AMIT MALKANI vs. ASST. COMMISSIONER OF INCOME TAX, UDAIPUR

Judgment 19/04/2022 At the outset learned counsel appearing for the petitioner submits that the assessment order has not been passed by the respondent-Income Tax Department and submits that the controversy involved in the present writ petition is squarely covered by the ratio laid down by Jaipur Bench of this Court in the bunch of writ petitions led by D.B. Civil Writ Petition No. 969/2022:Sudesh Taneja Vs. Income Tax Commissioner, decided on 27.1.2022 wherein the Division Bench held as under:

“37. In this context we have perused the provisions of reassessment contained in the Finance Act, 2021. We have noticed earlier the major departure that the new scheme of reassessment has made under these provisions. The time limits for issuing notice for reassessment have been changed. The concept of income chargeable to tax escaping assessment on account of failure on the part of the assessee to (Uploaded on 20/04/2022 at 02:21:41 PM) (Downloaded on 28/10/2026 at 12:05:21 AM) (2 of 3) [CW-4598/2022] disclose truly or fully all material facts is no longer relevant. Elaborate provisions are made under Section 148A of the Act enabling the Assessing Officer to make enquiry with respect to material suggesting that income has escaped assessment, issuance of notice to the assessee calling upon why notice under Section 148 should not be issued and passing an order considering the material available on record including response of the assessee if made while deciding whether the case is fit for issuing notice under Section 148. There is absolutely no indication in all these provisions which would suggest that the legislature intended that the new scheme of reopening of assessments would be applicable only to the period post 01.04.2021. In absence of any such indication all notices which were issued after 01.04.2021 had to be in accordance with such provisions. To reiterate, we find no indication whatsoever in the scheme of statutory provisions suggesting that the past provisions would continue to apply even after the substitution for the assessment periods prior to substitution. In fact there are strong indications to the contrary. We may recall, that time limits for issuing notice under Section 148 of the Act have been modified under substituted Section 149. Clause (a) of sub-section (1) of Section 149 reduces such period to three years instead of originally prevailing four years under normal circumstances. Clause (b) extends the upper limit of six years previously prevailing to ten years in cases where income chargeable to tax which has escaped assessment amounts to or is likely to amount to 50 lacs or more. Sub-section (1) of Section 149 thus contracts as well as expands the time limit for issuing notice under Section 148 depending on the question whether the case falls under clause (a) or clause (b). In this context the first proviso to Section 149(1) provides that no notice under Section 148 shall be issued at any time in a case for the relevant assessment year beginning on or before 01.04.2021 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 Section 149 as they stood immediately before the commencement of the Finance Act, 2021. As per this proviso thus no notice under Section 148 would be issued for the past assessment years by resorting to the larger period of limitation prescribed in newly substituted clause (b) of Section 149(1).

This would

indicate

that the notice that would be issued after 01.04.2021 would be in terms of the substituted Section 149(1) but without breaching the upper time limit provided in the original Section 149(1) which stood substituted. This aspect has also been highlighted in the memorandum explaining the proposed provisions in the Finance Bill. If according to the revenue for past period (Uploaded on 20/04/2022 at 02:21:41 PM) (Downloaded on 28/10/2026 at 12:05:21 AM) (3 of 3) [CW-4598/2022] provisions of section 149 before amendment were applicable, this first proviso to section 149(1) was wholly unnecessary. Looked from both angles, namely, no indication of surviving the past provisions after the substitution and in fact an active indication to the contrary, inescapable conclusion that we must arrive at is that for any action of issuance of notice under Section 148 after 01.04.2021 the newly introduced provisions under the Finance Act, 2021 would apply. Mere extension of time limits for issuing notice under section 148 would not change this position that obtains in law. Under no circumstances the extended period available in clause (b) of sub-section (1) of Section 149 which we may recall now stands at 10 years instead of 6 years previously available with the revenue, can be pressed in service for reopening assessments for the past period. This flows from the plain meaning of the first proviso to sub-section (1) of Section 149. In plain terms a notice which had become time barred prior to 01.04.2021 as per the then prevailing provisions, would not be revived by virtue of the application of Section 149(1)(b) effective from 01.04.2021. All the notices issued in the present cases are after 01.04.2021 and have been issued without following the procedure contained in Section 148A of the Act and are therefore invalid. Learned counsel appearing for the respondent department is not in a position to controvert the aforesaid factual aspect of the matter. In view of the above, this writ petition is also allowed in the same terms and conditions as enumerated in the judgment delivered in the case of Sudesh Taneja (supra). The stay application also stands disposed of accordingly. (MADAN GOPAL VYAS),J (MANINDRA MOHAN SHRIVASTAVA),ACJ 37-nidhi/- Powered by TCPDF (www.tcpdf.org) (Uploaded on 20/04/2022 at 02:21:41 PM) (Downloaded on 28/10/2026 at 12:05:21 AM)