Rohit Kumar v. Income Tax Officer Ward 54 (1), Delhi

* IN THE HIGH COURT OF DELHI AT NEW DELHI % Judgment reserved on: 07 January 2025 Judgment pronounced on: 15 January 2025 + W.P.(C) 2830/2022 ROHIT KUMAR .....Petitioner Through: Mr. Salil Aggarwal, Sr. Adv. with Mr. Mahir Aggarwal, Mr. Uma Shankar and Mr. Madhur Aggarwal, Advs. versus INCOME TAX OFFICER WARD 54 (1), DELHI .....Respondent Through: Mr. Debesh Panda, SSC with Ms. Zehra Khan, JSC, Mr. Vikramaditya Singh, Mr. Kanishk Aggarwal, Ms. Anauntta Shankar and Mr. Ruchir Joshi, Advs. CORAM:HON'BLE MR. JUSTICE YASHWANT VARMA HON'BLE MR. JUSTICE DHARMESH SHARMA J U D G M E N T YASHWANT VARMA, J. 1.The writ petitioner seeks to question the invocation of Section 148 of the Income Tax Act, 1961[1] by the respondents in relation to Assessment Year[2] 2015-16. The challenge appears to have been originally mounted basis the digital signing of the notice under Section 148 on 09 April 2021 although it bore a date of 31 March 2021. The petitioner appears to have originally contended that since the notice 1 Act 2 AY2 AY W.P.(C) 2830/2022 Signature Not Verified Page 1 of 36 would be deemed to have been issued on 09 April 2021, it would be the reassessment regime as introduced by virtue of Finance Act, 2021 which would have been applicable. This according to the writ petitioner would have required the respondents to follow the procedure as prescribed by Section 148A of the Act which had come to be introduced by virtue of Finance Act, 2021. It is these aspects which came to be noticed by the Court originally when it entertained the writ petition on 15 February 2022 and led to the passing of an interim order providing that while it would be open for the Assessing Officer[3] to frame an order of assessment, the same would not be given effect to. 2.When the matter was heard finally by us, Mr. Aggarwal, learned senior counsel appearing for the writ petitioner, had contended that since the notice had been digitally signed on 09 April 2021, it would be that date which would be liable to be viewed as the date of issuance of notice. It was his contention that this issue in any case stands conclusively settled in light of the judgment of the Court in Suman Jeet Agarwal vs. Income Tax Officer and Ors[4] and where the Court had held as follows:- “25.24. With respect to impugned notices falling in category "A", there is an additional factor which evidence that the said notices were admittedly not issued on March 31, 2021. The said notices were digitally signed on April 1, 2021, or thereafter. The note appearing at the foot of each notice clearly declares that the date of the affixation of digital signature shall be treated as the date of the notice. The note reads "if digitally signed, the date of signature may be taken as date of document". In these notices therefore, the date of the notice itself is determined by the date of affixation of digital signature and not the date of generation. The contention of the Department that, the said note appearing at the footer of the notice has no basis in law and should be ignored by this court, cannot be 3 AO 4 2022 SCC OnLine Del 3141 W.P.(C) 2830/2022 Signature Not Verified accepted. The Department cannot deny the contents of its own notice and it is bound by the said contents. 25.25. In this regard it will also be useful to refer to para 2.10.6 of the Income Tax Business Application, User Assessment Manual, Version 1.9, August 2020, as referred to by the Department in its counter-affidavit in W. P. (C) No. 13814 of 2021. The said instruction draws the attention of the Income-tax Officer to the consequence of the date of digital signature and date of generation of document being different, if the digital signatures are affixed subsequently. Para 2.10.6 reads as under : "ii. Generate and Digitally sign later (Applicable for single as well as bulk generation) : Click generate and digitally sign later. In this case, document will be generated successfully immediately. accepted. The Department cannot deny the contents of its own notice and it is bound by the said contents. 25.25. In this regard it will also be useful to refer to para 2.10.6 of the Income Tax Business Application, User Assessment Manual, Version 1.9, August 2020, as referred to by the Department in its counter-affidavit in W. P. (C) No. 13814 of 2021. The said instruction draws the attention of the Income-tax Officer to the consequence of the date of digital signature and date of generation of document being different, if the digital signatures are affixed subsequently. Para 2.10.6 reads as under : "ii. Generate and Digitally sign later (Applicable for single as well as bulk generation) : Click generate and digitally sign later. In this case, document will be generated successfully immediately. To sign the document later, go to 'view/edit despatch register' screen. Select the status as 'pending for signing' and search. Select the document and click sign documents. Ensure digital signature certificate is attached to the system. Select the digital signature certificate of the user. Click sign. Document will be signed successfully. However, this option is required to be very carefully exercised in the case of orders as the date of generation of document and date of digital sign may be different as these will be actual date of generation and digital signing." Finding for notices falling under category "A" We therefore hold that the impugned notices falling under category "A" shall be held to be dated as on the date digital signature certificate was affixed. Since the date of affixation of digital signature certificate on the impugned notices is April 1, 2021 and thereafter they were sent and delivered through the Income Tax Business Application portal on or after April 1, 2021, the impugned notices falling under category "A" can only be said to have been issued on or after April 1, 2021” xxxx xxxx xxxx 31. For the reasons and principles that we have laid down, we dispose of these writ petitions with the following directions : 31.1. Category "A" : The notices falling under category "A", which were digitally signed on or after April 1, 2021, are held to bear the date on which the said notices were digitally signed and not March 31, 2021. The said petitions are disposed of with the direction that W.P.(C) 2830/2022 Signature Not Verified the said notices are to be considered as show-cause notices under section 148A(b) of the Act as per the directions of the apex court in the Ashish Agarwal, (supra) judgment” 3.It was further submitted that from the reasons which had been supplied it is apparent that the income which is alleged to have escaped assessment was spelt out as INR 46,17,000/- and thus falling below the threshold of INR 50 lakhs which forms part of the amended Section 149(1)(b) as that provision came to exist in the statute post 01 April 2021. According to Mr. Aggarwal, the reassessment action is thus liable to be additionally struck down on this score. 4. Learned senior counsel then submitted that the challenge raised in the present petition would in any event be liable to be answered in favour of the writ petitioner in light of the concession made on behalf of the respondent before the Supreme Court in Union of India and Ors. vs. Rajeev Bansal[5]and when it had been categorically stated that reassessment notices issued for AY 2015-16 would not sustain. 5.Mr. Agarwal also assailed the reassessment action on the ground of the proposed reassessment having been approved by the Joint Commissioner and who, according to learned senior counsel, cannot be recognised to be the authority competent in law as per Section 151 of the Act. 4. Learned senior counsel then submitted that the challenge raised in the present petition would in any event be liable to be answered in favour of the writ petitioner in light of the concession made on behalf of the respondent before the Supreme Court in Union of India and Ors. vs. Rajeev Bansal[5]and when it had been categorically stated that reassessment notices issued for AY 2015-16 would not sustain. 5.Mr. Agarwal also assailed the reassessment action on the ground of the proposed reassessment having been approved by the Joint Commissioner and who, according to learned senior counsel, cannot be recognised to be the authority competent in law as per Section 151 of the Act. 6.Appearing for the respondents, Mr. Panda, learned counsel has firstly submitted that although the reassessment action pertains to AY 2015-16, the time within which a notice could have been issued for reopening would be 31 March 2022. This, according to learned counsel, would be the position which would obtain bearing in mind the First 5 2024 SCC OnLine SC 2693 W.P.(C) 2830/2022 Signature Not Verified Page 4 of 36 Proviso to Section 149 and which bids one to examine whether a notice for reassessment pertaining to any AY prior to 01 April 2021 would be compliant with the time limits as forming part of Section 149 as it ’existed prior to Finance Act, 2021. It was further Mr. Pandas contention that the concession of the Additional Solicitor General as appearing in the judgment of the Supreme Court in Rajeev Bansal is liable to be appreciated bearing in mind the context in which that submission was addressed and the same being whether the period for reopening pertaining to AY 2015-16 would be impacted and regulated by the provisions of the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020[6] According to Mr. Panda, even though the provisions of TOLA may not have been applicable for reopening an assessment pertaining to AY 2015-16, however, since the respondents in any case had the jurisdiction to reopen right upto 31 March 2022, the proceedings as initiated cannot be faulted. 7.Mr. Panda then argued that since pursuant to the liberty accorded by this Court when the writ petition was originally entertained a final assessment order has come to be passed, there was no obligation upon the respondents to either follow the Section 148A route or undertake a course correction pursuant to the judgment rendered by the Supreme Court in Union of India and Ors. vs. Ashish Agarwal[7]. Learned counsel sought to draw sustenance and support for the aforenoted 6 TOLA 7 (2023) 1 SCC 617 W.P.(C) 2830/2022 Signature Not Verified submission from the judgment handed down by this Court in Anindita Sengupta vs. Assistant Commissioner of Income Tax and Ors[8]. 8.Having broadly noticed the rival submissions which were addressed, we proceed to examine the challenge on merits hereinafter. 9.From the case as set up in the writ petition as well as the various decisions which were cited for our consideration, it becomes apparent that the challenge originally appears to have been addressed on grounds which ultimately found favour with this Court in Mon Mohan Kohli vs. Assistant Commissioner of Income Tax and Anr.[9]. Mon Mohan Kohliwas a decision which was concerned with the validity of reassessment notices issued after the promulgation of Finance Act, 2021 and thus at a time when section 148A had come to exist on the statute and yet the respondents having chosen to commence proceedings based on the erstwhile regime of reassessment which had prevailed. The Court in Mon Mohan Kohli ultimately held that any notice issued after 01 April 2021 would have to be in accordance with the procedure prescribed under Section 148A. 10.The decision of this Court as well as similar judgments rendered by different High Courts ultimately travelled upto the Supreme Court and where those appeals ultimately came to be decided in terms of a judgment handed down in Ashish Agarwal. In Ashish Agarwal, the Supreme Court ultimately passed the following directions: - “28. In view of the above and for the reasons stated above, the present appeals are allowed in part. The impugned common judgments and orders [Ashok Kumar Agarwal v. Union of India, 2021 SCC OnLine All 799] passed by the High Court of Judicature 8 2024 SCC OnLine Del 2296 9 2021 SCC OnLine Del 5250 W.P.(C) 2830/2022 Signature Not Verified Page 6 of 36 at Allahabad in WT No. 524 of 2021 and other allied tax appeals/petitions, is/are hereby modified and substituted as under: 28.1. 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 148-A of the IT Act as substituted by the Finance Act, 2021 and construed or treated to be show-cause notices in terms of Section 148-A(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 the assessees can reply to the show-cause notices within two weeks thereafter. 28.2. The requirement of conducting any enquiry, if required, with the prior approval of specified authority under Section 148-A(a) is hereby dispensed with as a one-time measure vis-à-vis those notices which have been issued under Section 148 of the unamended Act from 1-4-2021 till date, including those which have been quashed by the High Courts. 28.3. Even otherwise as observed hereinabove holding any enquiry with the prior approval of specified authority is not mandatory but it is for the assessing officers concerned to hold any enquiry, if required. 28.4. The assessing officers shall thereafter pass orders in terms of Section 148-A(d) in respect of each of the assessees concerned; Thereafter after following the procedure as required under Section 148-A may issue notice under Section 148 (as substituted). 28.5. All defences which may be available to the assessees including those available under Section 149 of the IT Act and all rights and contentions which may be available to the assessees concerned and Revenue under the Finance Act, 2021 and in law shall continue to be available.” 11.As is manifest from the above, the Supreme Court in order to strike a just balance between the interest of the assessee and the Revenue, provided that all notices issued pan India after 01 April 2021, albeit in accordance with the procedure contemplated under the earlier regime of reassessment, would be deemed to be notices referable to Section 148A(b) and the procedure as prescribed in that provision being thereafter liable to be followed. W.P.(C) 2830/2022 Signature Not Verified Page 7 of 36 12.It would be relevant to note that the judgment of the Supreme Court in Ashish Agarwal came to be pronounced in May 2022 and by which time the reassessment proceedings drawn against the writ petitioner pursuant to liberty accorded by us came to be completed and an order of assessment passed on 31 March 2022 making additions of INR 49,98,000/- on account of unexplained cash credits under Section 69 of the Act as well as INR 3,68,750/- on account of income from other sources. W.P.(C) 2830/2022 Signature Not Verified Page 7 of 36 12.It would be relevant to note that the judgment of the Supreme Court in Ashish Agarwal came to be pronounced in May 2022 and by which time the reassessment proceedings drawn against the writ petitioner pursuant to liberty accorded by us came to be completed and an order of assessment passed on 31 March 2022 making additions of INR 49,98,000/- on account of unexplained cash credits under Section 69 of the Act as well as INR 3,68,750/- on account of income from other sources. 13.It was perhaps in the aforesaid backdrop that Mr. Panda had contended that since an order of assessment had already come to be passed prior to judgment being pronounced in Ashish Agarwal, the respondents were clearly not obliged to retrace their steps and commence proceedings on the basis that the notice of 09 April 2021 was liable to be treated as one referable to Section 148A(b) of the Act. It is in the aforesaid context that Mr. Panda had referred to the following conclusions that we had come to render in Anindita Sengupta:- “22. As is manifest from a reading of the aforesaid passages forming part of the decision in Union of Indiav. Ashish Agarwal [(2022) 444 ITR 1 (SC); (2023) 1 SCC 617.] , the Supreme Court was essentially concerned with the imperatives of striking a just balance between the right of the respondents to undertake and conclude a reassessment that may have been initiated while at the same time according due protection to the interest of the assessees. The Supreme Court held that although the High Courts were correct in taking the view that after the amendments in the Act, coming to be enforced with effect from April 1, 2021, notices could have been issued only in terms of the substituted provisions, the Department appeared to have proceeded under the mistaken yet bona fide belief that those amendments were yet to be enforced. It was in the aforesaid background that it found that the ends of justice would warrant the notices issued with reference to the erstwhile provisions being saved and being read as referable to section 148A(b). It was to subserve W.P.(C) 2830/2022 Signature Not Verified the aforesaid primary objective that Union of India v. Ashish Agarwal [(2022) 444 ITR 1 (SC); (2023) 1 SCC 617.] proceeded to hold that the impugned section 148 notices would be deemed to have been issued under section 148A and treated to be show-cause notices referable to clause (b) thereof. W.P.(C) 2830/2022 Signature Not Verified the aforesaid primary objective that Union of India v. Ashish Agarwal [(2022) 444 ITR 1 (SC); (2023) 1 SCC 617.] proceeded to hold that the impugned section 148 notices would be deemed to have been issued under section 148A and treated to be show-cause notices referable to clause (b) thereof. 23. As we read the penultimate directions which came to be framed, the procedure laid out in Union of India v. Ashish Agarwal [(2022) 444 ITR 1 (SC); (2023) 1 SCC 617.] clearly stood confined to matters where although notices may have been issued, proceedings were yet to have attained finality. This clearly flows from the impugned notices being ordained to be treated as show-cause notices under section 148A(b) and the concomitant liberty being accorded to Assessing Officers to proceed further in accordance with section 148A(d). As we read that decision, we find ourselves unable to construe those directions as either warranting or mandating a reopening of proceedings which had come to be rendered a quietus in the meanwhile. The judgment was primarily concerned with the validity of various notices which had been promulgated and proceedings drawn in accordance with the statutory procedure which stood in place prior to April 1, 2021. It also becomes pertinent to note that the decision rendered by our court in Mon Mohan Kohli v. Asst. CIT [(2022) 441 ITR 207 (Delhi); 2021 SCC OnLine Del 5250.] perhaps constituted the solitary exception in the sense of having left a window open to the respondents to draw proceedings afresh. A majority of the High Courts, however, do not appear to have made such a provision or provide the Revenue with a right of recourse. The Supreme Court was thus faced with a peculiar and an unprecedented situation where the Revenue was rendered remediless to assess escaped income even though material may have merited such an action being pursued solely on account of a misinterpretation of the correct legal position. It was these factors which clearly appear to have weighed upon the Supreme Court to mould and sculpt a procedure which would strike a just balance between competing interests. 24. In order to carve out an equitable solution which would redress the deadlock, the Supreme Court invoked its powers conferred by article 142 of the Constitution and ordained that all such notices would be treated as being under section 148A(b) and for proceedings to be taken forward in accordance with law thereafter. The direction so framed thus enabled the assessee to question the assumption of jurisdiction under section 148 and take advantage of the beneficial measures embodied in section 148A. The assessee thus derived a right to assail the initiation of reassessment proceedings on jurisdictional grounds by preferring objections which the Assessing Officer was statutorily obliged to take into consideration before issuing notices under section 148 of the Act. The Revenue on the W.P.(C) 2830/2022 Page 9 of 36 Signature Not Verified other hand, and notwithstanding its folly of having erroneously proceeded under the erstwhile regime, was enabled to continue proceedings in accordance with the amended procedure as introduced by virtue of the Finance Act, 2021 ((2021) 432 ITR (Stat) 52) and thus avoid the specter of a fait accompli which it faced on account of some of the High Court decisions. This is apparent from the Supreme Court observing that the judgments rendered by some of the High Courts had left the Revenue remediless and resulting in “no reassessment proceedings at all, even if the same are permissible under the Finance Act, 2021 and as per substituted section 147.” W.P.(C) 2830/2022 Page 9 of 36 Signature Not Verified other hand, and notwithstanding its folly of having erroneously proceeded under the erstwhile regime, was enabled to continue proceedings in accordance with the amended procedure as introduced by virtue of the Finance Act, 2021 ((2021) 432 ITR (Stat) 52) and thus avoid the specter of a fait accompli which it faced on account of some of the High Court decisions. This is apparent from the Supreme Court observing that the judgments rendered by some of the High Courts had left the Revenue remediless and resulting in “no reassessment proceedings at all, even if the same are permissible under the Finance Act, 2021 and as per substituted section 147.” 25. However, we are of the firm opinion that Union of India v. Ashish Agarwal [(2022) 444 ITR 1 (SC); (2023) 1 SCC 617.] neither intended nor mandated concluded assessments being reopened. The respondent clearly appears to have erred in proceedings along lines contrary to the above as would be evident from the reasons which follow. Firstly, Union of India v. Ashish Agarwal [(2022) 444 ITR 1 (SC); (2023) 1 SCC 617.] was principally concerned with judgments rendered by various High Courts striking down section 148 notices holding that the respondents had erred in proceeding on the basis of the unamended family of provisions relating to reassessment. They had essentially held that it was the procedure constructed in terms of the amendments introduced by the Finance Act, 2021 which would apply. None of those judgments were primarily concerned with concluded assessments. It is this indubitable position which constrained the Supreme Court to frame directions requiring those notices to be treated as being under section 148A(b) and for the Assessing Officer proceeding thereafter to frame an order as contemplated by section 148A(d) of the Act. The Supreme Court significantly observed that the High Courts instead of quashing the impugned notices should have framed directions for those notices being construed and deemed to have been issued under section 148A. Union of India v. Ashish Agarwal [(2022) 444 ITR 1 (SC); (2023) 1 SCC 617.] proceeded further to observe that the Revenue should have been “permitted to proceed further with thereassessment proceedings as per the substituted provisions….” Our view of the judgement being confined to proceedings at the stage of notice is further fortified from the Supreme Court providing in paragraph 8 of the report that “The respective impugned section 148 notices issued to the respective assessees shall be deemed to have been issued under section 148A of the Income-tax Act as substituted by the Finance Act, 2021 ((2021) 432 ITR (Stat) 52) and treated to be show-cause notices in terms of section 148A(b)”. As would be manifest from the aforesaid extract, the emphasis clearly was on the notices which formed the subject matter of challenge before various High Courts and the aim of the Supreme Court being to salvage the W.P.(C) 2830/2022 Signature Not Verified process of reassessment. This is further evident from the Supreme Court observing that the Assessing Officer would thereafter proceed to pass orders referable to section 148A(d). We consequently find ourselves unable to construe Union of India v. Ashish Agarwal [(2022) 444 ITR 1 (SC); (2023) 1 SCC 617.] as an edict which required completed assessments to be invalidated and reopened. Union of India v. Ashish Agarwal [(2022) 444 ITR 1 (SC); (2023) 1 SCC 617.] cannot possibly be read as mandating the hands of the clock being rewound and reversing final decisions which may have come to be rendered in the interregnum. W.P.(C) 2830/2022 Signature Not Verified process of reassessment. This is further evident from the Supreme Court observing that the Assessing Officer would thereafter proceed to pass orders referable to section 148A(d). We consequently find ourselves unable to construe Union of India v. Ashish Agarwal [(2022) 444 ITR 1 (SC); (2023) 1 SCC 617.] as an edict which required completed assessments to be invalidated and reopened. Union of India v. Ashish Agarwal [(2022) 444 ITR 1 (SC); (2023) 1 SCC 617.] cannot possibly be read as mandating the hands of the clock being rewound and reversing final decisions which may have come to be rendered in the interregnum. 26. Regard must also be had to the undisputed fact that the petitioner never questioned the validity of the original notices on grounds which were urged before the various High Courts and where assessees had questioned the invocation of the unamended provisions. The petitioner chose to contest the reassessment proceedings on merits. It is also admitted before us that the petitioner was also not a party to the Mon Mohan Kohli v. Asst. CIT [(2022) 441 ITR 207 (Delhi); 2021 SCC OnLine Del 5250.] batch of matters. There was therefore, no justification for the respondent to have issued notices afresh seeking to reopen proceedings which had been rendered a closure prior to the judgment rendered in Union of India v. Ashish Agarwal [(2022) 444 ITR 1 (SC); (2023) 1 SCC 617.] . At the cost of being repetitive we deem it appropriate to observe that the Union of India v. Ashish Agarwal [(2022) 444 ITR 1 (SC); (2023) 1 SCC 617.] judgment neither spoke of completed assessments nor did it embody any direction that could be legitimately or justifiably construed as mandating completed assessments being reopened and more so where the assessee had raised no objection to the initiation of proceedings. 27. We are also of the firm opinion that even paragraph 25.5 of Union of India v. Ashish Agarwal [(2022) 444 ITR 1 (SC); (2023) 1 SCC 617.] would not sustain the stand taken by the respondent since the same clearly confines itself to decisions or judgments rendered by a High Court invalidating a notice under section 148 and the manifest intent of the Supreme Court being that its judgment would apply and govern irrespective of whether an appeal had been laid before it. 28. It is in the aforesaid context that we also bear in mind the pertinent observations rendered by the Constitution Bench in High Court Bar Association v. Uttar Pradesh [(2024) 6 SCC 267.] when it held that a direction under article 142 of the Constitution should not impact the substantive rights of those litigants who are not even parties to the lis. The Constitution Bench while acknowledging the amplitude of the article 142 power placed a significant caveat when it observed that benefits derived by a litigant based on a judicial W.P.(C) 2830/2022 Page 11 of 36 Signature Not Verified order validly passed cannot be annulled especially when they may not even have been parties to the cause. This too convinces us to hold in favour of the petitioner and come to the inevitable conclusion that the writ petition must succeed.” 14. The disputation on the aforenoted issues again arose for the consideration of the Supreme Court in Rajeev Bansal. The petitioner seeks to draw support from the recordal of submissions advanced by the Additional Solicitor General of India as appearing in paragraph 19 of the report and where it appears to have been contended that notices issued for AY 2015-16 on or after 01 April 2021 would have to be dropped as they would not fall within the protective umbrella of TOLA. W.P.(C) 2830/2022 Page 11 of 36 Signature Not Verified order validly passed cannot be annulled especially when they may not even have been parties to the cause. This too convinces us to hold in favour of the petitioner and come to the inevitable conclusion that the writ petition must succeed.” 14. The disputation on the aforenoted issues again arose for the consideration of the Supreme Court in Rajeev Bansal. The petitioner seeks to draw support from the recordal of submissions advanced by the Additional Solicitor General of India as appearing in paragraph 19 of the report and where it appears to have been contended that notices issued for AY 2015-16 on or after 01 April 2021 would have to be dropped as they would not fall within the protective umbrella of TOLA. 15.It becomes pertinent to note that the provisions of TOLA had saved the time limit for effecting compliance with statutory obligations which fell for completion within the period 20 March 2020 upto 31 March 2021. The date of 31 March 2021 was thereafter further extended upto 30 June 2021. In order to appreciate the submissions which were addressed on this score, it would be beneficial to reproduce paragraph 19 of the report hereinbelow: - “19. Mr. N. Venkataraman, learned Additional Solicitor General of India, made the following submissions on behalf of the Revenue: (a) Parliament enacted Taxation and other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 as a free-standing legislation to provide relief and relaxation to both the assessees and the Revenue during the time of covid-19. Taxation and other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 seeks to relax actions and proceedings that could not be completed or complied with within the original time limits specified under the Income-tax Act; (b) Section 149 of the new regime provides three crucial benefits to the assessees : (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-assessment for previous assessment years cannot be undertaken beyond six years; and (iii) the monetary threshold of W.P.(C) 2830/2022 Signature Not Verified Signature Not Verified Rupees fifty lakhs will apply to the reassessment for the previous assessment years; (c) The relaxations provided under section 3(1) of the Taxation and other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 apply “notwithstanding anything contained in the specified Act”. Section 3(1), therefore, overrides the time limits for issuing a notice under section 148 read with section 149 of the Income-tax Act; (d) Taxation and other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 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 ((2021) 432 ITR (Stat) 52) substituted the old regime for reassessment with a new regime. The first proviso to section 149 does not expressly bar the application of Taxation and other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020. Section 3 of the Taxation and other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 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 Taxation and other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020, then all the notices issued between April 1, 2021 and June 30, 2021 pertaining to the assessment years 2013-2014, 2014-2015, 2015-2016, 2016-2017, and 2017-2018 will be within the period of limitation as explained in the tabulation below: -(f) The Revenue concedes that for the assessment year 20152016, all notices issued on or after April 1, 2021 will have to be dropped as they will not fall for completion during the period prescribed under the Taxation and other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020; -(f) The Revenue concedes that for the assessment year 20152016, all notices issued on or after April 1, 2021 will have to be dropped as they will not fall for completion during the period prescribed under the Taxation and other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020; (g) Section 2 of the Taxation and other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 defines “specified Act” to mean and include the Income-tax Act. The new regime, which came into effect on April 1, 2021, is now part of the Income-tax Act. Therefore, Taxation and other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 continues to apply to the Income-tax Act even after April 1, 2021; and (h) Union of India v. Ashish Agarwal [(2022) 444 ITR 1 (SC); (2023) 1 SCC 617.] treated section 148 notices issued by the Revenue between April 1, 2021 and June 30, 2021 as show-cause notices in terms of section 148A(b). Thereafter, the Revenue issued notices under section 148 of the new regime between July and August 2022. Invalidation of the section 148 notices issued under the new regime on the ground that they were issued beyond the time limit specified under the Income-tax Act read with the Taxation and other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 will completely frustrate the judicial exercise undertaken by this court in Union of India v. Ashish Agarwal [(2022) 444 ITR 1 (SC); (2023) 1 SCC 617.] .” 16.As is manifest from the above, the Additional Solicitor General appears to have made that submission bearing in mind the time limits ordinarily applicable to AY 2015-16 conditioned by the prescription of time as applicable in light of Section 149 as well as the Proviso thereto. The argument of the learned Additional Solicitor General which stands recorded specifically in Para 19(f) of Rajeev Bansal is liable to be appreciated bearing in mind the completion of the three and six year period for AY 2015-16 which would have come to an end on 31 March 2019 and 31 March 2022, respectively. Since both those terminal dates did not fall within the period 20 March 2020 to 30 June 2021 (the period contemplated under Section 3 of TOLA), it appears to have been urged that the provisions of that statute would not apply. W.P.(C) 2830/2022 Signature Not Verified Page 14 of 36 17. 17.The question which, however, still survives is whether the impugned notice issued on 09 April 2021 can be said to be barred by time or lacking in jurisdiction. Undisputedly, AY 2015-16 pertains to a period prior to 01 April 2021 and would thus be governed by the First Proviso to Section 149. Section 149 as amended by Finance Act, 2021 reads as under: - “149. (1) No notice under section 148 shall be issued for the relevant —assessment 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 in his possession books of accounts 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: 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 subsection (1) of this section, as they stood immediately before the commencement of the Finance Act, 2021: Provided further that the provisions of this sub-section shall not apply in 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 of March, 2021: 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 subsection (1) of this section, as they stood immediately before the commencement of the Finance Act, 2021: Provided further that the provisions of this sub-section shall not apply in 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 of 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 notice issued under clause (b) of section 148A or the period during which the proceeding under section 148A is 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 to the Assessing Officer for passing an order under clause (d) of section 148A is less than seven days, such W.P.(C) 2830/2022 Page 15 of 36 Signature Not Verified remaining period shall be extended to seven days and the period of limitation under this sub-section shall be deemed to be extended accordingly. —Explanation.For the purposes of clause (b) of this sub-section, "asset" 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 (1) as to the issue of notice shall be subject to the provisions of section 151. ” 18.The validity of the impugned notice would thus have to be evaluated on the anvil of whether the respondents could have validly initiated reassessment on 09 April 2021. Since the reassessment notice pertained to AY 2015-16 and thus prior to 01 April 2021 as per the unamended Section 149, the notice could have been issued within a maximum period of six years from the end of the relevant AY. Tested on that basis, it is apparent that the terminal date for issuance of notice would be 31 March 2022. 19.As was noticed in the preceding parts of this decision, the decision of the Supreme Court in Ashish Agarwal which came to be pronounced in May 2022 had introduced a legal fiction in terms of which all notices under Section 148 were liable to be viewed and treated as being referable to Section 148A(b) of the Act. The formulation of this legal fiction in Ashish Agarwal stands lucidly explained by the Supreme Court in Rajeev Bansal the relevant extracts whereof are reproduced hereinbelow: - “94. Before we proceed, we need to bear in mind three important periods: periods: (i) The period up to June 30, 2021 - this period is covered by the provisions of the Income-tax Act read with Taxation and other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020; by the provisions of the Income-tax Act read with Taxation and other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020; W.P.(C) 2830/2022 Signature Not Verified (ii) The period from July 1, 2021 to May 3, 2022 - the period before the decision of this court in Union of India v. Ashish Agarwal [(2022) 444 ITR 1 (SC); (2023) 1 SCC 617.] ; and (iii) The period after May 4, 2022 - the period after the decision of this court in Union of India v. Ashish Agarwal [(2022) 444 ITR 1 (SC); (2023) 1 SCC 617.] . This period is covered by the directions issued by this court in Union of India v. Ashish Agarwal [(2022) 444 ITR 1 (SC); (2023) 1 SCC 617.] and the provisions of the Income-tax Act read with Taxation and other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020. W.P.(C) 2830/2022 Signature Not Verified (ii) The period from July 1, 2021 to May 3, 2022 - the period before the decision of this court in Union of India v. Ashish Agarwal [(2022) 444 ITR 1 (SC); (2023) 1 SCC 617.] ; and (iii) The period after May 4, 2022 - the period after the decision of this court in Union of India v. Ashish Agarwal [(2022) 444 ITR 1 (SC); (2023) 1 SCC 617.] . This period is covered by the directions issued by this court in Union of India v. Ashish Agarwal [(2022) 444 ITR 1 (SC); (2023) 1 SCC 617.] and the provisions of the Income-tax Act read with Taxation and other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020. 95. The third proviso to section 149 reads thus: “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 notice issued under clause (b) of section 148A or the period during which the proceeding under section 148A is stayed by an order or injunction of any court, shall be excluded.” 96. The third proviso excludes the following periods to calculate the period of limitation : (i) the time allowed to the assessee under section 148A(b); and (ii) the period during which the proceedings under section 148A are “stayed by an order or injunction of any court”. 97. A legal fiction is a supposition of law that a thing or event exists even though, in reality, it does not exist. (Gajraj Singh v. State Transport Appellate Tribunal [(1997) 1 SCC 650.] ) The word “deemed” is used to treat a thing or event as something, which otherwise it may not have been, with all the attendant consequences. (CIT v. Calcutta Stock Exchange Association Ltd. [(1959) 36 ITR 222 (SC); 1959 SCC OnLine SC 126.] ; Smt. Sudha Rani Garg v. Jagdish Kumar [(2004) 8 SCC 329.] ) The effect of a legal fiction is that “a position which otherwise would not obtain is deemed to obtain under the circumstances”.(Gajraj Singh v. State Transport Appellate Tribunal [(1997) 1 SCC 650.] ) In K. Prabhakaran v. P. Jayarajan [(2005) 1 SCC 754; 2005 SCC (Cri) 451.] , Chief Justice R.C. Lahoti, speaking for the majority, observed that: “39…. While pressing into service a legal fiction it should not be forgotten that legal fictions are created only for some definite purpose and the fiction is to be limited to the purpose for which it was created and should not be extended beyond that legitimate field. A legal fiction presupposes the existence of the state of facts which may not exist and then works out the consequences which flow from that state of facts. Such consequences have got to be worked out only to W.P.(C) 2830/2022 Page 17 of 36 Signature Not Verified their logical extent having due regard to the purpose for which the legal fiction has been created. Stretching the consequences beyond what logically flows amounts to an illegitimate extension of the purpose of the legal fiction.” 98. A legal fiction is created for a definite purpose and it should be limited to the purpose for which it is enacted or applied. It is a well-established principle of interpretation that the courts must give full effect to a legal fiction by having due regard to the purpose for which the legal fiction is created. (State of Maharashtra v. Laljit Rajshi Shah [(2000) 2 SCC 699; 2000 SCC (Cri) 533.] ) The consequences that follow the creation of the legal fiction “have got to be worked out to their logical extent”. (Bengal Immunity Comany Ltd. v. State of Bihar [(1955) 6 STC 446 (SC); 1955 SCC OnLine SC 2.] ) The court has to assume all the facts and consequences that are incidental or inevitable corollaries to giving effect to the fiction. (Industrial Supplies Pvt. Ltd. v. Union of India [(1980) 4 SCC 341.]) 98. A legal fiction is created for a definite purpose and it should be limited to the purpose for which it is enacted or applied. It is a well-established principle of interpretation that the courts must give full effect to a legal fiction by having due regard to the purpose for which the legal fiction is created. (State of Maharashtra v. Laljit Rajshi Shah [(2000) 2 SCC 699; 2000 SCC (Cri) 533.] ) The consequences that follow the creation of the legal fiction “have got to be worked out to their logical extent”. (Bengal Immunity Comany Ltd. v. State of Bihar [(1955) 6 STC 446 (SC); 1955 SCC OnLine SC 2.] ) The court has to assume all the facts and consequences that are incidental or inevitable corollaries to giving effect to the fiction. (Industrial Supplies Pvt. Ltd. v. Union of India [(1980) 4 SCC 341.]) 99. In Union of India v. Ashish Agarwal [(2022) 444 ITR 1 (SC); (2023) 1 SCC 617.] , this court created a legal fiction by deeming the section 148 notices issued under the old regime as show-cause notices under section 148A(b) of the new regime. The purpose of the legal fiction was to enable the Revenue “to proceed further with the reassessment proceedings as per the substituted provisions” of the Income-tax Act. Accordingly, all the reassessment notices issued under the old regime were deemed to always have been show-cause notices issued under section 148A(b) of the new regime. The fiction replaced section 148 n