Salik Khan Son Of Iliyas Khan, Resident Of Ward v. Assessment Unit, Income Tax Department

IN THE HIGH COURT OF JUDICATURE AT PATNACivil Writ Jurisdiction Case No.7568 of 2024 ====================================================== Salik Khan son of Iliyas Khan, resident of Ward No. 6, Dholbaja, P.S.Forbesganj, District-Araria, Bihar-854318. ... ... Petitioner/s Versus 1.Assessment Unit, Income Tax Department having its office at 6th Floor,Mayur Bhawan, Connaught Circus, New Delhi 110001.Mayur Bhawan, Connaught Circus, New Delhi 110001. 2.Income Tax Officer, Ward 3(1), Purnea. ... ... Respondent/s ======================================================Appearance :For the Petitioner/s: Mr. D.V.Pathy, AdvocateFor the Respondent/s: Ms.Archana Sinha @ Archana Shahi, Advocate====================================================== CORAM: HONOURABLE THE CHIEF JUSTICE and HONOURABLE MR. JUSTICE HARISH KUMARORAL JUDGMENT(Per: HONOURABLE THE CHIEF JUSTICE)Date : 06-05-2024 The petitioner is before this Court alleging that thepresent proceeding under Section 148 of the Income Tax Act,1961 (for brevity, Act) is hit by limitation. 2. Learned Counsel for the petitioner submits that theissue is already covered by two judgments (CWJC No. 7517 of2023 and CWJC No. 7573 of 2023) of a Division Bench of thisCourt produced as Annexure P-12 series. 3. Learned Senior Standing Counsel for the IncomeTax Department however submits that there is substantialdifference in the above case since notice was issued within fouryears, as was provided before the amendment on 01.04.2021. The Hon’ble Supreme Court has also extended the time forissuance of notices especially since the Department had bonafide not noticed the amendment brought on 01.04.2021,[(Annexure P-11-judgment), Union of India Vs. AshishAgrawalreported in (2023) 1 SCC 617]. 4. On facts it is to be noticed that the notice underSection 148 of the Act was first issued by Annexure P-1 on30.06.2021 for the Assessment Year 2017-18 as Section 148stood before the amendment. There was a four-year periodprovided from the last date of the relevant assessment year andthe four year period would have expired only on 31.03.2022,while the notice was issued on 30.06.2021. Later to that a noticewas issued only as per Annexure P-4 which is dated 26.08.2022.The contention of the Department is also that the notice dated26.08.2022 was under Section 148 of the Act and before thatunder Section 148A, a notice was issued on 23.6.2022. 5. As far as the notice underSection 148 and Section 148A is concerned, the issue is covered by the judgments ofthis Court referred to above. It was categorically found thatSection 149 provides for a time-limit for notice to be issuedunder Section 148 which under clause (a) of Sub-section (1) isthree years. A limitation of 10 years is provided only for escaped assessment where the tax escaped is more than Rs. 50 Lakhs. Inthe present case admittedly the total assessment is only of Rs. 31lakhs and the demand now raised is slightly more than Rs. 19lakhs. Insofar as Section 148A it was brought into the Act byFinance Act, 2021 with effect from 01.04.2021 when Section148 also stood substituted. Section 148A deals with the enquiryand opportunity provided before issuance of notice underSection 148 but under the very same Finance Act, 2021. Thelimitation period provided under Section 149 was also amendedand it was brought down to three years where the escapedassessment is of less than Rs. 50 lakhs. 6. The Hon’ble Supreme Court in Union of India Vs. assessment where the tax escaped is more than Rs. 50 Lakhs. Inthe present case admittedly the total assessment is only of Rs. 31lakhs and the demand now raised is slightly more than Rs. 19lakhs. Insofar as Section 148A it was brought into the Act byFinance Act, 2021 with effect from 01.04.2021 when Section148 also stood substituted. Section 148A deals with the enquiryand opportunity provided before issuance of notice underSection 148 but under the very same Finance Act, 2021. Thelimitation period provided under Section 149 was also amendedand it was brought down to three years where the escapedassessment is of less than Rs. 50 lakhs. 6. The Hon’ble Supreme Court in Union of India Vs. Ashish Agrawal [(2023) 1 SCC 617] dealt with the issue ofnotices, not in consonance with the amendments brought aboutby Finance Act, 2021. It was noticed that the Revenue hasissued approximately 9000 re-assessment notices to therespective assessees, post 01.04.2021, but under the erstwhileSections 148 to 151, by relying on the Explanations in thenotifications dated 31.03.2021 and 27.04.2021. It was held thatthe new provisions substituted by the Finance Act, 2021 wereremedial and benevolent in nature; substituted with a specificaim and object to protect the rights and interest of the assessees. The same was also in public interest and by virtue of thejudgment of various High Courts, there would be no re-assessment proceedings if the benevolent provisions of FinanceAct, 2021 is applied across the board. It was only in suchcircumstances that the judgments in appeal before the Hon’bleSupreme Court were modified and substituted, specificallyproviding for the Assessing Officers who had issued notices post01.04.2021, without following the procedure under Section148A to provide the respective assesssees information andmaterial relied upon by the Revenue within thirty days so thatthe assessees can reply to the show cause notices within twoweeks thereafter. 7. The judgment of the Hon’ble Supreme Court isdated 04.05.2022 and in that circumstances everynoticee/assessee should have been supplied the information andmaterial relied upon by the Revenue within thirty days. Here thenotice under Section 148A was issued on 23.06.2022 afteralmost a year from the date provided by the Hon’ble SupremeCourt. 8. In the above circumstances, we do not find a way topermit the re-assessment under Section 148 to be continued. Weallow the writ petition interfering with the orders passed beyond the period of limitation provided and the extended period asprovided by the Hon’ble Supreme Court in the cited judgment. 9. It goes without saying that demand notices issuedpursuant to the assessment order stands quashed. (K. Vinod Chandran, CJ) Anjani/-AFR/NAFRCAV DATEUploading Date 07.05.2024Transmission Date ( Harish Kumar, J)