Wp/15910/2022 Of Azim Premji Trustee Company Pvt Ltd v. Deputy Commissioner Of Income Tax

IN THE HIGH COURT OF KARNATAKA, BENGALURU DATED THIS THE 28 DAY OF OCTOBER, 2022 BEFORE THE HON'BLE MR.JUSTICE S.R.KRISHNA KUMAR -WRIT PETITION No.15910 OF 2022(TIT) BETWEEN: AZIM PREMJI TRUSTEE COMPANY PVT LTD A COMPANY INCORPORATED UNDER THE PROVISIONS OF THE COMPANIES ACT, 1956 (SOLE TRUSTEE OF PIONEER INDEPENDENT TRUST WHICH IS A PRIVATE DISCRETIONARY TRUST SETTLED UNDER THE INDIAN TRUSTS ACT 1882) ADDRESS AT: NO 134, NEXT TO WIPRO CORPORATE OFFICE SARJAPUR ROAD, BANGALORE – 560035. REPRESENTED HEREIN BY ITS DIRECTOR MR SRINIVASAN PAGALTHIVARTHI ALSO: AT NO. 524, 16 CROSS, INDIRANAGAR 2 STAGE BENGALURU – 560 038. …PETITIONER (BY SRI. S. GANESH, SENIOR COUNSEL FOR SRI. SANDEEP HUILGOL,, ADVOCATE) AND: 1 . DEPUTY COMMISSIONER OF INCOME TAX CIRCLE 4(1) (1) BANGALORE BMTC BUILDING, 80 FEET ROAD, 6 BLOCK, NEAR KHB GAMES VILLAGE, KORAMANGALA, BENGALURU-560 095 2 . PRINCIPAL CHIEF COMMISSIONER OF INCOME TAX KARNATAKA AND GOA REGION GROUND FLOOR C R BUILDING NO 01 QUEENS ROAD, BANGALORE - 560001 3 . PRINCIPAL COMMISSIONER OF INCOME - TAX 2 BANGALORE, BMTC BUILDING, 80 FEET ROAD, 6 BLOCK, NEAR KHB GAMES VILLAGE, KORAMANGALA, BENGALURU-560 095 4 . CENTRAL BOARD OF DIRECT TAXES DEPARTMENT OF REVENUE MINISTRY OF FINANCE NORTH BLOCK NEW DELHI 110002 REPRESENTED HEREIN BY ITS CHAIRPERSON …RESPONDENTS (BY SRI.K.V. ARAVIND., ADVOCATE) THIS W.P. IS FILED UNDER ARTICLE 226 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE IMPUGNED ORDER DTD: 28.07.2022 BEARING ITBA/COM/F/17/2022-23/1044214522(1) PASSED BY R1 U/S 148A(d) OF THE INCOME TAX ACT, 1961 FOR THE ASSESSMENT YEAR 2014-15 ANNEXURE-A AND ETC. THIS W.P. COMING ON FOR FURTHER HEARING, THIS DsAY, THE COURT MADE THE FOLLOWING:- ORDER In this petition, petitioner has sought for the following reliefs: “ (i) Quashing the impugned order dated: 28.07.2022 bearing ITBA/COM/F/17/2022-23/1044214522(1) passed by Respondent No.1 under Section 148A(d) of the Income Tax Act, 1961, for the Assessment Year 20184-15 (Annexure-‘A’). (ii) Quashing the impugned notice dated: 28.07.2022 bearing ITBA/AST/M/148_1/2022-23/1044223868(1) issued by Respondent No.1 under Section 148 of the Income –tax Act, 1961, for the Assessment Year 2014-15(Annexure-‘B’); (iii) Declaring that Section 56(2) (vii) (c) of the Income-tax Act, 1961, has no application to the listed shares of Wipro Ltd., that were gifted to Pioneer Independent Trust in the previous year relevant to Assessment Year 2014-15; (iv) Quashing the Circular bearing No.6/2012 [F.NO.133/44/2012-SO (TPL) issued by Respondent No.4 03.08.2012 (Annexure-‘C’) ; and (v) Pass such other or further orders as this Hon’ble Court may deem fit in the facts and circumstances of the case, and in the interest of justice and equity.” 2. Heard Sri. S.Ganesh, learned Senior counsel appearing for the petitioner and Sri.K.V.Aravind, learned counsel for the respondents – revenue. 3. Briefly stated the contentions urged by the petitioner are as under:- The Petitioner is a Private Limited Company and the trustee of a private discretionary Trust called ‘Pioneer Independent Trust’ (for short ‘the Trust’), of which the only two beneficiaries are private limited guarantee companies without share capital, which are exclusively engaged in charitable and philanthropic activities. On 03.06.2013, the Trust received a gift of 6.1 crore shares of Wipro Ltd., from a charitable entity belonging to the Azim Premji Group, to be held as a part of the corpus of Trust. This gift was contemporaneously disclosed to the stock exchanges and this information was also disseminated to the public at large. This gift was also specifically disclosed in the audited accounts of the petitioner for the year ending 31.03.2014. The face value of these shares (Rs.2/- per share) was also disclosed by the petitioner. be held as a part of the corpus of Trust. This gift was contemporaneously disclosed to the stock exchanges and this information was also disseminated to the public at large. This gift was also specifically disclosed in the audited accounts of the petitioner for the year ending 31.03.2014. The face value of these shares (Rs.2/- per share) was also disclosed by the petitioner. 3.1 During the financial year 2013-14 ending on 31.03.2014, the petitioner sold a portion of the said Wipro shares and disclosed the resulting capital gain in its audited accounts. The petitioner filed its Return of Income for the Assessment Year 2014-15 disclosing the capital gain from the said sale of Wipro shares. 3.2 The petitioner was subjected to a full scrutiny assessment under Section 143(3) of the I.T.Act. As the Assessing Officer (for short ‘the A.O’) also had to assess the capital gain arising from the sale of Wipro shares, the A.O. was made fully aware of the sale price of Wipro shares. In any event, the market price of Wipro shares was completely in the public realm as it is a very well known and widely traded shares. Further, during the course of the scrutiny assessment, the A.O specifically asked for and was given a copy of the petitioner’s demat account, which gave the A.O full information about the gift of Wipro shares received by the petitioner are also the sale thereof and the market value of the said shares. There was no other information which the A.O could possibly ask for in respect of the Wipro shares received and sold (partly) by the petitioner. 3.3 The A.O passed the assessment order for the Assessment Year 2014-15 under Section 143(3) of the Income Tax Act (for short ‘ the I.T.Act’) without treating the gift of Wipro shares received by the petitioner as its taxable income under Section 56(2)(vii)(c) of the I.T.Act, even though the A.O had all the information that was required for deciding, whether to apply or not to apply Section 56(2)(vii)(c) of the I.T.Act. Thus, there was no failure or omission on the part of the petitioner to disclose any material facts or information in respect of the said gift of Wipro shares received by the petitioner. 3.4 On 01.04.2021, Sections 147 to 151 of the I.T.Act were amended vide Finance Act, 2021 by bringing into force a new regime. Subsequently, the 1[st] respondent issued a Notice dated 21.06.2021 to the Trust under Section 133(6) of the I.T.Act, to which a reply was submitted on 24.06.2021, pursuant to which, one more notice dated 25.06.2021 was issued by the 1[st] respondent, to which also, the petitioner submitted replies dated 28.06.2021 and 29.06.2021. Thereafter, respondents issued a Notice dated 30.06.2021 under Section 148 of the I.T.Act (after amendment). The petitioner challenged the said notice and sought for other reliefs also by preferring W.P.No.12668/2021, which was allowed by the Division Bench of this Court vide final order dated 18.04.2022. 3.5 Petitioner contends that several matters across various High Courts came up for consideration before the Apex Court in the context of the aforesaid amendment which came into force from 01.04.2021 in the case of Union of India & Others vs. Ashish Agarwal – (2022) SCC Online SC 543. Pursuant to the said order, the 1[st]respondent issued a show cause notice dated 31.05.2022 to the Trust by invoking Section 148A(b) calling upon the petitioner to show cause as to why a Notice under Section 148 should not be issued in respect of Assessment Year 2014-15 for the income in relation to Wipro shares which had allegedly escaped assessment. 3.5 Petitioner contends that several matters across various High Courts came up for consideration before the Apex Court in the context of the aforesaid amendment which came into force from 01.04.2021 in the case of Union of India & Others vs. Ashish Agarwal – (2022) SCC Online SC 543. Pursuant to the said order, the 1[st]respondent issued a show cause notice dated 31.05.2022 to the Trust by invoking Section 148A(b) calling upon the petitioner to show cause as to why a Notice under Section 148 should not be issued in respect of Assessment Year 2014-15 for the income in relation to Wipro shares which had allegedly escaped assessment. 3.6 Petitioner filed a reply on 04.06.2022 and requested the A.O. to furnish information and material so as to enable the petitioner to submit a detailed reply. Thereafter, on 13.06.2022, though the respondents did not accede to the aforesaid request made by the petitioner, the petitioner submitted a detailed reply along with all relevant documents and requested the respondents to drop the proceedings. It is the grievance of the petitioner that despite the aforesaid facts and circumstances, respondents proceeded to pass the impugned order, aggrieved by which, the petitioner is before this Court by way of the present petition. 4. The respondents – revenue have filed their statement of objections inter alia disputing the various contentions urged by the petitioner. It is contended that apart from the fact that the petition is premature, the impugned order is correct, legal and proper and in accordance with the judgment of the Apex Court in Ashish Agarwal’s case (supra) and the other judgments relied upon by the respondents. It is contended that the respondents have correctly invoked Section 56(2)(vii)(c) of the I.T.Act and the proceedings initiated by the respondents are well within limitation, both under the pre-amended provisions as well as after amendment and the income of the petitioner having escaped assessment, the respondents were fully justified in initiating the subject proceedings and passing the impugned order, which does not warrant interference by this Court in the present petition. It is therefore contended that there is no merit in the petition and the same is liable to be dismissed. 5. I have given my anxious consideration to the rival submissions and perused the material on record. 6. Before adverting to the rival contentions, it is necessary to state that it is an undisputed fact that the impugned proceedings were initiated subsequent to 01.04.2021 when Sections 147 to 151 were amended under the Finance Act, 2021. In Ashish Agarwal’s case (supra),the Apex Court laid down the detailed guidelines and issued directions with regard to proceedings and notices under the pre-amendment regime and post-amendment regime and held as under:- 3. While appreciating the controversy, a few facts and the relevant statutory provisions applicable pre 01.04.2021 and post 01.04.2021 are required to be referred to. The procedure governing initiation of reassessment proceedings prior to coming into force of the Finance Act, 2021 was governed by the following provisions:— “Income escaping assessment- 147. If the Assessing Officer has reason to believe that any income chargeable to tax has escaped assessment for any assessment year, he may, subject to the provisions of sections 148 to 153, assess or reassess such income and also any other income chargeable to tax which has escaped assessment and which comes to his notice subsequently in the course of the proceedings under this section, or recomputed the loss or the depreciation allowance or any other allowance, as the case may be, for the assessment year concerned (hereafter in this section and in sections 148 to 153 referred to as the relevant assessment year): “Income escaping assessment- 147. If the Assessing Officer has reason to believe that any income chargeable to tax has escaped assessment for any assessment year, he may, subject to the provisions of sections 148 to 153, assess or reassess such income and also any other income chargeable to tax which has escaped assessment and which comes to his notice subsequently in the course of the proceedings under this section, or recomputed the loss or the depreciation allowance or any other allowance, as the case may be, for the assessment year concerned (hereafter in this section and in sections 148 to 153 referred to as the relevant assessment year): Provided that where an assessment under sub-section (3) of section 143 or this section has been made for the relevant assessment year, no action shall be taken under this section after the expiry of four years from the end of the relevant assessment year, unless any income chargeable to tax has escaped assessment for such assessment year by reason of the failure on the part of the assessee to make a return under section 139 or in response to a notice issued under sub-section (1) of section 142 or section 148 or to disclose fully and truly all material facts necessary for his assessment, for that assessment year: Provided further that nothing contained in the first proviso shall apply in a case where any income in relation to any asset (including financial interest in any entity) located outside India, chargeable to tax, has escaped assessment for any assessment year: Provided also that the Assessing Officer may assess or reassess such income, other than the income involving matters which are the subject matters of any appeal, reference or revision, which is chargeable to tax and has escaped assessment. Explanation 1.—Production before the Assessing Officer of account books or other evidence from which material evidence could with due diligence have been discovered by the Assessing Officer will not necessarily amount to disclosure within the meaning of the foregoing proviso. Explanation 2.—For the purposes of this section, the following shall also be deemed to be cases where income chargeable to tax has escaped assessment, namely:— (a) where no return of income has been furnished by the assessee although his total income or the total income of any other person in respect of which he is assessable under this Act during the previous year exceeded the maximum amount which is not chargeable to income-tax; assessee although his total income or the total income of any other person in respect of which he is assessable under this Act during the previous year exceeded the maximum amount which is not chargeable to income-tax; (b) where a return of income has been furnished by the assessee but no assessment has been made and it is noticed by the Assessing Officer that the assessee has understated the income or has claimed excessive loss, deduction, allowance or relief in the return; assessee but no assessment has been made and it is noticed by the Assessing Officer that the assessee has understated the income or has claimed excessive loss, deduction, allowance or relief in the return; (ba) where the assessee has failed to furnish a report in respect of any international transaction which he was so required under section 92E; respect of any international transaction which he was so required under section 92E; (c) where an assessment has been made, but— (i) income chargeable to tax has been underassessed; or (ii) such income has been assessed at too low a rate; or (iii) such income has been made the subject of excessive relief under this Act; or relief under this Act; or (iv) excessive loss or depreciation allowance or any other allowance under this Act has been computed; allowance under this Act has been computed; (ba) where the assessee has failed to furnish a report in respect of any international transaction which he was so required under section 92E; respect of any international transaction which he was so required under section 92E; (c) where an assessment has been made, but— (i) income chargeable to tax has been underassessed; or (ii) such income has been assessed at too low a rate; or (iii) such income has been made the subject of excessive relief under this Act; or relief under this Act; or (iv) excessive loss or depreciation allowance or any other allowance under this Act has been computed; allowance under this Act has been computed; (ca) where a return of income has not been furnished by the assessee or a return of income has been furnished by him and on the basis of information or document received from the prescribed income-tax authority, under sub-section (2) of section 133C, it is noticed by the Assessing Officer that the income of the assessee exceeds the maximum amount not chargeable to tax, or as the case may be, the assessee has understated the income or has claimed excessive loss, deduction, allowance or relief in the return; assessee or a return of income has been furnished by him and on the basis of information or document received from the prescribed income-tax authority, under sub-section (2) of section 133C, it is noticed by the Assessing Officer that the income of the assessee exceeds the maximum amount not chargeable to tax, or as the case may be, the assessee has understated the income or has claimed excessive loss, deduction, allowance or relief in the return; (d) where a person is found to have any asset (including financial interest in any entity) located outside India. financial interest in any entity) located outside India. Explanation 3.—For the purpose of assessment or reassessment under this section, the Assessing Officer may assess or reassess the income in respect of any issue, which has escaped assessment, and such issue comes to his notice subsequently in the course of the proceedings under this section, notwithstanding that the reasons for such issue have not been included in the reasons recorded under subsection (2) of section 148. Explanation 4.—For the removal of doubts, it is hereby clarified that the provisions of this section, as amended by the Finance Act, 2012, shall also be applicable for any assessment year beginning on or before the 1[st] day of April, 2012. Issue of notice where income has escaped assessment- 148.(1) Before making the assessment, reassessment or recomputation under section 147, the Assessing Officer shall serve on the assessee a notice requiring him to furnish within such period, as may be specified in the notice, a return of his income or the income of any other person in respect of which he is assessable under this Act during the previous year corresponding to the relevant assessment year, in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed; and the provisions of this Act shall, so far as may be, apply accordingly as if such return were a return required to be furnished under section 139: Provided that in a case— (a) where a return has been furnished during the period commencing on the 1[st] day of October, 1991 and ending on the 30[th] day of September, 2005 in response to a notice served under this section, and commencing on the 1[st] day of October, 1991 and ending on the 30[th] day of September, 2005 in response to a notice served under this section, and verified in the prescribed manner and setting forth such other particulars as may be prescribed; and the provisions of this Act shall, so far as may be, apply accordingly as if such return were a return required to be furnished under section 139: Provided that in a case— (a) where a return has been furnished during the period commencing on the 1[st] day of October, 1991 and ending on the 30[th] day of September, 2005 in response to a notice served under this section, and commencing on the 1[st] day of October, 1991 and ending on the 30[th] day of September, 2005 in response to a notice served under this section, and (b) subsequently a notice has been served under sub-section (2) of section 143 after the expiry of twelve months specified in the proviso to subsection (2) of section 143, as it stood immediately before the amendment of said sub-section by the Finance Act, 2002 (20 of 2002) but before the expiry of the time limit for making the assessment, re-assessment or recomputation as specified in sub-section (2) of section 153, every such notice referred to in this clause shall be deemed to be a valid notice: section (2) of section 143 after the expiry of twelve months specified in the proviso to subsection (2) of section 143, as it stood immediately before the amendment of said sub-section by the Finance Act, 2002 (20 of 2002) but before the expiry of the time limit for making the assessment, re-assessment or recomputation as specified in sub-section (2) of section 153, every such notice referred to in this clause shall be deemed to be a valid notice: Provided further that in a case— (a) where a return has been furnished during the period commencing on the 1[st] day of October, 1991 and ending on the 30[th] day of September, 2005, in response to a notice served under this section, and commencing on the 1[st] day of October, 1991 and ending on the 30[th] day of September, 2005, in response to a notice served under this section, and (b) subsequently a notice has been served under clause (ii) of sub-section (2) of section 143 after the expiry of twelve months specified in the proviso to clause (ii) of sub-section (2) of section 143, but before the expiry of the time limit for making the assessment, reassessment or recomputation as specified in sub-section (2) of section 153, every such notice referred to in this clause shall be deemed to be a valid notice. of sub-section (2) of section 143 after the expiry of twelve months specified in the proviso to clause (ii) of sub-section (2) of section 143, but before the expiry of the time limit for making the assessment, reassessment or recomputation as specified in sub-section (2) of section 153, every such notice referred to in this clause shall be deemed to be a valid notice. Explanation.—For the removal of doubts, it is hereby declared that nothing contained in the first proviso or the second proviso shall apply to any return which has been furnished on or after the 1[st] day of October, 2005 in response to a notice served under this section. (2) The Assessing Officer shall, before issuing any notice under this section, record his reasons for doing so. Time limit for notice- 149.(1) No notice under section 148 shall be issued for the relevant assessment year,— (a) if four years have elapsed from the end of the relevant assessment year, unless the case falls under clause (b) or clause (c); assessment year, unless the case falls under clause (b) or clause (c); (b) if four years, but not more than six years, have elapsed from the end of the relevant assessment year unless the income chargeable to tax which has escaped assessment amounts to or is likely to amount to one lakh rupees or more for that year; from the end of the relevant assessment year unless the income chargeable to tax which has escaped assessment amounts to or is likely to amount to one lakh rupees or more for that year; Time limit for notice- 149.(1) No notice under section 148 shall be issued for the relevant assessment year,— (a) if four years have elapsed from the end of the relevant assessment year, unless the case falls under clause (b) or clause (c); assessment year, unless the case falls under clause (b) or clause (c); (b) if four years, but not more than six years, have elapsed from the end of the relevant assessment year unless the income chargeable to tax which has escaped assessment amounts to or is likely to amount to one lakh rupees or more for that year; from the end of the relevant assessment year unless the income chargeable to tax which has escaped assessment amounts to or is likely to amount to one lakh rupees or more for that year; (c) if four years, but not more than sixteen years, have elapsed from the end of the relevant assessment year unless the income in relation to any asset (including financial interest in any entity) located outside India, chargeable to tax, has escaped assessment. elapsed from the end of the relevant assessment year unless the income in relation to any asset (including financial interest in any entity) located outside India, chargeable to tax, has escaped assessment. Explanation.—In determining income chargeable to tax which has escaped assessment for the purposes of this subsection, the provisions of Explanation 2 of section 147 shall apply as they apply for the purposes of that section. (2) The provisions of sub-section (1) as to the issue of notice shall be subject to the provisions of section 151. (3) If the person on whom a notice under section 148 is to be served is a person treated as the agent of a nonresident under section 163 and the assessment, reassessment or recomputation to be made in pursuance of the notice is to be made on him as the agent of such non-resident, the notice shall not be issued after the expiry of a period of six years from the end of the relevant assessment year. Explanation.—For the removal of doubts, it is hereby clarified that the provisions of sub-sections (1) and (3), as amended by the Finance Act, 2012, shall also be applicable for any assessment year beginning on or before the 1[st] day of April, 2012. Sanction for issue of notice- 151.(1) No notice shall be issued under section 148 by an Assessing Officer, after the expiry of a period of four years from the end of the relevant assessment year, unless the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner is satisfied, on the reasons recorded by the Assessing Officer, that it is a fit case for the issue of such notice. (2) In a case other than a case falling under sub-section (1), no notice shall be issued under section 148 by an Assessing Officer, who is below the rank of Joint Commissioner, unless the Joint Commissioner is satisfied, on the reasons recorded by such Assessing Officer, that it is a fit case for the issue of such notice. (3) For the purposes of sub-section (1) and sub-section (2), the Principal Chief Commissioner or the Chief Commissioner or the Principal Commissioner or the Commissioner or the Joint Commissioner, as the case may be, being satisfied on the reasons recorded by the Assessing Officer about fitness of a case for the issue of notice under section 148, need not issue such notice himself.” 3.1. In pursuance to the power vested under section 3 of the Relaxation Act, 2020, the Central Government issued following Notifications inter-alia extending the time lines prescribed under section 149 for issuance of reassessment notices under section 148 of the Income Tax Act, 1961: The Explanations to the Notifications dated 31[st] March, 2021 and 27[th] April, 2021 issued under section 3 of the Relaxation Act, 2020 also stipulated that the provisions, as they existed prior to the amendment by the Finance Act, 2021, shall apply to the reassessment proceedings initiated thereunder. 3.1. In pursuance to the power vested under section 3 of the Relaxation Act, 2020, the Central Government issued following Notifications inter-alia extending the time lines prescribed under section 149 for issuance of reassessment notices under section 148 of the Income Tax Act, 1961: The Explanations to the Notifications dated 31[st] March, 2021 and 27[th] April, 2021 issued under section 3 of the Relaxation Act, 2020 also stipulated that the provisions, as they existed prior to the amendment by the Finance Act, 2021, shall apply to the reassessment proceedings initiated thereunder. 3.2. The Parliament introduced reformative changes to Sections 147 to 151 of the Income Tax Act, 1961 governing reassessment proceedings by way of the Finance Act, 2021, which was passed on 28[th] March, 2021. The substituted sections 147 to 149 and section 151 applicable w.e.f. 01.04.2021, passed in the Finance Act, 2021, are as under:— Income escaping assessment- “147. If any income chargeable to tax, in the case of an assessee, has escaped assessment for any assessment year, the Assessing Officer may, subject to the provisions of sections 148 to 153, assess or reassess such income or recompute the loss or the depreciation allowance or any other allowance or deduction for such assessment year (hereafter in this section and in sections 148 to 153 referred to as the relevant assessment year). Explanation.—For the purposes of assessment or reassessment or recomputation under this section, the Assessing Officer may assess or reassess the income in respect of any issue, which has escaped assessment, and such issue comes to his notice subsequently in the course of the proceedings under this section, irrespective of the fact that the provisions of section 148A have not been complied with.”. Issue of notice where income has escaped assessment- 148. Before making the assessment, reassessment or recomputation under section 147, and subject to the provisions of section 148A, the Assessing Officer shall serve on the assessee a notice, along with a copy of the order passed, if required, under clause (d) of section 148A, requiring him to furnish within such period, as may be specified in such notice, a return of his income or the income of any other person in respect of which he is assessable under this Act during the previous year corresponding to the relevant assessment year, in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed; and the provisions of this Act shall, so far as may be, apply accordingly as if such return were a return required to be furnished under section 139: Provided that no notice under this section shall be issued unless there is information with the Assessing Officer which suggests that the income chargeable to tax has escaped assessment in the case of the assessee for the relevant assessment year and the Assessing Officer has obtained prior approval of the specified authority to issue such notice. Explanation 1.—For the purposes of this section and section 148A, the information with the Assessing Officer which suggests that the income chargeable to tax has escaped assessment means,— (i) any information flagged in the case of the assessee for the relevant assessment year in accordance with the risk management strategy formulated by the Board from time to time; the relevant assessment year in accordance with the risk management strategy formulated by the Board from time to time; (ii) any final objection raised by the Comptroller and Auditor-General of India to the effect that the assessment in the case of the assessee for the relevant assessment year has not been made in accordance with the provisions of this Act. General of India to the effect that the assessment in the case of the assessee for the relevant assessment year has not been made in accordance with the provisions of this Act. (i) any information flagged in the case of the assessee for the relevant assessment year in accordance with the risk management strategy formulated by the Board from time to time; the relevant assessment year in accordance with the risk management strategy formulated by the Board from time to time; (ii) any final objection raised by the Comptroller and Auditor-General of India to the effect that the assessment in the case of the assessee for the relevant assessment year has not been made in accordance with the provisions of this Act. General of India to the effect that the assessment in the case of the assessee for the relevant assessment year has not been made in accordance with the provisions of this Act. Explanation 2.—For the purposes of this section, where,— (i) a search is initiated under section 132 or books of account, other documents or any assets are requisitioned under section 132A, on or after the 1[st] day of April, 2021, in the case of the assessee; or account, other documents or any assets are requisitioned under section 132A, on or after the 1[st] day of April, 2021, in the case of the assessee; or (ii) a survey is conducted under section 133A, other than under sub-section (2A) or sub-section (5) of that section, on or after the 1[st] day of April, 2021, in the case of the assessee; or under sub-section (2A) or sub-section (5) of that section, on or after the 1[st] day of April, 2021, in the case of the assessee; or (iii) the Assessing Officer is satisfied, with the prior approval of the Principal Commissioner or Commissioner, that any money, bullion, jewellery or other valuable article or thing, seized or requisitioned under section 132 or under section 132A in case of any other person on or after the 1[st] day of April, 2021, belongs to the assessee; or of the Principal Commissioner or Commissioner, that any money, bullion, jewellery or other valuable article or thing, seized or requisitioned under section 132 or under section 132A in case of any other person on or after the 1[st] day of April, 2021, belongs to the assessee; or (iv) the Assessing Officer is satisfied, with the prior approval of Principal Commissioner or Commissioner, that any books of account or documents, seized or requisitioned under section 132 or section 132A in case of any other person on or after the 1[st] day of April, 2021, pertains or pertain to, or any information contained therein, relate to, the assessee, of Principal Commissioner or Commissioner, that any books of account or documents, seized or requisitioned under section 132 or section 132A in case of any other person on or after the 1[st] day of April, 2021, pertains or pertain to, or any information contained therein, relate to, the assessee, the Assessing Officer shall be deemed to have information which suggests that the income chargeable to tax has escaped assessment in the case of the assessee for the three assessment years immediately preceding the assessment year relevant to the previous year in which the search is initiated or books of account, other documents or any assets are requisitioned or survey is conducted in the case of the assessee or money, bullion, jewellery or other valuable article or thing or books of account or documents are seized or requisitioned in case of any other person. Explanation 3.—For the purposes of this section, specified authority means the specified authority referred to in section 151.” Conducting inquiry, providing opportunity before issue of notice under section 148 - “148A. The Assessing Officer shall, before issuing any notice under section 148,— (a) conduct any enquiry, if required, with the prior approval of specified authority, with respect to the information which suggests that the income chargeable to tax has escaped assessment; of specified authority, with respect to the information which suggests that the income chargeable to tax has escaped assessment; Explanation 3.—For the purposes of this section, specified authority means the specified authority referred to in section 151.” Conducting inquiry, providing opportunity before issue of notice under section 148 - “148A. The Assessing Officer shall, before issuing any notice under section 148,— (a) conduct any enquiry, if required, with the prior approval of specified authority, with respect to the information which suggests that the income chargeable to tax has escaped assessment; of specified authority, with respect to the information which suggests that the income chargeable to tax has escaped assessment; (b) provide an opportunity of being heard to the assessee, with the prior approval of specified authority, by serving upon him a notice to show cause within such time, as may be specified in the notice, being not less than seven days and but not exceeding thirty days from the date on which such notice is issued, or such time, as may be extended by him on the basis of an application in this behalf, as to why a notice under section 148 should not be issued on the basis of information which suggests that income chargeable to tax has escaped assessment in his case for the relevant assessment year and results of enquiry conducted, if any, as per clause (a); with the prior approval of specified authority, by serving upon him a notice to show cause within such time, as may be specified in the notice, being not less than seven days and but not exceeding thirty days from the date on which such notice is issued, or such time, as may be extended by him on the basis of an application in this behalf, as to why a notice under section 148 should not be issued on the basis of information which suggests that income chargeable to tax has escaped assessment in his case for the relevant assessment year and results of enquiry conducted, if any, as per clause (a); (c) consider the reply of assessee furnished, if any, in response to the show-cause notice referred to in clause (b); response to the show-cause notice referred to in clause (b); (d) decide, on the basis of material available on record including reply of the assessee, whether or not it is a fit case to issue a notice under section 148, by passing an order, with the prior approval of specified authority, within one month from the end of the month in which the reply referred to in clause (c) is received by him, or where no such reply is furnished, within one month from the end of the month in which time or extended time allowed to furnish a reply as per clause (b) expires: including reply of the assessee, whether or not it is a fit case to issue a notice under section 148, by passing an order, with the prior approval of specified authority, within one month from the end of the month in which the reply referred to in clause (c) is received by him, or where no such reply is furnished, within one month from the end of the month in which time or extended time allowed to furnish a reply as per clause (b) expires: Provided that the provisions of this section shall not apply in a case where,— (a) a search is initiated under section 132 or books of account, other documents or any assets are requisitioned under section 132A in the case of the assessee on or after the 1[st] day of April, 2021; or account, other documents or any assets are requisitioned under section 132A in the case of the assessee on or after the 1[st] day of April, 2021; or Provided that the provisions of this section shall not apply in a case where,— (a) a search is initiated under section 132 or books of account, other documents or any assets are requisitioned under section 132A in the case of the assessee on or after the 1[st] day of April, 2021; or account, other documents or any assets are requisitioned under section 132A in the case of the assessee on or after the 1[st] day of April, 2021; or (b) the Assessing Officer is satisfied, with the prior approval of the Principal Commissioner or Commissioner that any money, bullion, jewellery or other valuable article or thing, seized in a search under section 132 or requisitioned under section 132A, in the case of any other person on or after the 1[st] day of April, 2021, belongs to the assessee; or of the Principal Commissioner or Commissioner that any money, bullion, jewellery or other valuable article or thing, seized in a search under section 132 or requisitioned under section 132A, in the case of any other person on or after the 1[st] day of April, 2021, belongs to the assessee; or (c) the Assessing Officer is satisfied, with the prior approval of the Principal Commissioner or Commissioner that any books of account or documents, seized in a search of the Principal Commissioner or Commissioner that any books of account or documents, seized in a search under section 132 or requisitioned under section 132A, in case of any other person on or after the 1[st] day of April, 2021, pertains or pertain to, or any information contained therein, relate to, the assessee. Explanation.—For the purposes of this section, specified authority means the specified authority referred to in section 151.” Time limit for notice- “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); 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 account 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: from the end of the relevant assessment year unless the Assessing Officer has in his possession books of account 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 1[st] 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 sub-section (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 31[st] 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 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 31[st] 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 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 subsection, “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.’ Sanction for issue of notice- “151. Specified authority for the purposes of section 148 and section 148A shall be— (i) Principal Commissioner or Principal Director or Commissioner or Director, if three years or less than three years have elapsed from the end of the relevant assessment year; Commissioner or Director, if three years or less than three years have elapsed from the end of the relevant assessment year; (ii) Principal Chief Commissioner or Principal Director General or where there is no Principal Chief Commissioner or Principal Director General, Chief Commissioner or Director General, if more than three years have elapsed from the end of the relevant assessment year.” General or where there is no Principal Chief Commissioner or Principal Director General, Chief Commissioner or Director General, if more than three years have elapsed from the end of the relevant assessment year.” 3.3. In sub-section (1) of section 151A of the Income Tax Act, in the opening portion, after the words and figures “issuance of notice under section 148”, the words, figures and letter “or conducting of enquiries or issuance of show-cause notice or passing of order under section 148A” are inserted. 4. Despite the substituted sections 147 to 151 of the Income Tax Act, 1961 by the Finance Act, 2021 coming into force on 1[st] April, 2021, according to learned ASG, the Revenue issued approximately 90,000 reassessment notices to the respective assessees under the erstwhile sections 148 to 151 thereof by relying on explanations in the Notifications dated 31[st] March, 2021 and 27[th] April, 2021. The said reassessment notices were the subject matter of writ petitions before the various High Courts. The respective High Courts have held that all the respective reassessment notices issued under the erstwhile sections 148 to 151 of the Income Tax Act, 1961, are bad in law as the reassessment notices issued after 01.04.2021 are governed by the substituted sections 147 to 151 of the Income Tax Act, 1961, substituted by the Finance Act, 2021. Consequently, the respective High Courts have set aside all the reassessment notices issued under section 148 of the Income Tax Act, 1961 wherever assailed. The common judgment and order passed by the High Court of Allahabad is the subject matter of the present appeals. However, the High Court of Delhi in its common judgment and order dated 15.12.2021 while quashing the respective reassessment notices has also observed that if the law permits the revenue to take further steps in the matter they shall be at liberty to do so. 5. We have heard Shri N. Venkataraman, learned ASG app