The Chhattisgarh High Court while presiding over 4 petitions upheld the validity of the section 148 notices issued between March 1, 2021, to June 30, 2021 without following section 148A procedure due to COVID-19 lockdown.
Mr. P.K.Tulsyan, counsel for the petitioners submitted that the petitioners have filed the income tax return for the Assessment Year 2017-18 and Financial Year 2016-17. Subsequent thereto on the basis of some information available initially scrutiny was done however no concealment was found but again a notice under Section 148 of the Income Tax Act, 1961 has been issued. On the date when the notice under Section 148 of the Income Tax Act is issued, the power to issue the notice was preceded with a new provision of law, and thereby Section 148 is to read with Section 148-A of the Income Tax Act, 1961. As per the amended Finance Act, 2021, which was published in the Gazette on 28th March, 2021, section 2 to 88 was notified to come into force on 1st day of April 2021 and accordingly the new Section 148A was inserted which prescribed that before issuing the notice under Section 148 of the Income Tax Act, the Assessing Officer was bound to conduct an enquiry giving an opportunity of hearing to the assessee with the prior approval of specified authority and show cause notice in detail was necessarily specifying the particular date for hearing. Since the operation of Section 148A came into being on 01st April, 2021, as such, the notice issued to the petitioners on 28.06.2021 under Section 148 of the Income Tax Act, without following the procedure under Section 148A without giving an opportunity of hearing would be illegal and contrary to the provisions of Section 148A and it cannot be sustained. The respondents though have placed reliance on certain notification of the 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 even to extend the period of operation of a section of the old Act of Section 148 of the Income Tax Act. Section 148A came in between which required certain obligations to be performed by the Assessing Officer, therefore without giving any opportunity of hearing the notice under Section 148 of the Act, 1961 would be alleged.
On the other hand, the respondents submitted that because of the pandemic and lockdown of all activities including the normal working of the office, a lot of people could not file their return and submit the necessary papers with the department in respect of their income tax. As such, the Ministry of Finance in the exercise of power under the Finance Act issued the notification whereby the application of old provisions of Section 148 of the Income Tax Act was extended initially until 30th April, 2021 and thereafter was further extended until 30th day of June, 2021. The single-judge bench of Justice Goutam Bhaduri while dismissing the petitions held that the people could not file their return or comply with the various mandates of the Income Tax Act. Considering such a situation for the benefit of the assessee and to facilitate the individual to come out of the woods the time limit framed under Income Tax Act was extended. Likewise, certain rights which were reserved in favour of the Income Tax Department were also preserved and were extended at parity. Consequently the provisions of Section 148 which was prevailing prior to the amendment of the Finance Act, 2021 was also extended. Here, in this case, the power to issue the notice under Section 148 which was prior to the amendment was also saved and the time was extended. As a result, the notice issued on 28.06.2021 would also be saved. Therefore, no interference is required to be made in the said issuance of notice.
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