Madhya Pradesh High Court
Vksc Infraprojects Ltd. (Formerly ... vs Dy. Commissioner Asst. Commissioner Of ... on 9 May, 2023
Author: Sheel Nagu
Bench: Sheel Nagu
1
IN THE HIGH COURT OF MADHYA PRADESH
AT JABALPUR
WP No. 19848 of 2022
(VKSC INFRAPROJECTS LTD. (FORMERLY VINOD KUMAR SHUKLA CONSTRUCTION PVT. LTD.) Vs DY.
COMMISSIONER ASST. COMMISSIONER OF INCOME TAX 5(1) AND OTHERS)
Dated : 09-05-2023
Shri Kishore Roy with Shri Sapan Usrethe - Advocate for petitioner.
Shri Siddharth Sharma - Advocate for respondents.
Issue notice to respondents on payment of process fee within seven working days, failing which this petition shall stand dismissed without further reference to the Court.
In matter of similar nature, this Court has passed interim order on 27.04.2023 in W.P. No.6738/2023 to the following extent :-
"Since an advanced copy has already been served upon Shri Siddharth Sharma, Junior Standing Counsel for the Income Tax Department, who is appearing virtually, the need to issue notice gets obviated.
2. The challenge herein is to a notice under Section 148 in regard to assessment year 2014-15 issued pursuant to the directives of the Apex court in the case of Union of India Vs. Ashish Agrawal i n Civil Appeal No.3005/2022 dated 4th May 2022. It is submitted that while resolving the controversy stemming from the amendment caused to various provisions of the Income Tax Department including Section 148 w.e.f. 01- 04-2021, the Apex Court held thus:
"2 8 . In view of the above and for the Signature Not Verified Signed by: SHIBA NARAYAN BISWAL Signing time: 5/11/2023 10:36:43 AM 2 reasons stated above, the present appeals are allowed in part. The impugned common judgments and orders [Ashok Kumar Agarwal v. Union of India, 2021 SCC OnLine All 799] passed by the High Court of Judicature at Allahabad in WT No. 524 of 2021 and other allied tax appeals/petitions, is/are hereby modified and substituted as under:
2 8 .1 . 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 148-A of the IT Act as substituted by the Finance Act, 2021 and construed or treated to be show-cause notices in terms of Section 148-A(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 assessees can reply to the show-cause notices within two weeks thereafter.
28.2. The requirement of conducting any enquiry, if required, with the prior approval of specified authority under Section 148- A(a) is hereby dispensed with as a one-time measure vis-a-vis those notices which have been issued under Section 148 of the unamended Act from 1-4-2021 till date, including those which have been quashed by the High Courts.
2 8 . 3 . Even otherwise as observed hereinabove holding any enquiry with the prior approval of specified authority is not mandatory but it is for the assessing officers concerned to hold any enquiry, if required. 28.4. The assessing officers shall thereafter pass orders in terms of Section 148-A(d) in Signature Not Verified Signed by: SHIBA NARAYAN BISWAL Signing time: 5/11/2023 10:36:43 AM 3 respect of each of the assessees concerned; Thereafter after following the procedure as required under Section 148-A may issue notice under Section 148 (as substituted). 28.5. All defences which may be available to the assessees including those available under Section 149 of the IT Act and all rights and contentions which may be available to the assessees concerned and Revenue under the Finance Act, 2021 and in law shall continue to be available. 2 9 . The present order shall be applicable PAN INDIA and all judgments and orders passed by the different High Courts on the issue and under which similar notices which were issued after 1-4-2021 issued under Section 148 of the 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 India 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 the present order shall also govern the pending writ petitions, pending before various the High Courts in which similar notices under Section 148 of the Act issued after 1-4-2021 are under challenge.
30. The impugned common judgments and orders [Ashok Kumar Agarwal v. Union of India, 2021 SCC OnLine All 799] passed by the High Court of Allahabad and the similar judgments and orders passed by various High Courts, more particularly, the respective judgments and orders passed by t h e various High Courts particulars of which are mentioned hereinabove, shall stand modified/substituted to the aforesaid Signature Not Verified Signed by: SHIBA NARAYAN BISWAL Signing time: 5/11/2023 10:36:43 AM 4 extent only.
31. All these appeals are accordingly partly allowed to the aforesaid extent. In the facts of the case, there shall be no order as to costs."
3. The learned counsel for the petitioner herein submits that the Apex Court has clearly held that all defences available under amended Section 149 shall be available to be availed by the assessee. The amended Section 149 reads thus:
"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 e n d 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 Signature Not Verified Signed by: SHIBA NARAYAN BISWAL Signing time: 5/11/2023 10:36:43 AM 5 more for that year:
Provided t h a t 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 Signature Not Verified Signed by: SHIBA NARAYAN BISWAL Signing time: 5/11/2023 10:36:43 AM 6 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 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.
Explanation.-For the purposes of clause (b) of this sub-section, "asset" shall include immovable property, being land or building or both, shares and securities, loans and advances, deposits in bank account.(2) The provisions of sub-section (1) as to the issue of notice shall be subject to the provisions of section-151.] Signature Not Verified Signed by: SHIBA NARAYAN BISWAL Signing time: 5/11/2023 10:36:43 AM 7
4. The limitation prescribed for issuance of notice under amended Section 149(1)(b) is a maximum period of 10 years. However, Section 149(1)(b) is circumscribed by first proviso, which stipulates that no notice under Section 148 shall be issued qua relevant assessment year beginning on or before 1st day of April 2021 if such notice could not have been issued under the unamended Section 149 as it stood prior to 01-04- 2021.
5. As such, to find out as to whether the impugned notice qua (Assessment Year 2014-15) issued under Section 148 was beyond the period of limitation or not, one has to test the same on the anvil of unamended Section 149, which for ready reference and convenience is reproduced below :-
"149. Time-limit for notice.(1) No notice under Section 148 shall be issued for the relevant assessment year-
(a) if four years have elapsed from the end of the relevant assessment year, unless the case falls under clause (b) or clause (c);
( b ) i f four years, but not more than six years, have elapsed from the end of the relevant assessment year unless the income chargeable to tax which has escaped assessment amounts to or is likely to amount to one lakh rupees or more for that year;
(c) if four years, but not more than sixteen years, have elapsed from the end of the relevant assessment year unless the income Signature Not Verified Signed by: SHIBA NARAYAN BISWAL Signing time: 5/11/2023 10:36:43 AM 8 in relation to any asset (including financial interest in any entity) located outside India, chargeable to tax, has escaped assessment. Explanation. ÂÂ"In determining income chargeable to tax which has escaped assessment for the purposes of this sub- section, the provisions of Explanation 2 of Section 147 shall apply as they apply for the purposes of that section.
(2) The provisions of sub-section (1) as to the issue of notice shall be subject to the provisions of Section 151.
(3 ) If the person on whom a notice under Section 148 is to be served is a person treated as the agent of a non-resident under Section 163 and the assessment, reassessment or recomputation to be made in pursuance of the notice is to be made on him as the agent of such non-resident, the notice shall not be issued after the expiry of a period of six years from the end of the relevant assessment year.
Explanation.--For the removal of doubts, it is hereby clarified that the provisions of sub- sections (1) and (3), as amended by the Finance Act, 2012, shall also be applicable for any assessment year beginning on or before the 1st day of April, 2012."
(emphasis supplied)
6. A bare reading of aforesaid unamended Section 149, prevailing prior to 01/04/2021 reveals that the maximum period of limitation prescribed for reopening of assessment of income which escaped assessment was 6 years.
7. In the instant case, the assessment year Signature Not Verified Signed by: SHIBA NARAYAN BISWAL Signing time: 5/11/2023 10:36:43 AM 9 pertaining to which the assessment is being reopened, is 2014-15 by issuance of impugned notice under Section 148 on 15/07/2022, which prima facie appears to be beyond the limitation period of 6 years prescribed under unamended Section 149.
8. Per contra, Shri Sharma, learned counsel appearing for the Income Tax Department has drawn the attention of this Court to the CBDT instruction 1/2022 dated 11/05/2022 (Annexure P/9), in particular clause 6.1, which is extracted below:
"Hon'ble Supreme Court has upheld the views of High Courts that the benefit of new law shall be made available even in respect of proceedings relating to past assessment years. Decision of Hon'ble Supreme Court read with the time extension provided by TOLA will allow extended reassessment notices to travel back in time to their original date when such notices were to be issued and then new section 149 of the Act is to be applied at that point."
9. Submission of Shri Sharma is that while calculating the period of limitation to find out as to whether notice u/S.148 is time barred or not, the extension of time granted by TOLA [Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020] should also be taken into account to ensure proper execution of order of Apex Court in Signature Not Verified Signed by: SHIBA NARAYAN BISWAL Signing time: 5/11/2023 10:36:43 AM 10 Ashish Agrawal (supra), especially when the Apex Court had also referred to the said concept of TOLA.
10. True it is that the decision in the case of Ashish Agrawal (supra) had referred to the extension granted by TOLA to the limitation period but in the operative portion, the Apex Court has not mentioned anything about TOLA. Therefore, prima facie the contention of learned junior standing counsel for the Income Tax Department does not appear to be tenable.
11. As an interim measure, it is directed that impugned order dated 14.07.2022 (Annexure P/2) passed under Section 148A(d) and the consequential notice under Section 148 dated 15.07.2022 (Annexure P/1) under the amended Income Tax Act shall remain stayed till the next date of hearing.
12. List in the week commencing 26/06/2023 along with W.P. Nos.4128/2023, 4130/2023, 4142/2023, 4145/2023 and 4146/2023."
In the present case, the notice under Section 148 of Income Tax Act has been issued on 13.07.2022 in respect of assessment year 2013-14 and, therefore, the question as to whether the bar contained under Section 149 of Income Tax Act comes in way of the Revenue to proceed with the said notice or not, is required to be answered.
From the aforesaid quoted order dated 27.04.2023, it appears that several High Courts have decided cases in favour or against the assessee and the issue Signature Not Verified Signed by: SHIBA NARAYAN BISWAL Signing time: 5/11/2023 10:36:43 AM 11 in question is pending adjudication before the Apex Court in case of Union of India & ors. Vs. Rajeev Bansal, SLP (C) No.6706/2023 arising out of final judgment and order dated 22.02.2023 in WT No.1086/2022 passed by Allahabad High Court.
Learned counsel for the Revenue has placed reliance on the final order passed by the Co-ordinate Bench of this Court at Gwalior dated 25.04.2023 passed in W.P. No.9099/2023 where it is pointed out that an issue of same nature has been declined to be entertained by the Co-ordinate Bench at Gwalior on the ground that all the grounds can very well be raised before the Assessing Officer in proceedings under Section 148 of Income Tax Act.
Learned counsel for petitioner - Shri Sapan Usrethe in this regard has placed reliance upon decision of the Apex Court rendered on 03.01.2023 in Red Chilli International Sales Vs Income Tax Officer and another, (2023 SCC OnLine SC 237) setting aside an order of the Punjab & Haryana High Court passed on 02.06.2022 in C.W.P. No.10073 of 2022 remanding the case to the High Court which had dismissed the petition in limine on the ground of non-availing of the statutory remedy under Section 246 on Income Tax Act.
In view of above, following the order dated 27.04.2023, this Court as an interim measure directs that impugned order dated 12.07.2022 (Annexure-P/2) and notice dated 13.07.2022 (Annexure-P/3) shall remain stayed till next date of hearing.
List the case in the week commencing 19.06.2023 along with W.P. No.6738/2023 and W.P. No.4128/2023.
(SHEEL NAGU) (HIRDESH)
JUDGE JUDGE
Signature Not Verified
Signed by: SHIBA NARAYAN
BISWAL
Signing time: 5/11/2023
10:36:43 AM
12
Biswal
Signature Not Verified
Signed by: SHIBA NARAYAN
BISWAL
Signing time: 5/11/2023
10:36:43 AM