High Court bench quashed reassessment notices issued after 01.04.2021 in multiple writ petitions. The court held the notices were invalid for failing to follow Section 148A procedural requirements mandated by the Finance Act 2021.
Impugned notices under Section 148 quashed and set aside; consequential proceedings invalid; writ petitions allowed.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
HIGH COURT OF JUDICATURE FOR RAJASTHAN AT JODHPUR
D.B. Civil Writ Petition No. 4756/2022
Narpat Singh S/o Shri Idan Singh, Aged About 36 Years, Taratra, Ranigaon, District Barmer (Raj.) (Pan No. Clyps3799B).
----Petitioner
Versus
3.
The Income Tax Officer, Ward-1, Barmer (Raj.).
----Respondents
Connected With
D.B. Civil Writ Petition No. 4765/2022
Niranjan Singh S/o Shri Tan Singh, Aged About 36 Years, Resident Of Near Mayur Noble Academy, Tansingh Gerej, Gandhi Nagar, District Barmer (Raj.) (Cjeps8054F).
----Petitioner
Versus
----Respondents
D.B. Civil Writ Petition No. 4767/2022
Om Prakash Joshi S/o Shri Jagdish Prasad Joshi, Aged About 42 Years, Resident Of C/o Suraj Computer, Laxmi Bazar, District Barmer-(Raj.). (Pan No. Agjpj8867B).
----Petitioner
Versus
(2 of 9)
[CW-4756/2022]
New Delhi.
----Respondents
D.B. Civil Writ Petition No. 4786/2022
Vikram Singh Jaswant Singh (Huf), Karta Vikram Singh Singh Rathore S/o Shri Jaswant Singh, Aged About 19 Years, Resident Of Jaswant Bhawan, Roy Colony, District Barmer (Raj.) (Aafhv9396B).
----Petitioner
Versus
----Respondents
D.B. Civil Writ Petition No. 4792/2022
Uday Singh S/o Shri Pahar Singh, Aged About 32 Years, Village Rohiri, Tehsil Shiv, District Barmer (Raj.) (Adbpu7542F)
----Petitioner
Versus
----Respondents
D.B. Civil Writ Petition No. 4793/2022
Vikram Singh Rathore S/o Jaswant Singh Rathore, Aged About 37 Years, Opp. Kamdar Company, Roy Colony, District Barmer(Raj.) (Pan No.afvpr6863E).
----Petitioner
Versus
(3 of 9) [CW-4756/2022]
----Respondents
D.B. Civil Writ Petition No. 4796/2022
Chhel Kanwar Rathore W/o Shri Kishan Singh, Aged About 48 Years, Resident Of Jaswant Bhawan, Roy Colony, District Barmer(Raj.). (Ahrpr8431Q).
----Petitioner
Versus
----Respondents
D.B. Civil Writ Petition No. 4818/2022
Hanwant Singh S/o Shri Hindu Singh Rathore, Aged About 44 Years, Resident Of Jaswant Bhawan, Roy Colony, District Barmer (Raj.) (Cgpps6382G).
----Petitioner
----Respondents
D.B. Civil Writ Petition No. 4819/2022
Mahendra Singh Rathore S/o Shri Jaswant Singh, Aged About 36 Years, Resident Of Jaswant Bhawan, Roy Colony, Barmer (Raj.). (Pan No. Afvpr6862F)
(4 of 9)
[CW-4756/2022]
----Petitioner
Versus
----Respondents
For Petitioner(s) : Mr. Yogesh Purohit For Respondent(s) : Ms. Surbhi Bissa, Associate to Mr. K.K. Bissa
HON'BLE MR. JUSTICE SANDEEP MEHTA HON'BLE MR. JUSTICE FARJAND ALI
Order
04/04/2022
It is stated by learned counsel representing the parties that the controversy involved in these writ petitions is squarely covered by the ratio of judgment rendered by a Coordinate Division Bench of this Court in the case of Sudesh Taneja vs. Income Tax Officer & Ors. (D.B. Civil Writ Petition No.969/2022) decided on 27.01.2022, wherein while quashing the impugned notices of re-assessment, this Court observed as under:-
“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
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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 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
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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 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.
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Industries Ltd. and Ors. Vs. Union of India and Ors., reported in (2007) 13 SCC 673, it was observed as under:-
“63. At the outset, we may state that on account of globalization and socio-economic problems (including income disparities in our economy) the power of Delegation has become a constituent element of legislative power as a whole. However, as held in the case of Indian Express Newspaper v. Union of India reported in (1985) 1 SCC 641 at page 689, subordinate legislation does not carry the same degree of immunity which is enjoyed by a statute passed by a competent Legislature. Subordinate legislation may be questioned on any of the grounds on which plenary legislation is questioned. In addition, it may also be questioned on the ground that it does not conform to the statute under which it is made. It may further be questioned on the ground that it is inconsistent with the provisions of the Act or that it is contrary to some other statute applicable on the same subject matter. Therefore, it has to yield to plenary legislation. It can also be questioned on the ground that it is manifestly arbitrary and unjust. That, any inquiry into its vires must be confined to the grounds on which plenary legislation may be questioned, to the grounds that it is contrary to the statute under which it is made, to the grounds that it is contrary to other statutory provisions or on the ground that it is so patently arbitrary that it cannot be said to be inconformity with the statute. It can also be challenged on the ground that it violates Article 14 of the Constitution.”
by
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The CBDT while issuing the notifications dated 31.03.2021 and 27.04.2021 when introduced an explanation which provided by way of clarification that for the purposes of issuance of notice under Section 148 as per the time limits specified in Section 149 or 151, the provisions as they stood as on 31.03.2021 before commencement of the Finance Act, 2021 shall apply, plainly exceeded its jurisdiction as a subordinate legislation. The subordinate legislation could not have travelled beyond the powers vested in the Government of India by the parent Act. Even otherwise it is extremely doubtful whether the explanation in the guise of clarification can change the very basis of the statutory provisions. If the plain meaning of the statutory provision and its interpretation is clear, by adopting a position different in an explanation and describing it to be clarificatory, the subordinate legislature cannot be permitted to amend the provisions of the parent Act. Accordingly, these explanations are unconstitutional and declared as invalid.
“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
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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. 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 view of the Sudesh Taneja’s judgment (supra), the impugned notice/s and all consequential proceedings, if any, are invalid and bad in law and hence, the same are quashed and set aside. The writ petitions are allowed. Stay applications are disposed of.
(FARJAND ALI),J
(SANDEEP MEHTA),J
158-Sudhir Asopa/-
3 issues framed by the court
Whether reassessment notices issued after 01.04.2021 without adhering to Section 148A of the Income Tax Act are valid.
Whether CBDT notifications clarifying old assessment laws exceeded delegated legislative power.
Whether the explanation introduced by CBDT could amend the parent statute.
Colour shows how this judgement treated each authority
Sudesh Taneja vs. Income Tax Officer & Ors.Followed¶87
Sudesh Taneja vs. Income Tax Officer & Ors. (D.B. Civil Writ Petition No.969/2022)
The State of Jammu & Kashmir Vs. Triloki Nath Khosa and Ors.Referred¶96
The State of Jammu & Kashmir, Vs. Triloki Nath Khosa and Ors., reported in AIR 1974 SC 1 · Who else cites this
St. Johns Teachers Training Institute Vs. Regional Director, National Council For Teachers EducationReferred¶96
St. Johns Teachers Training Institute Vs. Regional Director, National Council For Teachers Education and Another, reported in (2003) 3 SCC 321
Shayara Bano Vs Union of IndiaReferred¶96
Shayara Bano Vs Union of India reported in 2017 9 SCC 1 · Who else cites this
J.K. Industries Ltd. and Ors. Vs. Union of India and Ors.Referred¶99
J.K. Industries Ltd. and Ors. Vs. Union of India and Ors., reported in (2007) 13 SCC 673 · Who else cites this
Indian Express Newspaper v. Union of IndiaReferred¶100
Indian Express Newspaper v. Union of India reported in (1985) 1 SCC 641 · Who else cites this
4 provisions across 3 enactments
Narpat Singh
Union Of India
Central Board Of Direct Taxes
Income Tax Officer
Sandeep Mehta
Farjand Ali
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
