Krishan Kedia v. Income Tax Officer and Others

IN T

Krishan Kedia

Income Tax Off

CORAM : HO HO

Present: Mr

Ms

for

SUDEEPTI SH

The under Section 1

21.03.2023 unde Act, 1961, for th BRIEF FACTS

2.

The Brief facts of th dated 06.04.202 the petitioner fo THE HIGH COURT OF PUNJ AT CHANDIGA -.-

CW De

VERSUS ficer & Ors

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

-.-

HARMA, J. e challenge in the present writ pe 148 of Income Tax Act, 1961 a er Section 147 read with Section he Assessment Year 2014-2015. S e case of the petitioner pertains t he present case as per pleadings 21 under old Section 148 of the In or the Assessment Year 2014-201 JAB AND HARYANA ARH WP-4789-2024 (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 along with assessment order da ns 144 and 144B of the Income T to the Assessment Year 2014-20 s in the writ petition are that not ncome Tax Act, 1961 was issued 15, despite the fact that Section

ated Tax

¶015tice

of the Income T w.e.f. 01.04.202

27.11.2021 was NeFAC to ReF dated 22.12.202 Thereafter, after 1961, the assess 144B of the In passed. The pe before the Com reopening of the

06.04.2021 is ba in consequence in Union of In 543 was issued reply and after Section 148A(d Supreme Court ONLINE SC 5 Section 148 of t after following after considerin

21.03.2023 for t Tax Act, 1961 was substituted

¶21Notice under Section 142(1 s issued to the petitioner. Th AC on 08.12.2021. Therefore, 21 of the Income Tax Act, 1 r following the procedure as laid sment order dated 24.03.2022 un ncome Tax Act, 1961, for the titioner filed appeal against the mmissioner of Income Tax (Appe e assessment under old Section 1 arred by limitation. On 27.05.2 to judgment passed on 04.05.20 ndia and Others Vs. Ashish Ag The petitioner filed reply to t proceeding under Section 148A d) in consequence to judgment da in Union of India and Others 543 was passed. Pursuant there the Income Tax Act, 1961 was the procedure as laid down und ng the reply filed by the pe the Assessment Year 2014-15 wa with new Sections 148 and 14 1) of Income Tax Act, 1961 da hen the case was transferred fr again notice under Section 142 961 was issued to the petition d down under the Income Tax A nder Section 147 read with Sect Assessment Year 2014-2015 w assessment order dated 24.03.20 eals), inter alia, on the ground t 148 of the Income Tax Act, 1961 2022, notice under Section 148A 022 by the Hon'ble Supreme Co ggarwal [2022] SCC ONLINE the same and after considering A(d), order dated 27.07.2022 un ated 04.05.2022 passed by Hon' Vs. Ashish Aggarwal [2022] S eto notice dated 27.07.2022 un issued to the petitioner. Thereaf der the Income Tax Act, 1961 etitioner, assessment order da as passed.

48A ated rom 2(1) ner. Act, was that 1 on A(b) ourt SC nder 'ble SCC nder fter, and

3.

Hen under Section 1

21.03.2023 unde Act, 1961, for t barred by limita SUBMISSIONS

4.

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

5.

Lea proposition of l Rajeev Bansal

6.

We record of the pre nce the present petition challen 148 of Income Tax Act, 1961 a er Section 147 read with Section the Assessment Year 2014-201 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 read with Sections 144 61 dated 21.03.2023 is also bad i 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. nging the notice dated 27.07.20 along with assessment order da ns 144 and 144B of the Income T 5 on the ground that the same contends:- 022 issued under Section 148 of by limitation in view of the com erefore, the assessment order un 4 and 144B of the Income Tax A in the eyes of law. 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

ated Tax are ming nder Act, 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 :- 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

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

(a) where no return of in assessee although his total 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 ncome has been furnished by income or the total income of a 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)

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

Exp this in r com und hav of s Exp sha bef Issu rec may any section 133C, it is noticed income of the assessee ex 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 by the Assessing Officer that xceeds the maximum amount 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

not has oss, ding nder ome ssue ings ssue

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

dur yea and pro suc

Pr

(a) on Sep

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

(a) on Sep and ring the previous year correspo ar, in the prescribed form and 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 onding to the relevant assessm verified in the prescribed man 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

ment nner as if 39: cing y of and ) of viso 002) re-o be cing y of ion,

(b) sec in bef rea sec dee Exp not app of O

(2) sec Tim ass

(a) yea

(b) end tax one

(c) 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 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 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 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

sub-fied but ent, of be that hall day this vant ment e to nt to

to a Ind Exp esc of pur

(2) sub

(3) a p pur res six Exp pro or b San Off rele Ch any asset (including financial in dia, chargeable to tax, has escap planation.-In determining incom caped assessment for the purpose 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 terest in any entity) located outs ed assessment. me chargeable to tax which es of this subsection, the provisi 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

side has ions l be d is and in non-d of Act, g on sing f the r or

sat fit c

(2) sha bel 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

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 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 by the Assessing Officer, that it

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

is a tice o is oner at it oint ons ssue ions for

The 27t also am pro

3.2 by w.e Inc "14 esc may rea allo yea as t Exp rec rea ass cou tha 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. 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 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 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".

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

Issu und Ass cop in per pre pre for of t wer

Pr is inc ass has not Exp info cha 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 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 escaped assessment:-nt, reassessment or recomputat the provisions of section 148A, he assessee a notice, along wit uired, under clause (d) of sect 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-

th a fied ther ting ions turn here f the ficer uch

(i) ass form

(ii) of I Exp

(i) doc afte

(ii) sec of A

(iii) Pri jew und on

(iv) Pri or 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. 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 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 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

vant tegy eral for with ther n or sub-day f the ion, ned rson l of ount pril, ein,

rela info esc ass to acc con oth seiz Exp mea Con und "14 sec

(a) spe tha

(b) prio sho not dat by 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 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 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 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

ave has hree vant s of y is y or are rity tice nder l of ests e to eing ded

und wh in con

(c) sho

(d) rep und spe wh mo per

Pro whe

(a) doc cas

(b) Pri jew sec 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 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 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); 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

ment uiry ding tice l of h in here y as case ther ion, nder

oth ass

(c) Pri or und of A Exp mea Tim "1 ass

(a) yea

(b) end in wh form am

Pro in a 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 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 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 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

ount ned day ned rity vant ment has ence y to ime 1st

day tim pro imm

Pro in a wit init any of M

Pro lim ass is s

Pro refe lim und rem lim acc 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 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. 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 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

that ood pply ead arch s or day d of 48A

riod d of rder uch d of

Exp sha sha

(2) sub San "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 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-

¶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. 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.' 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

set" oth, nt. l be r or l or ctor hree Act, any ued 021, rent ome High ded

Finance Act, 20 and Others Vs. Court partly allo the judgment of Aggarwal [2022 "5. on lea beh

¶6I refo rea rea gav inte ass esc offi cha pro 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 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 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:- 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

ndia eme n of hish ring esh, on 1 of and for n of ame ged

(2) has sing on tory

(In not

6.1 a m yea Par tax wit sec

6.2 foll Alo offi of t ach com

6.3 ass opp 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 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 er and ors; (2003) 1 SCC 72, , the reopening was permissible and in some cases beyond even r a considerable time. Therefo 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

has for six fore, fore, 021, Act, hout Act. sing 48A s in A of m to ease an d an

req of G

6.4 stre und if r esc ass cau ma whe IT A tim

6.5 spe sec opi opp con any 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 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 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 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

case een tice uiry, t to has ider ow-s of s to f the f the per f the d an t of duct

enq prio info esc

6.6 for sec issu ten abs

¶7bei spe ass resp pro rela bee wit

¶8Cou sam 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 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 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 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

has imit uted for ases were h a new ings has ment High f the

sub ma pro mis not una issu bon The tha ins und hav Act issu sec pro sub Fin req 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 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, 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 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

t be ment fide ious een nder per n of er a ced. n in fore, ued t to ded een sion d to

ass IT A in pas 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 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 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 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

f the and ders nder Act, irty and can rior be ices ded een r in e as

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

able kept tive urts een ned said fide blic pass fore eals High ove. our

ord also ord

¶10App and W.T her 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 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 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. 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

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

¶11jud and issu gov afo 148A(a) is hereby dispensed avis those notices which hav the unamended Act from 01 which have been quashed by as observed hereinabove ho 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 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 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

vis-8 of hose wise rior d; rms ned ired (as sses and all ssue be

und fur sim wit sha 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 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 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 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 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

any ging ourt rder ous Act High d by and are ourt line d be was e of

information and reply to the sho the Hon'ble Su required, with t dispensed with under Section 1 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 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 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 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) 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

can d by y, if a) is ued till sing ach ired hers was here uch ment e to that ices after were mber

2017-2018. Th declared the not appropriate sanc

12.

In deal with the iss time limits pres 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 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 vided 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 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 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

who not with tain nder cers 014-and were t in med es:- also

are

of Union of I reproduced as un "ii.

¶6com con to sta (Re tim spe Cen TO com

¶7into 2(1 Act com com India Vs. Rajeev Bansal [2024 nder :- . TOLA On 24 March 2020, the Ce mplete lockdown for the entire ntain the spread of the COVID-e Central Government sought to redress the challenges faced tutory requirements due to the p e President of India promulgat elaxation of Certain Provisions me limits for completion or c ecified Acts falling for completio 20 and 29 June 2020 till 30 J ntral Government issued a notif OLA Ordinance to extend the mpliance of actions under the spe On 29 September 2020, Parlia o force with retrospective effect 1)(b) defines "specified Act" to t. Section 3(1) of TOLA extende mpliance of actions under the mpletion or compliance during th 4] 469 ITR 46 (SC). The same entral Government announced e nation" for twenty-one days -19 pandemic. (14) Following t implement various relief measu by the taxpayers in meeting pandemic. (15) On 31 March 20 ted the Taxation and Other La s) Ordinance 2020 (16) to exte compliance of actions under n or compliance between 20 Ma June 2020. On 24 June 2020, ification under Section 3(1) of e time limit for completion ecified Acts till 31 March 2021. ament enacted TOLA, which ca from 31 March 2020. (18) Sect mean and include the Income T ed the time limit for completion e "specified Act", which fell he period from 20 March 2020 a

e is "a s to this, ures 020, aws end arch or ame Tax n or for

rea "3( not 20t oth Go com

(a) of a oth or spe [...] And ma com in t suc Go

¶8S lim pow exte December 2020, to 31 March 2 ads thus:

(1) Where, any time-limit has b tified under, the specified Act wh th day of March, 2020 to the 31 her date after the 31st day of vernment, may, by notification mpletion or compliance of such a completion of any proceedings any notice, intimation, notificat her action, by whatever name ca tribunal, by whatever name ca ecified Act; ] d where completion of complia de within such time, then, mpliance of such action shall, n the specified Act, stand extended ch other date after 31st day vernment may, by notification, sp Section 3(1) empowered the Cen mit beyond 31 March 2021 by a wers, the Central Government is end the period of relaxation till 2021. The relevant part of Sectio been specified in, or prescribed hich falls during the period from 1st day of December, 2020, or s f December, 2020, as the Cen n, specify in this behalf, for action as – or passing of any order or issua tion, sanction or approval, or su alled, by any authority, commiss alled, under the provisions of ance of such action has not b the timelimit for completion notwithstanding anything contain d to the 31st day of March, 2021 of March, 2021, as the Cen specify in this behalf:" ntral Government to extend the t a notification. In pursuance of ssued the following notifications l 30 June 2021: a. Notification N

on 3 d or uch tral nce uch sion een or ned , or tral ime f its s to

Ma Ma com Apr exte Jun

¶9leg or com com of s xxx B.

¶18of 2020 dated 31 December 2 arch 2021. Resultantly, TOLA arch 2020 to 30 March 2021; b. March 2021 specified that 31 A e time period covered by TOL mpletion or compliance of action ril 2021; and c. Notification No ended the time limit for complet ne 2021. The effect of TOLA and th gislation was that: (i) if the time p issuance of any notice, sanction mpliance from 20 March 2020 mpletion or compliance of such e stipulated period, then the time such action was extended to 30 J x

xxx

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. 2020 extended the end date to covered the period between Notification No. 20 of 2021 da April 2021 shall be the end date LA. It extended the time limit ns under the Income Tax Act till o. 38 of 2021 dated 27 April 20 tion or compliance of actions till e notifications issued under prescribed for passing of any or , or approval fell for completion to 31 March 2021; and (ii) if h action could not be made dur limit for completion or complia June 2021. xxx

xxx 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

ated e of for l 30 l 30 rder n or ring nce es:- also

C. S

¶19Ind 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 notice under Section 148 re Tax Act; 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 ead with section 149 of the Inco

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

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.

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

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

Sau Ma Dh foll f. The Revenue concedes tha all notices issued on or af dropped as they will not fal prescribed under TOLA; g. Section 2 of TOLA defi include the Income Tax Act. effect on 1 April 2021, is Therefore, TOLA continues t after 1 April 2021; and h. Ashish Agarwal (supra) tr the Revenue between 1 Apri cause notices in terms of Revenue issued notices und between July and August 20 notices issued under the ne were issued beyond the time Tax Act read with TOLA wi exercise undertaken by this C

¶0Mr Percy Pardiwalla, Mr V S urabh Soparkar, and Mr K Shi anish Shah, Mr Darshan Pate aran Gandhi, and Mr Ved J lowing submissions on behalf of at for the assessment year 2015-fter 1 April 2021 will have to ll for completion during the per fines "specified Act" to mean a The new regime, which came i now part of the Income Tax A to apply to the Income Tax Act e reated Section 148 notices issued il 2021 and 30 June 2021 as sho Section 148A(b). Thereafter, der Section 148 of the new reg

¶022Invalidation of the Section 1 ew regime on the ground that t e limit specified under the Inco ill completely frustrate the judic Court in Ashish Agarwal (supra) Sridharan, Mr Tushar Hemani, ivram, learned senior counsel, el, Mr Suhrith Parthasarthy, Jain, learned counsel, made f the respondents:

-16, be riod and into Act. even d by ow-ime they ome cial . Mr Mr

a. TOLA applies only whe between 20 March 2020 and was enacted after TOLA. C field till the new regime cam Revenue had to issue Sectio regime without recourse to th b. TOLA did not amend the extended the specified time 149(1)(b) only refers to th erstwhile Section 149(1)(b); c. Notification No. 38 of 202 extend the time limits expiri old regime till 30 June 2021. April 2021, when the old reg by a new regime. Therefore into the new regime; d. The notices can be cat categories: i. First category: for assess 2015, the six-year time limit 31 March 2020 and 31 Marc reassessment notices were is be barred by limitation; en the period of limitation expi d 31 March 2021. Finance Act 20 Consequently, TOLA only held e into effect from 1 April 2021. T on 148 notices in terms of the n he extended timelines under TOL e erstwhile Section 149 but mer limits. The first proviso to Sect he period of limitation under

21 was issued on 27 April 2021 ing under Section 149(1)(b) of . The notification was issued afte egime was repealed and substitu e, this notification cannot be re tegorized into the following f sment years 2013-2014 and 20 in terms of Section 149 expired ch 2021 respectively. However, ssued after 1 April 2021 and wo

ires The new LA; rely 1 to er 1 uted ead four 014-d on

ii. Second category: for th issue pertains to whether authority was obtained by th reassessment notices under S this category of cases, the March 2020. However, not 2020 by obtaining sanction Section 151(1) of the old reg iii. Third category: for asses 2018, the three-year period expired on 31 March 2020 The notices under Section 1 three years, that is, after 1 A were obtained under Section the new regime; and iv. The directions issued b (supra) were not intended challenge the reassessment this Court. Therefore, reasse been initiated for such assess e. The applicability of the fi the new regime has to be test under Section 148 of the new the Income Tax Act, the e assessment year 2015-2016, the sanction of the appropri he assessing officers before issu Section 148 of the old regime. F e four-year period expired on tices were issued after 31 Ma n under Section 151(2) instead gime; ssment years 2016-2017 and 20 d in terms of the amended reg and 31 March 2021, respectiv 148 were issued after the expiry April 2021. However, the sancti n 151(i) instead of Section 151(ii) by this Court in Ashish Agarw to apply to assesses who did notices before the High Courts essment proceedings could not h ses. first proviso to Section 149(1)(b) ted on the date of issuance of no w regime. Even if TOLA is read i e time limits for completion

iate uing For arch d of 017-ime ely. y of ions

i) of wal not s or ave ) of tice into

xxx

¶44and E. R i. F

¶45compliance of actions can However, the notices under S issued by the Revenue from J of July to September 2022 stipulated under the Income f. Ashish Agarwal (supra) ca exclude the entire period fro The directions issued by th Constitution cannot contra contained in the Income T Ashish Agarwal (supra) exp available to the assesses un defence of limitation availab g. TOLA is only applicable limits. Section 151 does no issuance of sanctions by th TOLA does not apply to Sect x

xxx

We now proceed to analyse the d judicial background discussed Reading TOLA into the Income First proviso to Section 149(1) of The first proviso to Section 149 be extended till 30 June 20 Section 148 of the new regime w July to September 2022. The per is beyond the extended time lim Tax Act read with TOLA; annot be interpreted in a manner om April 2021 to September 20 is Court under Article 142 of avene the substantive provisi Tax Act. Moreover, this Court pressly left open all the defen nder the new regime, including le under Section 149; and to the provisions that specify t ot prescribe any time limit for he specified authorities. Therefo tion 151. xxx

xxx e issues given the broad legisla above. e Tax Act f the new regime 9(1)(b) provides thus:

¶021were riod mits r to

¶022ions t in nces ime fore,

"14 ass

¶46as f

¶49(1) No notice under section sessment year, -

(a) If three years have elap assessment year, unless the c

(b) If three years, but not m from the end of the relev Assessing Officer has in po other documents or eviden chargeable to tax, represent escaped assessment amounts lakh rupees or more for that Provided that no notice un any time in a case for the r on or before 1st day of April been issued at that time o beyond the time limit specif

(b) of sub-section (1) of this before the commencement of

The ingredients of the proviso follows:

(i) no notice under Section 1 at any time for an assessme April 2021; (ii) if it is barr 148 shall be issued for the relev psed from the end of the relev case falls under clause (b); more than ten years, have elap vant assessment year unless ossession of books of account nce which reveal that the inco ted in the form of asset, which ts to or is likely to amount to f year: der section 148 shall be issued relevant assessment year beginn 2021, if such notice could not h on account of being immedia fied under the provisions of cla section, as they stood immedia f the Finance Act, 2021:"

(emphasis supplied) could be broken down for analy 148 of the new regime can be issu ent year beginning on or befor red at the time when the notice

vant vant psed t or ome has fifty d at ning ave tely ause tely ysis ued re 1

¶47Ben any Sub dat atta cou inte ass bee is c only rea prin sought to be issued because the provisions of" 149(1)(b) could be issued under Sec assessment year 2021-2022 a issuance of such notice c 149(1)(b) of the old regime. In CTO v. Biswanath Jhunjh ngal Sales Tax Rules 1941 empo y assessment within four year bsequently, the State Governme e law to extend the time limit fro te of assessment. The extension o e respondents on the ground ained finality because of the e uld not be reassessed. This Cou ention of the notification to perm sessment made or order passed, en made before six years. It was clear and the language is unamb e legislative intention by readin ly to the incomplete assessments ached finality because of lapse of nciple that emanates from Biswa e courts should give full effect to of the "time limits specified un ) of the old regime. Thus, a no ction 148 of the new regime and before only if the time limit continued to exist under Sect hunwalla, (1996) 5 SCC 626 owered the Commissioner to rev rs from the date of assessme ent issued a notification follow om four years to six years from of the time limit was challenged that the assessments which h expiry of the period of four ye urt observed that it was the cl mit the Commissioner to revise a d, provided the assessment had held that if the legislative intent biguous, full effect must be given ng the notification as applying ts but also to assessments that h f the earlier prescribed period. T anath Jhunjhunwalla (supra) is t the legislative intention of grant

nder tice for for vise ent. wing d by had ears lear any not n to not had The that

rea exp

¶48dat pro bey wh Afte cam thre issu elap for exp not und exp

¶49of w reg bef can ass also assessment powers to assessing press provision, states otherwise.

Notices have to be judged a te the notice is issued. Section ovided two time limits: (i) four yond four years and within six ye ich escaped assessment amoun er 1 April 2021, the time limits me into force. The ordinary time ee years. Therefore, in all situat ued under the new regime if psed from the end of the releva assessment year 2018-2019, pired on 31 March 2023 under tice is issued after 1 April 2021, der the new regime will be applic pire on 31 March 2022. The first proviso to Section 14 whether the time limit prescribed gime continues to exist for the fore. Resultantly, a notice unde nnot be issued if the period of six sessment year has expired at the o ensures that the new time li officers unless the legislature, . ccording to the law existing on n 149 of the old regime prima r years for all situations and ears if the income chargeable to nted to Rupees one lakh or mo s prescribed under the new reg e limit of four years was reduced tions, reassessment notices could not more than three years h ant assessment year. For examp the four year period would h r the old regime. However, if the three year time limit prescri cable. The three year time limit w 49(1)(b) requires the determinat d under Section 149(1)(b) of the assessment year 2021-2022 a er Section 148 of the new reg x years from the end of the relev time of issuance of the notice. T mit of ten years prescribed un

by rily

(ii) tax ore. ime d to d be ave ple, ave bed will old and ime vant This

Sec exa wou exp of t ass am retr

¶50reg lak six cha one ten lak

¶51cou wh ction 149(1) (b) of the new r ample, for the assessment year uld have expired on 31 March pired on 31 March 2019. Witho the new regime, the Revenue co sessments for the year 2012-ounted to Rupees fifty lakhs rospective operation of Section e assesses. Another important change un gime is the increase in the mon kh to Rupees fifty lakhs. The old years from the end of the relev argeable to tax which escaped e lakh. In comparison, the new years if the escaped assessment khs. This change could be summa Regime Time Limit Old regime Four years but more than six yea New regime Three years but more than ten ye Given Section 149(1)(b) of the uld be issued after three years o ich escaped assessment is mo regime applies prospectively. F r 2012-2013, the ten year per h 2023, while the six year per ut the proviso to Section 149(1) ould have had the power to reop 2013 if the escaped assessm or more. The proviso limits 149(1)(b) to protect the interests nder Section 149(1)(b) of the n netary threshold from Rupees o d regime prescribed a time limi vant assessment year if the inco assessment was more than Rup regime increases the time limi t amounts to more than Rupees f arized thus: Income chargeable to tax which has escaped assessment not ars Rupees one lakh or more not ears Rupees fifly lakhs or more e new regime, reassessment noti only if the income chargeable to ore than Rupees fifty lakhs. T

For riod riod )(b) pen ment s of new one t of ome pees t to fifty ices tax

pro wit old

¶52new pas lak Ven not lim be ass

¶53disc reg The situ new not acc from issu oviso to Section 149(1)(b) limits th respect to the time limits spec d regime. In Ashish Agarwal (supra), thi w regime must be provided for t st periods. The increase of the m kh to Rupees fifty lakh is nkataraman has also conceded tices issued under the new reg mit prescribed under Section 149( dropped if the income charg sessment is less than Rupees fifty The position of law which ca cussion may be summarized th gime is not prospective. It also ap e time limit of four years is no uations. The Revenue can issue w regime only if three years or e relevant assessment year; (iii) e new regime stipulates that the tices for past assessment year cording to Section 149(1)(b) of m the end of the relevant asse ued invoking the time limit un the retrospectivity of that provis ified under Section 149(1)(b) of is Court held that the benefit of the reassessment conducted for monetary threshold from Rupees o beneficial for the assesses. on behalf of the Revenue that gime by invoking the six year t

(1)(b) of the old regime will have geable to tax which has escap y lakhs. an be derived based on the ab hus: (i) Section 149(1) of the n pplies to past assessment years; ow reduced to three years for e notices under Section 148 of less have elapsed from the end the proviso to Section 149(1)(b) e Revenue can issue reassessm rs only if the time limit survi f the old regime, that is, six ye essment year; and (iv) all noti nder Section 149(1)(b) of the

sion f the f the one Mr all ime e to ped ove new

(ii) all d of ) of ment ives ears ices

reg has ii. T

¶54exp cla bef pro app not ma

(i) f per and

(ii) per a. xxx

¶62tim com TO gime will have to be dropped if t s escaped assessment is less than TOLA can extend the time limit The proviso to Section 149(1 pression "beyond the time limit use (b) of subsection (1) of this fore the commencement of the oviso specifically refers to the t 9(1)(b) of the old regime. Th plication of TOLA, the time li tices after 1 April 2021 expires 14-2015, 2015-2016, 2016-2017 nner: for the assessment years 2013-riod expires on 31 March 2020 d for the assessment years 2016-2 riod expires on 31 March 2020 a Finance Act 2021 substituted th x

xxx

The purpose of Section 3(1) of me limits prescribed under th mpletion or compliance from 20 OLA was enacted in the backd the income chargeable to tax wh n Rupees fifty lakhs. t till 31 June 2021 1)(b) of the new regime uses t specified under the provisions section, as they stood immedia e Finance Act, 2021." Thus, time limits specified under Sect he Revenue accepts that with imit for issuance of reassessm s for assessment years 2013-20 7, and 2017-2018 in the follow -2014 and 2014-2015, the six y 0 and 31 March 2021 respective 2017 and 2017-2018, the three y and 31 March 2021 respectively. he old regime xxx

xxx f TOLA is to provide relaxation e specified Acts, which fell 0 March 2020 to 31 March 20 drop of the COVID-19 pandem

hich s of tely hout ment 014, wing year ely; year n of for

¶021mic,

wh imp com leg req and gov per cha sug ind tax pay wit dea

¶63cer dur Sec act Ma act Con spe ich impeded the functioning of position of national and local lo mmon people, including litigants gal obligations. The COVID19 pa quired legislatures across the wo d policies to redress the difficul vernmental authorities. (122) rsons and business entities f aracterised by a lack of cash or ggested that this would imp dividuals and entities would not b xes. Therefore, the World Bank yment deadlines to allow individ th the crisis. (123) Many countri adlines for filing tax returns. TOLA extended the time limits rtain actions under the specifie ring the COVID-19 outbreak. T ction 3(1) indicates that the rela tion whose time limit falls for com arch 2021. Section 3(1) is only c tions contemplated under the nsequently, the amendment or su ecified Acts will not affect the ap f the government at all levels. T ckdowns created difficulties for s and assesses, to comply with th andemic and the ensuing lockdow orld to dynamically adapt their la lties faced by persons, entities, a The World Bank identified t faced severe financial situati easily convertible-to-cash assets pact revenue collection beca be in a position to pay the asses advised deferral of tax filings a duals and business entities to co ies across the world have extend ts for completion or compliance ed Act, which fell for complet The use of the expression "any" axation applies to "all" or "eve mpletion from 20 March 2020 to concerned with the performance provisions of the specified A ubstitution of a provision under pplication of TOLA, so long as

The heir wns aws and that ions s. It ause ssed and ope ded e of " in ery" o 31 e of

act

¶64ens pro Tax of pro pro mu har b. R

¶65not Sec not ass pro rea situ bef tion contemplated under the pro e period specified by TOLA, tha

¶21When enacting a statute, the sure that the provisions of one ovisions of another legislation. x Act is to levy tax on income and the Government. On the other ovide relaxation of the time f oceedings falling for completion e two enactments operate in sepa st ensure that the provisions of rmoniously unless there is an irr Reading TOLA into Section 149 Section 3(1) of TOLA applies tice" under the Income Tax Ac ction 3(1) of TOLA will apply tice under section 148 of the Inc e time limits of four years and six sessment years as specified und ovided a relaxation of the assessment notice under Section uations where the time limit sp fore 20 March 2020. The effec ovision falls for completion dur at is, 20 March 2020 to 31 Ma e legislature often endeavours e legislation do not conflict w

(125) The purpose of the Inco d raise revenues for the function hand, the purpose of TOLA is for completion of any actions n within a particular period. Th arate and distinct fields. This Co the two enactments are interpre reconcilable conflict between the to the action of "issuance of a ct. The relaxation provided un to the issuance of a reassessm come Tax Act. TOLA did not ame x years from the end of the relev der the Income Tax Act. It mer time period for issuance of n 148. TOLA has no application pecified under Section 149 expi ct of TOLA is that at the time

ring arch s to with ome ning s to or hus, ourt eted em. any nder ment end vant rely f a n in ired

issu to d and not am Sec was ins Sec exte diff

¶66by spe Go diff lim

¶67Inc to m sub uance of a reassessment notice u determine two things: (i) the tim d (ii) the extent of relaxati tifications for issuance of notic end section 149 of the Income ction 149 to determine the time s the legislative intent behin tance, the six year time limit for ction 149(1)(b) of the old regime ended the period for issuing no fficulties that arose because of th Section 3(1) of TOLA allowed notification "such other date aft e time limit for completion or co ecified Acts. The provision vernment to specify different dat fferent actions. The notifications 21 extend the operation of TOL mit for completing actions under

¶21Section 2(1)(b)(ii) of TOLA def come Tax Act. After 1 April 202 mean the Income Tax Act as ame bstitution of Sections 147 to 1 under Section 148, the Revenue e limit specified under Section 1 ion provided by TOLA and ces. Thus, although TOLA did e Tax Act, it has to be read w limit for issuance of a notice. T nd the enactment of TOLA. F r assessment year 2013-2014 un e expired on 31 March 2020. TO otice until 30 June 2021, given e COVID-19 pandemic. the Central Government to spe fter the 31st day of March, 2021" ompliance of any action under also empowered the Cen tes for completion or compliance dated 31 March 2021 and 27 Ap LA by providing an extended t r the Income Tax Act till 30 Ju efines `specified Act' to include 21, Section 2(1)(b)(ii) must be re ended by the Finance Act 2021. T 51 will not affect the purpose

has 49; its not with This For nder OLA cify " as tral e of pril ime June ead The

TO or Ma Inc spe for

¶68retr TO rea Rev Sec not exte ben for xxx G. OLA, which is, to provide relaxat compliance of any actions fa arch 2020 and 31 March 2021. come Tax Act after 1 April 2 ecified under the substituted pro completion between 20 March 2 After 1 April 2021, the Income e substituted provisions. Th rospectively for past assessmen OLA was still in existence, and th e application of TOLA and its no assessment notice under Sectio venue would still have to look a ction 149 of the new regime; an tice as extended by TOLA and its end the operation of the old law nefit from the extended time lim completion between 20 March 2 x

xxx

Conclusions

¶4In view of the above discussion a. After 1 April 2021, the Inc with the substituted provision tion of the time limit for complet alling for completion between TOLA will continue to apply to 2021 if any action or proceed ovisions of the Income Tax Act fa 2020 and 31 March 2021. e Tax Act has to be read along w e substituted provisions ap nt years as well. On 1 April 20 he Revenue could not have igno otifications. Therefore, for issuin on 148 after 1 April 2021, at: (i) the time limit specified un nd (ii) the time limit for issuance s notifications. The Revenue can w under TOLA, but it can certai mit for completion of actions fall 2020 and 31 March 2021.

xxx

xxx n, we conclude that: come Tax Act has to be read alo ns;

ding falls with pply 021, ored ng a nder e of nnot inly ling x

b. TOLA will continue to ap April 2021 if any action o substituted provisions of completion between 20 Marc c. Section 3(1) of TOLA ov Tax Act only to the extent of of a reassessment notice und d. TOLA will extend the tim the authority specified under whether TOLA will apply to this: if the time limit of assessment year falls betwe 2021, then the specified au extended time till 30 June 20 e. In the case of Section 151 time limit of four years from between 20 March 2020 and authority under Section 151( 2021 to grant approval; f. The directions in Ashish A the ninety thousand reassess regime during the period 1 A g. The time during which th to be stayed is from the date pply to the Income Tax Act afte or proceeding specified under the Income Tax Act falls ch 2020 and 31 March 2021; verrides section 149 of the Inco f relaxing the time limit for issua der Section 148; e limit for the grant of sanction r Section 151. The test to determ o Section 151 of the new regime three years from the end of een 20 March 2020 and 31 Ma uthority under Section 151(i) 021 to grant approval; of the old regime, the test is: if the end of an assessment year fa d 31 March 2021, then the specif

(2) has extended time till 31 Ma Agarwal (supra) will extend to sment notices issued under the April 2021 and 30 June 2021; e show cause notices were deem e of issuance of the deemed not

er 1 for ome nce n by mine e is an arch has f the falls fied arch all old med

CONCLUSION

14.

The referred to in Pa of India Vs. Ra for notice, as pr substituted by t 2014-2015 wou would expire on of limitation r

30.06.2021. If th And till 31.03.2

31.03.2020. Sec Tax Act. Secti compliance of between 1 April 2021 and relevant information and ma the assesses in terms of the Ashish Agarwal (supra), and the assesses to respond to the h. The assessing officers reassessment notice under Se the time limit surviving und TOLA. All notices issued bey barred and liable to be set as N e present case pertains to the ye ara 19(e) of the judgment of Ho ajeev Bansal (Supra), as referred rescribed under Section 149 of th the Finance Act, 2021 w.e.f. 0 uld expire on 31.03.2018 if it is n 31.03.2021 if it is to be issued read with TOLA is taken, th he period of three years is taken 2018, TOLA was not applicable ction 2 (1) (b) defines "Specified on 3 (1) of TOLA extended action under the "Specified A d 30 June 2021 till the supply aterial by the assessing officers directions issued by this Cour d the period of two weeks allowed e show cause notices; and s were required to issue ection 148 of the new regime wit der the Income Tax Act read w eyond the surviving period are t side; ear 2014-2015. A perusal of ta on'ble the Supreme Court in Un d to above, shows that the time li he Income Tax Act, 1961, which

1.04.2021 for the assessment y to be issued within three years a within six years. Further, if exp hen the period would expire n, that would expire on 31.03.20 since TOLA came into force w. d Act" to mean and include Inco the time limit for completion Act", which fell for completion

y of s to t in d to thin with ime able nion imit h is year and piry on

¶018.e.f. ome n or

compliance dur Section 3 (1) em

31.03.2021 and

15.

In Union of India year 2014-2015 and if after the limit till 30.06.2 the Income Ta extended period subsequent asse Sections 144 an in view of the ju Union of India

16.

In v dated 27.07.202 under Section 14 are, hereby, set a

17.

Pen

(ARUN PAL

JUDGE

March 10, 2025 Tripti/pj

Wh

Wh ring the period from 20.03.202 mpowered the Central Governme the same was extended up to 30 view of the judgment passed b Vs. Rajeev Bansal (Supra), ev were to be issued within six yea expiry of 31.03.2021, TOLA is 2021. Admittedly, in the presen ax Act, 1961 was issued on 2 d. Therefore, the notice dated 2 essment order dated 21.03.202 nd 144B of the Income Tax Act, udgment dated 03.10.2024 passe vs. Rajeev Bansal (Supra). view of the above, the present 22 under Section 148 along with 47 of the Income Tax Act, 1961 aside. nding application(s), if any, also LLI)

hether speaking/non-speaking : S hether reportable

: Y 20 and 31.12.2020 to 31.03.20 ent to extend the time limit beyo .06.2021. by Hon'ble the Supreme Court ven if the notices for the assessm ars, the same expired on 31.03.20 to be applied, it extended the ti nt case, notice under Section 148

27.07.2022, which is beyond

27.07.2022 under Section 148 a 23 under Section 147 read w 1961 would be barred by limitat ed by Hon'ble the Supreme Cour writ petition is allowed and not assessment order dated 21.03.20 for the assessment year 2014-20 stand disposed of. (SUDEEPTI SHARMA) JUDGE Speaking

¶021ond t in ment ime 8 of and with rt in