Amit Malkani v. Asst. Commissioner Of Income Tax, Udaipur, Central Circle-1Udaipur

HIGH COURT OF JUDICATURE FOR RAJASTHAN ATJODHPUR D.B. Civil Writ Petition No. 4598/2022 Amit Malkani S/o Ghanshyam Malkani, Aged About 42 Years, 7,3, Anand Vihar Tekri Madri Road, Udaipur 313001, Rajasthan. ----Petitioner Versus Asst. Commissioner Of Income Tax, Udaipur, Central Circle-1Udaipur Having Its Address At Office Of The AssistantCommissioner Of Income Tax Central Circle-1, Udaipur,Rajasthan Through Assistant Commissioner Of Income Tax. ----Respondent For Petitioner(s): Mr. A.K. Gupta through VC For Respondent(s): Mr. K.K. Bissa For Respondent(s): Mr. K.K. Bissa HON'BLE ACTING CHIEF JUSTICE MR. MANINDRA MOHAN SHRIVASTAVA HON'BLE MR. JUSTICE MADAN GOPAL VYAS 19/04/2022 Judgment At the outset learned counsel appearing for the petitionersubmits that the assessment order has not been passed by therespondent-Income Tax Department and submits that thecontroversy involved in the present writ petition is squarelycovered by the ratio laid down by Jaipur Bench of this Court in thebunch of writ petitions led by D.B. Civil Writ Petition No.969/2022:Sudesh Taneja Vs. Income Tax Commissioner, decidedon 27.1.2022 wherein the Division Bench held as under: “37. In this context we have perused the provisions ofreassessment contained in the Finance Act, 2021. Wehave noticed earlier the major departure that the newscheme of reassessment has made under theseprovisions. The time limits for issuing notice forreassessment have been changed. The concept ofincome chargeable to tax escaping assessment onaccount of failure on the part of the assessee toreassessment contained in the Finance Act, 2021. Wehave noticed earlier the major departure that the newscheme of reassessment has made under theseprovisions. The time limits for issuing notice forreassessment have been changed. The concept ofincome chargeable to tax escaping assessment onaccount of failure on the part of the assessee to “37. In this context we have perused the provisions ofreassessment contained in the Finance Act, 2021. Wehave noticed earlier the major departure that the newscheme of reassessment has made under theseprovisions. The time limits for issuing notice forreassessment have been changed. The concept ofincome chargeable to tax escaping assessment onaccount of failure on the part of the assessee toreassessment contained in the Finance Act, 2021. Wehave noticed earlier the major departure that the newscheme of reassessment has made under theseprovisions. The time limits for issuing notice forreassessment have been changed. The concept ofincome chargeable to tax escaping assessment onaccount of failure on the part of the assessee to disclose truly or fully all material facts is no longerrelevant. Elaborate provisions are made under Section148A of the Act enabling the Assessing Officer to makeenquiry with respect to material suggesting that incomehas escaped assessment, issuance of notice to theassessee calling upon why notice under Section 148should not be issued and passing an order consideringthe material available on record including response ofthe assessee if made while deciding whetherthe case is fit for issuing notice under Section 148.There is absolutely no indication in all these provisionswhich would suggest that the legislature intended thatthe new scheme of reopening of assessments would beapplicable only to the period post 01.04.2021. Inabsence of any such indication all noticeswhich were issued after 01.04.2021 had to be inaccordance with such provisions. To reiterate, we findno indication whatsoever in the scheme of statutoryprovisions suggesting that the past provisions wouldcontinue to apply even after the substitution forthe assessment periods prior to substitution. In factthere are strong indications to the contrary. We mayrecall, that time limits for issuing notice under Section148 of the Act have been modified under substitutedSection 149. Clause (a) of sub-section (1) ofSection 149 reduces such period to three years insteadof originally prevailing four years under normalcircumstances. Clause (b) extends the upper limit of sixyears previously prevailing to ten years in cases whereincome chargeable to tax which has escapedassessment amounts to or is likely to amount to 50 lacsor more. Sub-section (1) of Section 149 thus contractsas well as expands the time limit for issuing noticeunder Section 148 depending on the question whetherthe case falls under clause (a) or clause (b). In thiscontext the first proviso to Section 149(1) provides thatno notice under Section 148 shall be issuedat any time in a case for the relevant assessment yearbeginning on or before 01.04.2021 if such notice couldnot have been issued at that time on account of beingbeyond the time limit specified under the provisions ofclause (b) of sub-section (1) of Section 149 as theystood immediately before the commencement of theFinance Act, 2021. As per this proviso thus no noticeunder Section 148 would be issued for the pastassessment years by resorting to the larger period oflimitation prescribed in newly substituted clause (b) ofSection149(1).Thiswouldindicatethatthe notice that would be issued after 01.04.2021 wouldbe in terms of the substituted Section 149(1) butwithout breaching the upper time limit provided in theoriginal Section 149(1) which stood substituted. Thisaspect has also been highlighted in thememorandum explaining the proposed provisions in theFinance Bill. If according to the revenue for past period provisions of section 149 before amendment wereapplicable, this first proviso to section 149(1) waswholly unnecessary. Looked from both angles, namely,no indication of surviving the past provisions after thesubstitution and in fact an active indication to thecontrary, inescapable conclusion that we must arrive atis that for any action of issuance of notice underSection 148 after 01.04.2021 the newly introducedprovisions under the Finance Act, 2021 would apply.Mere extension of time limits for issuing notice undersection 148 would not change this position that obtainsin law. Under no circumstances the extended periodavailable in clause (b) of sub-section (1) of Section 149which we may recall now stands at 10 years instead of6 years previously available with the revenue, can bepressed in service for reopening assessments for thepast period. This flows from the plain meaning of thefirst proviso to sub-section (1) of Section 149. In plainterms a notice which had become time barred prior to01.04.2021 as per the then prevailing provisions, wouldnot be revived by virtue of the application of Section149(1)(b) effective from 01.04.2021. All thenotices issued in the present cases are after01.04.2021 and have been issued without following theprocedure contained in Section 148A of the Act and aretherefore invalid. Learned counsel appearing for the respondent department isnot in a position to controvert the aforesaid factual aspect of thematter. In view of the above, this writ petition is also allowed in thesame terms and conditions as enumerated in the judgmentdelivered in the case of Sudesh Taneja (supra). The stay application also stands disposed of accordingly. (MADAN GOPAL VYAS),J (MANINDRA MOHAN SHRIVASTAVA),ACJ 37-nidhi/-