DCIT, Central Circle - 4(4), Kolkata , Kolkata V. Jayashree Jayakar Mohanka, Legal Heir of Late Lalit Mohanka, Kolkata

ITSSA 37/KOL/2018

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 9315 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 8 month(s) 6 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 10-01-2020
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2005-2006
• Appeal Filed On: 04-05-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR P K SRIHARI
• Assessee Lawyers: D S DAMLE
• Keywords: Reopening of assessment; Unexplained cash credit; Capital asset; Search and seizure; Period of limitation; Source of fund; Retrospective amendment; Additional evidence; Validity of assessment; Block assessment; Time period of passing order; Reason to believe; Reassessment proceedings; Set aside
• Section: 143(3); 2(14); 142(1); 115JB; 143(2); 113; 43; 72; 13; 147; 131; 68; 27; 148; 132

Judgement Text

1 IT(SS)A NO. 37 & 38/KOL/2018 JAYASHREE JAYAKAR MOHANKA, L /H OF LATE LALIT MOHANKA, AY- 2005-06 & 2006-07 , C , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH: KOL KATA ( ) . . , . ' # $% % , '( ) [BEFORE SHRI A. T. VARKEY, JM & DR. A. L. SAINI, A M] I.T(SS).A. NOS. 37 & 38/KOL/2018 ASSESSMENT YEARS: 2005-06 & 2006-07 DEPUTY COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE-4(4), KOLKATA. VS. JAYASHREE JAYAKAR MOHANKA, L/H OF LATE LALIT MOHANKA (PAN: AEAPM5899P) APPELLANT RESPONDENT DATE OF HEARING 12.12.2019 DATE OF PRONOUNCEMENT 10.01.2020 FOR THE APPELLANT DR. P. K. SRIHARI, CIT, DR FOR THE RESPONDENT SHRI D. S. DAMLE, FCA ORDER PER SHRI A.T.VARKEY, JM BOTH THESE APPEALS PREFERRED BY THE ASSESSEE IS AGA INST THE SEPARATE ORDERS OF THE LD. CIT(A)-21, KOLKATA DATED 28.02.2018 FOR AY 2005-06 AND 2006-07. 2. FIRST WE TAKE UP THE APPEAL OF THE REVENUE FOR A Y 2005-06. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE, LD. CIT(A) HAS ERRED IN HOLDING THAT THE NOTICE ISSUED U/S. 148 OF THE I. T. ACT, 1961 ON 19 .08.2013 FOR AY 2005-06 WAS BARRED BY LIMITATION WITHOUT APPRECIATING THE FACT THAT ASSESSEE HAD BAN K DEPOSITS IN A FOREIGN COUNTRY AND IN THAT CASE, SIXTEEN YEARS FROM THE END OF THE RELEVANT ASSESSME NT YEAR IS THE TIME LIMIT FOR REOPENING ASSESSMENT AS PER SECTION 149(1)(C) OF THE I. T. ACT. 2.THAT THE LD. CIT(A) HAS ERRED IN LAW BY SAYING TH AT AS PER THE FINANCE ACT, 2012 AS ENACTED BY THE PARLIAMENT, SECTION 149(1)(C) WAS MADE EFFECTIVE PR OSPECTIVELY FROM 01.07.2012 AND THEREBY ALSO HAS ERRED IN LAW BY OBSERVING THAT THERE WAS NOTHIN G EXPRESSLY PROVIDED BY THE AMENDING ACT, WHICH INDICATE LEGISLATIVE MIND TO MAKE THE PROVISION APP LICABLE TO THOSE PROCEEDINGS WHICH HAD BECOME BARRED BY LIMITATION ON 0-1.07.2012. 3.THAT THE LD. CIT(A) HAS ERRED IN LAW IN HOLDING T HAT THE PROVISION U/S. 149(1)(C) ARE RETRO-ACTIVE I N OPERATION INASMUCH AS THEY ARE APPLICABLE FOR AY 20 06-07 ONWARDS AND IN SUCH SENSE, THE ASSESSMENT ORDER PASSED U/S. 147 ON 19.01.2015 FOR AY 2005-06 WAS VOID AB INITIO. 2 IT(SS)A NO. 37 & 38/KOL/2018 JAYASHREE JAYAKAR MOHANKA, L /H OF LATE LALIT MOHANKA, AY- 2005-06 & 2006-07 3. THE SOLE ISSUE INVOLVED IN THE GROUNDS OF APPEAL OF REVENUE IS AGAINST THE ACTION OF THE LD. CIT(A) IN HOLDING THAT THE PROCEEDINGS U/S. 147 OF THE INCOME-TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) BECOME TIME BARRED PRIOR TO 01.07.2012 COULD NOT BE REVIVED BY THE AMENDMENT IN SECTION 149(1)(C) OF TH E ACT. THEREFORE, ACCORDING TO HIM THE ASSESSMENT REOPENED BY THE AO ON 19.08.2013 WAS BAR RED BY LIMITATION AND ACCORDINGLY, THE LD. CIT(A) CANCELLED THE ORDER U/S. 147/143(3) OF THE ACT DATED 19.01.2015 SINCE IT IS AB INITIO VOID. 4. BRIEFLY STATED FACTS AS OBSERVED BY THE AO ARE T HAT THE DECEASED ASSESSEE FILED HIS RETURN OF INCOME ON 21.10.2005 DECLARING TOTAL INCO ME AT RS.4,85,860/-. THE SAME WAS ASSESSED AND ACCEPTED U/S. 143(3) OF THE ACT VIDE O RDER DATED 15.10.2007. A SEARCH WAS CONDUCTED ON 22.09.2011 ON THE BUSINESS PREMISES AN D RESIDENCE OF THE MOHANKA GROUP INCLUDING THE FACTORY PREMISES OF M/S. ELECTRO ZAVO D (INDIA) PVT LTD BEING THE FLAGSHIP COMPANY AS WELL AS THE RESIDENCES OF LATE LALIT MOH ANIKA & SMT. JAYASHREE JAYAKAR MOHANKA, DIRECTORS OF THE SAID COMPANY. IN COURSE OF SEARCH OPERATION, STATEMENT OF SMT. JAYASHREE JAYAKAR MOHANKA WAS RECORDED U/S. 132(4) OF THE ACT. IN THE PROCESS, SHE WAS SHOWN DOCUMENTS IN POSSESSION OF THE DEPARTMENT REV EALING INVESTMENTS MADE BY HER OR ON BEHALF IN A BANK ACCOUNT BEARING NO. 5091415336, MA INTAINED WITH M/S. HSBC, SWITZERLAND. SHE ADMITTED THAT AN ACCOUNT HAD BEEN OPENED BY HER HUSBAND LATE LALIT MOHANKA, JOINTLY WITH HERSELF AT THE SAID BANK. SU BSEQUENTLY, ANOTHER STATEMENT WAS RECORDED U/S. 131 ON 18.11.2011, IN WHICH SHE ALSO ADMITTED THAT THE MONEYS INVESTED THEREIN DID NOT APPEAR IN THE REGULAR BOOKS OF ACCO UNTS AND WERE THEREAFTER DISCLOSED FOR TAX PURPOSES. ACCORDING TO AO, THE ASSESSEE VIDE AFFIDA VIT DATED 13.07.2013 STATED THAT SHE HAD NO KNOWLEDGE ABOUT THE OPERATIONS OF THE BANK ACCOU NT IN SWITZERLAND AND IT WAS IN THE EXCLUSIVE KNOWLEDGE OF HER LATE HUSBAND. THEREAFTER SHE PROCURED A BANK STATEMENT RELATING TO THE BANK ACCOUNT AND A COPY OF THE SAME HAD BEEN SUBMITTED TO THE DEPARTMENT ON 19.02.2013 SHOWING THE SAID ACCOUNT WAS IN THE NAME OF HER LATE HUSBAND AS FIRST HOLDER AND HERSELF AS THE SECOND HOLDER. THE SAID STATEMENT R ECORDED ALL TRANSACTIONS SINCE INCEPTION OF THE ACCOUNT OPENED ON 03.08.2004 TILL CLOSURE OF TH E SAME ON 24.02.2009 THE ENTIRE PERIOD BEING DURING THE LIFETIME OF LATE LALIT MOHANKA, WH O EXPIRED ON 07.10.2009. SO, ACCORDING TO AO THE ENTIRE INCOME WAS CHARGEABLE IN THE HANDS OF LATE LALIT MOHANKA, AND THEREAFTER ON HIS DEMISE, ON HIS ESTATE REPRESENTED BY THE LEG AL REPRESENTATIVE IN TERMS OF SEC. 159 OF 3 IT(SS)A NO. 37 & 38/KOL/2018 JAYASHREE JAYAKAR MOHANKA, L /H OF LATE LALIT MOHANKA, AY- 2005-06 & 2006-07 THE ACT. ACCORDING TO AO, THE BANK ACCOUNT STATEMEN T INDICATED THAT THE SAME WAS OPENED ON 06.08.2004 AND THAT AN AGGREGATE AMOUNT OF RS.83 ,70,274.48 HAD BEEN DEPOSITED INTO THE SAID BANK ACCOUNT DURING THE YEAR UNDER CONSIDERATI ON. IT WAS ALSO NOTED THAT THE SAID DEPOSIT WERE NOT REFLECTED IN THE BALANCE SHEET OF THE ASSESSEE AND NOT OFFERED TO TAX AS INCOME FOR THE YEAR IN HIS RETURN OF INCOME. IN VI EW OF THE ABOVE, THE AO ISSUED NOTICE U/S. 148 ON 19.08.2013 SEEKING TO REOPEN THE ASSESSMENT FOR THE AY 2005-06 AND REQUIRED THE ASSESSEE TO FURNISH A RETURN OF INCOME IN RESPONSE TO THE SAID NOTICE. IN THE OBJECTIONS, THE ASSESSEE CHALLENGED THE VALIDITY OF THE NOTICE ISSU ED U/S. 148 ARGUING THAT THE PROCEEDINGS U/S. 147 FOR THE AY 2005-06 HAD BECOME TIME BARRED ON 31.03.2012 AND HENCE, THE NOTICE U/S. 148 ISSUED ON 19.08.2013 WAS WITHOUT JURISDICT ION AND AB INITIO VOID. ACCORDING TO THE ASSESSEE THE CLAUSE OF SEC. 149(1) INSERTED BY TH E FINANCE ACT, 2012 EXTENDING THE TIME LIMIT FOR REOPENING OF ASSESSMENT FROM SIX YEARS TO SIXTEEN YEARS COULD NOT COME TO THE RESCUE OF THE AO FOR THE ASSESSMENT YEAR 2005-06 SI NCE THE PROCEEDINGS U/S. 147 FOR THE RELEVANT YEAR HAD BECOME TIME BARRED ON 31.03.2012 WHEREAS SECTION 149(1)(C) OF THE ACT CAME INTO FORCE W.E.F. 01.07.2012. IN SUPPORT OF T HIS PROPOSITION THE ASSESSEE RELIED ON THE JUDGMENT OF HONBLE SUPREME COURT IN THE CASE OF S. S. GADGIL VS. LAL & CO 53 ITR 231. INSPITE OF THE ABOVE, THE AO PROCEEDED TO CONTINUE WITH THE REASSESSMENT PROCEEDINGS AND CONSEQUENTLY FRAMED THE ASSESSMENT U/S. 147/143(3) OF THE ACT MAKING THE ADDITION OF RS. 84,07,136.95. AGGRIEVED, ASSESSEE PREFERRED AN APP EAL BEFORE THE LD. CIT(A), WHO CANCELLED THE REASSESSMENT PROCEEDINGS BY OBSERVING AS UNDER: 1. I HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF THE LD. AR AND PERUSED THE RELEVANT PROVISIONS OF THE ACT. THE FACTS OF THE CASE ARE IN NARROW CO MPASS. THE APPELLANT IN THE PRESENT CASE IS LEGAL HEIR OF LATE LALITMOHANKA WHO HAD FILED RETUR N OF INCOME FROM AY 2005-06 DURING HIS LIFETIME. A SEARCH U/S. 132 WAS CONDUCTED ON 22.09 .2011 AT THE BUSINESS AND RESIDENTIAL PREMISES OF LATE LALITMOHANKA AND M/S. ELECTRO ZAVO D INDIA PVT LTD ON THE PREMISE THAT THE DEPARTMENT WAS IN POSSESSION OF INFORMATION THAT A BANK ACCOUNT IN THE NAME OF SHRI LALITMOHANKA WAS OPENED BY HIM WITH HSBC PRIVATE BA NKING, GENEVA, SWITZERLAND. IN THE COURSE OF SEARCH AND SUBSEQUENT PROCEEDINGS CONDUCT ED BY THE AUTHORIZED OFFICER, SMT. MOHANKA, LEGAL HEIR OF HER HUSBAND ADMITTED THE EXI STENCE OF SUCH AN ACCOUNT. IT ALSO APPEARS THAT SUBSEQUENT TO SEARCH MRS. MOHANKA BASE D ON THE INFORMATION PROVIDED BY THE TAX DEPARTMENT HAD REQUESTED THE SAID BANK TO PROVI DE HER WITH STATEMENT OF THE SAID BANK A/C AND THE COPY THEREOF ON BEING SUPPLIED BY THE B ANK WAS PROVIDED TO THE TAX DEPARTMENT. SUBSEQUENT TO SEARCH, PROCEEDINGS UNDER CHAPTER XIV OF THE ACT WERE INITIATED BY THE LD. AO FOR THE AY 2006-07 AND ONWARDS. ON RECEIPT OF THE R ELEVANT BANK STATEMENTS, THE LD. AO NOTED THAT THE SAID BANK ACCOUNT WAS OPENED AND THE DEPOSITS IN THE SAID BANK ACCOUNT WERE FIRST MADE BY SHRI MOHANKA IN FY 2004-05 BEING PREV IOUS YEAR RELEVANT TO THE AY 2005-06. SINCE THE SAID ASSESSMENT YEAR DID NOT COME WITHIN THE AMBIT OF PROVISIONS OF SECTION 153C, 4 IT(SS)A NO. 37 & 38/KOL/2018 JAYASHREE JAYAKAR MOHANKA, L /H OF LATE LALIT MOHANKA, AY- 2005-06 & 2006-07 THE LD. AO ISSUED A NOTICE U/S 148 DATED 19.08.2013 AFTER RECORDING THE REASONS TO BELIEVE FOR REOPENING OF ASSESSMENT. 2. THE APPELLANT PER SE DID NOT OBJECT TO THE FACTS STATED IN THE RECORDED REASONS BUT OBJECTED TO THE INITIATION OF THE REASSESSMENT PROCEEDINGS U /S 147 ON THE GROUND THAT PROVISIONS OF SECTION 149 DID NOT PERMIT THE LD. AO TO REOPEN THE ASSESSMENT FOR THE AY 2005-06 SINCE THE PROCEEDINGS FOR THE RELEVANT YEAR HAD BECOME TIME B ARRED ON 31.03.2012 WHEREAS THE REASSESSMENT PROCEEDINGS IN THE WERE INITIATED ONLY ON 19.08.2013 I.E. AFTER THE PROCEEDINGS HAD BECOME TIME BARRED. IN THE COURSE OF APPELLATE PROCEEDINGS THE LD. AR OF THE APPELLANT MADE EXTENSIVE ARGUMENTS CLAIMING THAT IN TERMS OF SECTION 149 AS WAS IN FORCE, THE ASSESSMENT PROCEEDINGS FOR AY 2005-06 COULD NOT BE REOPENED BY THE DEPARTMENT AFTER 01.04.2012 BY TAKING RECOURSE TO EXTENDED LIMITATIO N PERIOD PRESCRIBED IN SECTION 149(1)(C) OF THE ACT. 3. FROM THE SUBMISSIONS OF THE LD. AR, I THUS NOTE THAT THE ONLY MATERIAL ISSUE TO BE DECIDED IN THE PRESENT APPEAL IS WHETHER THE INITIATION OF REASSESSMENT PROCEEDINGS U/S 148 ON 19.08.2013 COULD BE SAID TO BE WITHIN THE PERIOD OF LIMITATION AS PRESCRIBED IN SECTION 149 OF THE ACT OR WHETHER ON THE FACTS OBTAINED IN THE PRE SENT CASE IT CAN BE SAID THAT THE REASSESSMENT PROCEEDINGS HAD BECOME TIME BARRED ON 31.03.2012 AND THEREFORE INITIATION OF PROCEEDINGS U/S 147 ON 19.08.2013 WAS HIT BY THE LA W OF LIMITATION. 4. SECTION 149(1) OF THE INCOME-TAX ACT, 1961 AS NO W IN FORCE READS AS FOLLOWS: (1) NO NOTICE UNDER SECTION 148 SHALL BE ISSUED 47 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, HAV E 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 MOR E 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 AN Y ASSET (INCLUDING FINANCIAL INTEREST IN ANY ENTITY) LOCATED OUTSIDE INDIA, CHARGEABLE TO TAX, H AS ESCAPED ASSESSMENT. 5. ON PERUSAL OF THE SAID SECTION AND PROVISIONS OF THE FINANCE BILL, 2012 READ WITH NOTES ON CLAUSES THEREON; I FIND THAT CLAUSE (C) WAS ENACTED BY THE LEGISLATURE THROUGH FINANCE ACT, 2012. BY ENACTING CLAUSE (C) IN SECTION 149(1), THE LEGISLATURE ENLARGED THE PERIOD OF LIMITATION UPTO 16 YEARS FOR ASSESSING ANY INCOME E SCAPING ASSESSMENT AND WHICH AN ASSESSEE DERIVED IN RELATION TO ANY ASSET LOCATED OUTSIDE IN DIA. I NOTE THAT EVEN THOUGH THE FINANCE BILL, 2012 WAS PRESENTED IN THE PARLIAMENT ON 29TH FEBRUARY 2012 AND THE BILL WAS ENACTED INTO FINANCE ACT, 2012 IN MAY 2012 YET CLAUSE CC) O F SECTION 149(1) WAS MADE EFFECTIVE PROSPECTIVELY FROM 01.07.2012. THE NOTES ON CLAUSES STATED THAT THE AMENDED PROVISIONS CAME IN FORCE WITH EFFECT FROM 01.07.2012. I THEREF ORE NOTE THAT THE AMENDING ACT BEING FINANCE ACT, 2012 BY WHICH CLAUSE (C) WAS ENACTED A ND INSERTED IN SECTION 149(1), PARTICULARLY PRESCRIBED THAT THE AMENDING LAW CAME INTO EFFECT ON 01.07.2012 AND THERE WAS NOTHING IN THE AMENDING ACT WHICH INDICATED THE LEG ISLATIVE INTENT TO MAKE THE SAID PROVISION OPERATIVE RETROSPECTIVELY. IN THIS REGARD THE LD. A R OF THE APPELLANT BROUGHT TO MY ATTENTION THE PROVISIONS OF FINANCE BILL, 2012 BY WHICH AMEND MENTS WERE PROPOSED TO BE MADE IN THE INCOME-TAX ACT, 1961 TO AMEND SEVERAL SECTIONS WITH RETROSPECTIVE EFFECT. FOR EXAMPLE, THE SECTIONS 2(14) & 2(47) DEFINING THE EXPRESSIONS 'CA PITAL ASSET' & 'TRANSFER' WERE AMENDED AND THE AMENDED PROVISIONS WERE MADE EFFECTIVE RETROSPE CTIVELY FROM 01.04.1962. SIMILARLY AMENDMENTS WERE CARRIED OUT IN SECTION 9(1)(VI) & 9 (1)(VII) ENLARGING THE DEFINITION OF INCOME DEEMED TO ACCRUE IN INDIA BY WAY OF 'ROYALTY ' AND 'FEES FOR TECHNICAL SERVICES' AND THE AMENDMENTS WERE MADE EFFECTIVE RETROSPECTIVELY FROM 01.04.1976. UNLIKE, THE FOREGOING AMENDMENTS WHICH WERE SPECIFICALLY MADE EFFECTIVE R ETROSPECTIVELY, THE AMENDMENT IN SECTION 149(1) WAS MADE EFFECTIVE PROSPECTIVELY FROM 01.07. 2012. IN THE ABOVE FACTUAL BACKGROUND THEREFORE IT IS NECESSARY TO ASCERTAIN WHETHER THE LD. AO COULD BE HELD TO BE JUSTIFIED IN 5 IT(SS)A NO. 37 & 38/KOL/2018 JAYASHREE JAYAKAR MOHANKA, L /H OF LATE LALIT MOHANKA, AY- 2005-06 & 2006-07 REOPENING THE ASSESSMENT FOR AY 2005-06 WHICH BECAM E TIME BARRED ON 31.03.2012 AND ON THAT DATE ADMITTEDLY CLAUSE (C) OF SECTION 149(1) W AS NOT IN FORCE. 6. PROVISIONS OF THE INCOME-TAX ACT, 1961, AS WERE IN FORCE ON 31.03.2012; ASSESSMENT OF ANY ASSESSEE COULD BE REOPENED BY THE LD. AO UNDER SECT ION 147 OF THE ACT BY ISSUING NOTICE U/S 148 WITHIN THE TIME PRESCRIBED IN SECTION 149 OF TH E ACT. AS PER SECTION 149, NO ASSESSMENT COULD BE REOPENED AFTER THE EXPIRY OF PERIOD OF SIX YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR. AS SUCH THE ASSESSMENT FOR AY 2005 -06 COULD HAVE BEEN LEGALLY REOPENED AT ANY TIME TILL 31.03.2012 AND NOT THEREAFTER. FROM T HE FACTS ON RECORD IT IS EVIDENT THAT NO NOTICE U/S 148 WAS ISSUED BY THE LD. AO FOR AY 2005 -06 TILL 31.03.2012 EVEN THOUGH THE SEARCH IN THE APPELLANT'S CASE WAS CONDUCTED ON 22. 09.2011 ON THE BASIS OF INFORMATION AVAILABLE WITH THE DEPARTMENT THAT MR. LALITMOHANKA MAINTAINED UNDISCLOSED ACCOUNT WITH HSBC BANK, GENEVA. I FURTHER NOTE THAT AS PER THE P ROVISIONS OF SECTION 149(1) AS THEY WERE IN FORCE TILL ITS AMENDMENT BY FINANCE ACT, 2012, T HE REOPENING OF ASSESSMENT FOR AY 2005-06 WAS NOT PERMISSIBLE AFTER 31.03.2012. IT IS ONLY IF IT IS HELD THAT PROVISIONS OF SECTION 149(1)(C) WERE RETROSPECTIVE IN OPERATION THEN ALON E IT CAN BE HELD THE REOPENING AS MADE BY THE LD. AO IS WITHIN THE PERIOD OF LIMITATION. 7. AS NOTED IN THE FOREGOING; FROM THE PLAIN LANGUA GE USED IN SECTION 149 OR IN THE FINANCE ACT, 2012, 'THERE IS NOTHING WHICH IN ANY MANNER SH OWS THAT THE LEGISLATURE INTENDED TO PROVISIONS OF SECTION 149(1)(C) APPLICABLE RETROSPE CTIVELY. ON THE CONTRARY I NOTE THAT EVEN THOUGH THE FINANCE ACT, 2012 WAS PASSED BY THE LEGI SLATURE AND APPROVED BY THE PRESIDENT IN MAY 2012, SECTION 149(1)(C) WAS MADE APPLICABLE PRO SPECTIVELY FROM 01.07.2012. THESE FACTS CONSIDERED CUMULATIVELY THEREFORE LEADS TO CONCLUSI ON THAT THE LEGISLATURE DID NOT INTEND TO MAKE THE AMENDED PROVISION APPLICABLE RETROSPECTIVE LY. THE ASSESSEE'S RELIANCE ON THE JUDGMENT OF THE SUPREME COURT IN THE CASE OF J.P. J ANI ITO VS INDUPRASAD D. BHATT (72 ITR 595) THEREFORE APPEARED TO BE RELEVANT IN DECIDING THIS ISSUE. THE ISSUE FOR CONSIDERATION BY THE HON'BLE SUPREME COURT IN THAT CASE WAS SIMILAR TO THE ONE INVOLVED IN THE PRESENT CASE. IN THAT CASE THE ASSESSEE HAD CLAIMED THAT HIS ASSESSM ENT WAS REOPENED BY THE LD. AO BY TAKING BENEFIT OF THE EXTENDED PERIOD OF LIMITATION WHICH WAS PROVIDED FOR IN SECTION 148 UNDER THE 1961 ACT WHEREAS THE PERIOD OF LIMITATION UNDER THE 1922 ACT HAD ALREADY EXPIRED. IT WAS ASSESSEE'S CONTENTION THAT EVEN THOUGH THE PERIOD O F LIMITATION FOR REOPENING OF ASSESSMENT WAS EXPANDED IN SECTION 148 OF THE 1961 ACT, THE SA ID PROVISION DID NOT REVIVE THE ASSESSMENT WHICH HAD ALREADY BECOME TIME BARRED BEFORE THE AME NDED PROVISIONS OF SECTION 148 OF THE INCOME-TAX ACT, 1961 CAME INTO FORCE. IN THAT CASE THE INCOME- TAX ASSESSMENT OF THE ASSESSEE FOR AY 1947-48 WAS MADE BY THE LD. AO ON 31.01.1952 . THEREAFTER THE LD. AO ISSUED A NOTICE DATED 27.03.1956 UNDER SECTION34(1)(A) OF TH E INCOME-TAX ACT, 1922 AND SERVED IT BY AFFIXTURE. THE LD. AO COMPLETED THE ASSESSMENT ON 2 9.02.1957 AGAINST WHICH THE APPEAL WAS FILED BY THE ASSESSEE. THE AAC ALLOWED THE APPEAL A ND SET ASIDE THE ASSESSMENT ORDER ON THE GROUND THAT THERE WAS NO VALID SERVICE OF NOTICE. T HE ORDER OF AAC WAS PASSED ON 05.01.1963 BY WHICH TIME THE INCOME-TAX ACT, 1922 WAS REPEALED AND INCOME-TAXACT, 1961 HAD COME IN FORCE WITH EFFECT FROM 01.04.1962. UNDER THE INCOME -TAX ACT, 1961 THE PERIOD OF LIMITATION WAS ENLARGED FROM 8 YEARS TO 16 YEARS AND THEREFORE TAKING BENEFIT OF THE ENLARGED PERIOD THE LD. AO ISSUED A SHOW CAUSE ON 04.01.1963 AND SUBSEQ UENTLY ISSUED THE NOTICE U/S 148 OF THE NEW INCOME-TAX ACT, 1961 ON 13.11.1963. THE ASSESSE E CHALLENGED THE VALIDITY OF THE NOTICE AND THE CONSEQUENT REASSESSMENT PROCEEDINGS BY FILI NG A CIVIL APPLICATION. THE HON'BLE GUJARAT HIGH COURT ALLOWED THE ASSESSEE'S PLEA CHAL LENGING THE VALIDITY OF THE NOTICE AND HELD THAT ON TRUE CONSTRUCTION OF SECTION 297(2)(D) (II) OF THE 1961 ACT, THE ITO COULD NOT ISSUE A NOTICE U/S 148 IN ORDER TO REOPEN THE ASSESSMENT IN A CASE WHERE THE RIGHT TO REOPEN THE ASSESSMENT WAS BARRED UNDER THE OLD ACT AT THE TIME WHEN THE NEW ACT CAME INTO FORCE. ACCORDING TO HIGH COURT WHEN THE PERIOD FOR REOPENI NG THE ASSESSMENT UNDER SECTION 34(1)(A) OF THE OLD ACT HAD ALREADY LAPSED AT THE T IME WHEN THE NEW ACT COMMENCED, THEN IN SUCH CASE ITO WAS NOT COMPETENT TO ISSUE A NOTICE U /S 148 OF THE NEW ACT SO' AS TO REOPEN THE ASSESSMENT BY RELYING ON PROVISIONS ENACTED IN SECT ION 297(2)(D)(II) OF THE NEW ACT. ON FURTHER APPEAL THE SUPREME COURT UPHELD THE JUDGMEN T OF GUJARAT HIGH COURT. WHILE 6 IT(SS)A NO. 37 & 38/KOL/2018 JAYASHREE JAYAKAR MOHANKA, L /H OF LATE LALIT MOHANKA, AY- 2005-06 & 2006-07 UPHOLDING THE HIGH COURT'S DECISION, THE SUPREME CO URT'S RELEVANT OBSERVATIONS WERE AS FOLLOWS: 'IT WAS ADMITTED IN THIS CASE THAT THE RIGHT OF THE ITO TO REOPEN THE ASSESSMENT FOR THE YEAR 1947-48 WAS BARRED UNDER THE OLD ACT BEFOR E THE NEW ACT CAME INTO FORCE. IT WAS OPINED THAT IT WAS NOT PERMISSIBLE TO CONSTRUE SECTIONS 297(2)(D)(II ) OF THE NEW ACT AS REVIVING THE RIGHT OF THE ITA TO REOPEN THE ASSESSMENT WHICH WAS ALREADY BARREDUNDER THE OLD ACT. THE REASON WAS THAT SUCH A CONSTRUCTION OF SECTION 297(2)(A)(II) WOULD BE TANTAMOUNT TO GIVING OF RETR OSPECTIVE OPERATION TO THAT SECTION WHICH IS NOT WARRANTED EITHER BY THE EXPRESS LANGUA GE OF THE SECTION OR BY NECESSARYIMPLICATION. THE PRINCIPLE IS BASED ON THE WELL-KNOWN RULE OF INTERPRETATION THAT, UNLESS THE TERMS OF THE STATUTE EXPRESSLY SO PROVIDE OR UNLESS THERE IS ANECESSARY IMPLICATION, RETROSPECTIVE OPERATION SHOULD NOT BE GIVEN TO THE STATUTE SO AS TO AFFECT, AFTER OR DESTROY ANY RIGHT ALREADY ACQUIRED OR TO A NY REMEDY ALREADY LOST BY EFFLUX OF TIME. THE LANGUAGE OF THE NEW SECTION MUST BE READ AS APPLICABLE ONLY TO THOSE CASES WHERE THE RIGHT OF THE ITO TO REOPEN THE ASSESSMENT WAS NOT BARRED UNDER THE REPEALED SECTION, THE NEW STATUTE DOES NOT DISCLOSE IN EXPRESS TERMS OR BY NECESSARY IMPLICATION THAT THERE WAS A REVIVAL OF THE RIGHT O F THE ITO TO REOPEN AN ASSESSMENT WHICH WAS ALREADY BARRED UNDER THE OLD ACT. IT MUST BE HELD THAT, ON A PROPER CONSTRUCTION OF S ECTION 297(2)(D )(II) OF THE NEW ACT, THE ITO COULD NOT ISSUE A NOTICE UNDER SECTION 148 IN ORDER TO REOPEN THE ASSESSMENT OF AN ASSESSEE IN A CASE WHERE THE RIGHT TO REOPEN THE ASSESSMENT WAS BARRED UNDER THE OLD ACT AT THE DATE WHEN THE NEW ACT CAME INTO FORCE. IT FOLLOWED, THER EFORE, THAT THE NOTICES DATED 13-11-1963 AND 9-1-1964, ISSUED BY THE ITO, WERE ILLEGAL AND U LTRA VIRES AND WERE RIGHTLY QUASHED BY THE HIGH COURT BY THE GRANT OF A WRIT. THE APPEAL WAS D ISMISSED AND DECISION OF HIGH COURT AFFIRMED. ' 8. THE JUDGMENT OF THE SUPREME COURT IN THE CASE OF S.S. GADGIL VS LAL & CO. (50 ITR 231) IS ALSO RELEVANT IN DECIDING THIS ISSUE. IN THAT CASE WHILE COMPLETING THE ASSESSMENT FOR AY 1954-55, THE LD. AO FOUND THAT THE ASSESSEE HAD BUS INESS CONNECTIONS WITH NON-RESIDENTS AND THEREFORE AN SCN WAS ISSUED ON 12.03.1957 DIRECTING THE ASSESSEE TO SHOW CAUSE WHY IT SHOULD NOT BE TREATED AS AN AGENT OF NON-RESIDENT P ARTIES FOR AY 1954-55. THE ASSESSEE NOT ONLY DENIED THAT IT WAS AN AGENT OF NON-RESIDENTS B UT ALSO CONTENDED THAT THE ACTION UNDER SECTION 43 WAS TIME BARRED. THE LD. AO HOWEVER ISSU ED NOTICE U/S 34 OF THE 1922 ACT ON 27.03.1957 TREATING THE ASSESSEE TO BE AGENT OF NON -RESIDENTS AFTER REJECTING ASSESSEE'S CONTENTION THAT PROCEEDINGS HAD BECOME TIME BARRED. RELYING ON PROVISO TO SECTION 34(1)(B)(III) INSERTED BY FINANCE ACT, 1956; THE IT O HELD THAT THE LEGISLATURE HAD EXTENDED THE TIME LIMIT IN CLEAR AND EXPRESS TERMS TO COVER ACTION U/S 34 AGAINST AGENTS OF NON- RESIDENTS. THE REOPENING WAS CHALLENGED IN WRIT PET ITION BEFORE THE HIGH COURT. THE BOMBAY HIGH COURT HELD THAT ON THE DATE WHEN THE NOTICE U/ S 34 WAS ISSUED, BY THE REASON OF THE PROVISO THE NOTICE WAS OUT OF TIME AND THE PERIOD P ROVIDED THEREBY COULD NOT BE EXTENDED BY THE FINANCE ACT, 1956 SO AS TO AUTHORIZE AO TO ISSU E A NOTICE FOR ASSESSMENT TREATING THE ASSESSEE TO BE AGENT OF NON- RESIDENT. ON APPEAL TH E SUPREME COURT WHILE UPHOLDING THE JUDGMENT OF BOMBAY HIGH COURT NOTED THAT AS PER SEC TION 34 A NOTICE OF ASSESSMENT AGAINST A PERSON DEEMED TO BE AN AGENT OF A NON-RESIDENT UNDE R SECTION 43, COULD NOT BE ISSUED AFTER EXPIRY OF ONE YEAR FROM THE END OF THE RELEVANT ASS ESSMENT YEAR. SUCH PERIOD EXPIRED ON 31.03.1956. UNDER THE AMENDED PROVISIONS HOWEVER TH E PERIOD WAS EXTENDED TO TWO YEAR FROM THE END OF RELEVANT ASSESSMENT YEAR. ACCORDING LY NO NOTICE COULD HAVE BEEN ISSUED AFTER 31.03.1956 BY RELYING UPON THE AMENDED LAW. THE COU RT NOTED THAT THE LD. AO HAD TAKEN RECOURSE UNDER THE AMENDED SECTION 34 WHICH GRANTED HIM PERIOD OF TWO YEARS FROM THE END OF THE ASSESSMENT YEAR. THE COURT HOWEVER NOTED THA T FINANCE ACT, 1956 WHICH BROUGHT ABOUT THE AMENDMENT IN SECTION 34 WAS NOT GIVEN RETROSPEC TIVE EFFECT. ACCORDING THE APEX COURT, UNDISPUTEDLY THE PERIOD FOR SERVICE OF NOTICE UNDER THE UN-AMENDED SECTION 34 EXPIRED BEFORE 01.04.1956 AND THERE WAS NOTHING IN THE AMENDED ACT EXTENDING THE PERIOD BEYOND THE END OF ONE YEAR FROM THE END OF THE YEAR OF ASSESSMENT. TH E APEX COURT THEREFORE HELD THAT THE ITO 7 IT(SS)A NO. 37 & 38/KOL/2018 JAYASHREE JAYAKAR MOHANKA, L /H OF LATE LALIT MOHANKA, AY- 2005-06 & 2006-07 COULD HAVE COMMENCED THE REASSESSMENT PROCEEDINGS O N 27.03.1957 ONLY IF THE AMENDED SECTION WAS APPLICABLE AND NOT OTHERWISE. ACCORDING TO COURT HOWEVER THE AMENDMENT ACT CAME IN FORCE WITH EFFECT FROM 01.04.1956 AND PRIOR TO THAT DATE THE PERIOD EARLIER PROVIDED FOR ISSUE OF ONCE U/S 34 HAD EXPIRED. IN THE OPINIO N OF THE COURT, THERE WAS NO OVER-LAPPING PERIOD AND THEREFORE THERE WAS NO SCOPE FOR ISSUING NOTICE UNDER THE AMENDED SECTION 34 WHICH EXTENDED THE PERIOD OF LIMITATION. 9, I ALSO NOTE THAT THE SUPREME COURT HAD OCCASION TO CONSIDER THE SCOPE OF AMENDED LIMITATION PERIOD IN THE REVENUE PROCEEDINGS IN THE CASE OF UNION OF INDIA VS UTTAM STEELS LTD (319 ELT 598), IN THIS CASE THE ASSESSEE WAS CARRYI NG ON BUSINESS OF MANUFACTURE & EXPORT OF GALVANIZED CORRUGATED SHEETS. THE COMPANY HAD EFFEC TED EXPORT SHIPMENTS ON 25.5.1999 & 10.06.1999, IN RESPECT OF SUCH EXPORTS, UNDER SECTI ON 116 OF THE CENTRAL EXCISE ACT, 1944; THE COMPANY COULD HAVE FURNISHED ITS CLAIM FOR REBATE W ITHIN SIX MONTHS FROM THE DATES OF SHIPMENT. THE COMPANY HOWEVER FILED ITS CLAIM ON 28 .12.1999 WHICH WAS BEYOND THE PERIOD PRESCRIBED IN SECTION 116 OF THE RELEVANT ACT. SUBS EQUENT TO FILING OF CLAIM, THE FINANCE ACT, 2000 AMENDED SECTION 116 EXTENDING THE PERIOD FOR F URNISHING REBATE CLAIMS FROM SIX MONTHS TO ONE YEAR. THE SAID SECTION BECAME EFFECTIVE FROM 12.05.2000. THE ASSESSEE PLEADED THAT UNDER THE AMENDED PROVISIONS OF SECTION 116, THE CL AIM FURNISHED WAS WITHIN PERIOD OF LIMITATION AND THEREFORE THE REBATE CLAIM SHOULD BE ALLOWED. THE ASSESSEE'S CONTENTION WAS ACCEPTED BY APPELLATE AUTHORITIES INCLUDING HIGH CO URT, BUT ON APPEAL THE SUPREME COURT OVERRULED THE JUDGMENT OF THE HIGH COURT AND HELD T HAT SINCE THE PERIOD OF LIMITATION PRESCRIBED IN SECTION 11B HAD ALREADY EXPIRED PRIOR TO AMENDMENT COMING INTO EFFECT, THE AMENDMENT ACT DID NOT AND COULD NOT REVIVE DEAD PRO CEEDINGS. IN ARRIVING AT SUCH CONCLUSION, THE APEX COURT RELIED ON NUMEROUS JUDGM ENTS RENDERED ON THE SUBJECT. THE RELEVANT FINDINGS OF THE APEX COURT WERE AS FOLLOWS : 10. WE HAVE HEARD THE LEARNED COUNSEL FOR THE PARTI ES AND SHRI BAGARIA, THE LEARNED AMICUS CURIAE AT SOME LENGTH. THERE IS NO DOUBT WHA TSOEVER THAT A PERIOD OF LIMITATION BEING PROCEDURAL OR ADJECTIVAL LAW WOULD ORDINARILY BE RETROSPECTIVE IN NATURE. THIS, HOWEVER, IS WITH ONE PROVISO SUPER ADDED WHICH IS T HAT THE CLAIM MADE UNDER THE AMENDED PROVISION SHOULD NOT ITSELF HAVE BEEN A DEA D CLAIM IN THE SENSE THAT IT WAS TIME-BARRED BEFORE AN AMENDING ACT WITH A LARGER PE RIOD OF LIMITATION COMES INTO FORCE. A NUMBER OF JUDGMENTS OF THIS COURT HAVE REC OGNISED THE AFORESAID PROPOSITION: 10.1 THUS, IN S.S GADGIL V. LAL AND CO. AIR 1965 SC 171, THIS COURT STATED: (AIR P. 177, PARA 13) '13. AS WE HAVE ALREADY POINTED OUT, THE RIGHT TO C OMMENCE A PROCEEDING FORASSESSMENT AGAINST THE ASSESSEE AS AN AGENT OF A NON-RESIDENT PARTY UNDER THE INCOME TAX ACT BEFORE IT WAS AMENDED, ENDED ON 31-3 -1956. IT IS TRUE THAT UNDER THE AMENDING ACT BY SECTION 18 OF THE FINANCE ACT, 1.95 6, AUTHORITY WAS CONFERRED UPON THE INCOME TAX OFFICER TO ASSESS A PERSON AS AN AGENT O F A FOREIGN PARTY UNDER SECTION 43 WITHIN TWO YEARS FROM THE END OF THE YEAR OF ASSESS MENT. BUT AUTHORITY OF THE INCOME TAX OFFICER UNDER THE ACT BEFORE IT WAS AMENDED BY THE FINANCE ACT OF 1956 HAVING ALREADY COME TO AN END, THE AMENDING PROVISION WILL NOT ASSIST HIM TO COMMENCE A PROCEEDING EVEN THOUGH AT THE DATE WHEN HE ISSUED T HE NOTICE IT IS WITHIN THE PERIOD PROVIDED BY THAT AMENDING ACT. THIS WILL BE SO, NOT WITHSTANDING THE FACT THAT THERE HAS BEEN NO DETERMINABLE POINT OF TIME BETWEEN THE EXPI RY OF THE TIME PROVIDED UNDER THE OLD ACT AND THE COMMENCEMENT OF THE AMENDING ACT. T HE LEGISLATURE HAS GIVEN TO SECTION 1.8 OF THE FINANCE ACT, 1956, ONLY A LIMITE D RETROSPECTIVE OPERATION I.E. UP TO 1- 4-1956, ONLY. THAT PROVISION MUST BE READ SUBJECT T O THE RULE THAT IN THE ABSENCE OF AN EXPRESS PROVISION OR CLEAR IMPLICATION, THE LEGISLA TURE DOES NOT INTEND TO ATTRIBUTE TO THE AMENDING PROVISION A GREATER RETROSPECTIVITY TH AN IS EXPRESSLY MENTIONED, NOR TO AUTHORISE THE INCOME TAX OFFICER TO COMMENCE PROCEE DINGS WHICH BEFORE THE NEW ACT CAME INTO FORCE HAD BY THE EXPIRY OF THE PERIOD PRO VIDED, BECOME BARRED. ' 8 IT(SS)A NO. 37 & 38/KOL/2018 JAYASHREE JAYAKAR MOHANKA, L /H OF LATE LALIT MOHANKA, AY- 2005-06 & 2006-07 10.2 TO SIMILAR EFFECT IS THE JUDGMENT IN ITO V. IN DUPRASADDEVSHANKER BHATT AIR 1969 SC 778. THE COURT HELD: (AIR P. 783, PARA 6) '6. IN OUR OPINION, THE PRINCIPLE OF THIS DECISION APPLIES IN THE PRESENT CASE AND IT MUST BE HELD THAT ON A PROPER CONSTRUCTION O F SECTION 297(2)(D)(II) OF THE NEW ACT, THE INCOME TAX OFFICER CANNOT ISSUE A NOTICE UNDER SECTION 148 IN ORDER TO REOPEN THE ASSESSMENT OF AN ASSESSEE IN A CASE WHERE THE RIGHT TO REOPEN THE ASSESSMENT WAS BARRED UNDER THE OLD ACT AT THE DATE WHEN THE NEW ACT CAME INTO FORCE. IT FOLLOWS THEREFORE THAT THE NOTICES DATED 13-11-1963 AND 9-1-1964 ISSUED BY THE INCOME TAX OFFICER, AHME DABAD WERE ILLEGAL AND ULTRA VIRES AND WERE RIGHTLY QUASHED BY THE GUJARAT HIGH COURT BY THE GRANT OF A WRIT.' 10.3 IN NEW INDIA INSURANCE CO. LTD V. SMTSHAATLMIS RA, ADULT 1975 2 SCC 840, THIS COURT SAID: (SCC P. 846, PARA 7) '7 .... '(2) ... THE NEW LAW OF LIMITATION PROVIDIN G A LONGER PERIOD CANNOT REVIVE A DEAD REMEDY. NOR CAN IT SUDDENLY EXTINGUIS H VESTED RIGHT OF ACTION BY PROVIDING FOR A SHORTER PERIOD OF LIMITATION. 10.4 SIMILARLY IN T KALLAMURTHI Y. FIVE GORIIHALKKA LWAKF 2008 9 SCC 306, THIS COURT SAID: (SCC P. 322, PARA 40) '40. IN THIS BACKGROUND, LET US NOW SEE WHETHER THI S SECTION HAS ANY RETROSPECTIVE EFFECT. IT IS WELL SETTLED THAT NO STATUTE SHALL BE CONSTRUED TO HAVE A RETROSPECTIVE OPERATION UNTIL ITS LANGUAGE IS SUCH THAT WOULD REQ UIRE SUCH CONCLUSION. THE EXCEPTION TO THIS RULE IS ENACTMENTS DEALING WITH PROCEDURE. THIS WOULD MEAN THAT THE LAW OF LIMITATION, BEING A PROCEDURAL LAW, IS RETROSPECTIV E IN OPERATION IN THE SENSE THAT IT WILL ALSO APPLY TO PROCEEDINGS PENDING AT THE TIME OF THE ENACTMENT AS ALSO TO PROCEEDINGS COMMENCED THEREAFTER, NOTWITHSTANDING T HAT THE CAUSE OF ACTION MAY HAVE ARISEN BEFORETHE NEW PROVISIONS CAME INTO FORCE. HO WEVER, IT MUST BE NOTED THAT THERE IS AN IMPORTANT EXCEPTION TO THIS RULE ALSO. WHERE THE RIGHT OF SUIT IS BARRED UNDER THE LAW OF LIMITATION IN FORCE BEFORE THE NEW PROVISION CAME INTO OPERATION AND A VESTED RIGHT HAS ACCRUED TO ANOTHER, THE NEW PROVISION CAN NOT REVIVE THE BARRED RIGHT OR TAKE AWAY THE ACCRUED VESTED RIGHT. ' 10.5 FOR THE LATEST EXPOSITION OF THE SAME RULE SEE THIRUMALAI CHEMICALS LTD. V. UNION OFINDLA2011 6 SCC 739. SCC AT PARA 29. 11. THE EFFECT OF THE AMENDMENT OF SECTION 11-8 ON 12-5-2000 IS THAT ALL CLAIMS FOR REBATE PENDING ON THIS DATE WOULD BE GOVERNED BY A PERIOD OF ONE YEAR FROM THE DATE OF SHIPMENT AND NOT SIX MONTHS. THIS, HOWEVER, IS S UBJECT TO THE RIDER THAT THE CLAIM FOR REBATE SHOULD NOT BE MADE BEYOND THE ORIGINAL P ERIOD OF SIX MONTHS. ON THE FACTS OF THE PRESENT CASE, SINCE THE CLAIMS FOR REBATE WE RE MADE BEYOND THE ORIGINAL PERIOD OF SIX MONTHS, THE RESPONDENTS CANNOT AVAIL OF THE EXTENDED PERIOD OF ONE YEAR ON THE SUBSEQUENT TO SECTION 11-B. 12. THE EFFECT OF SECTION 11-8, AND IN PARTICULAR, APPLICATIONS FOR REBATE BEING MADE WITHIN TIME, HAS BEEN LAID DOWN IN MAFATLAL INDUSTR IES LTD. V. UNION OF INDIA 1997 5 SCC 536, THUS: (SCC PP. 631-32, PARA 108) '10B. THE DISCUSSION IN THE JUDGMENT YIELDS THE FOL LOWING PROPOSITIONS. WE MAY FOREWARN THAT THESE PROPOSITIONS ARE SET OUT MERELY FOR THE SAKE OF CONVENIENT REFERENCE AND ARE NOT SUPPOSED TO BE EXHAUSTIVE. IN CASE OF ANY DOUBT OR AMBIGUITY IN THESE PROPOSITIONS, REFERENCE MUST BE HAD TO THE DI SCUSSION AND PROPOSITIONS IN THE BODY OF THE JUDGMENT. 9 IT(SS)A NO. 37 & 38/KOL/2018 JAYASHREE JAYAKAR MOHANKA, L /H OF LATE LALIT MOHANKA, AY- 2005-06 & 2006-07 (I) WHERE A REFUND OF TAX/DUTY IS CLAIMED ON THE GR OUND THAT IT HAS BEEN COLLECTED FROM THE PETITIONER/PLAINTIFF-WHETHER BEFORE THE COMMENC EMENT OF THE CENTRAL EXCISES AND CUSTOMS LAWS (AMENDMENT) ACT, 1991 OR THEREAFTER-BY MISINTERPRETING OR MISAPPLYING THE PROVISIONS OF THE CENTRAL EXCISES A ND SALT ACT, 1944 READ WITH CENTRAL EXCISE TARIFF ACT, 1985 OR CUSTOMS ACT, 1962 READ W ITH CUSTOMS TARIFF ACT OR BY MISINTERPRETING OR MISAPPLYING ANY OF THE RULES, RE GULATIONS OR NOTIFICATIONS ISSUED UNDER THE SAID ENACTMENTS, SUCH A CLAIM HAS NECESSA RILY TO BE PREFERRED UNDER AND IN ACCORDANCE WITH THE PROVISIONS OF THE RESPECTIVE EN ACTMENTS BEFORE THE AUTHORITIES SPECIFIED THEREUNDER AND WITHIN THE PERIOD OF LIMIT ATION PRESCRIBED THEREIN. NO SUIT IS MAINTAINABLE IN THAT BEHALF. WHILE THE JURISDICTION OF THE HIGH COURTS UNDER ARTICLE 226-AND OF THIS COURT UNDER ARTICLE 32-CANNOT BE CI RCUMSCRIBED BY THE PROVISIONS OF THE SAID ENACTMENTS, THEY WILL CERTAINLY HAVE DUE R EGARD TO THE LEGISLATIVE INTENT EVIDENCED BY THE PROVISIONS OF THE SAID ACTS AND WO ULD EXERCISE THEIR JURISDICTION CONSISTENT WITH THE PROVISIONS OF THE ACT. THE WRIT PETITION WILL BE CONSIDERED AND DISPOSED OF IN THE LIGHT OF AND IN ACCORDANCE WITH THE PROVISIONS OF SECTION 11-B. THIS IS FOR THE REASON THAT THE POWER UNDER ARTICLE 226 HAS TO BE EXERCISED TO EFFECTUATE THE RULE OF LAW AND NOT FOR ABROGATING IT. THE SAID ENACTMENTS INCLUDING SECTION LL-B OF THE C ENTRAL EXCISES AND SALT ACT AND SECTION 27 OF THE CUSTOMS ACT DO CONSTITUTE 'LAW' W ITHIN THE MEANING OF ARTICLE 265 OF THE CONSTITUTION OF INDIA AND HENCE, ANY TAX COLLEC TED, RETAINED OR NOT REFUNDED IN ACCORDANCE WITH THE SAID PROVISIONS MUST BE HELD TO BE COLLECTED, RETAINED OR NOT REFUNDED, AS THE CASE MAY BE, UNDER THE AUTHORITY O F LAW. BOTH THE ENACTMENTS ARE SELF- CONTAINED ENACTMENTS PROVIDING FOR LEVY, ASSESSMENT , RECOVERY AND REFUND OF DUTIES IMPOSED THEREUNDER. SECTION 11-B OF THE CENTRAL EXC ISES AND SALT ACT AND SECTION 27 OF THE CUSTOMS ACT, BOTH BEFORE AND AFTER THE 1991 (AM ENDMENT) ACT ARE CONSTITUTIONALLY VALID AND HAVE TO BE FOLLOWED AND GIVEN EFFECT TO S ECTION 72 OF THE CONTRACT ACT HAS NO APPLICATION TO SUCH A CLAIM OF REFUND AND CANNOT FO RM A BASIS FOR MAINTAINING A SUIT OR A WRIT PETITION. ALL REFUND CLAIMS EXCEPT THOSE MENTIONED UNDER PROPOSITION (II) BELOW HAVE TO BE AND MUST BE FILED AND ADJUDICATED UNDER THE PROVISIONS OF THE CENTRAL EXCISES AND SALT ACT OR THE CUSTOMS ACT, AS THE CAS E MAY BE. IT IS NECESSARY TO EMPHASISE IN THIS BEHALF THAT ACT PROVIDES A COMPLE TE MECHANISM FOR CORRECTING ANY ERRORS WHETHER OF FACT OR LAW AND THAT NOT ONLY AN APPEAL IS PROVIDED TO A TRIBUNAL- WHICH IS NOT A DEPARTMENTAL ORGAN-BUT TO THIS COURT , WHICH IS A CIVIL COURT. ' 10. I FURTHER NOTE THAT THE PRINCIPLE LAID DOWN THE FOREGOING JUDGMENT OF THE SUPREME COURT IN 72 ITR 595 WAS APPLIED BY THE JURISDICTION AL CALCUTTA HIGH COURT IN THE CASE OF CIT VS MANIK CHAND NAHATA (78 ITR 204) WHEREIN T HE COURT HELD AS FOLLOWS: 'IT WAS NOT DISPUTED THAT UNLESS THE ESCAPED INCOME AMOUNTED TO RUPEES ONE LAKH OR MORE, THE ITO WOULD HAVE NO RIGHT TO REOPEN THE PROCEEDINGS UNDER THE 1922 ACT BEYOND THE EXPIRY OF EIGHT YEARS FROM THE RELEVANT ASSESSMENT YEAR. THE EXPRESSION 'LIKELY TO AMOUNT TO, MEANS T HAT THE ITO MUST FORM SOME KIND OF BELIEF OR EVEN A SUSPICION BEFORE THE NOTIC E UNDER SECTION 34 OF 1922 ACT IS ISSUED THAT THE AMOUNT OF ESCAPED INCOME FOR THE YEAR OR ANY OTHER YEAR MAY AMOUNT TO RUPEES ONE LAKH OR MORE IN THE AGGREG ATE. THE SATISFACTION OR BELIEF OR SUSPICION MUST NECESSARILY BE TENTATIVE B ECAUSE AFTER THE FINAL ADJUDICATION IT MAY BE FOUND THAT NO INCOME HAD ESC APED ASSESSMENT AT ALL. THIS IS THE CONTEXT AND BACKGROUND IN WHICH THE EXP RESSION 'LIKELY TO AMOUNT' IS TO BE CONSTRUED. IN THE INSTANT CASE, THERE WAS NO MATERIAL TO HOLD THAT THE AMOUNT OF ESCAPED INCOME WAS LIKELY TO EXCEED RUPEES ONE LAKH. CONSEQ UENTLY, SINCE THE RIGHT TO REOPEN THE PROCEEDINGS WAS BARRED UNDER THE 1922 AC T BEFORE THE 1961 ACT CAME INTO FORCE, IT COULD NOT BE REVIVED BY THE 196 1 ACT. AS SUCH THE NOTICE 10 IT(SS)A NO. 37 & 38/KOL/2018 JAYASHREE JAYAKAR MOHANKA, L /H OF LATE LALIT MOHANKA, AY- 2005-06 & 2006-07 UNDER SECTION 148 OF THE 1961. ACT, MUST BE HELD TO BE ILLEGAL AND INVALID AND MUST BE STRUCK DOWN. 11. APPLYING THE RATIO LAID DOWN IN THE FOREGOING J UDGMENTS TO THE FACTS OF THEAPPELLANT'S CASE, THEN I FIND THAT SEARCH UNDER SECTION 132 WAS CONDUCTED AGAINST THE APPELLANT ON 22.09.2011 BUT THE NOTICE ULS 148 INITIATING THE RE -ASSESSMENT PROCEEDINGS FOR AY 2005-06 WAS ISSUED ON 19.08.2013. AS PER SECTION 149(1) AS WAS IN FORCE TILL 31.03.2012, THE ASSESSMENT FOR AY 2005-06 COULD HAVE BEEN VALIDLY REOPENED BY THE LD. AD AT ANY TIME TILL 31.03.2012. ADMITTEDLY NO NOTICE ULS 148 WAS ISSUED TILL THEN. IT IS TRUE THAT FINANCE BILL, 2012 INTRODUCED IN PARLIAMENT IN FEBRUARY 2012 PROPOSED TO INSERT C LAUSE (C) IN SECTION 149(1) BY WHICH PERIOD OF LIMITATION FOR ISSUANCE OF NOTICE ULS 148 WAS EXTENDED UPTO SIXTEEN YEARS. HOWEVER AS PER THE FINANCE ACT, 2012 AS ENACTED BY THE PARL IAMENT, SECTION 149(1)(C) WAS MADE EFFECTIVE PROSPECTIVELY FROM 01.07.2012. THE NOTES ON CLAUSES SPECIFICALLY STATED THAT THE AMENDED PROVISIONS WERE TO COME IN FORCE WITH EFFEC T FROM 01.07.2012. I THEREFORE FIND THAT THERE WAS NOTHING EXPRESSLY PROVIDED BY THE AMENDIN G ACT WHICH INDICATED LEGISLATIVE MIND TO MAKE THE PROVISION APPLICABLE TO THOSE PROCEEDINGS WHICH HAD BECOME BARRED BY LIMITATION AS ON 01.07.2012 I.E. THE DATE WHEN THE AMENDED' PROVI SIONS CAME INTO FORCE. I AGREE WITH THE OBSERVATIONS OF THE JUDICIAL FORUMS THAT PERIOD OF LIMITATION IS ALWAYS PART OF PROCEDURAL LAW AND THEREFORE SUCH PROVISIONS ARE GENERALLY RETRO-A CTIVE IN OPERATION. IN FACT THE PROVISIONS OF SECTION 149(1)(C) ARE RETRO-ACTIVE IN OPERATION IN AS MUCH AS THEY ARE NOT APPLICABLE ONLY TO PROCEEDINGS FOR AY 2012-13 AND ONWARDS BUT THEY ARE APPLICABLE TO ALL SUCH PROCEEDINGS WHICH THE LD. AO COULD HAVE LEGALLY TAKEN FOR REOPE NING OF ASSESSMENT AS ON 01.07.2012. FOR EXAMPLE, AS ON 1ST JULY 2012, THE LD. AO COULD HAVE REOPENED THE ASSESSMENTS COMMENCING ON OR AFTER' 1ST APRIL 2006 I.E. AY 2006-07 AND ONW ARDS. AS PER THE LAW IN FORCE AS ON 1.4.2006 I.E. FOR AY 2006-07, THE ASSESSMENT COULD HAVE BEEN REOPENED ONLY UPTO A PERIOD OF SIX YEARS FROM THE END OF THE RELEVANT ASSESSMENT Y EAR. HOWEVER SINCE THE LD. AO COULD HAVE REOPENED THE ASSESSMENT FOR AY 2006-07 AS ON 1ST JU LY 2012, THE EXTENDED PERIOD OF SIXTEEN YEARS BECAME AVAILABLE FOR AYS 2006-07 AND ONWARDS AND IN SUCH SENSE, THE AMENDMENT WAS RETRO-ACTIVE IN OPERATION. AS PER THE PRINCIPLE LAI D DOWN IN THE JUDGMENTS CITED ABOVE, I HOWEVER FIND THAT THE ASSESSMENTS FOR AND UPTO AY 2 005-06 HAD BECOME TIME BARRED AS ON 31.03.2012. SECTION 149(1)(C) CAME INTO FORCEONLY E FFECTIVE FROM 01.07.2012 AND AS SUCH THERE WAS NO OVERLAPPING PERIOD. IN THE CIRCUMSTANCES TH EREFORE THE PROCEEDINGS U/S 147 WHICH BECAME TIME BARRED PRIOR TO 1ST JULY 2012, COULD NO T BE REVIVED BY THE AMENDMENT IN SECTION 149(1)(C). I AM THEREFORE OF THE CONSIDERED OPINION THAT SINCE IN THE PRESENT CASE, THE ASSESSMENT WAS REOPENED BY THE LD. AO ONLY ON 19.08 .2013, THE SAME WAS BARRED BY LIMITATION. ACCORDINGLY I HOLD THAT THE PROCEEDINGS WERE WITHOUT JURISDICTION AND CONSEQUENTLY THEREFORE THE ASSESSMENT ORDER PASSED U/S 147 WAS A B INITIO VOID. THE ORDER U/S 147/143(3) DATED 19.01.2015 IS THEREFORE CANCELLED. GROUND NO. 2 IS THEREFORE ALLOWED. 5. AGGRIEVED BY THE AFORESAID ORDER, THE REVENUE IS NOW IN APPEAL BEFORE US. 6. ASSAILING THE DECISION OF THE LD. CIT(A) THE LD. CIT, DR MADE ORAL AS WELL AS WRITTEN SUBMISSIONS. FOR THE SAKE OF CLARITY, THE R ELEVANT SUBMISSION OF THE LD. CIT, DR ARE EXTRACTED AS FOLLOWS: THE DEPARTMENT WAS IN POSSESSION OF AN INFORMATION THAT LALITMOHANKA [SINCE DECEASED) AND HIS WIFE JAYASHREEJAYAKARMOHANKA JOINTLY HOLD A BAN K A/C. NO. 5091415336, MAINTAINED WITH HSBC, SWITZERLAND. THE A/C. WAS OPENED ON 06.08.201 4 AND HAVING DEPOSITS IN US$ WHICH WAS EQUIVALENT TO RS. 84,07,136/- IN INR. A SEARCH AND SEIZURE U/S 132 OF THE I. T. ACT, 1961 WAS CONDUCTED ON 22.09.2011 WHEN SMT. JAYASHREEJAYAKARM OHANKA ADMITTED THAT THE ACCOUNT WAS OPENED BY HER HUSBAND. SHE ALSO ADMITTED THE FACT W HEN HER STATEMENT WAS RECORDED U/S 131 ON 18.11.2011. RE- ASSESSMENT PROCEEDING WAS INITIATED BY ISSUING NOTICE U/S 148 ON 19.08.2013. ASSESSMENT WAS COMPLETED U/S 147/ 143(3) ON 19.01.2 015 WHEN THE AFORESAID AMOUNT OF RS. 11 IT(SS)A NO. 37 & 38/KOL/2018 JAYASHREE JAYAKAR MOHANKA, L /H OF LATE LALIT MOHANKA, AY- 2005-06 & 2006-07 84,07,136/- WAS ADDED AS UNDISCLOSED INCOME. ASSESS EE PREFERRED APPEAL. LD. CIT(A) VIDE ORDER DATED 28.02.2018 IN APPEAL NO., 932/DCIT. CC-4(4)/C IT(A)-21/KOI/2014-15 HAS HELD THAT THE NOTICE U/S 148 WAS TIME BARRED AND THEREFORE, ASSES SMENT ORDER U/S 147 WAS VOID AB INITIO. THE MOOT POINT IN THIS CASE APPEARED TO BE THE VALI DITY OF THE REASSESSMENT PROCEEDINGS U/S 147 FOR AY 2005-06 OF THE CAPTIONED ASSESSEE IN THE LIG HT OF THE AMENDED PROVISION U/S 149(1) OF THE INCOME TAX ACT W.E.F. 01.07.2012 AND ON THE VIEW OF THE CIT(A) IN AWARDING RELIEF TO THE ASSESSEE THAT SINCE THE TIME LIMIT FOR REASSESSMENT U/S 147 FOR AY 2005-06 [BEING SIX YEARS, AS PER PRE-AMENDED SECTION 149(1)] WAS EXPIRED BEFORE THE SAID AMENDMENT CAME INTO FORCE, THE DEPARTMENT HAD NO POWER TO 'REVIVE' THE PROCEEDINGS FOR AY 2005-06 AS PER THE AMENDED SECTION 149(1). THE OPINION OF THE DEPARTMENT ON THE ABOVEMENTIONED ISSUE IS GIVEN IN THE FOLLOWING PARAGRAPHS FOR KIND CONSIDERATION. IT MAY BE STATED THAT THE PROVISION U/S 149(1)(C) W AS NOT AN AMENDMENT, BUT IT WAS ALTOGETHER A NEW LAW BROUGHT INTO EXISTENCE BY THE ENACTMENT OF FINANCE ACT, 2012 TO BRING THE UNACCOUNTED FOREIGN ASSETS AND INTERESTS INTO TAX NET. FURTHER, THE REASON TO BELIEVE WAS FORMED ON 19.08.2013 ON THE BASIS OF THE INFORMATION THAT THE ASSESSEE HAS BEEN HOLDING UNACCOUNTED FOREIGN ASSET IN BANK ACCOUNT MAINTAINED WITH HSBC, SWITZERLAND, WHICH WAS A FRESH INFORMATION THAT COULD NOT HAVE BEEN BROUGHT INTO B EING BEFORE THE NEW SECTION 149(1)(C) BECAME OPERATIONAL BY THE ENACTMENT OF FINANCE ACT, 2012. THE LD. CIT(A) RELIED ON THE DECISION OF THE HON'BL E APEX COURT IN J. P. JANI ITO VS INDUPRASAD D BHATT (72 ITR 595). HOWEVER, IN MY OPINION, THIS WAS THE CASE WHERE THE DEPARTMENT REOPENED A CASE UNDER THE INCOME TAX ACT, 1961 FOR AY 47-48 WHERE THE CASE WAS ALREADY BARRED BY LIMITATION UNDER THE OLD INCOME TAX ACT,1 922, BEING REPELLED. THE HON'BLE APEX COURT DECIDED IN FAVOUR OF THE ASSESSEE BY INTERPRE TING THE SECTION 297(2)(D)(II) WHICH SPECIFICALLY DEALS WITH REOPENING OF ASSESSMENTS UN DER THE INCOME TAX ACT, 1961 VIS-A-VIS SUCH PROCEEDINGS UNDER THE REPELLED THE INDIA INCOME TAX ACT, 1922. IN MY OPINION, THIS DECISION CANNOT BE APPLIED IN THIS PRESENT CASE AS THE FACT OF THE CASE IS ENTIRELY DIFFERENT THAN THE CASE REFERRED IN J.P. JANI ITO VS INDUPRASAD 0 BHATT (72 ITR 595). IN THIS PRESENT CASE, THE INTERPRETATION OF SECTION 297(2)(D)(II) IS NOT RELE VANT AS THIS REOPENING HAS NO NEXUS WITH THE OLD AND REPELLED THE INDIA INCOME TAX ACT, 1922 REQUIRI NG INTERPRETATION OF THE CONSTRUCTION OF SECTION 297(2)(D)(II) OF THE INCOME TAX ACT, 1961. THE REST OF THE DECISIONS CITED BY THE LD. CIT(A) E ITHER INVOLVES ARGUMENTS IN RESPECT OF PROCEEDINGS UNDER THE INDIA INCOME TAX ACT, 1922 RE VIVED UNDER INCOME TAX ACT, 1961 OR IN RESPECT OF AMENDMENT OF OLD PROVISIONS GIVING RISE TO ENHANCED/EXPANDED POWER TO THE TAX AUTHORITY. THE LD. CIT(A) HAS RIGHTLY COMMENTED THAT THE PERIO D OF LIMITATION IS ALWAYS PART OF PROCEDURAL LAW AND THEREFORE SUCH PROVISIONS A RERETRO-ACTIVE IN OPERATION. HOWEVER, IF THE OPINION OF THE LD. (IT(A) THAT SINCE THE LEGISLATURE DID NOT EXPRE SSLY PROVIDE THAT THE NEW PROVISION U/S 149(1)(C) SHOULD BE APPLICABLE IN THE CASES WHICH W ERE PREVIOUSLY BARRED BY LIMITATION AS ON 01.07.2012, THEREFORE, THE PROCEEDINGS FOR AY 2005- 06 CANNOT BE REVIVED UNDER THE NEW LAW AS PER THE FRESH PROVISION U/S 149(1)(C) APPEAR TO BE ILLOGICAL AND ERRONEOUS, BECAUSE, IF SUCH VIEW IS ACCEPTED THEN IT WOULD MEAN THAT IN SPITE OF THE NEW LAW AS PER THE FRESH PROVISION U/S 149(1)(C), THE DEPARTMENT CANNOT PROCEED BEYOND SIX YEARS, AND THAT WOULD RENDER THE LAW INEFFECTIVE AND MEANINGLESS. THIS COULD NOT HAVE BE EN THE LEGISLATIVE INTENSION TO BRING INTO FORCE THE NEW PROVISION U/S 149(1)(C) TO TACKLE THE MONSTER OF FOREIGN BLACK MONEY. IN VIEW OF THE ABOVE, IT IS FELT THAT THE DECISION GIVEN BY THE LD. CIT(A) IS NOT BASED ON CORRECT APPRECIATION OF LAW AND OF FACT, AND THEREFORE, IT IS PRAYED BEFORE THE HONBLE ITAT, KOLKATA THAT THE DECISION MADE BY THE LD. CIT(A) BE REVERSE D. 12 IT(SS)A NO. 37 & 38/KOL/2018 JAYASHREE JAYAKAR MOHANKA, L /H OF LATE LALIT MOHANKA, AY- 2005-06 & 2006-07 IT MAY KINDLY BE NOTED THAT THE FINANCE BILL 2012 W AS LAID ON THE FLOOR OF LOK SABHA AS BILL NO. 11 OF 2012 ON 16TH MARCH, 2012, AS PER THE RECOMMEN DATION OF THE PRESIDENT. FURTHER, THE EXPLANATION UNDER SECTION 149(3) CLEAR LY BRINGS OUT THE APPLICATION OF THE NEW SUB SECTION 149(1)(C) FOR NOT MORE THAN 16 YEARS. EXPLANATION - FOR THE REMOVAL OF DOUBTS, IT IS HERE BY CLARIFIED THAT THE PROVISIONS OF SUB-SECTION (1) AND (3), AS AMENDED BY THE FINANCE ACT, 2012, S HALL ALSO BE APPLICABLE FOR ANY ASSESSMENT YEAR BEGINNING ON OR BEFORE THE 1ST DAY OF APRIL, 2 012. THE FINANCE BILL 2012, AS LAID ON THE FLOOR OF LOK SABHA HAS ALSO STATED THAT - THE PROVISIONS OF SECTION 149 ARE PROCEDURAL IN NAT URE. HOWEVER, IT IS CLARIFIED BY INSERTING A NEW EXPLANATION TO THE AFORESAID SECTION THAT THE P ROVISIONS OF SUB-SECTIONS (1) AND (3) OF THIS SECTION AS AMENDED BY THE FINANCE ACT, 2012, SHALL ALSO BE APPLICABLE TO THE PROCEEDINGS INITIATED UNDER THIS SECTION FOR ANY ASSESSMENT YEA R BEGINNING ON OR BEFORE 1ST APRIL, 2012. THEREFORE, THE DECISION RELIED BY THE RESPONDENT AS SESSEE ARE NOT RELEVANT IN AS MUCH AS, NO WRIT PETITION WAS FILED AGAINST THE ISSUE OF NOTICE U/S. 148 IN THE INSTANT CASE. ON THE OTHER HAND, THE INTENTION OF THE PARLIAMENT CANNOT BE OVERLOOKED AND ESCAPEMENT OF FOREIGN ASSET UNDER TAXATION. 7. PER CONTRA, THE LD. AR FULLY RELIED ON THE ORDER OF THE LD. CIT(A). HE FURTHER DREW OUR ATTENTION TO THE DECISION OF THIS TRIBUNAL IN THE CASE OF DCIT VS SRI BISWANATH GARODIA IN ITA NOS.1672 TO 1674/KOL/2018 DATED 08.11.2019 WHEREIN IDENTICAL ISSUE WAS INVOLVED AND THIS TRIBUNAL UPHE LD THE ORDER OF LD. CIT(A) HOLDING THE PROCEEDINGS INITIATED U/S 148/147 IN RESPECT OF AYS 2005-06 AND EARLIER, AFTER 1 ST APRIL 2012 TO BE TIME BARRED. 8. WE HAVE HEARD RIVAL SUBMISSIONS AND HAVE PERUSED THE MATERIAL AVAILABLE ON RECORD. ON PERUSAL OF THE DECISION OF THIS TRIBUNAL IN THE CASE OF SHRI BISHWANATH GARODIA (SUPRA), WE FIND THAT NOT ONLY THE ISSUE AN D THE FACTUAL MATRIX INVOLVED WAS SAME BUT EVEN THE GROUNDS OF APPEAL TAKEN BY THE RE VENUE IN THOSE BATCH OF APPEALS WAS IDENTICALLY WORDED AS IN THE PRESENT APPEAL. WE THEREFORE FIND MERIT IN THE LD. ARS CONTENTION THAT THE ISSUE AT HAND IS SQUARELY COVERED BY THE DECISION OF THE TRIBUNAL (SUPRA). FOR THE SAKE OF BREVITY, THE RELE VANT FINDINGS OF THIS TRIBUNAL IS REPRODUCED HEREUNDER: 12. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSE D THE ORDERS OF THE AUTHORITIES BELOW. WE HAVE ALSO CRITICALLY EXAMINED THE APPLICA BLE LEGAL PROVISIONS AS ALSO THE JUDICIAL DECISIONS RELIED UPON BY BOTH THE PARTIES. THE FACT S OF THE CASE ARE IN NARROW COMPASS WHICH ARE NOT DISPUTED BY EITHER OF THE PARTIES. THE PREL IMINARY QUESTION TO BE DECIDED FIRST IS WHETHER THE INITIATION OF REASSESSMENT PROCEEDINGS BY THE AO FOR THE AYS 200-02 TO 2005-06 13 IT(SS)A NO. 37 & 38/KOL/2018 JAYASHREE JAYAKAR MOHANKA, L /H OF LATE LALIT MOHANKA, AY- 2005-06 & 2006-07 ON 16-02-2016 WAS LEGALLY SUSTAINABLE. IF ANSWER TO THIS QUESTION IS AGAINST THE REVENUE AND IN FAVOUR OF THE ASSESSEE, THEN THE GROUNDS RAISED IN CROSS OBJECTIONS BECOME ACADEMIC. IN ORDER TO UNDERSTAND THE ISSUE WE MAY, AT THE COST O F REPETITION, REFER TO THE PROVISIONS OF SECTION 149 WHICH READ AS FOLLOWS: ' (1) NO NOTICE UNDER SECTION 148 SHALL BE ISSUED F OR 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, HAV E 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 MOR E 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 AN Y ASSET (INCLUDING FINANCIAL INTEREST IN ANY ENTITY) LOCATED OUTSIDE INDIA, CHARGEABLE TO TA X, HAS ESCAPED ASSESSMENT. EXPLANATION- FOR THE REMOVAL OF DOUBTS, IT IS HEREB Y CLARIFIED THAT PROVISIONS OF SUB-SECTION (1) AND (3) HAS AMENDED BY THE FINANCE ACT, 2012 SH ALL ALSO BE APPLICABLE FOR ANY ASSESSMENT YEAR BEGINNING ON/BEFORE 1 ST DAY OF APRIL, 2012. 13. WE NOTE THAT PRIOR TO ENACTMENT OF CLAUSE (C) I N SECTION 149(1), THE PROCEEDINGS FOR REASSESSMENT COULD BE INITIATED AT ANY TIME BEFORE THE END OF SIX YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR AND NOT BEYOND. ACCORDINGL Y THE PROCEEDINGS UNDER SECTION 147 FOR THE AY 2001-02 COULD NOT HAVE BEEN INITIATED ANYTIM E ON OR AFTER 01-04-2008. IN SO FAR AS AY 2005-06, NO PROCEEDINGS UNDER SECTION 147 COULD HAVE BEEN INITIATED ON OR AFTER 01-04- 2012. WE THUS FIND THAT WHEN CLAUSE (C) OF SECTION 149(1) BECAME OPERATIONAL ON 01-07- 2012, THE REASSESSMENT PROCEEDINGS, AS PER THE LAW THEN EXISTING HAD ALREADY BECOME TIME BARRED OR DEAD. AS SUCH AS PER THE PROVISIONS OF TH E ACT AS ON FORCE ON 31-03-2012, THE ASSESSEE HAD OBTAINED A VESTED RIGHT, AS PROVIDED B Y SECTION 149(1). FROM THE LANGUAGE EMPLOYED BY THE LEGISLATURE WHILE ENACTING CLAUSE ( C) IN SECTION 149(1), WE FIND THAT LEGISLATIVE MIND TO MAKE THE SAID PROVISION APPLICA BLE RETROSPECTIVELY SO AS TO REVIVE PROCEEDINGS WHICH HAD ALREADY BECOME TIME BARRED, I S NOWHERE DISCERNIBLE. NOWHERE EITHER IN THE AMENDMENT ACT OR IN NOTES ON CLAUSES, IT IS APPARENT THAT THE PARLIAMENT WHILE ENACTING CLAUSE (C) IN SECTION 149(1) INTENDED TO B ESTOW ON THE TAX AUTHORITIES POWERS TO REVIVE THE PROCEEDINGS WHICH HAD ALREADY BECOME DEA D AT THE TIME WHEN THE AMENDED PROVISIONS OF SECTION 149(1)(C) BECAME OPERATIONAL ON 01-07-2012. IN THIS REGARD, WE NOTE THAT THE LD. DR PER SE NEVER QUESTIONED THE JUDICIA L PRINCIPLE THAT AN AMENDMENT IN FISCAL STATUTE IS GENERALLY PROSPECTIVE IN NATURE. HOWEVER RELYING HEAVILY ON THE EXPLANATION APPENDED TO THE SECTION 149, THE REVENUE HAS TRIED TO MAKE OUT A CASE THAT THE AMENDED PROVISION OF SECTION 149(1)(C) BROUGHT INTO EFFECT PROSPECTIVELY, HAD RETROSPECTIVE EFFECT, IN TERMS OF WHICH ANY ASSESSMENT FOR AND UPTO SIXTEEN YEARS BEFORE 01-07-2012 COULD BE REOPENED. 14. IN ORDER TO VERIFY THE CORRECTNESS OF THIS CONT ENTION, IT IS THEREFORE RELEVANT TO UNDERSTAND THE FUNCTION WHICH AN EXPLANATION PERFOR MS IN A FISCAL STATUTE. IT IS JUDICIALLY HELD THAT AN EXPLANATION CANNOT BE READ IN ISOLATIO N. INTENTION OF AN EXPLANATION IS THAT IN CASE IF ANY PROVISION OF THE PRINCIPAL ACT IS NOT C LEAR THEN IT SHALL BE MADE CLEAR BECAUSE OF THE EXPLANATION. HOWEVER FOR THE PURPOSE OF TAKING AN ACTION OR FOR THE PURPOSE OF INTERPRETING THE LAW, THE FOUNDATION IS THE MAIN SE CTION AND THE EXPLANATION IS ONLY A SUBORDINATE PART. THE OBJECT OF THE EXPLANATION IS TO UNDERSTAND THE RELEVANT PROVISION OF THE ACT IN ITS TRUE LIGHT BUT THE EXPLANATION DOES NOT ORDINARILY ENLARGE THE SCOPE OF THE ORIGINAL SECTION WHICH IT EXPLAINS. THE EXPLANATION SHOULD T HEREFORE BE READ SO AS TO HARMONIZE WITH AND CLEAR UP AN AMBIGUITY, IF ANY, IN THE MAIN SECT ION AND IT SHOULD NOT BE SO CONSTRUED AS TO 14 IT(SS)A NO. 37 & 38/KOL/2018 JAYASHREE JAYAKAR MOHANKA, L /H OF LATE LALIT MOHANKA, AY- 2005-06 & 2006-07 WIDEN THE AMBIT OF THE SECTION TO WHICH IT IS APPEN DED. IT IS AN ERROR TO EXPLAIN THE EXPLANATION WITH THE AID OF THE SECTION TO WHICH IT IS APPENDED AND ANY SUCH CASE, WILL REVERSE THEIR ROLES. IT IS TO BE BORNE IN MIND THAT AN EXPLANATION TO A SECTION IS NOT A SUBSTANTIVE PROVISION BY ITSELF AND IT MERELY EXPLA INS THE MEANING OF THE WORDS OR TO CLARIFY THE AMBIGUITIES, IF ANY. IT IS ALWAYS INTENDED THAT EXPLANATION ADDED TO A STATUTORY PROVISION IS NOT A SUBSTANTIVE PROVISION OF THE STATUTE AND T HEREFORE IT CANNOT TAKE AWAY A STATUTORY RIGHT WITH WHICH ANY PERSON UNDER THE LAW HAS BEEN CLOTHED BY THE PRINCIPAL PROVISION OR SET AT NOUGHT THE WORKING OF AN ACT BY BECOMING AN HIND RANCE IN THE INTERPRETATION OF THE SAME. APPLYING THESE JUDICIAL PRINCIPLES TO THE PRESENT C ASE, WE NOTE THAT THE PARLIAMENT IN ITS WISDOM WHILE ENACTING CLAUSE (C) IN SECTION 149(1) MADE THE SAME OPERATIONAL PROSPECTIVELY FROM 01-07-2012. NOWHERE IN THE LANGUAGE USED BY TH E PARLIAMENT, IT DISCLOSED ITS MIND THAT THE SAID PROVISION WAS INTENDED TO REVIVE OR REOPEN THE PROCEEDINGS WHICH HAD ATTAINED FINALITY PRIOR TO THE DATE ON WHICH THE AMENDED PRO VISION CAME INTO OPERATION. IN THE CIRCUMSTANCES IN ABSENCE OF ANY CLEAR MANDATE BY TH E PARLIAMENT, THE REVENUE CANNOT PRESS INTO SERVICE THE PROVISIONS OF THE EXPLANATION TO C LAIM THAT EVEN THE PROCEEDINGS WHICH HAD ATTAINED FINALITY OR WHERE THE PROCEEDINGS U/S 147 HAD BECOME TIME BARRED, THE SAME STOOD REVIVED BECAUSE OF THE EXPLANATION. 15. WE FIND THAT IN THE IMPUGNED ORDER THE LD. CIT( A) RELIED ON THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF J.P. JANI ITO VS INDUPRASAD D. BHATT (SUPRA). IN THE DECIDED CASE THE ASSESSEE HAD CLAIMED THAT HIS ASSE SSMENT WAS REOPENED BY THE LD. AO BY TAKING BENEFIT OF THE EXTENDED PERIOD OF LIMITATION WHICH WAS PROVIDED FOR IN SECTION 148 UNDER THE 1961 ACT WHEREAS THE PERIOD OF LIMITATION UNDER THE 1922 ACT HAD ALREADY EXPIRED. IT WAS ASSESSEES CONTENTION THAT EVEN THOUGH THE P ERIOD OF LIMITATION FOR REOPENING OF ASSESSMENT WAS EXPANDED IN SECTION 148 OF THE 1961 ACT, THE SAID PROVISION DID NOT REVIVE THE PROCEEDING FOR REASSESSMENT WHICH HAD ALREADY B ECOME TIME BARRED BEFORE THE AMENDED PROVISIONS OF SECTION 148 OF THE INCOME-TAX ACT, 19 61 CAME INTO FORCE. WHILE UPHOLDING THE HIGH COURTS DECISION QUASHING THE NOTICE ISSUED U/ S 148, THE SUPREME COURTS HELD AS UNDER: IT WAS ADMITTED IN THIS CASE THAT THE RIGHT OF THE ITO TO REOPEN THE ASSESSMENT FOR THE YEAR 1947-48 WAS BARRED UNDER THE OLD ACT BEFORE THE NEW ACT CAME INTO FORCE. IT WAS OPINED THAT IT WAS NOT PERMISSIBLE TO CONSTRUE SECTIONS 297(2)( D)(II ) OF THE NEW ACT AS REVIVING THE RIGHT OF THE ITO TO REOPEN THE ASSESSMENT WHICH WAS ALREA DY BARRED UNDER THE OLD ACT. THE REASON WAS THAT SUCH A CONSTRUCTION OF SECTION 297(2)(A )( II) WOULD BE TANTAMOUNT TO GIVING OF RETROSPECTIVE OPERATION TO THAT SECTION WHICH IS NO T WARRANTED EITHER BY THE EXPRESS LANGUAGE OF THE SECTION OR BY NECESSARY IMPLICATION. THE PRI NCIPLE IS BASED ON THE WELL-KNOWN RULE OF INTERPRETATION THAT, UNLESS THE TERMS OF THE STATUT E EXPRESSLY SO PROVIDE OR UNLESS THERE IS A NECESSARY IMPLICATION, RETROSPECTIVE OPERATION SHOU LD NOT BE GIVEN TO THE STATUTE SO AS TO AFFECT, ALTER OR DESTROY ANY RIGHT ALREADY ACQUIRED OR TO REVIVE ANY REMEDY ALREADY LOST BY EFFLUX OF TIME. THE LANGUAGE OF THE NEW SECTION MUS T BE READ AS APPLICABLE ONLY TO THOSE CASES WHERE THE RIGHT OF THE ITO TO REOPEN THE ASSE SSMENT WAS NOT BARRED UNDER THE REPEALED SECTION. THE NEW STATUTE DOES NOT DISCLOSE IN EXPRE SS TERMS OR BY NECESSARY IMPLICATION THAT THERE WAS A REVIVAL OF THE RIGHT OF THE ITO TO REOP EN AN ASSESSMENT WHICH WAS ALREADY BARRED UNDER THE OLD ACT. IT MUST BE HELD THAT, ON A PROPER CONSTRUCTION OF S ECTION 297(2)(D )(II) OF THE NEW ACT, THE ITO COULD NOT ISSUE A NOTICE UNDER SECTION 148 IN O RDER TO REOPEN THE ASSESSMENT OF AN ASSESSEE IN A CASE WHERE THE RIGHT TO REOPEN THE AS SESSMENT WAS BARRED UNDER THE OLD ACT AT THE DATE WHEN THE NEW ACT CAME INTO FORCE. IT FOLLO WED, THEREFORE, THAT THE NOTICES DATED 13- 11-1963 AND 9-1-1964, ISSUED BY THE ITO, WERE ILLEG AL AND ULTRA VIRES AND WERE RIGHTLY QUASHED BY THE HIGH COURT BY THE GRANT OF A WRIT. (EMPHASIS SUPPLIED) 16. THIS PRINCIPLE WAS REITERATED BY THE HONBLE APE X COURT IN ITS JUDGMENT IN THE CASE OF UNION OF INDIA VS UTTAM STEELS LTD (319 ELT 598) . IN THIS CASE IT WAS THE ASSESSEES PLEA 15 IT(SS)A NO. 37 & 38/KOL/2018 JAYASHREE JAYAKAR MOHANKA, L /H OF LATE LALIT MOHANKA, AY- 2005-06 & 2006-07 THAT THE AMENDED PROVISIONS OF SECTION 11B OF THE C ENTRAL EXCISE ACT, 1944 WHICH GRANTED ADDITIONAL TIME FOR PREFERRING REFUND CLAIM SHOULD BE MADE AVAILABLE TO THE ASSESSEE EVEN THOUGH WITHIN THE ORIGINAL LIMITATION PERIOD THE AS SESSEE HAD FAILED TO FURNISH SUCH CLAIM AND THE TIME LIMIT FOR MAKING SUCH CLAIM HAD EXPIRED PR IOR TO THE AMENDING ACT BECOMING OPERATIONAL. THE ASSESSEES PLEA FOR EXTENSION OF L IMITATION PERIOD WAS RESISTED BY THE REVENUE BUT WAS ALLOWED BY THE HONBLE HIGH COURT. ON APPEAL BY THE REVENUE, THE HONBLE SUPREME COURT HELD AS FOLLOWS: 10. WE HAVE HEARD THE LEARNED COUNSEL FOR THE PART IES AND SHRI BAGARIA, THE LEARNED AMICUS CURIAE AT SOME LENGTH. THERE IS NO DOUBT WHATSOEVER THAT A PERIOD OF LIMITATION BEING PROCEDURAL OR ADJECTIVAL LAW WOULD ORDINARILY BE RE TROSPECTIVE IN NATURE. THIS, HOWEVER, IS WITH ONE PROVISO SUPER ADDED WHICH IS THAT THE CLAI M MADE UNDER THE AMENDED PROVISION SHOULD NOT ITSELF HAVE BEEN A DEAD CLAIM IN THE SEN SE THAT IT WAS TIME-BARRED BEFORE AN AMENDING ACT WITH A LARGER PERIOD OF LIMITATION COM ES INTO FORCE. A NUMBER OF JUDGMENTS OF THIS COURT HAVE RECOGNISED THE AFORESAID PROPOSITIO N: 10.1 THUS, IN S.S GADGIL V. LAL AND CO. AIR 1965 SC 171, THIS COURT STATED: (AIR P. 177, PARA 13) 13. AS WE HAVE ALREADY POINTED OUT, THE RIGHT TO C OMMENCE A PROCEEDING FOR ASSESSMENT AGAINST THE ASSESSEE AS AN AGENT OF A NON-RESIDENT PARTY UNDER THE INCOME TAX ACT BEFORE IT WAS AMENDED, ENDED ON 31-3-1956. IT IS TRUE THAT UN DER THE AMENDING ACT BY SECTION 18 OF THE FINANCE ACT, 1956, AUTHORITY WAS CONFERRED UPON THE INCOME TAX OFFICER TO ASSESS A PERSON AS AN AGENT OF A FOREIGN PARTY UNDER SECTION 43 WITHIN TWO YEARS FROM THE END OF THE YEAR OF ASSESSMENT. BUT AUTHORITY OF THE INCOME TAX OFFICER UNDER THE ACT BEFORE IT WAS AMENDED BY THE FINANCE ACT OF 1956 HAVING ALREADY C OME TO AN END, THE AMENDING PROVISION WILL NOT ASSIST HIM TO COMMENCE A PROCEEDING EVEN T HOUGH AT THE DATE WHEN HE ISSUED THE NOTICE IT IS WITHIN THE PERIOD PROVIDED BY THAT AME NDING ACT. THIS WILL BE SO, NOTWITHSTANDING THE FACT THAT THERE HAS BEEN NO DETERMINABLE POINT OF TIME BETWEEN THE EXPIRY OF THE TIME PROVIDED UNDER THE OLD ACT AND THE COMMENCEMENT OF THE AMENDING ACT. THE LEGISLATURE HAS GIVEN TO SECTION 18 OF THE FINANCE ACT, 1956, ONLY A LIMITED RETROSPECTIVE OPERATION I.E UP TO 1-4-1956, ONLY. THAT PROVISION MUST BE READ SUBJECT TO THE RULE THAT IN THE ABSENCE OF AN EXPRESS PROVISION OR CLEAR IMPLICATION, THE LEGISLA TURE DOES NOT INTEND TO ATTRIBUTE TO THE AMENDING PROVISION A GREATER RETROSPECTIVITY THAN I S EXPRESSLY MENTIONED, NOR TO AUTHORISE THE INCOME TAX OFFICER TO COMMENCE PROCEEDINGS WHIC H BEFORE THE NEW ACT CAME INTO FORCE HAD BY THE EXPIRY OF THE PERIOD PROVIDED, BECOME BA RRED. 10.2 TO SIMILAR EFFECT IS THE JUDGMENT IN ITO V. IN DUPRASADDEVSHANKER BHATT AIR 1969 SC 778. THE COURT HELD: (AIR P. 783, PARA 6) 6. IN OUR OPINION, THE PRINCIPLE OF THIS DECISION APPLIES IN THE PRESENT CASE AND IT MUST BE HELD THAT ON A PROPER CONSTRUCTION OF SECTION 297(2 )(D)(II) OF THE NEW ACT, THE INCOME TAX OFFICER CANNOT ISSUE A NOTICE UNDER SECTION 148 IN ORDER TO REOPEN THE ASSESSMENT OF AN ASSESSEE IN A CASE WHERE THE RIGHT TO REOPEN THE AS SESSMENT WAS BARRED UNDER THE OLD ACT AT THE DATE WHEN THE NEW ACT CAME INTO FORCE. IT FOLLO WS THEREFORE THAT THE NOTICES DATED 13-11- 1963 AND 9-1-1964 ISSUED BY THE INCOME TAX OFFICER, AHMEDABAD WERE ILLEGAL AND ULTRA VIRES AND WERE RIGHTLY QUASHED BY THE GUJARAT HIGH COURT4 BY THE GRANT OF A WRIT. 10.3 IN NEW INDIA INSURANCE CO. LTD V. SMT SHANTI M ISRA, ADULT 1975 2 SCC 840, THIS COURT SAID: (SCC P. 846, PARA 7) 7. (2) THE NEW LAW OF LIMITATION PROVIDING A LONGER PERIOD CANNOT REVIVE A DEAD REMEDY. NOR CAN IT SUDDENLY EXTINGUISH VESTED RIGHT OF ACTION BY PROVIDING FOR A SHORTER PERIOD OF LIMITATION. 16 IT(SS)A NO. 37 & 38/KOL/2018 JAYASHREE JAYAKAR MOHANKA, L /H OF LATE LALIT MOHANKA, AY- 2005-06 & 2006-07 10.4 SIMILARLY IN T. KALIAMURTHI V. FIVE GORI THAIK KALWAKF 2008 9 SCC 306, THIS COURT SAID: (SCC P. 322, PARA 40) 40. IN THIS BACKGROUND, LET US NOW SEE WHETHER THI S SECTION HAS ANY RETROSPECTIVE EFFECT. IT IS WELL SETTLED THAT NO STATUTE SHALL BE CONSTRUED TO HAVE A RETROSPECTIVE OPERATION UNTIL ITS LANGUAGE IS SUCH THAT WOULD REQUIRE SUCH CONCLUSION . THE EXCEPTION TO THIS RULE IS ENACTMENTS DEALING WITH PROCEDURE. THIS WOULD MEAN THAT THE LAW OF LIMITATION, BEING A PROCEDURAL LAW, IS RETROSPECTIVE IN OPERATION IN TH E SENSE THAT IT WILL ALSO APPLY TO PROCEEDINGS PENDING AT THE TIME OF THE ENACTMENT AS ALSO TO PROCEEDINGS COMMENCED THEREAFTER, NOTWITHSTANDING THAT THE CAUSE OF ACTIO N MAY HAVE ARISEN BEFORE THE NEW PROVISIONS CAME INTO FORCE. HOWEVER, IT MUST BE NOT ED THAT THERE IS AN IMPORTANT EXCEPTION TO THIS RULE ALSO. WHERE THE RIGHT OF SUIT IS BARRED U NDER THE LAW OF LIMITATION IN FORCE BEFORE THE NEW PROVISION CAME INTO OPERATION AND A VESTED RIGH T HAS ACCRUED TO ANOTHER, THE NEW PROVISION CANNOT REVIVE THE BARRED RIGHT OR TAKE AW AY THE ACCRUED VESTED RIGHT. 10.5 FOR THE LATEST EXPOSITION OF THE SAME RULE SEE THIRUMALAI CHEMICALS LTD. V. UNION OF INDIA2011 6 SCC 739, SCC AT PARA 29. 11. THE EFFECT OF THE AMENDMENT OF SECTION 11-B ON 12-5-2000 IS THAT ALL CLAIMS FOR REBATE PENDING ON THIS DATE WOULD BE GOVERNED BY A PERIOD OF ONE YEAR FROM THE DATE OF SHIPMENT AND NOT SIX MONTHS. THIS, HOWEVER, IS SUBJECT TO TH E RIDER THAT THE CLAIM FOR REBATE SHOULD NOT BE MADE BEYOND THE ORIGINAL PERIOD OF SIX MONTHS. O N THE FACTS OF THE PRESENT CASE, SINCE THE CLAIMS FOR REBATE WERE MADE BEYOND THE ORIGINAL PER IOD OF SIX MONTHS, THE RESPONDENTS CANNOT AVAIL OF THE EXTENDED PERIOD OF ONE YEAR ON THE SUBSEQUENT AMENDMENT TO SECTION 11- B.(EMPHASIS SUPPLIED) 17. AS REGARDS THE REVENUES CONTENTION THAT THE PR OVISO OR EXPLANATION TO THE PRINCIPAL PROVISION OF THE STATUTE SHOULD BE GIVEN RETROSPECTIVE OPERATION, WE FIND THAT SIMILAR CONTENTION WAS CONSIDERED AND NEGATED BY TH E CONSTITUTION BENCH OF THE HONBLE SUPREME COURT IN THE CASE OF CIT VS VATIKA TOWNSHIP PVT LTD (SUPRA). IN THIS CASE THE HONBLE APEX COURT WAS CALLED UPON TO INTERPRET WHE THER THE PROVISO TO SECTION 113 ENACTED BY THE FINANCE ACT, 2002 LEVYING SURCHARGE ON THE T AX PAYABLE UNDER BLOCK ASSESSMENT, WAS CLARIFICATORY AND THEREFORE RETROSPECTIVE IN OPERAT ION OR WHETHER IT WAS APPLICABLE PROSPECTIVELY. THE DIVISION BENCH OF THE HONBLE SU PREME COURT IN ITS EARLIER JUDGMENTS HAD HELD THE SAID PROVISO TO BE RETROSPECTIVE IN OP ERATION BECAUSE IN ITS OPINION THE SAID PROVISO WAS CLARIFICATORY IN NATURE. HOWEVER, LATER ON THE ISSUE WAS REFERRED TO THE LARGER BENCH BECAUSE THE EARLIER VIEW WAS DOUBTED. WHILE D ECIDING THE ISSUE OF RETROSPECTIVE OPERATION OF THE FISCAL STATUTE, THE HONBLE COURT MADE THE FOLLOWING IMPORTANT OBSERVATIONS HAVING BEARING ON THE PRESENT CASE. 31. OF THE VARIOUS RULES GUIDING HOW A LEGISLATION HAS TO BE INTERPRETED, ONE ESTABLISHED RULE IS THAT UNLESS A CONTRARY INTENTION APPEARS, A LEGISLATION IS PRESUMED NOT TO BE INTENDED TO HAVE A RETROSPECTIVE OPERATION. THE IDEA BEHIND THE RULE IS THAT A CURRENT LAW SHOULD GOVERN CURRENT ACTIVITIES. LAW PASSED TODAY CANNOT APPLY TO THE EVENTS OF THE PAST. IF WE DO SOMETHING TODAY, WE DO IT KEEPING IN VIEW THE LAW O F TODAY AND IN FORCE AND NOT TOMORROW'S BACKWARD ADJUSTMENT OF IT. OUR BELIEF IN THE NATURE OF THE LAW IS FOUNDED ON THE BED ROCK THAT EVERY HUMAN BEING IS ENTITLED TO ARRANGE HIS AFFAIR S BY RELYING ON THE EXISTING LAW AND SHOULD NOT FIND THAT HIS PLANS HAVE BEEN RETROSPECTIVELY U PSET. THIS PRINCIPLE OF LAW IS KNOWN AS LEXPROSPICIT NON RESPICIT : LAW LOOKS FORWARD NO T BACKWARD. AS WAS OBSERVED IN PHILLIPS V. EYRE [1870] LR 6 QB 1, A RETROSPECTI VE LEGISLATION IS CONTRARY TO THE GENERAL PRINCIPLE THAT LEGISLATION BY WHICH THE CONDUCT OF MANKIND IS TO BE REGULATED WHEN INTRODUCED FOR THE FIRST TIME TO DEAL WITH FUTURE A CTS OUGHT NOT TO CHANGE THE CHARACTER OF PAST TRANSACTIONS CARRIED ON UPON THE FAITH OF THE THEN EXISTING LAW. 17 IT(SS)A NO. 37 & 38/KOL/2018 JAYASHREE JAYAKAR MOHANKA, L /H OF LATE LALIT MOHANKA, AY- 2005-06 & 2006-07 32. THE OBVIOUS BASIS OF THE PRINCIPLE AGAINST RETR OSPECTIVITY IS THE PRINCIPLE OF 'FAIRNESS', WHICH MUST BE THE BASIS OF EVERY LEGAL RULE AS WAS OBSERVED IN THE DECISION IN L'OFFICECHERIFIEN DES PHOSPHATES V. YAMASHITA-SH INNIHON STEAMSHIP CO. LTD. [1994] 1 AC 486. THUS, LEGISLATIONS WHICH MODIFIED ACCRUED R IGHTS OR WHICH IMPOSE OBLIGATIONS OR IMPOSE NEW DUTIES OR ATTACH A NEW DISABILITY HAVE T O BE TREATED AS PROSPECTIVE UNLESS THE LEGISLATIVE INTENT IS CLEARLY TO GIVE THE ENACTMENT A RETROSPECTIVE EFFECT; UNLESS THE LEGISLATION IS FOR PURPOSE OF SUPPLYING AN OBVIOUS OMISSION IN A FORMER LEGISLATION OR TO EXPLAIN A FORMER LEGISLATION. WE NEED NOT NOTE THE CORNUCOPIA OF CASE LAW AVAILABLE ON THE SUBJECT BECAUSE AFORESAID LEGAL POSITION CLEARLY EMERGES FR OM THE VARIOUS DECISIONS AND THIS LEGAL POSITION WAS CONCEDED BY THE COUNSEL FOR THE PARTIE S. IN ANY CASE, WE SHALL REFER TO FEW JUDGMENTS CONTAINING THIS DICTA, A LITTLE LATER. 33. WE WOULD ALSO LIKE TO POINT OUT, FOR THE SAKE O F COMPLETENESS, THAT WHERE A BENEFIT IS CONFERRED BY A LEGISLATION, THE RULE AGAINST A RETR OSPECTIVE CONSTRUCTION IS DIFFERENT. IF A LEGISLATION CONFERS A BENEFIT ON SOME PERSONS BUT W ITHOUT INFLICTING A CORRESPONDING DETRIMENT ON SOME OTHER PERSON OR ON THE PUBLIC GEN ERALLY, AND WHERE TO CONFER SUCH BENEFIT APPEARS TO HAVE BEEN THE LEGISLATORS OBJECT, THEN T HE PRESUMPTION WOULD BE THAT SUCH A LEGISLATION, GIVING IT A PURPOSIVE CONSTRUCTION, WO ULD WARRANT IT TO BE GIVEN A RETROSPECTIVE EFFECT. THIS EXACTLY IS THE JUSTIFICATION TO TREAT PROCEDURAL PROVISIONS AS RETROSPECTIVE. IN GOVERNMENT OF INDIA V. INDIAN TOBACCO ASSOCIATIO N [2005] 7 SCC 396, THE DOCTRINE OF FAIRNESS WAS HELD TO BE RELEVANT FACTOR TO CONSTRUE A STATUTE CONFERRING A BENEFIT, IN THE CONTEXT OF IT TO BE GIVEN A RETROSPECTIVE OPERATION . THE SAME DOCTRINE OF FAIRNESS, TO HOLD THAT A STATUTE WAS RETROSPECTIVE IN NATURE, WAS APPLIED IN THE CASE OF VIJAY V. STATE OF MAHARASHTRA [2006] 6 SCC 286. IT WAS HELD THAT WHER E A LAW IS ENACTED FOR THE BENEFIT OF COMMUNITY AS A WHOLE, EVEN IN THE ABSENCE OF A PROV ISION THE STATUTE MAY BE HELD TO BE RETROSPECTIVE IN NATURE. HOWEVER, WE ARE CONFRONTED WITH ANY SUCH SITUATION HERE. 34. IN SUCH CASES, RETROSPECTIVELY IS ATTACHED TO B ENEFIT THE PERSONS IN CONTRADISTINCTION TO THE PROVISION IMPOSING SOME BURDEN OR LIABILITY WHERE T HE PRESUMPTION ATTACHES TOWARDS PROSPECTIVITY. IN THE INSTANT CASE, THE PROVISO ADD ED TO SECTION 113 OF THE ACT IS NOT BENEFICIAL TO THE ASSESSEE. ON THE CONTRARY, IT IS A PROVISION WHICH IS ONEROUS TO THE ASSESSEE. THEREFORE, IN A CASE LIKE THIS, WE HAVE TO PROCEED WITH THE NORMAL RULE OF PRESUMPTION AGAINST RETROSPECTIVE OPERATION. THUS, THE RULE AGA INST RETROSPECTIVE OPERATION IS A FUNDAMENTAL RULE OF LAW THAT NO STATUTE SHALL BE CO NSTRUED TO HAVE A RETROSPECTIVE OPERATION UNLESS SUCH A CONSTRUCTION APPEARS VERY CLEARLY IN THE TERMS OF THE ACT, OR ARISES BY NECESSARY AND DISTINCT IMPLICATION. DOGMATICALLY FR AMED, THE RULE IS NO MORE THAN A PRESUMPTION, AND THUS COULD BE DISPLACED BY OUT WEI GHING FACTORS 18. THE HONBLE SUPREME COURT WHILE ADJUDICATING TH E MATTER ALSO TOOK NOTE OF THE FACT THAT THE SAME FINANCE ACT, 2002 CARRIED OUT SO ME OTHER AMENDMENTS TO THE INCOME-TAX ACT, 1961 WHICH WERE GIVEN RETROSPECTIVE OPERATION BY THE PARLIAMENT. HOWEVER THE PROVISO TO SECTION 113, WAS MADE EFFECTIVE PROSPECTIVELY FR OM 01-06-2002. THE RELEVANT DISCUSSION IN THE SAID JUDGMENT IS AS FOLLOWS: D) THERE ARE SOME OTHER CIRCUMSTANCES WHICH REFLEC T THE LEGISLATIVE INTENT. THE PROBLEM WHICH WAS HIGHLIGHTED IN THE CONFERENCE OF CHIEF CO MMISSIONERS ON THE RATE OF SURCHARGE APPLICABLE IS NOTED ABOVE. IN VIEW OF THE AFORESAID DIFFICULTIES POINTED OUT BY THE CHIEF COMMISSIONERS IN THEIR CONFERENCE, IT BECOMES CLEAR THAT AS PER THE PROVISIONS THEN ENFORCED, LEVY OF SURCHARGE IN THE BLOCK ASSESSMENT ON THE UNDISCLOSED INCOME WAS A DIFFICULT PROPOSITION. IT IS FOR THIS REASON RETROSPECTIVE AM ENDMENT TO SECTION 113 WAS SUGGESTED. NOTWITHSTANDING THE SAME, THE LEGISLATURE CHOSE NOT TO DO SO, AS IS CLEAR FROM THE DISCUSSION HEREINAFTER. 'NOTES ON CLAUSES' APPENDED TO FINANCE BILL, 2002 W HILE PROPOSING INSERTION OF PROVISO CATEGORICALLY STATES THAT 'THIS AMENDMENT WILL TAKE EFFECT FROM 1ST JUNE, 2002'. THESE 18 IT(SS)A NO. 37 & 38/KOL/2018 JAYASHREE JAYAKAR MOHANKA, L /H OF LATE LALIT MOHANKA, AY- 2005-06 & 2006-07 BECOME EPIGRAPHIC WORDS, WHEN SEEN IN CONTRADISTINC TION TO OTHER AMENDMENTS SPECIFICALLY STATING THOSE TO BE CLARIFICATORY OR RETROSPECTIVEL Y DEPICTING CLEAR INTENTION OF THE LEGISLATURE. IT CAN BE SEEN FROM THE SAME NOTES THAT FEW OTHER A MENDMENTS IN THE INCOME TAX ACT WERE MADE BY THE SAME FINANCE ACT SPECIFICALLY MAKING TH OSE AMENDMENTS RETROSPECTIVELY. FOR EXAMPLE, CLAUSE 40 SEEKS TO AMEND S.92F. CLAUSE III (A) OF S.92F IS AMENDED 'SO AS TO CLARIFY THAT THE ACTIVITIES MENTIONED IN THE SAID CLAUSE IN CLUDE THE CARRYING OUT OF ANY WORK IN PURSUANCE OF A CONTRACT.' THIS AMENDMENT TAKES EFFE CT RETROSPECTIVELY FROM 01.04.2002. VARIOUS OTHER AMENDMENTS ALSO TAKE PLACE RETROSPECT IVELY. THE NOTES ON CLAUSES SHOW THAT THE LEGISLATURE IS FULLY AWARE OF 3 CONCEPTS: (I) PROSPECTIVE AMENDMENT WITH EFFECT FROM A FIXED DATE ; (II) RETROSPECTIVE AMENDMENT WITH EFFECT FROM A FIXED AN TERIOR DATE; AND (III) CLARIFICATORY AMENDMENTS WHICH ARE RETROSPECTIVE IN NATURE. THUS, IT WAS A CONSCIOUS DECISION OF THE LEGISLATUR E, EVEN WHEN THE LEGISLATURE KNEW THE IMPLICATION THEREOF AND TOOK NOTE OF THE REASONS WH ICH LED TO THE INSERTION OF THE PROVISO, THAT THE AMENDMENT IS TO OPERATE PROSPECTIVELY. LEA RNED COUNSEL APPEARING FOR THE ASSESSEES SAGACIOUSLY CONTRASTED THE AFORESAID STIPULATION WH ILE EFFECTING AMENDMENT IN SECTION 113 OF THE ACT, WITH VARIOUS OTHER PROVISIONS NOT ONLY IN THE SAME FINANCE ACT BUT FINANCE ACTS PERTAINING TO OTHER YEARS WHERE THE LEGISLATURE SPE CIFICALLY PROVIDED SUCH AMENDMENT TO BE EITHER RETROSPECTIVE OR CLARIFICATORY. IN SO FAR AS AMENDMENT TO SECTION 113 IS CONCERNED, THERE IS NO SUCH LANGUAGE USED AND ON THE CONTRARY, SPECIFIC STIPULATION IS ADDED MAKING THE PROVISION EFFECTIVE FROM 1ST JUNE, 2002. 19. IN THE PRESENT CASE WE NOTE THAT THE FINANCE AC T, 2012, BY WHICH CLAUSE (C) WAS ENACTED IN SECTION 149(1), ALSO MADE SEVERAL OTHER AMENDMENTS IN THE INCOME-TAX ACT, 1961 AND THESE WERE MADE APPLICABLE WITH RETROSPECTIVE E FFECT. FOR INSTANCE, SECTIONS 2(14) & 2(47) WHICH DEFINE THE WORDS CAPITAL ASSET & TRA NSFER WERE AMENDED WITH RETROSPECTIVE EFFECT FROM 01-04-1962. SIMILARLY AMENDMENTS IN SEC TION 9(1)(VI) & 9(1)(VII) ENLARGING THE DEFINITION OF INCOME DEEMED TO ACCRUE IN INDIA BY W AY OF ROYALTY AND FEES FOR TECHNICAL SERVICES WERE MADE EFFECTIVE RETROSPECTIVELY FROM 01-04-1976. THESE AMENDMENTS WERE ALSO CLOSELY LINKED WITH FOREIGN SOURCES OF INCOME OR TR ANSACTIONS BETWEEN THE NON-RESIDENTS. HOWEVER THE LEGISLATURE IN ITS WISDOM MADE THE FORE GOING AMENDMENTS WITH RETROSPECTIVE EFFECT, WHEREAS THE AMENDMENT IN SECTION 149(1) BY INSERTING CLAUSE (C) WAS MADE EFFECTIVE PROSPECTIVELY FROM 01-07-2012. WE THEREFORE FIND ME RIT IN THE LD. ARS SUBMISSION THAT LEGISLATIVE INTENT TO MAKE THE CLAUSE (C) OF SECTIO N 149(1) APPLICABLE RETROSPECTIVELY SO AS TO REVIVE CLOSE PROCEEDINGS WAS NOT APPARENT. 20. BEFORE US, THE LD. AR BOLSTERED HIS ARGUMENT BY MAKING REFERENCE TO THE JUDGMENT OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS UNION BANK OF INDIA (SUPRA). HE SUBMITTED THAT THE FINANCE ACT, 2012 INSERTED EXPLA NATION (3) TO SECTION 115JB WHICH READS AS FOLLOWS: 'EXPLANATION 3-FOR THE REMOVAL OF DOUBTS, IT IS HER EBY CLARIFIED THAT FOR THE PURPOSES OF THIS SECTION, THE ASSESSEE, BEING A COMPANY TO WHICH THE PROVISO TO SUB-SECTION (2) OF SECTION 211 OF THE COMPANIES ACT, 1956(1 OF 1956) IS APPLICABLE , HAS, FOR AN ASSESSMENT YEAR COMMENCING ON OR BEFORE THE 1ST DAY OF APRIL, 2012, AN OPTION TO PREPARE ITS PROFIT AND LOSS ACCOUNT FOR THE RELEVANT PREVIOUS YEAR EITHER IN AC CORDANCE WITH THE PROVISIONS OF PART II AND PART III OF SCHEDULE VI TO THE COMPANIES ACT, 1 956 OR IN ACCORDANCE WITH THE PROVISIONS OF THE ACT GOVERNING SUCH COMPANY.' BY ENACTING THIS EXPLANATION, LIABILITY TO PAY TAX ON BOOK PROFIT UNDER SECTION 115JB WAS SOUGHT TO BE FIXED ON THE COMPANIES CARRYING ON THE BUSINESS OF BANKING, INSURANCE OR 19 IT(SS)A NO. 37 & 38/KOL/2018 JAYASHREE JAYAKAR MOHANKA, L /H OF LATE LALIT MOHANKA, AY- 2005-06 & 2006-07 ELECTRICITY. RELYING ON EXPLANATION (3), THE REVENU E SOUGHT TO JUSTIFY THE ASSESSMENT OF BOOK PROFIT IN THE HANDS OF A NATIONALIZED BANK FOR THE AY 2005-06. IT WAS ARGUED BY THE REVENUE THAT THE EXPLANATION (3) MADE THE PROVISIONS OF SEC TION 115JB APPLICABLE TO ASSESSEES CARRYING ON BANKING BUSINESS FOR THE AYS BEGINNING ON OR BEFORE 01-04-2012. WHILE DEALING WITH THE REVENUES ARGUMENT WITH REGARD TO RETROSPE CTIVE APPLICATION OF SECTION 115JB BECAUSE OF EXPLANATION (3) INSERTED BY THE FINANCE ACT, 2012; THE HONBLE HIGH COURT OBSERVED AS FOLLOWS: THIS EXPLANATION STARTS WITH THE EXPRESSION 'FOR T HE REMOVAL OF DOUBTS'. IT DECLARES THAT FOR THE PURPOSE OF THE SAID SECTION IN CASE OF AN ASSES SEE-COMPANY TO WHICH SECOND PROVISO TO SECTION 129 (1) OF THE COMPANIES ACT, 2013 IS APPLI CABLE, WOULD HAVE AN OPTION FOR THE ASSESSMENT YEAR COMMENCING ON OR BEFORE 1ST APRIL, 2012 TO PREPARE ITS STATEMENT OF PROFIT AND LOSS EITHER IN ACCORDANCE WITH THE PROVISIONS O F SCHEDULE III TO THE COMPANIES ACT, 2013 OR IN ACCORDANCE WITH THE PROVISIONS OF THE ACT GOV ERNING SUCH COMPANY. TO OUR MIND, THIS IS SOME WHAT CURIOUS PROVISION. IN THE ORIGINAL FORM, SUB-SECTION (2) OF SECTION 115JB OF THE ACT DID NOT OFFER ANY SUCH OPTION TO A BANKING COMP ANY, INSURANCE COMPANY OR ELECTRICITY COMPANY TO PREPARE ITS PROFIT AND LOSS ACCOUNT AT I TS CHOICE EITHER IN TERMS OF ITS GOVERNING ACT OR AS PER TERMS OF SECTION 115JB OF THE ACT. SE CONDLY, BY VIRTUE OF THIS EXPLANATION IF AN ANOMALY WHICH WE HAVE NOTICED IS SOUGHT TO BE REMOV ED, WE DO NOT THINK THAT THE LEGISLATURE HAS ACHIEVED SUCH PURPOSE. IN PLAIN TERMS, THIS IS NOT A CASE OF RETROSPECTIVE LEGISLATIVE AMENDMENT. IT IS STATED TO BE CLARIFICATORY AMENDME NT FOR REMOVAL OF DOUBTS. WHEN THE PLAIN LANGUAGE OF SUB-SECTION (2) OF SECTION 115JB DID NO T PERMIT ANY AMBIGUITY, WE DO NOT THINK THE LEGISLATURE BY INTRODUCING A CLARIFICATORY OR D ECLARATORY AMENDMENT CURE A DEFECT WITHOUT RESORTING TO RETROSPECTIVE AMENDMENT, WHICH IN THE PRESENT CASE HAS ADMITTEDLY NOT BEEN DONE. 21. WE NOTE THAT THE LANGUAGE OF EXPLANATION (3) T O SECTION 115JB IS SOMEWHAT SIMILAR TO THE LANGUAGE OF THE EXPLANATION BELOW SE CTION 149. IN BOTH PLACES IT IS PROVIDED THAT THE EXPLANATION IS INSERTED FOR REMOVAL OF DO UBTS AND THE EXPLANATION IS APPLICABLE TO ASSESSMENT YEARS BEGINNING ON OR BEFORE 01-04-2012. YET THE HONBLE BOMBAY HIGH COURT HELD THAT SINCE THE PRINCIPAL PROVISION OF THE ACT WAS NOT AMENDED RETROSPECTIVELY, BY APPLYING THE EXPLANATION (3), THE PRINCIPAL PROVISI ONS OF SECTION 115JB CANNOT BE MADE APPLICABLE TO BANKING COMPANIES RETROSPECTIVELY. IN OUR CONSIDERED OPINION, THE SAME PRINCIPLE APPLIES TO THE PRESENT APPEALS AS WELL. 22. WE FURTHER FIND THAT THE ISSUE INVOLVED IN THE PRESENT APPEAL IS SQUARELY DEALT WITH BY THE HONBLE DELHI HIGH COURT IN THE CASE OF BRAH MDATT VS UOI (SUPRA). IN THIS CASE A SEARCH WAS CONDUCTED AGAINST THE ASSESSEE IN JULY 2 011. IN THE STATEMENT RECORDED DURING THE COURSE OF SEARCH THE ASSESSEE HAD ADMITTED OF S ETTLING A SUBSTANTIAL AMOUNT ON A TRUST ESTABLISHED OUTSIDE INDIA IN THE YEAR 1998. THE ASS ESSEE ADMITTED THAT HE WAS ONE OF THE BENEFICIARY OF THE TRUST WHICH HAD A BANK ACCOUNT W ITH HSBC, GENEVA, SWITZERLAND. BASED ON SUCH INFORMATION, THE REVENUE REOPENED HIS INCOM E-TAX ASSESSMENT FOR AY 1998-99 TAKING RECOURSE TO THE PROVISIONS OF SECTION 149(1)(C) OF THE ACT. THE ASSESSEE CHALLENGED THE LEGALITY OF THE NOTICE U/S 148 AND CONSEQUENT PROCE EDINGS BY FILING WRIT PETITION. BEFORE THE HONBLE DELHI HIGH COURT, THE REVENUE PLEADED THAT THE PROVISIONS OF SECTION 149(1)(C) WERE INTENDED TO BE RETROSPECTIVE IN OPERATION AND THEREFORE THE PROCEEDINGS UNDER SECTION 148 WERE VALIDLY INITIATED AND CONSEQUENTLY THEREFO RE THE WRIT PETITION WAS LIABLE TO BE DISMISSED. THE HONBLE DELHI HIGH COURT TOOK NOTE O F THE REVENUES AVERMENTS IN THE FOLLOWING WORDS: 11. IT IS SUBMITTED THAT THE INTENT AND PURPOSE BE HIND THE 2012 AMENDMENT OF THE ACT WAS TO EMPOWER THE REVENUE TO REOPEN ASSESSMENTS BEYOND A PARTICULAR PERIOD: IN THIS CASE, BY 16 YEARS, IF IT IS REVEALED THAT THE ASSESSEE HELD ASS ET ABROAD. GIVEN THIS RELEVANT CONDITION, THE ASSESSEE COULD NOT COMPLAIN THAT AS REGARDS MATTERS THAT HAD NOT BEEN DISCLOSED, REASSESSMENT PROCEEDINGS WERE VALIDLY INSTITUTED. 20 IT(SS)A NO. 37 & 38/KOL/2018 JAYASHREE JAYAKAR MOHANKA, L /H OF LATE LALIT MOHANKA, AY- 2005-06 & 2006-07 23. WE THUS NOTE THAT BEFORE THE HONBLE DELHI HIGH COURT, THE REVENUE HAD PARTICULARLY ARGUED THAT THE PROVISIONS OF SECTION 149(1)(C) WERE ENACTED TO EMPOWER THE REVENUE TO REOPEN THE ASSESSMENTS FOR A PERIOD OF S IXTEEN YEARS PRIOR TO 01-07-2012 AND SUCH AMENDMENT BEING RETROSPECTIVE IN NATURE, THE A SSESSMENT FOR AY 1998-99 WAS CORRECTLY REOPENED. NEGATING THE REVENUES CONTENTION, THE HO NBLE DELHI HIGH COURT HELD AS UNDER: 17. THIS COURT IS OF THE OPINION THAT THERE IS NO MERIT IN THE REVENUE'S CONTENTION. IN PRITHVI COTTON MILLS LTD. V. BROACH BOROUGH MUNICIPALITY [1 971] 79 ITR 136 (SC), EXAMINED THE VALIDITY OF THE RETROSPECTIVE AMENDMENT OF A STATUT E IN LIGHT OF ARTICLE 19(1)(G) OF THE CONSTITUTION OF INDIA, I.E. A FUNDAMENTAL RIGHT TO PRACTICE ANY PROFESSION, OR TO CARRY ON ANY OCCUPATION, TRADE OR BUSINESS. THE COURT SAID: 'IN TESTING WHETHER A RETROSPECTIVE IMPOSITION OF A TAX OPERATES SO HARSHLY AS TO VIOLATE FUNDAMENTAL RIGHTS UNDER ARTICLE 19(1)(G), THE FACT ORS CONSIDERED RELEVANT INCLUDE THE CONTEXT IN WHICH RETROACTIVITY WAS CONTEMPLATED SUCH AS WHE THER THE LAW IS ONE OF VALIDATION OF TAXING STATUTE STRUCK-DOWN BY COURTS FOR CERTAIN DE FECTS; THE PERIOD OF SUCH RETROACTIVITY, AND THE DECREE AND EXTENT OF ANY UNFORESEEN OR UNFORESE EABLE FINANCIAL BURDEN IMPOSED FOR THE PAST PERIOD ETC.' 18. IN GOVINDDAS V. ITO [1976] 103 ITR 123 THE SUPR EME COURT HELD THAT SECTION 171 (6) OF THE INCOME TAX ACT WAS PROSPECTIVE AND INAPPLICABLE FOR ANY ASSESSMENT YEAR PRIOR TO 1 ST APRIL, 1962, THE DATE ON WHICH THE ACT CAME INTO F ORCE AND OBSERVED THAT: '11. NOW IT IS A WELL SETTLED RULE OF INTERPRETATIO N HALLOWED BY TIME AND SANCTIFIED BY JUDICIAL DECISIONS THAT, UNLESS THE TERMS OF A STATUTE EXPRE SSLY SO PROVIDE OR NECESSARILY REQUIRE IT, RETROSPECTIVE OPERATION SHOULD NOT BE GIVEN TO A ST ATUTE SO AS TO TAKE AWAY OR IMPAIR AN EXISTING RIGHT OR CREATE A NEW OBLIGATION OR IMPOSE A NEW LIABILITY OTHERWISE THAN AS REGARDS MATTERS OF PROCEDURE. THE GENERAL RULE AS STATED BY HALSBURY IN VOL. 36 OF THE LAWS OF ENGLAND (3RD EDN.) AND REITERATED IN SEVERAL DECISI ONS OF THIS COURT AS WELL AS ENGLISH COURTS IS THAT ALL STATUTES OTHER THAN THOSE WHICH ARE MERELY DECLARATORY OR WHICH RELATE ONLY TO MATTERS OF PROCEDURE OR OF EVIDENCE ARE PRIMA FA CIE PROSPECTIVELY AND RETROSPECTIVE OPERATION SHOULD NOT BE GIVEN TO A STATUTE SO AS TO AFFECT, ALTER OR DESTROY AN EXISTING RIGHT OR CREATE A NEW LIABILITY OR OBLIGATION UNLESS THAT EF FECT CANNOT BE AVOIDED WITHOUT DOING VIOLENCE TO THE LANGUAGE OF THE ENACTMENT. IF THE E NACTMENT IS EXPRESSED IN LANGUAGE WHICH IS FAIRLY CAPABLE OF EITHER INTERPRETATION, IT OUGHT T O BE CONSTRUED AS PROSPECTIVE ONLY.' IN CIT V. SCINDIA STEAM NAVIGATION CO. LTD [1961] 4 2 ITR 589, IT WAS HELD THAT AS THE LIABILITY TO PAY TAX IS COMPUTED ACCORDING TO THE L AW IN FORCE AT THE BEGINNING OF THE ASSESSMENT YEAR, I.E., THE FIRST DAY OF APRIL, ANY CHANGE IN LAW UPSETTING THE POSITION AND IMPOSING TAX LIABILITY AFTER THAT DATE, EVEN IF MAD E DURING THE CURRENCY OF THE ASSESSMENT YEAR, UNLESS SPECIFICALLY MADE RETROSPECTIVE, DOES NOT APPLY TO THE ASSESSMENT FOR THAT YEAR. THESE PRINCIPLES WERE REITERATED IN CIT V. VATIKA T OWNSHIP (P.) LTD [2014] 49 TAXMANN.COM 249/227 TAXMAN 121/367 ITR 466 (SC). 19. IN VIEW OF THE ABOVE DISCUSSION, IT IS HELD THA T THE PETITION HAS TO SUCCEED; THE IMPUGNED REASSESSMENT NOTICE AND ALL CONSEQUENT PROCEEDINGS ARE HEREBY QUASHED AND SET ASIDE. THE WRIT PETITION IS ALLOWED; HOWEVER WITHOUT ORDER ON COSTS. 24. WE FURTHER NOTE THAT THE REVENUES SLP AGAINST THE DECISION OF THE HONBLE DELHI HIGH COURT WAS DISMISSED BY THE HONBLE SUPREME COU RT ON 05-07-2019. WE ALSO FIND THAT FOLLOWING THE JUDGMENT OF THE HONBLE DELHI HIGH CO URT (SUPRA), THE COORDINATE BENCHES OF THIS TRIBUNAL IN THE FOLLOWING CASES SIMILARLY QUAS HED THE REASSESSMENT PROCEEDINGS U/S 148 WHICH WERE INITIATED FOR ASSESSMENT YEARS PRIOR TO AY 2006-07 TAKING AID OF SECTION 149(1)(C) OF THE ACT. 21 IT(SS)A NO. 37 & 38/KOL/2018 JAYASHREE JAYAKAR MOHANKA, L /H OF LATE LALIT MOHANKA, AY- 2005-06 & 2006-07 RAJU VERMA VS DCIT IN ITA NOS.1796 & 1797/DEL/2017 DATED 09.04.2019 RAVICHANDRA V MEHTA VS DCIT IN ITA NOS.409, 450, 41 0 AND 451/RJT/2017 DATED 25-02- 2019 25. RESPECTFULLY FOLLOWING THE DECISIONS CITED ABOV E AND FOR THE REASONS DISCUSSED IN THE FOREGOING, WE THEREFORE DO NOT SEE ANY REASON T O INTERFERE WITH THE ORDERS OF THE LD. CIT(A) FOR THE AYS 2001-02 TO 2005-06. 9. SINCE THE ISSUE INVOLVED IN THE PRESENT APPEAL A ND APPLICABLE LEGAL PROVISIONS GOVERNING THE SAME IN THE ASSESSEES CASE BEING IDE NTICAL WITH THE ABOVE DECISION (SUPRA), WE HAVE NO HESITATION IN HOLDING THAT THE LD. CIT(A) WAS JUSTIFIED IN HOLDING THAT THE NOTICE DATED 19.08.2013ISSUED U/S 148 IN R ESPECT OF AY 2005-06 WAS TIME BARRED AND CONSEQUENTLY THEREFORE THE ORDER DATED 1 9.01.2015 PASSED BY THE AO BEING AB INITIO VOID WAS THEREFORE RIGHTLY CANCELLED. WE ALSO NOTE THAT THE DECISION OF THIS TRIBUNAL IS IN CONSONANCE WITH THE DECISION OF THE HONBLE DELHI HIGH COURT IN THE CASE OF BRAHMDATT VS UOI (SUPRA). DURING THE COURSE OF APPELLATE HEARING, THE LD. AR ALSO BROUGHT TO OUR ATTENTION THAT NOT ONLY THE SLP PREFERRED BY THE REVENUE HAS BEEN DISMISSED BY THE HONBLE SUPREME COURT BUT EVEN THE REVIEW PETITION FILED BY THE DEPARTMENT BEFORE THE HONBLE DELHI HIGH COURT WAS DISMISSED VIDE ORDER DATED 26.07.2019. FOR THE REASONS SET OUT IN FOREGOING TH EREFORE WE FIND NO REASON TO INTERFERE WITH THE ORDER OF THE LD. CIT(A). THE REV ENUES APPEAL FOR AY 2005-06 IS THEREFORE DISMISSED. 10. NOW, WE DEAL WITH THE REVENUES APPEAL FOR THE AY 2006-07 WHEREIN FOLLOWING GROUNDS HAVE BEEN RAISED: 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS.46,84,050/- BY ENTERTAI NING ADDITIONAL EVIDENCES IN VIOLATION OF RULE 46A OF THE I. T. RULE, 1962. 2. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE ISSUE MAY BE RESTORED BACK TO THE FILE OF THE AO, FOR NECESSARY EXAMINATION OF TH E ADDITIONAL EVIDENCES SO ENTERTAINED BY THE LD. CIT(A). 11. BRIEFLY STATED, THE FACTS ARE THAT, IN RESPONSE TO NOTICE U/S 153C FOR AY 2006-07, THE ASSESSEE IN THE CAPACITY OF LEGAL REPRESENTATIVE HA D FILED A RETURN OF INCOME ON 20.03.2013DECLARING TOTAL INCOME OF RS.46,65,327/- . THEREAFTER, NOTICES U/S. 143(2) AND 22 IT(SS)A NO. 37 & 38/KOL/2018 JAYASHREE JAYAKAR MOHANKA, L /H OF LATE LALIT MOHANKA, AY- 2005-06 & 2006-07 142(1) OF THE ACT WERE ISSUED ON 26.03.2013 AND IN COMPLIANCE THEREOF THE LD. AR OF THE ASSESSEE APPEARED AND FURNISHED DETAILS, STATEMENT AND COMPUTATION FROM WHICH THE AO FOUND THAT FIVE BANK ACCOUNTS WERE UNDISCLOSED. O N EXAMINATION OF THE SAID BANK STATEMENTS, THE AO NOTED THAT AN AMOUNT OF RS.46,84 ,050/- WAS CREDITED IN THE ASSESSEES BANK ACCOUNT ON 31.03.2006 AND SINCE THE SAID CREDI T DID NOT APPEAR IN HIS BOOKS OF ACCOUNTS, THE ASSESSEE WAS SHOW CAUSED TO EXPLAIN A S TO WHY IT SHOULD NOT BE ADDED UNDER SEC. 68 OF THE ACT. THE EXPLANATION PUT FORTH BY TH E ASSESSEE WAS THAT THE SUM OF RS.46,84,050/- REFLECTED IN THE BANK STATEMENT ON 3 1.03.2006 DID NOT REPRESENT FRESH DEPOSIT OR NEW INVESTMENT BUT THE SAME REPRESENTED MATURITY PROCEEDS OF THE INVESTMENT IN BONDS MADE FOR WHICH THE NECESSARY ENTRY IN THE BANK STAT EMENT APPEARED ON 07.12.2004 AND THEREFORE DID NOT CONSTITUTE UNDISCLOSED INCOME OF THE ASSESSEE FOR THE RELEVANT YEAR. THE AO HOWEVER DID NOT ACCEPT THE EXPLANATION AND ADDED THE SAID SUM BY WAY OF UNEXPLAINED CASH CREDIT IN AY 2006-07. BEING AGGRIEVED, THE ASS ESSEE PREFERRED AN APPEAL BEFORE THE LD. CIT(A), WHO DELETED THE IMPUGNED ADDITION BY OBSERV ING AS UNDER: I HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF THE LD. A.R AND PERUSED THE RELEVANT PROVISIONS OF THE ACT. IN THESE GROUNDS THE PRIMARY OBJECTION OF THE LD. AR OF THE APPELLANT IS THAT THE SUM OF $ 105,000 BROUGHT TO TAX BY THE LD. AO WAS NEITHER DEPOSITED IN NOR INVESTED THROUGH THE FOREIGN BANK ACCOUNT IN THE RELEVANT FI NANCIAL YEAR 2005-06 AND THEREFORE THE IMPUGNED ADDITION OF RS,46,84,050/- WAS UNSUSTAINAB LE. THE LD. AO IN THE ASSESSMENT ORDER HAS TAXED THE CREDIT ENTRY OF $105,000 WHICH IS REF LECTED IN THE BANK STATEMENT ON 31.03.2006, AS UNEXPLAINED INCOME OF THE APPELLANT. THE APPELLA NT HAS HOWEVER CONTENDED THAT THE CREDIT OF $105,000 REFLECTED IN THE BANK STATEMENT ON 31.0 3.2006 DOES NOT REPRESENT ANY FRESH DEPOSIT OR NEW INVESTMENT IN THE FOREIGN BANK ACCOU NT MADE IN THE YEAR UNDER APPEAL. THE APPELLANT PLACED ON RECORD THE COPY OF BANK STATEME NT FOR FY 2004-05 WHICH INTER ALIA CONTAINED DEBIT ENTRY ON 07.12.2004 EVIDENCING THA T SUM OF $105,000 WAS INVESTED IN 'ITALY 2.5%'. THE APPELLANT CONTENDED THAT IT WAS THIS VER Y INVESTMENT 'ITALY 2.5%' WHICH STOOD REDEEMED IN THE RELEVANT YEAR UNDER CONSIDERATION A ND THE REDEMPTION PROCEEDS WAS CREDITED IN THE SAME BANK ACCOUNT ON 31.03.2006 UNDER THE NA RRATION, 'REDM: 105000: ITALY 2,5% 31.3.06 : 100,0'. REFERRING TO THESE FACTS THE APPE LLANT FURTHER SUBMITTED THAT THE INVESTMENT WAS OUT OF DEPOSITS MADE IN THE BANK ACCOUNT IN FY 2004-05. THE APPELLANT THUS CLAIMED THAT THE CREDIT OF $ 105,000 IN THE BANK ACCOUNT ON 31.0 3.2006 STOOD DULY EXPLAINED AND THEREFORE NO ADDITION ON THIS COUNT WAS PERMISSIBLE IN THE RE LEVANT AY 2006-07. 2. FROM PERUSAL OF THE REMAND REPORT DATED 02.06.20 16 FURNISHED BY THE LD. AO, IT IS FOUND THAT THE LD. AO HAD STATED THAT SIMILAR AVERMENTS W ERE MADE BY THE APPELLANT IN THE COURSE OF ASSESSMENT AS WELL. ALTHOUGH THE LD. AO TACITLY ADM ITTED THAT THE ENTRIES ON 07.12.2004 AND 31.03.2006 DID HAVE CONNECTION AND CORRELATION BUT THE SAME COULD NOT BE VERIFIED DUE TO THREE FACTORS, WHICH HAVE BEEN ELABORATED BY THE LD . AO SUBSEQUENTLY IN THE REMAND REPORT. THE LD. AR OF THE APPELLANT HAS FURNISHED DETAILED REBUTTALS TO EACH OF THE FACTORS SET OUT BY THE LD. AO IN THE IMPUGNED ORDER. THE LD. AR ALSO F URNISHED CONFIRMATION DATED 28.07.2016 OBTAINED FROM HSBC, GENEVA STATING THAT THE CREDIT ON 31.03.2006 REPRESENTED THE REDEMPTION PROCEEDS OF THE INVESTMENT ORIGINALLY MA DE ON 07.12.2004. THE RELEVANT SECURITY PURCHASE & REDEMPTION VOUCHER ACCOMPANIED THE CONFI RMATION ISSUED BY THE HSBC, GENEVA. 23 IT(SS)A NO. 37 & 38/KOL/2018 JAYASHREE JAYAKAR MOHANKA, L /H OF LATE LALIT MOHANKA, AY- 2005-06 & 2006-07 3. ON GIVING DUE CONSIDERATION TO THE SUBMISSIONS O F RIVAL PARTIES AND THE FACTS AND MATERIAL AVAILABLE ON RECORD, IT IS NOTED THAT SHRI LALIT MO HANKA MAINTAINED A BANK ACCOUNT WITH HSBC, GENEVA. IN THE ASSESSMENT PROCEEDINGS THE APP ELLANT OBTAINED AND FURNISHED THE BANK STATEMENTS OF THE AFORESAID BANK ACCOUNT FROM THE D ATE ON WHICH THE ACCOUNT WAS OPENED TO THE DATE OF CLOSURE. I FIND THAT THE INDIAN TAX AUT HORITIES HAD ALSO OBTAINED AUTHENTICATED INFORMATION REGARDING THE BANK ACCOUNT FROM THE SWI SS AUTHORITIES. THE LD. AO HAD CARRIED OUT A DETAILED ANALYSIS OF THE ENTRIES IN THE BANK STATEMENTS AND TAXED THE DEPOSITS, INTEREST INCOME AND CAPITAL GAIN AS PER LAW IN THE RESPECTIV E YEARS TO WHICH IT PERTAINED. ACCORDINGLY EVEN IN THE ASSESSMENT YEAR IN QUESTION I.E. AY 200 6-07, THE LD. AO HAD ASSESSED THE RELEVANT DEPOSITS, INTEREST INCOME ETC. PERTAINING TO THIS Y EAR WHICH HAS BEEN ELABORATELY DISCUSSED IN THE ASSESSMENT ORDER. THE LIMITED DISPUTE IN THESE GROUNDS HOWEVER CONCERN ONLY THE AO'S ACTION OF ASSESSING A CREDIT OF $105,000 (EQUIVALEN T TO RS.46,84,050/-) AS UNEXPLAINED INCOME OF THE APPELLANT. 4. FROM THE ENTRIES IN THE BANK ACCOUNT, IT IS NOTE D THAT THE ACCOUNT WAS OPENED ON 03.08.2004 WITH 'NIL' BALANCE. ON 02.12.2004 THERE WAS A DEPOS IT OF $1,10,133.25 (EQUIVALENT TO RS.48,70,092). ON 07.12.2004 A DEBIT ENTRY OF $ 105 ,285.05 WAS REFLECTED IN THE BANK STATEMENT UNDER THE NARRATION 'P: 105000: ITALY:2.5 %.31.03.2006:99357'. THE ENTRY SUGGESTED THAT AN INVESTMENT OF $105,000 WAS MADE O UT OF THE DEPOSIT MADE ON 02.12.2004 AND THAT THE SAME WAS REDEEMABLE ON 31.03.2006. ON 31.03.2006, THE REDEMPTION PROCEEDS OF $ 105,000 WAS CREDITED IN THE APPELLANT'S BANK ACCO UNT UNDER THE NARRATION, REDM: 105000: ITALY 2.5% 31.3.06 : 100,0'. THE LD. AO IN HIS REMA ND REPORT ALTHOUGH ADMITTED THAT THE CREDIT ON 31.03.2006 APPEARED TO HAVE RELATION WITH THE DEBIT ENTRY ON 07.12.2004 BUT SINCE THE APPELLANT WAS UNABLE TO FULLY SUBSTANTIATE THE SAME HE WAS NOT IN A POSITION TO ACCEPT THE SUBMISSION OF THE APPELLANT AT ITS FACE VALUE. THE LD. AO HAS ENLISTED THREE FACTORS JUSTIFYING THE ADDITION. 5. THE FIRST FACTOR ACCORDING TO THE LD. AO IS THAT THE APPELLANT WAS UNABLE TO FULLY SUBSTANTIATE THAT-THE CREDIT ON 31.03.2006 RELATED TO THE INVESTMENT MADE IN EARLIER FY 2004- 05 AND ALSO FAILED TO PROVIDE CONSENT TO OBTAIN NEC ESSARY AUTHENTICATION FROM THE SWISS AUTHORITIES IN THIS REGARD. THESE OBJECTIONS HOWEVE R STANDS NEGATED IN LIGHT OF THE SPECIFIC CONFIRMATION DATED 28.07.2016 ISSUED BY HSBC, GENEV A. THE APPELLANT HAS PROVIDED THE CONFIRMATION. ISSUED BY HSBC, GENEVA STATING THAT T HE AMOUNT OF $105,000 RECEIVED ON 30.03.2006 RELATED TO THE REDEMPTION OF 2.5% ITALY 03-31.03.2006 GLOBAL PURCHASED ON 07.12.2004 FOR AN AMOUNT OF $ 105,285.05. THE RELEV ANT SECURITY PURCHASE ADVICE & REDEMPTION ADVICE HAS ALSO BEEN PROVIDED BY HSBC, G ENEVA. IN VIEW OF THESE FACTS AND MATERIAL AVAILABLE ON RECORD, THERE REMAINS NO DOUB T WHATSOEVER THAT THE CREDIT OF USD 105,000 RELATED TO THE INVESTMENT OF $105,285 MADE BY THE APPELLANT ON 07.12.2004. I AM THEREFORE OF THE CONSIDERED VIEW THAT SINCE THE APP ELLANT HAS SUFFICIENTLY DEMONSTRATED THAT THE CREDIT ON 31.03.2006 RELATED TO THE INVESTMENT MADE IN EARLIER FY 2004-05, THE IMPUGNED ADDITION OFRS.46,84,050/-WAS UNTENABLE ON FACTS AND IN LAW. 6. THE THIRD & LAST OBJECTION OF THE LD. AO TO JUST IFY THE IMPUGNED ADDITION IS THAT THE APPELLANT HAS NEVER OFFERED THE INVESTMENT MADE IN FY 2004-05 TO TAX SUOMOTO BUT DISPUTED THE VALIDITY OF REASSESSMENT PROCEEDINGS FOR THE EA RLIER AY 2005-06 ON TECHNICAL GROUNDS, IN MY CONSIDERED VIEW HOWEVER THIS OBJECTION IS OF NO RELEVANCE. THE TAXABILITY OF ANY SUM IS NOT DEPENDENT ON THE FACT WHETHER THE ASSESSEE HAS ACCE PTED THE SAME AS HIS/HER INCOME OR NOT. AT THE SAME TIME, IT IS ALSO RELEVANT TO MENTION THAT ANY ITEM OF INCOME CAN BE ASSESSABLE TO TAX ONLY IN THE YEAR IN WHICH IT IS LEGALLY CHARGEABLE TO TAX UNDER THE PROVISIONS OF THE ACT. IN THE PRESENT CASE THE FACTS ON RECORD PROVE BEYOND DOUBT THAT THE DEPOSIT/INVESTMENT WAS MADE IN FY 2004-05 AND THEREFORE AS PER LAW THE SUM WAS LEG ALLY CHARGEABLE TO TAX ONLY IN AY 2005- 06, THE FACT THAT THE APPELLANT HAS CHALLENGED THE VALIDITY OF ASSESSMENT ORDER PASSED FOR AY 2005- 06 WILL NOT MAKE ANY DIFFERENCE NOR SHALL IT HAVE ANY BEARING TO BRING TO TAX THE SAID SUM IN THE RELEVANT AY 2006-07, IN THE CIRCUMSTANCE S THIS OBJECTION OF THE LD. AO TO JUSTIFY THE ADDITION OF RS.46,84,050/- IS HELD TO BE UNJUSTIFIE D. 24 IT(SS)A NO. 37 & 38/KOL/2018 JAYASHREE JAYAKAR MOHANKA, L /H OF LATE LALIT MOHANKA, AY- 2005-06 & 2006-07 7. OVERALL, FOR THE REASONS SET OUT ABOVE, I HOLD T HAT THE IMPUGNED ADDITION, OF RS,46,84,050/- AS UNEXPLAINED INCOME OF THE APPELLANT FOR THE RELE VANT AY 2006-07 WAS MISCONCEIVED AND UNJUSTIFIED. THE LD. AO IS DIRECTED TO DELETE THE A FORESAID ADDITION. THESE GROUNDS OF APPEAL THEREFORE STAND ALLOWED. 12. AGGRIEVED BY THE AFORESAID ORDER, THE REVENUE I S NOW IN APPEAL BEFORE US. AT THE TIME OF HEARING THE LD. CIT, DR RELIED ON THE AOS ORDER. HE FURTHER CLAIMED THAT THE LD. CIT(A) WAS UNJUSTIFIED IN GRANTING RELIEF TO TH E ASSESSEE BY ADMITTING ADDITIONAL EVIDENCE IN VIOLATION OF RULE 46A OF THE INCOME TAX RULES, 1962 [ HEREIN AFTER THE RULES ]AND THEREFORE PRAYED THAT THE MATTER BE REST ORED TO THE FILE OF THE AO FOR FRESH ADJUDICATION. PER CONTRA, THE LD. AR FULLY RELIED O N THE LD. CIT(A)S ORDER AND CLAIMED THAT THE RELIEF WAS NOT ALLOWED BY LD. CIT(A) BY AD MITTING ANY FRESH EVIDENCE AND MOREOVER THE ISSUE WAS ADJUDICATED AFTER CALLING FO R THE REMAND REPORT FROM THE AO. 13. WE HAVE HEARD RIVAL SUBMISSIONS AND HAVE PERUSE D THE MATERIAL AVAILABLE ON RECORD. ALTHOUGH IN THE GROUNDS OF APPEAL AS WELL I N THE COURSE OF HEARING, THE REVENUE HAS ASSAILED THE LD. CIT(A)S ORDER PRINCIP ALLY ON THE GROUND OF VIOLATION OF RULE 46A, BUT BEFORE US, THE LD. CIT, DR WAS UNABLE TO PIN POINT WHAT ADDITIONAL EVIDENCE WAS PRODUCED BY THE ASSESSEE BEFORE THE LD . CIT(A) WHICH INFLUENCED HIS DECISION. THE LD. CIT, DR DID NOT BRING TO OUR ATTE NTION ANY PARTICULAR DOCUMENT, WHICH IN HIS OPINION CONSTITUTED FRESH OR NEW EVID ENCE WITHIN THE AMBIT OF RULE 46A. WE ALSO FIND FROM THE APPELLATE ORDER THAT THE REMA ND REPORT WAS CALLED FOR PRIOR TO ADJUDICATION OF THE APPEAL AND IN THAT VIEW OF THE MATTER IT WAS IMPERATIVE FOR THE REVENUE TO POINT OUT THE SPECIFIC DOCUMENT OR EVIDE NCE WHICH WAS IN THE NATURE OF ADDITIONAL EVIDENCE, NOT AVAILABLE WITH THE AO. 14. WE ALSO FIND THAT IN THE REMAND REPORT THE AO A DMITTED THAT THE EXPLANATION PUT FORTH IN APPEAL WAS ALSO MADE IN THE COURSE OF ASSE SSMENT AND, AFTER EXAMINING THE ENTRIES IN THE BANK STATEMENT, HE ADMITTED THAT THE RE WAS PRIMA FACIE CONNECTION BETWEEN THE ENTRIES MADE IN THE BANK STATEMENT ON 0 7.12.2004 AND 31.03.2006, BECAUSE THE NARRATION OF THE ENTRIES WAS IDENTICAL. AT THE TIME OF HEARING OF APPEAL, THE LD. AR FILED BEFORE US COPIES OF THE RELEVANT BANK STATEMENTS FOR THE MONTHS OF DECEMBER 2004 AND MARCH 2006. THE RELEVANT BANK ENT RY ON 07.12.2004 25 IT(SS)A NO. 37 & 38/KOL/2018 JAYASHREE JAYAKAR MOHANKA, L /H OF LATE LALIT MOHANKA, AY- 2005-06 & 2006-07 WAS, 07.12.2004 P:105000: ITALY 2.5% 31.03.06 : 99,357 , VALUE 07.12.2004 DEBIT 105,285.05 . THE ENTRY ON 31.03.2006 WAS, 31.03.2006 REDM:105000: ITALY 2.5% 31.03.06 : 100,0, VALUE 31.03.2006CREDIT 105,000.00. FROM THE FOREGOING ENTRIES IN THE BANK STATEMENTS, IT WAS CL EARLY DISCERNIBLE THAT THE SUM OF USD 105000 WAS INVESTED IN DECEMBER 2004 IN BONDS Y IELDING COUPON RATE OF 2.5% AND HAVING MATURITY DATE OF 31.03.2006. WE ALSO NOT E THAT THE COUPON INTEREST ON SUCH BOND WAS ASSESSED AS INCOME IN THE IMPUGNED ORDER. THE ENTRIES IN THE BANK STATEMENT BY ITSELF MADE IT ABUNDANTLY CLEAR THAT THE INVESTM ENT IN BONDS MADE ON 07.12.2004 WAS REDEEMED ON 31.03.2006 AND PROCEEDS WERE CREDIT ED TO THE BANK ACCOUNT ON MATURITY. ON THESE FACTS THEREFORE, WE HOLD THAT TH E LD. CIT(A) WAS RIGHT IN CONCLUDING THAT THE CREDIT ON 31.03.2006 RELATED TO THE INVEST MENT MADE IN EARLIER FY 2004-05 AND THEREFORE NO ADDITION WAS PERMISSIBLE IN THE RELEVA NT AY 2006-07. 15. WE NOTE FROM THE REMAND REPORT THAT, ANOTHER GR OUSE OF THE AO WAS THAT THE ASSESSEE WAS RESISTING THE ADDITION MADE EVEN IN AY 2005-06 ON THE TECHNICAL GROUND OF LIMITATION. ON REALIZING THE POSSIBILITY THAT TH E SAID SUM MAY ESCAPE ASSESSMENT EVEN IN AY 2005-06 ON TECHNICAL GROUNDS, THE AO JUS TIFIED THE ADDITION IN THE AY 2006-07 BEING THE YEAR IN WHICH THE INVESTMENT WAS REDEEMED. WE ARE HOWEVER UNABLE TO AGREE WITH THE SAID CONTENTION BECAUSE IT IS A TRITE LAW THAT ANY INCOME CAN BE ASSESSED TO TAX ONLY IN THE RIGHT YEAR IN WHICH IT IS TAXABLE AND NOT IN ANY OTHER YEAR. WE NOTE THAT THE SAID SUM OF USD 105000 WAS INVESTE D IN FY 2004-05 AND IN THE INCOME-TAX ASSESSMENT FOR AY 2005-06, THE AO HAD AS SESSED THE SOURCE OF SUCH INVESTMENT U/S 68 OF THE ACT, IN THE ORDER PASSED U /S 147 OF THE ACT. IN THAT VIEW OF THE MATTER, THE IMPUGNED ADDITION IN AY 2006-07 CONSTIT UTED DOUBLE TAXATION OF THE SAME SUM, WHICH IS IMPERMISSIBLE IN LAW. WE THEREFORE SE E NO REASON TO INTERFERE WITH THE ORDER OF THE LD. CIT(A). THE REVENUES APPEAL FOR A Y 2006-07 IS THEREFORE DISMISSED. 16. IN THE RESULT, BOTH THE APPEALS OF REVENUE ARE DISMISSED. ORDER IS PRONOUNCED IN THE OPEN COURT ON 10 TH JANUARY, 2020 SD/- (DR. A. L. SAINI) SD/-(ABY. T. VARKEY) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED :10 TH JANUARY, 2020 JD.(SR.P.S.) 26 IT(SS)A NO. 37 & 38/KOL/2018 JAYASHREE JAYAKAR MOHANKA, L /H OF LATE LALIT MOHANKA, AY- 2005-06 & 2006-07 COPY OF THE ORDER FORWARDED TO: 1. APPELLANT DCIT, CENTRAL CIRCLE-4(4), KOLKATA 2 RESPONDENT JAYASHREE JAYAKAR MOHANKA, L/H OF L ATE LALIT MOHANKA, MARUTI SADAN, 12, DOVER PARK, BALLYGUNGE, KOLKATA-7 00 019. 3. 4. 5. CIT(A)-11, KOLKATA. (SENT THROUGH E-MAIL) CIT , KOLKATA DR, ITAT, KOLKATA. (SENT THROUGH E-MAIL) / TRUE COPY, BY ORDER, ASSISTANT REGISTRAR