Wpt v. The Principal Commissioner Of Income Tax, Raipur, Aaykar Bhavan, Civillines, Raipur Chhattisgarh,Lines, Raipur Chhattisgarh

HIGH COURT OF CHHATTISGARH AT BILASPUR WPT No. 170 of 2021 Smt. Sangeet Madhuri Lakra W/o Ajay Lakra, Aged About 36 YearsOccupation Shiksha Karmi Gr 1, R/o Village Silma, Post Batauli, TahsilBatauli, District Sarguja, Civil And Revenue District Sarguja - (C.G.)Presently Residing At Math Para, Near City Bus Stand, Ambikapur,District Sarguja Chhattisgarh ---- Petitioner Versus 1. The Principal Commissioner Of Income Tax, Raipur, Aaykar Bhavan, CivilLines, Raipur Chhattisgarh,Lines, Raipur Chhattisgarh, 2. The Income Tax Officer, Income Tax Office, Kharsiya Marg, Near AmbikaPetrol Pump, Ambikapur, ChhattisgarhPetrol Pump, Ambikapur, Chhattisgarh ---- Respondents For Petitioner For Respondents : Shri Ashok Patil, Advocate. : Shri Ajay Kumrani, Advocate. 08/09/2021 Hon'ble Shri Justice Goutam Bhaduri Order On Board Heard. 1.Default as pointed out by the Registry is ignored. 2.Challenge in this petition is to the notice dated 28.06.2021 (Annexure P-1) issued under Section 148 of the Income Tax Act, 1961. 1) issued under Section 148 of the Income Tax Act, 1961. 3.Learned counsel for the petitioner would submit that the petitioner hasfiled the income tax return for the Assessment Year 2017-18 andFinancial Year 2016-17. Subsequent thereto on the basis of someinformation available initially a scrutiny was done however noconcealment was found but again a notice under Section 148 of theIncome Tax Act, 1961 has been issued. It is submitted that on the datei.e. on 28.06.2021 when the notice under Section 148 of the Income TaxAct (hereinafter referred to as “Act of 1961”) is issued, the power to issuethe notice was preceded with a new provision of law and thereby Section148 is to read with Section 148-A of the Income Tax Act, 1961. He wouldfiled the income tax return for the Assessment Year 2017-18 andFinancial Year 2016-17. Subsequent thereto on the basis of someinformation available initially a scrutiny was done however noconcealment was found but again a notice under Section 148 of theIncome Tax Act, 1961 has been issued. It is submitted that on the datei.e. on 28.06.2021 when the notice under Section 148 of the Income TaxAct (hereinafter referred to as “Act of 1961”) is issued, the power to issuethe notice was preceded with a new provision of law and thereby Section148 is to read with Section 148-A of the Income Tax Act, 1961. He would 4. 4. submit that as per the amended Finance Act, 2021, which was publishedin the Gazette on 28[th] March, 2021, section 2 to 88 was notified to comeinto force on 1[st] day of April 2021 and accordingly the new Section 148Awas inserted which prescribed that before issuing the notice underSection 148 of the Income Tax Act, the Assessing Officer was bound toconduct an enquiry giving an opportunity of hearing to the assessee withthe prior approval of specified authority and show cause notice in detailwas necessary specifying particular date for hearing. He would submitthat since the operation of Section 148A came into being on 01[st] April,2021, as such, the notice issued to the petitioner on 28.06.2021 underSection 148 of the Income Tax Act, without following the procedure underSection 148A without giving an opportunity of hearing would be illegaland contrary to the provisions of Section 148A and it cannot besustained. It is further submitted that the respondents though haveplaced reliance on certain notification of Ministry of Finance but when thelaw has been enacted by the Parliament then in such case thenotification issued by the Ministry of Finance would not over ride even toextend the period of operation of section of the old Act of Section 148 ofthe Income Tax Act. It is stated Section 148A came in between whichrequires certain obligation to be performed by the Assessing Officer,therefore without giving any opportunity of hearing the notice underSection 148 of the Act, 1961 would be alleged. He therefore submits thatthe impugned notice is illegal and is liable to be quashed. Per contra, learned counsel for the respondents would submit thatbecause of pandemic and lock down of all activities including the normalworking of office, lot of people could not file their return and submit thenecessary papers with the department in respect of their income tax. Assuch, the Ministry of Finance in exercise of power under the Finance Actissued the notification whereby the application of old provisions ofSection 148 of the Income Tax Act was extended initially uptill 30[th] April, 5. 6. 2021 and thereafter was further extended uptill 30[th] day of June, 2021.He would submit therefore the notice issued by Annexure P-1 dated28.06.2021 would be within its ambit of the power of department in theextended time of it's operation till 30.06.2021. Consequently, the noticeunder Section 148 of the Income Tax Act is completely valid and legal. 5. 6. 2021 and thereafter was further extended uptill 30[th] day of June, 2021.He would submit therefore the notice issued by Annexure P-1 dated28.06.2021 would be within its ambit of the power of department in theextended time of it's operation till 30.06.2021. Consequently, the noticeunder Section 148 of the Income Tax Act is completely valid and legal. Perused the documents. The notice under Section 148 of the Income TaxAct was issued for Assessment Year of 2017-18. The notice was issuedon 28.06.2021. The grievance of the petitioner that the notice of likenature could have been issued till the cut off date 30.03.2021 assubsequent thereto the new Section 148A intervened before issuance ofnotice directly under Section 148 of the Income Tax Act. The FinanceAct, 2021 was notified on 28[th] March, 2021 which purports that Section 2to 88 shall come into force on the 1[st] day of April, 2021 and Section 108to 123 shall come into force on such date Central Government notifies inofficial Gazette to appoint. The relevant part wherein Section 148A of theIncome Tax Act is enveloped is covered under Section 42 of the FinanceAct, 2021. By introduction of Section 148A, it was mandated that theAssessing Officer before issuing any notice under Section 148 shallconduct an enquiry, if required, with the prior approval of specifiedauthority, provide an opportunity of being heard and show cause noticeto be served and time was also prescribed. The question here in thiscase comes for consideration that whether with the promulgation of theAct on 1[st] day of April, 2021, whether the notice directly issued underSection 148 on 28.06.2021 is valid or not as bar of 148A was created byinsertion of Section on 01[st] April, 2021. In order to get the answer, thereference is made to the notification dated 31.03.2021 and 27.04.2021.For the reasons of lock down during pandemic as all the activities likefiling of return, assessment were arrested, the Parliament enacted theTaxation & Others Laws (Relaxation & Amendment of Certain Provisions)Act, 2020. In such Act any time limit specified or prescribed or notified 7. under specified Act between 20[th] March 2020 to 31[st] December 2021 orother date thereafter, after December 2021 Central Government weregiven the power to notify. For the sake of brevity, the relevant part ofrelaxation of certain provisions of specified Act is reproduced hereinbelow : “3. (1) Where, any time-limit has been specified in, orprescribed or notified under, the specified Act which fallsduring the period from the 20[th] day of March, 2020 to the31[st] day of December, 2020, or such other date after the31[st] day of December, 2020, as the Central Governmentmay, by notification, specify in this behalf, for thecompletion or compliance of such action as— (a) completion of any proceeding or passing ofany order or issuance of any notice, intimation,notification, sanction or approval, or such other action, bywhatever name called, by any authority, commission ortribunal, by whatever name called, under the provisions ofthe specified Act;” “3. (1) Where, any time-limit has been specified in, orprescribed or notified under, the specified Act which fallsduring the period from the 20[th] day of March, 2020 to the31[st] day of December, 2020, or such other date after the31[st] day of December, 2020, as the Central Governmentmay, by notification, specify in this behalf, for thecompletion or compliance of such action as— (a) completion of any proceeding or passing ofany order or issuance of any notice, intimation,notification, sanction or approval, or such other action, bywhatever name called, by any authority, commission ortribunal, by whatever name called, under the provisions ofthe specified Act;” The necessity occurred because of the Covid pandemic lock down in thebackdrop of the fact that few of the assessee could not file their return.Likewise since the offices were closed, the department also could notperform the statutory duty under the Income Tax Act. Considering thecomplexity, the Parliament thought it proper to delegate the Ministry ofFinance, the date of applicability of the amended section. The delegationis not a self-contained and complete Act and is only been made in theinterest of flexibility and smooth working of the Act, and the delegationtherefore was a practical necessity. The Ministry of Finance have beendelegated with such power therefore this delegation can always beconsidered to be a sound basis for administrative efficiency and it doesnot by itself amount to abdication of power. Reading of both thenotification dated 31.03.2021 and 27.04.2021 whereby the application ofsection 148 of the Income Tax Act, which was originally existing before 8. the amendment was deferred meaning thereby the reassessmentmechanism as prevalent prior to 31[st] March, 2021 was saved by thenotification. The notification is made by the Ministry of Finance, CentralGovernment considering the fact of lock down all over India, it can bealways be assumed that the deferment of the application of section 148Awas done in a control way. It is settled proposition that any modificationof the Executives implies certain amount of discretion and to beexercised with the aid of the legislative policy of the Act and cannot travelbeyond it and run counter to it or certainly change the essential features,the identity, structure or the policy of the Act. Therefore, this legislativedelegation which is exercised by the Central Government by notificationto uphold the mechanism as prevailed prior to March, 2021 is not inconflict with any Act and notification by executive i.e. Ministry of Financewould be the part of legislative function. In likewise situation the principle as laid down in case of A.K.Roy v.Union of India reported in AIR 1982 SC 710, the Supreme Court heldthat the Constitution (Fourty-Fourth) Amendment Act, 1978, whichconferred power on the Executive to bring the provisions of that Act intoforce did not suffer from excessive delegation of legislative power. TheCourt observed that the power to issue a notification for bringing intoforce the provisions of a constitutional amendment is not a constituentpower, because it does not carry with it the power to amend theConstitution in any manner. Likewise in this case, the delegation to theexecutive with conferment of the power to the Central Government tospecify the date by way of relaxation of time limit, the main purpose ofthe Finance Act is not defeated. Therefore, it would be a conditionallegislation. As the legislature has declared the Act and has given thepower to executive to extend the implementation by way of notification.The legislature has resorted to conditional legislation to give the power toexecutive, in what circumstances the law should become operative or when the operation should be extended would be covered by doctrine ofthe conditional legislation. when the operation should be extended would be covered by doctrine ofthe conditional legislation. Under the circumstances by the notifications the operation of Section 148of the Income Tax Act was extended, thereby deferment of Section 148Awas done. It was done by the Ministry of Finance by way of conditionallegislation in the peculiar circumstances which arose during thepandemic and lock down and Central Government can not be said tohave encroached upon turf of Parliament. For sake of brevity, both the notifications are reproduced herein below :- (A) MINISTRY OF FINANCE(Department of Revenue)(CENTRAL BOARD OF DIRECT TAXES)NOTIFICATIONNew Delhi, the 31[st] March, 2021 S.O. 1432(E).—In exercise of the powers conferred by sub-section (1) of section 3 of the Taxation and Other Laws(Relaxation and Amendment of Certain Provisions) Act, 2020 (38of 2020) (hereinafter referred to as the said Act), and in partialmodification of the notification of the Government of India in theMinistry of Finance, (Department of Revenue) No.93/2020 datedthe 31[st] December, 2020, published in the Gazette of India,Extraordinary, Part II, Section 3, Sub-section (ii), vide number S.O.4805(E), dated the 31[st] December, 2020, the Central Governmenthereby specifies that,–– (A) where the specified Act is the Income-tax Act, 1961 (43 of1961) (hereinafter referred to as the Income-tax Act) and, — (a) the completion of any action referred to in clause(a) of sub-section (1) of section 3 of the Act relates topassing of an order under sub-section (13) of section144C or issuance of notice under section 148 as pertime-limit specified in section 149 or sanction undersection 151 of the Income-tax Act, — (i) the 31[st] day of March, 2021 shall be the end date ofthe period during which the time limit, specified in, orprescribed or notified under, the Income-tax Act fallsfor the completion of such action; and (ii) the 30[th] day of April, 2021 shall be the end date towhich the time-limit for the completion of such actionshall stand extended. Explanation.— For the removal of doubts, it is herebyclarified that for the purposes of issuance of notice undersection 148 as per time-limit specified in section 149 orsanction under section 151 of the Income-tax Act, under thissub-clause, the provisions of section 148, section 149 and section 151 of the Income-tax Act, as the case may be, asthey stood as on the 31[st] day of March 2021, before thecommencement of the Finance Act, 2021, shall apply. (b) the compliance of any action referred to in clause (b) ofsub-section (1) of section 3 of the said Act relates tointimation of Aadhaar number to the prescribed authorityunder sub-section (2) of section 139AA of the Income-taxAct, the time-limit for compliance of such action shall standextended to the 30th day of June, 2021. (B) where the specified Act is the Chapter VIII of the Finance Act,2016 (28 of 2016) (hereinafter referred to as the Finance Act) andthe completion of any action referred to in clause (a) of sub-section (1) of section 3 of the said Act relates to sending anintimation under sub-section (1) of section 168 of the Finance Act,— (i) the 31[st] day of March, 2021 shall be the end date of theperiod during which the time limit, specified in, or prescribedor notified under, the Finance Act falls for the completion ofsuch action; and (ii) the 30[th] day of April, 2021 shall be the end date to whichthe time-limit for the completion of such action shall standextended. [Notification No. 20/2021/F. No. 370142/35/2020-TPL]SHEFALI SINGH, Under Secy., Tax Policy and Legislation Division Note : The principal notification was published in the Gazette ofIndia, Extraordinary, Part II, Section 3,Sub-section (ii) vide S.O.No. 4805 dated 31[st] December, 2020. (B) MINISTRY OF FINANCE(Department of Revenue)(CENTRAL BOARD OF DIRECT TAXES)NOTIFICATIONNew Delhi, the 27th April, 2021 (i) the 31[st] day of March, 2021 shall be the end date of theperiod during which the time limit, specified in, or prescribedor notified under, the Finance Act falls for the completion ofsuch action; and (ii) the 30[th] day of April, 2021 shall be the end date to whichthe time-limit for the completion of such action shall standextended. [Notification No. 20/2021/F. No. 370142/35/2020-TPL]SHEFALI SINGH, Under Secy., Tax Policy and Legislation Division Note : The principal notification was published in the Gazette ofIndia, Extraordinary, Part II, Section 3,Sub-section (ii) vide S.O.No. 4805 dated 31[st] December, 2020. (B) MINISTRY OF FINANCE(Department of Revenue)(CENTRAL BOARD OF DIRECT TAXES)NOTIFICATIONNew Delhi, the 27th April, 2021 S.O. 1703(E).— In exercise of the powers conferred by sub-section (1) of section 3 of the Taxation and Other Laws (Relaxationand Amendment of Certain Provisions) Act, 2020 (38 of 2020)(hereinafter referred to as the said Act), and in partial modificationof the notifications of the Government of India in the Ministry ofFinance, (Department of Revenue) No. 93/2020 dated the 31stDecember, 2020, No. 10/2021 dated the 27[th] February, 2021 andNo. 20/2021 dated the 31[st] March, 2021, published in the Gazetteof India, Extraordinary, Part-II, Section 3, Subsection (ii), videnumber S.O. 4805(E), dated the 31[st] December, 2020, videnumber S.O. 966(E) dated the 27[th] February, 2021 and videnumber S.O. 1432(E) dated the 31[st] March, 2021, respectively(hereinafter referred to as the said notifications), the CentralGovernment hereby specifies for the purpose of sub-section (1) ofsection 3 of the said Act that, — (A) where the specified Act is the Income-tax Act, 1961 (43 of1961) (hereinafter referred to as the Income-tax Act) and, — (a) the completion of any action, referred to in clause (a) ofsub-section (1) of section 3 of the said Act, relates to passingof any order for assessment or reassessment under theIncome-tax Act, and the time limit for completion of suchaction under section 153 or section 153B thereof, expires onthe 30[th] day of April, 2021 due to its extension by the saidnotifications, such time limit shall further stand extended tothe 30[th] day of June, 2021; (b) the completion of any action, referred to in clause (a) ofsub-section (1) of section 3 of the said Act, relates to passingof an order under sub-section (13) of section 144C of theIncome-tax Act or issuance of notice under section 148 asper time-limit specified in section 149 or sanction undersection 151 of the Income-tax Act, and the time limit forcompletion of such action expires on the 30[th] day of April,2021 due to its extension by the said notifications, such timelimit shall further stand extended to the 30[th] day of June,2021. Explanation.— For the removal of doubts, it is hereby clarified thatfor the purposes of issuance of notice under section 148 as pertime-limit specified in section 149 or sanction under section 151 ofthe Income-tax Act, under this sub-clause, the provisions of section148, section 149 and section 151 of the Income-tax Act, as thecase may be, as they stood as on the 31[st] day of March 2021,before the commencement of the Finance Act, 2021, shall apply. (B) where the specified Act is the Chapter VIII of the FinanceAct, 2016 (28 of 2016) (hereinafter referred to as the FinanceAct) and the completion of any action, referred to in clause(a) of sub-section (1) of section 3 of the said Act, relates tosending an intimation under sub-section (1) of section 168 ofthe Finance Act, and the time limit for completion of suchaction expires on the 30[th] day of April, 2021 due to itsextension by the said notifications, such time limit shallfurther stand extended to the 30[th] day of June, 2021. [Notification No. 38 /2021/ F. No. 370142/35/2020-TPL]RAJESH KUMAR BHOOT, Jt. Secy. Tax Policy & LegislationDivision (B) where the specified Act is the Chapter VIII of the FinanceAct, 2016 (28 of 2016) (hereinafter referred to as the FinanceAct) and the completion of any action, referred to in clause(a) of sub-section (1) of section 3 of the said Act, relates tosending an intimation under sub-section (1) of section 168 ofthe Finance Act, and the time limit for completion of suchaction expires on the 30[th] day of April, 2021 due to itsextension by the said notifications, such time limit shallfurther stand extended to the 30[th] day of June, 2021. [Notification No. 38 /2021/ F. No. 370142/35/2020-TPL]RAJESH KUMAR BHOOT, Jt. Secy. Tax Policy & LegislationDivision Note: The principal notification was published in the Gazette ofIndia, Extraordinary, Part II, Section 3, Sub-section (ii) vide S.O.No. 4805 dated 31[st] December, 2020. 10.Reading of the aforesaid notification would show that it was issued inexercise of power conferred under the Taxation and other Laws(Relaxation and Amendment of Certain Provisions) Act, 2020 and timefor issuance of notice under Section 148, the end date was initiallyextended uptill on 30[th] day of April 2021 and subsequently again bynotification dated 27[th] April, 2021 the time limit of 30[th] day of April 2021 was further extended up till 30[th] day of June, 2021. By effect of suchnotification, the individual identity of Section 148, which was prevailingprior to amendment and insertion of section 148A was insulated andsaved uptill 30.06.2021. 11. The pandemic and lock down prevailed all over India. The people couldnot file their return or comply with the various mandate of Income TaxAct. Considering such situation for the benefit of the assessee and tofacilitate the individual to come out of woods the time limit framed underIncome Tax Act was extended. Likewise certain right which was reservedin favour of the Income Tax Department was also preserved and wasextended at parity. Consequently the provisions of Section 148 whichwas prevailing prior to the amendment of Finance Act, 2021 was alsoextended. Here in this case, the power to issue notice under Section 148which was prior to the amendment was also saved and the time wasextended. In a result, the notice issued on 28.06.2021 (Annexure P-1)would also be saved. Therefore, no interference is required to be madein the said issuance of notice and accordingly the petition is dismissed. SdSS Sd/- gouri (Goutam Bhaduri)Judge