Tata Communications Transformation Services v. ACIT

Case snapshot

Sections / provisions: 148

Questions before the Court / Tribunal

• S. 148 : Reassessment-Notice-Constitutional validity-The delegation authorized being only for the purpose of enlarging limitation under a valid law, such delegation could not be exercised to resurrect the provision of law that stood omitted from the statute book by virtue of its substitution made by the Finance Act, 2021, w.e.f. 01.04.2021 – Reassessment notices issued under section 148 of the Act are quashed-It is left open to the assessing authority to initiate – Re-assessment proceedings in accordance with the provisions of the Act, as amended by the Finance Act, 2021 after making due compliance as required under the law. [S. 147, 148A, 149, 151, 151A, 153, 292 Relaxation of Certain Provisions) Act, 2020 (TOLA), S. 3(1) of the Act 38 of 2020, Art. 226] The Hon’ble Bombay High Court agreeing with the views taken by the Allahabad High Court, Rajasthan High Court, Delhi High Court and…
• 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

1/71 1377.WP-1334-2021 AND ORS.doc IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION (1377) WRIT PETITION NO.1334 OF 2021 Tata Communications Transformation Services Limited, having its office at Plot No.C21 & C36, G Block, Bandra Kurla Complex, Bandra (East), Mumbai – 400 098 ) ) ) ) ….Petitioner V/s. (1) Assistant Commissioner of Income Tax 14(1) (2), Aaykar Bhavan, M.K. Road, Mumbai – 400 020 ) ) (2) Principal Commissioner of Income Tax – 6, Aaykar Bhavan, M.K. Road, Mumbai – 400 020 ) ) (3) Union of India Through the Secretary , Ministry of Finance, Government of India, North Block, New Delhi – 100 001 ) ) ) ) ….Respondents WITH WP/1300/2021 WITH WP(L.)/19303/2021 WITH WP(L.)/ 19311/2021 WITH WP/2830/2021 WITH WP/3374/2021 WITH WP/3289/2021 WITH WP/2467/2021 WITH WP/2468/2021 WITH WP/2470/2021 WITH (940) WP/2037/2021, (941) WP/2242/2021, (942) WP/2326/ 2021, (943) WP/2327/2021, (944) WP/2330/2021, (945) WP/ 2333/2021, (946) WP/2531/2021, (947) WP/2578/2021, (948) WP/2650/2021, (949) WP/2664/2021, (950) WP/2703/2021, (951) WP/2742/2021, (952) WP/2749/2021, (953) WP/2930/ 2021, (954) WP/2946/2021, (955) WP/3279/2021, (956) WP/ 3281/2021, (957) WP/3295/2021, (958) WP/3316/2021, (959) WP/3489/2021, (960) WP/3537/2021, (961) WP/3749/ 2021, (962) WP/3762/2021, (963) WP/3934/2021, (964) WP/ 3936/ 2021, (965) WP/3939/2021, (966) WP/3940/2021, (967) WP/ 3943/2021 (968) WP/3965/2021, (969) WP/3172/2021, (970) WP/3678/2021, (971) WP/3566/2021, (972) WP/3584/ 2021, (973) WP/3567/2021, (974) WP/3565/2021, (975) WP/ 3575/2021, (976) WP(L.)/25606/2021, (977) WP(L.)/30142/ 2021, (978) WP(L.)/30201/2021, (979) WP(L.)/31306/2021, (980) WP(L.)/31332/2021, (981) WP(L.)/31339/2021, (982) WP (L.)/31350/2021, (984) WP(L.)/31364/2021, (985) WP(L.)/ 31442/2021, (986) WP (L.)/31645/2021, (987) WP(L.)/31647/ Gauri Gaekwad

12/71 1377.WP-1334-2021 AND ORS.doc 2022, (2082) WP(L.)/2578/2022, (2083) WP(L.)/2581/2022, (2084) WP(L.)/2586/2022, (2085) WP(L.)/3042/2022, (2086) WP(L.)/3048/2022, (2087) WP(L.)/3051/2022, (2088) WP(L.)/ 3052/2022, (2089) WP(L.)/3056/2022, (2090) WP(L.)/3074/ 2022, (2091) WP(L.)/3093/2022, (2092) WP(L.)/3147/2022, (2093) WP(L.)/3148/2022, (2094) WP(L.)/3150/2022, (2095) WP(L.)/3153/2022, (2096) WP(L.)/3157/2022, (2097) WP(L.)/ 3163/2022, (2098) WP(L.)/3170/2022, (2099) WP(L.)/3175/ 2022, (2100) WP(L.)/3180/2022, (2101) WP(L.)/3181/2022, (2102) WP(L.)/3183/2022, (2103) WP(L.)/3186/2022, (2104) WP(L.)/3213/2022, (2105) WP(L.)/3214/2022, (2106) WP(L.)/ 3217/2022, (2107) WP(L.)/3241/2022, (2108) WP(L.)/3319/ 2022, (2109) WP(L.)/3330/2022, (2110) WP(L.)/3331/2022, (2111) WP(L.)/3332/2022, (2112) WP(L.)/3356/2022, (2113) WP(L.)/3364/2022, (2114) WP(L.)/3368/2022, (2115) WP(L.)/ 3405/2022, (2116) WP(L.)/3417/2022, (2117) WP(L.)/3435/ 2022, (2118) WP(L.)/3940/2022. WITH CIVIL APPELLATE JURISDICTION WRIT PETITION NO. 2899 OF 2021 RAJEBAHADUR MADHUSUDAN TRIMBAK ....PETITIONER V/s. INCOME TAX OFFICER) WARD & ANR. ....RESPONDENTS WITH WP/3750/2021 WITH WP/3751/2021 WITH WP/3479/2021 WITH WP/3480/2021 WITH WP/3481/2021 WITH WP/3482/ 2021 WP/3483/2021 WITH WP/3859/2021 WITH WP/3745/ 2021 WITH WP/3633/2021 WITH WP/3706/2021 WITH WP/ 3601/2021 WITH WP/3857/2021 WITH WP/3747/2021 WITH WP/3748/2021 WITH WP/3746/2021 WITH WP/4025/2021 WITH WP/4020/2021 WITH WP/3853/2021 WITH WP/4211/ 2021 WITH WP/4230/2021 WITH WP/4208/2021 WITH WP/ 4210/2021 WITH WP/4209/2021 WITH WP/4641/2021 WITH WP/4640/2021 WITH WP/5362/2021 WITH WP/5363/2021 WITH WP/4931/2021 WITH WP/5087/2021 WITH WP/4928/ 2021 WITH WP/4924/2021 WITH WP/5432/2021 WITH WP/ 5429/2021 WITH WP/7944/2021 WITH WP/7072/2021 WITH WP/7826/2021 WITH WP/9/2022 WITH WP/7928/2021 WITH WP/7925/2021 WP(ST .)/22383/2021 WITH WP/12/2022 WITH Gauri Gaekwad

17/71 1377.WP-1334-2021 AND ORS.doc JUDGMENT (PER K.R. SHRIRAM, J.) : WRIT PETITION NO.1334 OF 2021 1 This writ petition, along with other writ petitions listed today , have been filed by various assessees to challenge initiation of assessment proceedings under Section 148 of the Income Tax Act, 1961 (the Act) for different assessment years. All notices in these petitions for initiation of assessment proceedings have been issued after 1st April 2021. 2 Since substantial questions of law were involved, interim protection has been granted. Revenue has also filed reply in many petitions and many petitioners have also filed rejoinder. Since issues were identical, we did not insist on the Revenue filing a reply in each of the petitions. 3 The cause of action of dispute arising in all these writ petitions purely being legal, i.e., on the validity of the assessment proceedings initiated against assessees after 1 st April 2021 under the provisions of the Act, as it existed before 1 st April 2021, read with the Taxation and Other Laws ( Relaxation and Amendment of Certain Provisions ) Act, 2020 (the Relaxation Act) and the notifications issued thereunder, the peculiar facts or pleadings of each case, in our view, are not material to the adjudication of the issues involved. 4 We have heard the counsels led by Mr. Mistri, Mr. Pardiwalla, Mr. Andhyarujina and Mr. Chatterji for petitioners and Mr. Anil Singh, Gauri Gaekwad

Assistant Commissioner of Income Tax & Anr.3, High Court of Rajasthan (Single Judge) in Bpip Infra (P .) Ltd. V/s. Income Tax Officer, Ward 4(1), Jaipur4 and High Court of Calcutta in Bagaria Properties and Investment Pvt. Ltd. and Anr. V/s. Union of India and Ors.5 and Division Bench of Rajasthan High Court in Sudesh Taneja V/s. Income Tax Officer, Ward – 1(3), Jaipur and Anr.6 and High Court of Madras (Division Bench) in Vellore Institute of Technology V/s. Central Board of Direct Taxes and Anr.7 6 The provisions for reassessment to reopen the assessment under certain circumstances was amended by the Finance Act, 2021 with effect from 1st April 2021.

Prior thereto, under Section 147 of the Act, the 1. 2021 (438) ITR 622 2. (2021) 131 taxmann.com 22 (Allahabad) 3. (2021) 133 taxmann.com 166 (Delhi) 4. (2021) 133 taxmann.com 48 (Rajasthan) 5. W.P.O. No.244 of 2021 dated 17.01.2022 6. D.B. Civil Writ Petition No.969 of 2022 pronounced on 27.01.2022 7. Writ Petition No.15019 of 2021 dated 04.02.2022 Gauri Gaekwad

Appellant / petitioner / assessee submissions

38/71 1377.WP-1334-2021 AND ORS.doc 26 A Division Bench of the Allahabad High Court in the case of Ashok Kumar Agarwal (Supra) has ruled in favour of the assessee and in paragraphs 64 to 73 held as under : “64. As to the first line of reasoning applied by the learned counsel for the petitioner, as noted above, there can be no exception to the principle – an Act of legislative substitution is a composite act. Thereby , the legislature chooses to put in place another or, replace an existing provision of law. It involves simultaneous omission and re-enactment. By its very nature, once a new provision has been put in place of a preexisting provision, the earlier provision cannot survive, except for things done or already undertaken to be done or things expressly saved to be done.

Revenue / respondent submissions

36/71 1377.WP-1334-2021 AND ORS.doc notifications dated 31st March 2021 and 27 th April 2021 are thus ultra vires the powers of the subordinate legislation and therefore, unconstitutional; (d) under the taxing statutes there is no scope for intendment. If two views are possible, one favouring the assessee should be taken. It was pointed out that the Division Bench of Allahabad High Court, Rajasthan High Court, Delhi High Court, Madras High Court and a single Judge of Calcutta High Court have already decided these issues in favour of the assessees. Being pan-India legislation in the field of taxation, the Court should strive to achieve consistency . The view adopted by these Courts, should, therefore, be followed by this Court. 24 On the other hand, the Revenue has opposed the petitions and contended that : (a) the substitution of old provisions for reopening of assessment would not obliterate the previous set of statutory provisions. They would continue to have effect for the past period, i.e., for assessment years upto 31 st March 2021. If the notice for reopening of assessment was issued for any period prior to 1 st April 2021, the provisions as they stood at the relevant time would apply . In such a case, there was no requirement of following the procedure laid down under Section 148A of the Act before issuing notice under Section 148 of the Act; (b) present situation is unprecedented and has arisen on account of pandemic caused by COVID-19. Unprecedented situation Gauri Gaekwad

60/71 1377.WP-1334-2021 AND ORS.doc must be given a purposive interpretation. F . Referring to para 80 of the decision of the Hon’ble Allahabad High Court - liberty should be granted 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. 33 The submissions made by learned ASG, as additional arguments of respondents, as submitted by Mr. Mistri, with whom we agree, in effect are all restatement, made in different style, of the same argument urged before the Allahabad, Delhi, Rajasthan, Calcutta and Madras High Court. They had already argued/ contended that as the original time limit for issuing a notice under Section 148 of the Act was expiring on or before 31st March 2021 and such time limit has been extended by the Relaxation Act, the old/unamended provisions of Section 148 of the Act will continue to govern such notices.

Court / Tribunal analysis and reasoning

37/71 1377.WP-1334-2021 AND ORS.doc required extraordinary measures. The Relaxation Ordinance, 2020 and Relaxation Act were, therefore, framed giving extension of time limits for taking actions and making compliances. These extensions were for the benefit of both, actions that had to be taken by the Revenue as well as compliances which had to be made by the assessees. The assessees cannot take advantage of the unusual circumstances prevailing on account of COVID-19. The CBDT , therefore, in exercise of powers conferred in subsection (1) of Section 3 of the Relaxation Act, has issued necessary explanation which merely clarifies which statutory provisions any way provide. This explanation makes explicit what is otherwise implicit under the Act. The same is well within the power of the Government. 25 Two questions, therefore, which come up for our consideration are : (a) Whether, after introduction of new provisions for reassessment of income by virtue of the Finance Act, 2021 with effect from 1st April 2021, substituting the then existing provisions, would the substituted provisions survive and could be used for issuing notices for reassessment for the past period?; (b) Whether the explanations contained in the CBDT Circular Nos.20 of 2021 of 31 st March 2021 and 38 of 2021 of 27 th April 2021 are legal and valid? Gauri Gaekwad

In absence of any express saving clause and, since no reassessment proceeding had been initiated prior to the Act of legislative substitution, the second aspect of the matter does not require any further examination. 65. Therefore, other things apart, undeniably , on 01.04.2021, by virtue of plain/unexcepted effect of Section 1(2)(a) of the Finance Act, 2021, the provisions of Sections 147, 148, 149, 151 (as those provisions existed upto 31.03.2021), stood substituted, along with a new provision enacted by way of Section 148A of that Act. In absence of any saving clause, to save the pre-existing (and now substituted) provisions, the revenue authorities could only initiate reassessment proceeding on or after 01.04.2021, in accordance with the substituted law and not the pre-existing laws.

As a fact, no jurisdiction had been assumed by the assessing authority against any of the petitioners, under the unamended law. Hence, no time extension could ever be made under section 3(1) of the Enabling Act, read with the Notifications issued thereunder. 68. The submission of the learned Additional Solicitor General of India that the provision of Section 3(1) of the Enabling Act gave an overriding effect to that Act and therefore saved the provisions as existed under the unamended law, also cannot be accepted. That saving could arise only if jurisdiction had been validly assumed before the date 01.04.2021. In the first place Section 3(1) of the Enabling Act does not speak of saving any provision of law.

It only provides a general relaxation of limitation granted on account of general hardship existing upon the spread of pandemic COVID -19. After enforcement of the Finance Act, 2021, it applies to the substituted provisions and not the pre-existing provisions. 72. Reference to reassessment proceedings with respect to pre-existing and now substituted provisions of Sections 147 and 148 of the Act has been introduced only by the later Notifications issued under the Act. Therefore, the validity of those provisions is also required to be examined. We have concluded as above, that the provisions of Sections 147, 148, 148A, 149, 150 and 151 substituted the old/pre-existing provisions of the Act w.e.f.

This was real object and purpose of the enactment of Sub-section (2) and the interpretation of this sub-section must fall in line with the advancement of that object and purpose. We must therefore accept as the underlying assumption of Subsection (2) that there is under-statement of consideration in respect of the transfer and Subsection (2) applies only where the actual consideration received by the assessee is not disclosed and the consideration declared in respect of the transfer is shown at a lesser figure than that actually received." (iv) It is well accepted that reopening a completed assessment causes great hardship to the assessee and also brings uncertainty . In a judgment in case of Gujarat Power Gauri Gaekwad

To protect the interests of the Revenue, therefore, such special provisions are made under section 147 of the Act. However, it must be appreciated that an assessment previously framed after scrutiny when reopened, results into considerable hardship to the assessee. The assessment gets reopened not only qua those grounds which are recorded in the reasons, but also with respect to the entire original assessment, of course at the hands of the Revenue. This obviously would lead to considerable hardship and uncertainty. It is precisely for this reason that even while recognizing such powers, in special requirements of the statute, certain safeguards are provided by the statute which are zealously guarded by the courts.

Operative decision and relief

70/71 1377.WP-1334-2021 AND ORS.doc (c) In any case, Relaxation Act is not applicable for Assessment Years 2015-2016 or any subsequent year and, hence, the question of applicability of the Notification Nos.20 and 38 of 2021 does not arise. The time limit to issue notice under Section 148 of the Act for the Assessment Years 2015-2016 onwards was not expiring within the period for which Section 3(1) of Relaxation Act was applicable and, hence, Relaxation Act could never apply for these assessment years. As a consequence, there can be no question of extending the period of limitation for such assessment years. 50 To sum up, since we are in respectful agreement with the reasons recorded and views taken by the Allahabad High Court, Rajasthan High Court, Delhi High Court and Madras High Court, in the cases referred hereinabove, and for reasons noted above, all these writ petitions listed above are disposed by allowing the same. The explanations to the Notification No.20 of 2021 dated 31 st March 2021 and Notification No.38 of 2021 dated 27 th April 2021 are declared ultra vires and are, therefore, bad in law and null and void. 51 All the impugned notices issued under Section 148 of the Act are quashed and set aside. 52 It will be open to the Assessing Officers concerned to initiate fresh reassessment proceedings in accordance with the relevant provisions Gauri Gaekwad

71/71 1377.WP-1334-2021 AND ORS.doc of the Act as amended by the Finance Act, 2021 after strictly complying with the provisions of the Act. 53 All petitions disposed accordingly . No order as to costs. (N.J. JAMADAR, J.) (K.R. SHRIRAM, J.) Gauri Gaekwad

Ratio and legal principle

The narrow proposition associated with Tata Communications Transformation Services v. ACIT concerns s. 148 : reassessment-notice-constitutional validity-the delegation authorized being only for the purpose of enlarging limitation under a valid law, such delegation could not be exercised to resurrect the provision of law that stood omitted from the statute book by virtue of its substitution made by the finance act, 2021, w.e.f. 01.04.2021 – reassessment notices issued under section 148 of the act are quashed-it is left open to the assessing authority to initiate – re-assessment proceedings in accordance with the provisions of the act, as amended by the finance act, 2021 after making due compliance as required under the law. [s. 147, 148a, 149, 151, 151a, 153, 292 relaxation of certain provisions) act, 2020 (tola), s. 3(1) of the act 38 of 2020, art. 226] the hon’ble bombay high court agreeing with the views taken by the allahabad high court, rajasthan high court, delhi high court and… 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 PETITION NO.1334 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: S. 148 : Reassessment-Notice-Constitutional validity-The delegation authorized being only for the purpose of enlarging limitation under a valid law, such delegation could not be exercised to resurrect the provision of law that stood omitted from the statute book by virtue of its substitution made by the Finance Act, 2021, w.e.f. 01.04.2021 – Reassessment notices issued under section 148 of the Act are quashed-It is left open to the assessing authority to initiate – Re-assessment proceedings in accordance with the provisions of the Act, as amended by the Finance Act, 2021 after making due compliance as required under the law. [S. 147, 148A, 149, 151, 151A, 153, 292 Relaxation of Certain Provisions) Act, 2020 (TOLA), S. 3(1) of the Act 38 of 2020, Art. 226] The Hon’ble Bombay High Court agreeing with the views taken by the Allahabad High Court, Rajasthan High Court, Delhi High Court and… Its practical value lies in the way the Bombay High Court connected the governing provisions—148—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 148 and the decision date 2022-02-24; 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 Tata Communications Transformation Services v. ACIT, the proceeding is WRIT PETITION NO.1334 OF 2021, and the decision is dated 2022-02-24. 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 Mr. Justice K.R. Shriram; Hon'ble Mr. Justice N.J. Jamadar. 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 148. 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 REVIEW_APPEAL_SLP_CHECK_PENDING. 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

• 148 — apply the exact version considered in the judgment.

Case network

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• Hero Products India Pvt. Ltd. v. NFAC — Bombay High Court · Quashed / set aside
• Pr. CIT v. Macleods Pharmaceuticals Ltd. — Bombay High Court · Quashed / set aside

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