing Officer that xceeds the maximum amount

Act hich d by e or pect ired elief ther and of

Exp this in r com und hav of s Exp sha bef Issu rec may any dur yea chargeable to tax, or as th understated the income o deduction, allowance or relie

(d) where a person is fou financial interest in any entit planation 3.-For the purpose of s section, the Assessing Officer respect of any issue, which has e mes to his notice subsequently der this section, notwithstandin ve not been included in the reas section 148. planation 4.-For the removal of e provisions of this section, as a all also be applicable for any fore the 1st day of April, 2012. ue of notice where income has e

8.

(1) Before making computation under section 147, t e assessee a notice requiring him y be specified in the notice, a re y other person in respect of wh ring the previous year correspo ar, in the prescribed form and he case may be, the assessee or has claimed excessive lo ef in the return; und to have any asset (includ ty) located outside India. f assessment or reassessment un may assess or reassess the inco escaped assessment, and such is in the course of the proceedi ng that the reasons for such is sons recorded under subsection f doubts, it is hereby clarified t amended by the Finance Act, 20 assessment year beginning on escaped assessment e assessment, reassessment the Assessing Officer shall serve m to furnish within such period, eturn of his income or the income ich he is assessable under this onding to the relevant assessm verified in the prescribed man

has oss, ding nder ome ssue ings ssue

(2) that 012, or or e on , as e of Act ment

and pro suc

Pr

(a) on Sep

(b) sec to s am but ass a v Pro

(a) on Sep and

(b) sec in bef d setting forth such other particu ovisions of this Act shall, so far ch return were a return required rovided that in a case-where a return has been furnis the 1st day of October, 1991 ptember, 2005 in response to a n subsequently a notice has bee ction 143 after the expiry of twe subsection (2) of section 143, a endment of said sub-section by t before the expiry of the time li sessment or recomputation as sp 3, every such notice referred to i alid notice: ovided further that in a case-where a return has been furnis the 1st day of October, 1991 ptember, 2005, in response to a d subsequently a notice has bee ction (2) of section 143 after the the proviso to clause (ii) of su fore the expiry of the time l ulars as may be prescribed; and as may be, apply accordingly a to be furnished under section 13 hed during the period commenc 1 and ending on the 30th day notice served under this section, a en served under sub-section (2) elve months specified in the prov as it stood immediately before the Finance Act, 2002 (20 of 20 imit for making the assessment, pecified in sub-section (2) of sect in this clause shall be deemed to hed during the period commenc 1 and ending on the 30th day a notice served under this secti en served under clause (ii) of s e expiry of twelve months specif ub-section (2) of section 143, limit for making the assessme

as if 39: cing y of and ) of viso 002) re-o be cing y of ion, sub-fied but ent,

rea sec dee Exp not app of O

(2) sec Tim ass

(a) yea

(b) end tax one

(c) to a Ind Exp esc assessment or recomputation a ction 153, every such notice re emed to be a valid notice. planation.-For the removal of thing contained in the first pro ply to any return which has bee October, 2005 in response to a n The Assessing Officer shall, be ction, record his reasons for doin me limit for notice :-

¶9(1) No notice under section 1 sessment year-if four years have elapsed from ar, unless the case falls under cla if four years, but not more tha d of the relevant assessment yea x which has escaped assessment a e lakh rupees or more for that ye if four years, but not more tha e end of the relevant assessment any asset (including financial in dia, chargeable to tax, has escap planation.-In determining incom caped assessment for the purpose as specified in sub-section (2) eferred to in this clause shall doubts, it is hereby declared t oviso or the second proviso sh en furnished on or after the 1st d notice served under this section. efore issuing any notice under ng so. 148 shall be issued for the relev m the end of the relevant assessm ause (b) or clause (c); an six years, have elapsed from ar unless the income chargeable amounts to or is likely to amoun ear; n sixteen years, have elapsed fr t year unless the income in relat terest in any entity) located outs ed assessment. me chargeable to tax which es of this subsection, the provisi

of be that hall day this vant ment e to nt to rom side has

of pur

(2) sub

(3) a p pur res six Exp pro or b San Off rele Ch sat fit c

(2) sha bel Explanation 2 of section 147 rposes of that section. The provisions of sub-section ( bject to the provisions of section If the person on whom a notice person treated as the agent of a n e assessment, reassessment or rsuance of the notice is to be mad ident, the notice shall not be iss years from the end of the releva planation.-For the removal of do ovisions of sub-sections (1) and ( 12, shall also be applicable for before the 1st day of April, 2012 nction for issue of notice :-

¶1(1) No notice shall be issued ficer, after the expiry of a perio evant assessment year, unless th ief Commissioner or Principal isfied, on the reasons recorded b case for the issue of such notice. In a case other than a case falli all be issued under section 148 low the rank of Joint Commissio shall apply as they apply for

(1) as to the issue of notice shall

¶151under section 148 is to be serve non-resident under section 163 a r recomputation to be made de on him as the agent of such n sued after the expiry of a period ant assessment year. oubts, it is hereby clarified that

(3), as amended by the Finance A any assessment year beginning

¶2under section 148 by an Assess d of four years from the end of he Principal Chief Commissioner Commissioner or Commissione by the Assessing Officer, that it

ing under sub-section (1), no no 8 by an Assessing Officer, who oner, unless the Joint Commissio

l be d is and in non-d of Act, g on sing f the r or r is is a tice o is

is s is a

(3) Pri Pri Com rec of n

3.1 Act inte issu Act Date

31.0

24.0

31.0

27.0

The 27t also am pro satisfied, on the reasons recorde a fit case for the issue of such no For the purposes of sub-sec incipal Chief Commissioner or incipal Commissioner or th mmissioner, as the case may b corded by the Assessing Officer a notice under section 148, need n In pursuance to the power veste t, 2020, the Central Governme er-alia extending the time lines uance of reassessment notices un t, 1961: e of Notification Original lim issuance of Section 148 of

03.2020

20.03.2020 to

06.2020

20.03.2020 to

03.2021

31.03.2021

04.2021

30.04.2021 e Explanations to the Notificat th April, 2021 issued under sec o stipulated that the provisio endment by the Finance Act, 20 oceedings initiated thereunder. ed by such Assessing Officer, tha tice. ction (1) and sub-section (2), r the Chief Commissioner or he Commissioner or the Jo be, being satisfied on the reas about fitness of a case for the is ot issue such notice himself." ed under section 3 of the Relaxat ent issued following Notificati s prescribed under section 149 nder section 148 of the Income T mitation for notice under of the Act Extended Limitation o 29.06.2020

30.06.2020 o 31.12.2020

31.03.2021

30.04.2021

30.06.2021 tions dated 31st March, 2021 a ction 3 of the Relaxation Act, 20 ons, as they existed prior to 021, shall apply to the reassessm

at it oint ons ssue ions for Tax and

3.2 by w.e Inc "14 esc may rea allo yea as t Exp rec rea ass cou tha Issu und Ass cop 2 The Parliament introduced refo 1 of the Income Tax Act, 1961 go way of the Finance Act, 2021,

¶21The substituted sections 147 e.f. 01.04.2021, passed in the Fin come escaping assessment-

¶47If any income chargeable to caped assessment for any asses y, subject to the provisions of assess such income or recomp owance or any other allowance ar (hereafter in this section and the relevant assessment year). planation.-For the purposes of computation under this section, t assess the income in respect o sessment, and such issue comes urse of the proceedings under th at the provisions of section 148A ue of notice where income has e

¶8Before making the assessmen der section 147, and subject to sessing Officer shall serve on th py of the order passed, if requ ormative changes to sections 147 overning reassessment proceedi which was passed on 28th Mar 7 to 149 and section 151 applica nance Act, 2021, are as under:- tax, in the case of an assessee, ssment year, the Assessing Offi of sections 148 to 153, assess pute the loss or the depreciat e or deduction for such assessm d in sections 148 to 153 referred of assessment or reassessment the Assessing Officer may assess of any issue, which has escap s to his notice subsequently in his section, irrespective of the f have not been complied with". escaped assessment:- nt, reassessment or recomputat the provisions of section 148A, he assessee a notice, along wit uired, under clause (d) of sect

7 to ings rch, able has ficer or ment d to or s or ped fact

in per pre pre for of t wer

Pr is inc ass has not Exp info cha

(i) ass form

(ii) of I 8A, requiring him to furnish with such notice, a return of his in rson in respect of which he is as evious year corresponding to th escribed form and verified in t th such other particulars as may this Act shall, so far as may be, re a return required to be furnish rovided that no notice under this information with the Assessing come chargeable to tax has esca sessee for the relevant assessme s obtained prior approval of th tice. planation 1.-For the purposes of formation with the Assessing Offi argeable to tax has escaped asse any information flagged in the c sessment year in accordance w mulated by the Board from time any final objection raised by the India to the effect that the assess e relevant assessment year has n e provisions of this Act. hin such period, as may be specif ncome or the income of any ot ssessable under this Act during he relevant assessment year, in the prescribed manner and sett y be prescribed; and the provisi apply accordingly as if such ret hed under section 139: section shall be issued unless th g Officer which suggests that aped assessment in the case of ent year and the Assessing Offi e specified authority to issue su f this section and section 148A, ficer which suggests that the inco essment means-case of the assessee for the relev with the risk management strat to time; e Comptroller and Auditor-Gene sment in the case of the assessee not been made in accordance w

fied ther ting ions turn here f the ficer uch ome vant tegy eral for

Exp

(i) doc afte

(ii) sec of A

(iii) Pri jew und on

(iv) Pri or rela info esc ass to acc con planation 2.-For the purposes of a search is initiated under secti cuments or any assets are requi er the 1st day of April, 2021, in t a survey is conducted under se ction (2A) or sub-section (5) of t April, 2021, in the case of the ass ) the Assessing Officer is satisf incipal Commissioner or Comm wellery or other valuable article der section 132 or under section or after the 1st day of April, 202 ) the Assessing Officer is sati incipal Commissioner or Comm documents, seized or requisitio 2A in case of any other person 21, pertains or pertain to, or a ate to, the assessee, the Assessin formation which suggests that t caped assessment in the case sessment years immediately prec the previous year in which th count, other documents or any a nducted in the case of the assess f this section, where-ion 132 or books of account, ot isitioned under section 132A, on the case of the assessee; or ection 133A, other than under s that section, on or after the 1st d sessee; or fied, with the prior approval of missioner, that any money, bulli e or thing, seized or requisition n 132A in case of any other per 21, belongs to the assessee; or isfied, with the prior approval issioner, that any books of acco oned under section 132 or sect n on or after the 1st day of Ap any information contained there ng Officer shall be deemed to h the income chargeable to tax e of the assessee for the th ceding the assessment year relev he search is initiated or books assets are requisitioned or survey see or money, bullion, jewellery

ther n or sub-day f the ion, ned rson l of ount pril, ein, ave has hree vant s of y is

oth seiz Exp mea Con und "14 sec

(a) spe tha

(b) prio sho not dat by und wh in con

(c) sho her valuable article or thing or b zed or requisitioned in case of an planation 3.-For the purposes ans the specified authority referr nducting inquiry, providing op der section 148 – 48A. The Assessing Officer sha ction 148-conduct any enquiry, if requ ecified authority, with respect t at the income chargeable to tax h provide an opportunity of bein or approval of specified authori ow cause within such time, as m t less than seven days and but n te on which such notice is issued him on the basis of an applicatio der section 148 should not be i ich suggests that income charge his case for the relevant asses nducted, if any, as per clause (a) consider the reply of assessee f ow-cause notice referred to in cla books of account or documents ny other person. of this section, specified autho red to in section 151." pportunity before issue of not ll, before issuing any notice un uired, with the prior approval to the information which sugge has escaped assessment; ng heard to the assessee, with ity, by serving upon him a notice may be specified in the notice, be not exceeding thirty days from d, or such time, as may be extend on in this behalf, as to why a no issued on the basis of informat eable to tax has escaped assessm sment year and results of enqu ; furnished, if any, in response to ause (b);

are rity tice nder l of ests e to eing ded tice ment

(d) rep und spe wh mo per

Pro whe

(a) doc cas

(b) Pri jew sec oth ass

(c) Pri or und decide, on the basis of mater ply of the assessee, whether or n der section 148, by passing an ecified authority, within one mo ich the reply referred to in clau such reply is furnished, within nth in which time or extended r clause (b) expires: ovided that the provisions of thi ere-a search is initiated under sect cuments or any assets are requi se of the assessee on or after the the Assessing Officer is satisfi incipal Commissioner or Comm wellery or other valuable article ction 132 or requisitioned under her person on or after the 1st d sessee; or the Assessing Officer is satisfi incipal Commissioner or Comm documents, seized in a search u der section 132A, in case of any rial available on record includ not it is a fit case to issue a no order, with the prior approval onth from the end of the month use (c) is received by him, or wh n one month from the end of time allowed to furnish a reply is section shall not apply in a c tion 132 or books of account, ot isitioned under section 132A in 1st day of April, 2021; or fied, with the prior approval of missioner that any money, bulli e or thing, seized in a search un r section 132A, in the case of a day of April, 2021, belongs to ied, with the prior approval of missioner that any books of acco under section 132 or requisition other person on or after the 1st d

ding tice l of h in here y as case ther ion, nder any ount ned

of A Exp mea Tim "1 ass

(a) yea

(b) end in wh form am

Pro in a day tim pro imm

Pro in a April, 2021, pertains or pertain erein, relate to, the assessee. planation.-For the purposes of ans the specified authority referr me limit for notice –

¶149(1) No notice under section sessment year-if three years have elapsed from ar, unless the case falls under cla if three years, but not more tha d of the relevant assessment yea his possession books of accoun ich reveal that the income cha m of asset, which has escaped as ount to fifty lakh rupees or more ovided that no notice under sect a case for the relevant assessme y of April, 2021, if such notice me on account of being beyond ovisions of clause (b) of sub-sect mediately before the commencem ovided further that the provision a case, where a notice under se n to, or any information contain f this section, specified autho red to in section 151." 148 shall be issued for the relev m the end of the relevant assessm ause (b); an ten years, have elapsed from ar unless the Assessing Officer nt or other documents or evide argeable to tax, represented in ssessment amounts to or is likely e for that year: tion 148 shall be issued at any t ent year beginning on or before could not have been issued at t the time limit specified under ion (1) of this section, as they sto ment of the Finance Act, 2021: s of this sub-section shall not ap ection 153A, or section 153C r

ned rity vant ment has ence y to ime 1st that ood pply

wit init any of M

Pro lim ass is s

Pro refe lim und rem lim acc Exp sha sha

(2) sub San th section 153A, is required to tiated under section 132 or boo y assets requisitioned under sect March, 2021: ovided also that for the purp mitation as per this section, the ti sessee, as per show-cause notice 8A or the period during which t stayed by an order or injunction ovided also that where immediat ferred to in the immediately p mitation available to the Assess der clause (d) of section 148 maining period shall be extende mitation under this sub-section cordingly. planation.-For the purposes of c all include immovable property ares and securities, loans and ad The provisions of sub-section ( bject to the provisions of section nction for issue of notice-be issued in relation to a sea oks of account, other documents tion 132A, on or before the 31st d poses of computing the period ime or extended time allowed to e issued under clause (b) of sect the proceeding under section 14 of any court, shall be excluded: tely after the exclusion of the per preceding proviso, the period sing Officer for passing an or 8A is less than seven days, su ed to seven days and the period shall be deemed to be extend clause (b) of this subsection, "ass y, being land or building or bo dvances, deposits in bank accoun

(1) as to the issue of notice shall

151.'

arch s or day d of 48A

riod d of rder uch d of ded set" oth, nt.

"15

(i) P Dir end

(ii) whe Gen yea

9.

De 1961, by the F reassessment no to the assessees which were assa High Courts qu Tax Act, 1961. Courts setting a Income Tax Act Finance Act, 20 and Others Vs. Court partly allo the judgment of Aggarwal [2022

¶51Specified authority for the p 8A shall be-Principal Commissioner or Prin rector, if three years or less than d of the relevant assessment year Principal Chief Commissioner ere there is no Principal Chief C neral, Chief Commissioner or D ars have elapsed from the end of spite the substituted Sections 1 Finance Act, 2021 which came otices under Section 148 of the I after coming into force of Finan ailed before different High Cou uashed the reassessment notices Union of India challenged the j aside reassessment notices und t, which were issued after 01.04. 021 before the Hon'ble Supreme Ashish Aggarwal [2022] SCC O owed the appeals filed by the U f Hon'ble Supreme Court in Uni 2] SCC Online SC 543 is reprodu purposes of section 148 and sect ncipal Director or Commissioner n three years have elapsed from r; r or Principal Director General Commissioner or Principal Direc Director General, if more than th f the relevant assessment year." 47 to 151 of the Income Tax A e into force on 01.04.2021 ma Income Tax Act, 1961 were issu nce Act, 2021 i.e. after 01.04.20 urts on different grounds. Differ under Section 148 of the Inco judgments passed by different H der Section 148 of the unamen .2021 i.e. after coming into force e Court of India in Union of In Online SC 543 . Hon'ble Supre Union of India. Relevant portion ion of India and Others Vs. Ash uced as under:-

r or l or ctor hree Act, any ued 021, rent ome High ded e of ndia eme n of

"5. on lea beh

¶6I refo rea rea gav inte ass esc offi cha pro (In not

6.1 a m yea We have heard Shri N. Venk behalf of the Revenue and Shri C rned Senior Advocates and oth half of the respective assessee. It cannot be disputed that by su e Income Tax Act (IT Act) by th formative changes are made assessment proceedings. Amende 1 of the IT Act prescribe the assessment proceedings. Howev ve rise to numerous litigations a er alia, on the grounds such as tangible/reliable material/inf sessing officer leading to form caped assessment, (3) no enquiry ficer prior to the issuance of n ange of opinion of the assessing ocedure laid down by this Cour ndia) Ltd. v. Income Tax Office t been followed. Further pre-Finance Act, 2021, maximum period up to six years ars leading to uncertainty for kataraman, learned ASG appear C.A. Sundaram and Shri S. Gane her learned counsel appearing bstitution of sections 147 to 151 he Finance Act, 2021, radical a e governing the procedure ed sections 147 to 149 and sect procedure governing initiation ver, for several reasons, the sa and the reopening were challeng

(1) no valid "reason to believe" formation in possession of mation of belief that income y being conducted by the assess notice; and reopening is based officer and (4) lastly the mandat rt in the case of GKN Drivesha er and ors; (2003) 1 SCC 72, , the reopening was permissible and in some cases beyond even r a considerable time. Therefo

ring esh, on 1 of and for n of ame ged

(2) has sing on tory afts has for six fore,

Par tax wit sec

6.2 foll Alo offi of t ach com

6.3 ass opp req of G

6.4 stre und if r rliament thought it fit to amend x administration, ease complianc th a view to achieve the said o ctions 147 to 149 and section 151 2 Under the substituted provisio 21, no notice under section 148 lowing the procedure prescribed ong with the notice under sectio ficer (AO) is required to serve th the IT Act. section 148A of the IT e nature of a condition preceden e IT Act can thus be said to be hieve the ultimate object of simp mpliance and reduce litigation. 3 But prior to pre-Finance sessment, the procedure of giving portunity to the assessee and th quired to be followed as per the GKN Driveshafts (India) Ltd. (su 4 However, by way of section 1 eamlined and simplified. It prov der section 148, the assessing off required, with the approval of s the Income Tax Act to simplify ces and reduce litigation. Therefo object, by the Finance Act, 20 1 have been substituted. ons of the IT Act vide Finance A of the IT Act can be issued with d under section 148A of the IT A on 148 of the IT Act, the assess he order passed under section 14 T Act is a new provision which is nt. Introduction of section 148A e a game changer with an aim plifying the tax administration, e Act, 2021, while reopening g the reasons for reopening and he decision of the objectives w judgment of this Court in the c upra). 148A, the procedure has now b vides that before issuing any not fficer shall (i) conduct any enqu specified authority, with respec

fore, 021, Act, hout Act. sing 48A s in A of m to ease an d an were case een tice uiry,

esc ass cau ma whe IT A tim

6.5 spe sec opi opp con any enq prio info esc

6.6 for e information which suggests tha caped assessment; (ii) provide an sessee, with the prior approval o e reply of the assessee furnished use notice referred to in clause ( terial available on record incl ether or not it is a fit case to issu Act and (v) the AO is required me stipulated. 5 Therefore, all safeguards are p 8 of the IT Act is issued. At eve ecified authority is required, even ction 148A(a). Only in a case wh inion that before any notice is is portunity is to be given to the a nducting any enquiry, the assess y enquiry. Thus if the assessing quiry is required, the assessing o or approval of the specified formation which suggests that t caped assessment. 6 Substituted section 149 is the issuance of notice under section at the income chargeable to tax n opportunity of being heard to of specified authority; (iii) consi d, if any, in response to the sho

(b); and (iv) decide, on the basis luding reply of the assessee, as ue a notice under section 148 of to pass a specific order within rovided before notice under sect ery stage, the prior approval of n for conducting the enquiry as p here, the assessing officer is of ssued under section 148A(b) and assessee, there is a requiremen sing officer may do so and cond g officer is of the opinion that a officer can do so, however, with d authority, with respect to the income chargeable to tax provision governing the time li n 148 of the IT Act. The substitu

has ider ow-s of s to f the f the per f the d an t of duct any has imit

sec issu ten abs

¶7bei spe ass resp pro rela bee wit

¶8Cou sam sub ma pro mis not una ction 149 of the IT Act has redu uance of such a notice to three y years. It also provides further sent under the earlier regime pre Thus, the new provisions subs ing remedial and benevolent i ecific aim and object to prote sessee as well as and the sa pective High Courts have righ ovisions shall be made available ating to past assessment years, en issued on or after 1st April, 2 th the view taken by the various H However, at the same time, th urts would result in no reassessm me are permissible under the bstituted sections 147 to 151 of de remediless and the objec oceedings cannot be frustrated. stake and in view of subseque tifications, the Revenue issued th 8 after the amendment was enfo amended section 148. In our vie uced the permissible time limit years and only in exceptional ca additional safeguards which w e-Finance Act, 2021. stituted by the Finance Act, 20 in nature and substituted with ect the rights and interest of ame being in public interest, htly held that the benefit of n e even in respect of the proceedi , provided section 148 notice

¶021We are in complete agreem High Courts in holding so. he judgments of the several H ment proceedings at all, even if Finance Act, 2021 and as p the IT Act. The Revenue cannot ct and purpose of reassessm It is true that due to a bonaf ent extension of time vide vari the impugned notices under sect forced w.e.f. 01.04.2021, under ew the same ought not to have b

for ases were h a new ings has ment High f the per t be ment fide ious

issu bon The tha ins und hav Act issu sec pro sub Fin req ass IT A in pas ued under the unamended Act an e substituted provisions of sectio e Finance Act, 2021. There appea e amendments as the officers of t nafide belief that the amendmen erefore, we are of the opinion th at regard which the High Cour tead of quashing and setting asi der the unamended provision of ve passed an order construing th t/unamended provision of the IT ued under section 148A of the ction 148A and the Revenue o oceed further with the reasse bstituted provisions of sections 1 nance Act, 2021, subject to c quirements and the defences, sessee under the substituted prov Act and which may be available law. Therefore, we propose to ssed by the respective High Cour

(i) The respective impugned respective assessees shall be section 148A of the IT Act nd ought to have been issued un ons 147 to 151 of the IT Act as p ars to be genuine nonapplication the Revenue may have been unde nts may not yet have been enforc hat some leeway must be shown rts could have done so. Therefo ide the reassessment notices issu f IT Act, the High Courts ough he notices issued under unamend T Act as those deemed to have b e IT Act as per the new provis ought to have been permitted essment proceedings as per 147 to 151 of the IT Act as per compliance of all the procedu which may be available to visions of sections 147 to 151 of e under the Finance Act, 2021 a modify the judgments and ord rts as under: - d section 148 notices issued to e deemed to have been issued un as substituted by the Finance A

nder per n of er a ced. n in fore, ued t to ded een sion d to ural f the and ders nder Act,

2021 and treated to be show 148A(b). The respective ass days from today provide to material relied upon by the reply to the notices within tw

(ii) The requirement of cond approval of the specified au dispensed with as a one-tim which have been issued und Act from 01.04.2021 till date quashed by the High Courts;

(iii) The assessing officers terms of section 148A(d) aft required under section 14 concerned assessees;

(iv) All the defences which under section 149 and/or w Finance Act, 2021 and in law to the Assessing Officer und open and/or shall continue to

(v) The present order s judgments and orders pass quashing the similar notices w-cause notices in terms of sect sessing officers shall within th the assessees the information a Revenue so that the assessees c wo weeks thereafter; ducting any enquiry with the pr uthority under section 148A(a) me measure vis-a-vis those noti der Section 148 of the unamend e, including those which have b ; shall thereafter pass an order fter following the due procedure 8A(b) in respect of each of may be available to the asses which may be available under w and whatever rights are availa der the Finance Act, 2021 are k o be available and; shall substitute/modify respec ed by the respective High Cou s issued under unamended sect

irty and can rior be ices ded een r in e as ssee able kept tive

¶9lea Sen resp ord Rev bel suc exc this aga Cou We pow ord also ord

148 of the IT Act irrespe assailed before this Court or There is a broad consensus on rned ASG appearing on behalf nior Advocates/learned counse pective assessees. We are also der is passed, it will strike a b venue as well as the respective lief of the officers of the Revenu ch notices, the Revenue may not chequer which would suffer. The e present order with a view avoid s Court and burden this Court ainst the similar judgments and urts, the particulars of some of e have also proposed to pass the wers under Article 142 of the Co e present order shall govern, not ders passed by the High Court of o be made applicable in resp ders passed by various High erefore the present order shall be ective of whether they have b r not. the aforesaid aspects amongst lf of the Revenue and the learn el appearing on behalf of of the opinion that if the afores balance between the rights of assesses as because of a bonaf ue in issuing approximately 900 t suffer as ultimately it is the pub erefore, we have proposed to p ding filing of further appeals bef with approximately 9000 appe orders passed by the various H which are referred to hereinabo e aforesaid order in exercise of Constitution of India by holding t t only the impugned judgments a f Judicature at Allahabad, but sh pect of the similar judgments a Courts across the country a e applicable to PAN INDIA.

een ned said fide blic pass fore eals High ove. our that and hall and

¶10App and W.T her In view of the above and for th peals are ALLOWED IN PART. d orders passed by the High Co T. No. 524/2021 and other a reby modified and substituted as

(i) The impugned section 14 assessees which were issued the IT Act, which were the before the various respectiv have been issued under s substituted by the Finance A to be show cause notices assessing officer shall, withi the respective assessees info by the Revenue, so that the cause notices within two wee

(ii) The requirement of con with the prior approval of 148A(a) is hereby dispensed avis those notices which hav the unamended Act from 01 which have been quashed by as observed hereinabove ho e reasons stated above, the pres The impugned common judgme ourt of Judicature at Allahabad allied tax appeals/petitions, is/ under: - 48 notices issued to the respec d under unamended section 148 e subject matter of writ petiti ve High Courts shall be deemed section 148A of the IT Act Act, 2021 and construed or trea in terms of section 148A(b). T in thirty days from today provide formation and material relied up e assesees can reply to the sho eks thereafter; nducting any enquiry, if requir f specified authority under sect d with as a one-time measure v ve been issued under section 148

1.04.2021 till date, including th y the High Courts. Even otherw olding any enquiry with the pr

sent ents d in /are tive 8 of ions d to as ated The e to pon ow-red, vis-8 of hose wise

¶11jud and issu gov afo und fur sim wit sha approval of specified authori concerned Assessing Officers

(iii) The assessing officers sh of section 148A(d) in res assessees; Thereafter after fo under section 148A may is substituted);

(iv) All defences which m including those available un all rights and contentions concerned assessees and Rev and in law shall continue to b The present order shall be dgments and orders passed by d d under which similar notices w ued under section 148 of the verned by the present order oresaid extent. The present orde der Article 142 of the Constitu ther appeals by the Revenue milar judgments and orders, wit th approximately 9000 appeals. all also govern the pending wri ity is not mandatory but it is for s to hold any enquiry, if required hall thereafter pass orders in ter spect of each of the concern following the procedure as requi ssue notice under section 148 may be available to the asses nder section 149 of the IT Act a which may be available to venue under the Finance Act, 20 be available. applicable PAN INDIA and different High Courts on the is which were issued after 01.04.20 Act are set aside and shall and shall stand modified to er is passed in exercise of pow ution of India so as to avoid a on the very issue by challeng th a view not to burden this Co We also observe that present or t petitions, pending before vari

d; rms ned ired (as sses and all ssue be wers any ging ourt rder

Hig issu

¶12Cou var ord men afo

10.

The in case of Unio SC 543l, Hon'b 148 issued to th 148 of the Inco various respecti 148-A of the In construed or tre further held tha passing of the information and reply to the sho the Hon'ble Su required, with t dispensed with under Section 1 gh Courts in which similar not ued after 01.04.2021 are under c The impugned common judgme urt of Allahabad and the simila rious High Courts, more particu ders passed by the various Hig ntioned hereinabove, shall s oresaid extent only. erefore, in above referred to jud on of India and Others Vs. Ash le the Supreme Court held that t e respective assessees which we ome Tax Act and were subject ve High Courts shall be deemed ncome Tax Act as substituted ated to be show cause notices in at the Assessing Officer shall, judgment i.e. 04.05.2022, pro d material relied upon by the R ow cause notices within 2 week upreme Court that the requirem the prior approval of specified a as one time measure viz-a-viz 48 of the unamended Act from 0 tices under Section 148 of the challenge. ents and orders passed by the H ar judgments and orders passed ularly, the respective judgments a gh Courts particulars of which tand modified/substituted to dgment of Hon'ble Supreme Co hish Aggarwal [2022] SCC Onl the impugned notices under Sect ere issued under unamended Sect matter of writ petitions before d to have been issued under Sect by the Finance Act, 2021 and n terms of Section 148A(b). It w within 30 days from the date ovide to the respective assess Revenue, so that the Assessees ks thereafter. It was further held ment of conducting any enquiry authority under Section 148A(a z those notices which were issu

01.04.2021 (Finance Act, 2021)

Act High d by and are ourt line d be was e of sees can d by y, if a) is ued

date i.e. 04.05.2 Officer shall the of the concerned under Section 14

11.

On Vs. Ashish Agg implementation clarified that the extended reasse notices were cha notices would "t be issued and th point." The in under Section 1 considering the 148A(d) and su issued to the as 2022, for the As 2017-2018. Th declared the not appropriate sanc

12.

In deal with the iss time limits pres 2022 (Decision in Ashish Agga ereafter pass orders in terms of d assessees and thereafter, after f 48A may issue notice(s) under S n 11.05.2022 following the decis garwal, the Central Board of Dire of the decision in Ashish Aggar e judgment in Ashish Aggarwal essment notices were issued, irr allenged or not. These instructio travel back in time to their origi hen new Section 149 of the Inco nstructions further elaborated th 148 of the new regime. The A replies furnished by the asses ubsequently notices under Sect ssessees by the Assessing Offic ssessment Year 2013-2014, 2014 hese notices were challenged tices to be invalid being time b ction of the specified authority. Ashish Aggarwal's case (supr sue as to whether or not reassessm scribed under the provisions of arwal). Further that the Assess Section 148A(d) in respect of e following the procedure as requi Section 148 (as substituted). sion in Union of India and Oth ect Taxes issued instructions for rwal's case (supra), wherein it w would apply to all the cases wh respective of the fact whether su ons further stated that reassessm inal date when such notices were ome Tax Act is to be applied at t he mechanism for issuing noti Assessing Officers accordingly a ssees passed orders under Sect tion 148 of the new regime w cers, between July and Septem 4-2015, 2015-2016, 2016-2017 before several High Courts, w arred and being issued without ra) Hon'ble Supreme Court did ment notices were issued within f Income Tax Act, 1961 read w

sing ach ired hers was here uch ment e to that ices after were mber and who not

relaxations prov Provisions) Act Section 148 of between July an 2015, 2015-201 being issued wi challenged by w Union of India the following iss "B.

18.

13.

Bef relevant portion of Union of I reproduced as un B.

¶18vided under the Taxation and O t, 2020 (TOLA). Different High the new regime issued to the a nd September 2022, for the A 6, 2016-2017 and 2017-2018 to ithout appropriate sanction of s way of filing the appeals befo and Others Vs. Rajiv Bansal. T sues in Union of India and Othe . Issues

The present batch of appeals a. Whether TOLA and no apply to reassessment notice b. Whether the reassessm 148 of the new regime betw valid." fore proceeding further it woul n of the judgment passed by the H India Vs. Rajeev Bansal [2024 nder :- Issues

The present batch of appeals a. Whether TOLA and no apply to reassessment notice Other Laws (Relaxation of Cert h Courts declared the notices un assessees by the Assessing Offic Assessment Year 2013-2014, 20 o be invalid, being time barred specified authority. The same w ore the Hon'ble Supreme Court The Hon'ble Supreme Court fram ers Vs. Rajiv Bansal :- s gives rise to the following issue otification issued under it will a es issued after 1 April 2021; and ment notices issued under Sect ween July and September 2022 ld be appropriate to reproduce Hon'ble Supreme Court in the c 4] 469 ITR 46 (SC). The same s gives rise to the following issue otification issued under it will a es issued after 1 April 2021; and

tain nder cers 014-and were t in med es:- also

are case e is es:- also

C. S

¶19Ind b. Whether the reassessm 148 of the new regime betw valid. Submissions

Mr N Venkataraman, learne dia, made the following submissio a. Parliament enacted TOLA provide relief and relaxati Revenue during the time of actions and proceedings t complied with within the orig Income Tax Act; b. Section 149 of the new reg to the assesses:

(i) the four-year time limit f to three years;

(ii) the first proviso to Secti for previous assessment year years; and

(iii) the monetary threshold the reassessment for previous c. The relaxations provided "notwithstanding anything Section 3(1), therefore, over ment notices issued under Sect ween July and September 2022 ed Additional Solicitor General ons on behalf of the Revenue: A as a free-standing legislation ion to both the assesses and f COVID-19. TOLA seeks to re that could not be completed ginal time limits specified under gime provides three crucial bene for all situations has been redu ion 149 ensures that re-assessm rs cannot be undertaken beyond of Rupees fifty lakhs will apply s assessment years; under Section 3(1) of TOLA ap contained in the specified A rrides the time limits for issuing

are l of n to elax or efits ced ment d six y to pply ct."

notice under Section 148 re Tax Act; d. TOLA does not extend th provides a relaxation for actions following the proc regime; e. The Finance Act 2021 s assessment with a new regim does not expressly bar the TOLA applies to the entire I 149 and 151 of the new r Section 149(1)(b) is read wit between 1 April 2021 an assessment years 2013-201 2017, and 2017-2018 will be explained in the tabulation b Assessment Year Within 3 years Exp Lim rea TO 2013-2014

31.03.2017 T app 2014-2015

31.03.2018 T app 2015-2016

31.03.2019 T app 2016-2017

31.03.2020

¶302017-2018

31.03.2021

30.

f. The Revenue concedes tha all notices issued on or af ead with section 149 of the Inco he life of the old regime. It mer the completion or compliance cedure laid down under the n substituted the old regime for me. The first proviso to Section 1 application of TOLA. Section 3 Income Tax Act, including Secti regime. Once the first proviso th TOLA, then all the notices issu nd 30 June 2021 pertaining 14, 2014-2015, 2015-2016, 20 e within the period of limitation below: xpiry of mitation ad with OLA for Within six Years Expiry Limitation read TOLA for

(5) O L A not plicable

31.03.2020

30.06.2021 O L A not plicable

31.03.2021

30.06.2021 O L A not plicable

31.03.2022 T O L A applicable .06.2021

31.03.2023 T O L A applicable .06.2021

31.03.2024 T O L A applicable at for the assessment year 2015-fter 1 April 2021 will have to

ome rely e of new re-3 of ions o to ued to 016-n as of with r (4) not not not -16,

CONCLUSION

14.

A p Bansal (supra) Additional Solic notices issued o for completion d

15.

Ad dated 06.04.202 under Section judgment dated (supra) and the Tax Act, 1961 issuance of notic

16.

In India in para 1 issued under Se 2015-2016 and Income Tax Ac limitation.

17.

In v dated 27.07.202 dropped as they will not fal prescribed under TOLA; N perusal of para 19 (f) of the jud shows that it is conceded positi citor General of India, that for t n or after 1 April 2021 will have during the period prescribed und dmittedly, notice under Section 21 for the Assessment Year 2 148A(b) of the Income Tax A

04.05.2022 in Union of India ereafter notice dated 27.07.2022 were issued to the petitioner w ce as per law amended by the Fin view of the statement made b 9 (f) of Rajeev Bansal's case ection 148 of the Income Tax A consequential order dated 26.0 ct, 1961 for the Assessment Ye view of the above, the present 22 issued under Section 148 o ll for completion during the per dgment passed in the case of Ra ion of the respondents, through the assessment year 2015-2016, e to be dropped as they will not der TOLA. 148 of the Income Tax Act, 19 2015-2016 and subsequent noti Act, 1961 issued in view of and Others Vs. Ashish Aggarw 2 under Section 148 of the Inco without following the procedure nance Act, 2021. by Additional Solicitor General e (supra), notice dated 27.07.20 Act, 1961 for the Assessment Y

05.2023 under Section 147 of ear 2015-2016 would be barred writ petition is allowed and not of the Income Tax Act, 1961

riod ajiv , all fall ices wal ome for l of Year d by tice

consequential o 1961 for the Ass

18.

Pen

(ARUN PAL

JUDGE

March 10, 2025 tripti

Wh

Wh rder dated 26.05.2023 under Se sessment Year 2015-2016 are he nding application(s), if any, also LLI)

hether speaking/non-speaking : S hether reportable

: Y ection 147 of the Income Tax A ereby set aside. stand disposed of. (SUDEEPTI SHARMA) JUDGE Speaking

Act,