TMI Blog2023 (10) TMI 1140X X X X Extracts X X X X X X X X Extracts X X X X ..... fied is the approval of the competent authority of the Income Tax under section 151 of the Act, which enable the assessing officer to assume the jurisdiction. What is to be noticed with relevance is that the First Proviso to section 149 of the Act as introduced in Finance Act, 2021, inter alia stipulated that no notice under section 148 shall be issued at any time in a case for the relevant Assessment Year beginning on or before 1st day of April 2021, if such notice could not have been issued at that time on account of being beyond the time limit specified under the provision as it stood immediately before the commencement of the Finance Act, 2021. In respect of the notice u/s 148 of the Act relating to the assessment year beginning on or before 01.04.2021, the operational conditions in the provision as they stood before 01.04.2021 were maintained. It thus included the factor of prescription of time limit-the limitation. The Supreme Court in Ashish Agarwal [ 2022 (5) TMI 240 - SUPREME COURT] striking balance between the notices issued by the Department under the old regime and the provisions brought into force under the new regime held that all notices issued under Sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... exists in the old regime. The Taxation and Other Laws Act, 2020 was rightly viewed to be a secondary legislation. It was therefore held that secondary legislation would not override the principal legislation-the Finance Act, 2021. Also negatived by the Division Bench in Keenara Industries Pvt. Ltd. (supra) as per observations in paragraph 36 of the judgment, the concept of freezing the time limit. It was held that it was not permissible in law for the Revenue to travel back in time. Nor does the Taxation and Other Laws Act endorse to such concept. It was held that Notifications extending the due dates under the old provisions could not breath any more after the repeal of the old provisions. Therefore, the point is no more res integra that all original notices under section 148 of the Act referable to the old regime and issued between 01.04.2021 to 30.06.2021 would stand beyond the prescribed permissible timeline of six years from the end of Assessment Year 2013-14 and Assessment Year 2014-15. Therefore, all such notices when they would relate to Assessment Year 2013-14 or Assessment Year 2014-15 would be time barred as per the provisions of the Act as applicable in the old ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 148A(d)/Date of Notice under Section 148 of the Act Assessment Year 1. 5295 of 2023 07.04.2021 01.07.2022 2013-14 01.07.2022 2. 5366 of 2023 19.04.2021 30.07.2022 2014-15 31.07.2022 3.2 While in the respective impugned orders under section 148A(d) of the Act mentioned are the factual details and the reasons on the basis of which the assessing officer has found that the cases are fit to be reopened for the assessment in respect of the year under consideration, it is inter alia stated that the notice under section 148 of the Act was originally issued for the assessment years 2013-14 or 2014-15, as the case may be. All the said notices were treated as show-cause notice under section 148A(b) of the Act in light of the decision of the Supreme Court in Union of India vs. Ashish Agarwal[(2023) 1 SCC 617 : (2022) 444 ITR 1 (SC)], and that thereupon, the order under section 148A(d) was passed. 4. At the outset, learned advocate for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs, have elapsed from the end of the relevant assessment year unless the income in relation to any asset (including financial interest in any entity) located outside India, chargeable to tax, has escaped assessment. Explanation.-In determining income chargeable to tax which has escaped assessment for the purposes of this sub-section, the provisions of Explanation 2 of section 147 shall apply as they apply for the purposes of that section. (2) The provisions of sub-section (1) as to the issue of notice shall be subject to the provisions of section 151. (3) If the person on whom a notice under section 148 is to be served is a person treated as the agent of a non-resident under section 163 and the assessment, reassessment or re-computation to be made in pursuance of the notice is to be made on him as the agent of such non-resident, the notice shall not be issued after the expiry of a period of six years from the end of the relevant assessment year. Explanation-For the removal of doubts, it is hereby clarified that the provisions of sub- sections (1) and (3), as amended by the Finance Act, 2012, shall also be applicable for any assessment year beginning on or before the 1st ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 subsection shall be deemed to be extended accordingly. Explanation. For the purposes of clause (b) of this subsection, 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. Sanction for issue of notice 151. 5.2.2 As per the aforesaid amended section 149, notice under section 148 of the Act could be issued within three ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of 2021 dated 27.04.2021 whereby the time limit was extended till 30.06.2021. 5.3.1 Notwithstanding that the amended sections 147 to 151 in the Act came into force with effect from 01.04.2021 under the Finance Act, 2021, the Income Tax Department issued innumerable notices during the period from 01.04.2021 to 30.06.2021 for reopening the assessment under the provisions of the old regime. The Department for issuing such notices, relied on explanation to the aforesaid notification whereby the time limit was extended as stated above. These notices became subject matter of challenge before different High Courts. The Notifications issued for extension of time were prayed to be declared ultra vires. 5.4 The Supreme Court had an occasion to consider such cases arrived before it from different High Courts, wherein the notices issued during the period from 01.04.2021 to 30.06.2021 in relation to the earlier assessment years were challenged. The provisions post-Finance Act, 2021, under the new regime had come into force. This controversy before the Apex Court culminated into decision in Ashish Agarwal (supra). 5.4.1 The Supreme Court striking balance between the notices iss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roversy on hand, 28.5 All defences which may be available to the assesses including those available under section 149 of the IT Act and all rights and contentions which may be available to the concerned assessees and Revenue under the Finance Act, 2021 and in law shall continue to be available. (para 28.5) 5.4.4 Thus, one of the direction and clarification in Ashish Agarwal (supra) , is that all the defences that were available to the asessee under section 149 under the Finance Act, 2021 and in law whatever rights are available to the assessing officer under the Finance Act, 2021 are kept open to be continued to be available. 5.4.5 In light of above direction of the Supreme Court in para 28.5 of Ashish Agarwal (supra) , the First Proviso to Section 149 after 01.04.2021 in the new regime may deservedly recapitulated, Provided that no notice under section 148 shall be issued at any time in a case for the relevant assessment year beginning on or before 1st day of April, 2021, if such notice could not have been issued at that time on account of being beyond the time limit specified under the provisions of clause (b) of sub-section (1) of this section, as they stood i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Finance Act, 2021. 2.15 As per clause (b) of sub-section (1) of section 149 of the Act, as they stood immediately before the commencement of the Finance Act, 2021, no notice under section 148 of the Act shall be issued for the relevant assessment year if 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 Rs.1 lakh or more for that assessment year. 2.16 It is, therefore, urged that the notice under Section 148 of the Act can be issued on or after 01.04.2021 only if the limitation for issuing such notice under old regime of reopening had not expired prior to Finance Act, 2021 coming into force. It is clarified that the new provisions relating to reopening introduced by the Finance Act, 2021 came into force with effect from 01.04.2021. 5.6.1 In other words, it was the contention that as per the provisions of Section 149 of the Act in the old regime, a notice under Section 148 could have been issued to the assesse, if four years had elapsed from the end of the Assessment Year, but not six years. After six years from the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot contain savings clause and since the legislature through Finance Act, 2021 and TLA Act did not include any intention to protect and extend the erstwhile scheme of section 148 of the Act. The life of erstwhile scheme of 148 cannot be elongated. The principle that would also employ is that the substitution for omit and obliterate the pre-existing provision and in absence of any saving clause either under the ordinance or the TLA Act the Finance Act, 2021 the presumption is available for the old provision to continue beyond 31.03.2021. 6. In Keenara Industries Pvt. Ltd. (supra) , this Court laid down the proposition of law thus, 20. Thus, the notice under section 148 of the Act can be issued on or after 01.04.2021 only if the limitation for issuing such notice under old regime of reopening had not expired prior to Finance Act, 2021 coming into force, which means w.e.f. 01.04.2021. As per the old regime of reopening, the reopening notice under section 148 of the Act could have been issued before the expiry of six years from the end of relevant assessment year. In other words, no notice could have been issued after expiry of period of six years from the end of the relevant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... questions posed before it thus, (i) The reassessment proceedings initiated with the notice under Section 148 (deemed to be a notice under Section 148-A), issued between 01.04.2021 and 30.06.2021, cannot be conducted by giving the benefit of relaxation/extension under the Taxation and Other Laws (Relaxation And Amendment of Certain Provisions) Act (TOLA) 2020 up to 30.03.2021, and the time limit prescribed in Section 149 (1)(b) (as substituted w.e.f. 01.04.2021) cannot be counted by giving such relaxation from 30.03.2020 onwards to the revenue. (ii) In respect of the proceedings where the first proviso to Section 149(1)(b) is attracted, the benefit of TOLA 2020 will not be available to the revenue, or in other words, the relaxation law under TOLA 2020 would not govern the time frame prescribed under the first proviso to Section 149 as inserted by the Finance Act 2021, in such cases. 6.3 This Court is in agreement with the decision in Keenara Industries Pvt. Ltd. (supra), of this Court as well with Allahabad High Court decision in Rajeev Bansal (supra) . 6.4 Therefore, the point is no more res integra that all original notices under section 148 of the Act ref ..... X X X X Extracts X X X X X X X X Extracts X X X X
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