LATE MOOL CHAND YADAV SON OF LATE SHRI CHOUTH MAL YADAV V. INCOME TAX OFFICER

CW/2002/2022

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The case involves a challenge to a reassessment notice issued by the Income Tax Officer, Ward 4(2), Jaipur, to the petitioner, Late Mool Chand Yadav, who was deceased at the time of the notice. The notice was for the assessment year 2017-2018 and was contested on the grounds that it was issued to a deceased person and did not follow the correct procedural provisions as amended by the Finance Act, 2021. The petitioner argued that the reassessment provisions applicable post-01.04.2021 should not be applied retroactively to earlier assessment years. The court referenced a similar case, Sudesh Taneja Vs. ITO, to support its decision to quash the notice.

• Counselvise Citation: [2022] 140 COUNSELVISE.COM (IT) 749388 (HC-RAJASTHAN)
• Appeal Type: Others
• Pronouncement Date: 07-02-2022
• Assessment Year: misc
• Other Referred Cases: Sudesh Taneja Vs. ITO
• Laws Referred To: Income Tax Act, 1961, Finance Act, 2021, General Clauses Act, 1897
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: AMIT MALANI
• Assessee Lawyers: SIDDHARTH RANKA
• Keywords: Dead person; Invalid notice; Legal heir; Reassessment notice; Substituted provisions
• Section: 148; 149; 148A

Judgement Text

"(1 of 5) [CW-2002/2022] HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR D.B. Civil Writ Petition No. 2002/2022 Late Mool Chand Yadav Son Of Late Shri Chouth Mal Yadav, Resident Of 1/89 Vidhyadhar Nagar, Jaipur 302023 Through His Wife And Legal Heir Smt. Nisha Yadav Resident Of 1/89, Ram Marg, Vidhyadhar Nagar, Jaipur. 302039 ----Petitioner Versus Income Tax Officer, Ward 4(2), Jaipur Having Its Address At Room No. 208, 2Nd Floor, New Cerntral Revenue Building, Bhagwan Dass Road, Jaipur. 302005 ----Respondent For Petitioner(s) : Mr. Siddharth Ranka, through VC For Respondent(s) : Mr. Amit Malani on behalf of Mr. Mr. RB Mathur, Sr. Adv, through VC HON'BLE THE CHIEF JUSTICE MR. AKIL KURESHI HON'BLE MR. JUSTICE SUDESH BANSAL Order 07/02/2022 Heard learned counsel for the petitioner Mr. Siddharth Ranka and Mr. Amit Malani appearing for the income tax department on advance copy. Petitioner has challenged a notice for reassessment dated 22.04.2021 issued by the assessing officer for the assessment year 2017-2018. Learned counsel for the petitioner submitted that the notices are issued to a dead person and secondly for the assessment period prior to 01.04.2021 notices issued after 2021 without following the procedure as provided under the substituted provisions for reassessment under the Income Tax Act, 1961 by (2 of 5) [CW-2002/2022] the Finance Act, 2021. He pointed out that in a recent Division Bench judgment of this Court in a similar circumstances has quashed the reassessment notice. In case of Sudesh Taneja Vs. ITO decided on 27.01.2022 this Court had made following observations:- “36. It can thus be seen that original provisions upon their substitution stood repealed for all purposes and had no existence after introduction of the substituting provisions. We may refer to Section 6 of the General Clauses Act, 1897 which provides inter-alia that where the State Act or Central Act or regulation repeals any enactment then unless a different intention appears repeal shall not revive anything not in force or existing at the time at which the repeal takes effect or affect the previous operation of any enactment so repealed or anything duly done or suffered thereunder. Under the circumstances after substitution unless there is any intention discernible in the scheme of statute either pre-existing or newly introduced, the substituted provisions would not survive. 37. In this context we have perused the provisions of reassessment contained in the Finance Act, 2021. We have noticed earlier the major departure that the new scheme of reassessment has made under these provisions. The time limits for issuing notice for reassessment have been changed. The concept of income chargeable to tax escaping assessment on account of failure on the part of the assessee to disclose truly or fully all material facts is no longer relevant. Elaborate provisions are made under Section 148A of the Act enabling the Assessing Officer to make enquiry with respect to material suggesting that income has escaped assessment, issuance of notice to the assessee calling upon why notice under Section 148 should not be issued and passing an order considering the material available on record including response of the assessee if made while deciding whether the case is fit for issuing notice under Section 148. There is absolutely no indication in all these provisions which would suggest that the legislature intended that the new scheme of reopening of assessments would be applicable only to the period post 01.04.2021. In absence of any such indication all notices which were issued after 01.04.2021 had to be in accordance with such provisions. To reiterate, we find no indication whatsoever in the scheme of statutory provisions (3 of 5) [CW-2002/2022] suggesting that the past provisions would continue to apply even after the substitution for the assessment periods prior to substitution. In fact there are strong indications to the contrary. We may recall, that time limits for issuing notice under Section 148 of the Act have been modified under substituted Section 149. Clause (a) of sub-section (1) of Section 149 reduces such period to three years instead of originally prevailing four years under normal circumstances. Clause (b) extends the upper limit of six years previously prevailing to ten years in cases where income chargeable to tax which has escaped assessment amounts to or is likely to amount to 50 lacs or more. Sub-section (1) of Section 149 thus contracts as well as expands the time limit for issuing notice under Section 148 depending on the question whether the case falls under clause (a) or clause (b). In this context the first proviso to Section 149(1) provides that no notice under Section 148 shall be issued at any time in a case for the relevant assessment year beginning on or before 01.04.2021 if such notice could not have been issued at that time on account of being beyond the time limit specified under the provisions of clause (b) of sub- section (1) of Section 149 as they stood immediately before the commencement of the Finance Act, 2021. As per this proviso thus no notice under Section 148 would be issued for the past assessment years by resorting to the larger period of limitation prescribed in newly substituted clause (b) of Section 149(1). This would indicate that the notice that would be issued after 01.04.2021 would be in terms of the substituted Section 149(1) but without breaching the upper time limit provided in the original Section 149(1) which stood substituted. This aspect has also been highlighted in the memorandum explaining the proposed provisions in the Finance Bill. If according to the revenue for past period provisions of section 149 before amendment were applicable, this first proviso to section 149(1) was wholly unnecessary. Looked from both angles, namely, no indication of surviving the past provisions after the substitution and in fact an active indication to the contrary, inescapable conclusion that we must arrive at is that for any action of issuance of notice under Section 148 after 01.04.2021 the newly introduced provisions under the Finance Act, 2021 would apply. Mere extension of time limits for issuing notice under section 148 would not change this position that obtains in law. Under no circumstances the extended period available in clause (b) of sub-section (1) of Section 149 which we may recall now stands at 10 years instead of 6 years previously available with the revenue, can be pressed in service for reopening assessments for the past period. This flows from the plain meaning of the (4 of 5) [CW-2002/2022] first proviso to sub-section (1) of Section 149. In plain terms a notice which had become time barred prior to 01.04.2021 as per the then prevailing provisions, would not be revived by virtue of the application of Section 149(1)(b) effective from 01.04.2021. All the notices issued in the present cases are after 01.04.2021 and have been issued without following the procedure contained in Section 148A of the Act and are therefore invalid. 38……. 39……. 40……. 41. As noted, two Division Benches of Allahabad and Delhi High Courts have taken similar view. Two learned Single Judges of Calcutta and this High Court have followed this trend. Independently also we hold the same beliefs. As noted earlier we are conscious that Single Judge of Chhattisgarh High Court in Palak Khatuja (supra) has taken a different view. The view of the High Court was that the impugned notices were valid since by virtue of notifications dated 31.03.2021 and 27.04.2021 the application of Section 148 which was originally existing before amendment was deferred. It was further observed as under:- “Reading of the aforesaid notification would show that it was issued in exercise of power conferred under the Taxation and other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 and time for issuance of notice under Section 148, the end date was initially extended uptill on 30th day of April 2021 and subsequently again by notification dated 27th April, 2021 the time limit of 30th day of April 2021 was further extended up till 30th day of June, 2021. By effect of such notification, the individual identity of Section 148, which was prevailing prior to amendment and insertion of section 148A was insulated and saved uptill 30.06.2021.” With respect, we are unable to persuade ourselves to accept this analysis of the situation. In our understanding by virtue of notifications dated 31.03.2021 and 01.04.2021 issued by CBDT substitution of reassessment provisions framed under the Finance Act, 2021 were not deferred nor could they have been deferred. The date of such amendments coming into effect remained 01.04.2021. (5 of 5) [CW-2002/2022] 42. In the result we find that the notices impugned in the respective petitions are invalid and bad in law. The same are quashed and set aside. The learned Single Judge committed no error in quashing these notices. All the writ petitions are allowed. Appeals of the revenue are dismissed. Pending applications if any stand disposed of. “ In the result the impugned notices are quashed. Petition stands disposed of. (SUDESH BANSAL),J (AKIL KURESHI),CJ NAVAL KISHOR/13 "