Chhattisgarh HC upholds issuance of sec. 148 notice under old provisions after 31-03-2021

Case details: Palak Khatuja v. Union of India - [2021] 130 taxmann.com 44 (Chhattisgarh)

Judiciary and Counsel Details

• • Goutam Bhaduri, J.
  • N. Naha Roy, Adv for the Petitioner. 
  • Amit Choudhary and Mrs. Naushina Ali, Advs. for the Respondent.

Facts of the Case

Assessee filed return of income. Subsequently, based on the information available initially a scrutiny was done. However, no concealment was found but again a notice under Section 148 has been issued. Assessee submitted that the date when notice under Section 148 was issued, the power to issue notice was preceded with a new provision of law and thereby Section 148 is to be read with Section 148A. Since, the operation of Section 148A came into being on 01-04-2021, the notice issued to assessee on 30.06.2021 under Section 148, without following the procedure under Section 148A would be illegal and contrary to the provisions of Section 148A and it cannot be sustained.

Assessee further submitted that revenue has place reliance on certain notification of Ministry of Finance. But when the law has been enacted by the Parliament then in such case the notification issued by the Ministry of Finance would not override the provisions of Act even to extend the period of operation of old Section 148.

High Court held

On writ, the Chhattisgarh High Court held that the reading of the notifications No. 20/2021, dated 31-03-2021 & Notification No. 38 /2021, dated 27-04-2021, would show that there were issued in exercise of power conferred under the Taxation and other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020. Time for issuance of notice under Section 148 was initially extended till 30-04-2021 and subsequently again it was extended till 30-06-2021. 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 up till 30-06-2021.

The pandemic and lock down prevailed all over India. The people could not file their return or comply with the various mandate of Income Tax Act. Considering such situation for the benefit of assessee and to facilitate the individual to come out of woods, the time limit framed under Income Tax Act was extended. Likewise certain right which was reserved in favour of the Income Tax Department was also preserved and was extended at parity. Consequently the provisions of Section 148 which was prevailing prior to the amendment of Finance Act, 2021 was also extended. The power to issue notice under Section 148 which was prior to the amendment was also saved and the time was extended. In a result, the notice issued on 30.06.2021 would also be saved.