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2024 (3) TMI 888 - HC - Income TaxValidity of reopening of assessment - Time limit for issuing notice - validity of sanction for issuing the orders under Section 148A(d) - HELD THAT:- As gleaned from the proviso to subsection (1) of Section 149: it applies to assessment years commencing prior to 01.04.2021, i.e. assessment years before the amendments came into effect; and the time limits under Section 149(1)(b), Section 153A or 153C, as the case may be, as it stood before the commencement of the Finance Act, 2021, apply to notices u/s 148 in respect of cases pertaining to assessment years beginning on or before 01.04.2021. Since the disputes pertain to assessment years 2016-2017 and 2017-2018, the proviso undoubtedly applies to these cases. What are the implications of the application of the proviso? - In our view, as a consequence of the proviso, the time limit specified in the pre-amended Section 149 (1)(b) becomes applicable and the time limit prescribed therein was four years and not more than six years. Whether the application of the proviso to Section 149 has the effect of incorporating by reference pre-amended Section 151? - In order to substantiate the contention that pre-amended Section 151 gets incorporated by reference, learned standing counsel relied on sub-section 2 to the pre-amended Section 149. It should be noticed that the proviso to sub-section (1) of the amended Section 149 does not even incorporate the whole of pre-amended Section 149. It merely makes the time limit prescribed therein applicable to the issuance of notices for reassessment in respect of any assessment year beginning before 01.04.2021. A fortiori the proviso certainly does not incorporate pre-amended Section 151 by reference and make it applicable. Impact of the TOLA - Undoubtedly, TOLA extended the time limits under specified enactments, including the I-T Act. As per clause (a)(ii) of sub-section(1) of Section 3 thereof, time limits for grant of sanction or approval were also extended. Since the petitioner does not challenge the sanction with respect to the time limit, clause(a) of sub-section(1) of Section 3 is immaterial. Indeed, TOLA, which extends the time limits for completion of specified tasks up to 31.03.2021, itself becomes irrelevant because of the nature of the challenge in these writ petitions. In Siemens Financial Services [2023 (9) TMI 552 - BOMBAY HIGH COURT] concluded, in substantially similar facts and circumstances, that the amended Section 151 and not the pre-amended Section 151 would apply. For reasons set out above, we concur with the conclusion in Siemens Financial Services and Ganesh Das Khanna [2023 (9) TMI 552 - BOMBAY HIGH COURT] as subsequently followed in Twylight Infrastructure [2024 (1) TMI 759 - DELHI HIGH COURT]. Consequently, the validity of sanction for issuing the orders under Section 148A(d) and the notices under Section 148 should be tested with reference to amended Section 151. If so tested, it is evident that sanction was not granted by an authority specified under clause (ii) of Section 151. Hence, the orders u/s 148A(d) and the notices under Section 148 are quashed. As a corollary, the draft assessment orders u/s 144B/144C cannot survive and are also quashed.
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