Order v. Versus

IN THE HIGH COURT OF JUDICATURE AT BOMBAYNAGPUR BENCH, NAGPUR. WRIT PETITION NO. 96 OF 2022 Ravi Omprakash Agrawal.… Petitioner.VERSUS… Dy.Commissioner of Income Tax & ors.Respondents. WRIT PETITION NOs. 1292 & 1288 OF 2022 WRIT PETITION NO. 407 OF 2022 Charudatta & others.… Petitioners.VERSUSDy/Asstt. Commissioner of Income Tax & ors. … Respondents. WRIT PETITION NO. 441 OF 2022 Sarika Manish Agrawal.… Petitioner.VERSUSIncome Tax Officer and others.… Respondents. WRIT PETITION NO. 1339 OF 2022 D.P. Jain and Co.… Petitioner.VERSUSDy. Commissioner of Income Tax & ors. … Respondents. WRIT PETITION NO. 1337 OF 2022 Rajnigandha Suppliers Pvt.Ltd.… Petitioner.VERSUSDy. Commissioner of Income Tax & ors. … Respondents. Order Order Mr.A.Khandelwal, Advocate for Petitioners in Writ Petition Nos.1422, 1440 of 2022. Mr.Milind Bhusari, Advocate for Petitioners in Writ Petition Nos.1502, 1503, 1509, 1489 of 2022. Mr. H.V. Thakur, Advocate for Petitioner in Writ Petition No.3519 of2021. Mr.S.N. Bhattad, Advocate for Respondent -Income Tax Department.Mr.N. Deshpande, A.S.G.I. with Ms.M. Chandurkar, Ms.A.S.Athalaye,Ms.N. Chaubey, Advocates for Respondent Union of India and CBDT.Mr.N.N. Burange, Advocate for Respondent No.4 in W.P.No.1338/2022. ----------- CORAM : NITIN JAMDAR AND ANIL L. PANSARE, JJ.DATE : 18 APRIL 2022. P.C. This group of Writ Petitions, filed by the assessees raiseschallenge to the notice issued by the Respondent – Income TaxDepartment under Section 148 of the Income Tax Act, 1961 and to theproceedings initiated pursuant to the notice after 1 April 2021 under theprovisions of the Income Tax Act read with the Taxation and other Laws(Relaxation and Amendment of Certain Provisions) Act, 2020. 2.Since the challenge is based on legal provision it is notnecessary to detail the facts of each case and it will suffice if the dates ofnotice issued to each of the Petitioners under Section 148 of the IncomeTax Act are mentioned. The same are as under : In all these petitions ad-interim relief staying the operation of the noticeis granted. 3.The learned Counsel for the parties have placed before uscopy of the Judgment and order passed by the Division Bench of thisCourt (Principal Seat) in case of Tata Communications TransformationServices Limited .vrs. Assistant Commissioner of Income Tax and others(Writ Petition No.1334/2021 and other connected matters dated 29March 2022). The Division Bench, after noticing the view taken by theAllahabad High Court, Rajasthan High Court, Delhi High Court andMadras High Court, and giving certain additional reasons, has quashedand set aside the notice and also the explanation to the notification after declaring them as ultra vires. The relevant portion of the judgment andorder dated 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. 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 after 1st 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. to 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.” 4. The learned Counsel for the parties are ad idem that thisjudgment clearly applies to the facts of the present matters.judgment clearly applies to the facts of the present matters. 5.Accordingly, the impugned notices under Section 148 of theIncome Tax Act are quashed and set aside. However, it will be open tothe Assessing Officers concerned to initiated fresh re-assessmentproceedings in accordance with the relevant provisions of the Act asamended by the Finance Act, 2021 after complying with the provisionsof the Act. 6. As regards the clarification sought by the learned Counselfor Respondent – Income Tax Department regarding the period underinterim order to be excluded while computing the limitation isconcerned, according to us, such clarification is not warranted as it issettled that the same shall stand excluded. 7. All the Writ Petitions stand disposed of in above terms. (ANIL L. PANSARE, J) (NITIN JAMDAR, J) Rgd