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TMI Blog2025 (4) TMI 923X X X X Extracts X X X X X X X X Extracts X X X X ..... ncome Tax Act, 1961 as in force with effect from 01.04.2021 in terms of the decision of the Hon'ble Supreme Court in "Union of India and others Vs. Ashish Agarwal, 2022 SCC Online SC 543" rendered on 04.05.2022. 4. The Hon'ble Supreme Court in "Union of India and others Vs. Ashish Agarwal, 2022 SCC Online SC 543", summarized the legal position as follows:- "24. There appears to be genuine non-application of the amendments as the officers of the Revenue may have been under a bona fide belief that the amendments may not yet have been enforced. Therefore, we are of the opinion that some leeway must be shown in that regard which the High Courts could have done so. Therefore, instead of quashing and setting aside the reassessment notices issued under the unamended provision of the IT Act, the High Courts ought to have passed an order construing the notices issued under the unamended Act/unamended provision of the IT Act as those deemed to have been issued under Section 148-A of the IT Act as per the new provision Section 148-A and the Revenue ought to have been permitted to proceed further with the reassessment proceedings as per the substituted provisions of Sections 147 to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ause of a bona fide belief of the officers of the Revenue in issuing approximately 90,000 such notices, the Revenue may not suffer as ultimately it is the public exchequer which would suffer. 27. Therefore, we have proposed to pass the present order with a view to avoiding filing of further appeals before this Court and burden this Court with approximately 9000 appeals against the similar judgments and orders passed by the various High Courts, the particulars of some of which are referred to hereinabove. We have also proposed to pass the aforesaid order in exercise of our powers under Article 142 of the Constitution of India by holding that the present order shall govern, not only the impugned judgments and orders passed by the High Court of Judicature at Allahabad, but shall also be made applicable in respect of the similar judgments and orders passed by various High Courts across the country and therefore the present order shall be applicable to PAN INDIA. 28. In view of the above and for the reasons stated above, the present appeals are allowed in part. The impugned common judgments and orders [Ashok Kumar Agarwal v. Union of India, 2021 SCC OnLine All 799] passed by the Hig ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Revenue on the very issue by challenging similar judgments and orders, with a view not to burden this Court with approximately 9000 appeals. We also observe that the present order shall also govern the pending writ petitions, pending before various the High Courts in which similar notices under Section 148 of the Act issued after 1-4-2021 are under challenge. 30. The impugned common judgments and orders [Ashok Kumar Agarwal v. Union of India, 2021 SCC OnLine All 799] passed by the High Court of Allahabad and the similar judgments and orders passed by various High Courts, more particularly, the respective judgments and orders passed by the various High Courts particulars of which are mentioned hereinabove, shall stand modified/substituted to the aforesaid extent only. 31. All these appeals are accordingly partly allowed to the aforesaid extent. In the facts of the case, there shall be no order as to costs." (emphasis added) 5. In fact, pursuant to the above directions of the Hon'ble Supreme Court, the Central Board of Direct Taxes (CBDT) had also issued guidelines vide Instruction No.1 of 2022 dated 11.05.2022 to implement the above directions of the Hon'ble Supreme Court. 6. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... weeks allowed to the assessee's to respond to the show-cause notices; and 8. The Assessing Officers were required to issue the reassessment notice under section 148 of the new regime within the time limit surviving under the Income-tax Act read with the Taxation and other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020. All notices issued beyond the surviving period are time barred and liable to be set aside." 12. The case of the petitioner is that the Impugned Order / Notice dated 30.07.2022 issued under Section 148-A(d) and Section 148 of the Income Tax Act, 1961 respectively were without jurisdiction in the light of the following observations of the Hon'ble Supreme Court in Paragraph 32 in "Union of India Vs. Rajeev Bansal, [2024] 167 taxmann.com 70 / 2024 SCC OnLine SC 2693", wherein it was observed as under:- "32. A statutory authority may lack jurisdiction if it does not fulfil the preliminary conditions laid down under the statute, which are necessary to the exercise of its jurisdiction. There cannot be any waiver of a statutory requirement or provision that goes to the root of the jurisdiction of assessment. An order passed without jurisdiction is a nu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ril 1, 2021 and June 30, 2021 pertaining to the assessment years 2013-2014, 2014-2015, 2015-2016, 2016-2017, and 2017-2018 will be within the period of limitation as explained in the tabulation below: Assessment Year Within 3 Years Expiry of Limitation read with TOLA for (2) Within Six Years Expiry of Limitation read with TOLA for (4) 1 2 3 4 5 2013-2014 31-3-2017 TOLA not applicable 31-3-2020 30-6-2021 2014-2015 31-3-2018 TOLA not applicable 31-3-2021 30-6-2021 2015-2016 31-3-2019 TOLA not applicable 31-3-2022 TOLA not applicable 2016-2017 31-3-2020 30-6-2021 31-3-2023 TOLA not applicable 2017-2018 31-3-2021 30-6-2021 31-3-2024 TOLA not applicable (f) The Revenue concedes that for the assessment year 2015-2016, all notices issued on or after April 1, 2021 will have to be dropped as they will not fall for completion during the period prescribed under the Taxation and other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020." 16. It is therefore submitted that even though the Impugned Notice dated 30.07.2022 was issued under Section 148 of the Income Tax Act, 1961 as in force with effect from 01.04.2021 after Sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... supra), actually comes to the rescue of the Department and not to the petitioner. 21. It is submitted that the Notices issued under Section 148 of the Income Tax Act, 1961 under the old regime were deemed to have been stayed between 01.04.2021 and 30.06.2021, and was to be excluded for computation of limitation. It is further submitted that the time taken to respond to the aforesaid Section 148 Notice dated 31.03.2021 was also to be excluded. 22. It is therefore submitted that if the aforesaid period is excluded, the Impugned Section 148 Notice dated 30.07.2022 of the Income Tax Act, 1961 as in force with effect from 01.04.2021 will be within the time limit prescribed by the Hon'ble Supreme Court in Ashish Agarwal's case (cited supra) and Rajeev Bansal's case (cited supra) on a harmonious reading of the 1st Proviso to Section 149 of the Income Tax Act, 1961 as in force with effect from 01.04.2021. If this conclusion is accepted, this Writ Petition will be dismissed. 23. By way of rejoinder, the learned counsel for the petitioner would submit that the decision of the Hon'ble Supreme Court in Rajeev Bansal's case (cited supra) cannot be applied to the facts of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fore, the Impugned Section 148 Notice dated 31.03.2021 was in time as per the 1st Proviso to Section 149 of the Income Tax Act, 1961 as in force with effect from 01.04.2021. 30. The extended period of limitation for issuance of Notice under Section 148 of the Income Tax Act, 1961 under the old regime as it stood till 31.03.2021 would have expired on 31.03.2022. Both the period were during the period when the Country was still under both complete and intermittent lockdown due to outbreak of Covid-19 pandemic from March 2020. 31. The Parliament enacted the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) ('TOLA') Act, 2020, to ensure that both the interests of the Revenue and Assessee's were not defeated either because the Assessing Officer could not comply with the pre-conditions due to the difficulties that arose during the Covid-19 pandemic or an assessee could not keep up with the time. Section 3(1) of the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) ('TOLA') Act, 2020, relaxed the time limit for compliance with actions that fell for completion between 20.03.2020 and 31.03.2021. The Taxation and Other Laws (Rel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s 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 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." 33. Thus, as per the 1st Proviso to Section 149(1) of the amended provision, no notice under Section 148 of the Income Tax Act, 1961, shall be issued at any time in a case for the relevant Assessment Year beginning on or before 1st day of April 2021, if a notice under Section 148 or Section 153A or Section 153C of the Income Tax Act, 1961 could not have been issued at that time on account ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o.35 is reproduced below:- "35. Further, in our view, there is no question of concurrent jurisdiction of the JAO and the FAO for issuance of reassessment of notice under section 148 of the Act or even for passing assessment or reassessment order. When specific jurisdiction has been assigned to either the JAO or the FAO in the Scheme dated 29th March, 2022, then it is to the exclusion of the other. To take any other view in the matter, would not only result in chaos but also render the whole faceless proceedings redundant. If the argument of Revenue is to be accepted, then even when notices are issued by the FAO, it would be open to an assessee to make submission before the JAO and vice versa, which is clearly not contemplated in the Act. Therefore, there is no question of concurrent jurisdiction of both FAO or the JAO with respect to the issuance of notice under Section 148 of the Act. The scheme dated 29th March 2022 in paragraph 3 clearly provides that the issuance of notice "shall be through automated allocation" which means that the same is mandatory and is required to be followed by the Department and does not give any discretion to the Department to choose whether to follow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Taxation and other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 will operate neither to extend the time limit of three years from the end of the relevant assessment year under section 149(1)(a) of the new regime nor to extend the time limit of six years from the end of the relevant assessment years under section 149(1)(b) of the old regime. The non obstante clause ensures that the Revenue has additional time beyond the statutory stipulated time limit to complete or comply with the formalities given the administrative difficulties that arose due to the covid-19 pandemic. (iii) Sanction of the specified authority." 40. It is further clarified that the time during which the Show Cause Notices were deemed to be stayed is from the date of deemed issuance of notices between 01.04.2021 and 30.06.2021 till the supply of relevant informations and materials by the Assessing Officers to the assessee's in terms of the directions issued by the Hon'ble Supreme Court in Ashish Agarwal's case (cited supra) and the period of 2 weeks was allowed to the assessee's to respond to the Show Cause Notices. 41. The Hon'ble Supreme Court in Rajeev Bansal's case ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ces that were deemed to have been issued during the period between April 1, 2021 and June 30, 2021 were stayed till the date of supply of the relevant information and material by the Assessing Officer to the assessee. After the supply of the relevant material and information to the assessee, time begins to run for the assessee's to respond to the show-cause notices. 107. The third proviso to section 149 allows the exclusion of time allowed for the assessee's to respond to the show cause notice under section 149A(b) to compute the period of limitation. The third proviso excludes "the time or extended time allowed to the assessee". Resultantly, the entire time allowed to the assessee to respond to the show-cause notice has to be excluded for computing the period of limitation. In Union of India v. Ashish Agarwal [(2022) 444 ITR 1 (SC); (2023) 1 SCC 617.], this court provided two weeks to the assessee's to reply to the show cause notices. This period of two weeks is also liable to be excluded from the computation of limitation given the third proviso to section 149. Hence, the total time that is excluded for computation of limitation for the deemed notices is : (i) the time during w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the new regime. The surviving or balance time limit can be calculated by computing the number of days between the date of issuance of the deemed notice and June 30, 2021. 109. If this court had not created the legal fiction and the original reassessment notices were validly issued according to the provisions of the new regime, the notices under section 148 of the new regime would have to be issued within the time limits extended by Taxation and other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020. As a corollary, the reassessment notices to be issued in pursuance of the deemed notices must also be within the time limit surviving under the Income-tax Act read with Taxation and other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020. This construction gives full effect to the legal fiction created in Union of India v. Ashish Agarwal [(2022) 444 ITR 1 (SC); (2023) 1 SCC 617.] and enables both the assessee's and the Revenue to obtain the benefit of all consequences flowing from the fiction. (See State of A.P. v. A.P. Pensioners' Association [(2005) 13 SCC 161; 2006 SCC (L&S) 666. (This court observed that the "legal fiction undoubtedly is to be co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it stood till 31.03.2021 for the purpose of Section 148 of the Income Tax Act, 1961 as in force with effect from 01.04.2021 will be a still-born i.e., at the time of its issuance. This is not what was intended by either of the decision of the Hon'ble Supreme Court. 48. Therefore, it has to be held that a Notice under Section 148 of the Income Tax Act, 1961 as in force with effect from 01.04.2021 was issued within the extended period of limitation prescribed under Section 149(1)(b) of the Income Tax Act, 1961, after the said Notice dated 31.03.2021 issued under Section 148 of the Income Tax Act, 1961, as it stood till 31.03.2021 transformed itself into a Notice under Section 148-A(b) of the Income Tax Act, 1961 under the new regime as in force with effect from 01.04.2021 in the light of the decision of the Hon'ble Supreme Court in Ashish Agarwal's Case (cited supra). 49. Therefore, computation of limitation for issuance of a Notice under Section 148 of the Income Tax Act, 1961 under the new regime with effect from 01.04.2021, the period of limitation up to 02.06.2022 being the date of issuance of the Show Cause Notice and Reply dated 11.06.2022 of the petitioner, assessment has t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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