Wpt v. Principal Commissioner Of Income Tax Raipur 2 Aayakar Bhavan, Civil Lines, Raipur Chhattisgarh Lines, Raipur Chhattisgarh

HIGH COURT OF CHHATTISGARH AT BILASPUR WPT No. 180 of 2021 Shri Labtund Infrastructure Pvt. Ltd. Ground Floor, Shop No. 10 & 11,Ekatma Parisar, Rajbandha, Maidan, Raipur Chhattisgarh A Co. Regd.Under The Indian Companies Act, 2003, Through Its Director Nitin KumarAgrawal, Aged About 40 Years S/o Shri Gaurishankar Agrawal, R/oRajbandha Manidan Raipur Chhattisgarh Ekatma Parisar, Rajbandha, Maidan, Raipur Chhattisgarh A Co. Regd.Under The Indian Companies Act, 2003, Through Its Director Nitin KumarAgrawal, Aged About 40 Years S/o Shri Gaurishankar Agrawal, R/oRajbandha Manidan Raipur Chhattisgarh ---- Petitioner Versus 1. Principal Commissioner Of Income Tax Raipur 2 Aayakar Bhavan, Civil Lines, Raipur Chhattisgarh Lines, Raipur Chhattisgarh 2. The Assistant Commissioner Income Tax Circle1(1) Civil Lines, Raipur Chhattisgarh Chhattisgarh ---- Respondents For Petitioner : Shri Mool Chand Jain, Advocate For Respondents : Shri Ajay Kumrani on behalf of Shri Amit Chaudhari, AdvocateChaudhari, Advocate Hon'ble Shri Justice Goutam Bhaduri Order On Board 15.09.2021 Heard 1.Challenge in this petition is to the notice dated 25.06.2021,30.06.2021 (Annexure P-1) issued under Section 148 of theIncome Tax Act, 1961. 30.06.2021 (Annexure P-1) issued under Section 148 of theIncome Tax Act, 1961. 2. Learned counsel for the petitioner would submit that the petitionerhas filed the income tax return for the Assessment Year 2015-16,2014-15, 2013-14 and Financial Year 2014-15, 2013-14, 2012-13.Subsequent thereto on the basis of some information availableinitially a scrutiny was done however no concealment was foundbut again a notice under Section 148 of the Income Tax Act, 1961has been issued. It is submitted that on the date i.e. on 25.06.2021,30.06.2021 when the notice under Section 148 of the Income Taxhas filed the income tax return for the Assessment Year 2015-16,2014-15, 2013-14 and Financial Year 2014-15, 2013-14, 2012-13.Subsequent thereto on the basis of some information availableinitially a scrutiny was done however no concealment was foundbut again a notice under Section 148 of the Income Tax Act, 1961has been issued. It is submitted that on the date i.e. on 25.06.2021,30.06.2021 when the notice under Section 148 of the Income Tax Act (hereinafter referred to as “Act of 1961”) is issued, the power toissue the notice was preceded with a new provision of law andthereby Section 148 is to read with Section 148-A of the IncomeTax Act, 1961. He would submit that as per the amended FinanceAct, 2021, which was published in the Gazette on 28[th] March, 2021,section 2 to 88 was notified to come into force on 1[st] day of April2021 and accordingly the new Section 148A was inserted whichprescribed that before issuing the notice under Section 148 of theIncome Tax Act, the Assessing Officer was bound to conduct anenquiry giving an opportunity of hearing to the assessee with theprior approval of specified authority and show cause notice in detailwas necessary specifying particular date for hearing. He wouldsubmit that since the operation of Section 148A came into being on01[st] April, 2021, as such, the notice issued to the petitioner on25.06.2021, 30.06.2021 under Section 148 of the Income Tax Act,without following the procedure under Section 148A without givingan opportunity of hearing would be illegal and contrary to theprovisions of Section 148A and it cannot be sustained. It is furthersubmitted that the respondents though have placed reliance oncertain notification of Ministry of Finance but when the law hasbeen enacted by the Parliament then in such case the notificationissued by the Ministry of Finance would not over ride even toextend the period of operation of section of the old Act of Section148 of the Income Tax Act. It is stated Section 148A came inbetween which requires certain obligation to be performed by theAssessing Officer, therefore without giving any opportunity ofhearing the notice under Section 148 of the Act, 1961 would be alleged. He therefore submits that the impugned notice is illegaland is liable to be quashed. 3. Per contra, learned counsel for the respondents would submit thatbecause of pandemic and lock down of all activities including thenormal working of office, lot of people could not file their return andsubmit the necessary papers with the department in respect of theirincome tax. As such, the Ministry of Finance in exercise of powerunder the Finance Act issued the notification whereby theapplication of old provisions of Section 148 of the Income Tax Actwas extended initially uptill 30[th] April, 2021 and thereafter wasfurther extended uptill 30[th] day of June, 2021. He would submittherefore the notice issued by Annexure P-1 dated 25.06.2021,30.06.2021 would be within its ambit of the power of department inthe extended time of it's operation till 30.06.2021. Consequently,the notice under Section 148 of the Income Tax Act is completelyvalid and legal. because of pandemic and lock down of all activities including thenormal working of office, lot of people could not file their return andsubmit the necessary papers with the department in respect of theirincome tax. As such, the Ministry of Finance in exercise of powerunder the Finance Act issued the notification whereby theapplication of old provisions of Section 148 of the Income Tax Actwas extended initially uptill 30[th] April, 2021 and thereafter wasfurther extended uptill 30[th] day of June, 2021. He would submittherefore the notice issued by Annexure P-1 dated 25.06.2021,30.06.2021 would be within its ambit of the power of department inthe extended time of it's operation till 30.06.2021. Consequently,the notice under Section 148 of the Income Tax Act is completelyvalid and legal. 4. Perused the documents. The notice under Section 148 of theIncome Tax Act was issued for Assessment Year of 2015-16, 2014-15, 2013-14. The notice was issued on 25.06.2021, 30.06.2021.The grievance of the petitioner that the notice of like nature couldhave been issued till the cut off date 30.03.2021 as subsequentthereto the new Section 148A intervened before issuance of noticedirectly under Section 148 of the Income Tax Act. The Finance Act,2021 was notified on 28[th] March, 2021 which purports that Section2 to 88 shall come into force on the 1[st] day of April, 2021 andSection 108 to 123 shall come into force on such date CentralGovernment notifies in official Gazette to appoint. The relevant partIncome Tax Act was issued for Assessment Year of 2015-16, 2014-15, 2013-14. The notice was issued on 25.06.2021, 30.06.2021.The grievance of the petitioner that the notice of like nature couldhave been issued till the cut off date 30.03.2021 as subsequentthereto the new Section 148A intervened before issuance of noticedirectly under Section 148 of the Income Tax Act. The Finance Act,2021 was notified on 28[th] March, 2021 which purports that Section2 to 88 shall come into force on the 1[st] day of April, 2021 andSection 108 to 123 shall come into force on such date CentralGovernment notifies in official Gazette to appoint. The relevant part wherein Section 148A of the Income Tax Act is enveloped iscovered under Section 42 of the Finance Act, 2021. By introductionof Section 148A, it was mandated that the Assessing Officer beforeissuing any notice under Section 148 shall conduct an enquiry, ifrequired, with the prior approval of specified authority, provide anopportunity of being heard and show cause notice to be served andtime was also prescribed. The question here in this case comes forconsideration that whether with the promulgation of the Act on 1[st]day of April, 2021, whether the notice directly issued under Section148 on 25.06.2021, 30.06.2021 is valid or not as bar of 148A wascreated by insertion of Section on 01[st] April, 2021. In order to getthe answer, the reference is made to the notification dated31.03.2021 and 27.04.2021. For the reasons of lock down during pandemic as all the activitieslike filing of return, assessment were arrested, the Parliamentenacted the Taxation & Others Laws (Relaxation & Amendment ofCertain Provisions) Act, 2020. In such Act any time limit specified orprescribed or notified under specified Act between 20[th] March 2020to 31[st] December 2021 or other date thereafter, after December2021 Central Government were given the power to notify. For thesake of brevity, the relevant part of relaxation of certain provisionsof specified Act is reproduced herein below : “3. (1) Where, any time-limit has been specified in, orprescribed or notified under, the specified Act whichfalls during the period from the 20[th] day of March,2020 to the 31[st] day of December, 2020, or such otherdate after the 31[st] day of December, 2020, as theCentral Government may, by notification, specify infalls during the period from the 20[th] day of March,2020 to the 31[st] day of December, 2020, or such otherdate after the 31[st] day of December, 2020, as theCentral Government may, by notification, specify in this behalf, for the completion or compliance of suchaction as— (a) completion of any proceeding orpassing of any order or issuance of any notice,intimation, notification, sanction or approval, or suchother action, by whatever name called, by anyauthority, commission or tribunal, by whatever namecalled, under the provisions of the specified Act;” this behalf, for the completion or compliance of suchaction as— (a) completion of any proceeding orpassing of any order or issuance of any notice,intimation, notification, sanction or approval, or suchother action, by whatever name called, by anyauthority, commission or tribunal, by whatever namecalled, under the provisions of the specified Act;” 6. The necessity occurred because of the Covid pandemic lock downin the backdrop of the fact that few of the assessee could not filetheir return. Likewise since the offices were closed, the departmentalso could not perform the statutory duty under the Income Tax Act.Considering the complexity, the Parliament thought it proper todelegate the Ministry of Finance, the date of applicability of theamended section. The delegation is not a self-contained andcomplete Act and is only been made in the interest of flexibility andsmooth working of the Act, and the delegation therefore was apractical necessity. The Ministry of Finance have been delegatedwith such power therefore this delegation can always beconsidered to be a sound basis for administrative efficiency and itdoes not by itself amount to abdication of power. Reading of boththe notification dated 31.03.2021 and 27.04.2021 whereby theapplication of section 148 of the Income Tax Act, which wasoriginally existing before the amendment was deferred meaningthereby the reassessment mechanism as prevalent prior to 31[st]March, 2021 was saved by the notification. The notification is madeby the Ministry of Finance, Central Government considering thefact of lock down all over India, it can be always be assumed that the deferment of the application of section 148A was done in acontrol way. It is settled proposition that any modification of theExecutives implies certain amount of discretion and to be exercisedwith the aid of the legislative policy of the Act and cannot travelbeyond it and run counter to it or certainly change the essentialfeatures, the identity, structure or the policy of the Act. Therefore,this legislative delegation which is exercised by the CentralGovernment by notification to uphold the mechanism as prevailedprior to March, 2021 is not in conflict with any Act and notificationby executive i.e. Ministry of Finance would be the part of legislativefunction. 7.In likewise situation the principle as laid down in case of A.K.Royv. Union of India reported in AIR 1982 SC 710, the SupremeCourt held that the Constitution (Fourty-Fourth) Amendment Act,1978, which conferred power on the Executive to bring theprovisions of that Act into force did not suffer from excessivedelegation of legislative power. The Court observed that the powerto issue a notification for bringing into force the provisions of aconstitutional amendment is not a constituent power, because itdoes not carry with it the power to amend the Constitution in anymanner. Likewise in this case, the delegation to the executive withconferment of the power to the Central Government to specify thedate by way of relaxation of time limit, the main purpose of theFinance Act is not defeated. Therefore, it would be a conditionallegislation. As the legislature has declared the Act and has giventhe power to executive to extend the implementation by way ofnotification. The legislature has resorted to conditional legislation to give the power to executive, in what circumstances the law shouldbecome operative or when the operation should be extended wouldbe covered by doctrine of the conditional legislation. Under the circumstances by the notifications the operation ofSection 148 of the Income Tax Act was extended, therebydeferment of Section 148A was done. It was done by the Ministry ofFinance by way of conditional legislation in the peculiarcircumstances which arose during the pandemic and lock downand Central Government can not be said to have encroached uponturf of Parliament. For sake of brevity, both the notifications arereproduced herein below :- give the power to executive, in what circumstances the law shouldbecome operative or when the operation should be extended wouldbe covered by doctrine of the conditional legislation. Under the circumstances by the notifications the operation ofSection 148 of the Income Tax Act was extended, therebydeferment of Section 148A was done. It was done by the Ministry ofFinance by way of conditional legislation in the peculiarcircumstances which arose during the pandemic and lock downand Central Government can not be said to have encroached uponturf of Parliament. For sake of brevity, both the notifications arereproduced 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 andsection 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), vide number 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 & Legislation Division (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 & 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. 9.Reading of the aforesaid notification would show that it was issuedin exercise of power conferred under the Taxation and other Laws(Relaxation and Amendment of Certain Provisions) Act, 2020 andtime for issuance of notice under Section 148, the end date wasinitially extended uptill on 30[th] day of April 2021 and subsequentlyagain by notification dated 27[th] April, 2021 the time limit of 30[th] dayof April 2021 was further extended up till 30[th] day of June, 2021. Byeffect of such notification, the individual identity of Section 148,which was prevailing prior to amendment and insertion of section148A was insulated and saved uptill 30.06.2021. in exercise of power conferred under the Taxation and other Laws(Relaxation and Amendment of Certain Provisions) Act, 2020 andtime for issuance of notice under Section 148, the end date wasinitially extended uptill on 30[th] day of April 2021 and subsequentlyagain by notification dated 27[th] April, 2021 the time limit of 30[th] dayof April 2021 was further extended up till 30[th] day of June, 2021. Byeffect of such notification, the individual identity of Section 148,which was prevailing prior to amendment and insertion of section148A was insulated and saved uptill 30.06.2021. 10.The pandemic and lock down prevailed all over India. Thepeople could not file their return or comply with the variousmandate of Income Tax Act. Considering such situation for thebenefit of the assessee and to facilitate the individual to come outof woods the time limit framed under Income Tax Act was extended.Likewise certain right which was reserved in favour of the IncomeTax Department was also preserved and was extended at parity.Consequently the provisions of Section 148 which was prevailingprior to the amendment of Finance Act, 2021 was also extended.Here in this case, the power to issue notice under Section 148which was prior to the amendment was also saved and the timewas extended. In a result, the notice issued on 25.06.2021,30.06.2021 (Annexure P-1) would also be saved. Therefore, nointerference is required to be made in the said issuance of noticeand accordingly the petition is dismissed. people could not file their return or comply with the variousmandate of Income Tax Act. Considering such situation for thebenefit of the assessee and to facilitate the individual to come outof woods the time limit framed under Income Tax Act was extended.Likewise certain right which was reserved in favour of the IncomeTax Department was also preserved and was extended at parity.Consequently the provisions of Section 148 which was prevailingprior to the amendment of Finance Act, 2021 was also extended.Here in this case, the power to issue notice under Section 148which was prior to the amendment was also saved and the timewas extended. In a result, the notice issued on 25.06.2021,30.06.2021 (Annexure P-1) would also be saved. Therefore, nointerference is required to be made in the said issuance of noticeand accordingly the petition is dismissed. Jyoti Sd/- (Goutam Bhaduri)Judge