Ashok Kumar Agarwal v. Union of India

Case snapshot

Sections / provisions: Sections 147; 148; 148A; 149; 151 & 151A; Taxation and Other Laws (Relaxation of Certain Provisions) Act; 2020

Questions before the Court / Tribunal

• The petitioners have challenged the validity of the re-assessment notices issued to them, under Section 148 of the Act. Another challenge has been raised to the validity of the Explanation appended to clause (A)(a) of CBDT Notification No. 20 of 2021, dated 31.03.2021 and Explanation to clause (A)(b) of CBDT Notification No. 38 of 2021, dated 27.04.2021. Those notifications have been issued under the powers vested under Section 3(1) of the Act 38 of 2020 namely, the Taxation and Other Laws (Relaxation of Certain Provisions) Act, 2020 (hereinafter referred to as the ‘Enabling Act’). 80. In view of the above, all the writ petitions must succeed and are allowed. It is declared that the Ordinance, the Enabling Act and Sections 2 to 88 of the Finance Act 2021, as enforced w.e.f. 01.04.2021, are not conflicted. Insofar as the Explanation appended to Clause A(a), A(b), and the impugned…
• Which factual, statutory and procedural conditions controlled the requested relief?
• How did the forum apply the governing provisions to the evidence and procedural history recorded in this case?

Material facts and procedural background

2. This writ petition along with the other petitions mentioned in paragraph 4 below, have been filed by individual petitioners, to challenge initiation of re-assessment proceedings under Section 148 of the Income Tax

Act, 1961 for different assessment years. All reassessment proceedings have been initiated upon notices issued after the date 01.04.2021. 3. These petitions had been entertained and interim protection granted. Pursuant to earlier orders passed in the leading petitions - Writ Tax Nos. 524 of 2021 and 521 of 2021 and other matters, the revenue and the Union of India were required to file counter affidavits in those cases. Copies of such counter affidavits were, under a direction of this Court, served on all learned counsel for the petitioners. Replies by way of rejoinder affidavits have also been received in some of the cases. Those affidavits thus filed, have been read in all the writ petitions. 4. Since, the dispute arising in the present writ petitions is purely legal, with respect to the validity of the re-assessment proceedings initiated against the individual petitioners, after 01.04.2021, having resort to the provisions of the Income Tax Act, 1961 (hereinafter referred to as the 'Act') as they existed, read with the provisions of Act No. 38 of 2020 and the notifications issued thereunder, the peculiar fact pleadings of each case are not material to the adjudication of the legal issues involved here. However, for the purposes of convenience, the basic relevant facts, obtaining in each individual case are recorded in the below given chart: Sl. No. Writ Tax No. Name of the Petitioner A.Y. Date of Notice U/s

63. 778-2021 EXOTIC BUILDMART PVT. LTD 2014-15 30.06.2021 25.03.2015 64. 779-2021 KIRTI SINGH 2014-15 30.06.2021 14.03.2015 65. 780-2021 SUSHIL JOSHI 2013-14 30.06.2021 31.03.2014 66. 781-2021 SHIV SHAKTI CONSTRUCTIONS 2014-15 30.06.2021 29.11.2014 67. 782-2021 MUKESH KUMAR 2014-15 30.06.2021 14.03.2015 68. 795-2021 AMBIKA ENCLA VE PRIV ATE LIMITED 2015-16 28.06.2021 30.03.2016 69. 796-2021 KUSUM ENCLA VE PRIV ATE LIMITED 2015-16 28.06.2021 20.09.2015 70. 797-2021 AMBIKA ENCLA VE PRIV ATE LIMITED 2017-18 28.06.2021 27.11.2017 71. 801-2021 KANTA DEVI 2015-16 10.06.2021 19.03.2017 72. 810-2021 MRITUNJAY KUMAR 2013-14 06.04.2021 -- 73. 811-2021 VINITA KEJRIWAL 2014-15 28.06.2021 31.07.2014 74. 813-2021 MRITUNJAY KUMAR 2014-15 06.04.2021 – 5. As to the exact challenge raised, it may be noted, the petitioners have challenged the validity of the re-assessment notices issued to them, under Section 148 of the Act.

Another challenge has been raised to the validity of the Explanation appended to clause (A)(a) of CBDT Notification No. 20 of 2021, dated 31.03.2021 and Explanation to clause (A)(b) of CBDT Notification No. 38 of 2021, dated 27.04.2021. Those notifications have been issued under the powers vested under Section 3(1) of the Act 38 of 2020 namely, the Taxation and Other Laws (Relaxation of Certain Provisions) Act, 2020 (hereinafter referred to as the 'Enabling Act'). 6. Before recording the individual submissions advanced by learned counsel for the parties, we may take note of the legislative provisions giving rise to the issues before us. Prior to enforcement of the Finance Act, 2021, the law for making re-assessment under the Act was governed by the provisions of Sections 147, 148, 149 read with Sections 150, 151, 152 and 153 of the Act.

Under that law, the jurisdiction to reassess an assessee could arise upon necessary 'reason to believe' being recorded by the jurisdictional Assessing Officer, of that assessee - as to escapement of any income from

Appellant / petitioner / assessee submissions

Gupta along with Sri Rishi Raj Kapoor, Sri Shakeel Ahmad, Sri Parv Agarwal, Sri Salil Kapoor along with Sri Anuj Srivastava & Ms Soumya Singh alongwith Sri Satya Vrat Mehrotra, Sri Ankur Agarwal, Sri Krishna Deo Vyas, Sri Ashok Shankar Bhatnagar & Sri Harshul Bhatnagar, Sri Pranchal Agarwal, Sri V .K. Sabharwal, Sri R.B. Gupta, Ms. Shalini Goel and Ms. Rupal Agarwal, learned counsel for the petitioners; Sri Shashi Prakash Singh, learned Additional Solicitor General of India assisted by Sri Gopal Verma, Sri Dinesh Kumar Mishra, Sri Gaya Prasad Singh, Sri Sudarshan Singh, Sri Santosh Kumar Singh Paliwal, Sri Ajai Singh, Sri Gaurav Kumar Chand and Sri Krishna Agarwal, learned counsel appearing for the Union of India; Sri Gaurav Mahajan, Sri Praveen Kumar, Sri Krishna Agarwal, Sri Ashish Agarwal and Sri Manu Ghildyal, learned Standing Counsel for the revenue authorities.

issuance of show-cause notice or passing of order under section 148A" shall be inserted.” 18. In the above statutory context and reference, submissions have been advanced by learned counsel for the petitioners and have been responded to by the learned Additional Solicitor General of India representing the Union and the CBDT and learned counsel for the revenue. 19. Shri Rakesh Ranjan Agarwal, learned Senior Advocate has first submitted, upon enforcement of the Finance Act, 2021, the pre-existing Sections 147 to 151 of the Act stood repe aled and replaced by the above noted provisions. The entire statutory scheme of initiating, inquiring, conducting, and concluding the reassessment proceedings underwent a sea change.

Until this is done, it is impossible to ascertain whether any inconsistency exists between the two enactments. The area of operation in th e Code and the pollution laws in question are different with wholly different aims and objects, and though they alleviate nuisance, that is not of identical nature. They operate in their respective fields and there is no impediment for their existence side by side.” 45. Last, relying on another decision of the Supreme Court in Gammon India Ltd. Vs. Special Chief Secretary & Ors. , (2006) 3 SCC 354 , Sri Mehrotra would further emphasize - the first submission advanced by Sri Rakesh Ranjan Agarwal, learned counsel for the petitioners, that substitution has the twin effect of repeal and enactment by replacement.

46. Sri Ashish Bansal, learned counsel has adopted the submissions advanced by learned counsel for the petitioners, as noted above. He has further relied on the provisio ns of Section 151-A of the Act introduced by the Enabling Act. It reads as below: “151A. (1) The Central Government may make a scheme, by notification in the Official Gazette, for the purposes of assessment, reassessment or recomputation under section 147 or issuance of notice under section 148 or sanction for issue of such notice under section 151, so as to impart greater efficiency, transparency and accountability by— (a) eliminating the interface between the income-tax authority and the assessee or any other person to the extent technologically feasible; (b) optimising utilisation of the resources through economies of scale and functional specialisation; (c) introducing a team-based assessment, reassessment, re-computation or issuance or sanction of notice with dynamic jurisdiction.

Revenue / respondent submissions

53. Other learned counsel for the petitioners have adopted the aforesaid submissions, noted above. 54. Shri Shashi Prakash Singh, learn ed Additional Solicitor General of India, appearing for the Union of India as also the CBDT and learned counsel for the revenue, have submitted, the Ordinance was promulgated, occasioned solely by the circumstances arising from the spread of the

Court / Tribunal analysis and reasoning

countries of the world including India, causing immense loss to the lives of people, it has become imperative to relax certain provisions, including extension of time limit, in the taxation and other laws; AND WHEREAS, Parliament is not in session and the President is satisfied that circumstances exist which render it necessary for him to take immediate action; NOW, THEREFORE, in exercise of the powers conferred by clause (1) of article 123 of the Constitution, the President is pleased to promulgate the following Ordinance. CHAPTER I PRELIMINARY Short title and commencement 1. (1) This Ordinance may be called the Taxation and Other Laws (Relaxation of Certain Provisions) Ordinance, 2020. (2) Save as otherwise provided, it shall come into force at once.

By the Enabling Act, further provisions were made in addition to the provisions of Section 3 of the Ordinance. We may therefore take note of Sections 1, 2 and 3 of the Enabling Act. They read as below: “THE TAXATION AND OTHER LAWS (RELAXATION AND AMENDMENT OF CERTAIN PROVISIONS) ACT, 2020 NO. 38 OF 2020 [29th September, 2020.] AN ACT to provide for relaxation and amendment of provisions of certain Acts and for matters connected therewith or incidental thereto.

13 of 2021 came into force. Relevant to our discussion, we consider it appropriate to extract Sections 1 and 40 to 45 of the said Act. They read as below: “FINANCE ACT, 2021 [13 OF 2021] An Act to give effect to the financial proposals of the Central Government for the financial year 2021-2022. BE it enacted by Parliament in the Seventy-second Year of the Republic of India as follows:— CHAPTER I PRELIMINARY Short title and commencement. 1. (1) This Act may be called the Finance Act, 2021. (2) Save as otherwise provided in this Act,- (a) sections 2 to 88 shall come into force on the 1st day of April, 2021; (b) sections 108 to 123 shall come into force on such date as the Central Government may, by notification in the Official Gazette, appoint.

The rule is that when a subsequent Act amends an earlier one in such a way as to incorporate itself, or a part of itself, into the earlier, then the earlier Act must thereafter be read and construed as if the altered words had been written into the earlier Act with pen and ink and the old words scored out so that thereafter there is no need to refer to the amending Act at all. No doubt, in certain situations, the Court having regard to the purport and object sought to be achieved by the Legislature may construe the word "substitution" as an "amendment" ha ving a prospective effect. Therefore, we do not think that it is a universal rule that the word ‘substitution’ necessarily or always connotes two severable steps, that is to say, one of repeal and another of a fresh enactment even if it implies two steps.

Finance Act, 2021. Thus, the pre-existing provisions cannot be pressed into service by the revenue. Reliance has been placed on a decision of the Supreme Court in Kolhapur Canesugar Works Ltd. & Anr. Vs. Union Of India & Ors. , (2000) 2 SCC 536 . 24. Third, it has been submitted, even otherwise, the Enabling Act does not, and it could not save the pre-existing Sections 147, 148 and other provisions pertaining to reassessment, nor overriding effect can arise or be given (to itself) by the Enabling Act, since on the date of enactment of the Enabling Act, the Finance Act, 2021 was not born. Therefore, it was only through the Finance Act, 2021 that the provisions of the pre-existing law may have been saved if it had been so intended by the Parliament.

In absence of that saving clause, there exists no power either under Section 3(1) of the Enabling Act or any other law as may validate the issuance of the impugned Notification. 25. To validate such Notification, would be to resurrect and enforce a dead law, contrary to the statutory law in force, on the date of issuance of impugned Notification dated 27.04.2021. Clearly, that would be a legislative overreach by the delegate and therefore, ultra vires the Constitution of India. In that regard, reliance has been placed on another decision of the Supreme Court in Assam Company Ltd. & Anr. Vs. State of Assam & Ors. , (2001) 248 ITR 567 (SC) .

Operative decision and relief

80. In view of the above, all the writ petitions must succeed and are allowed . It is declared that the Ordinance, the Enabling Act and Sections 2 to 88 of the Finance Act 2021, as enforced w.e.f. 01.04.2021, are not conflicted. Insofar as the Explanation appended to Clause A(a), A(b), and the impugned Notifications dated 31.03.2021 and 27.04.2021 (respectively) are concerned, we declare that the said Explanations must be read, as applicable to reassessment proceedings as may have been in existence on 31.03.2021 i.e. before the substitution of Sections 147, 148, 148A, 149, 151 & 151A of the Act. Consequently, the reassessment notices in all the writ petitions are quashed. It is left open to the respective assessing authorities to initiate reassessment proceedings in accordance with the provisions of the Act as amended by Finance Act, 2021, after making all compliances, as required by law. 81. Accordingly, reassessment notice issued to the present petitioner dated 09.04.2021 for A.Y . 2017-18 is quashed. 82. All writ petitions are allowed . No order as to costs. 30.09.2021 Abhilash/Prakhar/AHA

Ratio and legal principle

The narrow proposition associated with Ashok Kumar Agarwal v. Union of India concerns the petitioners have challenged the validity of the re-assessment notices issued to them, under section 148 of the act. another challenge has been raised to the validity of the explanation appended to clause (a)(a) of cbdt notification no. 20 of 2021, dated 31.03.2021 and explanation to clause (a)(b) of cbdt notification no. 38 of 2021, dated 27.04.2021. those notifications have been issued under the powers vested under section 3(1) of the act 38 of 2020 namely, the taxation and other laws (relaxation of certain provisions) act, 2020 (hereinafter referred to as the ‘enabling act’). 80. in view of the above, all the writ petitions must succeed and are allowed. it is declared that the ordinance, the enabling act and sections 2 to 88 of the finance act 2021, as enforced w.e.f. 01.04.2021, are not conflicted. insofar as the explanation appended to clause a(a), a(b), and the impugned… The proposition cannot be separated from the judgment’s facts, the governing statutory version, the forum’s jurisdiction, and the exact relief recorded in WRIT TAX No. - 524 of 2021.

For working-paper purposes, the decision should be cited only after matching the material facts and reading the passages under the judgment-grounded record above. The editorial outcome label “Quashed / set aside” is a navigation aid; it does not replace the operative order or explain every issue in a multi-issue case.

Why this judgment matters

This decision is relevant when a file raises the same central question identified in the source headnote: The petitioners have challenged the validity of the re-assessment notices issued to them, under Section 148 of the Act. Another challenge has been raised to the validity of the Explanation appended to clause (A)(a) of CBDT Notification No. 20 of 2021, dated 31.03.2021 and Explanation to clause (A)(b) of CBDT Notification No. 38 of 2021, dated 27.04.2021. Those notifications have been issued under the powers vested under Section 3(1) of the Act 38 of 2020 namely, the Taxation and Other Laws (Relaxation of Certain Provisions) Act, 2020 (hereinafter referred to as the ‘Enabling Act’). 80. In view of the above, all the writ petitions must succeed and are allowed. It is declared that the Ordinance, the Enabling Act and Sections 2 to 88 of the Finance Act 2021, as enforced w.e.f. 01.04.2021, are not conflicted. Insofar as the Explanation appended to Clause A(a), A(b), and the impugned… Its practical value lies in the way the Allahabad High Court connected the governing provisions—Sections 147; 148; 148A; 149; 151 & 151A; Taxation and Other Laws (Relaxation of Certain Provisions) Act; 2020—to the procedural posture and evidence before it.

The authority level is High Court. That affects persuasive or binding weight, but authority level alone is never enough. Territorial jurisdiction, statutory period, the identity of the challenged order, and later appellate treatment must all be checked before the case is used in advice, a submission, or litigation strategy.

Practitioner action points

• Begin with the complete judgment and mark the paragraphs supporting the exact proposition relied upon.
• Match the statutory version of Sections 147; 148; 148A; 149; 151 & 151A; Taxation and Other Laws (Relaxation of Certain Provisions) Act; 2020 and the decision date 2021-09-30; do not assume the current text is identical.
• Compare the notice, assessment, appeal or other procedural sequence with the chronology recorded in this case.
• Verify the stated later-history status and any review, appeal, SLP, curative or rectification proceedings before citation.
• Record why the client’s evidence is materially similar, and also record any fact capable of distinguishing the result.

Does this case match your facts?

Detailed reliance and distinction analysis

Identity check. Confirm that the cited cause title is Ashok Kumar Agarwal v. Union of India, the proceeding is WRIT TAX No. - 524 of 2021, and the decision is dated 2021-09-30. These fields are taken from the judgment record and should appear exactly in the citation note.

Bench check. The judgment identifies the coram as Hon'ble Ms. Justice Naheed Ara Moonis; Hon'ble Mr. Justice Saumitra Dayal Singh. A later order by another bench, a larger bench, or a higher forum may alter the weight or interpretation of the proposition.

Provision check. The source associates the dispute with Sections 147; 148; 148A; 149; 151 & 151A; Taxation and Other Laws (Relaxation of Certain Provisions) Act; 2020. The practitioner should place the historical statutory text next to the current text and identify every amendment, proviso, explanation, rule or notification that could change the analysis.

Fact check. The source issue is not a free-standing abstract rule. It arises from the concrete record summarized above. A reliable application note should list the common facts, the different facts, and whether each difference affects jurisdiction, admissibility, limitation, burden, computation or relief.

Remedy check. The recorded result is Quashed / set aside. Where a matter is remanded, set aside, partly allowed, or disposed with directions, the exact operative language is more important than a binary winner/loser label.

History check. The current closure state is LATER_SC_TREATMENT_VERIFIED_ASHISH_AGARWAL_2022_AND_RAJEEV_BANSAL_2024. If that state is pending, the page does not assert that no later case exists. It means the check remains open and must be completed at the point of professional reliance.

Section / provision impact

• Sections 147 — apply the exact version considered in the judgment.
• 148 — apply the exact version considered in the judgment.
• 148A — apply the exact version considered in the judgment.
• 149 — apply the exact version considered in the judgment.
• 151 & 151A — apply the exact version considered in the judgment.
• Taxation and Other Laws (Relaxation of Certain Provisions) Act — apply the exact version considered in the judgment.
• 2020 — apply the exact version considered in the judgment.

Case network

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• Nabco Products Pvt. Ltd. v. UOI and others (Allahabad High Court) — Allahabad High Court · Quashed / set aside
• Dharmendra Kumar Singh v. UOI (Allahabad High Court) — Allahabad High Court · Quashed / set aside
• Ajay Bhandari v. Union of India (Allahabad High Court) — Allahabad High Court · Quashed / set aside

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