# Ajay Bhandari v. U.O.I. & Ors

- **Citation:** (2022) 6 ILRA 977
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2022-05-17
- **Case number:** Writ Tax No. 347 of 2022
- **Bench:** Surya Prakash Kesarwani, Jayant Banerji
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/ajay-bhandari-v-u-o-i-ors-48695
- **Pages:** 11

## Headnote

(A) Tax - The Income Tax Act, 1961 -
Sections 119, 142(1), 144-B, 147, 148,
148-A & 149 - Issue of notice where
income
has
escaped
assessment
-
Constitution of India - Article 142 -
Clauses 6.2 and 7.1 of the Board's
Circular - if a case does not fall under
Clause (b) of sub-Section (i) of Section
149
of
the
Act,
1961
-
for
the
Assessment Years 2013-14, 2014-15 and
2015-16
(where the income
of
an
assessee escaping assessment to tax is
less than Rs.50,00,000/-) - notice not
issued
within
limitation
under
the
unamended provisions of Section 149 -
then proceedings under the amended
provisions cannot be initiated. (Para-11)
Impugned notice under Section 148 of
Income Tax Act, 1961 - reason to believe -
income to the tune of Rs. 2,63,324/- -
escaped assessment for assessment year
2014-15 - re-assessment - Section 147 read
with 144B - without jurisdiction - jurisdiction
cannot be assumed after expiry of period of
limitation - barred by limitation - limitation
under the amended provisions of Section
148A and 149 of the Act - expired - allegation
of evaded income is Rs. 2,63,324/- -
provided to be read as Rs. 26,33,324/- - by
notice dated 17.3.2022 under Section 142(1)
of the Act - which is much below Rs. 50 Lacs.
(Para - 3,4,6)

HELD:-Impugned notice under Section 144,148
& Section 147 read with Section 144B of the
Act, 1961, for the Assessment Year 2014-15
quashed.(Para -12)

Writ Petition Allowed. (E-7)

List of Cases cited:-

## Text

6 All. Ajay Bhandari Vs. U.O.I. & Ors.
977

18. The writ petition stands allowed
in the manner as indicated above.

19. The original records received
from the Board of Revenue, U.P. at
Allahabad, through the Standing Counsel
appearing for the State respondents, shall
be returned forthwith.
----------
(2022)06ILR A977
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 17.05.2022

BEFORE

THE HON'BLE SURYA PRAKASH
KESARWANI, J.
THE HON'BLE JAYANT BANERJI, J.

Writ Tax No. 347 of 2022

Ajay Bhandari ...Petitioner
Versus
U.O.I. & Ors. ...Respondents

Counsel for the Petitioner:
Sri Alnkur Agarwal

Counsel for the Respondents:
A.S.G.I., Sri Anant Kumar Tiwari, Sri
Gaurav Mahajan

(A) Tax - The Income Tax Act, 1961 -
Sections 119, 142(1), 144-B, 147, 148,
148-A & 149 - Issue of notice where
income
has
escaped
assessment
-
Constitution of India - Article 142 -
Clauses 6.2 and 7.1 of the Board's
Circular - if a case does not fall under
Clause (b) of sub-Section (i) of Section
149
of
the
Act,
1961
-
for
the
Assessment Years 2013-14, 2014-15 and
2015-16
(where the income
of
an
assessee escaping assessment to tax is
less than Rs.50,00,000/-) - notice not
issued
within
limitation
under
the
unamended provisions of Section 149 -
then proceedings under the amended
provisions cannot be initiated. (Para-11)
Impugned notice under Section 148 of
Income Tax Act, 1961 - reason to believe -
income to the tune of Rs. 2,63,324/- -
escaped assessment for assessment year
2014-15 - re-assessment - Section 147 read
with 144B - without jurisdiction - jurisdiction
cannot be assumed after expiry of period of
limitation - barred by limitation - limitation
under the amended provisions of Section
148A and 149 of the Act - expired - allegation
of evaded income is Rs. 2,63,324/- -
provided to be read as Rs. 26,33,324/- - by
notice dated 17.3.2022 under Section 142(1)
of the Act - which is much below Rs. 50 Lacs.
(Para - 3,4,6)

HELD:-Impugned notice under Section 144,148
& Section 147 read with Section 144B of the
Act, 1961, for the Assessment Year 2014-15
quashed.(Para -12)

Writ Petition Allowed. (E-7)

List of Cases cited:-

1. Civil Appeal No. 3005 of 2022 (U.O.I. & ors.
Vs Ashish Agarwal) , 2022 SCC OnLine SC 543

2. Daujee Abhushan Bhandar Pvt. Ltd. Vs U.O.I.
& ors. , Writ Tax No. 78 of 2022

(Delivered by Hon'ble Surya Prakash
Kesarwani, J.
&
Hon'ble Jayant Banerji, J.)

1. Heard Shri Ankur Agarwal, learned
counsel for the petitioner, Shri S.P. Singh,
learned Additional Solicitor General of
India assisted by Shri Krishna Agarwal,
learned Senior Standing Counsel for the
respondent/Income Tax Department and
Shri Anant Kumar Tiwari, learned Central
Government Standing Counsel.

2. With the consent of the learned
counsel for the parties, this writ petition is
being finally heard without calling for a
counter affidavit inasmuch as no disputed
978 INDIAN LAW REPORTS ALLAHABAD SERIES
question of fact is involved in the writ
petition. The reliefs sought in the writ
petition are reproduced below:

"(i) Issue a Writ, Order or
Direction in the nature of Certiorari
quashing the impugned notice u/s 148 of
the Act, dated 31.03.2021, received by the
Petitioner
on
01.04.2021,
issued
by
Respondent-No.3,
for
A.Y.
2014-15.
(Annexure No. 2)

(ii) Issue a Writ, Order or
Direction in the nature of Certiorari
quashing the notice u/s 144 of the Act,
dated 13.01.2022, issued by Respondent
No.4, for A.Y. 2014-15 to the Petitioner.
(Annexure No. 4)

(iii) Issues a Writ, Order or
Direction in the nature of prohibition
restraining
the
respondents
from
completing the reassessment proceeding
under 148 of the Act against the Petitioner.

(iv) Issue any other writ order or
direction which this Hon'ble Court may
deem fit

(v) Award the costs of the petition
to the petitioner.

(vi) Issue a writ order or
direction in the nature of certiorari
quashing the impugned order u/s 147 read
with Section 144B of the Act against the
petitioner dated 31.03.2022 passed by
National Faceless Assessment Centre,
Delhi Respondent No. 4 (Annexure No.
13)"

3. It has been admitted by the learned
counsel for the parties before us that the
impugned notice under Section 148 of the
Income Tax Act, 1961 (hereinafter referred
to as the 'Act, 1961') for the assessment
year 2014-15 was issued by the respondent
no. 3 to the petitioner on 1.4.2021. The
"reasons to believe" recorded by the
respondent no. 3 for issuing the impugned
notice, is as under:

"I have reason to believe that an
income to the tune of Rs. 2,63,324/- has
escaped assessment for the aforesaid
year".

4. The re-assessment order dated
31.3.2022
has
been
passed
by
the
respondent no. 4 i.e. National Faceless
Assessment Centre, Delhi under Section
147 read with 144B of the Act, 1961.

5.

Shri
S.P.
Singh,
learned
Additional Solicitor General of India has
placed before us a copy of the two Judges
Bench judgement of Hon'ble Supreme
Court under Article 142 of the Constitution
of India in Civil Appeal No. 3005 of 2022
(Union of India and others Vs. Ashish
Agarwal) decided on 4.5.2022 and
reported in 2022 SCC OnLine SC 543
and submits that the notices issued after
1.4.2021 under Section 148 of the Act,
1961 are liable to be treated as notices
under Section 148A of the Act, 1961 as
substituted by the Finance Act, 2021. He
draws out attention to paragraph 27 of the
aforesaid judgement. He placed before us
copy
of
Instruction
being
F.No
279/Misc./M-51/2022-ITJ,
Ministry
of
Finance, Department of Revenue, Central
Board of Direct Taxes, ITJ Section dated
11.5.2022,
invited
our
attention
to
paragraph
7.1
of
the
aforesaid
Instruction and stated that the notices
under Section 148 relating to assessment
years 2013-14, 2014-15 and 2015-16 shall
not attract the judgement of Hon'ble
Supreme Court in the case of Ashish
Agarwal (supra). Lastly, Shri S.P. Singh
6 All. Ajay Bhandari Vs. U.O.I. & Ors.
979
submits that since the notice has been
issued on 1.4.2021 for the assessment year
2014-15, therefore, it shall be covered by a
Division Bench's judgement of this Court
in the case of Daujee Abhushan Bhandar
Pvt. Ltd. Vs. Union of India and 2 others
(Writ Tax No. 78 of 2022) decided on
10.3.2022.

6. Learned counsel for the petitioner
draws our attention to paragraphs 23 and 25
of the judgement of the Hon'ble Supreme
Court in the case of Ashish Agarwal
(supra) and submits that the impugned
notice under Section 148 of the Act, 1961
issued by the respondent no. 3 is wholly
without
jurisdiction
inasmuch
as
jurisdiction cannot be assumed after expiry
of the period of limitation. He further
submits that conferment of jurisdiction is
essentially an act of legislature and the
jurisdiction cannot be conferred by any
circular or even by orders of Court. He
submits that even under the amended
provisions, which has no application on
facts of the present case, impugned notice
under Section 148 of the Act, 1961 would
be without jurisdiction and barred by
limitation inasmuch as for the assessment
year 2014-15, the limitation under the
amended provisions of Section 148A and
149 of the Act, 1961 had expired on
31.3.2018 inasmuch as the allegation of
evaded income is Rs. 2,63,324/- which has
been provided to be read as Rs. 26,33,324/-
by notice dated 17.3.2022 under Section
142(1) of the Act, 1961, which is much
below Rs. 50 Lacs.

7. We have carefully considered the
submissions of the learned counsels for the
parties and perused the record of the writ
petition, the judgment of Hon'ble Supreme
Court in the case of Ashish Agarwal
(supra) and Circular F.No 279/Misc./M51/2022-ITJ, dated 11.05.2022 issued by
the Ministry of Finance, Department of
Revenue, Central Board of Direct Taxes,
ITJ Section, New Delhi. Section 147 of the
Act, 1961 as it existed till 31.03.2021,
empowers the Assessing Officer to assess
or reassess or recompute the loss or
depreciation
allowance
or
any
other
allowance, as the case may be, for the
concerned assessment year in the case of an
assessee if he has reason to believe that
income chargeable to tax has escaped
assessment, subject to the provisions of
Sections 148 to 153. A pre-condition to
initiate proceedings under Section 147 is
the issuance of notice under Section 148.
Thus,
notice
under
Section
148
is
jurisdictional notice. Section 149 provides
time limit for issuance of notice under
Section 148. The time limit is provided
under the unamended provisions (existed
till
31.03.2021)
and
the
amended
provisions (effective from 01.04.2021) as
amended by the Finance Act, 2021.
Unamended Section 149 and Amended
Section 149 are reproduced below:

Time Limit for Notice
Unamended
Section 149 of
the Act, 1961
Amended Section 149
of the Act, 1961
149.
(1)
No
notice
under
section 148 shall
be issued 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
149.
(1)
No
notice
under section 148 shall
be
issued
for
the
relevant
assessment
year,-

(a) if three years
have elapsed from the
end of the relevant
assessment year, unless
the case falls under
clause (b);
980 INDIAN LAW REPORTS ALLAHABAD SERIES
(b) or clause (c);

(b) if four
years,
but
not
more than six
years,
have
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 more
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 any
asset
(including
financial interest
in
any
entity)
located
outside
India, chargeable
to
tax,
has
escaped
assessment.

Explanation.
-In
determining
income
chargeable to tax
which
has

(b) if three years,
but not more than ten
years,
have
elapsed
from the end of the
relevant
assessment
year
unless
the
Assessing Officer has in
his possession books of
accounts
or
other
documents or evidence
which reveal that the
income chargeable to
tax, represented in the
form of asset, which
has escaped assessment
amounts to or is likely
to amount to fifty lakh
rupees or more for that
year:

Provided that no
notice
under
section
148 shall be issued at
any time in a case for
the relevant assessment
year beginning on or
before 1st day of April,
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 this
section, as they stood
immediately before the
commencement of the
Finance Act, 2021:

Provided
further
that the provisions of
this sub-section shall
not apply in a case,
where a notice under
escaped
assessment
for
the purposes of
this sub-section,
the provisions of
Explanation 2 of
section 147 shall
apply
as
they
apply
for
the
purposes of that
section.

(2)
The
provisions of subsection (1) as to
the issue of notice
shall be subject
to the provisions
of section 151.

(3) If the person
on whom a notice
under section 148
is to be served is
a person treated
as the agent of a
non-resident
under section 163
and
the
assessment,
reassessment
or
recomputation to
be
made
in
pursuance of the
notice is to be
made on him as
the agent of such
non-resident, the
notice shall not
be issued after
the expiry of a
period
of
six
years from the
end
of
the
relevant
section 153A, or section
153C read with section
153A, is required to be
issued in relation to a
search initiated under
section 132 or books of
account,
other
documents or any assets
requisitioned
under
section 132A, on or
before the 31st day of
March, 2021:

Provided also that
for the purposes of
computing the period of
limitation as per this
section, the time or
extended time allowed
to the assessee, as per
show-cause
notice
issued under clause (b)
of section 148A or the
period during which the
proceeding
under
section 148A is stayed
by
an
order
or
injunction of any court,
shall be

excluded:

Provided also that
where immediately after
the exclusion of the
period referred to in the
immediately preceding
proviso, the period of
limitation available to
the Assessing Officer
for passing an order
under clause (d) of
section 148A is less
than seven days, such
remaining period shall
6 All. Ajay Bhandari Vs. U.O.I. & Ors.
981
assessment year.

Explanation.
-For the removal
of doubts, it is
hereby
clarified
that
the
provisions of subsections (1) and
(3), as amended
by the Finance
Act, 2012, shall
also
be
applicable
for
any
assessment
year
beginning
on or before the
1st day of April,
2012.

be extended to seven
days and the period of
limitation in sub-section
(1) shall be deemed to
be
extended
accordingly.

Explanation.- For
the purposes of clause
(b) of this sub-section,
"asset"
shall include
immovable
property,
being land or building
or
both,
share
and
securities, loans and
advances, deposits in
bank account.

(2) The provisions of
sub-section (1) as to the
issue of notice shall be
subject to the provisions
of section 151.

8. In the case of Ashish Agarwal
(supra), Hon'ble Supreme Court held in
Paras 23, 25 and 27, as under:-

"23.However, at the same time,
the judgments of the several High Courts
would
result
in
no
reassessment
proceedings at all, even if the same are
permissible under the Finance Act, 2021
and as per substituted sections 147 to 151
of the IT Act. The Revenue cannot be made
remediless and the object and purpose of
reassessment
proceedings
cannot
be
frustrated. It is true that due to a bonafide
mistake and in view of subsequent
extension
of
time
vide
various
notifications, the Revenue issued the
impugned notices under section 148 after
the amendment was enforced w.e.f.
01.04.2021, under the unamended section
148. In our view the same ought not to
have been issued under the unamended
Act and ought to have been issued under
the substituted provisions of sections 147
to 151 of the IT Act as per the Finance
Act, 2021. There appears to be genuine
non-application of the amendments as the
officers of the Revenue may have been
under
a
bonafide
belief
that
the
amendments may not yet have been
enforced. Therefore, we are of the opinion
that some leeway must be shown in that
regard which the High Courts could have
done so. Therefore, instead of quashing
and setting aside the reassessment notices
issued under the unamended provision of
IT Act, the High Courts ought to have
passed an order construing the notices
issued under unamended Act/unamended
provision of the IT Act as those deemed to
have been issued under section 148A of
the IT Act as per the new provision section
148A and the Revenue ought to have been
permitted to proceed further with the
reassessment proceedings as per the
substituted provisions of sections 147 to
151 of the IT Act as per the Finance Act,
2021, subject to compliance of all the
procedural requirements and the defences,
which may be available to the assessee
under
the
substituted
provisions
of
sections 147 to 151 of the IT Act and
which may be available under the Finance
Act, 2021 and in law. Therefore, we
propose to modify the judgments and
orders passed by the respective High
Courts as under:

(i)
The
respective
impugned
section 148 notices issued to the respective
assessees shall be deemed to have been
issued under section 148A of the IT Act as
substituted by the Finance Act, 2021 and
treated to be show-cause notices in terms of
section 148A(b). The respective assessing
982 INDIAN LAW REPORTS ALLAHABAD SERIES
officers shall within thirty days from today
provide to the assessees the information
and material relied upon by the Revenue so
that the assessees can reply to the notices
within two weeks thereafter;

(ii)
The
requirement
of
conducting any enquiry with the prior
approval of the specified authority under
section 148A(a) be dispensed with as a
one-time measure vis-a-vis those notices
which have been issued under Section 148
of the unamended Act from 01.04.2021 till
date, including those which have been
quashed by the High Courts;

(iii) The assessing officers shall
thereafter pass an order in terms of section
148A(d) after following the due procedure
as required under section 148A(b) in
respect of each of the concerned assessees;

(iv) All the defences which may
be available to the assessee under section
149 and/or which may be available under
the Finance Act, 2021 and in law and
whatever rights are available to the
Assessing Officer under the Finance Act,
2021 are kept open and/or shall continue
to be available and;

(v) The present order shall
substitute/modify respective judgments and
orders passed by the respective High
Courts quashing the similar notices issued
under unamended section 148 of the IT Act
irrespective of whether they have been
assailed before this Court or not.

25. Therefore, we have proposed
to pass the present order with a view
avoiding filing of further appeals before
this Court and burden this Court with
approximately 9000 appeals against the
similar judgments and orders passed by the
various High Courts, the particulars of
some of which are referred to hereinabove.
We have also proposed to pass the
aforesaid order in exercise of our powers
under Article 142 of the Constitution of
India by holding that the present order
shall govern, not only the impugned
judgments and orders passed by the High
Court of Judicature at Allahabad, but
shall also be made applicable in respect of
the similar judgments and orders passed
by various High Courts across the country
and therefore the present order shall be
applicable to PAN INDIA.

27. The present order shall be
applicable PAN INDIA and all judgments
and orders passed by different High Courts
on the issue and under which similar
notices which were issued after 01.04.2021
issued under section 148 of the Act are set
aside and shall be governed by the present
order and shall stand modified to the
aforesaid extent. The present order is
passed in exercise of powers under Article
142 of the Constitution of India so as to
avoid any further appeals by the Revenue
on the very issue by challenging similar
judgments and orders, with a view not to
burden this Court with approximately 9000
appeals. We also observe that present
order shall also govern the pending writ
petitions, pending before various High
Courts in which similar notices under
Section 148 of the Act issued after
01.04.2021 are under challenge."

9. The judgment of Hon'ble Supreme
Court under Article 142 of the Constitution
of India, in the case of Ashish Agarwal
(supra)
has
been
explained
for
implementation/ clarified by Instruction
No.01/2022 being F.No 279/Misc./M51/2022-ITJ, dated 11.05.2022 issued by
the Ministry of Finance, Department of
6 All. Ajay Bhandari Vs. U.O.I. & Ors.
983
Revenue, Central Board of Direct Taxes,
ITJ Section, New Delhi, in exercise of
powers under Section 119 of the Act, 1961,
which is reproduced below:-

Instruction No. 01/2022
F. No 279/Misc./M-51/2022-ITJ
Ministry of Finance
Department of Revenue
Central Board of Direct Taxes
ITJ Section

New Delhi, Dated: 11th May, 2022

Subject: Implementation of the
judgment of the Hon'ble Supreme Court
dated 04.05.2022 (2022 SCC Online SC
543) (Union of India v. Ashish Agarwal) -
- Instruction regarding

1. Hon'ble Supreme Court, vide
its judgment dated 04.05.2022 (2022 SCC
Online SC 543), in the case of Union of
India v. Ashish Agarwal has adjudicated on
the validity of the issue of reassessment
notices issued by the Assessing Officers
during the period beginning on 1st April,
2021
and
ending
with
30th
June
2021,within the time extended by the
Taxation and Other Laws (Relaxation and
Amendment of Certain Provisions) Act,
2020 [hereinafter referred to as "TOLA"]
and various notifications issued thereunder
(these reassessment notices hereinafter
referred to as "extended reassessment
notices").

2. These extended reassessment
notices were issued by the Assessing
Officers under the provision of section 148
of the Income-tax Act, 1961 (hereinafter
referred to as "the Act") following the
procedure
prescribed
under
various
sections pertaining to reassessment namely
sections 147 to 151, as they existed prior to
their amendment by the Finance Act, 2021
(hereinafter referred to as "old law"). With
effect from l April 2021, the old law has
been substituted with new sections 147-151
(hereinafter referred to as the "new law").

3. Hon'ble Supreme Court has
held that these extended reassessment
notices issued under the old law shall be
deemed to be the show cause notices issued
under clause (b) of section 148A of the new
law and has directed Assessing Officers to
follow the procedure with respect to such
notices. It has also held that all the
defences available to assessees under
section 149 of the new law and whatever
rights are available to the Assessing
Officer under the new law shall continue to
be available. Hon'ble Supreme Court has
passed this order in exercise of its power
under Article 142 of the Constitution of
India.

4. The implementation of the
judgment of Hon'ble Supreme Court is
required to be done in a uniform manner.
Accordingly, in exercise of its power under
section 119 of the Act, the Central Board of
Direct Taxes (hereinafter referred to as "the
Board") directs that the following may be
taken
into
consideration
while
implementing this judgment.

5.0 Scope of the judgment:

5.1 Taking into account the
decision of the Hon'ble Supreme Court in
various paragraphs, it is clarified that the
judgment applies to all cases where extended
reassessment notices have been issued. This
is irrespective of the fact whether such
notices have been challenged or not.

6.0 Operation of the new section
149 of the Act to identify cases where
984 INDIAN LAW REPORTS ALLAHABAD SERIES
fresh notice under section 148 of the Act
can be issued:

6.1 With respect of operation of
new section 149 of the Act, the following
may be seen:

- Hon'ble Supreme Court has
held that the new law shall operate and all
the defences available to assessees under
section 149 of the new law and whatever
rights are available to the Assessing
Officer under the new law shall continue to
be available.

- Sub-section (I) of new section
149 of the Act as amended by the Finance
Act, 2021 (before its amendment by the
Finance Act, 2022) reads as under:-

149. (1) No notice under section
148 shall be issued for the relevant
assessment year,--

(a) if three years have elapsed
from the end of the relevant assessment
year, unless the case falls under clause (b):

(b) if three years, but not more
than ten years, have elapsed from the end
of the relevant assessment year unless the
Assessing 0fficer has in his possession
books of account or other documents or
evidence which reveal that the income
chargeable to tax, represented in the form
of asset, which has escaped assessment
amounts to or is likely to amount to fifty
lakh rupees or more for that year:

Provided that no notice under
section 148 shall be issued at any time in a
case for the relevant assessment year
beginning on or before 1st day of April,
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 this section, as they stood immediately
before the commencement of the Finance
Act, 2021:

- Hon'ble Supreme Court has
upheld the views of High Courts that the
benefit of new law shall be made available
even in respect of proceedings relating to
past assessment years. Decision of Hon'ble
Supreme
Court
read
with
the
time
extension provided by TOLA will allow
extended reassessment notices to travel
back in time to their original date when
such notices were to be issued and then
new section 149 of the Act is to be applied
at that point.

6.2 Based on above, the extended
reassessment notices are to be dealt with
as under:

(i) AY 2013-14, AY 2014-15 and
AY 2015-16: Fresh notice under section
148 of the Act can be issued in these
cases, with the approval of the specified
authority, only if the case falls under
clause (b) of sub-section (1) of section 149
as amended by the Finance Act, 2021 and
reproduced in paragraph 6.1 above.
Specified authority under section 151 of the
new law in this case shall be the authority
prescribed under clause (ii) of that section.

(ii) AY 16-17, AY 17-18: Fresh
notice under section 148 can be issued in
these cases, with the approval of the
specified authority, under clause (a) of subsection (1) of new section 149 of the Act,
since they are within the period of three
years from the end of the relevant
assessment year. Specified authority under
section 151 of the new law in this case shall
be the authority prescribed under clause (i)
of that section.
6 All. Ajay Bhandari Vs. U.O.I. & Ors.
985

7.0 Cases where the Assessing
Officer
is
required
to
provide
the
information and material relied upon
within 30 days:

7.1 Hon'ble Supreme Court has
directed that information and material is
required to be provided in all cases within 30
days. However, it has also been noticed that
notices cannot be issued in a case for AY
2013-14, AY 2014-15 and AY 2015-16, if the
income escaping assessment, in that case for
that year, amounts to or is likely to amount to
less than fifty lakh rupees. Hence, in order to
reduce the compliance burden of assessees, it
is clarified that information and material
may not be provided in a case for AY 201314, AY 2014-15 and AY 2015-16, if the
income escaping assessment, in that case for
that year, amounts to or is likely to amount to
less than fifty lakh rupees. Separate
instruction
shall
be
issued
regarding
procedure for disposing these cases.

8.0 Procedure required to be
followed by the Assessing Officers to
comply with the Supreme Court judgment:

8.1 The procedure required to be
followed by the Jurisdictional Assessing
Officer/Assessing Officer, in compliance
with the order of the Hon'ble Supreme
Court, is as under:

-
The
extended
reassessment
notices are deemed to be show cause notices
under clause (b) of 148A of the Act in
accordance with the judgment of Hon'ble
Supreme Court. Therefore, all requirement of
new law prior to that show cause notice shall
be deemed to have been complied with.

- The Assessing Officer shall
exclude cases as per clarification in
paragraph 7.1 above.

- Within 30 days i.e. by 2nd June
2022, the Assessing Officer shall provide to
the assessees, in remaining cases, the
information and material relied upon for
issuance of extended reassessment notices.

- The assessee has two weeks to
reply as to why a notice under section 148
of the Act should not be issued, on the basis
of information which suggests that income
chargeable to tax has escaped assessment
in his case for the relevant assessment
year. The time period of two weeks shall be
counted
from
the
date
of
last
communication of information and material
by the Assessing Officer to the assessee.

- In view of the observation of
Hon'ble Supreme Court that all the
defences of the new law are available to the
assessee, if assessee makes a request by
making an application that more time be
given to him to file reply to the show cause
notice, then such a request shall be
considered by the Assessing Officer on
merit and time may be extended by the
Assessing Officer as provided in clause (b)
of new section 148A of the Act.

- After receiving the reply, the
Assessing Officer shall decide on the basis
of material available on record including
reply of the assessee, whether or not it is a
fit case to issue a notice under section 148
of the Act. The Assessing Officer is
required to pass an order under clause (d)
of section 148A of the Act to that effect,
with the prior approval of the specified
authority of the new law. This order is
required to be passed within one month
from the end of the month in which the
reply is received by him from the assessee.
In case no such reply is furnished by the
assessee, then the order is required to be
passed within one month from the end of
986 INDIAN LAW REPORTS ALLAHABAD SERIES
the month in which time or extended time
allowed to furnish a reply expires. If it is a
fit case to issue a notice under section 148
of the Act, the Assessing Officer shall serve
on the assessee a notice under section 148
after obtaining the approval of the
specified authority under section 151 of the
new law. The copy of the order passed
under clause (d) of section 148A of the Act
shall also be served with the notice u/s 148.

- If it is not a fit case to issue a
notice under section 148 of the Act, the
order passed under clause (d) of section
148A to that effect shall be served on the
assessee.

Tanay Sharma
DCIT(OSD), ITJ-I

Copy to:

1. Chairman, Members and all
other officer in CBDT of the rank of
Under Secretary and above.

2. All Pr. Chief Commissioner of
Income Tax and all Directors General of
Income tax with a request to bring to the
attention of all officers.

3.
ADG(PR.
P&P),
Mayur
Bhawan, New Delhi for printing in the
quarterly Tax Bulletin and for circulation
as per usual mailing list.

4. The Comptroller and Auditors
General of india.

5.
ADG
(Vigilance),
Mayur
Bhawan, New Delhi.

6. Joint Secretary & Legal
Advisor, Ministry of Law & Justice, New
Delhi.

7. All Directorates of Incometax, New Delhi and Pr. DGIT (NADT),
Nagpur.

8. ITCC (3 copies).

9.
ADG
(System)-4,
for
uploading on the Department's website.

10. Data Base Cell for uploading
or irsofficeronline.gov.in.

11. njrs Support@nsdl.co.in for
uploading on NJRS.

12. Hindi Cell for translation.

13. Guard file."

10. Learned Additional Solicitor
General of India has made a statement
before us, as noted in paragraph-5 above,
that as per Clause-7.1 of the Board's
circular dated 11.05.2022, the notices under
Section 148 relating to the Assessment
Years 2013-14, 2014-15 and 2015-16, shall
not attract the judgment of Hon'ble
Supreme Court in the case of Ashish
Agarwal (supra) and the impugned notice
under Section 148 issued on 01.04.2021 for
the Assessment Year 2014-15 is, therefore,
clearly
barred
by
limitation
and
consequently
without
jurisdiction.
Therefore, in view of the admission made
by the learned Additional Solicitor General
on behalf of the respondents, we do not
propose to deal with the other arguments of
learned counsel for the petitioner as noted
in paragraph-6 above and thus all other
questions
including
the
question
of
conferment of jurisdiction etc., are left
open.

11. As per Clauses 6.2 and 7.1 of the
Board's Circular dated 11.05.2022, if a case
6 All. Modi Distillery Vs. State of U.P. & Anr.
987
does not fall under Clause (b) of subSection (i) of Section 149 of the Act, 1961
for the Assessment Years 2013-14, 201415 and 2015-16 (where the income of an
assessee escaping assessment to tax is less
than Rs.50,00,000/-) and notice has not
been issued within limitation under the
unamended provisions of Section 149, then
proceedings under the amended provisions
cannot be initiated.

12. For all the reasons aforestated, the
impugned notice under Section 148 of the
Act, 1961 issued on 01.04.2021 for the
Assessment
Year
2014-15
and
the
impugned notice dated 13.01.2022 under
Section 144 of the Act, 1961 and the
reassessment order dated 13.01.2022 under
Section 147 read with Section 144B of the
Act, 1961 for the Assessment Year 2014-15
passed by the respondent No.4 are hereby
quashed. The writ petition is allowed.
----------
(2022)06ILR A987
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 07.05.2022

BEFORE

THE HON'BLE SAUMITRA DAYAL SINGH, J.

Writ Tax No. 133 of 2021

Modi Distillery ...Petitioner
Versus
State of U.P. & Anr. ...Respondents

Counsel for the Petitioner:
Sri Pratik J. Nagar, Sri Atulya Kishore, Sri
Rajat Bose

Counsel for the Respondents:
C.S.C.

(A) Tax Law - The Uttar Pradesh Excise
Act, 1910 - Sections 2, 3, 11, 12, 13, 15,
16, 17, 18, 19, 20, 22, 28 & 40 - The U.P.
Excise Manual - paragraph Nos. 605, 608,
609, 610, 613, 615(5), 617(3), 814 -
''import', ''importer' and ''imported' -
The Customs Act , 1962 - Section 45, 46,
47, 49, 57, 58, 59, 68 , Indian Stamp Act,
1899 - 'bond' - for the purpose of levy of
Consideration fee/''Pratiphal Shulk', on
excess transportation loss of HSMS, the
applicable law for computation of that
regulatory fee would remain the laws of
the State of Uttar Pradesh, only -
Consideration
fee/''Pratipahal
Shulk'
would be imposed in accordance with the
rates prescribed in the State of Uttar
Pradesh and not any other State -
statutory authorities must act within the
confines of the law. (Para - 71)

Consideration Fee/'Pratiphal Shulk' - imposed
on petitioner - alleged - excess loss of High
Strength Malt Spirit ( HSMS) - against two
transactions - order confirmed in appeal -
remedy of revision - filed directly before this
Court - plea of lack of jurisdiction - entire
quantities of HSMS subjected to Consideration
Fee/Pratiphal Shulk' - imported into the
country - said goods fell outside the scope of
levy of Excise duty by State of U.P. - State
revenue authorities to impose Consideration
fee/'Pratiphal Shulk', against alleged loss of
revenue on foreign liquor - springing from
excess loss of the commodity HSMS - during its
transportation from a bonded warehouse at
I.C.D. Dadri, Gautam Budh Nagar - to
petitioner's distillery at Modi Nagar - whether
permissible.(Para -2,3,39 )

HELD:-Consideration
fee/''Pratiphal
Shulk'
may be levied on excess loss of HSMS,
whether imported from outside the country or
procured
from
another
State
of
India.
Injunction sought against that levy, by
looking at the provision of law providing for
levy of Consideration fee/''Pratiphal Shulk' on
excess loss of HSMS when transported within
the State, from a distillery inside the State of
Uttar
Pradesh,
is
misconceived
and
inapplicable. Petitioner bound to compensate
loss to revenue arising from excessive loss of
HSMS during transportation, inside the State
of Uttar Pradesh, at rates prescribed under
amended Paragraph 814 of the Manual.(Para
- 60)