AZIM PREMJI TRUSTEE COMPANY PVT LTD V. DEPUTY COMMISSIONER OF INCOME TAX

WP/15910/2022

AI Insights

The case involves Azim Premji Trustee Company Pvt Ltd, which is the trustee of Pioneer Independent Trust, challenging the reassessment notice and order issued by the Income Tax Department concerning the gift of Wipro shares received in the previous year relevant to Assessment Year 2014-15. The petitioner argued that all material facts were disclosed during the original assessment, and the reassessment was initiated beyond the permissible time limit. The respondents contended that the income had escaped assessment and the reassessment was justified under the amended provisions of the Income Tax Act. The court examined the applicability of the amended sections and the compliance with procedural requirements for reassessment.

• Counselvise Citation: [2022] 140 COUNSELVISE.COM (IT) 769757 (HC-KARNATAKA)
• Appeal Type: Others
• Pronouncement Date: 28-10-2022
• Assessment Year: misc
• Other Referred Cases: Union of India & Others vs. Ashish Agarwal
• Laws Referred To: Income Tax Act, 1961, Indian Trusts Act 1882, Companies Act, 1956
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: K V ARAVIND
• Assessee Lawyers: S
• Keywords: Escaped assessment; Gift of shares; Income Tax; Limitation Period; Reassessment
• Section: 148; 143(3); 148A(d); 56(2)(vii)(c)

Judgement Text

" 1 IN THE HIGH COURT OF KARNATAKA, BENGALURU DATED THIS THE 28TH DAY OF OCTOBER, 2022 BEFORE THE HON'BLE MR.JUSTICE S.R.KRISHNA KUMAR WRIT PETITION No.15910 OF 2022(T-IT) BETWEEN: AZIM PREMJI TRUSTEE COMPANY PVT LTD A COMPANY INCORPORATED UNDER THE PROVISIONS OF THE COMPANIES ACT, 1956 (SOLE TRUSTEE OF PIONEER INDEPENDENT TRUST WHICH IS A PRIVATE DISCRETIONARY TRUST SETTLED UNDER THE INDIAN TRUSTS ACT 1882) ADDRESS AT: NO 134, NEXT TO WIPRO CORPORATE OFFICE SARJAPUR ROAD, BANGALORE – 560035. REPRESENTED HEREIN BY ITS DIRECTOR MR SRINIVASAN PAGALTHIVARTHI ALSO: AT NO. 524, 16TH CROSS, INDIRANAGAR 2ND STAGE BENGALURU – 560 038. …PETITIONER (BY SRI. S. GANESH, SENIOR COUNSEL FOR SRI. SANDEEP HUILGOL,, ADVOCATE) AND: 1 . DEPUTY COMMISSIONER OF INCOME TAX CIRCLE 4(1) (1) BANGALORE BMTC BUILDING, 80 FEET ROAD, 6TH BLOCK, NEAR KHB GAMES VILLAGE, KORAMANGALA, BENGALURU-560 095 2 . PRINCIPAL CHIEF COMMISSIONER OF INCOME TAX KARNATAKA AND GOA REGION GROUND FLOOR C R BUILDING NO 01 QUEENS ROAD, BANGALORE - 560001 3 . PRINCIPAL COMMISSIONER OF INCOME - TAX 2 BANGALORE, BMTC BUILDING, 80 FEET ROAD, 6TH BLOCK, NEAR KHB GAMES VILLAGE, 2 KORAMANGALA, BENGALURU-560 095 4 . CENTRAL BOARD OF DIRECT TAXES DEPARTMENT OF REVENUE MINISTRY OF FINANCE NORTH BLOCK NEW DELHI 110002 REPRESENTED HEREIN BY ITS CHAIRPERSON …RESPONDENTS (BY SRI.K.V. ARAVIND., ADVOCATE) THIS W.P. IS FILED UNDER ARTICLE 226 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE IMPUGNED ORDER DTD: 28.07.2022 BEARING ITBA/COM/F/17/2022- 23/1044214522(1) PASSED BY R1 U/S 148A(d) OF THE INCOME TAX ACT, 1961 FOR THE ASSESSMENT YEAR 2014-15 ANNEXURE-A AND ETC. THIS W.P. COMING ON FOR FURTHER HEARING, THIS DsAY, THE COURT MADE THE FOLLOWING:- ORDER In this petition, petitioner has sought for the following reliefs: “ (i) Quashing the impugned order dated: 28.07.2022 bearing ITBA/COM/F/17/2022- 23/1044214522(1) passed by Respondent No.1 under Section 148A(d) of the Income Tax Act, 1961, for the Assessment Year 20184-15 (Annexure-‘A’). (ii) Quashing the impugned notice dated: 28.07.2022 bearing ITBA/AST/M/148_1/2022- 23/1044223868(1) issued by Respondent No.1 under Section 148 of the Income –tax Act, 1961, for the Assessment Year 2014-15(Annexure-‘B’); (iii) Declaring that Section 56(2) (vii) (c) of the Income-tax Act, 1961, has no application to the listed 3 shares of Wipro Ltd., that were gifted to Pioneer Independent Trust in the previous year relevant to Assessment Year 2014-15; (iv) Quashing the Circular bearing No.6/2012 [F.NO.133/44/2012-SO (TPL) issued by Respondent No.4 03.08.2012 (Annexure-‘C’) ; and (v) Pass such other or further orders as this Hon’ble Court may deem fit in the facts and circumstances of the case, and in the interest of justice and equity.” 2. Heard Sri. S.Ganesh, learned Senior counsel appearing for the petitioner and Sri.K.V.Aravind, learned counsel for the respondents – revenue. 3. Briefly stated the contentions urged by the petitioner are as under:- The Petitioner is a Private Limited Company and the trustee of a private discretionary Trust called ‘Pioneer Independent Trust’ (for short ‘the Trust’), of which the only two beneficiaries are private limited guarantee companies without share capital, which are exclusively engaged in charitable and philanthropic activities. On 03.06.2013, the Trust received a gift of 6.1 crore shares of Wipro Ltd., from a charitable entity belonging to the Azim Premji Group, to 4 be held as a part of the corpus of Trust. This gift was contemporaneously disclosed to the stock exchanges and this information was also disseminated to the public at large. This gift was also specifically disclosed in the audited accounts of the petitioner for the year ending 31.03.2014. The face value of these shares (Rs.2/- per share) was also disclosed by the petitioner. 3.1 During the financial year 2013-14 ending on 31.03.2014, the petitioner sold a portion of the said Wipro shares and disclosed the resulting capital gain in its audited accounts. The petitioner filed its Return of Income for the Assessment Year 2014-15 disclosing the capital gain from the said sale of Wipro shares. 3.2 The petitioner was subjected to a full scrutiny assessment under Section 143(3) of the I.T.Act. As the Assessing Officer (for short ‘the A.O’) also had to assess the capital gain arising from the sale of Wipro shares, the A.O. was made fully aware of the sale price of Wipro shares. In any event, the market price of Wipro shares was completely in the public realm as it is a very well known and widely traded shares. Further, during the course of the 5 scrutiny assessment, the A.O specifically asked for and was given a copy of the petitioner’s demat account, which gave the A.O full information about the gift of Wipro shares received by the petitioner are also the sale thereof and the market value of the said shares. There was no other information which the A.O could possibly ask for in respect of the Wipro shares received and sold (partly) by the petitioner. 3.3 The A.O passed the assessment order for the Assessment Year 2014-15 under Section 143(3) of the Income Tax Act (for short ‘ the I.T.Act’) without treating the gift of Wipro shares received by the petitioner as its taxable income under Section 56(2)(vii)(c) of the I.T.Act, even though the A.O had all the information that was required for deciding, whether to apply or not to apply Section 56(2)(vii)(c) of the I.T.Act. Thus, there was no failure or omission on the part of the petitioner to disclose any material facts or information in respect of the said gift of Wipro shares received by the petitioner. 3.4 On 01.04.2021, Sections 147 to 151 of the I.T.Act were amended vide Finance Act, 2021 by bringing 6 into force a new regime. Subsequently, the 1st respondent issued a Notice dated 21.06.2021 to the Trust under Section 133(6) of the I.T.Act, to which a reply was submitted on 24.06.2021, pursuant to which, one more notice dated 25.06.2021 was issued by the 1st respondent, to which also, the petitioner submitted replies dated 28.06.2021 and 29.06.2021. Thereafter, respondents issued a Notice dated 30.06.2021 under Section 148 of the I.T.Act (after amendment). The petitioner challenged the said notice and sought for other reliefs also by preferring W.P.No.12668/2021, which was allowed by the Division Bench of this Court vide final order dated 18.04.2022. 3.5 Petitioner contends that several matters across various High Courts came up for consideration before the Apex Court in the context of the aforesaid amendment which came into force from 01.04.2021 in the case of Union of India & Others vs. Ashish Agarwal – (2022) SCC Online SC 543. Pursuant to the said order, the 1st respondent issued a show cause notice dated 31.05.2022 to the Trust by invoking Section 148A(b) calling upon the petitioner to show cause as to why a Notice under Section 7 148 should not be issued in respect of Assessment Year 2014-15 for the income in relation to Wipro shares which had allegedly escaped assessment. 3.6 Petitioner filed a reply on 04.06.2022 and requested the A.O. to furnish information and material so as to enable the petitioner to submit a detailed reply. Thereafter, on 13.06.2022, though the respondents did not accede to the aforesaid request made by the petitioner, the petitioner submitted a detailed reply along with all relevant documents and requested the respondents to drop the proceedings. It is the grievance of the petitioner that despite the aforesaid facts and circumstances, respondents proceeded to pass the impugned order, aggrieved by which, the petitioner is before this Court by way of the present petition. 4. The respondents – revenue have filed their statement of objections inter alia disputing the various contentions urged by the petitioner. It is contended that apart from the fact that the petition is premature, the impugned order is correct, legal and proper and in accordance with the judgment of the Apex Court in Ashish 8 Agarwal’s case (supra) and the other judgments relied upon by the respondents. It is contended that the respondents have correctly invoked Section 56(2)(vii)(c) of the I.T.Act and the proceedings initiated by the respondents are well within limitation, both under the pre-amended provisions as well as after amendment and the income of the petitioner having escaped assessment, the respondents were fully justified in initiating the subject proceedings and passing the impugned order, which does not warrant interference by this Court in the present petition. It is therefore contended that there is no merit in the petition and the same is liable to be dismissed. 5. I have given my anxious consideration to the rival submissions and perused the material on record. 6. Before adverting to the rival contentions, it is necessary to state that it is an undisputed fact that the impugned proceedings were initiated subsequent to 01.04.2021 when Sections 147 to 151 were amended under the Finance Act, 2021. In Ashish Agarwal’s case (supra), the Apex Court laid down the detailed guidelines 9 and issued directions with regard to proceedings and notices under the pre-amendment regime and post- amendment regime and held as under:- 3. While appreciating the controversy, a few facts and the relevant statutory provisions applicable pre 01.04.2021 and post 01.04.2021 are required to be referred to. The procedure governing initiation of reassessment proceedings prior to coming into force of the Finance Act, 2021 was governed by the following provisions:— “Income escaping assessment- 147. If the Assessing Officer has reason to believe that any income chargeable to tax has escaped assessment for any assessment year, he may, subject to the provisions of sections 148 to 153, assess or reassess such income and also any other income chargeable to tax which has escaped assessment and which comes to his notice subsequently in the course of the proceedings under this section, or recomputed the loss or the depreciation allowance or any other allowance, as the case may be, for the assessment year concerned (hereafter in this section and in sections 148 to 153 referred to as the relevant assessment year): Provided that where an assessment under sub- section (3) of section 143 or this section has been made for the relevant assessment year, no action shall be taken under this section after the expiry of four years from the end of the relevant assessment year, unless any income chargeable to tax has escaped assessment for such assessment year by reason of the failure on the part of the assessee to make a return under section 139 or in response to a notice issued under sub-section (1) of section 142 or section 148 or to disclose fully and truly all material facts necessary for his assessment, for that assessment year: 10 Provided further that nothing contained in the first proviso shall apply in a case where any income in relation to any asset (including financial interest in any entity) located outside India, chargeable to tax, has escaped assessment for any assessment year: Provided also that the Assessing Officer may assess or reassess such income, other than the income involving matters which are the subject matters of any appeal, reference or revision, which is chargeable to tax and has escaped assessment. Explanation 1.—Production before the Assessing Officer of account books or other evidence from which material evidence could with due diligence have been discovered by the Assessing Officer will not necessarily amount to disclosure within the meaning of the foregoing proviso. Explanation 2.—For the purposes of this section, the following shall also be deemed to be cases where income chargeable to tax has escaped assessment, namely:— (a) where no return of income has been furnished by the assessee although his total income or the total income of any other person in respect of which he is assessable under this Act during the previous year exceeded the maximum amount which is not chargeable to income-tax; (b) where a return of income has been furnished by the assessee but no assessment has been made and it is noticed by the Assessing Officer that the assessee has understated the income or has claimed excessive loss, deduction, allowance or relief in the return; (ba) where the assessee has failed to furnish a report in respect of any international transaction which he was so required under section 92E; (c) where an assessment has been made, but— (i) income chargeable to tax has been underassessed; or (ii) such income has been assessed at too low a rate; or 11 (iii) such income has been made the subject of excessive relief under this Act; or (iv) excessive loss or depreciation allowance or any other allowance under this Act has been computed; (ca) where a return of income has not been furnished by the assessee or a return of income has been furnished by him and on the basis of information or document received from the prescribed income-tax authority, under sub- section (2) of section 133C, it is noticed by the Assessing Officer that the income of the assessee exceeds the maximum amount not chargeable to tax, or as the case may be, the assessee has understated the income or has claimed excessive loss, deduction, allowance or relief in the return; (d) where a person is found to have any asset (including financial interest in any entity) located outside India. Explanation 3.—For the purpose of assessment or reassessment under this section, the Assessing Officer may assess or reassess the income in respect of any issue, which has escaped assessment, and such issue comes to his notice subsequently in the course of the proceedings under this section, notwithstanding that the reasons for such issue have not been included in the reasons recorded under subsection (2) of section 148. Explanation 4.—For the removal of doubts, it is hereby clarified that the provisions of this section, 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. Issue of notice where income has escaped assessment- 148.(1) Before making the assessment, reassessment or recomputation under section 147, the Assessing Officer shall serve on the assessee a notice requiring him to furnish within such period, as may be specified in the notice, a return of his income or the income of any other person in respect of which he is assessable under this Act during the previous year corresponding to the relevant assessment year, in the prescribed form and 12 verified in the prescribed manner and setting forth such other particulars as may be prescribed; and the provisions of this Act shall, so far as may be, apply accordingly as if such return were a return required to be furnished under section 139: Provided that in a case— (a) where a return has been furnished during the period commencing on the 1st day of October, 1991 and ending on the 30th day of September, 2005 in response to a notice served under this section, and (b) subsequently a notice has been served under sub- section (2) of section 143 after the expiry of twelve months specified in the proviso to subsection (2) of section 143, as it stood immediately before the amendment of said sub-section by the Finance Act, 2002 (20 of 2002) but before the expiry of the time limit for making the assessment, re-assessment or recomputation as specified in sub-section (2) of section 153, every such notice referred to in this clause shall be deemed to be a valid notice: Provided further that in a case— (a) where a return has been furnished during the period commencing on the 1st day of October, 1991 and ending on the 30th day of September, 2005, in response to a notice served under this section, and (b) subsequently a notice has been served under clause (ii) of sub-section (2) of section 143 after the expiry of twelve months specified in the proviso to clause (ii) of sub- section (2) of section 143, but before the expiry of the time limit for making the assessment, reassessment or recomputation as specified in sub-section (2) of section 153, every such notice referred to in this clause shall be deemed to be a valid notice. Explanation.—For the removal of doubts, it is hereby declared that nothing contained in the first proviso or the second proviso shall apply to any return which has been furnished on or after the 1st day of October, 2005 in response to a notice served under this section. 13 (2) The Assessing Officer shall, before issuing any notice under this section, record his reasons for doing so. Time limit for notice- 149.(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) if 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 in relation to any asset (including financial interest in any entity) located outside India, chargeable to tax, has escaped assessment. Explanation.—In determining income chargeable to tax which has escaped assessment for the purposes of this subsection, 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 nonresident 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. 14 Sanction for issue of notice- 151.(1) No notice shall be issued under section 148 by an Assessing Officer, after the expiry of a period of four years from the end of the relevant assessment year, unless the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner is satisfied, on the reasons recorded by the Assessing Officer, that it is a fit case for the issue of such notice. (2) In a case other than a case falling under sub- section (1), no notice shall be issued under section 148 by an Assessing Officer, who is below the rank of Joint Commissioner, unless the Joint Commissioner is satisfied, on the reasons recorded by such Assessing Officer, that it is a fit case for the issue of such notice. (3) For the purposes of sub-section (1) and sub- section (2), the Principal Chief Commissioner or the Chief Commissioner or the Principal Commissioner or the Commissioner or the Joint Commissioner, as the case may be, being satisfied on the reasons recorded by the Assessing Officer about fitness of a case for the issue of notice under section 148, need not issue such notice himself.” 3.1. In pursuance to the power vested under section 3 of the Relaxation Act, 2020, the Central Government issued following Notifications inter-alia extending the time lines prescribed under section 149 for issuance of reassessment notices under section 148 of the Income Tax Act, 1961: Date of Notification Original limitation for issuance of notice under Section 148 of the Act Extended Limitation 31.03.2020 20.03.2020 to 29.06.2020 30.06.2020 24.06.2020 20.03.2020 to 31.12.2020 31.03.2021 31.03.2021 31.03.2021 30.04.2021 27.04.2021 30.04.2021 30.06.2021 15 The Explanations to the Notifications dated 31st March, 2021 and 27th April, 2021 issued under section 3 of the Relaxation Act, 2020 also stipulated that the provisions, as they existed prior to the amendment by the Finance Act, 2021, shall apply to the reassessment proceedings initiated thereunder. 3.2. The Parliament introduced reformative changes to Sections 147 to 151 of the Income Tax Act, 1961 governing reassessment proceedings by way of the Finance Act, 2021, which was passed on 28th March, 2021. The substituted sections 147 to 149 and section 151 applicable w.e.f. 01.04.2021, passed in the Finance Act, 2021, are as under:— Income escaping assessment- “147. If any income chargeable to tax, in the case of an assessee, has escaped assessment for any assessment year, the Assessing Officer may, subject to the provisions of sections 148 to 153, assess or reassess such income or recompute the loss or the depreciation allowance or any other allowance or deduction for such assessment year (hereafter in this section and in sections 148 to 153 referred to as the relevant assessment year). Explanation.—For the purposes of assessment or reassessment or recomputation under this section, the Assessing Officer may assess or reassess the income in respect of any issue, which has escaped assessment, and such issue comes to his notice subsequently in the course of the proceedings under this section, irrespective of the fact that the provisions of section 148A have not been complied with.”. Issue of notice where income has escaped assessment- 148. Before making the assessment, reassessment or recomputation under section 147, and subject to the provisions of section 148A, the Assessing Officer shall 16 serve on the assessee a notice, along with a copy of the order passed, if required, under clause (d) of section 148A, requiring him to furnish within such period, as may be specified in such notice, a return of his income or the income of any other person in respect of which he is assessable under this Act during the previous year corresponding to the relevant assessment year, in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed; and the provisions of this Act shall, so far as may be, apply accordingly as if such return were a return required to be furnished under section 139: Provided that no notice under this section shall be issued unless there is information with the Assessing Officer which suggests that the income chargeable to tax has escaped assessment in the case of the assessee for the relevant assessment year and the Assessing Officer has obtained prior approval of the specified authority to issue such notice. Explanation 1.—For the purposes of this section and section 148A, the information with the Assessing Officer which suggests that the income chargeable to tax has escaped assessment means,— (i) any information flagged in the case of the assessee for the relevant assessment year in accordance with the risk management strategy formulated by the Board from time to time; (ii) any final objection raised by the Comptroller and Auditor- General of India to the effect that the assessment in the case of the assessee for the relevant assessment year has not been made in accordance with the provisions of this Act. Explanation 2.—For the purposes of this section, where,— (i) a search is initiated under section 132 or books of account, other documents or any assets are requisitioned under section 132A, on or after the 1st day of April, 2021, in the case of the assessee; or 17 (ii) a survey is conducted under section 133A, other than under sub-section (2A) or sub-section (5) of that section, on or after the 1st day of April, 2021, in the case of the assessee; or (iii) the Assessing Officer is satisfied, with the prior approval of the Principal Commissioner or Commissioner, that any money, bullion, jewellery or other valuable article or thing, seized or requisitioned under section 132 or under section 132A in case of any other person on or after the 1st day of April, 2021, belongs to the assessee; or (iv) the Assessing Officer is satisfied, with the prior approval of Principal Commissioner or Commissioner, that any books of account or documents, seized or requisitioned under section 132 or section 132A in case of any other person on or after the 1st day of April, 2021, pertains or pertain to, or any information contained therein, relate to, the assessee, the Assessing Officer shall be deemed to have information which suggests that the income chargeable to tax has escaped assessment in the case of the assessee for the three assessment years immediately preceding the assessment year relevant to the previous year in which the search is initiated or books of account, other documents or any assets are requisitioned or survey is conducted in the case of the assessee or money, bullion, jewellery or other valuable article or thing or books of account or documents are seized or requisitioned in case of any other person. Explanation 3.—For the purposes of this section, specified authority means the specified authority referred to in section 151.” Conducting inquiry, providing opportunity before issue of notice under section 148 - “148A. The Assessing Officer shall, before issuing any notice under section 148,— (a) conduct any enquiry, if required, with the prior approval of specified authority, with respect to the information which suggests that the income chargeable to tax has escaped assessment; 18 (b) provide an opportunity of being heard to the assessee, with the prior approval of specified authority, by serving upon him a notice to show cause within such time, as may be specified in the notice, being not less than seven days and but not exceeding thirty days from the date on which such notice is issued, or such time, as may be extended by him on the basis of an application in this behalf, as to why a notice under section 148 should not be issued on the basis of information which suggests that income chargeable to tax has escaped assessment in his case for the relevant assessment year and results of enquiry conducted, if any, as per clause (a); (c) consider the reply of assessee furnished, if any, in response to the show-cause notice referred to in clause (b); (d) decide, on the basis of material available on record including reply of the assessee, whether or not it is a fit case to issue a notice under section 148, by passing an order, with the prior approval of specified authority, within one month from the end of the month in which the reply referred to in clause (c) is received by him, or where no such reply is furnished, within one month from the end of the month in which time or extended time allowed to furnish a reply as per clause (b) expires: Provided that the provisions of this section shall not apply in a case where,— (a) a search is initiated under section 132 or books of account, other documents or any assets are requisitioned under section 132A in the case of the assessee on or after the 1st day of April, 2021; or (b) the Assessing Officer is satisfied, with the prior approval of the Principal Commissioner or Commissioner that any money, bullion, jewellery or other valuable article or thing, seized in a search under section 132 or requisitioned under section 132A, in the case of any other person on or after the 1st day of April, 2021, belongs to the assessee; or (c) the Assessing Officer is satisfied, with the prior approval of the Principal Commissioner or Commissioner that any books of account or documents, seized in a search 19 under section 132 or requisitioned under section 132A, in case of any other person on or after the 1st day of April, 2021, pertains or pertain to, or any information contained therein, relate to, the assessee. Explanation.—For the purposes of this section, specified authority means the specified authority referred to in section 151.” Time limit for notice- “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- 20 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 subsection, “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.’ Sanction for issue of notice- “151. Specified authority for the purposes of section 148 and section 148A shall be— (i) Principal Commissioner or Principal Director or Commissioner or Director, if three years or less than three years have elapsed from the end of the relevant assessment year; (ii) Principal Chief Commissioner or Principal Director General or where there is no Principal Chief Commissioner or Principal Director General, Chief Commissioner or Director General, if more than three years have elapsed from the end of the relevant assessment year.” 3.3. In sub-section (1) of section 151A of the Income Tax Act, in the opening portion, after the words and figures “issuance of notice under section 148”, the words, figures and letter “or conducting of enquiries or issuance 21 of show-cause notice or passing of order under section 148A” are inserted. 4. Despite the substituted sections 147 to 151 of the Income Tax Act, 1961 by the Finance Act, 2021 coming into force on 1st April, 2021, according to learned ASG, the Revenue issued approximately 90,000 reassessment notices to the respective assessees under the erstwhile sections 148 to 151 thereof by relying on explanations in the Notifications dated 31st March, 2021 and 27th April, 2021. The said reassessment notices were the subject matter of writ petitions before the various High Courts. The respective High Courts have held that all the respective reassessment notices issued under the erstwhile sections 148 to 151 of the Income Tax Act, 1961, are bad in law as the reassessment notices issued after 01.04.2021 are governed by the substituted sections 147 to 151 of the Income Tax Act, 1961, substituted by the Finance Act, 2021. Consequently, the respective High Courts have set aside all the reassessment notices issued under section 148 of the Income Tax Act, 1961 wherever assailed. The common judgment and order passed by the High Court of Allahabad is the subject matter of the present appeals. However, the High Court of Delhi in its common judgment and order dated 15.12.2021 while quashing the respective reassessment notices has also observed that if the law permits the revenue to take further steps in the matter they shall be at liberty to do so. 22 5. We have heard Shri N. Venkataraman, learned ASG appearing on behalf of the Revenue and Shri C.A. Sundaram and Shri S. Ganesh, learned Senior Advocates and other learned counsel appearing on behalf of the respective assessee. 6. It cannot be disputed that by substitution of sections 147 to 151 of the Income Tax Act (IT Act) by the Finance Act, 2021, radical and reformative changes are made governing the procedure for reassessment proceedings. Amended sections 147 to 149 and section 151 of the IT Act prescribe the procedure governing initiation of reassessment proceedings. However, for several reasons, the same gave rise to numerous litigations and the reopening were challenged inter alia, on the grounds such as (1) no valid “reason to believe” (2) no tangible/reliable material/information in possession of the assessing officer leading to formation of belief that income has escaped assessment, (3) no enquiry being conducted by the assessing officer prior to the issuance of notice; and reopening is based on change of opinion of the assessing officer and (4) lastly the mandatory procedure laid down by this Court in the case of GKN Driveshafts (India) Ltd. v. Income Tax Officer; (2003) 1 SCC 72, has not been followed. 6.1 Further pre-Finance Act, 2021, the reopening was permissible for a maximum period up to six years and in some cases beyond even six years leading to uncertainty for a considerable time. Therefore, Parliament thought it fit to amend the Income Tax Act to 23 simplify the tax administration, ease compliances and reduce litigation. Therefore, with a view to achieve the said object, by the Finance Act, 2021, sections 147 to 149 and section 151 have been substituted. 6.2. Under the substituted provisions of the IT Act vide Finance Act, 2021, no notice under section 148 of the IT Act can be issued without following the procedure prescribed under section 148A of the IT Act. Along with the notice under section 148 of the IT Act, the assessing officer (AO) is required to serve the order passed under section 148A of the IT Act. section 148A of the IT Act is a new provision which is in the nature of a condition precedent. Introduction of section 148A of the IT Act can thus be said to be a game changer with an aim to achieve the ultimate object of simplifying the tax administration, ease compliance and reduce litigation. 6.3 But prior to pre-Finance Act, 2021, while reopening an assessment, the procedure of giving the reasons for reopening and an opportunity to the assessee and the decision of the objectives were required to be followed as per the judgment of this Court in the case of GKN Driveshafts (India) Ltd. (supra). 6.4 However, by way of section 148A, the procedure has now been streamlined and simplified. It provides that before issuing any notice under section 148, the assessing officer shall (i) conduct any enquiry, if required, with the approval of specified authority, with respect to the information which suggests that the income chargeable to tax has escaped assessment; (ii) 24 provide an opportunity of being heard to the assessee, with the prior approval of specified authority; (iii) consider the reply of the assessee furnished, if any, in response to the show-cause notice referred to in clause (b); and (iv) decide, on the basis of material available on record including reply of the assessee, as to whether or not it is a fit case to issue a notice under section 148 of the IT Act and (v) the AO is required to pass a specific order within the time stipulated. 6.5. Therefore, all safeguards are provided before notice under section 148 of the IT Act is issued. At every stage, the prior approval of the specified authority is required, even for conducting the enquiry as per section 148A(a). Only in a case where, the assessing officer is of the opinion that before any notice is issued under section 148A(b) and an opportunity is to be given to the assessee, there is a requirement of conducting any enquiry, the assessing officer may do so and conduct any enquiry. Thus if the assessing officer is of the opinion that any enquiry is required, the assessing officer can do so, however, with the prior approval of the specified authority, with respect to the information which suggests that the income chargeable to tax has escaped assessment. 6.6. Substituted section 149 is the provision governing the time limit for issuance of notice under section 148 of the IT Act. The substituted section 149 of the IT Act has reduced the permissible time limit for issuance of such a notice to three years and only in exceptional cases ten 25 years. It also provides further additional safeguards which were absent under the earlier regime pre-Finance Act, 2021. 7. 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 being in public interest, the respective High Courts have rightly 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 1st April, 2021. We are in complete agreement with the view taken by the various High Courts in holding so. 8. 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 IT Act. The Revenue cannot be made remediless and the object and purpose of reassessment proceedings cannot be frustrated. It 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. 01.04.2021, under the unamended section 148. In 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 147 to 151 of the 26 IT Act as per the Finance 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 IT Act, the High Courts ought to have passed an order construing the notices issued under unamended Act/unamended provision of the IT Act as those deemed to have been issued under section 148A of the IT Act as per the new provision section 148A 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 IT 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 IT Act and which may be available under the Finance Act, 2021 and in law. Therefore, we propose to modify the judgments and orders passed by the respective High Courts as under:— (i) The respective impugned section 148 notices issued to the respective assessees shall be deemed to have been issued under section 148A of the IT Act as substituted by the Finance Act, 2021 and treated to be show-cause notices in terms of section 148A(b). The respective 27 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; (ii) The requirement of conducting any enquiry with the prior approval of the specified authority under section 148A(a) be dispensed with as a one-time measure vis-à-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; (iii) The assessing officers shall thereafter pass an order in terms of section 148A(d) after following the due procedure as required under section 148A(b) in respect of each of the concerned assessees; (iv) All the defences which may be available to the assessee under section 149 and/or which may be available under the Finance Act, 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; (v) The present order shall substitute/modify respective judgments and orders passed by the respective High Courts quashing the similar notices issued under unamended section 148 of the IT Act irrespective of whether they have been assailed before this Court or not. 28 9. There is a broad consensus on the aforesaid aspects amongst the learned ASG appearing on behalf of the Revenue and the learned Senior Advocates/learned counsel appearing on behalf of the respective assessees. We are also of the opinion that if the aforesaid order is passed, it will strike a balance between the rights of the Revenue as well as the respective assesses as because of a bonafide belief of the officers of the Revenue in issuing approximately 90000 such notices, the Revenue may not suffer as ultimately it is the public exchequer which would suffer. Therefore, we have proposed to pass the present order with a view avoiding filing of further appeals before this Court and burden this Court with approximately 9000 appeals against the similar judgments and orders passed by the various High Courts, the particulars of some of which are referred to hereinabove. We have also proposed to pass the aforesaid order in exercise of our powers under Article 142 of the Constitution of India by holding that the present order shall govern, not only the impugned judgments and orders passed by the High Court of Judicature at Allahabad, but shall also be made applicable in respect of the similar judgments and orders passed by various High Courts across the country and therefore the present order shall be applicable to PAN INDIA. 10. In view of the above and for the reasons stated above, the present Appeals are ALLOWED IN PART. The impugned common judgments and orders passed 29 by the High Court of Judicature at Allahabad in W.T. No. 524/2021 and other allied tax appeals/petitions, is/are hereby modified and substituted as under:— (i) 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 IT 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; (ii) The requirement of conducting any enquiry, if required, with the prior approval of specified authority under section 148A(a) is hereby dispensed with as a one-time measure vis-à-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. 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; 30 (iii) 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); (iv) All defences which may be available to the assesses including those available under section 149 of the IT 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. 11. The 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 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 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 01.04.2021 are under challenge. 31 12. The impugned common judgments and orders 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 the various High Courts particulars of which are mentioned hereinabove, shall stand modified/substituted to the aforesaid extent only. 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. 7. It is also not in dispute that the order passed by the Hon’ble Division Bench in W.P.No.12668/2021 was on 18.04.2022 prior to the judgment of the Apex Court in Ashish Agarwal’s case (supra), which was rendered on 04.05.2022. In fact, in the said judgment, the Apex Court took note of the fact that even subsequent to 01.04.2021, the respondents – revenue had been issuing notices to the assessees’ by invoking the pre-amended Section 148 and accordingly, directed the said notices to be treated and construed to be show cause notices in terms of Section 148A(b) of the post-amended provisions. Accordingly, the respondents issued the aforesaid show cause notice dated 32 31.05.2022 with reference to Section 148A(b), which led to the respondents passing the impugned order. It is therefore clear that the legality, validity and correctness of the impugned order has to be examined in the light of the judgment of the Apex Court in Ashish Agarwal’s case as well as the provisions of Sections 147 to 151 of the I.T.Act, before and after amendment vide Finance Act, 2021 w.e.f. 01.04.2021. 8. In this context, it is relevant to extract Section 149 of the I.T.Act (after amendment), which reads as under:- Time limit for notice- 149.(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) if 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 in relation to any asset (including financial interest in any entity) located outside India, chargeable to tax, has escaped assessment. 33 Explanation.—In determining income chargeable to tax which has escaped assessment for the purposes of this subsection, 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 nonresident 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. 9. A reading of the aforesaid provision will indicate that Section 149(1)(a) contemplates that if Section 149(1)(b) does not apply, then the period of limitation is 3 years from the end of the relevant assessment year; in the instant case, the subject assessment year came to an end on 31.03.2015 and the applicable period of limitation is 3 years which expired on 31.03.2018 and consequently, the impugned proceedings initiated pursuant to the Notice 34 dated 30.06.2021 issued under Section 148 of the I.T.Act is clearly barred by limitation. 10. A perusal of Section 149(1)(b) will indicate that the period of limitation is extendable from 3 years up to 10 years from the end of the relevant assessment year, if 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 Rs.50 lakhs more for that year. 11. In the instant case, a perusal of the notices, show cause notice and the impugned order clearly establish that Section 149(1)(b) does not apply, because the allegation of escapement of income is not based on books of account or other documents or evidence in the possession of the A.O; on the contrary, the allegation of escapement of income is based only on the disclosure expressly made by the petitioner - assessee itself of the gift of Wipro shares received by it and the very same information was readily available with the A.O. when the 35 original assessment order dated 28.06.2016 was passed by him. It is significant to note that at the time of passing the said order dated 28.06.2016, the A.O. came to the definite conclusion that Section 56(2)(vii)(c) did not apply insofar as the petitioner was concerned despite having all details, information and material in this regard that was required at that time and based on the very same material, it was impermissible for the A.O. to simply / merely change his mind and initiate reassessment proceedings by issuing a notice dated 30.06.2021; it is therefore clear that in the facts of the instant case, Section 149(1)(b) was not applicable and it was only Section 149(1)(a) of the I.T.Act that was applicable and consequently, the impugned proceedings pursuant to the Notice dated 30.06.2021 issued beyond he period of limitation, which expired on 31.03.2018 are hopelessly barred by limitation and the impugned proceedings and order deserve to be quashed. 12. A perusal of the proviso to Section 149(1)(b) also creates a bar for issuance of a Notice by invoking Section 148(1)(b) for the relevant assessment year beginning on or before 01.04.2021, if such notice could not 36 have been issued at that time on account of being beyond the time limit specified under the provisions of Section 149(1)(b) as they stood prior to 01.04.2021; in other words, the proviso mandates that if a notice could not have been issued under Section 148 as being barred by limitation under Section 149(1)(b) as it stood prior to amendment, then such notices cannot be issued by relying upon Section 149(1)(b) after amendment which provides a longer / larger period of limitation. 13. In this context, it is relevant to state that while Section 149(1)(a) prior to amendment prescribed period of 4 years, Section 149(1)(b) prior to amendment prescribed a further period of 4 years subject to the conditions stipulated in Section 147 prior to amendment. However, after amendment, while Section 149(1)(a) prescribes a period of three years, Section 149 (1)(b) prescribes a further period beyond 3 years up to 10 years. The proviso to Section 149(1)(b) is a safeguard in favour of the assessee which prevents / prohibits the respondents – revenue from invoking the larger / longer period of 10 years in cases of time barred notices which had lapsed on account of the 37 expiry of the period of limitation under Section 149 (1)(b) prior to amendment. 14. It is therefore clear that if the further period of 4 years contemplated in Section 149(1)(b) had expired prior to 01.04.2021, the larger / longer period of 7 years contemplated in Section 149(1)(b) after amendment will not enure to the benefit of the revenue which is barred / prohibited from issuing such notices which are barred by limitation. 15. As stated above, in the facts of the instant case, it is Section 149(1)(a) that is applicable and not Section 149(1)(b) insofar as the petitioner is concerned and on this ground alone, the impugned order and proceedings deserve to be quashed; alternatively and assuming that Section 149(1)(b) is invocable by the respondents, even then the right of the revenue to issue a notice and initiate proceedings is circumscribed by the provisions of Sections 147 to 151 of the I.T.Act prior to amendment. 16. As stated earlier, the mandatory requirements / conditions / ingredients contained in Section 147 have to be 38 complied with by the respondents – revenue to issue a notice by placing reliance upon the pre-amended provisions. In this regard, in relation to assessment year 2013-14 pertaining to the financial year 2012-13, identical notices were issued by the respondents – revenue, which were challenged before this Court by the petitioner in W.P.No.8059/2021, wherein after referring to various judgments of the Apex Court and this Court, the impugned notice and reasons for reopening were quashed. The relevant portions of the said order passed in W.P.No.8059/2021 are extracted hereunder: “10. The first question that arises for consideration is, whether on 31.03.2021, the respondents were entitled to reopen the assessment proceedings of the petitioner for the assessment year 2012-13 after the expiry of four years as contemplated in Section 147 of the I.T.Act; in this context, reliance is placed upon the proviso to Section 147 of the I.T.Act by the respondents in order to contend that the respondents had a valid reason to believe that the undisclosed income had escaped assessment on account of the petitioner – assessee not disclosing fully and truly all material facts during the course of the original assessment. 39 11. The power / jurisdiction of the respondents – revenue to reopen assessments under Section 147 of the I.T.Act 1961, beyond the prescribed period of limitation on the ground that there were “income had escaped assessment due to failure on the part of the assessee to disclose fully and truly all material facts necessary for assessment” came up for consideration before the Apex Court XXXXXXXXXXXXXX 16. As held in the aforesaid decisions, the respondents – Revenue are entitled to invoke the proviso to Section 147 of the I.T.Act and reopen the proceedings even after the prescribed period of four years only if the petitioner – assessee had failed to fully and truly disclose all material facts for the purpose of assessment; failure on the part of the assessee to fully and truly disclose all facts which are material, relevant and germane for the purpose of assessment is a sine qua non for the purpose of reopening the assessment; in other words, in the absence of any material to show that the facts which were not fully and truly disclosed by the assessee were material, relevant and germane for the purpose of assessment which had been concluded by the revenue, the revenue did not have jurisdiction or authority of law to reopen the assessment beyond the prescribed period of four years; so also, even assuming that all facts had not been disclosed by the assessee at the time of assessment, so long as the said facts are not material, relevant or germane nor 40 have an impact or bearing on the assessment, it cannot be said that the petitioner – assessee had not fully and truly disclosed material facts so as to enable the respondents – revenue to reopen a concluded assessment. 17. In the instant case, it is the specific contention of the petitioner that all relevant and material facts had been stated and disclosed by the petitioner in its income tax returns as well as the reply to the queries put forth by the respondents and the same having been accepted without any demur by the respondents who had concluded the assessment proceedings and passed an assessment order on 31.03.2016, the impugned Demand notice dated 31.03.2021 which was issued beyond the period of limitation of four years was illegal, arbitrary and without jurisdiction or authority of law. It is also contended that a perusal of income tax returns as well as the reply submitted by the petitioner on 22.06.2015 to the notice dated 09.06.2015 issued by the respondents will indicate that the face value / book value of the shares as well as the total market value of all the quoted investments including the shares had been mentioned / stated in the returns in addition to other material particulars and details and consequently, there has not been any failure of full and true disclosure of material facts for the purpose of assessment. 41 18. Per contra, it is contended by the respondents that the petitioner had not disclosed and full and true facts in as much as the book value and the market value of the shares gifted in favour of the petitioner was not disclosed either in the returns or in the reply submitted by the petitioner and as such, the respondents were entitled to invoke the proviso to Section 147 of the I.T.Act and reopen the assessment. 19. As rightly contended by the petitioner, a perusal of the income tax returns submitted by the petitioner for the financial year 2012-13 will indicate that the same contains the following details:- (i) In the Annexures to the returns showing the schedules forming part of the Balance sheet, schedule – 3 contains the details of the investments, among which, long term investments are shown as A, B, C and D while short term investments are shown as A and B. (ii) At page No.1 of the schedules, among long term investments, quoted shares are shown at Sl.No.A, in which, shares of Wipro Ltd., having a face value of Rs.2/- each are shown as 49, 07,14,120 in number. (iii) At Page No.2 of the aforesaid schedules annexed to the returns, the details of the Wipro shares received by the petitioner as gift have been explained including how the aforesaid number of 49,07,14,120 had been arrived at by the petitioner. 42 (iv) At Page No.1 referred to supra, the total number of shares for the previous year i.e., 19,51,87,120 has also been stated. So also, at page No.2, the market value of all the quoted investments including the shares gifted in favour of the petitioner has been stated for assessment year 2012-13 and 2013-14. 20. The aforesaid details contained in the income tax returns submitted by the petitioner clearly falsifies the allegation of the respondents that the book value of the shares had not been mentioned / stated by the petitioner; so also, undisputedly, in order to attract Section 56 (2) (vii) (c) of the I.T.Act, the aggregate fair market value should exceed Rs.50,000/-; the aforesaid details mentioned in the income tax returns are sufficient to indicate that even if the market value of 49,07,14,120 shares is taken at 1 paise per share, it would exceed the aforesaid fair market value of Rs.50,000/- for the purpose of income tax; in other words, in the light of all the details furnished by the petitioner in the returns including the total number of shares, the methodology adopted to compute / quantify the number of shares, the total number of shares for the previous assessment year, the face value / book value of the shares being shown as Rs.2/- each and the total market value of the quoted investments including the gifted shares coupled with the fact that the market value of the shares of Wipro Ltd., which is the public limited company whose share value is 43 available readily in the public domain, it cannot be said that the petitioner had failed to fully and truly disclose all material facts necessary for its assessment. 21. As stated supra, in the light of all the aforesaid material and relevant facts being fully disclosed by the petitioner in its returns, which were more than sufficient to complete the assessment, mere non-disclosure of the market value of the shares separately by the petitioner in its returns cannot lead to an inference that the petitioner has not fully and truly disclosed all material facts necessary for assessment; to put it differently, so long as all other material and relevant facts had been furnished and disclosed and it can be clearly discerned from the returns and the documents that the market value of the shares was in excess of Rs.50,000/-, simply because the market value of 49,07,14,120 shares had not been separately stated / mentioned, it cannot be said that the respondents were entitled to take shelter under the proviso to Section 147 of the I.T. Act and seek to reopen the concluded proceedings of 2016 beyond the period of limitation on 31.03.2021. 22. The material on record also discloses that at the time of assessment proceedings, it was not the case of the respondents that the market value of the shares was a material fact that was not disclosed by the petitioner; on the other hand, in its notice dated 44 09.06.2015 issued under Section 142(1) of the I.T.Act, the only details sought for by the respondents was with regard to the complete list of donors with address, PAN and the amount donated. In the said notice, though there is a separate column which enables the respondents to seek details with regard to computation of income, audit report along with financial statements / schedules, additional information in this regard with regard to non- furnishing of the market value of the shares was not sought for by the respondents in the aforesaid notice dated 09.06.2015 (Annexure-G). This circumstance is also a pointer to the fact that the details furnished by the petitioner in its returns were sufficient and that the petitioner had fully and truly disclosed all material facts. 23. In response to the aforesaid notice dated 09.06.2015, petitioner submitted a reply dated 22.06.2015 and provided complete details of the corpus donors including mail, address and PAN and enclosed documentary evidence of the same. Despite receiving the said reply and documents submitted by the petitioner, respondents did not seek further information / clarification from the petitioner either with regard to the details and documents submitted in the reply or with regard to the market value of the shares or the other details mentioned in the returns submitted earlier, thereby indicating that in view of the information already submitted by the petitioner including the market value of the total 45 quoted investments including the market value of the shares apart from the fact that the market value of Wipro shares were readily available in the public domain and exceeding Rs.50,000/-, the respondents did not deem it necessary or warranted to call upon the petitioner to provide a separate market value of the shares. Accordingly, the respondents proceeded to complete / conclude the assessment proceedings and passed an assessment order on 31.03.2016 accepting the returns submitted by the petitioner. Under these circumstances, I am of the considered view that the impugned notice at Annexure-A and the reasons for reopening the same vide Annexure-A which proceed on the sole premise that the petitioner had not disclosed the boom value and the market value of the shares which tantamount to not fully and truly disclosing material facts are clearly illegal, arbitrary, factually incorrect and perverse and contrary to the material on record warranting interference by this Court in the present petition. 24. As held by the Apex Court and other High Courts including this Court, in the aforesaid decisions, in order to invoke the proviso to Section 147 of the I.T.Act, it is incumbent upon the respondents to establish that the relevant material facts essential for the purpose of assessment had not been disclosed by the petitioner; it cannot be gainsaid that all facts / particulars which have not been stated / mentioned in the returns are not material facts and it is only those facts which would 46 have an impact / bearing upon the assessment that can be construed or treated as essential. In the instant case, all relevant material facts viz., details of shares for the assessment years 2011-12 and 2012- 13 have been stated including the breakup, face value of the shares at Rs.2/- per share, the details of the shares for the previous year, market value of all the quoted investments including the shares etc., have been furnished by the petitioner and accepted at the time of assessment without any demur; under these circumstances, the respondents are not entitled to invoke the proviso to Section 147 of the I.T.Act in order to contend that the income from the shares has escaped assessment on account of failure on the part of the petitioner to fully and truly disclose all material facts. Viewed from this angle also, the impugned notice and the reasons assigned by the respondents deserve to be quashed. 25. As can be seen from the aforesaid decisions, it is the settled legal position that an assessee is under a duty or obligation to disclose only the basic and primary facts relating to his assessment and thereafter, it is for the Assessing officer to make further enquires and draw inferences and if he does not do so for any reason , then the Revenue cannot contend that there was any failure or omission on the part of the assessee. In the instant case, after being in possession of all the relevant facts relating to the gifts of shares received 47 by the petitioner, the Assessing officer consciously chose not to apply Section 56(2)(vii)(c) of the I.T.Act. However, after the expiry of the period of four years mentioned in the proviso to Section 147, the A.O has attempted to take a new view, which is not permissible in law. 26. It is well settled that in a case of reopening covered by the proviso to Section 147 of the I.T.Act, the reasons recorded must set out the exact particulars of the failure to disclose on the part of the assessee, on account of which the escapement of income has taken place and a ritual repetition of the proviso to Section 147 of the I.T.Act would not be sufficient. In the present case, the reasons recorded only state that though the number of WIPRO shares received as a gift were disclosed, but neither the book value nor the market value of the shares was disclosed in the Balance Sheet. This is factually incorrect because the returns submitted by the petitioner indicate that the face value of the WIPRO shares (Rs.2/- per share) and also their market value as on 31.03.2013 which is included in the total market value of the quoted investments are clearly disclosed. In any event, the share of WIPRO is widely quoted and frequently traded and its market value from minute to minute is readily available and it cannot be said that the petitioner has failed to disclose the information which is in the public domain and is continuously available to everybody. Further, 48 the reasons recorded do not even attempt to claim that the non-application of Section 56(2) (vii)(c) of the I.T.Act and the consequent alleged escapement of income was because the Assessing officer was allegedly unaware of the market price of WIPRO shares. For application of Section 56(2)(vii)(c) of the I.T.Act, even if a price as nominal as one paise is assigned to be the market value of each Wipro share received as a gift with the number of shares received as a gift being Rs.29.55 crores, the aggregate value will far exceed the limit of Rs.50,000/- specified in Section 56(2)(vii)(c) of the I.T.Act. Thus, in the facts of the case, it is axiomatic that the Assessing officer considered Section 56(2)(vii)(c) of the I.T.Act not to be attracted at all rather than being unaware of the market price of WIPRO shares as alleged. The market price of these shares is irrelevant because in the reasons recorded, nowhere it is specifically alleged and established that the alleged escapement of income was by reason of the so-called non- disclosure of the share price. In any event, such an allegation even if made, would be false because the Balance Sheet states the market value and consequently, on this ground also, the impugned notice and reasons assigned by the respondents deserve to be quashed. It is therefore clear that the jurisdictional condition precedent laid down by the proviso to Section 147 i.e failure to disclose a material fact, which failure allegedly is the proximate cause of the escapement of income has not been 49 fulfilled at all in the present case and the impugned notice deserves to be quashed. 27. Insofar as the decisions relied upon by the learned counsel for the respondents are concerned, the same are clearly distinguishable on facts and are not adverted to for the purpose of the present case; suffice it to state that the impugned notice and order which proceed on the premise that the face value / book value of the shares has not been stated is clearly factually incorrect; so also, in the peculiar facts of the instant case and the details / particulars of the shares and their value already available with the respondents as stated supra, mere non- mentioning of the market value of the shares also is neither relevant nor germane for the purpose of invoking the proviso to Section 147 of the I.T. Act and consequently, the impugned notice and reasons deserve to be quashed on this ground also.” 17. Coming to the facts of the case on hand, which is in relation to the assessment year 2014-15, the material on record discloses that the aforesaid judgment in W.P.No.8059/2021 was also rendered in relation to the same petitioner – company under identical and similar circumstances, albeit for the previous assessment year 2013-14 and the same is directly and squarely applicable to 50 the facts of the present case also and consequently, no reliance can be placed upon the proviso to Section 149(1)(b) [after amendment] by the respondents in order to contend that the notice dated 30.06.2021 was within the prescribed period of limitation. 18. A perusal of the material on record also indicates that apart from the various facts and circumstances that were taken into account by this Court in W.P.No.8059/2021 in relation to the previous assessment year 2013-14, in the present case, there was a sale of Wipro shares during the assessment year 2014-15 itself and the same was assessed to capital gains tax by the Assessing Officer which clearly indicated that he was fully aware of the market price of the Wipro shares much prior to issuance of the notice dated 30.06.2021 and consequently, it cannot be said that the income of the petitioner had escaped assessment due to failure on the part of the assessee to disclose fully and truly all material facts necessary for assessment. So also, in the original regular assessment proceedings for the subject assessment year 2014-15, the Assessing Officer had sought for and examined the 51 petitioner’ share demat account which was provided by the petitioner to the Assessing Officer furnishing all particulars regarding the Wipro shares; this circumstance is also a pointer to the fact that the Assessing Officer had complete and full knowledge of the subject shares and their value at the time of original assessment proceedings and on this score also, it cannot be said that the income of the petitioner had escaped assessment due to failure on the part of the assessee to disclose fully and truly all material facts necessary for assessment and consequently, the impugned order deserves to be quashed on this ground also. 19. Insofar as the other contentions of both sides and the other reliefs sought for by the petitioner, in view of the findings recorded above, I do not deem it necessary to go into the same for the purpose of disposal of the present petition. 20. In the result, I pass the following:- ORDER (i) The petition is partly allowed. 52 (ii) The impugned order at Annexure-A dated 28.07.2022 and the impugned Notice at Annexure-B both dated 28.07.2022 are hereby quashed. SD/- JUDGE Bmc/Srl. "