9911796707
TMI Blog2021 (10) TMI 697X X X X Extracts X X X X X X X X Extracts X X X X ..... below: "Heard Sri Rakesh Ranjan Agarwal, learned Senior Advocate, assisted by Sri Suyash Agarwal, Sri Shambhu Chopra, learned Senior Advocate, assisted by Ms. Mahima Jaiswal, Sri Abhinav Mehrotra, Sri Akhilesh Kumar along with Sri Ashish Bansal, Sri Divyanshu Agarwal along with Sri Ankit Saran, Sri Deepak Kapoor along with Sri Shubham Agarwal, Sri V.K. Sabarwal and Shri R.B. Gupta along with Sri Rishi Raj Kapoor, Sri Shakeel Ahmad, Sri Parv Agarwal, Sri Salil Kapoor along with Sri Anuj Srivastava & Ms Soumya Singh alongwith Sri Satya Vrat Mehrotra, Sri Ankur Agarwal, Sri Krishna Deo Vyas, Sri Ashok Shankar Bhatnagar & Sri Harshul Bhatnagar, Sri Pranchal Agarwal, Sri V.K. Sabharwal, Sri R.B. Gupta, Ms. Shalini Goel and Ms. Rupal Agarwal, learned counsel for the petitioners; Sri Shashi Prakash Singh, learned Additional Solicitor General of India assisted by Sri Gopal Verma, Sri Dinesh Kumar Mishra, Sri Gaya Prasad Singh, Sri Sudarshan Singh, Sri Santosh Kumar Singh Paliwal, Sri Ajai Singh, Sri Gaurav Kumar Chand and Sri Krishna Agarwal, learned counsel appearing for the Union of India; Sri Gaurav Mahajan, Sri Praveen Kumar, Sri Krishna Agarwal, Sri Ashish Agarwal and Sri Manu Ghild ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... HOBHIT SHUKLA 2013-14 30.06.2021 -- 10. 564-2021 VARDHMAN INDUSTRIES 2015-16 16.04.2021 25.09.2015 11. 565-2021 YOGESH JAISWAL 2017-18 25.05.2021 29.10.2017 12. 567-2021 NEERAJ PRAKASH 2013-14 30.06.2021 31.12.2015 13. 573-2021 PARVEEN QURESHI 2016-17 30.06.2021 15.06.2017 14. 592-2021 SARLA JAIN 2013-14 26.04.2021 31.03.2014 15. 612-2021 J.M. HOUSING LIMITED 2016-17 30.06.2021 15.10.2016 16. 613-2021 J.M. HOUSING LIMITED 2017-18 30.06.2021 27.01.2018 17. 614-2021 GSR MOVIES 2013-14 28.06.2021 28.09.2013 18. 615-2021 PAWANPUTRA HOTELS AND RESORTS PVT. LTD. 2013-14 30.06.2021 27.09.2013 19. 623/2021 HIRA LAL JAIN 2013-14 27.04.2021 29.07.2013 20. 624-2021 DEVOY BENARA 2013-14 27.04.2021 -- 21. 625-2021 JAI JAGDAMBA METALLOYS LIMITED 2017-18 14.04.2021 31.10.2017 22. 636-2021 STAR CORPORATION 2014-15 30.06.2021 29.09.2014 23. 640-2021 STAR CORPORATION 2013-14 29.06.2021 29.09.2013 24. 641-2021 STAR ASSOCIATES 2013-14 29.06.2021 28.09.2013 25. 642-2021 NAMAN GOVIL 2013-14 19.04.2021 30.11.2013 26. 643-2021 RUPA GOYAL 2017-18 25.05.2021 28.10.2018 27. 655-2021 NAMAN GOVIL 2014-1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... C BUILDMART PVT. LTD 2014-15 30.06.2021 25.03.2015 64. 779-2021 KIRTI SINGH 2014-15 30.06.2021 14.03.2015 65. 780-2021 SUSHIL JOSHI 2013-14 30.06.2021 31.03.2014 66. 781-2021 SHIV SHAKTI CONSTRUCTIONS 2014-15 30.06.2021 29.11.2014 67. 782-2021 MUKESH KUMAR 2014-15 30.06.2021 14.03.2015 68. 795-2021 AMBIKA ENCLAVE PRIVATE LIMITED 2015-16 28.06.2021 30.03.2016 69. 796-2021 KUSUM ENCLAVE PRIVATE LIMITED 2015-16 28.06.2021 20.09.2015 70. 797-2021 AMBIKA ENCLAVE PRIVATE LIMITED 2017-18 28.06.2021 27.11.2017 71. 801-2021 KANTA DEVI 2015-16 10.06.2021 19.03.2017 72. 810-2021 MRITUNJAY KUMAR 2013-14 06.04.2021 -- 73. 811-2021 VINITA KEJRIWAL 2014-15 28.06.2021 31.07.2014 74. 813-2021 MRITUNJAY KUMAR 2014-15 06.04.2021 - 5. As to the exact challenge raised, it may be noted, the petitioners have challenged the validity of the re-assessment notices issued to them, under Section 148 of the Act. Another challenge has been raised to the validity of the Explanation appended to clause (A)(a) of CBDT Notification No. 20 of 2021, dated 31.03.2021 and Explanation to clause (A)(b) of CBDT Notification No. 38 of 2021, dated 27.04.202 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n such facts, judicial intervention had been made by the Supreme Court as also by this Court, to relax the rules of limitation - to institute various proceedings. The Central Government also recognized that difficulty and promulgated the Ordinance No. 2 of 2020 dated 31.03.2020 titled Taxation and Other Laws (Relaxation of Certain Provisions) Ordinance, 2020 (hereinafter referred to as the 'Ordinance'). Relevant to our discussion, the introductory text of the said Ordinance together with provisions of Sections 1, 2 and 3 of the Ordinance are quoted below: "TAXATION AND OTHER LAWS (RELAXATION OF CERTAIN PROVISIONS) ORDINANCE, 2020 NO.2 OF 2020, DATED 31-3-2020 Promulgated by the President in the Seventy-first Year of the Republic of India. An Ordinance to provide relaxation in the provisions of certain Acts and for matters connected therewith or incidental thereto. WHEREAS, in view of the spread of pandemic COVID-19 across many countries of the world including India, causing immense loss to the lives of people, it has become imperative to relax certain provisions, including extension of time limit, in the taxation and other laws; AND WHEREAS, Parliament is not in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) filing of any appeal, reply or application or furnishing of any report, document, return statement or such other record, by whatever name called, under the provisions of the specified Act; or (c) in case where the specified Act is the Income-tax Act, 1961 (43 of 1961), - (i) making of investment, deposit, payment, acquisition, purchase, construction or such other action, by whatever name called, for the purposes of claiming any deduction, exemption or allowance under the provisions contained in - (I) sections 54 to 54GB or under any provisions of Chapter VI-A under the heading "B.-Deductions in respect of certain payments" thereof; or (II) such other provisions of that Act, subject to fulfillment of such conditions, as the Central Government may, by notification, specify; or (ii) beginning of manufacture or production of articles or things or providing any services referred to in section 10AA of that Act, in a case where the letter of approval, required to be issued in accordance with the provisions of the Special Economic Zones Act, 2005 (28 of 2005), has been issued on or before the 31st day of March, 2020 (28 of 2005), and where completion or compliance of such act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... b-clause (iiia), after the word "fund", the words and brackets "or the Prime Minister's Citizen Assistance and Relief in Emergency Situations Fund (PM CARES FUND)" shall be inserted." 9. Acting in exercise of powers vested under the Ordinance, the Central Government then issued Notification Nos. 35 of 2020, 39 of 2020 and 56 of 2020, dated 24.06.2020, 29.06.2020 and 29.07.2020, respectively. Briefly, by those Notifications, general time extension was granted under the Act for certain purposes. Since, the present dispute does not arise in the context of those Notifications, no useful purpose would be served in extracting their contents. 10. The aforesaid Ordinance was succeeded by the Enabling Act. It received the assent of the President on 29.09.2020 and was published in the Official Gazette, on that date itself. It was enforced retrospectively, with effect from 31.03.2020. By the Enabling Act, further provisions were made in addition to the provisions of Section 3 of the Ordinance. We may therefore take note of Sections 1, 2 and 3 of the Enabling Act. They read as below: "THE TAXATION AND OTHER LAWS (RELAXATION AND AMENDMENT OF CERTAIN PROVISIONS) ACT, 2020 NO. 38 OF 2020 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act, 1961,- (i) making of investment, deposit, payment, acquisition, purchase, construction or such other action, by whatever name called, for the purposes of claiming any deduction, exemption or allowance under the provisions contained in- (I) sections 54 to 54GB, or under any provisions of Chapter VI-A under the heading "B.-Deductions in respect of certain payments" thereof; or (II) such other provisions of that Act, subject to fulfilment of such conditions, as the Central Government may, by notification, specify; or (ii) beginning of manufacture or production of articles or things or providing any services referred to in section 10AA of that Act, in a case where the letter of approval, required to be issued in accordance with the provisions of the Special Economic Zones Act, 2005, has been issued on or before the 31st day of March, 2020, and where completion or compliance of such action has not been made within such time, then, the time-limit for completion or compliance of such action shall, notwithstanding anything contained in the specified Act, stand extended to the 31st day of March, 2021, or such other date after the 31st day of March, 2021, as the Central Govern ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... substituted; (v) sections 54 to 54GB of that Act, referred to in item (I) of subclause (i) of clause (c), or sub-clause (ii) of the said clause, the provision of this sub-section shall have the effect as if - (a) for the figures, letters and words "31st day of December, 2020", the figures, letters and words "29th day of September, 2020" had been substituted for the time-limit for the completion or compliance; and (b) for the figures, letters and words "31st day of March, 2021", the figures, letters and words "30th day of September, 2020" had been substituted for making such completion or compliance; (vi) any provisions of Chapter VI-A under the heading "B.- Deductions in respect of certain payments" of that Act, referred to in item (I) of sub-clause (i) of clause (c), the provision of this sub-section shall have the effect as if- (a) for the figures, letters and words "31st day of December, 2020", the figures, letters and words "30th day of July, 2020" had been substituted for the time-limit for the completion or compliance; and (b) for the figures, letters and words "31st day of March, 2021", the figures, letters and words "31st day of July, 2020" had been substituted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amount for the period of delay shall not exceed three-fourth per cent. for every month or part thereof; (b) no penalty shall be levied and no prosecution shall be sanctioned in respect of such amount for the period of delay. Explanation.-For the purposes of this sub-section, "the period of delay" means the period between the due date and the date on which the amount has been paid." 11. Reference has also been made to provisions of Chapter III to the Enabling Act. Numerous amendments were made to the Act as were not contemplated by the Ordinance. While no useful purpose would be served in extracting the entire contents of Section 4 of the Enabling Act, it would be useful to reproduce, and indicate some of the provisions amended, together with reference to the date from which such amendments were made effective. Sl. No. Section no. of the Income Tax Act, 1961, amended Insertion/Omission/Substitution with effect from 1. Explanation 1(1) to Section 6 01.04.2021 2. Section 10(4D) 01.04.2021 3. Section 10(23C) 01.04.2020 4. Provisos to Section 10 01.04.2021 & 01.06.2020 5. Section 10(23FBC) 01.04.2021 6. Explanation to Section 10(23FE) 01.04.2021 7. Explanatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 88 of 2020 was issued by the Central Government for the purposes of extension of time limits stipulated under Section 139 of the Act. For ready reference, the said provision reads as below: "MINISTRY OF FINANCE (Department of Revenue) (CENTRAL BOARD OF DIRECT TAXES) NOTIFICATION New Delhi, the 29th October, 2020 TAXATION AND OTHER LAWS S.O. 3906(E).-In exercise of the powers conferred by sub-section (1) of section 3 of the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 (38 of 2020) (hereinafter referred to as the Act), the Central Government hereby specifies, for the purpose of the said sub-section (1), that, in a case where the specified Act is the Income-tax Act, 1961 and the compliance for the assessment year commencing on the 1st day of April, 2020, relates to - (i) furnishing of return under section 139 thereof, the time-limit for furnishing of such return, shall- (a) in respect of the assessees referred to in clauses (a) and (aa) of Explanation 2 to sub-section (1) of the said section 139, stand extended to the 31st day of January, 2021; and (b) in respect of other assessees, stand extended to the 31st day of December, 2020: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... "31st day of March, 2021", the figures, letters and words "31st day of January, 2021" had been substituted: Provided further that where the specified Act is the Income-tax Act, 1961 (43 of 1961) and completion or compliance of action referred to in clause (a) of sub-section (1) of section 3 of the Act is an order under sub-section (3) of section 92CA of the Income-tax Act, 1961, the provision of this clause shall have the effect as if- (a) for the figures, letters and words "30th day of March, 2021", the figures, letters and words "30th day of January, 2021" had been substituted; and (b) for the figures, letters and words "31st day of March, 2021", the figures, letters and words "31st day of January, 2021" had been substituted; (B) clause (b) of sub-section (1) of section 3 of the Act, where the specified Act is the Income-tax Act, 1961 (43 of 1961) and the compliance for the assessment year commencing on the 1st day of April, 2020 relates to - (i) furnishing of return under section 139 thereof, the time limit for furnishing of such return, shall - (a) in respect of the assessees referred to in clauses (a) and (aa) of Explanation 2 to sub-section (1) of the said sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l stand extended; (b) for assessment or reassessment under the Income-tax Act, and the time limit for completion of such action under section 153 or section 153B thereof,- (i) expires on the 31st day of March, 2021 due to its extension by the said notification, such time limit shall stand extended to the 30th day of April, 2021; (ii) is not covered under (1) and expires on 31st day of March, 2021, such time limit shall stand extended to the 30th day of September, 2021; (B) where the specified Act is the Prohibition of Benami Property Transaction Act, 1988, (45 of 1988) (hereinafter referred to as the Benami Act) and the completion of any action, as referred to in clause (a) of sub-section (1) of section 3 of the said Act, relates to issue of notice under sub-section (1) or passing of any order under sub-section (3) of section 26 of the Benami Act,- (i) the 30th day of June, 2021 shall be the end date of the period during which the time limit specified in or prescribed or notified under the Benami Act falls, for the completion of such action; and (ii) the 30th day of September, 2021 shall be the end date to which the time limit for completion of such action shall stand e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ar number to the prescribed authority under sub-section (2) of section 139AA of the Income-tax Act, the time-limit for compliance of such action shall stand extended to the 30th day of June, 2021. (B) where the specified Act is the Chapter VIII of the Finance Act, 2016 (28 of 2016) (hereinafter referred to as the Finance Act) and the completion of any action referred to in clause (a) of sub section (1) of section 3 of the said Act relates to sending an intimation under sub-section (1) of section 168 of the Finance Act,- (i) the 31st day of March, 2021 shall be the end date of the period during which the time-limit, specified in, or prescribed or notified under, the Finance Act falls for the completion of such action; and (ii) the 30th day of April, 2021 shall be the end date to which the time-limit for the completion of such action shall stand extended." 16. Last, Notification No. 1703 (E) dated 27.04.2021 came to be issued under Section 3(1) of the Enabling Act, again providing for extensions of time to initiate reassessment proceedings and to conclude said proceedings. It reads thus: "NOTIFICATION S.O. 1703(E) [NO. 38/2021/F.NO. 370142/35/2020-TPL], DATED 27-4-2021 In e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he 31st day of March 2021, before the commencement of the Finance Act, 2021, shall apply. (B) where the specified Act is the Chapter VIII of the Finance Act, 2016 (28 of 2016) (hereinafter referred to as the Finance Act) and the completion of any action, referred to in clause (a) of sub-section (1) of section 3 of the said Act, relates to sending an intimation under subsection (1) of section 168 of the Finance Act, and the time limit for completion of such action expires on the 30th day of April, 2021 due to its extension by the said notifications, such time limit shall further stand extended to the 30th day of June, 2021." 17. In the meanwhile, the Finance Act, 2021, being Act No. 13 of 2021 came into force. Relevant to our discussion, we consider it appropriate to extract Sections 1 and 40 to 45 of the said Act. They read as below: "FINANCE ACT, 2021 [13 OF 2021] An Act to give effect to the financial proposals of the Central Government for the financial year 2021-2022. BE it enacted by Parliament in the Seventy-second Year of the Republic of India as follows:- CHAPTER I PRELIMINARY Short title and commencement. 1. (1) This Act may be called the Finance Act, 2021. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ficer which suggests that the income chargeable to tax has escaped assessment in the case of the assessee for the relevant assessment year and the Assessing Officer has obtained prior approval of the specified authority to issue such notice. Explanation 1.- For the purposes of this section and section 148A, the information with the Assessing Officer which suggests that the income chargeable to tax has escaped assessment means,- (i) any information flagged in the case of the assessee for the relevant assessment year in accordance with the risk management strategy formulated by the Board from time to time; (ii) any final objection raised by the Comptroller and Auditor General of India to the effect that the assessment in the case of the assessee for the relevant assessment year has not been made in accordance with the provisions of this Act. Explanation 2.- For the purposes of this section, where,- (i) a search is initiated under section 132 or books of account, other documents or any assets are requisitioned under section 132A, on or after the 1st day of April, 2021, in the case of the assessee; or (ii) a survey is conducted under section 133A, other than under sub-secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n this behalf, as to why a notice under section 148 should not be issued on the basis of information which suggests that income chargeable to tax has escaped assessment in his case for the relevant assessment year and results of enquiry conducted, if any, as per clause (a); (c) consider the reply of assessee furnished, if any, in response to the show-cause notice referred to in clause (b); (d) decide, on the basis of material available on record including reply of the assessee, whether or not it is a fit case to issue a notice under section 148, by passing an order, with the prior approval of specified authority, within one month from the end of the month in which the reply referred to in clause (c) is received by him, or where no such reply is furnished, within one month from the end of the month in which time or extended time allowed to furnish a reply as per clause (b) expires: Provided that the provisions of this section shall not apply in a case where,- (a) a search is initiated under section 132 or books of account, other documents or any assets are requisitioned under section 132A in the case of the assessee on or after the 1st day of April, 2021; or (b) the Asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , 2021: Provided also that for the purposes of computing the period of limitation as per this section, the time or extended time allowed to the assessee, as per show-cause notice issued under clause (b) of section 148A or the period during which the proceeding under section 148A is stayed by an order or injunction of any court, shall be excluded: Provided also that where immediately after the exclusion of the period referred to in the immediately preceding proviso, the period of limitation available to the Assessing Officer for passing an order under clause (d) of section 148A is less than seven days, such remaining period shall be extended to seven days and the period of limitation under this sub-section shall be deemed to be extended accordingly. Explanation.-For the purposes of clause (b) of this sub- section, "asset" shall include immovable property, being land or building or both, shares and securities, loans and advances, deposits in bank account. (2) The provisions of sub-section (1) as to the issue of notice shall be subject to the provisions of section 151. Substitution of new section for section 151. 44. For section 151 of the Income-tax Act, the following sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ;s Law Dictionary, Fifth Edition, at page 1281, the word "substitute" has been defined to mean "To put in the place of another person or thing" or "to exchange". In Collins English Dictionary, the word "substitute" has been defined to mean "to serve or cause to serve in place of another person or thing"; "to replace (an atom or group in a molecule) with (another atom or group)"; or "a person or thing that serves in place of another, such as a player in a game who takes the place of an injured colleague". 20. Further reliance has been placed on a decision of the Supreme Court in Gottumukkala Venkata Krishamraju Vs. Union of India & Ors., (2019) 17 SCC 590, wherein it was observed as under:- "13. This expression has also come up for interpretation by the Courts in Zile Singh v. State of Haryana and Others, (2004) 8 SCC 1, the import and impact of substituted provision were discussed in the following manner: "23. The text of Section 2 of the Second Amendment Act provides for the word "upto" being substituted for the word "after". What is the meaning and effect of the expression employed therein - "shall be substituted"? 24. The substitution of one text for the other pre-existin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... isting provisions of the Act, as they stood prior to the amendment made by the Finance Act, 2021. The later Act, i.e. the Finance Act, 2021 does not contain any saving clause as may allow the pre-existing provisions an extended life, after the enactment of the Finance Act, 2021. Thus, the pre-existing provisions cannot be pressed into service by the revenue. Reliance has been placed on a decision of the Supreme Court in Kolhapur Canesugar Works Ltd. & Anr. Vs. Union Of India & Ors., (2000) 2 SCC 536. 24. Third, it has been submitted, even otherwise, the Enabling Act does not, and it could not save the pre-existing Sections 147, 148 and other provisions pertaining to reassessment, nor overriding effect can arise or be given (to itself) by the Enabling Act, since on the date of enactment of the Enabling Act, the Finance Act, 2021 was not born. Therefore, it was only through the Finance Act, 2021 that the provisions of the pre-existing law may have been saved if it had been so intended by the Parliament. In absence of that saving clause, there exists no power either under Section 3(1) of the Enabling Act or any other law as may validate the issuance of the impugned Notification. 25. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e income keeping in mind the revenue of the State but the Legislature has not thought it necessary to do so. Even under Section 50, we do not see any provision which specifically authorises the State Government to make any such rules in the nature of the proviso to Rule 5 of the State Rules. It is an established principle that the power to make rules under an Act is derived from the enabling provision found in such Act. Therefore, it is fundamental that a delegate on whom such power is conferred has to act within the limits of the authority conferred by the Act and it cannot enlarge the scope of the Act. A delegate cannot override the Act either by exceeding the authority or by making provision which is inconsistent with the Act. Any Rule made in exercise of such delegated power has to be in consonance with the provisions of the Act, and if the Rule goes beyond what the Act contemplates, the Rule becomes in excess of the power delegated under the Act, and if it does any of the above, the Rule becomes ultra vires the Act." 26. It is also submitted, the delegation authorized being only for the purpose of enlarging limitation under a valid law, such delegation could not be exercised ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing power by an Act does not enable the rule-making authority to make a rule which travels beyond the scope of the enabling Act or which is inconsistent therewith or repugnant thereto." 28. Last, serious attempt has been made by Shri Agarwal, learned Senior Advocate to demonstrate that the decision of the learned Single Judge of the Chhattisgarh High Court in W.P. (T) No. 149 of 2021 Palak Khatuja Vs Union of India & Ors., decided on 23.08.2021 does not lay down the correct law. He has taken us through that decision at length and sought to draw points of distinction. Thus, it has been submitted that the Chhattisgarh High Court has applied a wrong test to look at the notification dated 31.03.2021 issued under the Enabling Act to interpret the principal legislation made by Parliament, being the Finance Act, 2021. He would submit, the delegated legislation can never overreach any Act of principal legislature. Second, though it may be true that the Ordinance was enforced arising from the spread of the pandemic COVID-19 and the circumstances emerging therefrom, yet it would be over simplistic to ignore the provisions of, either the Enabling Act or the Finance Act, 2021 and to read and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nced. They could not have availed their rights both on account of initial lockdown enforced all over the country as also on account of the devastation caused by the spread of COVID-19 and its aftermath with which we are still dealing, today. 30. However, the only intervention offered by the Ordinance and the Enabling Act was to extend the timelines under then pre-existing provisions of the Act, with reference to pending proceedings. Those provisions of the Ordinance and the Enabling Act had been enforced much before the enforcement of the Finance Act, 2021. Therefore, the Enabling Act was not visualized to impact the provisions of the Finance Act, 2021. The Notifications that may have been issued under the Ordinance and the Enabling Act cannot be read to remedy the situation upon the enforcement of the Finance Act, 2021 which has substituted and thus repealed the preexisting provisions of the Act and has re-enacted a new scheme for reassessment under the Act, with effect from 01.04.2021. 31. He would further submit, the provisions of Section 148 read with Section 148A as substituted by Finance Act, 2021 are completely mandatory. There can be no exception to the same. If the impug ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n, unless there was a clear legislative enactment by the principal legislature - to keep in abeyance Sections 2 to 88 of the Finance Act, 2021, no such saving or insulation by whatever name called, may ever arise. 35. On facts, once the principal legislature expressed its intent otherwise by enforcing those provisions w.e.f. 01.04.2021, the situation in law arises otherwise. The pre-existing provisions no longer continue to exist. No amount of effort by the delegate could resurrect those provisions or infuse life into those dead letters of law, in absence of enabling law delegating such function to the delegate of the Parliament i.e. to the Central Government or any other authority. 36. Adopting the submissions advanced by Sri Agarwal and Sri Chopra and Sri Abhinav Mehrotra, learned counsel for the petitioner has laid stress on the fact - by virtue of Sections 4 and 3 read with Section 294 of the Act, both substantive and procedural provisions under that Act remain dynamic since the Act seeks material validation every year through enactment of the Finance Act. Income tax laws suffer a process of continuous change and there is no inherent logic or principle embedded in that law, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ill, it chose to enforce the new scheme for re-assessment w.e.f. 01.04.2021 without enacting a saving clause. Thereby it brought an end to the possibility of any fresh proceeding being initiated under the pre-existing/unamended reassessment provisions, after the date 01.04.2021. 40. In support of his submission, Shri Abhinav Mehrotra has referred to the decision of the Supreme Court in Syndicate Bank v Prabha D. Naik & Anr., AIR 2001 SC 1968, wherein it was held as below: "Incidentally, the legislature is supposed to be aware of the needs of the society and the existing state of law: There is no reason whatsoever to consider that the legislature was unaware of the existing situation as regards the Portuguese Civil laws with a different provision for limitation. Needless to record, the special reference has been made to the State of Jammu and Kashmir but after incorporation of the State of Goa, Daman and Diu within the Indian Territory, if there was any intent of having the local law being made prevalent there pertaining to the question of limitation only, there would have been an express exclusion and in the absence of which no contra intention can be deduced, neither any contra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Supreme Court in A.B. Krishna & Ors. Vs. State of Karnataka & Ors., AIR 1998 SC 1050, where it was observed as below: "The Fire Services under the State Government were created and established under the Fire Force Act, 1964 made by the State Legislature. It was in exercise of the power conferred under Section 39 of the Act that the State Government made Service Rules regulating the conditions of the Fire Services. Since the Fire Services had been specially established under an Act of the legislature and the Government, in pursuance of the power conferred upon it under that Act, has already made Service Rules, any amendment in the Karnataka Civil Services (General Recruitment) Rules, 1977 would not affect the special provisions Validly made for the Fire Services. As a matter of fact, under the scheme of Article 309 of the Constitution, once a legislature intervenes to enact a law regulating the conditions of service, the power of the Executive, including the President or the Governor, as the case may be, is totally displaced on the principle of "doctrine of occupied field". If, however, any matter is not touched by that enactment, it will be competent for the Executive to eit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aws is further strengthened on the principle expressio unius (persone vel rei) est exclusio alterius. (The express intention of one person or thing is the exclusion of another), as illuminatingly stated in Garnett v. Bradley [(1878) 3 AC 944 : (1874-80) All ER Rep 648 : 48 LJQB 186 : 39 LT 261 (HL)] . The continuance of the existing legislation, in the absence of an express provision of repeal being presumed, the burden to show that these has been repeal by implication lies on the party asserting the same. The presumption is, however, rebutted and a repeal is inferred by necessary implication when the provisions of the later Act are so inconsistent with or repugnant to the provisions of the earlier Act that the two cannot stand together. But, if the two can be read together and some application can be made of the words in the earlier Act, a repeal will not be inferred. 14. The necessary questions to be asked are: (1) Whether there is direct conflict between the two provisions. (2) Whether the legislature intended to lay down an exhaustive Code in respect of the subject-matter replacing the earlier law. (3) Whether the two laws occupy the same field. 15. The doctrine of im ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... logically feasible; (b) optimising utilisation of the resources through economies of scale and functional specialisation; (c) introducing a team-based assessment, reassessment, re-computation or issuance or sanction of notice with dynamic jurisdiction. (2) The Central Government may, for the purpose of giving effect to the scheme made under sub-section (1), by notification in the Official Gazette, direct that any of the provisions of this Act shall not apply or shall apply with such exceptions, modifications and adaptations as may be specified in the notification: Provided that no direction shall be issued after the 31st day of March, 2022. (3) Every notification issued under sub-section (1) and sub-section (2) shall, as soon as may be after the notification is issued, be laid before each House of Parliament.;" 47. He would submit that that provision alone-pertaining to re-assessment proceedings had been introduced by the Enabling Act w.e.f. 01.11.2020. Otherwise, the Enabling Act does not touch upon re-assessment proceedings in any way. Therefore, it is preposterous on part of the revenue authorities to rely on the Enabling Act for any other purpose. Only upon assumptio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d accepted that the partition deed dated 24-9-1970 was executed after 15-2-1970 and before 2-10-1970 and was therefore a valid document. Section 21-A says that that section shall have effect "notwithstanding anything contained in Section 22 or in any other provision of this Act and in any other law for the time being in force" (emphasis supplied). The contention of the appellants is that if the partition deed is valid in view of Section 21-A, then in view of the above non obstante clause, the respondents cannot insist that the land allotted to the second appellant under the deed on 24-9-1990 shall further conform to the conditions contained in the definition of "stridhana land" in Section 3(42), namely, that she must be holding the land as on 15-2-1970. 16. It is well settled that while dealing with a non obstante clause under which the legislature wants to give overriding effect to a section, the court must try to find out the extent to which the legislature had intended to give one provision overriding effect over another provision. Such intention of the legislature in this behalf is to be gathered from the enacting part of the section. In Aswini Kumar Ghose v. Arabinda Bose [A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ance on a Constitution Bench decision of the Supreme Court in Memon Abdul Karim Haji Tayab, Central Cutlery Stories, Veraval Vs. Deputy Custodian-General, New Delhi & Ors., AIR 1964 SC 1256, wherein it was observed as under: "It will be seen that this is mainly a procedural section replacing the earlier Section 48 and lays down that sums payable to the Government or to the Custodian can be recovered thereunder as arrears of land revenue. The section also provides that where there is any dispute as to whether any sum is payable or not to the Custodian or to the Government, the Custodian has to make an enquiry into the matter and give the person raising the dispute an opportunity of being heard and thereafter decide the question. Further, the section makes the decision of the Custodian final subject to any appeal or revision under the Act and not open to question by any court or any other authority. Lastly the section provides that the sum shall be deemed to be payable to the Custodian notwithstanding that its recovery is barred by the Indian Limitation Act or any other law for the time being in force relating to limitation of action. Sub-sections (1) and (2) are clearly procedural ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Act, with effect from 01.04.2021. That having been done without saving the pre-existing provisions and without any legislative intent expressed either under the Finance Act, 2021 or the Enabling Act to preserve any part of the preexisting provisions for the purpose of assumption of jurisdiction and initiation of reassessment proceedings, for any of the previous years, no reassessment proceedings could be initiated under Section 148 of the Act after 01.04.2021 by taking resort to the pre-existing and now omitted provisions, pertaining to reassessment. 53. Other learned counsel for the petitioners have adopted the aforesaid submissions, noted above. 54. Shri Shashi Prakash Singh, learned Additional Solicitor General of India, appearing for the Union of India as also the CBDT and learned counsel for the revenue, have submitted, the Ordinance was promulgated, occasioned solely by the circumstances arising from the spread of the pandemic COVID-19. The extension of limitation granted or, the strict rule of limitation relaxed by the Ordinance was for the benefit of the assessees as also the statutory authorities. These extensions were granted by way of legislative acceptance of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. vs. State of Uttar Pradesh & Ors. (2010) 12 SCC 1, State of Andhra Pradesh & Ors. vs. McDowell & Co. (1996) 3 SCC 709 and Kuldip Nayar & Ors. vs. Union of India & Ors.(2006) 7 SCC 1, to state a few. 16. In furtherance of the twofold approach stated above, the Court, in Rakesh Kohli (supra) also called for a prudent approach to the following principleswhile examining the validity of statutes on taxability: (SCC p.327, para 32) "32. While dealing with constitutional validity of a taxation law enacted by Parliament or State Legislature, the court must have regard to the following principles: (i) there is always presumption in favour of constitutionality of a law made by Parliament or a State Legislature, (ii) no enactment can be struck down by just saying that it is arbitrary or unreasonable or irrational but some constitutional infirmity has to be found, (iii) the court is not concerned with the wisdom or unwisdom, the justice or injustice of the law as Parliament and State Legislatures are supposed to be alive to the needs of the people whom they represent and they are the best judge of the community by whose suffrage they come into existence, (iv) hardship is not rel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mercantile system of accounting on accrual of liability basis qua the specific head of deduction covered therein and not to other heads. But that is a matter for the legislature and its wisdom in doing so." 58. Relying further on the aforesaid decision, the learned ASGI would also submit, if any ambiguity may exist or may be perceived on account of enforcement of the Finance Act, 2021 it must be examined, and the law may be interpreted by applying the mischief rule. As noted above, the mischief being the unforeseen and difficult circumstances arising from spread of pandemic COVID-19, the Enabling Act only sought to remedy the same. Examined in that light, the extension of limitation to issue a reassessment notice under the Act, is incidental to the mischief addressed. 59. Unless free play is given to Section 3(1) of the Enabling Act read with the Notifications issued thereunder, a wholly lop-sided situation would arise whereby the assessee would remain saved from adverse consequences despite non-compliance shown but the statutory authorities would be handtied and restrained from taking any corrective action, solely on account of force majeure. In that regard, reliance has been pl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t, in any way, offend the existing law. Hence, the argument; the delegated power has been exercised in excess of the delegation made, is plainly erroneous and unfounded. 62. Last, reliance has been placed on a recent decision of the Supreme Court in Ramesh Kymal Vs. Siemens Gamesa Renewable Power Private Limited, (2021) 3 SCC 224, wherein, according to learned ASGI, in similar facts, the Supreme Court has read a similar amendment made to the Insolvency and Bankruptcy Code 2016 to enlarge the limitation, as unexceptionally applicable, to all cases. 63. Having heard learned counsel for the parties and having perused the record, we find that the thrust of the submissions advanced by learned counsel for the petitioners, are: (i) By substituting the provisions of the Act by means of the Finance Act, 2021 with effect from 01.04.2021, the old provisions were omitted from the statute book and replaced by fresh provisions with effect from 01.04.2021. Relying on the principle - substitution omits and thus obliterates the pre-existing provision, it has been further submitted, in absence of any saving clause shown to exist either under the Ordinance or the Enabling Act or the Finance Act 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... liament being aware of all realities, both as to the fact situation and the laws that were existing, it had consciously enacted the Enabling Act, to extend certain time limitations and to enforce only a partial change to the reassessment procedure, by enacting section 151-A to the Act. It then enacted the Finance Act, 2021 to change the substantive and procedural law governing the reassessment proceedings. That having been done, together with introduction of section 148-A to the Act, legislative field stood occupied, leaving the delegate with no room to manipulate the law except as to the time lines with respect to proceedings that may have been initiated under the Act (both prior to and after enforcement of the Finance Act, 2021). To bolster their submission, learned counsel for the petitioners also rely on the principle - the delegated legislation can never defeat the principal legislation. (vi) Last, it has also been asserted, the non-obstante clause created under section 3(1) of the Enabling Act must be read in the context and for the purpose or intent for which it is created. It cannot be given a wider meaning or application as may defeat the other laws. 64. As to the first ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xisting law as also under the law enforced from 01.04.2021, that proceeding must arise only upon jurisdiction being validly assumed by the assessing authority. Till such time jurisdiction is validly assumed by assessing authority - evidenced by issuance of the jurisdictional notice under Section 148, no re-assessment proceeding may ever be said to be pending before the assessing authority. The admission of the revenue authorities that all re-assessment notices involved in this batch of writ petitions had been issued after the enforcement date 01.04.2021, is tell-tale and critical. As a fact, no jurisdiction had been assumed by the assessing authority against any of the petitioners, under the unamended law. Hence, no time extension could ever be made under section 3(1) of the Enabling Act, read with the Notifications issued thereunder. 68. The submission of the learned Additional Solicitor General of India that the provision of Section 3(1) of the Enabling Act gave an overriding effect to that Act and therefore saved the provisions as existed under the unamended law, also cannot be accepted. That saving could arise only if jurisdiction had been validly assumed before the date 01.04 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essment proceedings with respect to pre-existing and now substituted provisions of Sections 147 and 148 of the Act has been introduced only by the later Notifications issued under the Act. Therefore, the validity of those provisions is also required to be examined. We have concluded as above, that the provisions of Sections 147, 148, 148A, 149, 150 and 151 substituted the old/pre-existing provisions of the Act w.e.f. 01.04.2021. We have further concluded, in absence of any proceeding of reassessment having been initiated prior to the date 01.04.2021, it is the amended law alone that would apply. We do not see how the delegate i.e. Central Government or the CBDT could have issued the Notifications, plainly to over reach the principal legislation. Unless harmonized as above, those Notifications would remain invalid. 73. Unless specifically enabled under any law and unless that burden had been discharged by the respondents, we are unable to accept the further submission advanced by the learned Additional Solicitor General of India that practicality dictates that the reassessment proceedings be protected. Practicality, if any, may lead to legislation. Once the matter reaches Court, it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was introduced, apparently again on account of the difficulties arising from the spread of pandemic COVID-19. That Section reads as under: "10A. Notwithstanding anything contained in sections 7, 9 and 10, no application for initiation of corporate insolvency resolution process of a corporate debtor shall be filed, for any default arising on or after 25th March, 2020 for a period of six months or such further period, not exceeding one year from such date, as may be notified2in this behalf: Provided that no application shall ever be filed for initiation of corporate insolvency resolution process of a corporate debtor for the said default occurring during the said period. Explanation. - For the removal of doubts, it is hereby clarified that the provisions of this section shall not apply to any default committed under the said sections before 25th March, 2020.]" 78. Plainly, in that case, the earlier provisions were not substituted rather they continued to exist. The parliamentary intervention by introducing Section 10A of that Act only provided - no proceeding be instituted for any default arising after 21.3.2020, for a period of six months or such period not exceeding one year ..... X X X X Extracts X X X X X X X X Extracts X X X X
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