Income Tax Officer, Ward-Behror v. Prem Bai

1. D.B. Special Appeal Writ No. 223/2022 Income Tax Officer, Ward-Behror Having Its Address At IncomeTax Building, Riico Industrial Area, Behror, Alwar-301701. ----Appellant Versus Prem Bai W/o Balbir Singh, Aged About 50 Years, CurrentlyResiding At A-88, Near Bsnl Exchange, Tehsil Behror, Alwar InThe State Of Rajasthan. ----Respondent 2. D.B. Special Appeal Writ No. 224/2022 Assistant Commissioner Of Income Tax, Circle-1, Alwar, HavingIts Address At C.r. Building Moti Doongri Road, Alwar 301001 ----Appellant Versus Balbir Singh S/o Shri Jai Singh Choudhary, Aged About 51Years, Currently Residing At A-88, Near Bsnl Exchange, TehsilBehror, Alwar In The State Of Rajasthan ----Respondent 3. D.B. Special Appeal Writ No. 253/2022 Assistant Commissioner Of Income Tax, ITO WD, Behror,Income Tax Building, Riico Colony, Riico Industrial Area, Behror,Rajasthan, 301701. ----Appellant Versus Dara Singh, Aged About 42 Years, 0, Village Post Gandala,Behror, Alwar, Rajasthan 301709, India. ----Respondent 4. D.B. Special Appeal Writ No. 314/2022 Income Tax Officer, Ward-1 Court Campus, Ajmer Road,Beawar, Rajasthan 305901 ----Appellant Versus Neeta Lalwani D/o Shanti Lal Gokhru, Aged About 45 Years,R/o 301, Lokashah Nagar, Outside Mewari Gate, Beawar, Ajmer305901 ----Respondent 5. D.B. Special Appeal Writ No. 316/2022 Assistant Commissioner Of Income Tax, Circle-2, Ajmer. ----AppellantVersus C R Kothari And Sons Stock Broking Private Limited, Having ItsRegistered Office At 12, Lrcm Officers Colony, Mehta Cottage,119/505, Darshan Pura Kalpi Road, Kanpur 208012 UttarPradesh, Through Its Director Hemant Kothari S/o Late ShriChainraj Kothari, Aged About 61 Years, R/o 4-Ya-7, JawaharNagar, Monilek Hospital Marg, Jaipur 302004 (Raj.) ----Respondent 6. D.B. Special Appeal Writ No. 317/2022 Assistant Commissioner Of Income Tax, Circle-2, Ajmer. ----AppellantVersus C R Kothari And Sons Stock Broking Private Limited, Having ItsRegistered Office At 12, Lrcm Officers Colony, Mehta Cottage,119/505, Darshan Pura Kalpi Road, Kanpur 208012 UttarPradesh, Through Its Director Hemant Kothari S/o Late ShriChainraj Kothari, Aged About 61 Years, R/o 4-Ya-7, JawaharNagar, Monilek Hospital Marg, Jaipur 302004 (Raj.) ----Respondent 7. D.B. Special Appeal Writ No. 318/2022 Assistant Commissioner Of Income Tax, Circle-2, Ajmer. ----Appellant Versus C R Kothari And Sons Commodities Private Limited, Having ItsRegistered Office At Kothari House A-495/a Panchsheel Nagar,A Block, Makarwali Road, Ajmer 305006, Rajasthan Through ItsDirector Priti Kothari W/o Mr. Alok Kothari R/o 1403, Amarnath Towers, Off. Yari Road, Versova, Andheri (West) Mumbai400061 ----Respondent 8. D.B. Special Appeal Writ No. 319/2022 Assistant Commissioner Of Income Tax Circle-2, Ajmer ----Appellant Versus C R Kothari And Sons Commodities Private Limited, Having ItsRegistered Office At Kothari House A-495/a Panchsheel Nagar,A Block, Makarwali Road, Ajmer 305006, Rajasthan Through ItsDirector Priti Kothari W/o Mr. Alok Kothari R/o 1403, AmarnathTowers, Off. Yari Road, Versova, Andheri (West) Mumbai400061 ----Respondent 9. D.B. Special Appeal Writ No. 320/2022 Assistant Commissioner Of Income Tax, Circle-2, Ajmer. ----Appellant Versus Robust Finvest Private Limited, Having Its Registered Office AtKothari House, A-495/a Panchsheel Nagar, A Block, MakarwaliRoad, Ajmer Through Its Director Hemant Kothari S/o Late ShriChainraj Kothari Aged About 61 Years, R/o 4-Ya-7, JawaharNagar, Monilek Hospital Marg, Jaipur 302004 (Raj.) ----Respondent 10. D.B. Special Appeal Writ No. 321/2022 Assistant Commissioner Of Income Tax, Circle-2, Ajmer. ----Appellant Versus ----Respondent 9. D.B. Special Appeal Writ No. 320/2022 Assistant Commissioner Of Income Tax, Circle-2, Ajmer. ----Appellant Versus Robust Finvest Private Limited, Having Its Registered Office AtKothari House, A-495/a Panchsheel Nagar, A Block, MakarwaliRoad, Ajmer Through Its Director Hemant Kothari S/o Late ShriChainraj Kothari Aged About 61 Years, R/o 4-Ya-7, JawaharNagar, Monilek Hospital Marg, Jaipur 302004 (Raj.) ----Respondent 10. D.B. Special Appeal Writ No. 321/2022 Assistant Commissioner Of Income Tax, Circle-2, Ajmer. ----Appellant Versus Robust Finvest Private Limited, Having Its Registered Office AtKothari House, A-495/a, Panchsheel Nagar, A Block, MakarwaliRoad, Ajmer Through Its Director, Hemant Kothari, S/o LateShri Chainraj Kothari, Aged About 61 Years, R/o 4-Ya-7,Jawahar Nagar, Monilek Hospital Marg, Jaipur 302004 (Raj.) ----Respondent 11. D.B. Special Appeal Writ No. 324/2022 Assistant Commissioner Of Income Tax, Circle-2, Ajmer ----Appellant Versus Robust Finvest Private Limited, Having Its Registered At KothariHouse, A-495/a, Panchsheel Nagar, A Block, Makarwali Road,Ajmer Through Its Director Hemant Kothari S/o Late ShriChainraj Kothari, Aged About 61 Years, R/o 4-Ya-7, JawaharNagar, Monilek Hospital Marg, Jaipur 302004, (Raj.) ----Respondent 12. D.B. Special Appeal Writ No. 328/2022 Income Tax Officer, Ward-1, Court Campus, Ajmer Road,Beawar, Rajasthan 305901. ----AppellantVersus Archana Jain D/o Noratmal Padawat, Aged About 37 Years, R/oShitala Mata Marg, Kumhar Mohalla, Bijainagar, Ajmer 305624 ----Respondent 13. D.B. Special Appeal Writ No. 340/2022 Assistant Commissioner Of Income Tax, Circle-2, Ajmer. ----AppellantVersus Chartered Gold Financial Services Private Limited, Having ItsRegistered Office At Kothari House, A-495/a, Panchsheel Nagar,A Block, Makarwali Road, Ajmer, Through Its Director PradeepKothari S/o Late Shri Chainraj Kothari Aged About 62 Years,R/o 1403, Amarnath Towers, Off Yari Road, Versova, AndheriWest, Mumbai-400061 ----Respondent 14. D.B. Special Appeal Writ No. 360/2022 Income Tax Officer, Ward-2(1), Dainik Navjyoti, Rawat BhataRoad, Kota, Rajasthan-324009. ----Appellant Versus Porwal Yuvak Sangh, 77-78, Porwal Bhawan, Vallabh Bari,Kota, (Rajasthan) 324006 Through Its Secretary Vinod PrakashPorwal S/o Gauri Sahai Porwal, Age About 65 Years, R/o HouseNo. 794, Jyoti Mandir Road Vistar Yojana, Dadabari, Kota,Rajasthan-324009. ----Respondent 15. D.B. Special Appeal Writ No. 361/2022 Income Tax Officer, Ward-2(1), Dainik Navjyoti, Rawat BhataRoad, Kota, Rajasthan-324009. ----AppellantVersus Porwal Yuvak Sangh, 77-78, Porwal Bhawan, Vallabh Bari,Kota, (Rajasthan) 324006 Through Its Secretary Vinod PrakashPorwal S/o Gauri Sahai Porwal, Age About 65 Years, R/o HouseNo. 794, Jyoti Mandir Road Vistar Yojana, Dadabari, Kota,Rajasthan-324009. ----Respondent 16. D.B. Special Appeal Writ No. 368/2022 Income Tax Officer, Ward 2(2), Dainik Navjyoti, Rawat BhataRoad, Kota, Rajasthan- 324009. ----Appellant Versus M/s Neva Ji Estates Private Limited, Having Its RegisteredOffice At Khinchi Sadan, Hatai Ka Chowk, Sakatpura, Kota-324008, Through Mr. Harish Gurjar, Its Authorized Person. ----Respondent 17. D.B. Special Appeal Writ No. 369/2022 Income Tax Officer, Ward-2(1), Dainik Navjyoti, Rawat BhataRoad, Kota, Rajasthan, 324009 ----Appellant Versus Porwal Yuvak Sangh, 77-78 Porwal Bhawan, Vallabh Bari, Kota(Rajasthan) 324006 Through Its Secretary Vinod Prakash Porwal S/o Gauri Sahai Porwal, Age About 65 Years, R/o HouseNo. 794, Jyoti Mandir Road Vistar Yojna, Dadabari, Kota,Rajasthan - 324009. ----Respondent 18. D.B. Special Appeal Writ No. 372/2022 Income Tax Officer,ward -2 (2), Ajmer, Cr Building, OppositeSession Court, Jaipur Road, Ajmer Rajasthan, 305001. ----Respondent 17. D.B. Special Appeal Writ No. 369/2022 Income Tax Officer, Ward-2(1), Dainik Navjyoti, Rawat BhataRoad, Kota, Rajasthan, 324009 ----Appellant Versus Porwal Yuvak Sangh, 77-78 Porwal Bhawan, Vallabh Bari, Kota(Rajasthan) 324006 Through Its Secretary Vinod Prakash Porwal S/o Gauri Sahai Porwal, Age About 65 Years, R/o HouseNo. 794, Jyoti Mandir Road Vistar Yojna, Dadabari, Kota,Rajasthan - 324009. ----Respondent 18. D.B. Special Appeal Writ No. 372/2022 Income Tax Officer,ward -2 (2), Ajmer, Cr Building, OppositeSession Court, Jaipur Road, Ajmer Rajasthan, 305001. ----Appellant Versus Dhanvarsha Oil Mills Private Limited, Having Its RegisteredOffice At F-157, 158, 159 Riico Industrial Area, Jaipur Road,Kekri, Ajmer Ajmer 305404 Rajasthan India Through ItsDirector Jyoti Mittal ----Respondent 19. D.B. Special Appeal Writ No. 375/2022 Income Tax Officer, Ward 2(1), Kota Having Its Address AtCentral Revenue Building, Dainik Navjyoti Building, RawatBhata Road, Kota 324009 ----Appellant Versus Ashok Kumar Adlakha Son Of Shri Shyam Lal Adlakha, Prop.M/s Shri Anand Associates Having His Address At 4, RailwaySociety, Mala Road, Kota 324001 ----Respondent 20. D.B. Special Appeal Writ No. 397/2022 Income Tax Officer, Ward-1, Kishangarh, Ajmer. ----Appellant Versus Uma Devi Gupta W/o Sh. Babu Lal Gupta, Aged About 86Years, R/o- Opp. Laxmi Narayan Mandir, Ajmer Road,Madanganj, Kishangarh, Ajmer-305801 (Raj.) ----Respondent 21. D.B. Special Appeal Writ No. 400/2022 Income Tax Officer, Ward -1, Kishangarh, Ajmer. ----Appellant Versus Sourabh Gupta S/o Sh. Dharmendra Gupta, Aged About 25Years, R/o 202, Near Gas Company, Opp. Laxmi NarayanMandir, Madanganj, Ajmer Road, Kishangarh - 305801, District- Ajmer (Raj.) ----Respondent 22. D.B. Special Appeal Writ No. 411/2022 Income Tax Officer, Ward -1, Kishangarh, Ajmer. ----Appellant Versus Rajendra Gupta (Huf) representative through Karta ShriRajendra Gupta S/o Sh. Babu La Gupta, R/o Opp. LaxmiNarayan Mandir, Ajmer Road, Madanganj, Kishangarh, Ajmer -305801 (Raj.) ----Respondent 23. D.B. Special Appeal Writ No. 412/2022 Income Tax Officer, Ward 2(1), Kota Having Its Address AtCentral Revenue Building, Dainik Navjyoti Building, RawatBhata Road, Kota 324009 ----Appellant Versus Ashok Kumar Adlakha Son Of Shri Shyam Lal Adlakha, AgedAbout 42 Years, Prop. M/s Shri Anand Associates Having HisAddress At 4, Railway Society, Mala Road, Kota 324001 ----Respondent For Appellant(s) : Ms. Parinitoo Jain through VCFor Respondent(s): HON'BLE THE CHIEF JUSTICE MR. AKIL KURESHI HON'BLE MR. JUSTICE SUDESH BANSAL 24/02/2022 Order Applications for dispensing with the filing of the certifiedcopies in each appeal is allowed in view of the fact that thejudgment being common certified copy has been produced in oneof the appeals. Rest of the defects are waived. All these appeals which are filed by the revenue arise out ofa common judgment of the learned Single Judge dated25.11.2021. By the impugned judgment the learned Single hadquashed respective notices of reassessment issued by thedepartment against the petitioners-assessees. Bunch of appealsfiled by the revenue arising out of the same judgment wasdisposed of by common judgment along with group of writpetitions filed by the assessees challenging the similar suchreassessment notices issued after 01.04.2021 but applying theprovisions for reassessment contained in the Income Tax Act,1961 which existed prior to 01.04.2021. By a judgment dated27.01.2022 in case of Sudesh Taneja Vs. Income Tax Officerand Anr. (D.B. Civil Writ Petition No. 969/2022), the writpetitions were allowed and revenue's appeals were dismissed.Following observations may be noted:- "37. In this context we have perused theprovisions of reassessment contained in the Finance Act,2021. We have noticed earlier the major departure thatthe new scheme 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 disclosetruly or fully all material facts is no longer relevant.Elaborate provisions are made under Section 148A ofthe Act enabling the Assessing Officer to make enquirywith respect to material suggesting that income hasescaped assessment, issuance of notice to the assesseecalling upon why notice under Section 148 should not beprovisions of reassessment contained in the Finance Act,2021. We have noticed earlier the major departure thatthe new scheme 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 disclosetruly or fully all material facts is no longer relevant.Elaborate provisions are made under Section 148A ofthe Act enabling the Assessing Officer to make enquirywith respect to material suggesting that income hasescaped assessment, issuance of notice to the assesseecalling upon why notice under Section 148 should not be issued and passing an order considering the materialavailable on record including response of the assessee ifmade while deciding whether the case is fit for issuingnotice under Section 148. There is absolutely noindication in all these provisions which would suggestthat the legislature intended that the new scheme ofreopening of assessments would be applicable only tothe period post 01.04.2021. In absence of any suchindication all notices which were issued after01.04.2021 had to be in accordance with suchprovisions. To reiterate, we find no indicationwhatsoever in the scheme of statutory provisionssuggesting that the past provisions would continue toapply even after the substitution for the assessmentperiods prior to substitution. In fact there are strongindications to the contrary. We may recall, that timelimits for issuing notice under Section 148 of the Acthave been modified under substituted Section 149.Clause (a) of sub-section (1) of Section 149 reducessuch period to three years instead of originallyprevailing four years under normal circumstances.Clause (b) extends the upper limit of six yearspreviously prevailing to ten years in cases where incomechargeable to tax which has escaped assessmentamounts to or is likely to amount to 50 lacs or more.Sub-section (1) of Section 149 thus contracts as well asexpands the time limit for issuing notice under Section148 depending on the question whether the case fallsunder clause (a) or clause (b). In this context the firstproviso to Section 149(1) provides that no notice underSection 148 shall be issued at any time in a case for therelevant assessment year beginning on or before01.04.2021 if such notice could not have been issued atthat time on account of being beyond the time limitspecified under the provisions of clause (b) of sub-section (1) of Section 149 as they stood immediatelybefore the commencement of the Finance Act, 2021. Asper this proviso thus no notice under Section 148 wouldbe issued for the past assessment years by resorting tothe larger period of limitation prescribed in newlysubstituted clause (b) of Section 149(1). This wouldindicate that the notice that would be issued after01.04.2021 would be in terms of the substituted Section149(1) but without breaching the upper time limitprovided in the original Section 149(1) which stoodsubstituted. This aspect has also been highlighted in thememorandum explaining the proposed provisions in theFinance Bill. If according to the revenue for past periodprovisions 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 under Section 148 after 01.04.2021 the newly introduced provisionsunder the Finance Act, 2021 would apply. Mereextension of time limits for issuing notice under section148 would not change this position that obtains in law.Under no circumstances the extended period available inclause (b) of sub-section (1) of Section 149 which wemay recall now stands at 10 years instead of 6 yearspreviously available with the revenue, can be pressed inservice for reopening assessments for the past period.This flows from the plain meaning of the first proviso tosub-section (1) of Section 149. In plain terms a noticewhich had become time barred prior to 01.04.2021 asper the then prevailing provisions, would not be revivedby virtue of the application of Section 149(1)(b)effective from 01.04.2021. All the notices issued in thepresent cases are after 01.04.2021 and have beenissued without following the procedure contained inSection 148A of the Act and are therefore invalid. 38.The second question framed by us arises in thiscontext. Would the explanation contained in both thenotifications of CBDT dated 31.03.2021 and 27.04.2021save the situation for the revenue? 39.It is well settled that there is presumption ofconstitutionality of a statute (refer to the ConstitutionBench judgment in case of The State of Jammu &Kashmir, Vs. Triloki Nath Khosa and Ors., reportedin AIR 1974 SC 1). The said principle of presumption ofconstitutionality also applies to piece of delegatedlegislation. In case of St. Johns Teachers TrainingInstitute Vs. Regional Director, National CouncilFor Teachers Education and Another, reported in(2003) 3 SCC 321, it was observed that it is wellsettled in considering the vires of subordinate legislationone should start with the presumption that it is intravires and if it is open to two constructions, one of whichwould make it valid and other invalid, the courts mustadopt that construction which makes it valid. However itis equally well settled that the subordinate legislationdoes not enjoy same level of immunity as the law framedby the Parliament or the State Legislature. The lawframed by the Parliament or the State Legislature can bechallenged only on the grounds of being beyond thelegislative competence or being contrary to thefundamental rights or any other constitutionalprovisions. Third ground of challenge which is nowrecognized in the judgment in case of Shayara Bano VsUnion of India reported in 2017 9 SCC 1 is oflegislation being manifestly arbitrary. A subordinatelegislation can be challenged on all these grounds as wellas on the grounds that it does not conform to the statuteunder which it is made or that it is inconsistent with theprovisions of the Act or it is contrary to some of thestatutes applicable on the subject matter. In case of J.K. Industries Ltd. and Ors. Vs. Union of India andOrs., reported in (2007) 13 SCC 673, it was observedas under:- “63. At the outset, we may state that onaccount of globalization and socio-economic problems (including incomedisparities in our economy) the power ofDelegation has become a constituentelement of legislative power as a whole.However, as held in the case of IndianExpress Newspaper v. Union of Indiareported in (1985) 1 SCC 641 at page 689,subordinate legislation does not carry thesame degree of immunity which is enjoyedby a statute passed by a competentLegislature. Subordinate legislation may bequestioned on any of the grounds on whichplenary legislation is questioned. Inaddition, it may also be questioned on theground that it does not conform to thestatute under which it is made. It mayfurther be questioned on the ground that itis inconsistent with the provisions of theAct or that it is contrary to some otherstatute applicable on the same subjectmatter. Therefore, it has to yield to plenarylegislation. It can also be questioned onthe ground that it is manifestly arbitraryand unjust. That, any inquiry into its viresmust be confined to the grounds on whichplenary legislation may be questioned, tothe grounds that it is contrary to thestatute under which it is made, to thegrounds that it is contrary to otherstatutory provisions or on the ground thatit is so patently arbitrary that it cannot besaid to be inconformity with the statute. Itcan also be challenged on the ground thatit violates Article 14 of the Constitution.” 40.With this background we may revert to theRelaxation Act, 2020 and the two notifications issuedby the CBDT. We may recall, under sub-section (1) ofSection 3 of the Relaxation Act, 2020 while extendingthe time limits for taking action and makingcompliances in the specified Acts upto 31.12.2020 thepower was given to the Central Government to extendthe time further by issuing a notification. This was theonly power vested in the Central Government. As apiece of delegated legislation the notifications issuedin exercise of such powers, had to be within theconfines of such powers. In plain terms under sub-section (1) of Section 3 of the Relaxation Act, 2020the Government of India was authorized to extend the time limits by issuing notifications in this regard.Issuing any explanation touching the provisions of theIncome Tax Act was not part of this delegation at all.The CBDT while issuing the notifications dated31.03.2021 and 27.04.2021 when introduced anexplanation which provided by way of clarification thatfor the purposes of issuance of notice under Section148 as per the time limits specified in Section 149 or151, the provisions as they stood as on 31.03.2021before commencement of the Finance Act, 2021 shallapply, plainly exceeded its jurisdiction as asubordinate legislation. The subordinate legislationcould not have travelled beyond the powers vested inthe Government of India by the parent Act. Evenotherwise it is extremely doubtful whether theexplanation in the guise of clarification can change thevery basis of the statutory provisions. If the plainmeaning of the statutory provision and itsinterpretation is clear, by adopting a position differentin an explanation and describing it to be clarificatory,the subordinate legislature cannot be permitted toamend the provisions of the parent Act. Accordingly,these explanations are unconstitutional and declaredas invalid. 41.As noted, two Division Benches of Allahabad andDelhi High Courts have taken similar view. Twolearned Single Judges of Calcutta and this High Courthave followed this trend. Independently also we holdthe same beliefs. As noted earlier we are consciousthat Single Judge of Chhattisgarh High Court in PalakKhatuja (supra) has taken a different view. Theview of the High Court was that the impugned noticeswere valid since by virtue of notifications dated31.03.2021 and 27.04.2021 the application of Section148 which was originally existing before amendmentwas deferred. It was further observed as under:- “Reading of the aforesaid notification wouldshow that it was issued in exercise of powerconferred under the Taxation and other Laws(Relaxation and Amendment of CertainProvisions) Act, 2020 and time for issuanceof notice under Section 148, the end datewas initially extended uptill on 30th day ofApril 2021 and subsequently again bynotification dated 27th April, 2021 the timelimit of 30th day of April 2021 was furtherextended up till 30th day of June, 2021. Byeffect of such notification, the individualidentity of Section 148, which was prevailingprior to amendment and insertion of section148A was insulated and saved uptill30.06.2021.” With respect, we are unable to persuadeourselves to accept this analysis of the situation. In ourunderstanding by virtue of notifications dated31.03.2021 and 01.04.2021 issued by CBDTsubstitution of reassessment provisions framed underthe Finance Act, 2021 were not deferred nor could theyhave been deferred. The date of such amendmentscoming into effect remained 01.04.2021. 42.In the result we find that the notices impugned inthe respective petitions are invalid and bad in law. Thesame are quashed and set aside. The learned SingleJudge committed no error in quashing these notices. Allthe writ petitions are allowed. Appeals of the revenueare dismissed. Pending applications if any standdisposed of." In the result these appeals are also dismissed. (SUDESH BANSAL),J (AKIL KURESHI),CJ 42.In the result we find that the notices impugned inthe respective petitions are invalid and bad in law. Thesame are quashed and set aside. The learned SingleJudge committed no error in quashing these notices. Allthe writ petitions are allowed. Appeals of the revenueare dismissed. Pending applications if any standdisposed of." In the result these appeals are also dismissed. (SUDESH BANSAL),J (AKIL KURESHI),CJ KAMLESH KUMAR /s-80 to 104 (except 91 and 102)