M/S SULTAN ENTERPRISES PVT. LTD. V. PRINCIPAL COMMISSIONER OF INCOME TAX

ITA/79/2023

AI Insights

The case involves M/s. Sultan Enterprises Pvt. Ltd., the appellant, contesting an order by the Principal Commissioner of Income Tax, Bhubaneswar, which revised an earlier assessment order. The revision was contested on the grounds that it was made beyond the statutory two-year period prescribed under section 263(2) of the Income Tax Act, 1961. However, the revision was argued to be within the extended period due to the provisions of the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020. The appellant challenged the validity of this legislative relaxation, citing precedents from the Gujarat and Bombay High Courts. The High Court of Orissa dismissed the appeal, finding no substantial question of law that warranted interference.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 756367 (HC-MISC)
• Appeal Type: Others
• Pronouncement Date: 08-08-2024
• Assessment Year: misc
• Other Referred Cases: Keenara Industries Pvt. Ltd. v. ITO, Tata Communications Transformations Services Ltd. v. Asst. CIT
• Laws Referred To: Income Tax Act, 1961, Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020
• Result in Favour of: Revenue
• Court: HIGH COURT
• Department Lawyers: S C MOHANTY; A KEDIA
• Assessee Lawyers: S RAY
• Keywords: Income Tax; Mandatory provision; Revision order; Revision order; Legislative Relaxation
• Section: 263(2)

Judgement Text

" Page 1 of 8 IN THE HIGH COURT OF ORISSA AT CUTTACK ITA No. 79 of 2023 M/s. Sultan Enterprises Pvt. Ltd. …. Appellant -Versus- Principal Commissioner of Income Tax, Bhubaneswar …. Respondent Advocates appeared in this case : For Appellant : Mr. S. Ray, Senior Advocate For Respondent : Mr. S.C. Mohanty, Sr. Standing Counsel Mr. A. Kedia, Jr. Standing Counsel CORAM: THE HON'BLE MR. JUSTICE ARINDAM SINHA AND THE HON’BLE MR. JUSTICE M.S. SAHOO J U D G M E N T ------------------------------------------------------------------------------------- Date of hearing and Judgment: 8th August, 2024 ------------------------------------------------------------------------------------- ARINDAM SINHA, J. 1. Mr. Ray, learned senior advocate appears on behalf of appellant-assessee. He submits, a substantial question of law ITA No.79 of 2023 Page 2 of 8 arises from impugned order dated 26th May, 2023 made by the Income Tax Appellate Tribunal (Cuttack Bench) in ITA no.29/CTK/2023, pertaining to assessment year 2015-16. The appeal has been filed in time. 2. Sub-section (2) in section 263 of Income Tax Act, 1961 mandates prescribed period, within which an order of revision can be made. The period is limited to two years from end of the financial year, in which the order sought to be revised was passed. This is a mandatory provision. There can be no extension of the period by an Act of Parliament, seeking to relax the mandate. The only way the mandate can be relaxed is by amending the provision itself. 3. He submits, facts are, the order of assessment was made on 18th December, 2017. Financial year running on date of said order was to end on 31st March, 2018. Two years from that date expired on 31st March, 2020. The order in revision was made on 18th March, 2021. As such the order in revision was not made within two years from end of the financial year, during which the assessment order was made. ITA No.79 of 2023 Page 3 of 8 4. Revenue in seeking to take advantage of purported relaxation by section 3(1)(a) in Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 contended before the Tribunal that the order of revision was, therefore, made within the relaxed, thus extended period of time. He submits, a substantial question of law therefore arises as to whether the Legislature by a subsequent Act can cause relaxation of a mandatory provision in any prior specified Act, without amending the provision. 5. Mr. Ray relies on view taken by a Division Bench of the Gujarat High Court in Keenara Industries Pvt. Ltd. v. ITO, reported in (2023) 453 ITR 51 (Guj), paragraph 13.5.2. He submits, the Division Bench relied on case of Tata Communications Transformations Services Ltd. v. Asst. CIT, reported in (2022) 443 ITR 49 (Bom). He lays emphasis on view of the Bombay High Court, quoted by the Gujarat High Court in its judgment. ITA No.79 of 2023 Page 4 of 8 6. Mr. Mohanty, learned advocate, Senior Standing Counsel assisted by Mr. Kedia, learned advocate, Junior Standing Counsel appear on behalf of revenue. Submission is, no substantial question of law arises from impugned order of the Tribunal. 7. On query from Court Mr. Ray has not been able to demonstrate that there has been vires challenge to the provision in Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020. His information is that Special Leave Petition is pending before the Supreme Court. 8. Sub-section (2) in section 263 of Income Tax Act, 1961 is reproduced below. “(2). No order shall be made under sub-section (1) after the expiry of two years from the end of the financial year in which the order sought to be revised was passed.” Relevant provision in chapter II in the Act of 2020 is reproduced below. ITA No.79 of 2023 Page 5 of 8 “3. (1) Where, any time-limit has been specified in, or prescribed or notified under, the specified Act which falls during the period from the 20th Day of March, 2020 to the 31st day of December, 2020, or such other date after the 31st day of December, 2020, as the Central Government may, by notification, specify in this behalf, for the completion or compliance of such action as- (a) Completion of any proceeding or passing of any order or issuance of any notice, intimation, notification, sanction or approval, or such other action, by whatever name called, by any authority, commission or tribunal, by whatever name called, under the provisions of the specified Act; xxx xxx xxx and where completion or compliance of such action has not been made within such time, then, the time-limit for completion or compliance of such action shall, notwithstanding anything contained in the specified Act, stand ITA No.79 of 2023 Page 6 of 8 extended to the 31st day of March, 2021, or such other date after the 31st day of March, 2021, as the Central Government may, by notification, specify in this behalf:” We have not reproduced other clauses in section 3(1), nor the provisos thereunder. 9. In Keenara Industries (supra) the Gujarat High Court relied on view taken by the Bombay High Court in Tata Communications (supra). Mr. Ray relied on the Bombay High Court view quoted in paragraph 13.5.2 in Keenara Industries (supra). We reproduce below relied upon extract of the Bombay High Court view. “Section 3(1) of the Relaxation Act does not provide that any notice issued under section 148 of the Act, after March 31, 2021 will relate back to the original date or that the clock is stopped on March 31, 2021 such that the provision as existing on such date will be applicable to notices issued relying on the provisions of the Relaxation Act. A plain reading of the Relaxation Act, as Mr. Mistri rightly ITA No.79 of 2023 Page 7 of 8 submitted, makes it clear that section 3(1) of the Relaxation Act merely extends the limitation provided in the specified Acts (including Income- tax Act) for doing certain acts but such acts must be performed in accordance with the provisions of the specified Acts. Therefore, if there is an amendment in the specified Act, the amended provision of the specified Act would apply to such actions of the Revenue. The Delhi High Court has considered and rejected the contention of the Revenue that the notice issued after April 1, 2021 relates back to an earlier period.” It does not appear from relied upon passage extracted from Tata Communications (supra), the Bombay High Court said that the Legislature in relaxing provisions in specified earlier Acts, was not competent to do so. We have also not been shown that the Gujarat High Court, in its judgment, went on to say so. In the premises, the judgments are of no assistance to appellant. 10. In the special jurisdiction exercised by High Courts under section 260-A in Income Tax Act, 1961, appeals are to ITA No.79 of 2023 Page 8 of 8 be admitted on there arising substantial question(s) of law from the order/judgment sought to be appealed against. On framing such question(s), the High Courts proceed to answer it or them, as a case there may be. The exercise requires interpretation of the law. Competence of the Legislature through Parliament to relax provisions in earlier specified Acts legislated by it, is outside scope of the appellate jurisdiction of the High Courts. 11. For reasons aforesaid we do not find any substantial question of law arises in the appeal. It is dismissed. 1. (Arindam Sinha) Judge (M.S. Sahoo) Judge Jyoti Digitally Signed Signed by: JYOTIPRAVA BHOL Designation: Junior Stenographer Reason: Authentication Location: HIGH COURT OF ORISSA Date: 09-Aug-2024 11:14:47 Signature Not Verified "