Nitin Sharma vs. Principal Chief Commissioner And Income Tax (Mpand Cg)

1 W.P. No.14571/2023

IN THE HIGH COURT OF MADHYA PRADESH AT JABALPUR BEFORE HON'BLE SHRI JUSTICE SHEEL NAGU & HON'BLE SHRI JUSTICE AVANINDRA KUMAR SINGH) WRIT PETITION No.14571 OF 2023 BETWEEN

: - NITIN SHARMA, S/O SHRI RAVINDRA KUMAR SHARMA, AGED ABOUT

YEARS, OCCUPATION : BUSINESS, R/O 765, NAPIER TOWN, NEAR ANAND TALKIES, JABALPUR (MADHYA PRADESH) .....PETITIONER (BY SHRI SAPAN USRETHE - ADVOCATE) AND 1. PRINCIPAL CHIEF COMMISSIONER OF INCOME TAX (M.P & C.G.), AAYAKAR BHAWAN, OPPOSITE MAIDA MILL, HOSHANGABAD ROAD, BHOPAL (MADHYA PRADESH) 2. DEPUTY/ASSISTANT OF INCOME TAX CIRCLE 2(1) – JABALPUR, AAYAKAR BHAWAN, NAPIER TOWN, JABALPUR (MADHYA PRADESH) 3. ASSESSMENT UNIT, INCOME TAX DEPARTMENT, NATIONAL FACELESS E ASSESSMENT CENTRE, CIVIC CENTRE, MINTO ROAD, NEW DELHI – 110002 .....RESPONDENTS 2 W.P. No.14571/2023

(BY SHRI SIDDHARTH SHARMA – ADVOCATE ) ----------------------------------------------------------------------------------------- Reserved on : 19/07/2023 Pronounced on : 30/10/2023 ---------------------------------------------------------------------------------------- This petition having been heard and reserved for orders, coming on for pronouncement this day, Hon’ble Shri Justice Sheel Nagu pronounced the following : ORDER This petition u/Art. 226 of the Constitution assails the order passed u/S. 148A(d) dated 19.07.2022 (Annexure-P/3), the consequential notice issued u/S. 148 dated 22.07.2023 (Annexure-P/4) and the assessment order dated 31.05.2023 (Annexure-P/10). 2. Though several grounds have been raised in the petition but learned counsel for petitioner restricts his challenge to the aforesaid orders and notice by contending that since the reassessment proceeding is based upon search conducted in October, 2014, the provisions of Section 148A are inapplicable in view of second proviso to Section 149 of Income Tax Act, 1961 (for brevity, “IT Act”). 3. As such, the dispute raised herein is purely legal, and therefore, this Court refrains from entering into the factual matrix. 4. Since the aforesaid challenge is to be tested on the anvil of second proviso to Section 149 of IT Act, the said provision of Section 149 of IT Act is reproduced below in toto: 3 W.P. No.14571/2023

“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); (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: 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 1st 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 31st 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 4 W.P. No.14571/2023

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.” (emphasis supplied) 5. The amended Section 149 of IT Act which was brought on the Statute Book by way of Finance Act, 2021 w.e.f. 01.04.2021, stipulates time period within which notice u/S. 148 can be issued. 5.1 A bare perusal of second proviso to Section 149(1) of IT Act reveals that in cases where notice u/S.153A or Section 153C read with Section 153A is required to be issued in relation to a search conducted u/S.132 or books of account and other documents or any asset are requisitioned u/S.132A on or before 31.03.2021, the time frame prescribed by Section 149(1) of IT Act is inapplicable. 5.2 Thus, it is obvious that in cases of search as is the case at hand, there is no restriction of time period for issuance of notice u/S.148 of IT Act. 5.3 The object of second proviso to Section 149(1) of IT Act is to keep the cases pertaining to search conducted for reassessment outside the purviews of the time restriction prescribed in Section 149(1) of IT Act. 6. It is thus evident as day light that the second proviso to Section 149(1) of IT Act does not eclipse the power of Revenue to issue notice u/S. 148 of IT Act. 7. The restriction, if any, imposed by second proviso to Section 149(1) of IT Act, is to the applicability of the time frame provided in Section 149(1) of IT Act to cases inter alia pertaining to search. 5 W.P. No.14571/2023