Order v. Versus

Order IN THE HIGH COURT OF JUDICATURE AT BOMBAYNAGPUR BENCH, NAGPUR. WRIT PETITION NO. 2209 OF 2022 Shailesh Totaramji Chowksey.… Petitioner. VERSUS Deputy Commissioner of Income Tax & another.… Respondents. WRIT PETITION NO. 2210 OF 2022 Jitendra Ramesh Malviya.… Petitioner. VERSUS Deputy Commissioner of Income Tax & another.… Respondents. ----------- Mr.S.V. Purohit, Advocate for PetitionersMr.S.N. Bhattad, Advocate for Respondent No.1.Mr.N.S.Deshpande, A.S.G.I. for Respondent No.2. ----------- CORAM : NITIN JAMDAR AND ANIL L. PANSARE, JJ. DATE : 27 APRIL 2022. P.C. Heard learned Counsel for the parties. Order 2.Issue notice to Respondents. Mr.S.N. Bhattad, Advocate forRespondent No.1 and Mr.N.S. Deshpande, learned A.S.G.I. forRespondent No.2 waive notice. Writ Petitions are taken up for disposal. 3.In both these petitions, Petitioners have challenged noticesissued by Respondent – Income Tax Department under Section 148 ofthe Income Tax Act, 1961. In Writ Petition No.2209/2022, notice isdated 29 June 2021 and the assessment order is passed on 26 March2022. In Writ Petition No.2210/2022, notice is dated 29 June 2021and the order of assessment is dated 25 March 2022. 4.In both these petitions Petitioners have made a reference tothe decision of Division Bench of this Court (Principal Seat) in case ofTata Communications Transformation Services Limited .vrs. AssistantCommissioner of Income Tax and others (Writ Petition No.1334/2021and other connected matters dated 29 March 2022). 5.The learned Counsel for the parties have placed before uscopy of the Judgment and order passed by the Division Bench of thisCourt in case of Tata Communications Transformation Services Limited.vrs. Assistant Commissioner of Income Tax and others (supra). TheDivision Bench, after noticing the view taken by the Allahabad HighCourt, Rajasthan High Court, Delhi High Court and Madras HighCourt, and giving certain additional reasons, has quashed and set aside the notice and also the explanation to the notification after declaringthem as ultra vires. The relevant portion of the judgment and orderdated 29 March 2022 reads thus - “41. In our view, the reopening notices issued after 1stApril, 2021 are unsustainable and bad in law even if onewas to apply the Explanations to the Notification Nos.20of 2021 and 38 of 2021. The Explanation seeks to extendthe applicability of erstwhile Sections 148, 149 and 151.The impugned Explanation does not cover Section 147,which (as amended) empowers the revenue to reopen anassessment subject to Sections 148 to 153, which includesSection 148A. Thus, even if Explanations are valid, themandatory procedure laid down by Section 148A has notbeen followed and hence, without anything further, thenotices under Section 148 of the Act are invalid and mustbe struck down for this reason as well. This proposition hasalso been upheld by the Delhi High Court. 42.…43.…44.…45.…46.…47.….48....49.Some more reasons why the reopening notices mustgo are : (a) Section 297 of the Act provides a savingclause for applicability of various provisions of the1922 Act, even though the Act itself had beenrepealed. In the absence of such a saving clause forapplicability of erstwhile Sections 147 to 151 of theAct, the amended provision of the Act would applyfrom 1st April, 2021. (b) Moreover, the reopening notices issued after1st April, 2021 are bad in law even if one was toapply the Explanations to the Notification Nos.20and 38. The Explanations seek to extend theapplicability of erstwhile Sections 148, 149 and 151.They do not cover Section 147, which empowersrevenue to reopen subject to Section 148 to 153,which includes Section 148A. Thus, even ifExplanation are valid, procedure of Section 148A isnot followed and hence, notices are invalid. (b) Moreover, the reopening notices issued after1st April, 2021 are bad in law even if one was toapply the Explanations to the Notification Nos.20and 38. The Explanations seek to extend theapplicability of erstwhile Sections 148, 149 and 151.They do not cover Section 147, which empowersrevenue to reopen subject to Section 148 to 153,which includes Section 148A. Thus, even ifExplanation are valid, procedure of Section 148A isnot followed and hence, notices are invalid. (c) In any case, Relaxation Act is not applicablefor Assessment Years 2015-2016 or any subsequentyear and, hence, the question of applicability of theNotification Nos.20 and 38 of 2021 does not arise.The time limit to issue notice under Section 148 ofthe Act for the Assessment Years 2015-2016onwards was not expiring within the period forwhich Section 3(1) of Relaxation Act was applicableand, hence, Relaxation Act could never apply forthese assessment years. As a consequence, there canbe no question of extending the period of limitationfor such assessment years. 50. To sum up, since we are in respectful agreementwith the reasons recorded and views taken by theAllahabad High Court, Rajasthan High Court, Delhi HighCourt and Madras High Court, in the cases referredhereinabove, and for reasons noted above, all these writpetitions listed above are disposed by allowing the same.The explanations to the Notification No.20 of 2021 dated31st March 2021 and Notification No.38 of 2021 dated27th April 2021 are declared ultra vires and are, therefore,bad in law and null and void. 51 . All the impugned notices issued under Section 148of the Act are quashed and set aside. 52 .It will be open to the Assessing Officers concernedto initiate fresh reassessment proceedings in accordancewith the relevant provisions of the Act as amended by theFinance Act, 2021 after strictly complying with theprovisions of the Act.” 6. The learned Counsel for the parties are ad idem that thisjudgment clearly applies to the facts of the present matters. 7.Accordingly, the impugned notices under Section 148 of theIncome Tax Act and the assessment orders are quashed and set aside.However, it will be open to the Assessing Officers concerned to initiatedfresh re-assessment proceedings in accordance with the relevantprovisions of the Act as amended by the Finance Act, 2021 aftercomplying with the provisions of the Act. 8. The Writ Petitions stand disposed of in above terms. (ANIL L. PANSARE, J) (NITIN JAMDAR, J) Rgd