Xilinx India Technology Services Private Limited vs. The Central Board of Direct Tax
What did the High Court hold?
The High Court disposed of the writ petitions in terms of the judgment of the Supreme Court in Ashish Agarwal (supra). The Supreme Court's decision, passed under Article 142 of the Constitution, held that notices issued under the unamended Section 148 of the Income Tax Act, 1961, after April 1, 2021, would be deemed to have been issued under Section 148A of the Act as substituted by the Finance Act, 2021. These notices were to be treated as show-cause notices under Section 148A(b). The Assessing Officer was directed to provide information and material relied upon by the Revenue within thirty days, allowing assessees two weeks to reply. Subsequently, orders under Section 148A(d) were to be passed, followed by notices under the substituted Section 148 if required. All defenses available to the assessees, including those under Section 149, and rights of the Revenue under the Finance Act, 2021, were preserved. The Supreme Court's order was made applicable PAN India and would govern all similar notices set aside by High Courts or pending adjudication.
What were the facts?
The petitioners, Sri Mohan Rao Gandra, Smt. Geetha Rani Gandra, and Sri Vikas Kumar, filed writ petitions before the High Court of Telangana challenging notices issued by the Income Tax Officer for reopening assessments for various Assessment Years (2017-18, 2016-17, and 2014-15). They contended that these notices, issued under Section 148 of the Income Tax Act, 1961, were based on notifications extending time limits under pre-amended provisions, which they argued were not applicable after April 1, 2021. They sought to declare these notifications ultra vires and the reopening notices illegal, arbitrary, barred by limitation, and without jurisdiction. The petitions also sought a stay on further proceedings.
What were the issues?
1. Whether Notifications No. 20/2021 and 38/2021, issued by the Central Board of Direct Taxes, extending time limits under pre-amended provisions of the Income Tax Act, 1961, are applicable after April 1, 2021, and if they are ultra vires the Act. (Question of law) 2. Whether the notices issued by the Income Tax Officer for reopening assessments for Assessment Years 2017-18, 2016-17, and 2014-15 are arbitrary, illegal, bad in law, barred by limitation, and without jurisdiction, being contrary to the provisions of the Income Tax Act, 1961. (Question of mixed law and fact) Assessee's Contentions: The petitioners argued that the impugned notifications extending time limits under the pre-amended provisions of the Income Tax Act were not applicable after April 1, 2021, and were thus ultra vires. They further contended that the reopening notices issued by the Income Tax Officer were consequently illegal, arbitrary, barred by limitation, and without jurisdiction. Revenue's Contentions: The judgment does not explicitly record the specific contentions of the revenue in detail, but it refers to the implementation of the Supreme Court's judgment in Ashish Agarwal (supra).
Which sections of the Income-tax Act were involved?
AI-generated summary — verify with the full judgment below
Cause title — parties, addresses and appearances
COMMON ORDER: (Pct Han bte Sn Jushcc ulat Bhuyan) Heard Mr. T.Archan Kumar, Mr. A.V.Raghu Ram, Mr. C.V.Narasimham and Mr. M.Naga Deepak, learned counsel for the petitioners. We have also heard Mr.B.Narasimha Sarma, Mr. J.V.Prasad and Mr. A.Radha Krishna, learned Standing Counsel for lncome Tax Department for the respondents as well as Mr. B.Mukher.jee, learned counsel appearing on behalf of Mr. N,Rajeshwar Rao, Iearned Assistant Solicitor General of lndia for Union of lndia. 2. ln all the writ petitions in this bunch, challenge has been made to the legality and validity of notices issued by the assessing officer under Section 148 of the lncome Tax Act, 1961 (briefly referred to hereinafter as the 'Act'). All the notices are post 01.04.2021 , but issued under the un-amended provision of Section 148 of the Act.
By the aforesaid notices, assessing officer proposed to assess/re-assess income of the petitioners for the respective assessment years on the ground that he has reasons to believe that income chargeable to tax had escaped assessment.
Contention of the petitioners is that Section 14BA of the Act has been inserted in the Act by way of recent amendment and which has come into effect trom 01.O4.2021. As per Section 14BA of the Act, the assessing ( THE HONOURABLE MRS JUSTICE SUREPALLI NANDA \
officer is required to conduct an enquiry with the approval of the specified authority with respect to the information suggesting thal income chargeable to tax has escaped assessment prior to issuing any notice under Section 148 of the Act. He is also required to provide an opportunity of hearing to the assessee and to consider a reply of the assessee. Thereafter, under Section 14BA(d) of the Act, he has to take a decision on the basis of the available materials including reply of the assessee as to whether it is a fit case for reopening and only thereafter and if he is satisfied that it is a fit case for reopening, then notice under Section 148 of the Act is required to be issued.
The impugned notices have been challenged in the present batch of writ petitions on the ground that the procedure laid down under Section 148,4 of the Act has not been followed, which has rendered the impugned notices null and void. 6. ln all the writ petitions, notices were issued and the impugned notices have been stayed. 7. lt may be mentioned that several High Courts had passed judgments setting aside such notices including the High Court of Judicature at Allahabad in Writ Tax No.52412021 , against which Union of lndia filed Special Leave Petitions. On leave being granted, Civil Appeal No.3005/2022 (Union \ \ Afler analysing the provisions of the Act from Sections 147 lo 151 of the Act, J r {
more particularly the provasions contained in Section 148A of the Act, Supreme Court observed as follows: Thus, the new provisions substituted by the Finance Act,2021 being remedial and benevolent in nature and substituted with a specific aim and object to protect the rights and interest of the assessee as well as and the same berng in public interest, the respective High Courts have raghtly held that the benefit of new provisions shall be made available even in respect of the proceedings relating to past assessment years, provided section 148 notice has been issued on or after lst Aprll, 2021 . We are in complete agreement with the view taken by the various High Courts in holding so."
However, taking the view that judgments of the High Courts would result in no re-assessment proceedings at all, Supreme Court proposed to modify the judgments and orders passed by various High Courts in the following manner: B. However, at the same time, the judgments of the several High Courts would result in no reassessment proceedings at all, even if the same are permissible under the Finance Act, 2021 and as per substituted sections 147 to 151 of the lT Act. The Revenue cannot be made remediless and the object and purpose of reassessment proceedings cannot be frustrated. lt is true that due to a bonafide mistake and in view of /,'subsequent extension of time vide various notifications, the Revenue issued the impugned notices under section 148 after the amendment was enforced w.e.f. 7
01 .O4 2021 . under the unamended section 148 ln our view the same ought not to have been issued under the unamended Act and ought to have been issued under the substituted provisions of sections 1 47 to 1 5'1 of the lT Act as per the Frnance Act, 2021 . There appears to be genuine non-application of the amendments as the officers of the Revenue may have been under a bonafide belief that the amendments may not yet have been enforced. Therefore, we are of the opinion that some leeway must be shown in that regard which the High Courts could have done so. Therefore, instead of quashing and setting aside the reassessment notices issued under the unamended provision of lT Act, the High Courts ought to have passed an order construing the notices issued under unamended AcU unamended provision of the lT Act as those deemed to have been issued under section 1484 of the lT Act as per the new provision section 1484 and the Revenue ought to have been permitted to proceed further with the reassessment proceedings as per the substituted provisions of sections 147 to 151 of the lT Act as per the Finance Act, 2021 , subject to compliance of all the procedural requirements and the defences, which may be available to the assessee under the substituted provisions of sections 147 to 151 of the lT Act and which may be available under the Finance Ac|,2021 and in law. Therefore, we propose to modify the judgments and orders passed by the respective High Courts as under:- The respective impugned section 148 notices issued to the respective assessees shall be deemed to have been issued under section 148A of the lT Act as substituted by the Finance Act, 2021 and treated to be show-cause notices in terms of section 148A(b). The respective assessing officers shall within thirty days from today provide to the assessees the information and material relied upon by the Revenue so that the assessees can reply to the notices within two weeks thereafter; The requirement of conducting any enquiry with the prior approval of the specified authority under section 148A(a) be dispensed with as a one{ime measure vis-a-vis those notices which have been issued under Section 148 of the unamended Act from 01 .04.2021 till date. including those which have been quashed by the High Courts; The assessing officers shall thereafter pass an order in terms of section 14BA(d) after following the due procedure as required under section 148A(b) in respect of each of the concerned ASSESSEES; All the defences which may be available to the assessee under section 149 andlor which may be available under the Finance Acl,2021 and in law and whatever rights are available to the Assessing Officer under the Finance Act, 2021 are kept open and/or shall continue to be available and; The present order shall substitute/modify respective judgments and orders passed by the respective High Courts quashing the Siifi'ria r nolices issued under unamended sectron '148 of the lT Act irrespective of whether they have been assailed before this Courl or not."
Finally, the Civil Appeals were allowed in part and judgments of the various High Courts have been modified and substituted as under:
"10. ln view of the above and for the reasons stated above, the present Appeals are ALLOWED lN PART. The impugned common judgments and orders passed by the High Court of Judicature at Allahabad in W.T. No. 52412021 and other allied tax appeals/petitions, is/are hereby modified and substituted as under.- The requirement of conducting any enquiry, if required, with the prior approval of specified authority under section 14BA(a) is hereby dispensed with as a one-time measure vis-d-ys those notices which have been issued nder section 148 of the unamended Act from The impugned section '148 notices issued to the respective assessees which were issued under unamended section 148 of the IT Act, which were the subject matter of writ petitions before the various respective High Courts shall be deemed to have been issued under section 148A of the lT Act as substituted by the Finance Act, 2021 and construed or treated to be show-cause notices in terms of section 148A(b). The assessing officer shall, within thirty days from today provide to the respective assessees information and material relied upon by the Revenue, so that the assesees can reply to the show-cause notices within two weeks thereafter;
U.A4.2021 till date, including those which have been quashed by the High Courts. Even otherwise as observed hereinabove holding any enquiry with the prior approval of specified authority is not mandatory but it is for the concerned Assessing Officers to hold any enquiry, if required; The assessing officers shall thereafter pass orders in terms of section 148A(d) in respect of each of the concerned assessees; Thereafter after following the procedure as required under section 148A may issue notice under section 148 (as substituted); All defences which may be available to the assesses including those available under section 149 of the lT Act and all rights and contentions which may be available to the concerned assessees and Revenue under the Finance Act, 2021 and in law shall continue to be available." 1
Supreme Court also clarified that its decision in Ashish Aganival (supra) rendered on 04.05.2022 was an order passed under Article 142 of lhe Constitution of lndia and would be binding in all cases where similar notices have either been set aside by the High Courts or are pending adjudication before the High Courts. lt has been held as follows. )1. fhe present order shall be applicable PAN INDIA and all judgments and orders passed by different High Courts on the issue and under which similar notices which were issued after 01 .04.2021 issued under section 148 of the )
i'i To, Act are set aside and shall be governed by the present order and shall stand modified to the aforesaid extent. The present order is passed in exercise of powers under Article 142 of the Constitution of lndia so as to avoid any further appeals by the Revenue on the very issue by challenging similar judgments and orders, with a view not to burden this Court with approximately 9000 appeals. We also observe that present order shall also govern the pending writ petitions, pending before various High Courts in which similar notices under Section 148 of the Act issued after 01.O4.2021 are under challenge-"
Mr. J.V.Prasad, learned Standing Counsel has placed before us lnstruction No 0112022 dated 1 1.05.2022 issuep by the Central Board of Direct Taxes (CBDT) issuing instructions to the assessing officers regarding implementation of the judgment of the Supreme Court in Ashish Agarwal (supra) which we have duly taken note of.
That being the position, the present batch of writ petitions would stand disposed of in terms of the judgment of the Supreme Court in Ashish Agarwal (supra). However, there shall be no order as to costs. '
As a sequel, miscellaneous applications pending, if any, in these Writ Petitions, shall stand closed. //// SD/.K.VENKAIAH ASSISTANT REGISTRAR ( tt) SECTION OFFICER
The Secretary to Govt. of lndia, Department of Revenue, Union of India, Ministry of Finance, Govemment of lndia, North Block, New Delhi-1 10001,
The Chairman, Central Board Of Direct Taxes, Department of Revenue, Ministry of Finance, Government of lndia, North Block, New Delhi-1 10001 .
INCOME TAX OFFICER, Ward 14(1), Hyderabad, l.T.Towers, A.C.Guards, Hyderabad- 500004. 4. Assistant Commissioner Of lncome Tax, Circle 8(1), Signature Towers, Opp Botanical Gardens, Kondapur, Hyderabad- 500084 I \
! ---
Assistant Commtssioner of lncome Tax Circle 3(1), Hyderabad Signature Towers, Opp. Botanical Gardens Kondapur, Hyderabad - 500084
The Secretary, Union of lndia, Department of Revenue. tvlinistry of Finance, North Block New Dethi - 1i0 001
Deputy Commissioner of lncome Tax, Circle 3(2), Hyderabad Signature Towers, Opp. Botanical Gardens Kondapur, Hyderabad - 500084
The Secretary, Central Board of Direct Taxes, Department of Revenue, Ministry of Finance, Union of lndia, North Block, New Delhi - 110002. 9. The Principal Commissioner of lncome Tax, Hyderabad - 1,, lncome Tax Towers, AC Gaurds, lvlasab Tank, Hyderabdd - 500004. 10-The Central Board of Direct Tax, lncome tax department New Delhi '1 1.The Assistant Commissioner of lncome Tax, Circle B(1), Hyderabad 12.One CC to Sri.A.V. Raghu Ram, Advocate [OPUC]
One CC to Sri.K. Raji Reddy, SC for CT [OPUC] 1 4. One CC to Sri.N. Rajeshwar Rao, Asst. Solicitor General [OPUC] '
One CC to Sri.C.V. Narasimham, Advocate [OPUC] '16.One CC to Sri.A. Radha Krishna, Advocate [OPUC]
One CC to Sri.T. Archan Kumar, Advocate IOPUCj 18.One CC to Sri.M. Naga Deepak, Advocate IOPUC] 19.Two CD Copies. i I I P[\.4 11 --- SWN"
t1 HIGH COURT DATED:131OG12022 COMMON ORDER WP.No.20529 20531 , 20581 , 20655, 29015, 29122 & 295320F 2021 AND 8245 &62440F 2022 \"" .\r [ 1 sr,-P 2[ll -,:7 * Disposing of the WPs Without costs. >b @
More judgments on Section 148
- ACIT Central Bilaspur, Bilaspur vs Arun Kumar Agrawal, SaktiITSSA 26/RPR/2025[2018-19]Status: Disposed21 Oct 2026AY 2018-19
- Vinod Agrawal, Kawardha vs Assisstant Commissioner of Income Tax…ITA 666/RPR/2026[2019-20]Status: Heard21 Oct 2026AY 2019-20
- Sar Business Tradelink Private Limited… vs Income Tax Officer, Ward - 1(2), RaipurITA 599/RPR/2026[2014-15]Status: Heard21 Oct 2026AY 2014-15
- Neo Incorporation, Rajkot vs DCIT Circle- 1(2), RajkotITA 471/RJT/2026[2012-2013]Status: Disposed21 Oct 2026AY 2012-2013
- Adj Agri International LLP, Rajkot vs The Income Tax Officer, Ward-1(1)(1), RajkotITA 1198/RJT/2026[2018-19]Status: Disposed21 Oct 2026AY 2018-19
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