Punjab-Haryana High Court
Ishwar Garg vs Union Of India And Others on 12 March, 2025
Bench: Arun Palli, Sudeepti Sharma
CWP-4887-2025(O&M)
2025(O&M) -1-
IN THE HIGH COURT OF PUNJAB AND HARYANA
AT CHANDIGARH
-.-
CM
CM-3753-CWP-2025 in/and
CWP
CWP-4887-2025(O&M)
Decided on ::- 12.03.2025
Ishwar Garg ....Petitioner
VERSUS
Union of India & Others ....Respondents
CORAM : HON'BLE MR. JUSTICE ARUN PALLI
HON'BLE MRS. JUSTICE SUDEEPTI SHARMA
Present: Mr. Sandeep Goyal, Advocate for the petitioner.
Ms. Gauri Neo Rampal, Sr. Standing Counsel
Counsel,
for the respondents.
-.-
SUDEEPTI SHARMA, J.
CM-3753-CWP
CWP-2025
1. The present application is filed for
for seeking stay of the coercive aaction
ction
pursuant to the notice issued under Section 148 of the Income Tax Act
Act, 1961 and
Assessment Order dated 01.03.2025 passed by the Assessing Authority.
2. The main case is fixed for 20.03.2025. On the oral request made by
learned counsel for the applicant/petitioner and with the consent of learned counsel
for the respondents,
respondent , the matter is preponed to today itself.
CWP-4887-2025(O&M)
2025(O&M)
1. The present writ petition has been filed under Articles 226/227 of the
Constitution of India with the following prayers:
prayers:-
(i) For the issuance of a Writ in the nature of certiorari quashing
the Notice dated 08.11.2024 whereby the respondent authorities have
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disposed of the issue of limitation without granting any opportunity to
the petitioner which is otherwise contrary to the judgment of this
Court passed in Kulwant Singh and others Vs. Unio
Union
n of India & Other
and the judgment passed by the Hon’ble Supreme Court in case of
Union of India Vs. Rajeev Bansal.
AND/OR
(ii) For the issuance of a Writ in the nature of certiorari quashing
the Notice dated 15.01.2025 disposing of the objections of the
petitioner on the basis of conjectures and surmises.
AND/OR
(iii) And also, For the issuance of a Writ in the nature of certiorari
quashing the Notice under Section 148 of the Income Tax Act, 1961
by the respondent No.2 for the reason that the same has been passed
without jurisdiction
jurisdiction under Section 149(1)(b) of the Income Tax Act,
1961
1961.
AND/OR
(iv) In the Interregnum,
um, further proceedings in pursuance to the
Notice under Section 148 of the Income Tax Act, 1961 issued by
respondent No.2 may kindly be staye
stayed.
AND/OR
(v) For issuance of any other writ or order as the Hon’ble Court
may deem it.
BRIEF FACTS
2. Brief facts of the present case as per pleadings in the writ petition are
that the petitioner is filing income tax return regularly as mandatorily required to
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be filed under Section 139(1) of the Income Tax Act, 1961. He had filed return of
income under Section 139(1) for the Assessment Year 2015
2015-2016
2016 on 31.10.2015
declaring total income amounting to Rs.2,84,510/
Rs.2,84,510/- and exempted income
amounting to Rs.2,68,49,813/-
Rs.2,68,49,813/
The petitioner received notice dated 20.04.2021 issued by respondent
No.2 (Income Tax Officer, Ward-1,
Ward 1, Panipat) under Section 148 for the Assessment
Year 2015-2016.
2016. Pursuant to the notice dated 20.04.2021, he filed return of
o
income on 27.05.2021. Thereafter, the petitioner received notice dated 16.11.2021
under Section 143(2) read with Section 147 of the Income Tax Act,, 1961.
Aggrieved by the validity of reassessment proceeding
proceedings initiated under Section
148A of the Income Tax
Tax Act, 1961, the petitioner challenged the same before this
Court in CWP-2601
2601 of 2022 titled as “Ishwar
Ishwar Garg Vs. Income Tax Officer &
Others“.
“. The same was disposed of as not pressed in view of the decision dated
04.05.2022 of Hon’ble Supreme Court in “Union
ion of India & Others. Vs. AshishAggarwal”. Thereafter, the petitioner received notice dated 12.03.2022 issued
under Section 142(1) of Income Tax Act by respondent No.5 (The National
Faceless Assessment Centre). Consequently,, in compliance of the decisi
decision
on ofHon’ble Supreme Court in “Union of India & Others. Vs. Ashish Aggarwal
[2022] SCC Online SC 543”
543 and notification dated 11.05.2022 issued by Central
Board of Direct Taxes (CBDT),
(CBDT) the
he petitioner received notice dated 01.06.2022
under Section 148A(b) of Income Tax Act, 1961 by respondent No.2 (Income Tax
Officer, Ward 1, Panipat). Hee filed reply to the same. Thereafter, order dated
25.07.2022
.07.2022 under Section 148A(d) was passed by resp
respondent No.2 (Income Tax
Officer, Ward-1,
1, Panipat), stating therein that as per the information available on
record it is a case of escaped assessment and therefore a fit case for issuance of
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notice under Section 148 of the Income Tax Act, 1961 for the Assessment
ssment Year
2015-2016.
16. Thereafter the petitioner received notice under Section 148 dated
25.07.2022
.07.2022 issued by respondent No.2 (Income Tax Officer, Ward 1, Panipat).
The petitioner filed another writ petition bearing CWP No.
No.24081 of 2022 titled as
“Ishwar Garg Vs. Central Board of Direct Taxes, North Block
Block-New
New Delhi
through Secretary, Ministry of Finance, New Delhi & Others
Others” , which was
disposed of in terms of CWP-18032-2022
CWP 2022 titled as “Kulwant Singh Vs. Union of
India and Others” directing the Revenue to examine each and every case relating
to the ‘deemed
deemed notices’
notices issued under Section 148 of the Act, in the light of the
observations made by the Hon’ble Supreme Court “”Union
Union of India Vs. Rajeev
Bansal [2024] 469 ITR 46 (SC)”.
(SC) Consequently,
uently, the petitioner received notice
dated 08.11.2024 under Section 142(1) of Income Tax Act, 1961 by respondent
No.5 (The National Faceless Assessment Centre) stating therein that notice under
Section 148 has been found to be well within the limits afte
afterr examining the case of
the petitioner in the light of the judgment passed by the Hon’ble Supreme Court in
the case of “Union
Union of India Vs. Rajeev Bansal
Bansal” and hee was required to furnish
certain details. Thereafter another notice was received by the petitioner dated
21.11.2024 under Section 142(1) of the Income Tax Act, 1961 to furnish certain
details. The petitioner received notice dated 09.12.2024 under Sectio
Section
n 143(2) read
with Section 147 of the Income Tax Act, 1961. He filed reply to the same. He
received another notice dated 13.01.2025 under Section 142(1) of the Income Tax
Act, 1961 issued by respondent No.5 (The National Faceless Assessment Centre).
3. Hence the present petition challenging the notice dated 08.11.2024
and 15.01.2025, for the Assessment Year 2015-2016
2016 on the ground of being barred
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by limitation in view of the judgment passed by the Hon’ble Supreme Court in the
case of Union of India Vs. Rajeev Bansal.
SUBMISSIONS
4. Learned counsel for the petitioner contends that notice dated
08.11.2024 issued under Section 142(1) of the Income Tax Act, 1961 and notice
dated 15.01.2025 disposing of the objections
objection of the petitioner is contrary to the
judgment of Hon’ble Supreme Court in the case of Union of India Vs. Rajeev
Bansal [2024] 469 ITR 46 (SC).
(SC)
5. Learned
earned counsel for the respondent
respondents could not rebut the settled
proposition of law as laid down by the Hon’ble Supreme Court in Union of India
Vs. Rajeev Bansal (Supra), by which the case of the petitioner is squarely
covered.
6. We have heard learned counsel for the parties and perused the whole
record of the present case.
case
JOINT READING OF JUDGMENTS OF HON’BLE SUPREME COURT IN
UNION OF INDIA AND OTHERS VS. ASHISH AGGARWAL [2022] SCC
ONLINE SC 543 AND UNION OF INDIA VS. RAJEEV BANSAL [2024] 469
ITR 46 (SC) CONCLUDES AS UNDER:-
UNDER
7. The Finance Act, 2021 substituted the entire scheme of reassessment
under Sections 147
147 to 151 of the Income Tax Act, 1961 w.e.f. 01.04.2021.
8. Prior to the coming into force of Finance Act, 2021 initiation of
reassessment proceedings was governed by the following provisions of Income
Tax Act, 1961:–
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“Income
Income escaping assessment147 If the Assessing Officer has reason to believe that any income
147.chargeable to tax has escaped assessment for any assessment year, he
may, subject to the provisions of sections 148 to 153, assess or
reassess such income and also any other in
income
come chargeable to taxwhich has escaped assessment and which comes to his notice
subsequently in the course of the proceedings under this section, or
recomputed the loss or the depreciation allowance or any other
allowance, as the case may be, for the ass
assessment
essment year concerned(hereafter in this section and in sections 148 to 153 referred to as the
relevant assessment year):
Provided that where an assessment under sub
sub-section
section (3) of section143 or this section has been made for the relevant assessment yea
year,
r, noaction shall be taken under this section after the expiry of four years
from the end of the relevant assessment year, unless any income
chargeable to tax has escaped assessment for such assessment year by
reason of the failure on the part of the asse
assessee
ssee to make a returnunder section 139 or in response to a notice issued under sub
sub-section
section(1) of section 142 or section 148 or to disclose fully and truly all
material facts necessary for his assessment, for that assessment year:
Provided further that 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 for any assessment year:
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that the Assessing Officer may assess or reassess suchincome, other than the income involving matters which are the subject
matters of any appeal, reference or revision, which is chargeable to
tax and has escaped assessment.
Explanation 1.-Production
1. before
re the Assessing Officer of accountbooks or other evidence from which material evidence could with due
diligence have been discovered by the Assessing Officer will not
necessarily amount to disclosure within the meaning of the foregoing
proviso.
Explanat
Explanation 2.-For
For the purposes of this section, the following shall
also be deemed to be cases where income chargeable to tax has
escaped assessment, namely :-
:
(a) where no return of income has been furnished by the
assessee although his total income or the tota
totall income of anyother person in respect of which he is assessable under this Act
during the previous year exceeded the maximum amount which
is not chargeable to income-tax;
tax;
(b) where a return of income has been furnished by the
assessee but no assessment has been made and it is noticed by
the Assessing Officer that the assessee has understated the
income or has claimed excessive loss, deduction, allowance or
relief in the return;
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(ba) where the assessee has failed to furnish a report in respect
of any international
ernational transaction which he was so required
under section 92E;
(c) where an assessment has been made, but
but-
(i) income chargeable to tax has been underassessed; or
(ii) such income has been assessed at too low a rate; or
(iii) such income has been made the subject of excessive relief
under this Act; or
(iv) excessive loss or depreciation allowance or any other
allowance under this Act has been computed;
(ca) where a return of income has not been furnished by the
assessee or a return of income has been furnished by him and
on the basis of information or document received from the
prescribed income-tax
tax authority, under sub
sub-section
section (2) of
section 133C, it is noticed by the Assessing Officer that the
income of the assessee ex
exceeds
ceeds the maximum amount not
chargeable to tax, or as the case may be, the assessee has
understated the income or has claimed excessive loss,
deduction, allowance or relief in the return;
(d) where a person is found to have any asset (including
financial interest in any entity) located outside India.
Explanation 3.-For
3. For the purpose of assessment or reassessment under
this section, the Assessing Officer may assess or reassess the income
in respect
respect of any issue, which has escaped assessment, and such issue
comes to his notice subsequently in the course of the proceedings
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under this section, notwithstanding that the reasons for such issue
have not been included in the reasons recorded under sub
subsection
section (2)
of section 148.
Explanation 4.-For
4. For the removal of doubts, it is hereby clarified that
the provisions of this section, as amended by the Finance Act, 2012,
shall also be applicable for any assessment year beginning on or
before the 1st day of April,
Ap 2012.
Issue of notice where income has escaped assessment
148. (1) Before making the assessment, reassessment or
recomputation under section 147, the Assessing Officer shall serve on
the assessee a notice requiring him to furnish within such period, as
may be specified in the notice, a return of his income or the income of
any other person in respect of which he is assessable under this Act
during the previous year corresponding to the relevant assessment
year, in the prescribed form and verified in tthe
he prescribed manner
and setting forth such other particulars as may be prescribed; and the
provisions of this Act shall, so far as may be, apply accordingly as if
such return were a return required to be furnished under section 139:
Provided that in a case-
c
(a) where a return has been furnished during the period commencing
on the 1st day of October, 1991 and ending on the 30th day of
September, 2005 in response to a notice served under this section, and
(b) subsequently a notice has been served under sub
sub-section
section (2) ofsection 143 after the expiry of twelve months specified in the proviso
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to subsection (2) of section 143, as it stood immediately before the
amendment of said sub-section
sub section by the Finance Act, 2002 (20 of 2002)
but before the expiry of the time
time limit for making the assessment, re-
re
assessment or recomputation as specified in sub
sub-section
section (2) of section
153, every such notice referred to in this clause shall be deemed to be
a valid notice:
Provided further that in a case-
case
(a) where a return has been
been furnished during the period commencingon the 1st day of October, 1991 and ending on the 30th day of
September, 2005, in response to a notice served under this section,
and
(b) subsequently a notice has been served under clause (ii) of sub-
sub
section (2) of section 143 after the expiry of twelve months specified
in the proviso to clause (ii) of sub
sub-section
section (2) of section 143, but
before the expiry of the time limit for making the assessment,
reassessment or recomputation as specified in sub
sub-section
section (2) of
section 153, every such notice referred to in this clause shall be
deemed to be a valid notice.
Explanation. For the removal of doubts, it is hereby declared that
Explanation.-For
nothing contained in the first proviso or the second proviso shall
apply to any return which
which has been furnished on or after the 1st day
of October, 2005 in response to a notice served under this section.
(2) The Assessing Officer shall, before issuing any notice under this
section, record his reasons for doing so.
Time limit for notice :-
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149. (1) No notice under section 148 shall be issued for the relevant
149.
assessment year-
year
(a) if four years have elapsed from the end of the relevant assessment
year, unless the case falls under clause (b) or clause (c);
(b) if four years, but not more than si
sixx 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;
(c) if four years, but not more than sixteen ye
years,
ars, 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 cha
Explanation.-In chargeable
rgeable to tax which has
escaped assessment for the purposes of this subsection, 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
sub section (1) as to the issue of notice sha
shall
ll 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
non-resident
resident under section 163 and
the assessment, reassessment or recomputation to be made in
pursuance of the notice is to be made on him as the agent of such non-
pursuance 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.
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Explanation. For the removal of doubts, it is hereby clarifie
Explanation.-For clarified
d that the
provisions of sub-sections
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 day of April, 2012.
Sanction for issue of notice :-
151. (1) No notice shall be issued under section 148 by an Assessing
151.Officer, after the expiry of a period of four years from the end of the
relevant assessment year, unless the Principal Chief Commissioner or
Chief Commissioner or Principal Commissioner or C
Commissioner
ommissioner issatisfied, on the reasons recorded by the Assessing Officer, that it is a
fit case for the issue of such notice.
(2) In a case other than a case falling under sub
sub-section
section (1), no notice
shall be issued under section 148 by an Assessing Offi
Officer,
cer, who is
below the rank of Joint Commissioner, unless the Joint Commissioner
is satisfied, on the reasons recorded by such Assessing Officer, that it
is a fit case for the issue of such notice.
(3) For the purposes of sub-section
sub section (1) and sub
sub-section (2),
), the
Principal Chief Commissioner or the Chief Commissioner or the
Principal Commissioner or the Commissioner or the Joint
Commissioner, as the case may be, being satisfied on the reasons
recorded by the Assessing Officer about fitness of a case for the issue
of notice under section 148, need not issue such notice himself.”
3.1 In pursuance to the power vested under section 3 of the Relaxation
Act, 2020, the Central Government issued following Notifications
inter alia extending the time lines prescribed under section 149 for
inter-alia
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issuance of reassessment notices under section 148 of the Income Tax
Act, 1961:
Date of Notification Original limitation for Extended Limitation
issuance of notice under
Section 148 of the Act
31.03.2020 20.03.2020 to 29.06.2020 30.06.202024.06.2020 20.03.2020 to 31.12.2020 31.03.2021
31.03.2021 31.03.2021 30.04.2021
27.04.2021 30.04.2021 30.06.2021
The Explanations to the Notifications dated 31st March, 2021 and
27th April, 2021 issued under section 3 of the Relaxation Act, 2020
also stipulated that the provisions, as they existed prior to the
amendment by the Finance Act, 2021, shall apply to the re
reassessment
assessmentproceedings initiated thereunder.
3.2 The Parliament introduced reformative changes to sections 147 to
151 of the Income Tax Act, 1961 governing reassessment proceedings
by way of the Finance Act, 2021, which was passed on 28th March,
2021. The substituted sections 147 to 149 and section 151 applicable
w.e.f. 01.04.2021, passed in the Finance Act, 2021, are as under:
under:-
Income escaping assessment-
assessment
“147. If any income chargeable to tax, in the case of an assessee, has
“147.
escaped assessment for any assessment
assessment year, the Assessing Officer
may, subject to the provisions of sections 148 to 153, assess or
reassess such income or recompute the loss or the depreciation
allowance or any other allowance or deduction for such assessment
year (hereafter in this section
section and in sections 148 to 153 referred to
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as the relevant assessment year).
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Explanation. For the purposes of assessment or reassessment or
Explanation.-For
recomputation under this section, the Assessing Officer may assess or
reassess the income in respect of any issu
issue,
e, which has escaped
assessment, and such issue comes to his notice subsequently in the
course of the proceedings under this section, irrespective of the fact
that the provisions of section 148A
148A have not been complied with
with”.
Issue of notice where income has
has escaped assessment
assessment:-
148. Before making the assessment, reassessment or recomputation
148.under section 147, and subject to the provisions of section 148A, the
Assessing Officer shall serve on the assessee a notice, along with a
copy of the order passed, if required, under clause (d) of section
148A, requiring him to furnish within such period, as may be specified
in such notice, a return of his income or the income of any other
person in respect of which he is assessable under this Act during the
previous year
year corresponding to the relevant assessment year, in theprescribed form and verified in the prescribed manner and setting
forth such other particulars as may be prescribed; and the provisions
of this Act shall, so far as may be, apply accordingly as if ssuch
uch returnwere a return required to be furnished under section 139:
Provided that no notice under this section shall be issued unless there
is information with the Assessing Officer 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
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notice.
Explanation 1.-For
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
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
Board from time to time;
(ii) any final objection raised by the Comptroller and Auditor
Auditor-General
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
thi Act.
Explanation 2.-For
2. the purposes of this section, where
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-
sub
section (2A) or sub-section
sub section (5) of that section, on or after the 1st day
of April, 2021, in the case of the assessee; or
(iii) the Assessing Officer is satisfied, with the prior approval of the
Principal Commissioner or Commissioner, that any money, bullion,
jewellery or other valuable article or thing, seized or requisitioned
under section 132 or under section 132A in case of any other person
on or after the 1st day of April,
April, 2021, belongs to the assessee; or
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(iv) the Assessing Officer is satisfied, with the prior approval of
Principal Commissioner or Commissioner, that any books of account
or documents, seized or requisitioned under section 132 or section
132A in case of any
any other person on or after the 1st day of April,
2021, pertains or pertain to, or any information contained therein,
relate to, the assessee, the Assessing Officer shall be deemed to have
information which suggests that the income chargeable to tax has
escaped
caped assessment in the case of the assessee for the three
assessment years immediately preceding the assessment year relevant
to the previous year in which the search is initiated or books of
account, other documents or any assets are requisitioned or sur
survey
vey is
conducted in the case of the assessee or money, bullion, jewellery or
other valuable article or thing or books of account or documents are
seized or requisitioned in case of any other person.
Explanation 3.-For
3. For the purposes of this section, specified authority
means the specified authority referred to in section 151.”
Conducting inquiry, providing opportunity before issue of notice
under section 148 –
“148A. The Assessing Officer shall, befor
“148A. beforee issuing any notice undersection 148-
148
(a) conduct any enquiry, if required, with the prior approval of
specified authority, with respect to the information which suggests
that the income chargeable to tax has escaped assessment;
(b) provide an opportunity
opportunity of being heard to the assessee, with theprior approval of specified authority, by serving upon him a notice to
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show cause within such time, as may be specified in the notice, being
not less than seven days and but not exceeding thirty days from the
date
te on which such notice is issued, or such time, as may be extended
by him on the basis of an application in 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);
show-cause
(d) decide,
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 m
month
onth 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
provisions of this section shall not apply in a casewhere
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, 202
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(b) the Assessing Officer is satisfied, with the prior approval of the
Principal Commissioner or Commissioner that any money, bullion,
jewellery or other valuable article or thing, seized in a search under
section 132 or requisitioned under section 132A, in the case of any
other person on or after the 1st day of April, 2021, belongs to the
assessee; or
(c) the Assessing Officer is satisfied, with the prior approval of the
Principal Commissioner or Commissioner that any books of account
or documents, seized in a search under section 132 or requisitioned
under section 132A, in case of any other person on or after the 1st day
of April, 2021, pertains or pertain to, or any information contained
therein, relate to, the assessee.
Explanation.
Explanation.-For the purposes
oses of this section, specified authority
means the specified authority referred to in section 151.”
Time limit for notice –
“149. (1) No notice under section 148 shall be issued for the relevant
“149.
assessment year-
year
(a) if three years have elapsed from the end of the relevant assessment
year, unless the case falls under clause (b);
(b) if three years, but not more than ten years, have elapsed from the
end of the relevant assessment year unless the Assessing Officer has
hin his possession books of account or other documents or evidence
which reveal that the income chargeable to tax, represented in the
form of asset, which has escaped assessment amounts to or is likely to
amount to fifty lakh rupees or more for that year
year:
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2025(O&M) -19-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
sub section (1) of this section, as they stoodimmediately before the commencement of the Finance Act, 2021:
Provided further that the provisions of this sub
sub-section
section shall not applyin a case, where a notice under section 153A, or section 153C read
with section 153A, is required to be issued in relation to a search
initiated under section 132 or books of account, other documents or
any assets requisitioned under section 132A, on or before the 31st day
off March, 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
show cause notice issued under clause (b) of section148A or the period during which tthe
he proceeding under section 148Ais 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
available to the Assessing Officer for passing an orderunder clause (d) of section 148A is less than seven days, such
remaining period shall be extended to seven days and the period of
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sub section shall be deemed to be extendedaccordingly
accordingly.
Explanation. For the purposes of clause (b) of this subsection, “asset”
Explanation.-For
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
sub section (1) as to th
thee issue of notice shall be
subject to the provisions of section 151.’
Sanction for issue of notice-
notice
“151. Specified authority for the purposes of section 148 and section
“151.
148A shall be-
be
(i) Principal Commissioner or Principal Director or Commissioner or
Director, if three years or less than three years have elapsed from the
end of the relevant assessment year;
(ii) Principal Chief Commissioner or Principal Director General or
where there is no Principal Chief Commissioner or Principal Director
General, Chief
Chief Commissioner or Director General, if more than three
years have elapsed from the end of the relevant assessment year.
year.”
9. Despite the substituted Sections 147 to 151 of the Income Tax Act,
1961, by the Finance Act, 2021 which came into force on 01.04
01.04.2021
.2021 many
reassessment notices under Section 148 of the Income Tax Act, 1961 were issued
to the assessees after coming into force of Finance Act, 2021 i.e. after 01.04.2021,
which were assailed before different High Courts on different grounds. Different
High Courts quashed the reassessment notices under Section 148 of the Income
Tax Act, 1961. Union of India challenged the judgments passed by different High
Courts setting aside reassessment notices under Section 148 of the unamended
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Income Tax Act, which
which were issued after 01.04.2021 i.e. after coming into force of
Finance Act, 2021 before the Hon’ble Supreme Court of India in Union of India
and Others Vs. Ashish Aggarwal [2022] SCC Online SC 543 . Hon’ble Supreme
Court partly allowed the appeals filed by the Union of India. Relevant portion of
the judgment of Hon’ble Supreme Court in Union of India and Others Vs. Ashish
Aggarwal [2022] SCC Online SC 543 is reproduced as under:
under:-
“5.. We have heard
rd Shri N. Venkataraman, learned ASG appearingon behalf of the Revenue and Shri C.A. Sundaram and Shri S. Ganesh,
learned Senior Advocates and other learned counsel appearing on
behalf of the respective assessee.
6.. It cannot be disputed that by substit
substitution
ution of sections 147 to 151 ofthe Income Tax Act (IT Act) by the Finance Act, 2021, radical and
reformative changes are made governing the procedure for
reassessment proceedings. Amended sections 147 to 149 and section
151 of the IT Act prescribe the pro
procedure
cedure governing initiation ofreassessment proceedings. However, for several reasons, the same
gave rise to numerous litigations and the reopening were challenged
inter alia, on the grounds such as (1) no valid “reason to believe” (2)
no tangible/reliable material/information in possession of the
assessing officer leading to formation of belief that income has
escaped assessment, (3) no enquiry being conducted by the assessing
officer prior to the issuance of notice; and reopening is based on
change of opinion
opinion of the assessing officer and (4) lastly the mandatoryprocedure laid down by this Court in the case of GKN Driveshafts
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72,, hasnot been followed.
6.1 Further pre-Finance
Finance Act, 2021, the reopeni
reopening
ng was permissible for
a maximum period up to six years and in some cases beyond even six
years leading to uncertainty for a considerable time. Therefore,
Parliament thought it fit to amend the Income Tax Act to simplify the
tax administration, ease compliances
compliances and reduce litigation. Therefore,
with a view to achieve the said object, by the Finance Act, 2021,
sections 147 to 149 and section 151 have been substituted.
6.2 Under the substituted provisions of the IT Act vide Finance Act,
2021, no notice under section 148 of the IT Act can be issued without
following the procedure prescribed under section 148A of the IT Act.
Along with the notice under section 148 of the IT A
Act,
ct, the assessing
officer (AO) is required to serve the order passed under section 148A
of the IT Act. section 148A of the IT Act is a new provision which is in
the nature of a condition precedent. Introduction of section 148A of
the IT Act can thus be said
said to be a game changer with an aim to
achieve the ultimate object of simplifying the tax administration, ease
compliance and reduce litigation.
6.3 But prior to pre-Finance
Finance Act, 2021, while reopening an
assessment, the procedure of giving the reasons for reopening and an
opportunity to the assessee and the decision of the objectives were
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required to be followed as per the judgment of this Court in the case
of GKN Driveshafts (India) Ltd. (supra).
6.4 However, by way of section 148A, the procedure has no
now
w been
streamlined and simplified. It provides that before issuing any notice
under section 148, the assessing officer shall (i) conduct any enquiry,
if required, with the approval of specified authority, with respect to
the information which suggests that the income chargeable to tax has
escaped assessment; (ii) provide an opportunity of being heard to the
assessee, with the prior approval of specified authority; (iii) consider
the reply of the assessee furnished, if any, in response to the show-
show
cause notice
notice referred to in clause (b); and (iv) decide, on the basis of
material available on record including reply of the assessee, as to
whether or not it is a fit case to issue a notice under section 148 of the
IT Act and (v) the AO is required to pass a specif
specific
ic order within the
time stipulated.
6.5 Therefore, all safeguards are provided before notice under section
148 of the IT Act is issued. At every stage, the prior approval of the
specified authority is required, even for conducting the enquiry as per
section 148A(a). Only in a case where, the assessing officer is of the
opinion that before any notice is issued under section 148A(b) and an
opportunity is to be given to the assessee, there is a requirement of
conducting any enquiry, the assessing
assessing officer may do so and conduct
any enquiry. Thus if the assessing officer is of the opinion that any
enquiry is required, the assessing officer can do so, however, with the
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prior approval of the specified authority, with respect to the
information which
which suggests that the income chargeable to tax has
escaped assessment.
6.6 Substituted section 149 is the provision governing the time limit
for issuance of notice under section 148 of the IT Act. The substituted
section 149 of the IT Act has reduced th
thee permissible time limit for
issuance of such a notice to three years and only in exceptional cases
ten years. It also provides further additional safeguards which were
absent under the earlier regime pre
pre-Finance Act, 2021.
7. Thus, the new provisions substituted
bstituted by the Finance Act, 2021
being remedial and benevolent in nature and substituted with a
specific aim and object to protect the rights and interest of the
assessee as well as and the same being in public interest, the
respective High Courts have rightly
rightly held that the benefit of new
provisions shall be made available even in respect of the proceedings
relating to past assessment years, provided section 148 notice has
been issued on or after 1st April, 2021. We are in complete agreement
with the view taken by the various High Courts in holding so.
8. However, at the same time, the judgments of the several High
Courts would result in no reassessment proceedings at all, even if the
same are permissible under the Finance Act, 2021 and as per
substituted sections 147 to 151 of the IT Act. The Revenue cannot be
substituted
made remediless and the object and purpose of reassessment
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proceedings cannot be frustrated. It is true that due to a bonafide
mistake and in view of subsequent extension of time vide various
notifications, the Revenue issued the impugned notices under section
notifications,
148 after the amendment was enforced w.e.f. 01.04.2021, under the
unamended section 148. In our view the same ought not to have been
issued under the unamended Act and ought to have been issue
issued
d under
the substituted provisions of sections 147 to 151 of the IT Act as per
the Finance Act, 2021. There appears to be genuine nonapplication of
the amendments as the officers of the Revenue may have been under a
bonafide 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
provision of IT Act, the High Courts ought to
have passed an order construing the notices issued under unamended
Act/unamended provision of the IT Act as those deemed to have been
issued under section 148A of the IT Act as per the new provision
section 148A and the Revenue ought to have been permitted to
proceed further with the reassessment proceedings as per the
substituted provisions of sections 147 to 151 of the IT Act as per the
Finance Act, 2021, subject to compliance of all the procedural
requirements and the defences, which may be available to the
assessee under the substituted provisions of sections 147 to 151 of the
IT Act and which may be available under the Finance Act, 2021 and
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in law. Therefore, we propose to modify the judgments and orders
passed by the respective High Courts as under: –
(i) The respective impugned section 148 notices issued to the
respective assessees shall be deemed to have been issued under
section 148A of the IT Act as substituted by the Finance Act,
2021 and treated to be show
show-cause
cause notices in terms of section148A(b). The respective assessing officers shall within thirty
days from today provide to the assessees the information and
material relied upon by the Revenue so that the assessees can
reply to the notices within two week
weeks thereafter;
(ii) The requirement of conducting any enquiry with the prior
approval of the specified authority under section 148A(a) be
dispensed with as a one-time
time measure vis
vis-a-vis
vis those noticeswhich have been issued under Section 148 of the unamended
Act from 01.04.2021 till date, including those which have been
quashed by the High Courts;
(iii) The assessing officers shall thereafter pass an order in
terms of section 148A(d) after following the due procedure as
required under section 148A(b) in respe
respect
ct of each of theconcerned assessees;
(iv) All the defences which may be available to the assessee
under section 149 and/or which may be available under the
Finance Act, 2021 and in law and whatever rights are available
to the Assessing Officer under the Finance Act, 2021 are kept
open and/or shall continue to be available and;
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(v) The present order shall substitute/modify respective
judgments and orders passed by the respective High Courts
quashing the similar notices issued under unamended section
148 of the IT Act irrespective of whether they have been
assailed before this Court or not.
9. There is a broad consensus on the aforesaid aspects amongst the
learned ASG appearing on behalf of the Revenue and the learned
Senior Advocates/learned counsel app
appearing
earing on behalf of the
respective assessees. We are also of the opinion that if the aforesaid
order is passed, it will strike a balance between the rights of the
Revenue as well as the respective assesses as because of a bonafide
belief of the officers of the Revenue in issuing approximately 90000
such notices, the Revenue may not suffer as ultimately it is the public
exchequer which would suffer. Therefore, we have proposed to pass
the present order with a view avoiding filing of further appeals before
this
is 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 ex
exercise
ercise 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
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orders passed by various High Courts across the country and
therefore the present order shall be applicable to PAN INDIA.
10. In view of the above and for the reasons stated above, the present
Appeals are ALLOWED IN PART. Th
Thee impugned common judgments
and orders passed by the High Court of Judicature at Allahabad in
W.T. No. 524/2021 and other allied tax appeals/petitions, is/are
hereby modified and substituted as under: –
(i) The impugned section 148 notices issued to the respective
assessees which were issued under unamended section 148 of
the IT Act, which were the subject matter of writ petitions
before the various respective High Courts shall be deemed to
have been issued under section 148A of the IT Act as
substituted by the Finance Act, 2021 and construed or treated
to be show cause notices in terms of section 148A(b). The
assessing officer shall, within thirty days from today provide to
the respective assessees information and material relied upon
by the Revenue, so that
hat the assesees can reply to the show-
show
cause notices within two weeks thereafter;
(ii) The requirement of conducting any enquiry, if required,
with the prior approval of specified authority under section
148A(a) is hereby dispensed with as a one
one-time measure
ure vis-
vis
avis those notices which have been issued under section 148 of
the unamended Act from 01.04.2021 till date, including those
which have been quashed by the High Courts. Even otherwise
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as observed hereinabove holding any enquiry with the prior
approval
al of specified authority is not mandatory but it is for the
concerned Assessing Officers to hold any enquiry, if required;
(iii) The assessing officers shall thereafter pass orders in terms
of section 148A(d) in respect of each of the concerned
assessees;; Thereafter after following the procedure as required
under section 148A may issue notice under section 148 (as
substituted);
(iv) All defences which may be available to the assesses
including those available under section 149 of the IT Act and
all rightss 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.
11.. The present order shall be applicable PAN INDIA and all
judgments and orders passed by different Hi
High
gh Courts on the issue
and under which similar notices which were issued after 01.04.2021
issued under section 148 of the Act are set aside and shall be
governed by the present order and shall stand modified to the
aforesaid extent. The present order is pa
passed
ssed in exercise of powers
under Article 142 of the Constitution of India so as to avoid any
further appeals by the 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 present order
shall also govern the pending writ petitions, pending before various
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High Courts in which similar notices under Section 148 of the Act
issued after 01.04.2021 are under challenge.
12.. The impugned common judgments and orders 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.
10. Therefore, in above referred to judgment of Hon’ble Supreme Court
in case of Union of India and Others Vs. Ashish Aggarwa
Aggarwal [2022] SCC Online
SC 543l,, Hon’ble the Supreme Court held that the impugned notices under Section
148 issued to the respective assessees which were issued under unamended Section
148 of the Income Tax Act and were subject matter of writ petitions before the
various respective High Courts shall be deemed to have been issued under Section
148-A
A of the Income Tax Act as substituted by the Finance Act, 2021 and be
construed or treated to be show cause notices in terms of Section 148A(b). It was
further held that the Assessing Officer shall, within 30 days from the date of
passing of the judgment i.e. 04.05.2022,
04.05.2022 provide to the respective assessees
information and material relied upon by the Revenue, so that the Assessees can
reply to the show cause notices within 2 weeks thereafter. It was further held by
the Hon’ble Supreme Court that the requirement of conducting any enquiry, if
required, with the prior approval of specified authority under Section 148A(a) is
dispensed with as one time measure viz-a-viz
viz viz those notices which were issued
under Section 148 of the unamended Act from 01.04.2021 (Finance Act, 2021) till
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date i.e. 04.05.2022 (Decision in Ashish Aggarwal)
Aggarwal). Further that the
he Assessing
Officer shall thereafter pass orders in terms of Section 148A(d) in respect of each
of the concerned
erned assessees and thereafter, after following the procedure as required
under Section 148A may issue notice(s)
notice under Section 148 (as substituted).
11. On 11.05.2022 following the decision in Union of India and Others
Vs. Ashish Aggarwal,
Aggarwal the Central Board
ard of Direct Taxes issued instructions for the
implementation of the decision in Ashish Aggarwal‘s case (supra
(supra), wherein it was
clarified that the judgment in Ashish Aggarwal would apply to all the cases where
extended reassessment notices were issued, irrespective
irrespective of the fact whether such
notices were challenged or not. These instructions further stated that reassessment
notices would “travel back in time to their original date when such notices were to
be issued and then new Section 149 of the Income Ta
Tax
x Act is to be applied at that
point.” The instructions further elaborated the mechanism for issuing notices
under Section 148 of the new regime. The Assessing Officers accordingly after
considering the replies furnished by the assessees passed orders un
under
der Section
148A(d) and subsequently notices under Section 148 of the new regime were
issued to the assessees by the Assessing Officers
Officers, between July and September
2022, for the Assessment Year 2013-2014,
2013 2014, 2014
2014-2015, 2015-2016, 2016-2017
2017 and
2017-2018.
2018. These notices were challenged before several High Courts, who
These
declared the notices to be invalid being time barred and being issued without the
appropriate sanction of the specified authority.
12. In Ashish Aggarwal‘s case (supra) Hon’ble Supreme Court did not
deal with the issue as to whether or not reassessment notices were issued within the
time limits prescribed under the provisions of Income Tax Act
Act, 1961 read with
relaxations provided under the Taxation and Other Laws (Relaxation of Certain
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Provisions)) Act,
Act 2020 (TOLA). Different
ifferent High Courts declared the notices under
Section 148 of the new regime issued to the assessees by the Assessing Officers
between July and September 2022,
2022 for the Assessment Year 2013
2013-2014,
2014, 2014-
2014
2015, 2015-2016,
2016, 2016-2017
2016 and 2017-2018
2018 to be invalid
invalid, being time barred and
being issued without appropriate sanction of specified authority
authority. The
he same were
challenged by way of filing the appeals before the Hon’ble Supreme Court in
Union of India and Others Vs. Rajiv Bansal.
Bansal. T
The Hon’ble Supreme Court framed
the following issues in Union of India and Others Vs. Rajiv Bansal :-
“B.
B. Issues
18. The present batch of appeals gives rise to the following issues:-
issues:
a. Whether TOLA and notification issued under it will also
apply to reassessment notices issued after 1 April 2021; and
b. Whether the reassessment notices issued under Section
148 of the new regime between July and September 2022 are
valid.”
13. Before proceeding further it would be appropriate to reproduce the
relevant portion of the judgment passed by the Hon’ble Supreme Court in the case
of Union of India Vs. Rajeev Bansal [2024] 469 ITR 46 (SC)
(SC). The same is
reproduced as under :-
:
B. Issues
18. The present batch of appeals give
givess rise to the following issues:-
issues:
a. Whether TOLA and notification issued under it will also
apply to reassessment notices issued after 1 April 2021; and
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148 of the new regime between July and September 2022 are
valid.
C. Submissions
19. Mr N Venkataraman, learned Additional Solicitor General of
India, made the following submissions on behalf of the Revenue:
a. Parliament enacted TOLA as a free
free-standing legislation
on toprovide relief and relaxation to both the assesses and the
Revenue during the time of COVID
COVID- 19. TOLA seeks to relaxactions and proceedings that could not be completed or
complied with within the original time limits specified under the
b. Section 149 of the new regime provides three crucial benefits
to the assesses:
(i) the four- year time limit for all situations has been reduced
to three years;
(ii) the first proviso to Section 149 ensures that re
re-assessment
assessmentfor previous assessmentt years cannot be undertaken beyond six
years; and
(iii) the monetary threshold of Rupees fifty lakhs will apply to
the reassessment for previous assessment years;
c. The relaxations provided under Section 3(1) of TOLA apply
“notwithstanding anything contained in the specified Act.”
Section 3(1), therefore, overrides the time limits for issuing a
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notice under Section 148 read with section 149 of the Income
Tax Act;
d.. TOLA does not extend the life of the old regime. It merely
provides a relaxation for the completion or compliance of
actions following the procedure laid down under the new
regime;
e. The Finance Act 2021 substituted the old regime for re-
re
assessment with a new regime. The first proviso to Section 149
does not expressly bar the application of TOLA. Section 3 of
TOLA applies to the entire Income Tax Act, including Sections
149 and 151 of the new regime. Once the first proviso to
Section 149(1)(b) is read with
th TOLA, then all the notices issued
between 1 April 2021 and 30 June 2021 pertaining to
assessment years 2013-2014,
2014, 2014
2014-2015, 2015-2016,
2016, 2016-
2016
2017, and 2017-2018
2018 will be within the period of limitation as
explained in the tabulation below:
Assessment Within 3 years Expiry of Within six Expiry of
Year Limitation Years Limitation
read with read with
TOLA for TOLA for (4)
(5)
2013-2014 31.03.2017 T O L A not 31.03.2020 30.06.2021applicable
2014-2015 31.03.2018 T O L A not 31.03.2021 30.06.2021
applicable
2015-2016 31.03.2019 T O L A not 31.03.2022 T O L A not
applicable applicable
2016-2017 31.03.2020 30.06.2021 31.03.2023 T O L A not
applicable
2017-2018 31.03.2021 30.06.2021 31.03.2024 T O L A not
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applicablef. The Revenue concedes that for the assessment year 2015
2015–16,all notices issued on or after 1 April 2021 will have to be
dropped as they will not fall for completion during the period
prescribed under TOLA;
CONCLUSION
14. A perusal of para 19 (f) of the judgment passed in the case of Rajiv
Bansal (supra) shows that it is conceded position
ion of the respondents, through theAdditional Solicitor General of India, that for the assessment year 2015
2015-2016,
16, allnotices issued on or after 1 April 2021 will have to be dropped as they will not fall
for completion during the period prescribed under TOLA
TOLA.
15. Admittedly, notice dated 08.11.2024 issued under Section 142(1) of
the Income Tax Act, 1961 for the Assessment Year 2015
2015-2016 and disposal ofobjections
jections dated 15.01.2025 which are the consequence of notice dated 20.04.2021issued under Section 148 of the Income Tax Act, 1961 for the Assessment Year
2015-2016, were issued to the petitioner without following the procedure for
issuance of notice as per law amended by the Finance Act, 2021.
16. A perusal of the record shows that the petitioner had earlier
approached this Court by way of filing of CWP
CWP-2619
2619 of 2022 which was disposedof as not pressed,
pressed in view of the decision dated 04.05.2022 of Hon
Hon’ble
‘ble SupremeCourt in “Union of India & Others. Vs. Ashish Aggarwal”
Aggarwal”. Subsequently
petitioner filed another CWP No.24073 of 2022 titled as “”Nisha
Nisha Garg Vs. CentralBoard of Direct Taxes, North Block-New
Block New Delhi through Secretary, Ministry ofFinance, New Delhi & Others” which was disposed of by this Court in terms of
TRIPTI SAINI
2025.04.08 09:53
I attest to the accuracy and
integrity of this document
CWP-4887-2025(O&M)
2025(O&M) -36-
decision in CWP-18032-2022
CWP titled as “Kulwant Singh Vs. Union of India and
Others“. In Kulwant Singh’s case this Court had categorically directed the
Revenue to examine each and every case relating
relating to the ‘deemed notices’ issued
under Section 148 of the Act, in the light of the observations made by the Hon’ble
Supreme Court “Union
“Union of India Vs. Rajeev Bansal [2024] 469 ITR 46 (SC)
(SC).”
17. In view of the statement made by Additional Solicitor General of
India in para 19 (f) of Rajeev Bansal’s
‘s case (supra), notice dated 08.11.2024
issued under Section 142(1) of the Income Tax Act, 1961 for the Assessment Year
2015-2016
2016 and disposal of objections
objections dated 15.01.2025 which are consequence of
notice dated 20.04.2021 issued under Section 148 of the Income Tax Act, 1961 for
the Assessment Year 2015-2016
2015 would be barred by limitation.
18. In view of the above, the
the present writ petition is allowed and notice
dated 08.11.2024 issued under Section 142(1) of the Income Tax Act, 1961 for the
Assessment Year 2015-2016
2015 2016 and disposal of objections dated 15.01.2025 which
are consequence of notice dated 20.04.2021 issued under Section 148 of the
Income Tax Act,
t, 1961 for the Assessment Year 2015
2015-2016 are hereby set aside.
19. Pending application(s),
application , if any, also stand disposed of.
(ARUN PALLI) (SUDEEPTI SHARMA)
JUDGE JUDGE
March 12,, 2025
tripti
Whether speaking/non-speaking
speaking : Speaking
Whether reportable : Yes
TRIPTI SAINI
2025.04.08 09:53
I attest to the accuracy and
integrity of this document