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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
N.V. ANJARIA, NIRAL R. MEHTA, JJ.
Astron Zircon Private Limited – Petitioner
Versus
Asstt. Commissioner Of Income Tax, Circle 1(1)(1) – Respondent
R/Special Civil Application No. 3893 Of 2023
Decided On : 13-03-2023
Income Tax Act - Reopening of Assessment - Section 148, Section 148A(d) - 147, 149, 151 - The court considered the legality of the notice issued under section 148 of the Income Tax Act, 1961 seeking to reopen the assessment for the assessment year 2013-2014 and the order passed under Section 148A(d) of the Act. The court analyzed the provisions of Section 147, 149, and 151 of the Act, both in the old regime and the new regime introduced by the Finance Act, 2021. It discussed the time limits for issuing notices for reopening of assessment and the impact of the provisions introduced in the Finance Act, 2021. The court highlighted the Supreme Court's decision in Ashish Agarwal (supra) and the directions given regarding the notices issued under Section 148 of the Act between 01.04.2021 to 30.06.2021. It also referred to the Division Bench's decision in Keenara Industries Pvt. Ltd. (supra) and the Allahabad High Court decision in Rajeev Bansal (supra) to establish the legal position on the time limits for issuing reopening notices.
Fact of the Case:
The Special Civil Application challenged the notice issued for re-opening of the assessment for the assessment year 2013-2014 under Section 148 and the orders passed under Section 148A(d) of the Income Tax Act, 1961. The petitioner contended that the notices were barred on the ground of limitation, having been issued after six years from the end of the relevant assessment year.
Finding of the Court:
The court found that the impugned notice in the petition under section 148 of the Act relatable to Assessment year 2013-14 was beyond the permissible time limit, therefore, illegal and without jurisdiction. The court set aside the Notice dated 29.07.2022 under Section 148 of the Income Tax Act, 1961 and Order dated 29.07.2022 under Section 148A(d) of the Income Tax Act, 1961 passed by the Assessing Officer seeking to reopen the assessment for the Assessment Year 2013-14.
Issues: The issues involved in the case were the legality of the notice issued under section 148 of the Income Tax Act, 1961 seeking to reopen the assessment for the assessment year 2013-2014 and the order passed under Section 148A(d) of the Act. The main issue was whether the notices were barred on the ground of limitation, having been issued after six years from the end of the relevant assessment year.
Ratio Decidendi: The court held that all original notices under section 148 of the Act issued between 01.04.2021 to 30.06.2021 would stand beyond the prescribed permissible timeline of six years from the end of Assessment Year 2013-14 and Assessment Year 2014-15. Therefore, all such notices when they would relate to Assessment Year 2013-14 or Assessment Year 2014-15 would be time barred as per the provisions of the Act as applicable in the old regime prior to 01.04.2021. Furthermore, these notices cannot be issued as per the amended provision of the Act.
Final Decision: The petition stands allowed. Rule is made absolute. The Notice dated 29.07.2022 under Section 148 of the Income Tax Act, 1961 and Order dated 29.07.2022 under Section 148A(d) of the Income Tax Act, 1961 passed by the Assessing Officer seeking to reopen the assessment for the Assessment Year 2013-14 impugned in the petition are hereby set aside.
ORDER :
(N.V. Anjaria, J.)
1. The Special Civil Application seeks to challenge the notice issued for re-opening of the assessment for the assessment year 2013-2014 under Section 148 and the orders passed under Section 148A(d) of the Income Tax Act, 1961.
1.2 In the facts and circumstances of the case, having regard to the issues involved and with consent and request of learned advocates for the parties, the petition was taken up for final consideration today.
2. Rule, returnable forthwith. Learned advocate Mr. Varun Patel waives service of Rule for the respondent.
2.1 Heard learned advocate Mr. S. N. Divatia for the petitioner and learned advocate for the respondent.
3. In the present petition filed under Article 226 of the Constitution, the petitioner has called in question the notice issued by respondent-assessing officer under Section 148 of the Income Tax Act, 1961 seeking to reopen the assessment in respect of assessment year 2013-14. Also challenged is the order passed under Section 148A(d) of the Income Tax Act, 1961 (hereinafter referred to as "the Act").
3.1 The details of date of notice, date of order under Section 148A(d) of the Act, assessment year, etc., in respect of the petitioner is given in the table below :
| Sr. No. | Special Civil Application No. | Date of original Notice under Section 148 | Date of Order under Section 148A(d) / Date of Notice under Sec. 148 of the Act | Assessment Year |
| 1. | 3893 of 2023 | 30.06.2021 | 29.07.2022 29.07.2022 | 2013-2014 |
3.2 While in the impugned order under section 148A(d) of the Act mentioned is the factual details and the reasons on the basis of which the assessing officer has found that the cases are fit to be reopened for the assessment in respect of the year under consideration, it is inter alia stated that the notice under section 148 of the Act was originally issued for the assessment years 2013-14 or 2014-15, as the case may be. All the said notices were treated as show-cause notice under section 148A(b) of the Act in light of the decision of the Supreme Court in Union of India vs. Ashish Agarwal[(2023) 1 SCC 617 : (2022) 444 ITR 1 (SC)], and that thereupon, the order under section 148A(d) was passed.
4. At the outset, learned advocate for the petitioner submitted that the notice issued under section 148 of the Act and the consequential order under section 148A(d) of the Act issued by the department for assessment years 2013-14 and 2014-2015 are barred on the ground of limitation, the notices having been issued after passage of six years from the end of the relevant assessment year.
4.1 It was submitted that in view of the decision of the Division Bench of this Court in Keenara Industries Pvt Ltd. vs. The Income Tax Officer being Special Civil Application No. 17321 of 2021 and allied petitions, decided on 07.02.2023, the question of legality of the notice issued in respect of Assessment Year 2013-14 is covered and the impugned notice is without jurisdiction as it is beyond the time limit prescribed.
5. In order to properly understand the controversy and the applicable provisions in particular, prior to coming into force of Finance Act, 2021 called old regime as well as the provisions introduced in the Finance Act, 2021 described as new regime, the development of the law emanating from Keenara Industries Pvt. Ltd. (supra) in that regard may be revisited with, by noticing the aspects considered and decided in the said decision.
5.1 Section 147 of the Act empowers the assessing officer to reassess the income of the assessee subject to the provisions of Sections 148 to 151 of the Act in case any income chargeable to tax has escaped assessment.
5.1.1 Prior to the applicability of Finance Act, 2021 with effect from 01.04.2021, for the provisions of section 149 then existed, notice under section 148 could be issued for the relevant assessment year within four/six years
The main legal point established in the judgment is that notices issued under section 148 of the Income Tax Act, 1961 between 01.04.2021 to 30.06.2021, relating to the assessment years 2013-14 and 20....
The main legal point established in the judgment is that notices for reopening assessment must be issued within the permissible time limit as prescribed by the relevant provisions of the Income Tax A....
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