In the case of Keenara Industries Private Limited v. ITO and other 256 cases Gujarat High Court set aside Notices under section 148 of Income Tax Act, 1961 and impugned orders under section 148A(d) on the ground of limitation.
The petitioner by way of the writ petition under Article 226 of the Constitution of India challenges notice issued under Section 148 of the Income Tax Act, 1961 as well as the order passed under Section 148A(d) of the Income Tax Act seeking to reopen the income tax assessment of the petitioner for assessment year 2014-15 terming the said notice and order as bad, illegal and contrary to law and without jurisdiction.
The petitioner is a company incorporated under the Companies Act, 1956 of which majority shareholders are citizens of India.
The Counsels for the appellant submitted that no notice under Section. 148 of the Income Tax Act can be issued beyond the first proviso to Section 149 of the Income Tax Act. The Finance Act, 2021 which came into force w.e.f. 01.04.2021, wherein provisions of Sections 147 to 151 were amended after enactment of TOLA.
The Counsels further pointed out that no corresponding amendment is made in Section 149 of the Act, and therefore, the notices issued under Section. 148 are beyond the limitation prescribed and therefore, without jurisdiction.
The Counsel for the respondents contended that petitions of Batch-I and Batch-II, the notices under Section 148 of the Income Tax Act for A.Y. 2013-14 and 2014-15, were issued by the department between the period 01.04.2021 to 30.06.2021.
The Counsel also stated that the said challenge would be contrary to the decision in the case of Ashish Agarwal, and it would also be inconsistent with the intention of the Supreme Court while exercising powers under Article 142 of the Constitution of India.
The Court of Justice Mauna M Bhatt of observed that “Notices under section 148 of the Income Tax Act and impugned orders under section 148A(d) of the Income Tax Act are quashed and set aside on the ground of limitation.”
The Bench also noted that though two Notifications dated 31.03.2021 and 27.04.2021 came to be issued by the CBDT, inpursuance to the power vested under section 3 of TOLA 2020, which came into force on 31.03.2020, they cannot be treated to have extended the time limit provided under the amended first proviso to section 149(1).
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
