TMI Blog2022 (2) TMI 274X X X X Extracts X X X X X X X X Extracts X X X X ..... the foreign bank on estimated bases at the rate of 10% on protective basis and substantive addition was made in the hand of father of the assessee Shiri Ravichandra V. Mehta - HELD THAT:- AO has not given any basis to compute the interest income on estimated bases at the rate of 10% is without disproving the facts and material furnished by the assessee, therefore the action of the learned CIT(A) is not justified which is also demonstrated from the dissatisfaction of the learned CIT(A) shown on the action of the assessing officer as elaborated above in this order. Therefore this appeal of the assessee is allowed. - I.T.A. No. 81/Rjt/2020 And I.T.A. Nos. 82 to 85/Rjt/2020 And I.T.A. No. 122 to 129/Rjt/2020 And I.T.A. Nos. 86 to 89/Rjt/2020 And I.T.A. No. 112 to 119/Rjt/2020 - - - Dated:- 27-12-2021 - Shri Mahavir Prasad, Judicial Memebr And Shri Amarjit Singh, Accountant Memebr For the Appellant : Shri Dipak Rindani , A.R. For the Respondent : Shri Ajay Pratap Singh, CIT. D.R. ORDER PER BENCH: These twenty five appeals filed by different Assessees Revenue (nine by assessee and sixteen by Revenue) are directed against the order of the Commissioner of I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to the department, that the tune of ₹ 39.60 crore was unaccounted and that they agreed to pay tax on the same. Thus the case of assessee was required to be reopened as the assessee had foreign banks account and substantial deposits in these accounts which represented assets located outside India within the meaning of explanation 2(d) to section 147 of the Act and the those assets were not disclosed under the Income Tax Act. Therefore, notice under section 148 of the act was issued on 27th February 2015. No return of income was filed. Detailed account statements was called from assessee in connection with income tax proceedings for assessment year 1996-97 assessment year to assessment year 2013- 2014 under section 147 and under section 153 A of the Act. However, no clear details were furnished. During the course of assessment proceedings for assessment years 1996-97, 1997- 98, 2005-06 (u/s.l47) and assessment years 2006 -2007 to 20 12-(u/s.l53A) a chart of working of interest income of ₹ 1,78,82,389/- was offered by the assessee mentioned at page number five of the assessment order. 4.1 The assessing officer after examining various facts and details of such accounts ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is almost the managerial/ Guardian capacity. The assessee has also submitted that this could not establish assessee's father's rights on funds and this could better establish that assessee's father never utilise a single penny for his benefit and never tried to be a beneficiary of the funds since when the funds were distributed to his two sons. 5.1 The assessee has also submitted that on perusal of records it was ascertained that the case was reopened in view of newly inserted second proviso to section 147 of the act, inserted by the finance act 2012 with effect from first of July 2012. The assessee has contended that the reopening is bad in law and not tenable. It was also submitted that assessing officer was not clear and sure about the escapement. The assessee has also submitted that ruling by various courts held that no reopening can be done beyond a period of four years on the basis of any amendment in the law with a retrospective effect. 5.2 The learned CIT(A) after taking into consideration the decision of ITAT Rajkot held that notice issued under section 148 of the act was barred by limitation therefore notice issued under section 148 of the act was quashe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ITO) (58 ITR 559) . The Hon'ble High Court of Gujarat held that on proper construction of section 297(2)(d)(ii) of the Act the ITO cannot issue notice u/s. 148 to reopen the assessment of a assessee in the case where the right to reopen the assessment was barred under the old (pre-amended) Act at the date when new Act (new amendment) came into force. The said decision was confirmed by the Supreme Court in the case of J.P. Jani Vs. Induprasad Devshankar Bhatt (72 ITR 595) . Similar decisions were made by the Hon ble High Court of Bombay in B.C. Prashar Vs. Vasantsen Dwarkadas [1956] 29 ITR 857 , and by the Supreme Court in S.S. Gadgil v. Lal Company [1964]. 6.3 It is the argument of the Learned.AR that in view of these the reopening of cases for Assessment Years 1996-97 to 2005-06, which had become barred by limitation on 31st March 2012 ( for Assessment Year 2005-06 ) and the Amending Act being Finance Act, 2012 inserting sub clause (c) to Section 149 (1) w.e.f. 01-07-2012 cannot give a fresh lease of life for reopening the same which has already become barred by limitation on 31.12.2012. Thus, the Notices issued u/s. 148 being beyond the limitation prescribed under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... om a prospective date will not revive. The time limit for those years for which limitation has already expired on the date of amendment. There was no challenge to vires of the amendment but still the Courts had held the u/s. 148 is beyond limitation period. In the present case in our hand, prior to amendment in section 149 and the time limit for issued of notice under section 148 for Ay 7996-97 expired on 31-03-2003 and date for 1997-98 expired on 31-03-2004. The amendment of section 149 is with effect from 01-07-2012 and its not retroprospective in nature. Thus the time limit which has already in expired could not have been revived by subsequent amendment. For all these reasons and complying the ratio laid down above cited cases, we hold that notice issued u/s.148 on 25-03-2013 for both the above years is beyond jurisdiction and accordingly quashed. Since the notice is held to be invalid, subsequent assessment order pursuant to the said notice as are also quashed and set aside . 11. In the result appeals of the assessee are allowed. Since we have quashed the assessment for the both the years, appeals of the Revenue have become infructuous and hence Revenue's appeals are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he ITAT as referred by learned counsel. 7. With the assistance of learned representatives would have gone to the decision of the ITAT dated 25th June, 2019 and the letter relevant part of the decision is reproduced as under:- 5. We have heard the rival contentions of both the parties and perused the materials available on record. There is no dispute to the fact that the assessment was framed in the case on hand on a protective basis under section 143(3) read with section 147 of the Act. The facts of the case in the case on hand are identical to the facts of the case as discussed in the case of the father of the assessee wherein the ITAT has quashed the proceedings initiated under section 147 of the Act. The relevant extract of the order is reproduced as under: 5. The facts in brief are that assessee is an individual whose status is not ordinarily resident . Though status of assessee was subject matter of limitation, however, by the impugned order, the status is adopted as non-ordinarily resident which is now dispute before us. In this case, a search was conducted at the business premises of the assessee on 20/03/2013, wherein it was found that assessee has bank accoun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of other authorities and not on the satisfaction of the AO initiating reassessment and hence bad in law. For this proposition various case laws are cited. 5.1. Accordingly, notice was issued on 25/03/2013 for the year under appeal as also subsequent years. The assessee by way of additional ground challenged the re-opening on the ground that notice is issue beyond jurisdiction. For this proposition, the Ld.AR cited a judgement of Hon ble Gujarat High Court in the case of Induprasad Bhatt vs. J.P. Jani (58 ITR 559) as approved by the Hon ble Supreme Court in the case of J.P.Jani vs. Induprasad Devshankerr Bhatt (72 ITR 595). The Ld.CIT(A) in the impugned order disposed of the ground by observing as under: I have carefully considered the contentions raised as also the case law cited. As per second proviso to section 147 of the I.T. Act. inserted by the Finance Act 2012 w.e.f.1.7.2012, nothing contained in the first proviso shall apply in a case where any income in relation to any asset (including financial interest in any entity) located outside India chargeable to tax has escaped assessment in any assessment year. Explanation 2(d) to section 147 reads as under: Expl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated the submissions made before the Ld.CIT(A) and also relied upon the decisions cited therein which are at page numbers 1 to 13 of the paper-book. He vehemently relied upon recent decision of Hon ble Delhi High Court in the case of Brahm Datt vs. ACIT 100 taxmann.com 324 (Delhi). It was contended that identical issue arose before Hon ble Delhi High Court in the case of Brahm Datt, wherein Court was quashed the notice issued u/s.148 of the Act for AY 1998-99 where the notice u/s.148 was issued on 24/03/2015 by applying amended provision of section 147, section 148 r.w.s. 149. The ratio laid down in the case relied upon by the assessee is that if before amendment in law, if the time limit for re-opening a case has expired, then by way of subsequent amendment from a prospective date the time limit has been expired will not revive. Relevant portion of the said judgment is reproduced hereunder: Section 149, read with section 148, of the Income-tax Act, 1961 Income escaping assessment Time-limit for issuance of notice (General) Assessment year 1998-99 Assessee was a senior citizen who was non-resident for assessment year 1998-99 Relying on assessee s statement during se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the income of the petitioner by relying on the provision enacted in s. 297(2)(d)(ii). The notice dt. 13th Nov., 1963, was, therefore, beyond jurisdiction and must be set aside. Along with that notice, the subsequent notice dt. 9th Jan., 1964, must also fail. 9.1. On further appeal by the Revenue against in quashing the notice u/s.148 of the Act, the Hon ble Supreme Court approving the judgement of Hon ble Gujarat High Court in the case of J.P. Jani vs. Induprasad Devshankar Bhatt (72 ITR 595) held as under: We considered that the language of the new section must be read as applicable only to those cases where the right of the ITO to reopen the assessment was not barred under the repealed section. In our view the new statute does not disclose in express terms or by necessary implication that there was a revival of the right of the ITO to reopen an assessment which was already barred under the old Act. This view is borne out by the decision of this Court in S.S. Gadgil vs. Lal Co. (1964) 53 ITR 231 (SC). In that case, a notice was issued against the assessee as an agent of a non-resident on 27th March, 1957, and that notice related to the asst. yr. 1954-55. Under cl. ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng already come to an end, the amending provision will not assist him to commence a proceeding even though at the date when he issued the notice it is within the period provided by that amending Act. This will be so, notwithstanding the fact that there has been no determinable point of time between the expiry of the time provided under the old Act and the commencement of the amending Act. The legislature has given to s. 18 of the Finance Act, 1956, only a limited retrospective operation, i.e., up to 1st April, 1956, only. That provision must be read subject to the rule that in the absence of an express provision or clear implication, the legislature does not intend to attribute to the amending provision a greater retrospectivity than is expressly mentioned, nor to authorise the ITO to commence proceedings which before the new Act came into force had by the expiry of the period provided become barred. 4. In our opinion, the principle of this decision applies in the present case and it must be held that, on a proper construction of s. 297(2)(d)(ii) of the new Act, the ITO cannot issue a notice under s. 148 in order to reopen the assessment of an assessee in a case where the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ponent relatable to the said assessment years. The assessee was, however, issued notices under section148 of the Act for fifteen assessment years, viz., assessment years 1968-69 to 1971-72 and assessment years 1981-82 to 1992-93 which were challenged on the ground of limitation. This court declined to exercise jurisdiction; on appeal, the Supreme Court held that the provision regulating period of limitation ought to receive strict construction. The Supreme Court held that the law of limitation was intended to give certainty and finality to legal proceedings and therefore, proceedings, which had attained finality under the existing law due to bar of limitation, could not be held to be open for revival unless the amended provision was clearly given retrospective operation so as to allow upsetting of proceedings, which had already been completed and attained finality. The observations of the Supreme Court are reproduced hereunder: 10. The main question that has been raised on behalf of the learned counsels appearing for the parties is whether the provisions of sub-section (1) of section 150 as amended can be availed for reopening assessments, which have attained finality and cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iod of limitation prescribed for assessment under section 149. 14. To hold that the amendment to sub-section (1) would enable the authorities to reopen assessments, which had already attained finality due to bar of limitation prescribed under section 149 as applicable prior to 1.4. 1989, would amount to give sub section (1) a retrospective operation which is neither expressly nor impliedly intended by the amended sub-section. 15. On behalf of the assessee before the High Court and in this Court reliance has been placed on the provisions contained in sub-section (2) of section 150. It is submitted that the provision contained in sub-section (2) of section150 is in the nature of clarification or Explanation to sub section(1).Sub-section (2) makes it clear that the embargo of period of limitation lifted under sub section (1) for proposed reassessments based on order in proceedings under appeal, reference or revision, as the case may be, would not apply to assessments which have attained finality due to bar of limitation applicable at the relevant time. 6. The High Court rejected the above contention of the assessee on the ground that on the amendment introduced with eff ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion Act could be commenced even though the original assessments for the relevant years in question have attained finality on expiry of period of limitation under Section 149of the Act. On a combined reading of sub-section (1) as amended with effect from 1.4.1989 and sub-section (2) of Section 150 as it stands, in our view, a fair and just interpretation would be that the Authority under the Act has been empowered only to reopen assessments, which have not already been closed and attained finality due to the operation of the bar of limitation under Section 149. 19. This Court took similar view in the case of S.S. Gadgil (supra) in somewhat comparable situation arising from the retrospective operation given to Section 34(I) of Income Tax Act, 1922 as amended with retrospective effect from 1.4.1956 by the Finance Act of 1956. In the case of S.S. Gadgil (supra) admittedly under clause (iii) of the proviso to Section 34(I) of the Indian Income Tax Act, 1922, as it then stood, a notice of assessment or reassessment could not be issued against a person deemed to be an agent of a non-resident under Section 43, after the expiry of one year from the end of the year of assessment. The Se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e the Authorities to reopen assessments, which have become final due to bar of limitation prior to 1.4.1989 and this position is applicable equally to reassessments proposed on the basis of Orders passed under the Act or under any other law. 14. The ratio of K.M Sharma and S.S. Gadgil, in the opinion of this court covers the facts of this case. Reassessment for 1998-99 could not be reopened beyond 31.03.2005 in terms of provisions of Section 149 of the Act as applicable at the relevant time. The petitioner ‟ s return for assessment year 1998-99 became barred by limitation on 31.03.2005. The question of revival of the period of limitation for reopening assessment for AY 1998-99 by taking recourse to the subsequent amendment made in Section 149 of the Act in the year 2012, i.e., more than 8 years after expiration of limitation on 31.03.2005, has been dealt with by the Supreme Court in K.M. Sharma (supra). 15. The AO has conceded in the order rejecting the petitioner s objection that It is also found that the assessee was a non-resident as contended by him, in the AY 1998-99. In the circumstances, there can be no question about the applicability of the then existing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ar prior to 1st April, 1962, the date on which the Act came into force and observed that: 11. Now it is a well settled rule of interpretation hallowed by time and sanctified by judicial decisions that, unless the terms of a statute expressly so provide or necessarily require it, retrospective operation should not be given to a statute so as to take away or impair an existing right or create a new obligation or impose a new liability otherwise than as regards matters of procedure. The general rule as stated by Halsbury in Vol. 36 of the Laws of England (3rd Edn.) and reiterated in several decisions of this Court as well as English courts is that all statutes other than those which are merely declaratory or which relate only to matters of procedure or of evidence are prima facie prospectively and retrospective operation should not be given to a statute so as to affect, alter or destroy an existing right or create a new liability or obligation unless that effect cannot be avoided without doing violence to the language of the enactment. If the enactment is expressed in language which is fairly capable of either interpretation, it ought to be construed as prospective only. I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Act are not sustainable. Accordingly, we quash the same. Hence, the ground of appeal of the assessee is allowed. In the result, the appeal of the assessee is allowed. 8. Thus, in parity with the decision of the coordinate bench of the ITAT as elaborated in the finding of thus learned CIT(A) and as reproduced above in this order we find that the notice issued in the case of the assessee is time-barred and same is not valid. Therefore we don't find any infirmity in the decision of learned CIT(A) and accordingly the appeal of the Revenue stand dismissed. ITA Nos. 113 to 118/Rjt/2020- A.Ys. 1999-2000 to 2004-05 (Revenue s appeals) 9. In the identical issues on similar facts we have adjudicated the appeal of the Revenue vide ITA No. 112/Rjt/2020 for A.Y. 1998-99 as supra. In the absence of any changed circumstances after applying the findings of the ITA ITA 112/Rjt/2020 for A.Y. 1998-99 as elaborated above all the other appeals of the Revenue vide ITA Nos. 112 to 118/Rjt/2020 for A.Ys. 1999- 2000 to A.Y. 2004-05 stand dismissed. 10. In the result all the appeals of the Revenue vide ITA Nos. 112- 118/Rjt/2020 stand dismissed . ITA No.86/Rjt/2020 by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Regarding confirming action of the assessing officer in making addition of ₹ 23,76,000/- on account of interest income from HSBC Geneva account on protective basis, the assessee has submitted that interest income from this a bank account of ₹ 77,55,720/- has been declared e in the return of income filed in response to notice under section 148 of the act. The said the interest income has been taxed by the assessing officer on protective basis and on substantive basis in the case of father of the assessee. However as held by ITAT Rajkot in the own case of the assessee in ITA No. 120, 121/Rjt/ 2020 and 01, 02/Rjt/2021 for A.Y. 2006-07 and A.Y. 2007-08 the said bank account belongs to assessee and therefore any income arising therefore should be taxed in the hands of assessee on substantive basis and not on protective basis. It is also submitted that income offered to tax on which tax has been paid same cannot be made protective by the department. 16. Regarding addition of ₹ 19,09,60,000/- the assessee submitted that it is not a fresh deposit of this year, it is a transferred amount from ABN Amro bank account number G208154A of assessee out of brought forward fun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ers all dated 27.02.2015 for A.Y. 2006- 07, 2007-08, 2008-09 and 2009-10 under Section 153A r.w.s. 143(3) of the Act in respect of the other son namely Jawahir Mehta as appearing from Page 167 to 187 were made on the basis of the capital gain shown and interest on NRO Account and added in the hands of the said Jawahir Mehta. Nowhere it is reflecting that the said assessments were made on protective basis on him. Be that as it may, if the assessment in the case of the father Ravichandra Mehta is made to be substantive in respect of the said sons namely Jawahir Mehta and Balkrishna the original assessment orders all dated 27.02.2015 in respect of both the sons do not alter its nature from substantive to protective. Ld. AO knowing fully well the fact again made addition on the same alleged income on substantive basis in the hands of the assessee. This is nothing but a case on double taxation. In this respect the Ld. AR relied upon the judgment passed by the Hon ble Jurisdictional High Court in the case of M. R. Shah Logistics Pvt. Ltd. vs. DCIT reported in (2019) 308 CTR 0493. The same has been carefully considered by us. In this particular case by taking the shelter of reopening the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to Shri Balakrishnan. Following the decision of the ITAT as referred above we do not find any infirmity in the decision of learned CIT(A). 21. Regarding ground appeal of the revenue vide ITA No. 119/Rjt/2020 after taking into consideration the flow of funds supported by bank statement placed in the paper book from page nos. 5 to 36, we considered that the learned CIT(A) has rightly deleted of ₹ 19,09,60,000/- holding that amount was pertained to earlier years and not a falling under section 68/69A during A.Y. 2005-06. Therefore this ground of appeal of the Revenue stands dismissed. 22. Regarding addition of ₹ 23,76,000/- both in the case of Ravichandra V. Mehta and in the case of Shri Balkrishna R. Mehta we restore these additions to the file of assessing officer for verification as directed above as already directed by the learned CIT(A). Therefore, this ground of appeal is allowed for statistical purpose. 23. In the result ground of appeal by the Revenue vide ITA No. 119 and ITA No.129 as above are partly allowed for statistical purposes. 24. The appeal of the assessee vide ITA No.86/Rjt/2020 and ITA No. 82/Rjt/2020 are allowed. ITA Nos. 83 to 85/Rjt/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts and issues involved in these three appeal of the assessee are similar and identical, therefor for the sake of convenience , these three appeals are adjudicated together by taking the ITA No.87/Rjt/2020 for A.Y. 2010-11 as lead case and its finding will be applicable to the other two appeals of the assessee. 33. During the course of assessment, the AO noticed that as part of balance sheet of the assessee there was investment in at HSBC account number 4432533 of ₹ 5,72,18,068/- and stated that in absence of the detail estimated the interest income at the rate of 10% per annum worked out to ₹ 57,21,806/- which was added in the hands of the assessee on protective basis as substantive addition has been made in the hands of the father of the assessee Shiri Ravichandra V. Mehta. The learned CIT(A) has sustained audition. 34. During the course of appellant proceeding before us the learned counsel has contended that assessee has already declared interest income in his return of income earned in a foreign bank account and paid the taxes. He further submitted that the assessing officer has incorrectly on estimated bases added 10% of the amount of bank balance as interest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he relevant para 40 at page number 19 is reproduced as under:- 40. Deleting of addition of ₹ 43,99,544/- by way of interest income from HSBC Account No. 4432533 has been challenged before us by the Revenue. While deleting the addition the Ld. CIT(A) has been pleased to pass orders in the following manner:- 5.12 In this submissions the Ld. AR has alleged that the AO has wrongly arrived that the interest income during A.Y. 2006-07 of ₹ 1m76,94,093/- as against interest income shown of ₹ 1,32,94,549/- in the P L account and the computation of income. Along with the submission dated 20.01.2016, the Ld. A.R. has filed the print out of the computerized books of account of the appellant as paper book which has been claimed to have been produced before the AO also during the assessment proceedings. At page 25 of the paper book, the FD HSBC SA interest has been shown at ₹ 1,32,94,549/- and same has been offered to tax. In the balance sheet at page 24 of the paper book the investments in HSBC 4432533/10998565 and 4432533/10998573 are ₹ 1,36,55,531/- and ₹ 74,06,740/- respectively. During the appeal proceeding it was orally explained by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vide ITA Nos. 87/Rjt/2020 to ITA No. 89/Rjt/2020 are allowed. ITA Nos. 122 to 128/Rjt/2020- A.Ys. 1998-99 to 2004-05- Revenue s appeal (in case of Shri Ravichandra V. Mehta) 38. All these appeals filed by the revenue are directed against the combined order of learned CIT(A) dated 13-01- 2020. 39. At the outset the learned consul submitted that the issue common to all the appeal are covered in favour of the assessee by the decision of ITAT Rajkot in assessee's case dated 25-02-2019 in the case of Shri Ravichandra V. Mehta for A.Y. 1996-97 and assessment year 1997- 1998 (in ITA No. 409/ RJT 201,450/ RJT/ 2017, 410/ RJT/ 2017 and 451 RJT/ 2017 and also the subsequent order of ITAT Rajkot dated 25th June, 2019 in the case of the assessee. 40. On the other hand, learned departmental representative is fair enough to not controvert this undisputed fact that impugned issues in the appeal are covered by the decision of ITAT as referred in the decision of learned CIT appeal 41. With the assistance of learned representatives who have gone through the decision of learned CIT(A). The learned CIT(A) has held that issues under section 148 in respect all the above-mentioned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... before the ITAT and the Tribunal also has quashed the assessment orders on the ground of legality of the notices u/s. 148. I find that the remand reports of the AO demonstrate the adamancy and nonapplication of mind as to the well-established principles of law and that the additional grounds and the additional evidences have to be admitted for fairness and justice in view of the related decisions of the Hon'ble Courts in favour of tax payers. 5.3 In relation to the legality of the notice(s) u/s.148 it has been contented by the appellant that the above referred additional ground is purely legal in nature and therefore, requires admission and adjudication. It is case of the appellant that a search was conducted in his case on 20.3.2012, that Notice u/s 148 was issued for the captioned years on 27.02.2015 and that the same has been issued in view of Section 149 (l)(c) of the Income Tax Act which was inserted by the Finance Act, 2012 with effect from 1.7.2012. As per provision of Section 149 as prevalent before the insertion of sub clause (c) to Sub section (1) of Section 149, it was provided that no Notice u/s 148 shall be issued for the relevant assessment year if not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the limitation prescribed under the pre-amended section 149 are bad in law and hence consequential assessments framed pursuant to such invalid notices are also required to be quashed and set aside. 5.5 In addition to above the appellant has enclosed and brought to attention the judgement of ITAT Rajkot Dated 25-02-2019 in the case of Shri Ravichandra V Mehta for AY 1996-97 and AY 1997-98 ( in ITA No.(s) 409/RJT/2017, 450/RJT/2017, 410/RJT/2017 and 451/RJT/2017) and also the subsequent order of ITAT Rajkot dated 25-06-2019 in the case of the assesse.e, Shri Balkrishna R Mehta himself for AY 1996- 97 and AY 1997-98 ( in ITA No.(s) 407/RJT/2017, and 408/RJT/2017) were the order dated 25-02-2019 iri the case of Shri Ravichandra V Mehta has been followed. 5.6 In the case of Shri Ravichandra V Mehta the additional ground of the appellant was that notice u/s. 148, pursuant to which impound assessment order is framed is barred by limitation u/s. 149 of the act and therefore assessment framed pursuant to such a valid notice is void ab initio. The ground of the Revenue was that the Ld. CIT(A) has erred in law and/or on facts virtually setting aside the order of AO passed u/s. 143 r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d hence Revenue's appeals are dismissed. 5.8 These orders of jurisdictional ITAT are binding and the appeals for AY 1998-99 to AY 2004-05 under consideration are covered by the earlier decisions of the Hon'ble ITAT Rajkot as the notices u/s. 148 were issued for these years on 27.02.2015 on the strength of the amended provisions w.e.f. 01.07.2012 whereas as per the pre-amended provision those notices- could not have been issued after 31.03.2005 for AY 1998-99, 31.03.2006 for AY 1999-2000, 31.03.2007 for AY 2000-01, 31.03.2008 for AY 2001-02, 31.03.2009 for AY 2002-03, 3103.2010 for AY 2003-04 and 31.03.2011 for AY 2004-05. Following there from the assessment orders u/s. 143(3) rws 147 made on 31.03.2015 for AY 1998-99 to AY 2004-05 on the strength of the notices u/s. 148 dated 27.02.2015 for respective AYs, under consideration in the present appeals, are required to be quashed as notices u/s. 148 issued on 27.02.2015 for those years are void ab initio. Under the circumstances the submissions made on the merits of additions in the impugned assessment orders and the additional evidences related to funds are not required to be adjudicated upon. 6. The appeals for AY ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t disclose in express terms or by necessary implication that there was a revival of the right of the ITO to reopen an assessment which was already barred under the old Act. This view is borne out by the decision of this Court in S.S. Gadgil vs. Lal Co. (1964) 53 ITR 231 (SC). In that case, a notice was issued against the assessee as an agent of a non-resident on 27th March, 1957, and that notice related to the asst. yr. 1954-55. Under cl. (iii) of the proviso to s. 34(1), as it stood prior to its amendment by the Finance Act, 1956, a notice of assessment or reassessment could not be issued against a person deemed to be an agent of a non-resident after the expiry of one year from the end of the year of assessment. The right to commence a proceeding for assessment against the assessee as agent of a non-resident for the asst. yr. 1954-55, therefore, ended on 31st March, 1956, under the new Act before its amendment in 1956. This provision was, however, amended by the Finance Act, 1956, and under the amended provision the period of limitation was extended to two years from the end of the assessment year. The amendment was made on 8th Sept., 1958, but was given effect to from 1st April ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sly mentioned, nor to authorise the ITO to commence proceedings which before the new Act came into force had by the expiry of the period provided become barred. 4. In our opinion, the principle of this decision applies in the present case and it must be held that, on a proper construction of s. 297(2)(d)(ii) of the new Act, the ITO cannot issue a notice under s. 148 in order to reopen the assessment of an assessee in a case where the right to reopen the assessment was barred under the old Act at the date when the new Act came into force. It follows, therefore, that the notice dt. 13th Nov., 1963, and 9th Jan., 1964, issued by the ITO, Ahmedabad, were illegal and ultra vires and were rightly quashed by the Gujarat High Court by the grant of a writ. For the reasons expressed, we hold that the judgment of the High Court of Gujarat dt. 14/15th Dec., 1964, is correct and this appeal must be dismissed with costs. 7. In view of the above decision, since the assessment could not have been reopened for Assessment Years 1996-97 to 2005-06, which has become barred by limitation on 31st March 2012, the Amending Act being Finance Act, 2012 inserting sub clause (c) Section 149 ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... retrospective operation so as to allow upsetting of proceedings, which had already been completed and attained finality. The observations of the Supreme Court are reproduced hereunder: 10. The main question that has been raised on behalf of the learned counsels appearing for the parties is whether the provisions of sub-section (1) of section 150 as amended can be availed for reopening assessments, which have attained finality and could not be reopened due to bar of limitation, that was attracted at the relevant time to the proposed reassessment proceedings under the provisions of section 149. 11. The submission made on behalf of the appellant is that neither the provisions of sub-section (1) nor sub-section (2) can be read as giving more than intended operation to the said provision. The provisions, it is argued, do not permit the authorities to reopen assessments, which have become final and reassessment of which had become barred by time before 1.4.1989 when section 150(1) was amended Reliance is placed on the decision in S.S. Gadgil v. Lal Co. [1964] 53 ITR 231. 12. The learned counsel appearing on behalf of the department has made an effort to persuade this Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (2) makes it clear that the embargo of period of limitation lifted under sub section (1) for proposed reassessments based on order in proceedings under appeal, reference or revision, as the case may be, would not apply to assessments which have attained finality due to bar of limitation applicable at the relevant time. 6. The High Court rejected the above contention of the assessee on the ground that on the amendment introduced with effect from 1.4.1989 in sub-section (1), which enables reopening of assessment based on any Order of 'Court in any proceedings in any law', there is no corresponding amendment made in sub- section (2) of Section 150 to bar reassessment based on Order of Court passed in any proceedings in any law in cases where prescribed period of litigation for reassessment had already expired. 17. We do not find the above reasoning of the High Court is sound. The plain language of sub-section (2) of Section 150 clearly restricts application of sub- section (1) to enable the Authority to reopen assessments which have not already become final on the expiry of prescribed period of limitation under Section 149. As is sought to be done by the High Court, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... x Act, 1922 as amended with retrospective effect from 1.4.1956 by the Finance Act of 1956. In the case of S.S. Gadgil (supra) admittedly under clause (iii) of the proviso to Section 34(1) of the Indian Income Tax Act, 1922, as it then stood, a notice of assessment or reassessment could not be issued against a person deemed to be an agent of a non-resident under Section 43, after the expiry of one year from the end of the year of assessment. The Section was amended by Section 18 of the Finance Act, 1956, extending this period of limitation to two years from the end of the assessment year. The amended was given retrospective effect from April 1, 1956. On March 12, 1957, the Income Tax Officer issued a notice calling upon the assessee to show cause why, in respect of the assessment year 1954-55, the assessee should not be treated as an agent under Section 43 in respect of certain non- residents. The case of the assessee, inter alia, was that the proposed action was barred by limitation as right to commence proceedings of assessment against the assessee as an agent of non-resident for the assessment year 1954-55 ended on 31.3.1956, under the Act before it was amended in 1956. This Cour ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e in Section 149 of the Act in the year 2012, i.e., more than 8 years after expiration of limitation on 31.03.2005, has been dealt with by the Supreme Court in K.M. Sharma (supra). 15. The AO has conceded in the order rejecting the petitioner s objection that It is also found that the assessee was a non-resident as contended by him, in the AY 1998- 99. In the circumstances, there can be no question about the applicability of the then existing provision- Section 149 (b), which stated that the normal time limit for reopening assessment was four years, but not more than six years, have elapsed from the end of the relevant assessment year unless the income chargeable to tax which has escaped assessment amounts to or is likely to amount to one lakh rupees or more for that year. 16. It has been said that the government in all its actions is bound by rules fixed and announced beforehand--rules which make it possible to foresee with fair certainty how the authority will use its coercive powers in given circumstances, and to plan one's affairs on the basis of this knowledge (Ref. FA Hayek, Road to Serfdom , 1944). In this case, the interpretation proposed by the revenue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs of procedure or of evidence are prima facie prospectively and retrospective operation should not be given to a statute so as to affect, alter or destroy an existing right or create a new liability or obligation unless that effect cannot be avoided without doing violence to the language of the enactment. If the enactment is expressed in language which is fairly capable of either interpretation, it ought to be construed as prospective only. In Commissioner of Income Tax v Scindia Steam Navigation Co. Ltd AIR 1961 SC 1633, it was held that as the liability to pay tax is computed according to the law in force at the beginning of the assessment year, i.e., the first day of April, any change in law upsetting the position and imposing tax liability after that date, even if made during the currency of the assessment year, unless specifically made retrospective, does not apply to the assessment for that year. These principles were reiterated in Commissioner of Income Tax v Vatika Township (P) Ltd [2014] 49 taxmann.com 249/227 Taxman 121/367 ITR 466(SC). 19. In view of the above discussion, it is held that the petition has to succeed; the impugned reassessment notice and all co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... decision of learned CIT(A) dated 11-02-2020 in confirming action of the Assessing Officer in making addition of ₹ 3,15,418/- on account of interest income from NRO account with HSBC account on protective basis. 47. The assessing officer has completed assessment under section 143 (3) r.w.s.147 of the act for assessment year 2000 -506 on 19 March 2014 with addition of ₹ 3,15,418/- being interest income from NRO account with HSBC Bank Mumbai in the hands of the assessee on protective basis. 47.1 The learned CIT(A) stated that for the assessment year 2005-2006 under consideration, the notice under section 147 of the act was issued on 29th of March 2012 which was within the six years of the end of the assessment year as per the pre-amended provisions and therefore the assessee is not protected by the orders of the ITAT. The learned CIT(A) has deleted all the other addition except the interest income from NRO account as the assessee was non resident. 47.2 During the course of appellant proceeding before us neither the assessee has made any discussion on this issue nor pointed out any material to controvert the decision of learned CIT(A), therefore, this ground of ap ..... 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