{"file_name": "2024_10_1633_1708_EN.pdf", "text": "[2024] 10 S.C.R. 1633 : 2024 INSC 754\n\nUnion of India & Ors. \nv. \nRajeev Bansal\n\n(Civil Appeal No. 8629 of 2024)\n\n03 October 2024\n\n[Dr Dhananjaya Y Chandrachud,* CJI, \nJ.B. Pardiwala and Manoj Misra, JJ.]\n\nIssue for Consideration\n\nWhether after 01 April 2021, the Income Tax Act, 1961 has to be \nread along with the substituted provisions; whether Taxation and \nOther Laws (Relaxation and Amendment of Certain Provisions) \nAct 2020 (TOLA) will continue to apply to the Income Tax Act \nafter 01  April 2021; whether section 3(1) of TOLA overrides \nsection 149 of the Income Tax Act; whether TOLA will extend \nthe time limit for the grant of sanction by the authority specified \nunder section 151 of the Income Tax Act; whether the directions \nin Ashish Agarwal will extend to all the reassessment notices \nissued under old regime; what were the requirements for issuing \nreassessment notice under section 148 of the new regime.\n\nHeadnotes†\n\nIncome Tax Act, 1961 – Finance Act 2021 – Whether after \n01 April 2021, the Income Tax Act, 1961 has to be read along \nwith the substituted provisions:\n\nHeld: After 01 April 2021, the Income Tax Act has to be read along \nwith the substituted provisions. [Para 114(a)]\n\nIncome Tax Act, 1961 – Taxation and Other Laws (Relaxation \nand Amendment of Certain Provisions) Act 2020 (TOLA) – \nFinance Act 2021 – Whether TOLA will continue to apply to \nthe Income Tax Act after 01 April 2021:\n\nHeld: TOLA will continue to apply to the Income Tax Act after 01 \nApril 2021 if any action or proceeding specified under the substituted \nprovisions of the Income Tax Act falls for completion between 20 \nMarch 2020 and 31 March 2021. [Para 114(b)]\n\n* Author\n\n\f1634 \n\n[2024] 10 S.C.R.\n\nIncome Tax Act, 1961 – s.149 – Taxation and Other Laws \n(Relaxation and Amendment of Certain Provisions) Act 2020 – \ns.3(1) – Finance Act 2021 –Whether section 3(1) of TOLA \noverrides section 149 of the Income Tax Act:\n\nHeld: Section 3(1) of TOLA overrides Section 149 of the Income \nTax only to the extent of relaxing the time limit for issuance of a \nreassessment notice under Section 148. [Para 114(c)]\n\nIncome Tax Act, 1961 – Taxation and Other Laws (Relaxation \nand Amendment of Certain Provisions) Act 2020 (TOLA) – \nFinance Act 2021 – Whether TOLA will extend the time limit \nfor the grant of sanction by the authority specified under \nsection 151 of the Income Tax Act :\n\nHeld: TOLA will extend the time limit for the grant of sanction by \nthe authority specified under Section 151 – The test to determine \nwhether TOLA will apply to Section 151 of the new regime is this: \nif the time limit of three years from the end of an assessment \nyear falls between 20 March 2020 and 31 March 2021, then \nthe specified authority under Section 151(i) has extended time \ntill 30 June 2021 to grant approval – In the case of Section 151 \nof the old regime, the test is: if the time limit of four years from \nthe end of an assessment year falls between 20 March 2020 \nand 31 March 2021, then the specified authority under Section \n151(2) has extended time till 31 March 2021 to grant approval. \n[Para 114(d), 114(e)]\n\nIncome Tax Act, 1961 – Taxation and Other Laws (Relaxation \nand Amendment of Certain Provisions) Act, 2020 – Finance Act \n2021 – Whether the directions in Ashish Agarwal will extend \nto all the reassessment notices issued under old regime:\n\nHeld: The directions in Ashish Agarwal will extend to all the ninety \nthousand reassessment notices issued under the old regime \nduring the period 01 April 2021 and 30 June 2021 – The time \nduring which the show cause notices were deemed to be stayed \nis from the date of issuance of the deemed notice between 01 \nApril 2021 and 30 June 2021 till the supply of relevant information \nand material by the assessing officers to the assesses in terms \nof the directions issued by this Court in Ashish Agarwal, and the \nperiod of two weeks allowed to the assesses to respond to the \nshow cause notices. [Para 114(f), 114(g)]\n\nDigital Supreme Court Reports\f[2024] 10 S.C.R. \n\n1635\n\nIncome Tax Act, 1961 – Taxation and Other Laws (Relaxation \nand Amendment of Certain Provisions) Act, 2020 – Finance Act \n2021 – What were the requirements for issuing reassessment \nnotice under section 148 of the new regime:\n\nHeld: The assessing officers were required to issue the \nreassessment notice under Section 148 of the new regime within \nthe time limit surviving under the Income Tax Act read with TOLA – \nAll notices issued beyond the surviving period are time barred and \nliable to be set aside. [Para 114(h)]\n\nIncome Tax Act, 1961 – Assessment as a quasi-judicial \nfunction:\n\nHeld: The assessing officers perform a quasi-judicial function \nduring reassessment, the powers vested in them are regulated \nby law – The process of reassessment is generally preceded \nby administrative proceedings, which require the assessing \nofficer to obtain the sanction of the specified authorities – The \ntaxing statutes generally lay down the procedure for issuance \nof notice to the proposed assessee in respect of income or \nproperty proposed to be taxed – It also prescribes the authority \nand procedure for hearing any objections to the liability for \ntaxation. [Para 27]\n\nIncome Tax Act, 1961 – Assessment as an issue of jurisdiction:\n\nHeld: The Income Tax Act, 1961 also mandates assessing \nofficers to fulfil certain pre-conditions before issuing a notice of \nreassessment – Section 149 requires assessing officers to issue \na notice of reassessment under Section 148 within the prescribed \ntime limits – Further, Section 151 requires assessing officers to \nobtain sanction of the specified authority before issuing notice \nunder Section 148 – A statutory authority may lack jurisdiction if \nit does not fulfil the preliminary conditions laid down under the \nstatute, which are necessary to the exercise of its jurisdiction – \nThere cannot be any waiver of a statutory requirement or provision \nthat goes to the root of the jurisdiction of assessment – An \norder passed without jurisdiction is a nullity – Any consequential \norder passed or action taken will also be invalid and without \njurisdiction – Thus, the power of assessing officers to reassess \nis limited and based on the fulfilment of certain preconditions. \n[Paras 31, 32]\n\nUnion of India & Ors. v. Rajeev Bansal\f1636 \n\n[2024] 10 S.C.R.\n\nInterpretation of Statutes – Taxing statutes – Principles of \nstrict interpretation and workability:\n\nHeld: Taxing statutes are interpreted by following the principles of \nstrict interpretation – While interpreting a taxing statute, there is \nno room for any intendment – A taxing statute must be construed \nby having regard to the strict letter of the law – In a taxing statute, \nit is not possible to assume any intention or governing purpose \nmore than what is stated in the plain language – A taxing statute \ncan successfully impose liability on persons or property only if it \nframes appropriate provisions to that end – The courts cannot \nplug in a loophole in a taxing statute “by a strained construction in \nreference to the supposed intention of the Legislature” – Further, \nthe considerations of equity or justice are not relevant in interpreting \na taxing statute – It is a well-accepted rule of construction that in \nsituations where the interpretation of taxing legislation is ambiguous \nor leads to two possible interpretations, the interpretation most \nbeneficial to the subject of the tax should be adopted – It would \nnot be an unjust result if a taxpayer escapes the tax net on account \nof the legislature’s failure to express itself clearly – A statute is \ndesigned to be workable – A statutory provision must be construed \nin a manner to make it workable to achieve the purpose of the \nlegislation – A construction that fails to achieve the manifest purpose \nof legislation or reduces the statutory provisions to futility should \nbe avoided. [Paras 35, 37]\n\nInterpretation of statutes – Harmonious construction – \nDiscussed. [Paras 39-43]\n\nIncome Tax Act, 1961 – First proviso to Section 149(1) of the \nnew regime – Ingredients of the proviso:\n\nHeld: The ingredients of the proviso could be broken down for \nanalysis as follows: (i) no notice under Section 148 of the new \nregime can be issued at any time for an assessment year beginning \non or before 1 April 2021; (ii) if it is barred at the time when the \nnotice is sought to be issued because of the “time limits specified \nunder the provisions of” 149(1)(b) of the old regime – Thus, a \nnotice could be issued under Section 148 of the new regime for \nassessment year 2021-2022 and before only if the time limit for \nissuance of such notice continued to exist under Section 149(1)(b) \nof the old regime. [Para 46]\n\nDigital Supreme Court Reports\f[2024] 10 S.C.R. \n\n1637\n\nIncome Tax Act, 1961 – s.149(1) of the new regime – Position \nof law:\n\nHeld: (i) Section 149(1) of the new regime is not prospective – It \nalso applies to past assessment years; (ii) The time limit of four \nyears is now reduced to three years for all situations – The Revenue \ncan issue notices under Section 148 of the new regime only if \nthree years or less have elapsed from the end of the relevant \nassessment year; (iii) the proviso to Section 149(1)(b) of the \nnew regime stipulates that the Revenue can issue reassessment \nnotices for past assessment years only if the time limit survives \naccording to Section 149(1)(b) of the old regime, that is, six \nyears from the end of the relevant assessment year; and (iv) all \nnotices issued invoking the time limit under Section 149(1)(b) of \nthe old regime will have to be dropped if the income chargeable \nto tax which has escaped assessment is less than Rupees fifty \nlakhs. [Para 53]\n\nCase Law Cited\n\nJ K Synthetics Ltd.  v. CTO [1997] 1 SCR 603  : (1994) 4 SCC \n276; Shamrao V Parulekar v. District Magistrate, Thana [1956] 1 \nSCR 644 : (1952) 2 SCC 1; Shyam Sunder v. Ram Kumar [2001] \nSupp. 1 SCR 115 : (2001) 8 SCC 24; S C Prashar v. Vasantsen \nDwarkadas [1964] 1 SCR 29; Supreme Court Bar Association v. \nUnion of India [1998] 2 SCR 795 : (1998) 4 SCC 409; Allahabad \nHigh Court Bar Association  v. State of UP [2024] 2 SCR 946 : \n(2024) 6 SCC 267; M Siddiq  v. Suresh Das [2019] 18 SCR 1  : \n(2020) 1 SCC 1 – followed.\n\nCIT v. Simon Carves Ltd. [1977] 1 SCR 207 : (1976) 4 SCC 435; \nAhmedabad Manufacturing and Calico Printing Co. Ltd.  v. S G \nMehta ITO, [1963] Supp. 2 SCR 92 : 1962 SCC OnLine SC 73; \nMurarilal Mahabir Prasad v. B R Vad [1976] 1 SCR 689 : (1975) \n2 SCC 736; CIT v. Sun Engineering Works (P) Ltd. [1992] Supp. \n1 SCR 732 : (1992) 4 SCC 363; Chandavarkar Sita Ratna Rao v. \nAshalata S Guram [1986] 3 SCR 866  : (1986) 4 SCC 447; K \nPrabhakaran  v. P Jayarajan [2005] 1 SCR 296  : (2005) 1 SCC \n754; VLS Finance Limited v. Commissioner of Income Tax [2016] \n3 SCR 390 : (2016) 12 SCC 32; – relied on.\n\nGKN Driveshafts (India) Ltd v. Income Tax Officer [2002] Supp. \n4 SCR 359 : (2003) 1 SCC 72 [5]; Ashok Kumar Agarwal v. Union \nof India, 2021 SCC OnLine All 799; Union of India  v. Ashish \n\nUnion of India & Ors. v. Rajeev Bansal\f1638 \n\n[2024] 10 S.C.R.\n\nAgarwal [2022] 3 SCR 638 : (2023) 1 SCC 617; Jindal Stainless \nLtd  v. State of Haryana [2016] 10 SCR 1  : (2017) 12 SCC 1; \nAmrit Banaspati Co. Ltd. v. State of Punjab [1992] 2 SCR 13 : \n(1992) 2 SCC 411; Dena Bank v. Bhikhabhai Prabhudas Parekh \n& Co. [2000] 3 SCR 509  : (2000) 5 SCC 694; Elel Hotels & \nInvestments Ltd v. Union of India [1989] 2 SCR 880 : (1989) 3 \nSCC 698; Mafatlal Industries Ltd v. Union of India [1996] Supp. \n10 SCR 585 : (1997) 5 SCC 536; CCE v. National Tobacco Co. \nof India Ltd. [1973] 1 SCR 822  : (1972) 2 SCC 560; Rai \nRamkrishna  v. State of Bihar [1964] 1 SCR 897  : (1963) SCC \nOnLine SC 31; CIT v. B C Srinivasa Setty [1981] 2 SCR 938 : \n(1981) 2 SCC 460; Kalawati Devi Harlalka v. CIT [1967] 3 SCR \n833  : 1967 SCC OnLine SC 44; Addl ITO  v. E Alfred [1962] \nSupp. 1 SCR 143 : 1961 SCC OnLine SC 243; S Sankappa v. \nITO [1968] 2 SCR 674 : 1967 SCC OnLine SC 25; Bhopal Sugar \nIndustries Ltd v. State of Madhya Pradesh [1979] 2 SCR 605 : \n(1979) 3 SCC 792; M M Ipoh  v. CIT [1968] 1 SCR 65  : 1967 \nSCC OnLine SC 40; Province of Bombay v. Khushaldas S Advani \n[1950] 1 SCR 621 : 1950 SCC OnLine SC 26; Express Newspaper \n(P) Ltd. v. Union of India [1959] 1 SCR 12 : 1958 SCC OnLine \nSC 23; Gullapalli Nageswara Rao v. State of A P [1960] 1 SCR \n580  : 1959 SCC OnLine SC 53; Indian & Eastern Newspaper \nSociety v. CIT [1980] 1 SCR 442 : (1979) 4 SCC 248; K T Moopil \nNair v. State of Kerala [1961] 3 SCR 77 : 1960 SCC OnLine SC \n7; CED v. M A Merchant [1989] 2 SCR 987 : 1989 Supp (1) SCC \n499; CST v. H M Esufali, H M Abdali [1973] 3 SCR 1005 : (1973) \n2 SCC 137; Deputy Commissioner of Commercial Taxes v. H R \nSri Ramulu [1977] 2 SCR 593 : (1977) 1 SCC 703; Income Tax \nOfficer v. S K Habibullah [1962] Supp. 2 SCR 716 : 1962 SCC \nOnLine SC 58; Supdt. of Taxes v. Onkarmal Nathmal Trust [1975] \nSupp. 1 SCR 365 : (1976) 1 SCC 766; S Narayanappa v. CIT \n[1967] 1 SCR 590 : 1966 SCC OnLine SC 173; R K Upadhyaya v. \nShanabhai Patel [1987] 3 SCR 42  : (1987) 3 SCC 96; S S \nGadgil v. Lal & Co., [1964] 8 SCR 72 : 1964 SCC OnLine SC \n112; CIT v. Robert J Sas [1963] Supp. 2 SCR 209 : (1963) 48 \nITR 177; CIT  v. Thayaballii Mulla Jeevaji Kapasi, 1967 SCC \nOnLine SC 352; CIT v. Onkarmal Meghraj [1974] 1 SCR 391 : \n(1974) 3 SCC 349; K M Sharma  v. ITO [2002] 2 SCR 1047: \n(2002) 4 SCC 339; Dr Premchandran Keezhoth  v. Chancellor \nKannur University [2023] 16 SCR 377 : 2023 SCC OnLine SC \n1592; CIT v. Anjum M.H. Ghaswala [2001] Supp. 4 SCR 303 : \n(2002) 1 SCC 633; State of U P v. Singhara Singh [1964] 4 SCR \n\nDigital Supreme Court Reports\f[2024] 10 S.C.R. \n\n1639\n\n485  : 1963 SCC OnLine SC 23; Tata Chemicals Ltd.  v. \nCommissioner of Customs [2015] 7 SCR 132 : (2015) 11 SCC \n628; CIT v. Maharaja Pratapsingh Bahadur of Gidhaur [1961] 2 \nSCR 760 : 1960 SCC OnLine SC 55; Chhugamal Rajpal v. S P \nChaliha [1971] 3 SCR 442  : (1971) 1 SCC 453; Chhotobhai \nJethabhai Patel  v. Industrial Court, Maharashtra [1972] 3 SCR \n731 : (1972) 2 SCC 46; Dwarka Prasad Agarwal v. B D Agarwal \n[2003] Supp. 1 SCR 336 : (2003) 6 SCC 230; CIT v. Kelvinator \nof India Ltd [2010] 1 SCR 768  : (2010) 2 SCC 723; Banarsi \nDebi v. ITO [1964] SCR 7 539 : 1964 SCC OnLine SC 48; Punjab \nLand Development and Reclamation Corporation Ltd. v. Presiding \nOfficer, Labour Court [1990] 3 SCR 111  : (1990) 3 SCC 682; \nCommissioner of Customs  v. Dilip Kumar & Co. [2018] 7 SCR \n1191 : (2018) 9 SCC 1; State of Gujarat v. Mansukhbhai Kanjibhai \nShah [2020] 9 SCR 330  : (2020) 20 SCC 360; Cape Brandy \nSyndicate v. Inland Revenue Commissioners (1921) KB 64, 71; \nA.V. Fernandes v. State of Kerala [1957] 1 SCR 837 : 1957 SCC \nOnLine SC 23; ITO v. T S Devinatha Nadar [1968] 2 SCR 33 : \n1967 SCC OnLine SC 52; Central India Spinning and Waving \nCo. Ltd. v. Municipal Committee [1958] 1 SCR 1102 : 1957 SCC \nOnLine SC 18; CIT  v. Shahzada Nand & Sons [1966] 3 SCR \n379 : 1966 SCC OnLine SC 24; Voltas Ltd. v. State of Gujarat \n[2015] 5 SCR 320 : (2015) 7 SCC 527; CIT v. Jargaon Electric \nSupply Co. Ltd., [1960] 3 SCR 880 : 1960 SCC OnLine SC 105; \nState of W B  v. Kesoram Industries Ltd. [2004] 1 SCR 564  : \n(2004) 10 SCC 201; Mahim Patram (P) Ltd.  v. Union of India \n[2007] 3 SCR 73 : (2007) 3 SCC 668; K P Mohammed Salim v. \nCIT [2008] 6 SCR 949  : (2008) 11 SCC 573; Mohan Kumar \nSinghania  v. Union of India [1991] Supp. 1 SCR 46  : (1992) \nSupp. 1 SCC 594; CIT v. Hindustan Bulk Carriers [2002] Supp. \n5 SCR 387 : (2003) 3 SCC 57; Gursahai Saigal v. CIT [1963] 3 \nSCR 893  : (1963) 48 ITR (SC) 1; CIT  v. Mahaliram Ramjidas, \nAIR 1940 PC 124; MCD  v. Shiv Shankar [1971] 3 SCR 607  : \n(1971) 1 SCC 442; Sultana Begum v. Prem Chand Jain [1996] \nSupp. 9 SCR 707  : (1997) 1 SCC 373; State of Bihar  v. Bihar \nRajya MSESKK Mahasangh [2004] Supp. 5 SCR 376 : (2005) \n9 SCC 129; Union of India  v. G.M. Kokil [1984] 3 SCR 292  : \n1984 Supp SCC 196; ICICI Bank Ltd  v. SIDCO Leathers Ltd. \n[2006] Supp. 1 SCR 528 : (2006) 10 SCC 452; Geeta v. State \nof UP [2010] 15 SCR 1126  : (2010) 13 SCC 678; A G \nVaradarajulu v. State of Tamil Nadu [1998] 2 SCR 390 : (1998) \n4 SCC 231; State of Orissa v. M A Tulloch [1964] 4 SCR 461 : \n\nUnion of India & Ors. v. Rajeev Bansal\f1640 \n\n[2024] 10 S.C.R.\n\n1963 SCC OnLine SC 18; Zaverbhai Amaidas v. State of Bombay \n[1955] 1 SCR 799 : (1954) 2 SCC 345; Ratan Lal Adukia v. Union \nof India [1989] 3 SCR 440  : (1989) 3 SCC 537; Pradeep S \nWodeyar v. State of Karnataka [2021] 11 SCR 985 : (2021) 19 \nSCC 62; Municipal Council Palai  v. T J Joseph [1964] 2 SCR \n87 : 1963 SCC OnLine SC 55; State of M P v. Kedia Leather & \nLiquor Ltd. [2003] Supp. 2 SCR 727 : (2003) 7 SCC 389; Harshad \nS Mehta  v. State of Maharashtra [2001] Supp. 2 SCR 577  : \n(2001) 8 SCC 257; CTO  v. Biswanath Jhunjhunwalla [1996] \nSupp. 5 SCR 286 : (1996) 5 SCC 626; Koteswar Vittal Kamath v. \nK Rangappa Baliga & Co. [1969] 3 SCR 40 : (1969) 1 SCC 255; \nBhagat Ram Sharma v. Union of India [1988] 1 SCR 1034 : 1988 \nSupp. SCC 30; State of Rajasthan  v. Mangilal Pindwal [1996] \nSupp. 3 SCR 98  : (1996) 5 SCC 60; Pernod Ricard India (P) \nLtd v. State of Madhya Pradesh [2024] 4 SCR 664 : 2024 SCC \nOnLine SC 566; G V Krishnamraju v. Union of India [2018] 11 \nSCR 39 : (2019) 17 SCC 590; Ram Narain v. Simla Banking & \nIndustrial Co. Ltd. [1956] 1 SCR 603 : 1956 SCC OnLine SC 1; \nLDA v. M K Gupta [1993] Supp. 3 SCR 615 : (1994) 1 SCC 243; \nRaj Kumar Shivhare v. Directorate of Enforcement [2010] 4 SCR \n608 : (2010) 4 SCC 772; Vivek Narayan Sharma v. Union of India \n[2023] 1 SCR 1 : (2023) 3 SCC 1; Income-tax Officer v. Vikram \nSujitkumar Bhatia [2023] 2 SCR 756  : (2023) 453 ITR 417; \nM P V Sundararamier v. State of Andhra Pradesh [1958] 1 SCR \n1422 : 1958 SCC OnLine SC 22; Srikrishna Private Ltd v. ITO \n[1996] Supp. 3 SCR 627 : (1996) 9 SCC 534; Jose Da Costa v. \nBascora Sadasiva Sinai Narcornim [1976] 3 SCR 1067 : (1976) \n2 SCC 917; Ganga Bishan v. Jai Narain (1986) 1 SCC 75; Delhi \nJudicial Service Association  v. State of Gujarat [1991] 3 SCR \n936  : (1991) 4 SCC 406; Shilpa Sailesh  v. Varun Sreenivasan \n[2023] 5 SCR 165  : 2023 SCC OnLine SC 544; Prem Chand \nGarg  v. The Excise Commissioner [1963] Supp. 1 SCR 885  : \n1962 SCC OnLine SC 37; Union Carbide Corpn. Ltd. v. Union \nof India [1991] Supp. 1 SCR 381  : (1991) 4 SCC 584; Vinay \nChandra Mishra, In re [1995] 2 SCR 638 : (1995) 2 SCC 584; \nDelhi Development Authority v. Skipper Construction Co. (P) Ltd. \n[1996] Supp. 2 SCR 295  : (1996) 4 SCC 622; J & K Public \nService Commission  v. Narinder Mohan [1993] Supp. 3 SCR \n900  : (1994) 2 SCC 630; State  v. Kalyan Singh [2017] 6 SCR \n946  : (2017) 7 SCC 444; Bir Singh  v. Mukesh Kumar [2019] 2 \nSCR 24  : (2019) 4 SCC 197; State of Punjab  v. Rafiq Masih \n[2014] 13 SCR 1343  : (2014) 8 SCC 883; Prashanti Medical \n\nDigital Supreme Court Reports\f[2024] 10 S.C.R. \n\n1641\n\nServices & Research Foundation v. Union of India [2019] 9 SCR \n828 : (2020) 14 SCC 785; Whirlpool of India Ltd. v. CIT (2000) \n9 SCC 62; CIT v. Greenworld Corporation [2009] 8 SCR 175 : \n(2009) 7 SCC 69; Gajraj Singh  v. STAT [1996] Supp. 6 SCR \n172 : (1997) 1 SCC 650; CIT v. Calcutta Stock Exchange [1959] \nSupp. 2 SCR 459  : 1959 SCC OnLine SC 126; Sudha Rani \nGarg v. Jagdish Kumar [2004] Supp. 4 SCR 206 : (2004) 8 SCC \n329; State of Maharashtra  v. Laljit Rajshi Shah [2000] 1 SCR \n1239 : (2000) 2 SCC 699; Bengal Immunity Company Ltd v. State \nof Bihar [1955] 2 SCR 603 : 1955 SCC OnLine SC 2; Industrial \nSupplies (P) Ltd. v. Union of India [1981] 1 SCR 375 : (1980) 4 \nSCC 341; Shree Chamundi Mopeds Ltd. v. Church of South India \nTrust Association [1992] 2 SCR 999  : (1992) 3 SCC 1; Abhey \nRam  v. Union of India [1997] 3 SCR 931  : (1997) 5 SCC 421; \nIndore Development Authority  v. Manoharlal [2020] 3 SCR 1  : \n(2020) 4 SCC (Civ) 496; Maharashtra Vidarbha Irrigation \nDevelopment Corporation v. Mahesh [2021] 9 SCR 1123 : (2022) \n2 SCC 772; East End Dwellings Co. Ltd.  v. Finsbury Borough \nCouncil [1952] AC 109; State of A P v. A P Pensioners Association \n[2005] Supp. 5 SCR 223 : (2005) 13 SCC 161; In Re: Interplay \nbetween Arbitration Agreements under the Arbitration and \nConciliation Act 1996 and the Indian Stamp Act 1899, 2023 INSC \n1066 – referred to.\n\nVellore Institute of Technology v. CBDT, 2022 SCC OnLine Mad \n2213; Tata Communications Transformation Services Ltd v. ACIT, \n2022 SCC OnLine Bom 664; Bagaria Properties and Investment \nPvt Ltd v. Union of India, 2022 SCC OnLine Cal 1093; Mon Mohan \nKohli v. ACIT, 2021 SCC OnLine Del 5250; Sudesh Taneja v. ITO, \n2022 SCC OnLine Raj 937; Manoj Jain  v. Union of India, 2022 \nSCC OnLine Cal 1369; Union of India v. Rajeev Bansal Writ Tax \nNo. 1086 of 2022 (Allahabad High Court); Keenara Industries \nPvt. Ltd.  v. ITO Surat R/Special CA No. 17321 of 2022 (High \nCourt of Gujarat); J M Financial and Investment Consultancy \nServices Pvt. Ltd. v. ACIT WP No. 1050 of 2022 (High Court of \nJudicature at Bombay); Siemens Financial Services Pvt. Ltd. v. \nDCIT [2023] 457 ITR 647 (High Court of Judicature at Bombay); \nGeeta Agarwal v. ITO DB Civil Writ Petition No. 14794 of 2022 \n(High Court of Judicature at Rajasthan); Ambika Iron and Steel \nPvt Ltd v. PCIT WP(C) No. 20919 of 2021 (High Court of Orissa); \nTwylight Infrastructure Pvt Ltd v. ITO WP(C) No. 16524/2022 (High \nCourt of Delhi); Ganesh Dass Khanna v. ITO [2024] 460 ITR 546 \n(High Court of Delhi) – referred to.\n\nUnion of India & Ors. v. Rajeev Bansal\f1642 \n\n[2024] 10 S.C.R.\n\nBooks and Periodicals Cited\n\nThomas Cooley, The Law of Taxation (4th edn, 1924) 2116; G P \nSingh, Principles of Statutory Interpretation (15th edn, 2023) 616; \nCary Coglianese and Neysun Mahboubi, ‘Administrative Law in \na Time of Crisis: Comparing National Responses to COVID-19’ \n(2021) 73(1) Administrative Law Review 1, 10; Cebreiro Gomez, \net al, COVID-19: Revenue Administration Implications – Potential \nTax Administration and Customs Measures to Respond to the \nCrisis, World Bank Group (2022) 19.\n\nList of Acts\n\nIncome Tax Act 1922; Income Tax Act 1961; Taxation and Other \nLaws (Relaxation and Amendment of Certain Provisions) Act 2020; \nFinance Act, 2002; Finance Act, 2012; Finance Act 2015; Finance \nAct 2021; Finance Act 2022; Arbitration and Conciliation Act, 1996; \nIndian Stamp Act 1899; Preventive Detention Amendment Act 1950; \nHaryana Amendment Act, 1995; Punjab Pre-emption Act, 1913; \nLand Acquisition Act 1894; Code of Civil Procedure 1908; Bengal \nSales Tax Rules 1941; Constitution of India.\n\nList of Keywords\n\nTime limit; Relaxing of time limit; Section 3(1) of TOLA overrides \nsection 149 of the Income Tax Act; Reassessment notices issued \nunder old regime; Section 151 of the old regime; Assessment as \na quasi-judicial function; Assessment as an issue of jurisdiction; \nPrinciples of strict interpretation and workability; Harmonious \nconstruction; Section 148 of the new regime; Section 149 of the \nnew regime; First proviso to Section 149(1) of the new regime; \nTaxing statute.\n\nCase Arising From\n\nCIVIL APPELLATE/ORIGINAL JURISDICTION: Civil Appeal No. \n8629 of 2024\n\nFrom the Judgment and Order dated 22.02.2023 of the High Court \nof Judicature at Allahabad in WT No. 1086 of 2022\n\nWith\n\nC.A. Nos. 8631, 9270, 8632, 10238, 8640, 10239, 10240, 8644, \n8641, 8650, 8645, 8643, 8649, 8652, 8642, 8647, 8636, 8646, 8639, \n8648, 8634, 8651, 8653, 8637, 8654, 8658, 8661, 8638, 8659, 8660, \n\nDigital Supreme Court Reports\f[2024] 10 S.C.R. \n\n1643\n\n8662, 8655 and 8664 of 2024, T.P.(C) No. 767 of 2023, C.A. Nos. \n9253, 8702, 8667, 8666, 8843-8844, 8668, 8678, 8680, 8679, 8669, \n8673, 8682, 10242, 8683, 8685, 8687, 10244, 8684, 8671, 9822, \n8689, 10245, 8672, 10246, 8670, 8681, 10250, 8676, 8686, 8688, \n10251, 10252, 8695, 8674, 8677, 8713, 8692, 8690, 8699, 8691, \n8704, 10254, 8845, 8846, 8696, 8707, 8697, 8847, 8706, 8852, \n8705, 8848, 8709, 8708, 8703, 8849, 8630, 8656 and 8665 of 2024, \nT.P.(C) No. 2187-2194 of 2024, C.A. Nos. 8675, 8700, 8969, 8746, \n8825, 8698, 8693, 8800, 9507, 8710, 8799, 10257, 8694, 8716, \n8719, 8717, 8736, 8712, 8723, 8727, 8718, 8729, 8953, 8711, 8738, \n8724, 8714, 8730, 8701, 8732, 8720, 8731, 8734, 8733, 8721, 8715, \n8735, 8725, 8726, 8742, 8737, 8747, 8728, 8722, 8740 and 8942 \nof 2024, T.P.(C) No. 2127 of 2024, C.A. Nos. 8739, 8955, 8745, \n8794, 8743, 8751, 8795, 9217, 8798, 8749, 8750, 8943, 8948, 8966, \n8949, 8741, 8951, 8952, 8748, 8796, 8950, 8954, 8744 and 8797 of \n2024, T.P.(C) No. 2714-2723 of 2023, C.A. Nos. 8802, 8956, 9056, \n8826, 8958, 8957, 8827, 8959, 8962, 9044, 8967, 8963 of 2024, \nT.P.(C) Nos. 2942 and 2937 of 2023, C.A. Nos. 9052, 9170, 9048, \n9180, 9186, 9043, 9046, 8960, 9231, 8964, 9042, 9228, 8961, 9202, \n9205, 9184, 9172, 9177, 8896, 9225, 9619, 9238, 9208, 9189, 9220, \n8897, 8905, 8930, 9223, 8898, 8926, 8899, 9240, 8900, 8895, 8906, \n8901, 9503, 8907, 8908, 8909, 8902, 8903, 8904, 9280, 8910, 9282, \n9285, 9287, 9296, 9298, 9300, 9302, 9304, 8911, 9305, 9306, 9311, \n9314, 9312, 8976, 8994, 8912, 8977, 8850, 8978, 8983, 8972, 8973, \n8974, 8995, 8996, 8984, 8985, 8988, 8989, 8990, 8999, 8913, 8991, \n10215, 8992, 9001, 9002, 8914, 9003, 8993, 9005, 9006, 8635, \n10984, 9261, 9273, 9038, 8997, 9000, 9039, 9008, 9009, 9010, \n9025, 9027, 9004, 9011, 8915, 9012, 9041, 9289, 8916, 9250, \n9013, 9014, 9028, 9168, 9015, 9171, 8917, 9016, 9017, 9007, \n9018, 9019, 9759, 8918, 9020, 9021, 9248, 9030, 9031, 9023, \n8919, 8920, 9032, 9173, 9175, 8946, 8921, 8922, 9024, 9262, \n9247, 9033, 9178, 8923, 8924, 9181, 9183, 9187, 9191, 9194, 9195, \n9760, 9037, 9196, 9221, 9198, 9266, 9224, 9201, 9203, 9226, 9230, \n8998, 9053, 9207, 9210, 9055, 9232, 9233, 9236, 9212, 9239, 9215, \n9243, 9245, 9252, 9216, 9295, 9057, 9269, 9254, 9058, 9271, 9272, \n9255, 9256, 9258, 9275, 9260, 9806, 9188, 9192, 9211, 9200, 9213, \n9218, 9222, 9229, 9234, 9824, 9825, 9235, 9241, 9364, 9602, 9330, \n9204, 9206, 9246, 9331, 9257, 9259, 9263, 9332, 9333, 9264, 9265, \n9334, 9267, 9335, 9365, 9336, 9268, 9288, 9290, 9291, 9292, 9293, \n9337, 9801, 9803, 9294, 9338, 9348, 9799, 9321, 9322, 9366, 9349, \n9351, 9323, 9374, 9324, 9375, 9376, 9378, 9805, 9325, 9329, 9352, \n9488, 9573, 9576, 9574, 9354, 9380, 9473, 9581, 9474, 9586, 9496, \n\nUnion of India & Ors. v. Rajeev Bansal\f1644 \n\n[2024] 10 S.C.R.\n\n9497, 9381, 9359, 9360, 9499, 9489, 9495, 9363, 9575, 9502, \n9583, 9342, 9341, 9411, 9297, 9277, 8851, 9529, 9483, 9484, \n9800, 9431, 9485, 9567, 9432, 9804, 9802, 9556, 9487, 9490, \n9379, 8807, 9433, 9584, 9634, 9578, 9585, 9557, 9494, 9558, \n9498, 9501, 9491, 9340, 9449, 9492, 9463, 8803, 9353, 9377, \n9391, 9350, 9450, 9370, 9452, 9530, 9373, 9390, 9399, 9367, \n9356, 9453, 9531, 9532, 9389, 9368, 9345, 9347, 9386, 9533, \n9454, 9412, 9414, 9387, 9461, 9925, 9493, 9395, 9534, 8809, \n9392, 8804, 9396, 8805, 9437, 9328, 9447, 9455, 9535, 9346, \n9465, 9451, 8810, 9398, 9388, 9517, 9559, 9430, 9394, 9459, \n9560, 9358, 9536, 8808, 9456, 9384, 9383, 9371, 9457, 9393, \n9561, 9518, 9568, 9519, 9520, 9537, 9562, 9538, 9563, 9407, \n9397, 8814, 9564, 9408, 9539, 9436, 8811, 9446, 9460, 9540, \n8806, 9541, 9542, 9543, 9544, 9521, 9400, 9545, 9522, 9438, \n8836-8837, 9441, 9468, 9546, 9547, 9523, 9571, 9548, 9319, \n9401, 9355, 9361, 9471, 9472, 9362, 9549, 9467, 9550, 9448, \n9551, 9445, 9552, 9443, 8945, 8813, 9339, 9464, 9565, 8817, \n9524, 9310, 9553, 9343, 8835, 9313, 9357, 9372, 8933, 9554, \n8812, 9525, 8815, 9320, 9442, 9466, 9526, 9439, 9926, 9555, \n9527, 8935, 9385, 9528, 8816, 8936, 8839, 9572, 9440, 9344, \n9566, 9237, 9242, 8633, 8657, 9251, 9569, 9307, 9570, 9577, \n10293, 9435, 9403, 8834, 9382, 9579, 9318, 9580, 9315, 9326, \n9405, 9591, 9406, 9593, 9582, 9587, 9594, 9054, 10985, 9402, \n9047, 9588, 8934, 9595, 9404, 9409, 9589, 8833, 9244, 9249, \n9426, 9045, 9281, 10036, 9600, 8937, 9278, 9590, 9601, 9169, \n10986, 9274, 9276, 9416, 9286, 9179, 9227, 9219, 9209, 9415, \n9279, 9417, 8828, 8832, 9190, 9182, 9197, 9283, 9174, 10987, \n9176, 10988, 9418, 9284, 9419, 8829, 9214, 9420, 9193, 8831, \n9185, 9421, 9423, 9424, 8830 and 9425 of 2024\n\nAppearances for Parties\n\nN Venkatraman, A.S.G., Rupesh Kumar, V Sridharan, Percy \nPardiwala, Amar Dave, Tushar Hemani, Parsi Pardiwala, Saurabh \nSoparkar, Raju K. Patel, K. Shivram, Dr. K. Shivaram, Suryanarayana \nSingh, Sr. Advs., Amrish Kumar, Mahesh Agarwal, Alok Yadav, \nAbhinabh Garg, E. C. Agrawala, Tushar Thareja, Rishabh Ostwal, \nBhakti Vardhan Singh, Ajay Kumar, Raj Bahadur Yadav, Shashank \nBajpai, Venkatraman Chandrashekhara Bharathi, Ishaan Sharma, \nAnnirudh Sharma Ii, Alka Aggarwal, Praneet Pranab, Mrs. Anamika \nAggarwal, Santosh Kumar, Mrs. A Deepa, Rajesh Kumar Singh, \nSonal Jain, Atit Jain, Ankur Aggarwal, Ms. Shradhanjali Patra, \nPravesh Nirwal, Uday Ram Bokadia, Pankaj Agarwal, Ruchesh \n\nDigital Supreme Court Reports\f[2024] 10 S.C.R. \n\n1645\n\nSinha, Amjid Maqbool, Ms. Prachi Pratap, Ms. Yashvi Aswani, \nDr. Prashant Pratap, Ms. Kinjal Agarwal, Vishavjeet Chaudhary, \nMs. Pallavi Pratap, Harish Pandey, Ved Jain, Nischay Kantoor, \nMs. Soniya Dodeja, Subodh S. Patil, Ms. Kavita Jha, Rohit Jain, \nVaibhav Kulkarni, Udit Naresh, Himanshu Aggarwal, Samarth \nChaudhari, Aditeya Bali, Akash Shukla, Mrs. Vanita Bhargava, Ajay \nBhargava, Ms. Nandita Chauhan, Ms. Tijil Thakur, M/s. Khaitan & \nCo., Rahul Krishna, Hardik Vora, Ms. Palak Kshatriya, Daivat Bhatt, \nPranaya Sahoo, Ms. Hetu Arora Sethi, Madhur Agrawal, Kunal \nCheema, Raghav Deshpande, Shubham Chandankhede, Rohit K. \nSingh, Akhilesh Kumar, Vipin Garg, Prakhar Srivastav, Abhishek \nAggarwal, Vandana Kothari, Rahul Narula, Ms. Aishwarya Bhatia, \nDr. Rakesh Gupta, Somil Agarwal, Ambhoj Kumar Sinha, \nKishore Kunal, Ravi Sawana, S Sriram, Karanjot Singh Khurana, \nS Vasudevan, Ms. Neha Sharma, Devashish Jain, Sridattha Charan, \nRomil Hotwani, Ms. Charanya Lakshmikumaran, Muhammad Ali \nKhan, Omar Hoda, Ms. Eesha Bakshi, Uday Bhatia, Kamran Khan, \nArjun Sharma, Abishek Jebaraj, Ms. A Reyna Shruti, Nishant \nThakkar, Ms. Jasmin Amalsvaada, Ms. Jasmin Amalsadvala, Hiten \nC Thakkar, Hitten Thakkar, Ranjan Nikhil Dharnidhar, Sidharth \nRanka, A. Karthik, Gursharan H. Virk, Ms. Aastha Mehta, Ms. \nDeepanwita Priyanka, Simranjit H. Virk, Ms. Prerana Mohapatra, \nPrashanth Undurti, Saswat Kumar Acharya, Dhananjay Bhaskar \nRay, Abhijeet Agarwal, Kumar Kale, Devendra Jain, Dharan \nGandhi, Ms. Gunjan Kakad, Rajat Mittal, Suprateek Neogi, Mridul \nAgnihotri, Prince Kumar, Jasdeep Singh Dhillon, Ms. Amanat Kaur \nChahal, Yutangar Singh Chauhan, Hds Bains, R. K. Batra, Abhay \nSingh Mann, Jas Sanghavi, Sandeep Yadav, Shubhranshu Padhi, \nJay Nirupam, D. Girish Kumar, Pranav Giri, Ekansh Sisodia, Sanjay \nPrakash Goyatan, Dhiraj Kumar Sammi, Dr. Chandrakant S. \nSarkar, Sourabh Saini, Asutosh Sharma, Kapil Goel, Sougat Sinha, \nSandeep Goel, Dhananjay Garg, Abhishek Garg, Tanuj Gulati, \nMs. Gayathri R. Manasa, Gaurav Choudhary, Ms. Anu Kushwaha, \nGhanshyam Choudhary, R.P. Bansal, Sukhsagar Syal, C. George \nThomas, P. S. Sudheer, Rishi Maheshwari, Ms. Anne Mathew, \nBharat Sood, Ms. Miranda Solaman, Ms. Nivedita Sudheer, Purvish \nJitendra Malkan, Alok Kumar, Kush Goel, Suraj Pandey, Ms. Neha \nAmbashtha, Ryan Singh, Abhinav Mehrotra, Kalrav Mehrotra, Ms. \nBhavna Mehrotra, S.V. Mehrotra, Piyush Kaushik, Anil Kumar, Asish \nBansal, Akarsh Garg, Kaushik Choudhury, Ms. Rupali Sharma, \nMs. Abhipsha Anamika, Yudhishthir Bharadwaj, Rachit Aggarwal, \nVikas Jain, Neelakash Gogoi, Subhan Shankar Gogoi, Kunal \nVerma, Jeet Kamdar, Ritik Gupta, Shivraj Pawar, Rakesh \n\nUnion of India & Ors. v. Rajeev Bansal\f1646 \n\n[2024] 10 S.C.R.\n\nWadhwa, Ms. Priyanshi Agrawal, Ms. Monika Sharma, Subhash \nChandra, Mohinder Singh, Sandeep Saxena, K. R. Anand, \nDeepak Chopra, Dr. Vikas Pahal, Chand Qureshi, B.K. Satija, \nMs. Vaibhavi Parikh, Ms. Anushree Prashit Kapadia, Nitin \nMehta, Ms. Ekta Kundu, Shrey Lodha, Akshat Vachher, Ms. \nAbhiti Vachher, Ms. Nandni Sharma, Parvesh Bansal, Rahul \nBansal, Jasvinder Choudhary, M/s. Vachher And Agrud, Salil \nKapoor, Ms. Ananya Kapoor, Sumeet Lalchandani, Sanat \nKapoor, Sumit Lalchandani, Dr. Shashwat Bajpai, Tarun \nChanana, Shivam Yadav, Ravi Kumar, Praveen Swarup, Arvind \nKumar, Aditya Singh, Venketesh Chaurasia, Ms. Rano Jain, \nDr. Parbodh Malhotra, Mrs. Renu Kamra Arora, Ms. Sakshi Rustagi, \nMs. Shakshi Srivastava, Jay Kishor Singh, Kedar Nath Tripathy, \nMs. Praveena Gautam, Pawan Shukla, Ms. Kanika Kalyan, \nMs. Akanksha Tyagi, Vishal Kalra, Saumyendra Singh Tomar, \nAnkit Sahni, Ms. Snigdha Gautam, Anil Kumar Gautam, Manish \nShah, Dillip Kumar Nayak, Ms. Disha Ray, Mrs. Sumita Ray, \nAneesh Mittal, Rahul Kaushik, Arjun Garg, Aakash Nandolia, \nMs. Sagun Srivastava, Ms. Kriti Gupta, Bandish Soparkar, \nMalak Manish Bhatt, Darshan Patel, Ms. Sukanya Joshi, \nMerusagar Samantaray, Ruturaj Satapathy, Abinash Barik, Ms. \nLhingneivah, Ms. Ayushi Upadhaya, Deepak Prakash, Rahul \nHakani, Ms. Bhuvneshwari Pathak, Ms. Shilpi Satyapriya Satyam, \nDhanesh Kumar, Mohit Balani, Pulkit Agarwal, Mohd Anas \nChaudhary, Sudhanshu Kaushesh, Mohd Sharyab Ali, Avnish \nChaturvedi, Rovin Singh Solanki, Zahid Ali, Vibhu Tandon, Ms. \nManya Pundhir, Shreyans Raniwala, Rajeev Jadhav, Priyanshu \nChauhan, Manoj Kumar, Manish Paliwal, Shashi Bekal, Ms. Niyati \nMankad, Ms. Neelam Jadhav, Ms. Megha Yadav, Mrs. Trupti \nDas, Dr. Avinash Poddar, Ms. Diva Singh, Ms. Anchal Poddar, \nMs. Rudrani Mishra, Awadhesh Sharma, Soumitra Chatterjee, \nDevendra Singh, Sudhir Mehta, Ms. Shailee Mehta, Ankit \nAnandraj Shah, Shubham Chopra, Tarun Arora, S. K. Verma, Ms. \nRutuja N Pawar, Ms. Hetal Laghave, Ms. Sneha More, Saurabh \nUpadhyay, Ms. Hardikaa Kalia, Ms. Tavishi Jain, Vikas Verma, \nMs. Pragati Neekhra, Aditya Bhanu Neekhra, Atul Dong, Aniket \nPatel, Rohit Singh, Ashok Anand, Ajay Gupta, Vinod Mehta, Ms. \nAstha Tyagi, Mahesh Aaarwal, Ms. Fereshte D Sethna, Sachit \nJolly, Ms. Anuradha Dutt, Ms. Soumya Singh, Ms. Disha Jham, \nMrunal Parekh, Devansh Jain, Vivek Agarwal, Raghav Dutt, Ms. \nB. Vijayalakshmi Menon, Suhrith Parthasarathy, Ms. Amritha \nSathyajith, Ms. Rashmi Nandakumar, Ms. Yashmita Pandey, \nAdvs. for the appearing parties.\n\nDigital Supreme Court Reports\f[2024] 10 S.C.R. \n\n1647\n\nJudgment / Order of the Supreme Court\n\nJudgment\n\nDr Dhananjaya Y Chandrachud, CJI\n\nTable of Contents*\n\nA. Background ......................................................................\n\ni.\n\nIncome Tax Act ..........................................................\n\nii. TOLA ..........................................................................\n\niii. Finance Act 2021 .......................................................\n\nB.\n\nIssues ................................................................................\n\n35\n\n35\n\n39\n\n41\n\n50\n\nC. Submissions ..................................................................... 51\n\nD. Legal Background ............................................................\n\ni. Assessment as a quasi-judicial function ..................\n\nii. Assessment as an issue of jurisdiction .....................\n\niii. Principles of strict interpretation and workability ........\n\niv. Principle of harmonious construction .......................\n\nE. Reading TOLA into the Income Tax Act ..............................\n\ni.\n\nFirst proviso to Section 149(1) of the new regime ........\n\nii. TOLA can extend the time limit till 31 June 2021 .........\n\na. Finance Act 2021 substituted the old regime .........\n\nb. Reading TOLA into Section 149 ...............................\n\niii. Sanction of the specified authority ............................\n\nF. Section 148 notices issued in June-September 2022 .......\n\ni.\n\nScope of Article 142 .................................................\n\nii. The scope of Ashish Agarwal extended to all the \nreassessment notices issued between 1 April 2021 \nand 30 June 2021 under the old regime ...............\n\niii. Effect of the legal fiction ..........................................\n\n55\n\n55\n\n59\n\n63\n\n66\n\n70\n\n70\n\n75\n\n75\n\n82\n\n86\n\n91\n\n91\n\n96\n\n99\n\na. Third proviso to Section 149 ................................. 100\n\nb.\n\nInterplay of Ashish Agarwal with TOLA ................... 107\n\nG. Conclusions .................................................................... 110\n\n* Ed. Note: Pagination as per the original Judgment.\n\nUnion of India & Ors. v. Rajeev Bansal\f1648 \n\n[2024] 10 S.C.R.\n\n1. The present batch of appeals involves the interplay of three \nParliamentary statutes: the Income Tax Act 1961,1 the Taxation and \nOther Laws (Relaxation and Amendment of Certain Provisions) Act \n2020,2 and the Finance Act 2021. The Income Tax Act was enacted \nto levy and collect tax on the income of assesses.3 Sections 147 to \n151 of the Income Tax Act deal with the procedure of reassessment \nof income chargeable to tax which has escaped assessment. The \nTOLA was enacted in the backdrop of the COVID-19 pandemic to \nprovide relaxation of time limits specified under the provisions of the \nIncome Tax Act and certain other legislations as defined under Section \n2(1)(b) of TOLA. The Finance Act 2021 amended the provisions \ndealing with the reassessment procedure under the Income Tax Act \nwith effect from 1 April 2021.\n\nA. Background\n\ni. \n\nIncome Tax Act\n\n2. Sections 147 to 151 deal with the procedure of reassessment. The \nscheme of reassessment under Sections 147 to 151 was substantially \noverhauled by the Finance Act 2021 with effect from 1 April 2021. \nUnder the old regime, Section 147 empowered the assessing officer4 \nto reopen assessment proceedings if they had “reason to believe” \nthat any income chargeable to tax has escaped assessment for the \nrelevant assessment year.5 Section 148 mandated the assessing \n\n1 \n\n2 \n\n3 \n\n4 \n\n“Income Tax Act”\n\n“TOLA”\n\nSection 2(7), Income Tax Act. [It defines an “assessee” to mean “a person by whom any tax or any other \nsum of money is payable under this Act, and includes – \n(a) every person in respect of whom any proceeding under this Act has been taken for the assessment \nof his income or assessment of fringe benefits or of the income of any other person in respect of \nwhich he is assessable, or of the loss sustained by him or by such other person, or of the amount \nof refund due to him or to such other person;\n\n(b) every person who is deemed to be an assessee under any provisions of this Act;\n(c) \n\nevery person who is deemed to be an assessee in default under any provision of this Act;”]\n\nSection 2(7A), Income Tax Act. [It defines an “assessing officer” to mean “the Assistant Commissioner or \nDeputy Commissioner or Assistant Director or Deputy Director or the Income-tax Officer who is vested \nwith the relevant jurisdiction by virtue of directions or orders issued under sub-section (1) or sub-section \n(2) of section 120 or any other provision of this Act, and the Additional Commissioner or Additional \nDirector or Joint Commissioner or Joint Director who is directed under clause (b) of sub-section (4) of \nthat section to exercise or perform all or any of the powers or functions conferred on, or assigned to, an \nAssessing Officer under this Act.”]\n\n5 \n\nSection 147, Income Tax Act\n\nDigital Supreme Court Reports\f[2024] 10 S.C.R. \n\n1649\n\nofficer to serve a notice on the assessee requiring them to submit \na return of their income.6\n\n3. Section 1497 prescribed the following time limits for issuing a notice \n\nunder Section 148 for an assessment year: \n\n6 \n\n7 \n\nSection 148, Income Tax Act. [It read:\n“148.(1) Before making the assessment, reassessment or recomputation under section 147, the \nAssessing Officer shall serve on the assessee a notice requiring him to furnish within such period, as \nmay be specified in the notice, a return of his income or the income of any other person in respect of \nwhich he is assessable under this Act during the previous year corresponding to the relevant assessment \nyear, in the prescribed form and verified in the prescribed manner and setting forth such other particulars \nas may be prescribed; and the provisions of this Act shall, so far as may be, apply accordingly as if such \nreturn were a return required to be furnished under section 139:\nProvided that in a case – \n(a) where a return has been furnished during the period commencing on the 1st day of October, 1991 \nand ending on the 30th day of September, 2005 in response to a notice served under this section, and\nsubsequently a notice has been served under sub-section (2) of section 143 after the expiry of twelve \nmonths specified in the proviso to sub-section (2) of section 143, as it stood immediately before the \namendment of said sub-section by the Finance Act, 2002 (20 of 2002) but before the expiry of the \ntime limit for making the assessment, re-assessment or recomputation as specified in sub-section \n(2) of section 153, every such notice referred to in this clause shall be deemed to be a valid notice:\n\n(b) \n\n(b) \n\nProvided further that in a case – \n(a) where a return has been furnished during the period commencing on the 1st day of October, 1991 \nand ending on the 30th day of September, 2005 in response to a notice served under this section, \nand\nsubsequently a notice has been served under clause (ii) of sub-section (2) of section 143 after \nthe expiry of twelve months specified in the proviso to sub-section (2) of section 143, as it stood \nimmediately before the amendment of said sub-section by the Finance Act, 2002 (20 of 2002) but \nbefore the expiry of the time limit for making the assessment, re-assessment or recomputation \nas specified in sub-section (2) of section 153, every such notice referred to in this clause shall be \ndeemed to be a valid notice.\n\nExplanation – For the removal of doubts, it is hereby declared that nothing contained in the first proviso \nor the second proviso shall apply to any return which has been furnished on or after the 1st day of \nOctober 2005 in response to a notice served under this section.\n(2) The Assessing Officer shall, before issuing any notice under this section, record his reasons for doing \nso.”]\n\n Section 149, Income Tax Act. [It reads:\n“149. Time limit for notice - (1) No notice under section 148 shall be issued for the relevant assessment \nyear,— \n(a) \n\nif four years have elapsed from the end of the relevant assessment year, unless the case falls \nunder clause (b) or clause (c); \nif four years, but not more than six years, have elapsed from the end of the relevant assessment \nyear unless the income chargeable to tax which has escaped assessment amounts to or is likely \nto amount to one lakh rupees or more for that year; \nif four years, but not more than sixteen years, have elapsed from the end of the relevant assessment \nyear unless the income in relation to any asset (including financial interest in any entity) located \noutside India, chargeable to tax, has escaped assessment. \n\n(b) \n\n(c) \n\nExplanation.—In determining income chargeable to tax which has escaped assessment for the purposes \nof this sub-section, the provisions of Explanation 2 of section 147 shall apply as they apply for the \npurposes of that section. \n(2) The provisions of sub-section (1) as to the issue of notice shall be subject to the provisions of section 151. \n(3) If the person on whom a notice under section 148 is to be served is a person treated as the agent of \na non-resident under section 163 and the assessment, reassessment or recomputation to be made in \npursuance of the notice is to be made on him as the agent of such non-resident, the notice shall not be \nissued after the expiry of a period of six years from the end of the relevant assessment year. \nExplanation.—For the removal of doubts, it is hereby clarified that the provisions of sub-sections (1) and \n(3), as amended by the Finance Act, 2012, shall also be applicable for any assessment year beginning \non or before the 1st day of April, 2012.”] \n\nUnion of India & Ors. v. Rajeev Bansal\f1650 \n\n[2024] 10 S.C.R.\n\n(i) \n\nfour years from the end of the relevant assessment year; \n\n(ii) \n\n(iii) \n\nfour years but not more than six years from the end of the \nrelevant assessment year if the income chargeable to tax which \nhas escaped assessment amounted to or was likely to amount \nto Rupees one lakh or more for that year; and \n\nfour years but not more than sixteen years from the end of the \nrelevant assessment year if the income in relation to any asset \n(including financial interest in any entity) located outside India \nand chargeable to tax has escaped assessment.\n\n4. Section 151 required the assessing officer to obtain the sanction of \nthe specified authority before issuing a notice under Section 148.8 In \ncase the notice was issued within four years, the sanctioning authority \nwas the Joint Commissioner.9 In case the notice was issued after the \nexpiry of four years, the sanctioning authority was the Principal Chief \nCommissioner,10 Chief Commissioner,11 Principal Commissioner or \nCommissioner.12 The authorities have a distinct meaning under the \nIncome Tax Act. Following a decision of this Court in GKN Driveshafts \n(India) Ltd v. Income Tax Officer,13 the assessing officer was also \n\n8 \n\nSection 151, Income Tax Act. [It read:\n151.(1) No notice shall be issued under section 148 by an Assessing Officer, after the expiry of a period \nof four years from the end of the relevant assessment year, unless the Principal Chief Commissioner or \nChief Commissioner or Principal Commissioner or Commissioner is satisfied, on the reasons recorded \nby the Assessing Officer, that it is a fit case for the issue of such notice.\n(2) In a case other than a case falling under sub-section (1), no notice shall be issued under section 148 \nby an Assessing Officer, who is below the rank of Joint Commissioner, unless the Joint Commissioner \nis satisfied, on the reasons recorded by such Assessing Officer, that it is a fit case for the issue of such \nnotice.\n(3) For the purposes of sub-section (1) and sub-section (2), the Principal Chief Commissioner or the \nChief Commissioner or the Principal Commissioner or the Commissioner or the Joint Commissioner, as \nthe case may be, being satisfied on the reasons recorded by the Assessing Officer about fitness of a \ncase for the issue of notice under section 148, need not issue such notice himself.]\n\n9 \n\nSection 2(28C) of the Income Tax Act defines Joint Commissioner to mean “a person appointed to be a \nJoint Commissioner of Income-tax or an Additional Commissioner of Income-tax under sub-section (1) of \nsection 117.”\n\n10 Section 2(34-A) of the Income Tax Act defines Principal Chief Commissioner of Income tax to mean “a \nperson appointed to be a Principal Chief Commissioner of Income-tax under sub-section (1) of section \n117.”\n\n11 Section 2(15A) of the Income Tax Act defines a Chief Commissioner to mean “a person appointed to a \nChief Commissioner of Income tax or a Director General of Income tax or a Principal Chief Commissioner \nof Income tax or a Principal Director General of Income-tax under sub-section (1) of Section 117.”\n\n12 Section 2(16) defines Principal Commissioner or Commissioner to mean “a person appointed to be a \nPrincipal Commissioner or Commissioner of Income tax or a Principal Director or Director of Income tax \nor a Principal Commissioner of Income tax or a Principal Director of Income tax under sub-section (1) of \nsection 117.”\n\n13 \n\n(2003) 1 SCC 72 [2002] Supp. (4) S.C.R. 359 [5]. It reads:\n\nDigital Supreme Court Reports\f[2024] 10 S.C.R. \n\n1651\n\nrequired to furnish reasons for reopening assessments and give an \nopportunity of hearing to the assessee.\n\n5. The Revenue had to follow the following procedure for reopening \n\nassessment under the old regime: \n\n(i) Section 147 allowed the assessing officer to reassess any \nincome chargeable to tax if the officer had“reasons to believe” \nthat such income escaped assessment; \n\n(ii) The assessing officer had to ensure that the notice under \nSection 148 was issued within the timelimits prescribed under \nSection 149;\n\n(iii) The assessing officer had to obtain the sanction of the specified \nauthority under Section 151 before issuing a reassessment \nnotice;\n\n(iv) The assessing officer had to grant an opportunity of hearing to \nthe assessee in terms of GKN Driveshafts (supra); and\n\n(v) The assessing officer was thereafter empowered to issue anotice \n\nof reassessment under Section 148.\n\nii. TOLA\n\n6. On 24 March 2020, the Central Government announced “a complete \nlockdown for the entire nation” for twenty-one days to contain the \nspread of the COVID-19 pandemic.14 Following this, the Central \nGovernment sought to implement various relief measures to redress \nthe challenges faced by the taxpayers in meeting the statutory \nrequirements due to the pandemic.15 On 31 March 2020, the President \nof India promulgated the Taxation and Other Laws (Relaxation \n\n“5. […] However, we clarify that when a notice under Section 148 of the Income Tax Act is issued, \nthe proper course of action for the noticee is to file return and if he so desires, to seek reasons for \nissuing notices. The assessing officer is bound to furnish reasons within a reasonable time. On receipt of \nreasons, the noticee is entitled to file objections to issuance of notice and the assessing officer is bound \nto dispose of the same by passing a speaking order. In the instant case, as the reasons have been \ndisclosed in these proceedings, the assessing officer has to dispose of the objections, if filed, by passing \na speaking order, before proceeding with the assessment in respect of the abovesaid five assessment \nyears.”]\n\n14 Press Information Bureau, PM calls for complete lockdown of entire nation for 21 days (24 March 2020) \n\nhttps://pib.gov.in/Pressreleaseshare.aspx?PRID=1608009\n\n15 Press Information Bureau, ‘Finance Minister announces several relief measures relating to Statutory and \nRegulatory compliance matters across Sectors in view of COVID-19 outbreak’ (24 March 2020) available \nat: https://pib.gov.in/PressReleseDetail.aspx?PRID=1607942\n\nUnion of India & Ors. v. Rajeev Bansal\f1652 \n\n[2024] 10 S.C.R.\n\nof Certain Provisions) Ordinance 202016 to extend time limits for \ncompletion or compliance of actions under the specified Acts falling \nfor completion or compliance between 20 March 2020 and 29 June \n2020 till 30 June 2020. On 24 June 2020, the Central Government \nissued a notification under Section 3(1) of the TOLA Ordinance to \nextend the time limit for completion or compliance of actions under \nthe specified Actstill 31 March 2021.17\n\n7. On 29 September 2020, Parliament enacted TOLA, which came into \nforce with retrospective effect from 31 March 2020.18 Section 2(1)(b) \ndefines “specified Act” to mean and include the Income Tax Act. Section \n3(1) of TOLA extended the time limit for completion or compliance \nof actions under the “specified Act”, which fell for completion or \ncompliance during the period from 20 March 2020 and 31 December \n2020, to 31 March 2021. The relevant part of Section 3 reads thus:\n“3(1) Where, any time-limit has been specified in, or \nprescribed or notified under, the specified Act which falls \nduring the period from the 20th day of March, 2020 to the \n31st day of December, 2020, or such other date after the \n31st day of December, 2020, as the Central Government, \nmay, by notification, specify in this behalf, for the completion \nor compliance of such action as – \n(a) completion of any proceedings or passing of any \norder or issuance of any notice, intimation, notification, \nsanction or approval, or such other action, by \nwhatever name called, by any authority, commission \nor tribunal, by whatever name called, under the \nprovisions of the specified Act; \n\n[…]\nAnd where completion of compliance of such action \nhas not been made within such time, then, the time-\nlimit for completion or compliance of such action shall, \nnotwithstanding anything contained in the specified Act, \nstand extended to the 31st day of March, 2021, or such \nother date after 31st day of March, 2021, as the Central \nGovernment may, by notification, specify in this behalf:”\n\n16 \n\n“TOLA Ordinance”\n\n17 CBDT, Notification No. 35 of 2020, dated 24 June 2020.\n\n18 Section 1(2), TOLA. [It reads: “(2) Save as otherwise provided, it shall be deemed to have come into \n\nforce on the 31st day of March, 2020.”]\n\nDigital Supreme Court Reports\f[2024] 10 S.C.R. \n\n1653\n\n8. Section 3(1) empowered the Central Government to extend the time \nlimit beyond 31 March 2021 by a notification. In pursuance of its \npowers, the Central Government issued the following notifications \nto extend the period of relaxation till 30 June 2021:\na. Notification No. 93 of 2020 dated 31 December 2020 extended \nthe end date to 30 March 2021. Resultantly, TOLA covered \nthe period between 20 March 2020 to 30 March 2021;\nb. Notification No. 20 of 2021 dated 31 March 2021 specified that \n31 April 2021 shall be the end date of the time period covered \nby TOLA. It extended the time limit for completion or compliance \nof actions under the Income Tax Act till 30 April 2021; and\nc. Notification No. 38 of 2021 dated 27 April 2021 extended the time \nlimit for completion or compliance of actions till 30 June 2021.\n9. The effect of TOLA and the notifications issued under the legislation \nwas that: (i) if the time prescribed for passing of any order or \nissuance of any notice, sanction, or approval fell for completion \nor compliance from 20 March 2020 to 31 March 2021; and (ii) if \nthe completion or compliance of such action could not be made \nduring the stipulated period, then the time limit for completion or \ncompliance of such action was extended to 30 June 2021. \n\niii. Finance Act 2021\n\n10. The Finance Act 2021 substituted the entire scheme of reassessment \nunder Sections 147 to 151 of the Income Tax Act with effect from \n1 April 2021. Substantial changes were brought about by the new \nregime. Broadly speaking, they are summarized thus:\n(i) Section 14819 mandates the assessing officer to initiate \nproceedings only based on prior information and with the prior \napproval of the specified authority;\n\n19 Section 148, Income Tax Act [It reads:\n\n[“148. Issue of notice where income has escaped assessment - Before making the assessment, \nreassessment or recomputation under section 147, and subject to the provisions of section 148A, the \nAssessing Officer shall serve on the assessee a notice, along with a copy of the order passed, if required, \nunder clause (d) of section 148A, requiring him to furnish within such period, as may be specified in such \nnotice, a return of his income or the income of any other person in respect of which he is assessable \nunder this Act during the previous year corresponding to the relevant assessment year, in the prescribed \nform and verified in the prescribed manner and setting forth such other particulars as may be prescribed; \nand the provisions of this Act shall, so far as may be, apply accordingly as if such return were a return \nrequired to be furnished under section 139: \nProvided that no notice under this section shall be issued unless there is information with the Assessing \nOfficer which suggests that the income chargeable to tax has escaped assessment in the case of the \nassessee for the relevant assessment year and the Assessing Officer has obtained prior approval of the \nspecified authority to issue such notice. \n\nUnion of India & Ors. v. Rajeev Bansal\f1654 \n\n[2024] 10 S.C.R.\n\n(ii) Section 148A20 requires the assessing officer to provide an \nopportunity of being heard to the assessee before deciding to \nissue a reassessment notice under Section 148. Section 148A \nrequires the assessing officer to:\n\n(a) conduct any enquiry, if required, with the prior approval \n\nof the specified authority;\n\n(b) provide an opportunity of hearing to the assessee by \nserving a show cause notice with the prior approval of \nthe specified authority;\n\nExplanation 1.—For the purposes of this section and section 148A, the information with the Assessing \nOfficer which suggests that the income chargeable to tax has escaped assessment means,— \n(i) any information flagged in the case of the assessee for the relevant assessment year in accordance \nwith the risk management strategy formulated by the Board from time to time; \n(ii) any final objection raised by the Comptroller and Auditor General of India to the effect that the \nassessment in the case of the assessee for the relevant assessment year has not been made in \naccordance with the provisions of this Act. \nExplanation 2.—For the purposes of this section, where,—(i) a search is initiated under section 132 or \nbooks of account, other documents or any assets are requisitioned under \nsection 132A, on or after the 1st day of April, 2021, in the case of the assessee; or \n(ii) a survey is conducted under section 133A, other than under sub-section (2A) or sub-section (5) of \nthat section, on or \nafter the 1st day of April, 2021, in the case of the assessee; or \n(iii) the Assessing Officer is satisfied, with the prior approval of the Principal Commissioner or \nCommissioner, that any money, bullion, jewellery or other valuable article or thing, seized or requisitioned \nunder section 132 or section 132A in case of any other person on or after the 1st day of April, 2021, \nbelongs to the assessee; or \n(iv) the Assessing Officer is satisfied, with the prior approval of Principal Commissioner or Commissioner, \nthat any books of account or documents, seized or requisitioned under section 132 or section 132A in \ncase of any other person on or after the 1st day of April, 2021, pertains or pertain to, or any information \ncontained therein, relate to, the assessee, \nthe Assessing Officer shall be deemed to have information which suggests that the income chargeable \nto tax has escaped assessment in the case of the assessee for the three assessment years immediately \npreceding the assessment year relevant to the previous year in which the search is initiated or books \nof account, other documents or any assets are requisitioned or survey is conducted in the case of the \nassessee or money, bullion, jewellery or other valuable article or thing or books of account or documents \nare seized or requisitioned in case of any other person. \nExplanation 3.—For the purposes of this section, specified authority means the specified authority \nreferred to in section 151.] \n\n20 Section 148A, Income Tax Act [It reads:\n\n“Section 148A. Conducting inquiry, providing opportunity before issue of notice under section 148. \nThe Assessing Officer shall, before issuing any notice under section 148,— \n(a) conduct any enquiry, if required, with the prior approval of specified authority, with respect to the \ninformation which suggests that the income chargeable to tax has escaped assessment; \n(b) provide an opportunity of being heard to the assessee, with the prior approval of specified authority, \nby serving upon him a notice to show cause within such time, as may be specified in the notice, being \nnot less than seven days and but not exceeding thirty days from the date on which such notice is issued, \nor such time, as may be extended by him on the basis of an application in this behalf, as to why a \nnotice under section 148 should not be issued on the basis of information which suggests that income \nchargeable to tax has escaped assessment in his case for the relevant assessment year and results of \nenquiry conducted, if any, as per clause (a); \n(c) consider the reply of assessee furnished, if any, in response to the show-cause notice referred to in \nclause (b); \n\nDigital Supreme Court Reports\f[2024] 10 S.C.R. \n\n1655\n\n(c) consider the reply furnished by the assessee in response \n\nto the show cause notice; and\n\n(d) decide on the basis of available material, including the \nreply of the assessee, whether or not it is a fit case to \nissue a notice under Section 148 by passing an order.\n\n(iii) The time limit under Section 149 has been reduced from four \nyears to three years from the end of the relevant assessment \nyear for all situations.21 Assessments can be reopened beyond \n\n(d) decide, on the basis of material available on record including reply of the assessee, whether or \nnot it is a Ct case to issue a notice under section 148, by passing an order, with the prior approval of \nspecified authority, within one month from the end of the month in which the reply referred to in clause \n(c) is received by him, or where no such reply is furnished, within one month from the end of the month \nin which time or extended time allowed to furnish a reply as per clause (b) expires: \nProvided that the provisions of this section shall not apply in a case where,—\n(a) a search is initiated under section 132 or books of account, other documents or any assets are \nrequisitioned under section 132A in the case of the assessee on or after the 1st day of April, 2021; or \n(b) the Assessing Officer is satisfied, with the prior approval of the Principal Commissioner or \nCommissioner that any money, bullion, jewellery or other valuable article or thing, seized in a search \nunder section 132 or requisitioned under section 132A, in the case of any other person on or after the 1st \nday of April, 2021, belongs to the assessee; or \n(c) the Assessing Officer is satisfied, with the prior approval of the Principal Commissioner or \nCommissioner that any books of account or documents, seized in a search under section 132 or \nrequisitioned under section 132A, in case of any other person on or after the 1st day of April, 2021, \npertains or pertain to, or any information contained therein, relate to, the assessee. \nExplanation.—For the purposes of this section, specified authority means the specified authority referred \nto in section 151.”] \n\n21 Section 149, Income Tax Act. [It reads:\n\n149. Time limit for notice - (1) No notice under section 148 shall be issued for the relevant assessment year,— \n(a) if three years have elapsed from the end of the relevant assessment year, unless the case falls under \nclause (b); \n(b) if three years, but not more than ten years, have elapsed from the end of the relevant assessment year \nunless the Assessing Officer has in his possession books of account or other documents or evidence \nwhich reveal that the income chargeable to tax, represented in the form of asset, which has escaped \nassessment amounts to or is likely to amount to fifty lakh rupees or more for that year: \nProvided that no notice under section 148 shall be issued at any time in a case for the relevant assessment \nyear beginning on or before 1st day of April, 2021, if such notice could not have been issued at that time \non account of being beyond the time limit specified under the provisions of clause (b) of sub-section (1) \nof this section, as they stood immediately before the commencement of the Finance Act, 2021: \nProvided further that the provisions of this sub-section shall not apply in a case, where a notice under \nsection 153A, or section 153C read with section 153A, is required to be issued in relation to a search \ninitiated under section 132 or books of account, other documents or any assets requisitioned under \nsection 132A, on or before the 31st day of March, 2021: \nProvided also that for the purposes of computing the period of limitation as per this section, the time or \nextended time allowed to the assessee, as per show-cause notice issued under clause (b) of section \n148A or the period during which the proceeding under section 148A is stayed by an order or injunction \nof any court, shall be excluded: \nProvided also that where immediately after the exclusion of the period referred to in the immediately \npreceding proviso, the period of limitation available to the Assessing Officer for passing an order under \nclause (d) of section 148A is less than seven days, such remaining period shall be extended to seven \ndays and the period of limitation under this sub- section shall be deemed to be extended accordingly. \nExplanation.—For the purposes of clause (b) of this sub-section, “asset” shall include immovable \nproperty, being land or building or both, shares and securities, loans and advances, deposits in bank \naccount. \n\nUnion of India & Ors. v. Rajeev Bansal\f1656 \n\n[2024] 10 S.C.R.\n\nthree years but within ten years from the end of the relevant \nassessment year if the income chargeable to tax which has \nescaped assessment amounts to or is likely to amount to Rupees \nfifty lakhs or more. However, the first proviso to Section 149 \nprohibits the issuance of a reassessment notice under the new \nregime if such notices have become time-barred under the old \nregime; and \n\n(iv) The sanctioning authorities specified under Section 151 of the new \nregime are different from those specified under the old regime.22 \nSection 151 of the new regime specifies the following authorities \nfor Section 148 and 148A: (i) Principal Commissioner or Principal \nDirector23 or Commissioner or Director if three years or less have \nelapsed from the end of the relevant assessment year; and \n(ii) Principal Chief Commissioner or Principal Director General or \nChief Commissioner or Director General if more than three years \nhave elapsed from the end of the relevant assessment year. \n\n11. The notifications dated 31 March 2021 and 27 April 2021 issued \nby the Central Government under Section 3(1) of TOLA contained \nan explanation declaring that the provisions under the old regime \nshall apply to the reassessment proceedings initiated under them.24 \nThus, the notifications directed the assessing officers to apply the \n\n(2) The provisions of sub-section (1) as to the issue of notice shall be subject to the provisions of section \n151.] \n\n22 Section 151, Income Tax Act. [It reads:\n\n151. Sanction for issue of notice – Specified authority for the purposes of section 148 and section 148A \nshall be, - \n(i) Principal Commissioner or Principal Director or Commissioner or Director, if three years or less than \nthree years have elapsed from the end of the relevant assessment year;\n(ii) Principal Chief Commissioner or Principal Director General or where there is no Principal Chief \nCommissioner or Principal Director General, Chief Commissioner or Director General, if more than three \nyears have elapsed from the end of the relevant assessment year.”]\n\n23 Section 2(21) of the Income Tax Act defines Principal Director General or Director General or Principal \nDirector or Director to mean “a person appointed to be a Principal Director General or Director General \nof Income tax or a Principal Director General or Director General of Income tax or, as the case may be, \na Principal Director or Director of Income tax or Principal Director of Income tax, under sub-section (1) \nof Section 117, and includes a person appointed under that sub-section to be an Additional Director of \nIncome tax or a Joint Director of Income tax or as Assistant Director or Deputy Director of Income tax.”\n\n24 Notification No. 20 of 2021 dt. 31 March 2021; Notification No. 38 of 2021 dt. 27 April 2021. [The \n\nexplanation reads:\n“Explanation – For the removal of doubts, it is hereby clarified that for the purposes of issuance of notice \nunder section 148 as per time-limit specified in section 149 or sanction under section 151 of the Income-\ntax Act, under this sub-clause, the provisions of section 148, section 149 and section 151 of the Income-\ntax Act, as the case may be, as they stood as on the 31st day of March 2021, before the commencement \nof the Finance Act, 2021, shall apply.”]\n\nDigital Supreme Court Reports\f[2024] 10 S.C.R. \n\n1657\n\nprovisions of the old regime for reassessment notices issued after 1 \nApril 2021. The assessing officers accordingly issued reassessment \nnotices between 1 April 2021 and 30 June 2021 by relying on the \nprovisions under Section 148 of the old regime. These reassessment \nnotices were challenged by the assesses before various High Courts.25\n\n12. The High Courts allowed the writ petitions and quashed all the \nreassessment notices issued between 1 April 2021 and 30 June \n2021 under the old regime on the ground that: (i) Sections 147 to \n151 stood substituted by Finance Act 2021 from 1 April 2021;26 (ii) \nIn the absence of any saving clause, the Revenue could initiate \nreassessment proceedings after 1 April 2021 only in accordance with \nthe provisions of the new regime since they were remedial, beneficial, \nand meant to protect the rights and interests of the assesses;27 and \n(iii) the Central Government could not exercise its delegated authority \nto “re-activate the pre-existing law.”28\n\n13. \n\nIn Union of India v. Ashish Agarwal,29 this Court held that it \nwas “in complete agreement with the view taken by various High \nCourts in holding” that “the benefit of the new provisions shall be \nmade available even in respect of the proceedings relating to past \nassessment years, provided Section 148 notice has been issued on \nor after 1-4-2021.” However, the Court observed that the Revenue \nissued the reassessment notices under a “bona fide belief that the \namendments may not yet have been enforced.” This Court exercised \nits discretionary jurisdiction under Article 142 in order to balance the \ninterests of the Revenue and the assesses and directed that the \nreassessment notices issued under the old regime shall be deemed \nto have been issued under Section 148-A(b) of the new regime. This \nCourt issued the following directions:\n\n25 See: Ashok Kumar Agarwal v. Union of India, 2021 SCC OnLine All 799; Vellore Institute of Technology \nv. CBDT, 2022 SCC OnLine Mad 2213; Tata Communications Transformation Services Ltd v. ACIT, 2022 \nSCC OnLine Bom 664; Bagaria Properties and Investment Pvt Ltd v. Union of India, 2022 SCC OnLine \nCal 1093; Mon Mohan Kohli v. ACIT, 2021 SCC OnLine Del 5250; Sudesh Taneja v. ITO, 2022 SCC \nOnLine Raj 937; Manoj Jain v. Union of India, 2022 SCC OnLine Cal 1369.\n\n26 Sudhesh Taneja (supra) [36]\n\n27 Ashok Kumar Agarwal (supra) [66]; Mon Mohan Kohli (supra) [66]; Tata Communications Transformation \n\nServices (supra) [34] \n\n28 Ashok Kumar Agarwal (supra) [80]; Sudesh Taneja (supra) [40]; Mon Mohan Kohli [49]; Tata \n\nCommunications Transformation Services [49] \n\n29 \n\n[2022] 3 SCR 638 : (2023) 1 SCC 617\n\nUnion of India & Ors. v. Rajeev Bansal\f1658 \n\n[2024] 10 S.C.R.\n\n“28. In view of the above and for the reasons stated above, \nthe present appeals are allowed in part. The impugned \ncommon judgments and orders passed by the High Court \nof Judicature at Allahabad in WT No. 524 of 2021 and \nother allied tax appeals/petitions, is/are hereby modified \nand substituted as under:\n\n28.1. The impugned Section 148 notices issued to the \nrespective assessees which were issued under unamended \nSection 148 of the IT Act, which were the subject-matter \nof writ petitions before the various respective High Courts \nshall be deemed to have been issued under Section 148-A \nof the IT Act as substituted by the Finance Act, 2021 and \nconstrued or treated to be show-cause notices in terms \nof Section 148-A(b). The assessing officer shall, within \nthirty days from today provide to the respective assessees \ninformation and material relied upon by the Revenue, so \nthat the assessees can reply to the show-cause notices \nwithin two weeks thereafter.\n\n28.2. The requirement of conducting any enquiry, if \nrequired, with the prior approval of specified authority under \nSection 148-A(a) is hereby dispensed with as a one-time \nmeasure vis-à-vis those notices which have been issued \nunder Section 148 of the unamended Act from 1-4-2021 \ntill date, including those which have been quashed by the \nHigh Courts.\n\n28.3. Even otherwise as observed hereinabove holding any \nenquiry with the prior approval of specified authority is not \nmandatory but it is for the assessing officers concerned \nto hold any enquiry, if required.\n\n28.4. The assessing officers shall thereafter pass orders \nin terms of Section 148-A(d) in respect of each of the \nassessees concerned; Thereafter after following the \nprocedure as required under Section 148-A may issue \nnotice under Section 148 (as substituted).\n\n28.5. All defences which may be available to the assessees \nincluding those available under Section 149 of the IT Act \nand all rights and contentions which may be available to \n\nDigital Supreme Court Reports\f[2024] 10 S.C.R. \n\n1659\n\nthe assessees concerned and Revenue under the Finance \nAct, 2021 and in law shall continue to be available.”\n\n14. On 11 May 2022, the Central Board of Direct Taxes issued an \nInstruction30 for the implementation of the decision Ashish Agarwal \n(supra). The Instruction “clarified” that Ashish Agarwal (supra) will \napply “to all cases where extended reassessment notices have been \nissued […] irrespective of the fact whether such notices have been \nchallenged or not.” Paragraph 6.1 of the Instruction stated that the \nreassessment notices will “travel back in time to their original date \nwhen such notices were to be issued and then new section 149 of \nthe Act is to be applied at that point.” Thus, the Instruction is based \non the presumption that the notices issued under Section 148 of the \nnew regime will travel back in time to their original dates, that is, the \ndate when the Section 148 notice under the old regime was issued. \n\n15. Paragraph 6.2 of the Instruction elaborated on the mechanism for \n\nissuing notices under Section 148 of the new regime:\n\n“6.2 Based on the above, the extended assessment notices \nare to be dealt with as under:\n\nAY 2013-14, AY 2014-15 and AY 2015-16: Fresh notice \nunder section 148 of the Act can be issued in these cases, \nwith the approval of the specified authority, only if the case \nfalls under clause (b) of sub-section (1) of section 149 as \namended by the Finance Act, 2021 and reproduced in \nparagraph 6.1 above. Specified authority under section \n151 of the new law in this case shall be the authority \nprescribed under clause (ii) of that section.\n\nAY 16-17, AY 17-18: Fresh notice under Section 148 \ncan be issued in these cases, with the approval of the \nspecified authority, under clause (a) of sub-section (1) of \nnew section 149 of the Act, since they are within the period \nof three years from the end of the relevant assessment \nyear. Specified authority under section 151 of the new law \nin this case shall be the authority prescribed under clause \n(i) of that section.”\n\n30 \n\nInstruction No. 01/2022 dt. 11 May 2022\n\nUnion of India & Ors. v. Rajeev Bansal\f1660 \n\n[2024] 10 S.C.R.\n\n16. The assessing officers accordingly considered the replies furnished \nby the assesses and passed orders under Section 148A(d). \nSubsequently, notices under Section 148 of the new regime were \nissued to the assesses by the assessing officers between July \nand September 2022 for the assessment years 2013-2014, 2014-\n2015, 2015-2016, 2016-2017, and 2017-2018. These notices were \nchallenged before several High Courts. The High Courts declared the \nnotices to be invalid on the ground that they were: (i) time-barred; and \n(ii) issued without the appropriate sanction of the specified authority.\n\n17. \n\nIn Ashish Agarwal (supra), this Court was called upon to decide \nwhether the Revenue was correct in issuing the reassessment notices \nunder the old regime when the new regime, which was beneficial to \nthe assesses, was already in force. This Court resolved the issue by \nholding that all reassessment notices issued after 1 April 2021 should \nhave been issued in accordance with the new regime. However, the \nCourt construed the notices issued under Section 148 of the old regime \nby deeming them to be notices issued under Section 148A(b) of the \nnew regime. In Ashish Agarwal (supra), this Court did not deal with the \nissue of whether or not the reassessment notices were issued within the \ntime limits prescribed under the provisions of the Income Tax Act read \nwith the relaxations provided under TOLA. This is the primary issue \nthat comes up for our consideration in the present batch of appeals. \n\nB. \n\nIssues\n\n18. The present batch of appeals gives rise to the following issues:\n\na. Whether TOLA and notifications issued under it will also apply \n\nto reassessment notices issued after 1 April 2021; and\n\nb. Whether the reassessment notices issued under Section 148 of \nthe new regime between July and September 2022 are valid.\n\nC. Submissions\n\n19. Mr N Venkataraman, learned Additional Solicitor General of India, \n\nmade the following submissions on behalf of the Revenue:\n\na. Parliament enacted TOLA as a free-standing legislation to provide \nrelief and relaxation to both the assesses and the Revenue \nduring the time of COVID-19. TOLA seeks to relax actions and \nproceedings that could not be completed or complied with within \nthe original time limits specified under the Income Tax Act;\n\nDigital Supreme Court Reports\f[2024] 10 S.C.R. \n\n1661\n\nb. Section 149 of the new regime provides three crucial benefits \nto the assesses: (i) the four-year time limit for all situations has \nbeen reduced to three years; (ii) the first proviso to Section 149 \nensures that re-assessment for previous assessment years \ncannot be undertaken beyond six years; and (iii) the monetary \nthreshold of Rupees fifty lakhs will apply to the re-assessment \nfor previous assessment years;\n\nc. \n\nThe relaxations provided under Section 3(1) of TOLA apply \n“notwithstanding anything contained in the specified Act.” Section \n3(1), therefore, overrides the time limits for issuing a notice \nunder Section 148 read with Section 149of the Income Tax Act;\n\nd. TOLA does not extend the life of the old regime. It merely \nprovides a relaxation for the completion or compliance of actions \nfollowing the procedure laid down under the new regime;\n\ne. The Finance Act 2021 substituted the old regime for re-\nassessment with a new regime. The first proviso to Section \n149 does not expressly bar the application of TOLA. Section \n3 of TOLA applies to the entire Income Tax Act, including \nSections 149 and 151 of the new regime. Once the first proviso \nto Section 149(1)(b) is read with TOLA, then all the notices \nissued between 1 April 2021 and 30 June 2021 pertaining to \nassessment years 2013-2014, 2014-2015, 2015-2016, 2016-\n2017, and 2017-2018 will be within the period of limitation as \nexplained in the tabulation below:\n\nAssessment \nYear \n(1)\n\nWithin 3 \nYears \n(2)\n\n2013-2014\n\n31.03.2017\n\n2014-2015\n\n31.03.2018\n\n2015-2016\n\n31.03.2019\n\n2016-2017\n\n31.03.2020\n\nExpiry of \nLimitation \nread with \nTOLA for \n(2) (3)\nTOLA not \napplicable\nTOLA not \napplicable\nTOLA not \napplicable\n30.06.2021\n\nWithin six \nYears \n(4)\n\n31.03.2020\n\nExpiry of \nLimitation \nread with \nTOLA for \n(4) (5)\n30.06.2021\n\n31.03.2021\n\n30.06.2021\n\n31.03.2022\n\n31.03.2023\n\nTOLA not \napplicable\nTOLA not \napplicable\nTOLA not \napplicable\n\n2017-2018\n\n31.03.2021\n\n30.06.2021\n\n31.03.2024\n\nUnion of India & Ors. v. Rajeev Bansal\f1662 \n\n[2024] 10 S.C.R.\n\nf. \n\nThe Revenue concedes that for the assessment year 2015-\n16, all notices issued on or after 1 April 2021 will have to be \ndropped as they will not fall for completion during the period \nprescribed under TOLA;\n\ng. Section 2 of TOLA defines “specified Act” to mean and include \nthe Income Tax Act. The new regime, which came into effect \non 1 April 2021, is now part of the Income Tax Act. Therefore, \nTOLA continues to apply to the Income Tax Act even after 1 \nApril 2021; and\n\nh. Ashish Agarwal (supra) treated Section 148 notices issued \nby the Revenue between 1 April 2021 and 30 June 2021 as \nshow-cause notices in terms of Section 148A(b). Thereafter, the \nRevenue issued notices under Section 148 of the new regime \nbetween July and August 2022. Invalidation of the Section 148 \nnotices issued under the new regime on the ground that they \nwere issued beyond the time limit specified under the Income \nTax Act read with TOLA will completely frustrate the judicial \nexercise undertaken by this Court in Ashish Agarwal (supra).\n\n20. Mr Percy Pardiwalla, Mr V Sridharan, Mr Tushar Hemani, Mr Saurabh \nSoparkar, and Mr K Shivram, learned senior counsel, Mr Manish \nShah, Mr Darshan Patel, Mr Suhrith Parthasarthy, Mr Dharan Gandhi, \nand Mr Ved Jain, learned counsel, made the following submissions \non behalf of the respondents:\n\na. TOLA applies only when the period of limitation expires between \n20 March 2020 and 31 March 2021. Finance Act 2021 was \nenacted after TOLA. Consequently, TOLA only held the field \ntill the new regime came into effect from 1 April 2021. The \nRevenue had to issue Section 148 notices in terms of the new \nregime without recourse to the extended timelines under TOLA;\n\nb. TOLA did not amend the erstwhile Section 149 but merely \nextended the specified timelimits. The first proviso to Section \n149(1)(b) only refers to the period of limitation under the erstwhile \nSection 149(1)(b);\n\nc. Notification No. 38 of 2021 was issued on 27 April 2021 to \nextend the time limits expiring under Section 149(1)(b) of the \nold regime till 30 June 2021. The notification was issued after \n1 April 2021,when the old regime was repealed and substituted \n\nDigital Supreme Court Reports\f[2024] 10 S.C.R. \n\n1663\n\nby a new regime. Therefore, this notification cannot be read \ninto the new regime; \n\nd. The notices can be categorized into the following four categories:\n\ni. \n\nFirst category: for assessment years 2013-2014 and \n2014-2015, the six-year time limit in terms of Section 149 \nexpired on 31 March 2020 and 31 March 2021 respectively. \nHowever, the reassessment notices were issued after 1 \nApril 2021 and would be barred by limitation;\n\nii. Second category: for the assessment year 2015-2016, the \nissue pertains to whether the sanction of the appropriate \nauthority was obtained by the assessing officers before \nissuing re-assessment notices under Section 148 of the \nold regime. For this category of cases, the four-year period \nexpired on 31 March 2020. However, notices were issued \nafter 31 March 2020 by obtaining sanction under Section \n151(2) instead of Section 151(1) of the old regime;\n\niii. Third category: for assessment years 2016-2017 and \n2017-2018, the three-year period in terms of the amended \nregime expired on 31 March 2020 and 31 March 2021, \nrespectively. The notices under Section 148 were issued \nafter the expiry of three years, that is, after 1 April 2021. \nHowever, the sanctions were obtained under Section 151(i) \ninstead of Section 151(ii) of the new regime; and\n\niv. The directions issued by this Court in Ashish Agarwal \n(supra) were not intended to apply to assesses who did \nnot challenge the reassessment notices before the High \nCourts or this Court. Therefore, reassessment proceedings \ncould not have been initiated for such assesses.\n\ne. The applicability of the first proviso to Section 149(1)(b) of the \nnew regime has to be tested on the date of issuance of notice \nunder Section 148 of the new regime. Even if TOLA is read into \nthe Income Tax Act, the time limits for completion or compliance \nof actions can be extended till 30 June 2021. However, the \nnotices under Section 148 of the new regime were issued by \nthe Revenue from July to September 2022. The period of July \nto September 2022 is beyond the extended time limits stipulated \nunder the Income Tax Act read with TOLA;\n\nUnion of India & Ors. v. Rajeev Bansal\f1664 \n\n[2024] 10 S.C.R.\n\nf. Ashish Agarwal (supra) cannot be interpreted in a manner \nto exclude the entire period from April 2021 to September \n2022. The directions issued by this Court under Article 142 of \nthe Constitution cannot contravene the substantive provisions \ncontained in the Income Tax Act. Moreover, this Court in Ashish \nAgarwal (supra) expressly left open all the defences available \nto the assesses under the new regime, including the defence \nof limitation available under Section 149; and\n\ng. TOLA is only applicable to the provisions that specify time limits. \nSection 151 does not prescribe any time limit for the issuance \nof sanctions by the specified authorities. Therefore, TOLA does \nnot apply to Section 151.\n\nD. Legal Background\n\ni. \n\nAssessment as a quasi-judicial function\n\n21. The power to levy tax is an essential and inherent attribute of \nsovereignty.31 It is an inherent attribute because the government \nrequires funds to discharge its governmental functions.32 Taxation is \nalso a recognised fiscal tool to achieve fiscal and social objectives.33 \nAlthough the power to levy taxes is plenary, it is subject to certain \nwell-defined limitations. Article 265 of the Constitution provides \nthat no tax shall be levied or collected except by authority of law. A \ntaxing statute must be valid and conform to other provisions of the \nConstitution.34\n\n22. Article 265 makes a distinction between “levy” and “collection.” \nThe expression “levy” has a wider connotation. It includes both \nthe imposition of a tax as well as assessment.35 The quantum of \ntax levied by a taxing statute, the conditions subject to which it is \nlevied, and how it is sought to be recovered are all matters within \nthe competence of the legislature.36In a taxing statute, the charging \n\n31 \n\nJindal Stainless Ltd v. State of Haryana (2017) 12 SCC 1 [17]; [310]\n\n32 Amrit Banaspati Co. Ltd. v. State of Punjab (1992) 2 SCC 411 [10]; Dena Bank v. Bhikhabhai Prabhudas \n\nParekh & Co. (2000) 5 SCC 694 [8]\n\n33 Elel Hotels & Investments Ltd v. Union of India (1989) 3 SCC 698 [20]\n\n34 Mafatlal Industries Ltd v. Union of India (1997) 5 SCC 536 [25]\n\n35 CCE v. National Tobacco Co. of India Ltd. (1972) 2 SCC 560 [19]\n\n36 \n\n Rai Ramkrishna v. State of Bihar (1963) SCC OnLine SC 31 [12]\n\nDigital Supreme Court Reports\f[2024] 10 S.C.R. \n\n1665\n\nprovisions are generally accompanied by a set of provisions for \ncomputing or assessing the levy. The character of assessment \nprovisions bears a relationship to the nature of the charge.37\n\n23. Thomas Cooley describes assessment as the most important of all \nthe proceedings in taxation. He further describes the necessity of \nassessment thus:\n\n“An assessment, when taxes are to be levied upon a \nvaluation, is obviously indispensable. It is required as the \nfirst step in the proceedings against individual subjects of \ntaxation, and is the foundation of all which follow it. Without \nan assessment they have no support, and are nullities. \nThe assessment is, therefore, the most important of all \nthe proceedings in taxation, and the provisions to insure \nits accomplishing its office are commonly very full and \nparticular. If there is no valid assessment, a tax on sale \nof lands is a nullity. A want of assessment is not a mere \nirregularity remedied by a curative statute. \n\nOn the other hand, no assessment is necessary where the \nstatute itself prescribes the amount to be paid, and this \ncan be recovered by suit. For instance, where a statute \nimposes a tax at a specified rate upon bank deposits, no \nother assessment other than that made by the statute \nitself is necessary.”38\n\n24. The expression “assessment” comprehends the entire procedure for \nascertaining and imposing liability upon taxpayers.39 The process of \nassessment involves computation of the income of the assessees, \ndetermination of tax payable by them, and the procedure for collecting \nor recovering tax.40 An assessing officer is concerned with the \nassessment and collection of revenue. An assessing officer must \n\n37 CIT v. B C Srinivasa Setty (1981) 2 SCC 460 [10]\n\n38 Thomas Cooley, The Law of Taxation (4th edn, 1924) 2116\n\n39 Kalawati Devi Harlalka v. CIT, 1967 SCC OnLine SC 44; Addl ITO v. E Alfred, 1961 SCC OnLine SC \n243 [7]; S Sankappa v. ITO, 1967 SCC OnLine SC 25 [3]; CCE v. National Tobacco Co. of India (1972) \n2 SCC 560 [19] [“19. […] The term “assessment”, on the other hand, is generally used in this country for \nthe actual procedure adopted in fixing liability to pay a tax on account of particular goods of property or \nwhatever may be the object of the tax in a particular case and determining its amount.”]\n\n40 Bhopal Sugar Industries Ltd v. State of Madhya Pradesh (1979) 3 SCC 792 [12]\n\nUnion of India & Ors. v. Rajeev Bansal\f1666 \n\n[2024] 10 S.C.R.\n\n25. \n\nadminister the provisions of the Income Tax Act in the interests of \nthe public revenue and to prevent evasion or escapement of tax \nlegitimately due to the State.41\n\nIn Province of Bombay v. Khushaldas S Advani,42 Justice S R Das \n(as the learned Chief Justice then was), in his concurring opinion \nobserved that if a statutory authority has the power to perform any \nact that will prejudicially affect the subject, then although there are \nno two parties apart from the authority and the contest is between \nthe authority proposing to do the act and the subject opposing it, the \nfinal determination of the authority will be quasi-judicial provided the \nauthority is required by the statute to act judicially. A quasi-judicial \nauthority is under an obligation to act judicially.43\n\n26. An assessment acquires finality on the making of an assessment order \nby the assessing officer.44 It creates a vested right in favour of the \nassessee.45 Section 2(8) of the Income Tax Act defines “assessment” \nto include reassessment. Reassessment is nothing but a fresh \nassessment.46 The effect of reopening the assessment is to vacate \nor set aside the order of assessment and to substitute in its place \nthe order of reassessment.47 The procedure of reassessment of tax \nis quasi-judicial because it prejudicially affects the vested rights48 of \nthe assessee. In CIT v. Simon Carves Ltd.,49 Justice H R Khanna, \nspeaking for a Bench of three Judges, explained the quasi-judicial \nfunction performed by the assessing officers during the process of \nassessment and reassessment thus:\n\n“10. […] The taxing authorities exercise quasi-judicial \npowers and in doing so they must act in a fair and not a \npartisan manner. Although it is part of their duty to ensure \n\n41 M M Ipoh v. CIT, 1967 SCC OnLine SC 40 [14]\n\n42 \n\n1950 SCC OnLine SC 26 [80]; Also see Express Newspaper (P) Ltd. v. Union of India, 1958 SCC OnLine \nSC 23 [111]\n\n43 Gullapalli Nageswara Rao v. State of A P, 1959 SCC OnLine SC 53 [6]\n\n44 \n\nIndian & Eastern Newspaper Society v. CIT (1979) 4 SCC 248 [5]; K T Moopil Nair v. State of Kerala, \n1960 SCC OnLine SC 7 [9]\n\n45 CED v. M A Merchant, 1989 Supp (1) SCC 499 [8]\n\n46 CST v. H M Esufali, H M Abdali (1973) 2 SCC 137 [17]\n\n47 Deputy Commissioner of Commercial Taxes v. H R Sri Ramulu (1977) 1 SCC 703 [7]\n\n48 See Income Tax Officer v. S K Habibullah, 1962 SCC OnLine SC 58 [7]\n\n49 \n\n[1977] 1 SCR 207 : (1976) 4 SCC 435\n\nDigital Supreme Court Reports\f[2024] 10 S.C.R. \n\n1667\n\nthat no tax which is legitimately due from an assessee \nshould remain unrecovered they must also at the same \ntime not act in a manner as might indicate that scales are \nweighted against the assessee. We are wholly unable to \nsubscribe to the view that unless those authorities exercise \nthe power in a manner most beneficial to the revenue \nand consequently most adverse to the assessee, they \nshould be deemed not to have exercised it in a proper \nand judicious manner.”\n\n27. Since the assessing officers perform a quasi-judicial function during \nreassessment, the powers vested in them are regulated by law.50 \nThe process of reassessment is generally preceded by administrative \nproceedings, which require the assessing officer to obtain the sanction \nof the specified authorities.51 The taxing statutes generally lay down \nthe procedure for issuance of notice to the proposed assessee in \nrespect of income or property proposed to be taxed. It also prescribes \nthe authority and procedure for hearing any objections to the liability \nfor taxation.52\n\nii. Assessment as an issue of jurisdiction\n\n28. Jurisdiction is defined as the power of a court, tribunal, or authority to \nhear and determine a cause or exercise any judicial power concerning \nsuch cause.53 The Revenue officers must have requisite jurisdiction \nto perform their functions and responsibilities following the provisions \nof the Income Tax Act. Under the Income Tax Act 1922,54 Section \n34 allowed an Income Tax Officer to reassess income that escaped \nassessment for a relevant assessment year. Section 34 provided that \na reassessment notice could not be issued beyond the prescribed \ntime limit (which was generally within eight years from the end of the \n\n50 Supdt. of Taxes v. Onkarmal Nathmal Trust (1976) 1 SCC 766 [37]; \n\n51 S Narayanappa v. CIT, 1966 SCC OnLine SC 173 [4] [“4. […] The proceedings for assessment or re-\nassessment under Section 34(1)(a) of the Income Tax Act start with the issue of a notice and it is only \nafter the service of the notice that the assessee, whose income in sought to be assessed or re-assessed, \nbecomes a party to those proceedings. The earlier stage of the proceeding for recording the reasons \nof the Income Tax Officer and for obtaining the sanction of the Commissioner are administrative in \ncharacter and are not quasi-judicial.]\n\n52 K T Moopil Nair v. State of Kerala, 1960 SCC OnLine SC 7 [9]\n\n53 \n\nIn Re: Interplay between Arbitration Agreements under the Arbitration and Conciliation Act 1996 and the \nIndian Stamp Act 1899, 2023 INSC 1066 [125]\n\n54 \n\n“Income Tax Act 1922”\n\nUnion of India & Ors. v. Rajeev Bansal\f1668 \n\n[2024] 10 S.C.R.\n\nrelevant assessment year). Thus,Section 34 conferred jurisdiction \non Income Tax Officers to reopen an assessment subject to the \nissuance of notice within the prescribed time limits.55 In Ahmedabad \nManufacturing and Calico Printing Co. Ltd. v. S G Mehta, ITO,56 \nJustice M Hidayatullah (as the learned Chief Justice then was), \nwriting for himself and Justice Raghubar Dayal, observed:\n\n“It must be remembered that if the Income-tax Act prescribes \na period during which the tax due in any particular \nassessment year may be assessed, then on the expiry of \nthat period the department cannot make an assessment. \nWhere no period is prescribed that assessment can be \ncompleted at any time but once completed it is final. \nOnce a final assessment has been made, it can only \nbe reopened to rectify a mistake apparent from the \nrecord (section 35) or to reassess where there has \nbeen an escapement of assessment of income for one \nreason or another (section 34). Both these sections \nwhich enable reopening of back assessments provide \ntheir own periods of time for action but all these \nperiods of time, whether for the first assessment or for \nrectification, or for reassessment, merely create a bar \nwhen that time passed against the machinery set up \nby the Income-tax Act for the assessment and levy of \nthe tax. They do not create an exemption in favour of \nthe assessee or grant an absolution on the expiry of \nthe period. The liability is not enforceable but the tax \nmay again become exigible if the bar is removed and \nthe taxpayer is brought within the jurisdiction of the \nsaid machinery by reasons of a new power. This is, \nof course, subject to the condition that the law must \nsay that such is the jurisdiction, either expressly or \nby clear implication. If the language of the law has that \nclear meaning, it must be given that effect and where \nthe language expressly so declares or clearly implies \nit, the retrospective operation is not controlled by the \ncommencement clause.”\n\n55 R K Upadhyaya v. Shanabhai Patel (1987) 3 SCC 96 [2]\n\n56 \n\n[1963] Supp. 2 SCR 92 : 1962 SCC OnLine SC 73\n\nDigital Supreme Court Reports\f[2024] 10 S.C.R. \n\n1669\n\n29. \n\n30. \n\nIn S S Gadgil v. Lal & Co., a three-Judge Bench of this Court held \nthat the period prescribed under Section 34 of the Income Tax Act \n1922 “is not a period of limitation.”57 It was further observed that \nSection 34 “imposes a fetter upon the power of the Income Tax Officer \nto bring to tax escaped income” by prescribing “different periods in \ndifferent classes of cases for enforcement of the right of the States to \nrecover tax.”58 Under Section 34, Income Tax Officers were statutorily \nbarred from issuing a notice of assessment or reassessment after \nthe expiry of the statutory time limit prescribed under the Income \nTax Act. Consequently, reassessment notices issued by the Revenue \nbeyond the prescribed time limits were declared invalid for being \ntime-barred.59 Assessment proceedings that have attained finality \nunder existing law due to a time bar cannot be held to be open for \nrevival unless the amended provision is given retrospective effect \nto allow upsetting the legal proceedings.60\n\nIf a statute expressly confers a power or imposes a duty on a \nparticular authority, then such power or duty must be exercised or \nperformed by that authority itself.61 Further, when a statute vests \ncertain power in an authority to be exercised in a particular manner, \nthen that authority has to exercise its power following the prescribed \nmanner.62 Any exercise of power by statutory authorities inconsistent \nwith the statutory prescription is invalid.63 Section 34 of the Income \nTax Act 1922 prescribed a duty on Income Tax Officers to seek \nprior approval of the Commissioner before issuing a reassessment \nnotice. In CIT v. Maharaja Pratapsingh Bahadur of Gidhaur,64 a \nthree-Judge Bench of this Court held that a notice issued under \nSection 34 without prior approval of the Commissioner was invalid.\n\n57 \n\n[1964] 8 SCR 72 : 1964 SCC OnLine SC 112 [10]\n\n58 S S Gadgil (supra) [10]\n\n59 CIT v. Robert J Sas (1963) 48 ITR 177; CIT v. Thayaballii Mulla Jeevaji Kapasi, 1967 SCC OnLine SC \n\n352.\n\n60 CIT v. Onkarmal Meghraj (1974) 3 SCC 349 [11]; K M Sharma v. ITO (2002) 4 SCC 339 [14]; M A \n\nMerchant (supra) [8]\n\n61 Dr Premchandran Keezhoth v. Chancellor, Kannur University, 2023 SCC OnLine SC 1592 [73]\n\n62 CIT v. Anjum M.H. Ghaswala (2002) 1 SCC 633 [27]; State of U P v. Singhara Singh, 1963 SCC OnLine \n\nSC 23 [8]\n\n63 Tata Chemicals Ltd. v. Commissioner of Customs (2015) 11 SCC 628 [18]\n\n64 \n\n1960 SCC OnLine SC 55 [1961] 2 SCR 760 [6]\n\nUnion of India & Ors. v. Rajeev Bansal\f1670 \n\n[2024] 10 S.C.R.\n\n31. The Income Tax Act 1961 also mandates assessing officers to fulfil \ncertain pre-conditions before issuing a notice of reassessment. \nSection 149 requires assessing officers to issue a notice of \nreassessment under Section 148 within the prescribed time limits. \nFurther, Section 151 requires assessing officers to obtain sanction \nof the specified authority before issuing notice under Section 148. \nIn Chhugamal Rajpal v. S P Chaliha, a three-Judge Bench of this \nCourt held that Section 151 must be strictly adhered to because it \ncontains “important safeguards.”65\n\n32. A statutory authority may lack jurisdiction if it does not fulfil the \npreliminary conditions laid down under the statute, which are necessary \nto the exercise of its jurisdiction.66 There cannot be any waiver of a \nstatutory requirement or provision that goes to the root of the jurisdiction \nof assessment.67 An order passed without jurisdiction is a nullity. Any \nconsequential order passed or action taken will also be invalid and \nwithout jurisdiction.68 Thus, the power of assessing officers to reassess \nis limited and based on the fulfilment of certain preconditions.69\n\niii. Principles of strict interpretation and workability\n\n33. The dominant purpose in interpreting a taxingstatute is to ascertain \nthe intention of the legislature to impose a charge.70 A literal rule \nof construction requires the language of a statute to be construed \naccording to its literal and grammatical meaning, whatever the result \nmay be.71 In comparison, a strict interpretation of a statute does not \nencompass strict literalism, which leads to absurdity or goes against \nthe express legislative intent.72 The principle of strict interpretation \nrequires the courts to interpret and decipher the meaning of the \nwords of the statute in their usual sense.73\n\n65 \n\n[1971] 3 SCR 442 : (1971) 1 SCC 453 [5]\n\n66 Chhotobhai Jethabhai Patel v. Industrial Court, Maharashtra (1972) 2 SCC 46 [16]\n\n67 Superintendent of Taxes v. Onkarmal Nathmal Trust (1976) 1 SCC 766 [28]\n\n68 Dwarka Prasad Agarwal v. B D Agarwal (2003) 6 SCC 230 [37]\n\n69 CIT v. Kelvinator of India Ltd (2010) 2 SCC 723 [6]. [“6. […] Reassessment has to be based on the \n\nfulfilment of certain precondition […]”]\n\n70 Banarsi Debi v. ITO, 1964 SCC OnLine SC 48 [6]\n\n71 Punjab Land Development and Reclamation Corporation Ltd. v. Presiding Officer, Labour Court (1990) 3 \n\nSCC 682 [67]\n\n72 Commissioner of Customs v. Dilip Kumar & Co. (2018) 9 SCC 1 [28]\n\n73 State of Gujarat v. Mansukhbhai Kanjibhai Shah (2020) 20 SCC 360 [24]\n\nDigital Supreme Court Reports\f[2024] 10 S.C.R. \n\n1671\n\n34. Taxing statutes are interpreted by following the principles of strict \ninterpretation.74 While interpreting a taxing statute, there is no room \nfor any intendment.75 A taxing statute must be construed by having \nregard to the strict letter of the law.76 In a taxing statute, it is not \npossible to assume any intention or governing purpose more than \nwhat is stated in the plain language. A taxing statute can successfully \nimpose liability on persons or property only if it frames appropriate \nprovisions to that end. The courts cannot plugin a loophole in a taxing \nstatute “by a strained construction in reference to the supposed \nintention of the Legislature.”77 Further, the considerations of equity \nor justice are not relevant in interpreting a taxing statute.78\n\n35. \n\n36. \n\nIt is a well-accepted rule of construction that in situations where \nthe interpretation of taxing legislation is ambiguous or leads to two \npossible interpretations, the interpretation most beneficial to the \nsubject of the tax should be adopted.79 It would not be an unjust \nresult if a taxpayer escapes the tax net on account of the legislature’s \nfailure to express itself clearly.80\n\nIn a taxing statute, the charging section has to be construed strictly, \nbut the machinery provisions must be interpreted in accordance with \nthe ordinary rules of statutory interpretation.81 The purpose is to give \neffect to the clear intention of the legislature. In Murarilal Mahabir \nPrasad v. B R Vad,82 this Court held that:\n\n“29. […] There is no equity about a tax in the sense that a \nprovision by which a tax is imposed has to be construed \nstrictly, regardless of the hardship that such a construction \nmay cause either to the treasury or to the taxpayer. If \nthe subject falls squarely within the letter of law he must \n\n74 G P Singh, Principles of Statutory Interpretation (15th edn, 2023) 616.\n\n75 Cape Brandy Syndicate v. Inland Revenue Commissioners (1921) KB 64, 71\n\n76 A.V. Fernandes v. State of Kerala, 1957 SCC OnLine SC 23\n\n77 Muralilal Mahabir Prasad v. B R Vad (1975) 2 SCC 736 [28]\n\n78 \n\nITO v. T S Devinatha Nadar, 1967 SCC OnLine SC 52 [30]\n\n79 Central India Spinning and Waving Co. Ltd. v. Municipal Committee, 1957 SCC OnLine SC 18 [5]; CIT v. \nShahzada Nand & Sons, 1966 SCC OnLine SC 24 [10]; T S Devinatha Nadar (supra) [25]; Voltas Ltd. v. \nState of Gujarat (2015) 7 SCC 527 [24]\n\n80 CIT v. Jargaon Electric Supply Co. Ltd., 1960 SCC OnLine SC 105 [7]; State of W.B. v. Kesoram \n\nIndustries Ltd. (2004) 10 SCC 201 [106]\n\n81 Mahim Patram (P) Ltd. v. Union of India (2007) 3 SCC 668 [25]\n\n82 \n\n[1976] 1 SCR 689 : (1975) 2 SCC 736 [29]\n\nUnion of India & Ors. v. Rajeev Bansal\f1672 \n\n[2024] 10 S.C.R.\n\nbe taxed, howsoever inequitable the consequences may \nappear to the judicial mind. If the Revenue seeking to tax \ncannot bring the subject within the letter of law, the subject \nis free no matter that such a construction may cause serious \nprejudice to the Revenue. In other words, though what is \ncalled equitable construction may be admissible in relation \nto other statutes or other provisions of a taxing statute, \nsuch a construction is not admissible in the interpretation \nof a charging or taxing provision of a taxing statute.” \n\n37. A statute is designed to be workable. A statutory provision must be \nconstrued in a manner to make it workable to achieve the purpose \nof the legislation.83 A construction that fails to achieve the manifest \npurpose of legislation or reduces the statutory provisions to futility \nshould be avoided.84 The machinery provisions must be construed \nto effectuate the object and purpose of a statute and not defeat \nthem. In J K Synthetics Ltd. v. CTO,85 a Constitution Bench of this \nCourt observed:\n\n“16. It is well-known that when a statute levies a tax \nit does so by inserting a charging section by which a \nliability is created or fixed and then proceeds to provide \nthe machinery to make the liability effective. It, therefore, \nprovides the machinery for the assessment of the liability \nalready fixed by the charging section, and then provides \nthe mode for the recovery and collection of tax, including \npenal provisions meant to deal with defaulters. Provision is \nalso made for charging interest on delayed payments, etc. \nOrdinarily the charging section which fixes the liability \nis strictly construed but that rule of strict construction \nis not extended to the machinery provisions which \nare construed like any other statute. The machinery \nprovisions must, no doubt, be so construed as would \neffectuate the object and purpose of the statute and \nnot defeat the same.”\n\n(emphasis supplied)\n\n83 K P Mohammed Salim v. CIT (2008) 11 SCC 573 [14]; \n\n84 Mohan Kumar Singhania v. Union of India, 1992 Supp (1) SCC 594 [52]; CIT v. Hindustan Bulk Carriers \n\n(2003) 3 SCC 57 [17]\n\n85 \n\n[1997] 1 SCR 603 : (1994) 4 SCC 276\n\nDigital Supreme Court Reports\f[2024] 10 S.C.R. \n\n1673\n\n38. The provisions in a taxing statute dealing with machinery for \nassessment have to be construed in accordance with the intention of \nthe legislature to make the charge levied effective.86 While interpreting \nprovisions that set up the machinery of assessment, the rule is \nthat construction should be preferred which makes the machinery \nworkable87 and furthers the intention of the legislature.88 In CIT v. \nSun Engineering Works (P) Ltd.,89 a two-Judge Bench of this Court \nobserved that the provision dealing with reassessment contained in \nSection 147 of the Income Tax Act was for the benefit of the Revenue:\n\n“40. Although, Section 147 is part of a taxing statute, \nit imposes no charge on the subject but deals merely \nwith the machinery of assessment and in interpreting a \nprovision of that kind, the rule is that construction should \nbe preferred which makes the machinery workable. Since \nthe proceedings under Section 147 of the Act are for the \nbenefit of the Revenue and not an assessee and are \naimed at gathering the ‘escaped income’ of an assessee, \nthe same cannot be allowed to be converted as ‘revisional’ \nor ‘review’ proceedings at the instance of the assessee, \nthereby making the machinery unworkable.”\n\niv. Principle of harmonious construction\n\n39. The legislature is presumed to enact a consistent and harmonious \nbody of laws in deference to the rule of law.90 In case of any apparent \nconflict within a provision or between two provisions of the same \nstatute, the courts must read the provisions harmoniously.91 The \nprinciple of harmonious construction requires courts to bring about \na reconciliation between seemingly conflicting provisions to give \neffect to both. An interpretation which reduces one of the provisions \nto a “dead letter” is not a harmonious construction. The principle of \nharmonious construction also applies to reconcile two seemingly \nconflicting provisions of different statutes.92\n\n86 Gursahai Saigal v. CIT (1963) 48 ITR (SC) 1 [9]\n\n87 CIT v. Mahaliram Ramjidas, AIR 1940 PC 124\n\n88 Gursahai Saigal (supra) [13]\n\n89 \n\n[1992] Supp. 1 SCR 732 : (1992) 4 SCC 363 [40]\n\n90 MCD v. Shiv Shankar (1971) 1 SCC 442 [5]\n\n91 Sultana Begum v. Prem Chand Jain (1997) 1 SCC 373 [15]\n\n92 \n\nIn re: Interplay between Arbitration Agreements under the Arbitration and Conciliation Act 1996 and the \nIndian Stamp Act 1899, 2023 INSC 1066 [165]\n\nUnion of India & Ors. v. Rajeev Bansal\f1674 \n\n[2024] 10 S.C.R.\n\n40. A legislature often appends a non obstante clause to a provision to \ngive it an overriding effect over provisions contained in the same \nstatute or a separate statute.93 The purpose of incorporating a non \nobstante clause in a provision is to prohibit the operation and effect \nof all contrary provisions.94 In Chandavarkar Sita Ratna Rao v. \nAshalata S Guram,95 Justice Sabyasachi Mukharji (as the learned \nChief Justice then was) explained the purpose of a non obstante \nclause thus:\n\n“67. A clause beginning with the expression “notwithstanding \nanything contained in this Act or in some particular provision \nin the Act or in some particular Act or in any law for the \ntime being in force, or in any contract” is more often than \nnot appended to a section in the beginning with a view to \ngive the enacting part of the section in case of conflict an \noverriding effect over the provision of the Act or the contract \nmentioned in the non obstante clause. It is equivalent to \nsaying that in spite of the provision of the Act or any other \nAct mentioned in the non obstante clause or any contract \nor document mentioned the enactment following it will \nhave its full operation or that the provisions embraced in \nthe non obstante clause would not be an impediment for \nan operation of the enactment.”\n\n41. A non-obstante clause must be given effect to the extent Parliament \nintended and not beyond.96 In construing a provision containing a \nnon obstante clause, courts must determine the purpose and object \nfor which the provision was enacted.97 The courts are also required \nto find out the extent to which the legislature intended to give one \nprovision overriding effect over another provision.98 In case of a clear \ninconsistency between two enactments, a provision containing a non \nobstante clause can be given an overriding effect over a provision \ncontained in another statute.\n\n93 State of Bihar v. Bihar Rajya MSESKK Mahasangh (2005) 9 SCC 129 [45]\n\n94 Union of India v. G M Kokil, 1984 Supp SCC 196 [11]\n\n95 \n\n96 \n\n[1986] 3 SCR 866 : (1986) 4 SCC 447\n\nICICI Bank Ltd v. SIDCO Leathers Ltd (2006) 10 SCC 452 [37]\n\n97 SIDCO Leathers Ltd (supra) [34]; Geeta v. State of U P (2010) 13 SCC 678 [45]\n\n98 A G Varadarajulu v. State of Tamil Nadu (1998) 4 SCC 231 [16]\n\nDigital Supreme Court Reports\f[2024] 10 S.C.R. \n\n1675\n\n42. Another principle of interpretation is that when two laws are \ninconsistent or repugnant, the later legislation is interpreted as having \nimpliedly repealed the earlier legislation. The principle underlying \nimplied repeal is that there is no need for the later enactment to state \nin express words that the earlier enactment has been repealed if the \nlegislative intent to supersede the earlier law is manifested through \nthe provisions of the later enactment.99 In MCD v. Shiv Shankar,100 \nthis Court culled out the following principles applicable to the implied \nrepeal of legislation:\n\na. A subsequent legislation may not be too readily presumed to \neffectuate a repeal of existing statutory laws in the absence of \nexpress or at least unambiguous indication to that effect;\n\nb. Courts must lean against implying a repeal unless the two \nprovisions are so plainly repugnant to each other that they \ncannot stand together and it is not possible on any reasonable \nhypothesis to give effect to both at the same time; \n\nc. \n\nd. \n\nIt is necessary to closely scrutinise and consider the true \nmeaning and effect of both the earlier and the later statute; and\n\nIf the objects of the two statutory provisions are different and the \nlanguage of each statute is restricted to its objects or subject, \nthen they are generally intended to rule in parallel lines without \nmeeting and there would be no real conflict.\n\n43. The principle on which the rule of implied repeal rests is that if the \nsubject-matter of a later legislation is identical to that of an earlier \nlegislation so that they both cannot stand together, then the earlier \nlegislation is impliedly repealed by the later legislation.101 The courts \nhave to determine whether the legislature intended the two sets of \nprovisions to be applied simultaneously.102 The presumption against \nimplied repeal is based on the theory that the legislature knows the \nexisting laws and does not intend to create any confusion by retaining \ntwo conflicting provisions or statutes.103 The test to be applied for the \n\n99 State of Orissa v. M A Tulloch, 1963 SCC OnLine SC 18 [20]\n\n100 \n\n[1971] 3 SCR 607 : (1971) 1 SCC 442 [5]\n\n101 Zaverbhai Amaidas v. State of Bombay (1954) 2 SCC 345 [16]\n\n102 Ratan Lal Adukia v. Union of India (1989) 3 SCC 537 [18]\n\n103 Pradeep S Wodeyar v. State of Karnataka (2021) 19 SCC 62 [69]\n\nUnion of India & Ors. v. Rajeev Bansal\f1676 \n\n[2024] 10 S.C.R.\n\nconstruction of implied repeal is whether the new or subsequent law \nis inconsistent with or repugnant to the old law. The inconsistency \nor repugnancy should clearly and manifestly reveal an intention to \nrepeal the existing laws.104 The inconsistency or repugnancy must \nbe such that the two statutes cannot be reconciled on reasonable \nconstruction or hypothesis. To determine whether a later statute \nrepeals by implication an earlier statute, it is necessary to examine \nthe scope and object of the two enactments by comparison of their \nprovisions.105 Implied repeal should be avoided, if possible, where \nboth the statutes can stand together.106\n\n44. We now proceed to analyse the issues given the broad legislative \n\nand judicial background discussed above.\n\nE. Reading TOLA into the Income Tax Act\n\ni. \n\nFirst proviso to Section 149(1) of the new regime\n\n45. The first proviso to Section 149(1)(b) provides thus:\n\n“149. (1) No notice under section 148 shall be issued for \nthe relevant assessment year, - \n\n(a) \n\n(b) \n\nIf three years have elapsed from the end of the \nrelevant assessment year, unless the case falls \nunder clause (b);\n\nIf three years, but not more than ten years, have \nelapsed from the end of the relevant assessment \nyear unless the Assessing Officer has in possession \nof books of account or other documents or evidence \nwhich reveal that the income chargeable to tax, \nrepresented in the form of asset, which has escaped \nassessment amounts to or is likely to amount to fifty \nlakh rupees or more for that year:\n\nProvided that no notice under section 148 shall be \nissued at any time in a case for the relevant assessment \nyear beginning on or before 1st day of April 2021, if \nsuch notice could not have been issued at that time \n\n104 Municipal Council Palai v. T J Joseph, 1963 SCC OnLine SC 55 [10] \n\n105 State of M P v. Kedia Leather & Liquor Ltd. (2003) 7 SCC 389 [15]\n\n106 Harshad S Mehta v. State of Maharashtra (2001) 8 SCC 257 [31]\n\nDigital Supreme Court Reports\f[2024] 10 S.C.R. \n\n1677\n\non account of being immediately beyond the time limit \nspecified under the provisions of clause (b) of sub-\nsection (1) of this section, as they stood immediately \nbefore the commencement of the Finance Act, 2021:”\n\n(emphasis supplied)\n\n46. The ingredients of the proviso could be broken down for analysis as \nfollows: (i) no notice under Section 148 of the new regime can be \nissued at any time for an assessment year beginning on or before 1 \nApril 2021; (ii) if it is barred at the time when the notice is sought to \nbe issued because of the “time limits specified under the provisions \nof” 149(1)(b) of the old regime. Thus, a notice could be issued under \nSection 148 of the new regime for assessment year 2021-2022 and \nbefore only if the timelimit for issuance of such notice continued to \nexist under Section 149(1)(b) of the old regime.\n\n47. \n\nIn CTO v. Biswanath Jhunjhunwalla,107 the Bengal Sales Tax \nRules 1941 empowered the Commissioner to revise any assessment \nwithin four years from the date of assessment. Subsequently, \nthe State Government issued a notification following the law to \nextend the time limit from four years to six years from the date \nof assessment. The extension of the time limit was challenged \nby the respondents on the ground that the assessments which \nhad attained finality because of the expiry of the period of four \nyears could not be reassessed. This Court observed that it was \nthe clear intention of the notification to permit the Commissioner \nto revise any assessment made or order passed, provided the \nassessment had not been made before six years. It was held that if \nthe legislative intention is clear and the language is unambiguous, \nfull effect must be given to the legislative intention by reading the \nnotification as applying not only to the incomplete assessments \nbut also to assessments that had reached finality because of lapse \nof the earlier prescribed period. The principle that emanates from \nBiswanath Jhunjhunwalla (supra) is that the courts should give \nfull effect to the legislative intention of granting reassessment \npowers to assessing officers unless the legislature, by express \nprovision, states otherwise. \n\n107 \n\n[1996] Supp. 5 SCR 286 : (1996) 5 SCC 626\n\nUnion of India & Ors. v. Rajeev Bansal\f1678 \n\n[2024] 10 S.C.R.\n\n48. Notices have to be judged according to the law existing on the date \nthe notice is issued. Section 149 of the old regime primarily provided \ntwo timelimits: (i) four years for all situations and (ii) beyond four \nyears and within six years if the income chargeable to tax which \nescaped assessment amounted to Rupees one lakh or more. After \n1 April 2021, the timelimits prescribed under the new regime came \ninto force. The ordinary timelimit of four years was reduced to three \nyears. Therefore, in all situations,reassessment notices could be \nissued under the new regime if not more than three years have \nelapsed from the end of the relevant assessment year. For example, \nfor assessment year 2018-2019, the four year period would have \nexpired on 31 March 2023 under the old regime. However, if the \nnotice is issued after 1 April 2021, the three year time limit prescribed \nunder the new regime will be applicable. The three year timelimit \nwill expire on 31 March 2022. \n\n49. The first proviso to Section 149(1)(b) requires the determination of \nwhether the timelimit prescribed under Section 149(1)(b) of the old \nregime continues to exist for the assessment year 2021-2022 and \nbefore. Resultantly, a notice under Section 148 of the new regime \ncannot be issued if the period of six years from the end of the relevant \nassessment year has expired at the time of issuance of the notice. \nThis also ensures that the new time limit of ten years prescribed \nunder Section 149(1)(b) of the new regime applies prospectively. For \nexample, for the assessment year 2012-2013, the ten year period \nwould have expired on 31 March 2023, while the six year period \nexpired on 31 March 2019. Without the proviso to Section 149(1)(b) \nof the new regime, the Revenue could have had the power to reopen \nassessments for the year 2012-2013 if the escaped assessment \namounted to Rupees fifty lakhs or more. The proviso limits the \nretrospective operation of Section 149(1)(b) to protect the interests \nof the assesses.\n\n50. Another important change under Section 149(1)(b) of the new regime \nis the increase in the monetary threshold from Rupees one lakh \nto Rupees fifty lakhs. The old regime prescribed a time limit of six \nyears from the end of the relevant assessment year if the income \nchargeable to tax which escaped assessment was more than Rupees \none lakh. In comparison, the new regime increases the time limit to \nten years if the escaped assessment amounts to more than Rupees \nfifty lakhs. This change could be summarized thus:\n\nDigital Supreme Court Reports\f[2024] 10 S.C.R. \n\n1679\n\nRegime\n\nTime limit\n\nIncome chargeable to \ntax which has escaped \nassessment\n\nOld regime\n\nNew regime\n\nFour years but not \nmore than six years\n\nRupees one lakh or \nmore\n\nThree years but not \nmore than ten years\n\nRupees fifty lakhs or \nmore\n\n51. Given Section 149(1)(b) of the new regime, reassessment notices \ncould be issued after three years only if the income chargeable to \ntax which escaped assessment is more than Rupees fifty lakhs. The \nproviso to Section 149(1)(b) limits the retrospectivity of that provision \nwith respect to the time limits specified under Section 149(1)(b) of \nthe old regime. \n\n52. \n\nIn Ashish Agarwal (supra), this Court held that the benefit of the \nnew regime must be provided for the reassessment conducted \nfor the past periods. The increase of the monetary threshold from \nRupees one lakh to Rupees fifty lakh is beneficial for the assesses. \nMr Venkataraman has also conceded on behalf of the Revenue that \nall notices issued under the new regime by invoking the six year time \nlimit prescribed under Section 149(1)(b) of the old regime will have \nto be dropped if the income chargeable to tax which has escaped \nassessment is less than Rupees fifty lakhs. \n\n53. The position of law which can be derived based on the above \ndiscussion may be summarized thus: (i) Section 149(1) of the \nnew regime is not prospective. It also applies to past assessment \nyears; (ii) The time limit of four years is now reduced to three \nyears for all situations. The Revenue can issue notices under \nSection 148 of the new regime only if three years or less have \nelapsed from the end of the relevant assessment year; (iii) the \nproviso to Section 149(1)(b) of the new regime stipulates that the \nRevenue can issue reassessment notices for past assessment \nyears only if the time limit survives according to Section 149(1)(b) \nof the old regime, that is, six years from the end of the relevant \nassessment year; and (iv) all notices issued invoking the time limit \nunder Section 149(1)(b) of the old regime will have to be dropped \nif the income chargeable to tax which has escaped assessment is \nless than Rupees fifty lakhs. \n\nUnion of India & Ors. v. Rajeev Bansal\f1680 \n\n[2024] 10 S.C.R.\n\nii. TOLA can extend the time limit till 31 June 2021\n\n54. The proviso to Section 149(1)(b) of the new regime uses the \nexpression “beyond the time limit specified under the provisions of \nclause (b) of sub-section (1) of this section, as they stood immediately \nbefore the commencement of the Finance Act, 2021.” Thus, the \nproviso specifically refers to the time limits specified under Section \n149(1)(b) of the old regime. The Revenue accepts that without \napplication of TOLA, the timelimit for issuance of reassessment \nnotices after 1 April 2021 expires for assessment years 2013-2014, \n2014-2015, 2015-2016, 2016-2017, and 2017-2018 in the following \nmanner:\n\n55. \n\n(i) \n\n(ii) \n\nfor the assessment years 2013-2014 and 2014-2015, the six \nyear period expires on 31 March 2020 and 31 March 2021 \nrespectively; and\n\nfor the assessment years 2016-2017 and 2017-2018, the three \nyear period expires on 31 March 2020 and 31 March 2021 \nrespectively.\n\na. Finance Act 2021 substituted the old regime\n\nIn Shamrao V Parulekar v. District Magistrate, Thana, 108 a \nConstitution Bench of this Court was called upon to decide the validity \nof the detention of the petitioner under the Preventive Detention \nAmendment Act 1950.109 The Detention Act 1950 was due to expire \non 1 April 1951, but the legislation was amended to prolong its life \nby another year till 1 April 1952. The petitioner was detained on 15 \nNovember 1951 and his detention would have expired on 1 April \n1952 with the expiration of the enactment. However, the Detention \nAct 1950 was amended in 1952, further prolonging its application \nfor six months till 1 October 1952. The issue before this Court was \nwhether the prolonging of the Detention Act 1950 also prolonged \nthe detention of the petitioner.\n\n56. Justice Vivian Bose, writing for the Constitution Bench, held that the \ndetention continued until the expiry of the Detention Act 1950 on 1 \nOctober 1952. The learned Judge further observed:\n\n108 \n\n[1956] 1 SCR 644 : (1952) 2 SCC 1\n\n109 “Detention Act 1950”\n\nDigital Supreme Court Reports\f[2024] 10 S.C.R. \n\n1681\n\n“7. The rule is that when a subsequent Act amends an \nearlier one in such a way as to incorporate itself, or a \npart of itself, into the earlier, then the earlier Act must \nthereafter be read and construed (except where that \nwould lead to a repugnancy, inconsistency or absurdity) \nas if the altered words had been written into the earlier \nAct with pen and ink and the old words scored out so that \nthereafter there is no need to refer to the amending Act \nat all. […] Bearing this in mind it will be seen that the \n1950 Act remains the 1950 Act all the way through \neven with its subsequent amendments. Therefore, \nthe moment the 1952 Act was passed and Section 2 \ncame into operation, the Act of 1950 meant the 1950 \nAct as amended by Section 2, that is to say, the 1950 \nAct now due to expire on 1-10-1952.”\n\n(emphasis supplied)\n\nThe principle which emanates from Shamrao V Parulekar (supra) \nis that after an amendment, the legislation has to be read along with \nthe amended provisions. \n\n57. The legislative practice of amendment by substitution is often used by \nthe legislatures. The process of substitution of a statutory provision \ngenerally involves two steps: first, the existing rule is deleted; \nand second, the new rule is brought into existence in its place.110 \nThe deletion effectively repeals the existing provision.111 Thus, an \namendment by substitution results in the repeal of an earlier provision \nand its replacement by a new provision.112 The repealed provision \nwill cease to operate from the date of repeal and the substituted \nprovision will commence operation from the date of its substitution.113 \nAfter the substitution, the legislation must be read and construed as \nif the altered words have been written into the legislation “with pen \nand ink and the old words scored out.”114 Therefore, after amendment \n\n110 Koteswar Vittal Kamath v. K Rangappa Baliga & Co. (1969) 1 SCC 255 [8]\n\n111 Bhagat Ram Sharma v. Union of India, 1988 Supp SCC 30 [17]\n\n112 State of Rajasthan v. Mangilal Pindwal (1996) 5 SCC 60 [9]\n\n113 Pernod Ricard India (P) Ltd v. State of Madhya Pradesh, 2024 SCC OnLine SC 566 [13]\n\n114 G V Krishnamraju v. Union of India (2019) 17 SCC 590 [18]; Ram Narain v. Simla Banking & Industrial \nCo. Ltd, 1956 SCC OnLine SC 1. [It was observed: 7. […] whenever an amended Act has to be applied \n\nUnion of India & Ors. v. Rajeev Bansal\f1682 \n\n[2024] 10 S.C.R.\n\n58. \n\nby substitution any reference to a legislation must be construed as \nthe legislation as amended by substitution.\n\nIn Shyam Sunder v. Ram Kumar,115 a Constitution Bench of this Court \nwas called upon to decide the extent of retrospective operation of an \namendment by substitution. In that case, the Haryana Amendment \nAct 1995 substituted Section 15 of the Punjab Pre-emption Act by \ntaking away the right of a co-sharer to pre-empt a sale during the \npendency of an appeal. This Court observed that according to Order \n20 Rule 14(1) of the Code of Civil Procedure 1908, the right of pre-\nemption becomes a vested right and can only be taken away by a \nknown method of law. As regards the retrospective operation of a \nsubstituted provision, it was held that “where a repeal of provisions \nof enactment is followed by fresh legislation by an amending Act, \nsuch legislation is prospective in operation and does not affect \nsubstantive or vested rights of the parties unless made retrospective \neither expressly or by necessary intendment.”116 This Court held that \nthe language used by the legislature indicated that it was introduced \nwith prospective effect and could not affect the accrued rights of the \nco-sharers. The decision of this Court in Shyam Sunder (supra) is \nan authority for the proposition that an amendment by substitution \ncan have a retrospective effect and affect the vested rights of the \nparties if the provision is made retrospective either expressly or by \nnecessary intendment.\n\n59. Parliament has often used the legislative process of amendment \nby substitution in the context of reassessment provisions under \nthe Income Tax Act.In S C Prashar v. Vasantsen Dwarkadas,117 \na Constitution Bench of this Court had to decide on the validity of \nthe notices issued under Section 34 of the Income Tax Act 1922. \nIn 1948, Section 34 of the Income TaxAct 1922 was substituted by \n\nsubsequent to the date of the amendment the various unamended provisions of the Act have to be read \nalong with the amended provisions as though they are part of it. This is for the purpose of determining \nwhat the meaning of any particular provision of the Act as amended is, whether it is in the unamended \npart or in the amended part. But this is the not the same thing as saying that the amendment itself must \nbe taken to have been in existence as from the date of the earlier Act. That would be imputing to the \namendment retrospective operation which could only be done if such retrospective operation is given by \nthe amending Act either expressly or by necessary implication.”]\n\n115 \n\n[2001] Supp. 1 SCR 115 : (2001) 8 SCC 24\n\n116 Shyam Sunder (supra) [28]\n\n117 \n\n[1964] 1 SCR 29\n\nDigital Supreme Court Reports\f[2024] 10 S.C.R. \n\n1683\n\na new provision which provided the following time limits: (i) eight \nyears from the end of the year if there was omission or failure on \nthe part of an assessee to make a return or disclose fully and truly \nall material facts necessary for assessment; and (ii) four years for \nall other cases. Justice M Hidayatullah (as the learned Chief Justice \nthen was), writing for himself and Justice Raghubar Dayal, observed \nthat the substituted provision was meant to enable the reassessment \nof income which had escaped assessment for past periods. It was \nfurther observed that the substituted provision “meant to operate \nretrospectively eight years in some cases and four years in others.”118 \nJustice A K Sarkar (as the learned Chief Justice then was) also \nobserved that no notice could be issued under the 1948 amendment \n“for a year from the end of which eight years had expired.”119\n\n60. The above principles can be applied as follows to the factual situation \nin the present appeals: (i) The Finance Act 2021 substituted Sections \n147 to 151 of the Income Tax Act with effect from 1 April 2021; \n(ii) Sections 147 to 151 of the old law ceased to operate from 1 April \n2021; (iii) After 1 April 2021, any reference to the Income Tax Act \nmeans the Income Tax Act as amended by the Finance Act 2021; (iv) \nThe time limits prescribed for issuing reassessment notices under \nSection 149operate retrospectively for three years for all situations \nand six years in case the escaped assessment amounts to or is \nlikely to amount to more than Rupees fifty lakhs.\n\n61. TOLA is a legislation enacted by Parliament. The assesses have \nneither challenged the legislative competence of Parliament to enact \nTOLA nor have they challenged the vires of the legislation. Section 3(1) \nof TOLA provides for the relaxation of “any time limit” prescribed under \nthe specified Acts for completion or compliance of “any proceeding \nor passing of any order or issuance of any sanction, intimation, \nnotification, sanction, or approval.” The expression “any” has been \ninterpreted by this Court to mean “all” or “every”.120 The context in \nwhich the word “any” appears has to be construed after taking into \nconsideration the scheme and the purpose of the enactment.121\n\n118 S C Prashar (supra) 107\n\n119 S C Prashar (supra) 86\n\n120 LDA v. M K Gupta (1994) 1 SCC 243 [4]; Raj Kumar Shivhare v. Directorate of Enforcement (2010) 4 \n\nSCC 772 [24];\n\n121 Vivek Narayan Sharma v. Union of India (2023) 3 SCC 1 [132]\n\nUnion of India & Ors. v. Rajeev Bansal\f1684 \n\n[2024] 10 S.C.R.\n\n62. The purpose of Section 3(1) of TOLA is to provide relaxation of time \nlimits prescribed under the specified Acts, which fell for completion \nor compliance from 20 March 2020 to 31 March 2021. TOLA was \nenacted in the backdrop of the COVID-19 pandemic, which impeded \nthe functioning of the government at all levels. The imposition of \nnational and local lockdowns created difficulties for the common \npeople, including litigants and assesses, to comply with their legal \nobligations. The COVID-19 pandemic and the ensuing lockdowns \nrequired legislatures across the world to dynamically adapt their laws \nand policies to redress the difficulties faced by persons, entities, and \ngovernmental authorities.122 The World Bank identified that persons \nand business entities faced severe financial situations characterised \nby a lack of cash or easily convertible-to-cash assets. It suggested that \nthis would impact revenue collection because individuals and entities \nwould not be in a position to pay the assessed taxes. Therefore, the \nWorld Bank advised deferral of tax filings and payment deadlines \nto allow individuals and business entities to cope with the crisis.123 \nMany countries across the world have extended deadlines for filing \ntax returns.124\n\n63. TOLA extended the time limits for completion or compliance of \ncertain actions under the specified Act, which fell for completion \nduring the COVID-19 outbreak. The use of the expression “any” in \nSection 3(1) indicates that the relaxation applies to “all” or “every” \naction whose time limit falls for completion from 20 March 2020 to \n31 March 2021. Section 3(1) is only concerned with the performance \nof actions contemplated under the provisions of the specified Acts. \nConsequently, the amendment or substitution of a provision under \nthe specified Acts will not affect the application of TOLA, so long \nas the action contemplated under the provision falls for completion \nduring the period specified by TOLA, that is, 20 March 2020 to 31 \nMarch 2021.\n\n122 Cary Coglianese and Neysun Mahboubi, ‘Administrative Law in a Time of Crisis: Comparing National \n\nResponses to COVID-19’ (2021) 73(1) Administrative Law Review 1, 10.\n\n123 Cebreiro Gomez, et al, COVID-19: Revenue Administration Implications – Potential Tax Administration \n\nand Customs Measures to Respond to the Crisis, World Bank Group (2022) 19\n\n124 See International Monetary Fund, Policy Responses to COVID-19 https://www.imf.org/en/Topics/imf-\n\nand-covid19/Policy-Responses-to-COVID-19\n\nDigital Supreme Court Reports\f[2024] 10 S.C.R. \n\n1685\n\n64. When enacting a statute, the legislature often endeavours to ensure \nthat the provisions of one legislation do not conflict with provisions of \nanother legislation.125 The purpose of the Income Tax Act is to levy tax \non income and raise revenues for the functioning of the Government. \nOn the other hand, the purpose of TOLA is to provide relaxation \nof the time for completion of any actions or proceedings falling for \ncompletion within a particular period. Thus, the two enactments \noperate in separate and distinct fields. This Court must ensure that \nthe provisions of the two enactments are interpreted harmoniously \nunless there is an irreconcilable conflict between them.\n\nb. Reading TOLA into Section 149\n\n65. Section 3(1) of TOLA applies to the action of “issuance of any notice” \nunder the Income Tax Act. The relaxation provided under Section 3(1) \nof TOLA will apply to the issuance of a reassessment notice under \nSection 148 of the Income Tax Act. TOLA did not amend the time limits \nof four years and six years from the end of the relevant assessment \nyears as specified under the Income Tax Act. It merely provided a \nrelaxation of the time period for issuance of a reassessment notice \nunder Section 148. TOLA has no application in situations where the \ntime limit specified under Section 149 expired before 20 March 2020. \nThe effect of TOLA is that at the time of issuance of a reassessment \nnotice under Section 148, the Revenue has to determine two things: \n(i) the time limit specified under Section 149; and (ii) the extent of \nrelaxation provided by TOLA and its notifications for issuance of \nnotices. Thus, although TOLA did not amend Section 149 of the \nIncome Tax Act, it has to be read with Section 149to determine the \ntime limit for issuance of a notice. This was the legislative intent \nbehind the enactment of TOLA. For instance, the six year time limit \nfor assessment year 2013-2014 under Section 149(1)(b) of the old \nregime expired on 31 March 2020. TOLA extended the period for \nissuing notice until 30 June 2021,given the difficulties that arose \nbecause of the COVID-19 pandemic. \n\n66. Section 3(1) of TOLA allowed the Central Government to specify by \nnotification “such other date after the 31st day of March, 2021” as \nthe time limit for completion or compliance of any action under the \n\n125 \n\nIn Re: Interplay between Arbitration Agreements under the Arbitration and Conciliation Act 1996 and the \nIndian Stamp Act 1899, 2023 INSC 1066 [159]\n\nUnion of India & Ors. v. Rajeev Bansal\f1686 \n\n[2024] 10 S.C.R.\n\nspecified Acts. The provision also empowered the Central Government \nto specify different dates for completion or compliance of different \nactions. The notifications dated 31 March 2021 and 27 April 2021 \nextend the operation of TOLA by providing an extended time limit \nfor completing actions under the Income Tax Act till 30 June 2021.\n\n67. Section 2(1)(b)(ii) of TOLA defines ‘specified Act’ to include the \nIncome Tax Act. After 1 April 2021, Section 2(1)(b)(ii) must be read \nto mean the Income Tax Act as amended by the Finance Act 2021. \nThe substitution of Sections 147 to 151 will not affect the purpose of \nTOLA, which is,to provide relaxation of the time limit for completion \nor compliance of any actions falling for completion between 20 March \n2020 and 31 March 2021. TOLA will continue to apply to the Income \nTax Act after 1 April 2021 if any action or proceeding specified under \nthe substituted provisions of the Income Tax Act falls for completion \nbetween 20 March 2020 and 31 March 2021. \n\n68. After 1 April 2021, the Income Tax Act has to be read along with the \nsubstituted provisions. The substituted provisions apply retrospectively \nfor past assessment years as well. On 1 April 2021, TOLA was still in \nexistence, and the Revenue could not have ignored the application \nof TOLA and its notifications. Therefore, for issuing a reassessment \nnotice under Section 148 after 1 April 2021, the Revenue would \nstill have to look at: (i) the time limit specified under Section 149 \nof the new regime; and (ii) the time limit for issuance of notice as \nextended by TOLA and its notifications. The Revenue cannot extend \nthe operation of the old lawunder TOLA, but it can certainly benefit \nfrom the extended time limit for completion of actions falling for \ncompletion between 20 March 2020 and 31 March 2021. \n\n69. For instance, Section 149(1)(a) of the new regime specified the time \nlimit of three years from the end of the relevant assessment year \nfor reopening of the assessment. For assessment year 2017-2018, \nthe three year period expired on 31 March 2021. The expiry of time \nfell within the time period contemplated by Section 3 of TOLA read \nwith its notifications. Resultantly, the Revenue had time until 30 June \n2021 to issue a reassessment notice for assessment year 2017-\n2018 under Section 149(1)(a). This harmonious reading gives effect \nto the legislative intention of both the Income Tax Act and TOLA. \nMoreover, Sections 147 to 151 are machinery provisions. Therefore, \nthey must be given an interpretation that is consistent with the object \nand purpose of the Income Tax Act.\n\nDigital Supreme Court Reports\f[2024] 10 S.C.R. \n\n1687\n\n70. \n\nIn Income-tax Officer v. Vikram Sujitkumar Bhatia,126 a two-Judge \nBench of this Court had to decide whether Section 153C of the \nIncome Tax Act, as amended by the Finance Act 2015, would apply \nto searches conducted before 1 June 2015 (the date of coming into \nforce of the amendment). This Court observed that since Section \n153C is a machinery provision, it should be interpreted in a manner \nto effectuate the object and purpose of the statute. It was observed \nthat the object and purpose of Section 153C was the assessment \nof the income of any other person. It was held that if the amended \nprovision is made applicable prospectively, it will frustrate the object \nand purpose of Section 153C.\n\n71. Section 3(1) of TOLA contains a non obstante clause: “notwithstanding \nanything contained in the specified Act.” The legislative intention of \nincluding the non obstante clause is to remove any obstacles which \nmay come in the way of the operation of the extension of the time \nlimit till 31 March 2021 or such other date after 31 March 2021 \nspecified by the Central Government. The purpose is to ensure \nthat the full benefit of the relaxation should be provided to both the \nassesses and the Revenue to tide over the difficulties caused by \nthe COVID-19 pandemic. \n\n72. The non obstante clause in Section 3(1) has to be read as controlling \nthe provisions of the specified Acts, including the provisions of the \nIncome Tax Act.127 In the context of the issuance of a reassessment \nnotice, the non obstante clause will override the provisions of the \nIncome Tax Act in case of any direct conflict or inconsistency. \nSection 3(1) overrides Section 149 only to the extent of relaxing \nthe time limit for issuance of reassessment notice under Section \n148. The time limit for issuance of a reassessment notices, which \nfall for completion between 20 March 2020 and 31 March 2021,has \nbeen extended till 30 June 2021. However, the non obstante clause \nunder Section 3(1) of TOLA will operate neither to extend the time \nlimit of three years from the end of the relevant assessment year \nunder Section 149(1)(a) of the new regime nor to extend the time \nlimit of six years from the end of the relevant assessment years \nunder Section 149(1)(b) of the old regime. The non obstante clause \n\n126 (2023) 453 ITR 417\n\n127 M P V Sundararamier v. State of Andhra Pradesh, 1958 SCC OnLine SC 22 \n\nUnion of India & Ors. v. Rajeev Bansal\f1688 \n\n[2024] 10 S.C.R.\n\nensures that the Revenue has additional time beyond the statutory \nstipulated time limit to complete or comply with the formalities \ngiven the administrative difficulties that arose due to the COVID-19 \npandemic. \n\niii. Sanction of the specified authority\n\n73. Section 151 imposes a check upon the power of the Revenue to \nreopen assessments. The provision imposes a responsibility on \nthe Revenue to ensure that it obtains the sanction of the specified \nauthority before issuing a notice under Section 148. The purpose \nbehind this procedural check is to save the assesses from harassment \nresulting from the mechanical reopening of assessments.128 A table \nrepresenting the prescription under the old and new regime is set \nout below:\n\nRegime\n\nTime limits\n\nSpecified authority\n\nSection 151(2) \nof the old \nregime\n\nBefore expiry of four \nyears from the end of the \nrelevant assessment year\n\nSection 151(1) \nof the old \nregime\n\nAfter expiry of four years \nfrom the end of the \nrelevant assessment year\n\nSection 151(i) \nof the new \nregime\n\nSection 151(ii) \nof the new \nregime\n\nThree years or less than \nthree years from the end \nof the relevant assessment \nyear\n\nMore than three years \nhave elapsed from the end \nof the relevant assessment \nyear\n\nJoint Commissioner\n\nPrincipal Chief \nCommissioner or \nChief Commissioner or \nPrincipal Commissioner \nor Commissioner\n\nPrincipal Commissioner \nor Principal Director or \nCommissioner or Director\n\nPrincipal Chief \nCommissioner or \nPrincipal Director General \nor Chief Commissioner or \nDirector General\n\n74. The above table indicates that the specified authority is directly \nco-related to the time when the notice is issued. This plays out as \nfollows under the old regime: \n\n128 Srikrishna Private Ltd v. ITO (1996) 9 SCC 534 [4]\n\nDigital Supreme Court Reports\f[2024] 10 S.C.R. \n\n1689\n\n(i) \n\n(ii) \n\nIf income escaping assessment was less than Rupees one \nlakh: (a) a reassessment notice could be issued under Section \n148 within four years after obtaining the approval of the Joint \nCommissioner; and (b) no notice could be issued after the \nexpiry of four years; and\n\nIf income escaping was more than Rupees one lakh: (a) a \nreassessment notice could be issued within four years after \nobtaining the approval of the Joint Commissioner; and (b) after \nfour years but within six years after obtaining the approval of \nthe Principal Chief Commissioner or Chief Commissioner or \nPrincipal Commissioner or Commissioner.\n\n75. After 1 April 2021, the new regime has specified different authorities \nfor granting sanctions under Section 151. The new regime is beneficial \nto the assesse because it specifies a higher level of authority for \nthe grant of sanctions in comparison to the old regime. Therefore, \nin terms of Ashish Agarwal (supra), after 1 April 2021, the prior \napproval must be obtained from the appropriate authorities specified \nunder Section 151 of the new regime. The effect of Section 151 of \nthe new regime is thus:\n\n(i) \n\n(ii) \n\nIf income escaping assessment is less than Rupees fifty \nlakhs: (a) a reassessment notice could be issued within \nthree years after obtaining the prior approval of the Principal \nCommissioner, or Principal Director or Commissioner or \nDirector; and (b) no notice could be issued after the expiry \nof three years; and\n\nIf income escaping assessment is more than Rupees fifty lakhs: \n(a) a reassessment notice could be issued within three years \nafter obtaining the prior approval of the Principal Commissioner, \nor Principal Director or Commissioner or Director; and (b) after \nthree years after obtaining the prior approval of the Principal \nChief Commissioner or Principal Director General or Chief \nCommissioner or Director General.\n\n76. Grant of sanction by the appropriate authority is a precondition for the \nassessing officer to assume jurisdiction under Section 148 to issue a \nreassessment notice. Section 151 of the new regime does not prescribe \na time limit within which a specified authority has to grant sanction. \nRather, it links up the time limits with the jurisdiction of the authority to \ngrant sanction. Section 151(ii) of the new regime prescribes a higher \n\nUnion of India & Ors. v. Rajeev Bansal\f1690 \n\n[2024] 10 S.C.R.\n\nlevel of authority if more than three years have elapsed from the end of \nthe relevant assessment year. Thus, non-compliance by the assessing \nofficer with the strict time limits prescribed under Section 151 affects \ntheir jurisdiction to issue a notice under Section 148. \n\n77. Parliament enacted TOLA to ensure that the interests of the \nRevenue are not defeated because the assessing officer could \nnot comply with the pre-conditions due to the difficulties that arose \nduring the COVID-19 pandemic. Section 3(1) of TOLA relaxes the \ntime limit for compliance with actions that fall for completion from \n20 March 2020 to 31 March 2021. TOLA will accordingly extend \nthe time limit for the grant of sanction by the authority specified \nunder Section 151. The test to determine whether TOLA will apply \nto Section 151 of the new regime is this: if the time limit of three \nyears from the end of an assessment year falls between 20 March \n2020 and 31 March 2021, then the specified authority under Section \n151(i) has an extended time till 30 June 2021 to grant approval. \nIn the case of Section 151 of the old regime, the test is: if the \ntime limit of four years from the end of an assessment year falls \nbetween 20 March 2020 and 31 March 2021, then the specified \nauthority under Section 151(2) has time till 31 March 2021 to grant \napproval. The time limit for Section 151 of the old regime expires \non 31 March 2021 because the new regime comes into effect on \n1 April 2021.\n\n78. For example, the three year time limit for assessment year 2017-2018 \nfalls for completion on 31 March 2021. It falls during the time period \nof 20 March 2020 and 31 March 2021,contemplated under Section \n3(1) of TOLA. Resultantly, the authority specified under Section 151(i) \nof the new regime can grant sanction till 30 June 2021.\n\n79. Under Finance Act 2021, the assessing officer was required to obtain \nprior approval or sanction of the specified authorities at four stages:\n\na. Section 148A(a) – to conduct any enquiry, if required, with \nrespect to the information which suggests that the income \nchargeable to tax has escaped assessment;\n\nb. Section 148A(b) – to provide an opportunity of hearing to the \nassessee by serving upon them a show cause notice as to why \na notice under Section 148 should not be issued based on the \ninformation that suggests that income chargeable to tax has \n\nDigital Supreme Court Reports\f[2024] 10 S.C.R. \n\n1691\n\n80. \n\nescaped assessment. It must be noted that this requirement \nhas been deleted by the Finance Act 2022;129\n\nc. Section 148A(d) – to pass an order deciding whether or not it \nis a fit case for issuing a notice under Section 148; and\n\nd. Section 148 – to issue a reassessment notice.\n\nIn Ashish Agarwal (supra), this Court directed that Section \n148 notices which were challenged before various High Courts \n“shall be deemed to have been issued under Section 148-A of \nthe Income Tax Act as substituted by the Finance Act, 2021 and \nconstrued or treated to be show-cause notices in terms of Section \n148-A(b).” Further, this Court dispensed with the requirement of \nconducting any enquiry with the prior approval of the specified \nauthority under Section 148A(a). Under Section 148A(b), an \nassessing officer was required to obtain prior approval from \nthe specified authority before issuing a show cause notice. \nWhen this Court deemed the Section 148 notices under the old \nregime as Section 148A(b) notices under the new regime, it \nimpliedly waived the requirement of obtaining prior approval from \nthe specified authorities under Section 151 for Section 148A(b). It \nis well established that this Court while exercising its jurisdiction \nunder Article 142, is not bound by the procedural requirements \nof law.130\n\n81. This Court in Ashish Agarwal (supra) directed the assessing officers \nto “pass orders in terms of Section 148-A(d) in respect of each of the \nassesses concerned.” Further, it directed the assessing officers to \nissue a notice under Section 148 of the new regime “after following \nthe procedure as required under Section 148-A.”Although this Court \nwaived off the requirement of obtaining prior approval under Section \n148A(a) and Section 148A(b), it did not waivethe requirement for \nSection 148A(d) and Section 148. Therefore, the assessing officer \nwas required to obtain prior approval of the specified authority \naccording to Section 151 of the new regime before passing an \norder under Section 148A(d) or issuing a notice under Section 148. \n\n129 Section 45, Finance Act 2022\n\n130 Allahabad High Court Bar Association v. State of U P (2024) 6 SCC 267 [27.3]\n\nUnion of India & Ors. v. Rajeev Bansal\f1692 \n\n[2024] 10 S.C.R.\n\nThese notices ought to have been issued following the time limits \nspecified under Section 151 of the new regime read with TOLA, \nwhere applicable.\n\nF. Section 148 notices issued in June-September 2022\n\ni. \n\nScope of Article 142\n\n82. Article 142 empowers this Court to pass such decree or make such \norder as is necessary for doing complete justice in any cause or matter \npending before it.131 The discretionary jurisdiction exercised by this \nCourt under Article 142 is of the widest amplitude.132 The Constitution \nhas left it to the judicial discretion of this Court to decide the scope \nand limits of its jurisdiction to render substantial justice in matters \ncoming before it.133 The expression “any cause or matter” mentioned \nunder Article 142 includes every kind of proceeding pending before \nthis Court.134 Article 142 allows this Court to give precedence to equity \nover law, provided the exercise of the discretion is consistent with \nconstitutional provisions and after due consideration of substantive \nprovisions instatutory law.135\n\n83. \n\nIn Prem Chand Garg v. The Excise Commissioner,136 Justice P B \nGajendragadkar (as the learned Chief Justice then was), speaking \nfor the majority, observed that the order made by this Court under \nArticle 142 “must not only be consistent with the fundamental rights \nguaranteed by the Constitution, but it cannot even be inconsistent \nwith the substantive provisions of the relevant statutory laws.” \nHowever, in Union Carbide Corpn.Ltd. v. Union of India,137 Justice \nVenkatachaliah (as the learned Chief Justice then was), speaking for \nthe majority, clarified Prem Chand Garg (supra) by observing that \n\n131 Article 142, Constitution. [It reads:\n\n“142(1) The Supreme Court in the exercise of its jurisdiction may pass such decree or make such order \nas is necessary for doing complete justice in any cause or matter pending before it, and any decree so \npassed or order so made shall be enforceable throughout the territory of India in such manner as may \nbe prescribed by or under any law made by Parliament and, until provision in that behalf is so made, in \nsuch manner as President may by order prescribe.”\n\n132 Jose Da Costa v. Bascora Sadasiva Sinai Narcornim (1976) 2 SCC 917 [37]\n\n133 Ganga Bishan v. Jai Narain (1986) 1 SCC 75 [5]\n\n134 Delhi Judicial Service Association v. State of Gujarat (1991) 4 SCC 406 [50]\n\n135 Shilpa Sailesh v. Varun Sreenivasan, 2023 SCC OnLine SC 544 [12]\n\n136 \n\n[1963] Supp. 1 SCR 885 : 1962 SCC OnLine SC 37\n\n137 \n\n[1991] Supp. 1 SCR 381 : (1991) 4 SCC 584 [83]\n\nDigital Supreme Court Reports\f[2024] 10 S.C.R. \n\n1693\n\nordinary laws cannot limit the constitutional powers of this Court under \nArticle 142. The learned Judge further observed that in exercising its \njurisdiction under Article 142, this Court will “take note of the express \nprohibitions in any substantive statutory provision based on some \nfundamental principles of public policy and regulate the exercise of \nits power and discretion accordingly.”\n\n84. \n\nIn Supreme Court Bar Association v. Union of India, 138 a \nConstitution Bench held that the powers under Article 142 cannot \nbe exercised to supplant substantive law applicable to the \nmatter pending before this Court. In Allahabad High Court Bar \nAssociation v. State of Uttar Pradesh,139 a Constitution Bench laid \ndown the following parameters for the exercise of the jurisdiction \nunder Article 142:\n\n“27.1. The jurisdiction can be exercised to do complete \njustice between the parties before the Court. It cannot be \nexercised to nullify the benefits derived by a large number \nof litigants based on judicial orders validly passed in their \nfavour who are not parties to the proceedings before this \nCourt;\n\n27.2. Article 142 does not empower this Court to ignore \nthe substantive rights of the litigants; and\n\n27.3. While exercising the jurisdiction under Article 142 of the \nConstitution of India, this Court can always issue procedural \ndirections to the courts for streamlining procedural aspects \nand ironing out the creases in the procedural laws to ensure \nexpeditious and timely disposal of cases. This is because, \nwhile exercising the jurisdiction under Article 142, this \nCourt may not be bound by procedural requirements \nof law. However, while doing so, this Court cannot \naffect the substantive rights of those litigants who are \nnot parties to the case before it. The right to be heard \n\n138 \n\n[1998] 2 SCR 795 : (1998) 4 SCC 409 [47. […] It, however, needs to be remembered that the powers \nconferred on the Court by Article 142 being curative in nature cannot be construed as powers which \nauthorise the Court to ignore the substantive rights of a litigant while dealing with a cause pending \nbefore it. This power cannot be used to “supplant” substantive law applicable to the case or cause under \nconsideration of the Court. Article 142, even with the width of its amplitude, cannot be used to build a \nnew edifice where none existed earlier, by ignoring express statutory provisions dealing with a subject \nand thereby to achieve something indirectly which cannot be achieved directly.]\n\n139 Allahabad High Court Bar Association v. State of U P (2024) 6 SCC 267\n\nUnion of India & Ors. v. Rajeev Bansal\f1694 \n\n[2024] 10 S.C.R.\n\nbefore an adverse order is passed is not a matter of \nprocedure but a substantive right.”\n\n(emphasis supplied)\n\n85. \n\nIn M Siddiq v. Suresh Das,140 a Constitution Bench observed \nthat Article 142 embodies the concept of justice, equity, and good \nconscience. This Court further observed that Article 142 empowers \nthe court to pass an order which accords with justice:\n\n“1026. The extraordinary constitutional power to pass any \ndecree or an order which, in the opinion of this Court is \nnecessary for doing complete justice embodies the idea \nthat a court must, by necessity, be empowered to craft \noutcomes that ensure a just outcome. When a court is \npresented before it with hard cases, they follow an \ninterpretation of the law that best fits and justifies the \nexisting legal landscape — the Constitution, statutes, \nrules, regulations, customs and common law. Where \nexclusive rule-based theories of law and adjudication \nare inadequate to explain either the functioning of the \nsystem or create a relief that ensures complete justice, \nit is necessary to supplement such a model with \nprinciples grounded in equitable standards. The power \nunder Article 142 however is not limitless. It authorises the \nCourt to pass orders to secure complete justice in the case \nbefore it. Article 142 embodies both the notion of justice, \nequity and good conscience as well as a supplementary \npower to the Court to effect complete justice.”\n\n(emphasis supplied)\n\n86. The exercise of the jurisdiction under Article 142 is meant to \nsupplement the existing legal framework to do complete justice \nbetween the parties.141 In a given circumstance, this Court can \nsupplement a legal framework to craft a just outcome when strict \nadherence to a source of law and exclusive rule-based theories \ncreate inequitable results.142\n\n140 \n\n[2019] 18 SCR 1 : (2020) 1 SCC 1 [1023]\n\n141 Vinay Chandra Mishra, In re (1995) 2 SCC 584 [46]; Delhi Development Authority v. Skipper Construction \n\nCo. (P) Ltd. (1996) 4 SCC 622 [16]\n\n142 M Siddiq (supra) [1019]; [1026]\n\nDigital Supreme Court Reports\f[2024] 10 S.C.R. \n\n1695\n\n87. The directions issued by this Court under Article 142 cannot be \nconsidered as a ratio because they are issued based on the peculiar \nfacts and circumstances of the cause or matter before this Court.143 \nIn State v. Kalyan Singh,144 this Court observed that a judgment \nhas two components: (a) declaration of law; and (b) directions. In \nBir Singh v. Mukesh Kumar,145 it was held that what is binding on \nall courts under Article 141146 is the declaration of law, and not the \ndirections issued under Article 142.147\n\n88. This Court has exercised its jurisdiction under Article 142 in tax \nmatters where the actions of the Revenue are not in accordance \nwith the law.148 In Whirlpool of India Ltd. v. CIT,149 this Court \ndirected the Income Tax Officer to give effect to the order of the \nIncome Tax Appellate Tribunal by disallowing a particular deduction. \nIn CIT v. Greenworld Corporation,150 the issue before this Court \nwas whether a Commissioner of Income Tax151 appropriately issued \ndirections under Section 263 of the Income Tax Act to an assessing \nofficer to reopen assessments. It was held that the facts of the case \ndid not merit the CIT to issue directions to the assessing officer. \nConsequently, this Court termed the reassessment notice issued \nby the assessing officer to be illegal and exercised its jurisdiction \n\n143 J & K Public Service Commission v. Narinder Mohan (1994) 2 SCC 630 [11].\n\n144 (2017) 7 SCC 444. [22. […] It is important to notice that Article 142 follows upon Article 141 of the \nConstitution, in which it is stated that the law declared by the Supreme Court shall be binding on all \ncourts within the territory of India. Thus, every judgment delivered by the Supreme Court has two \ncomponents — the law declared which binds courts in future litigation between persons, and the doing \nof complete justice in any cause or matter which is pending before it.]\n\n145 (2019) 4 SCC 197 [30]\n\n146 Article 141, Constitution of India. [It reads:\n\n“141. Law declared by Supreme Court to be binding on all courts – The law declared by the Supreme \nCourt shall be binding on all courts within the territory of India.”]\n\n147 Also see State of Punjab v. Rafiq Masih (2014) 8 SCC 883 [12]. [12. […] The Court has compartmentalized \nand differentiated the relief in the operative portion of the judgment by exercise of powers under Article \n142 of the Constitution as against the law declared. The directions of the Court under Article 142 of the \nConstitution, while moulding the relief, that relax the application of law or exempt the case in hand from \nthe rigour of the law in view of the peculiar facts and circumstances do not comprise the ratio decidendi \nand therefore lose its basic premise of making it a binding precedent. This Court in the qui vive has \nexpanded the horizons of Article 142 of the Constitution by keeping it outside the purview of Article 141 of \nthe Constitution and declaring it a direction of the Court that changes its complexion with the peculiarity \nin the facts and circumstances of the case.”]\n\n148 See Prashanti Medical Services & Research Foundation v. Union of India (2020) 14 SCC 785 [30]\n\n149 (2000) 9 SCC 62\n\n150 \n\n[2009] 8 SCR 175 : (2009) 7 SCC 69\n\n151 “CIT”\n\nUnion of India & Ors. v. Rajeev Bansal\f1696 \n\n[2024] 10 S.C.R.\n\nunder Article 142 to direct the reopening of the assessment by an \nappropriate assessing authority. \n\n89. \n\nii. The scope of Ashish Agarwal extended to all the \nreassessment notices issued between 1 April 2021 and \n30 June 2021 under the old regime\n\nIn Ashish Agarwal (supra), this Court: (i) upheld the judgments of \nthe High Courts; and (ii) deemed the notices issued under Section \n148 of the old regime as show cause notices issued under Section \n148A(b) of the new regime. By agreeing with the judgments of the \nHigh Courts, this Court laid down the law that the provisions of the \nnew regime will be applicable for all the reassessment notices issued \nunder Section 148 after 1 April 2021. As a result of this holding, \nall the reassessment notices issued in terms of Section 148 of the \nold regime would have been declared invalid. Therefore, this Court \ndeemed the reassessment notices issued under the old regime after \n1 April 2021 as show cause notices issued under Section 148A(b) \nof the new regime. \n\n90. \n\nIn Ashish Agarwal (supra), this Court rendered its decision on the \npremise that the Revenue issued approximately ninety thousand \nnotices under the old regime and all of them were the subject matter \nof writ petitions before the High Courts:\n\n“4. At this stage, it is required to be noted that approximately \n90,000 such reassessment notices under Section 148 \nof the unamended Income Tax Act were issued by the \nRevenue after 1-4-2021, which were the subject-matter \nof more than 9000 writ petitions before various High \nCourts across the country and by different judgments and \norders, the particulars of which are as above, the High \nCourts have taken a similar view and have set aside the \nrespective reassessment notices issued under Section \n148 on similar grounds.”\n\nFurther, this Court directed that its directions “shall be applicable \nPAN INDIA”:\n\n“29. The present order shall be applicable PAN INDIA \nand all judgments and orders passed by the different High \nCourts on the issue and under which similar notices which \n\nDigital Supreme Court Reports\f[2024] 10 S.C.R. \n\n1697\n\nwere issued after 1-4-2021 issued under Section 148 of \nthe Act are set aside and shall be governed by the present \norder and shall stand modified to the aforesaid extent. The \npresent order is passed in exercise of powers under \nArticle 142 of the Constitution of India so as to avoid \nany further appeals by the Revenue on the very issue \nby challenging similar judgments and orders, with a \nview not to burden this Court with approximately 9000 \nappeals. We also observe that the present order shall also \ngovern the pending writ petitions, pending before various \nthe High Courts in which similar notices under Section \n148 of the Act issued after 1-4-2021 are under challenge.”\n\n(emphasis supplied)\n\nThe purpose of this Court in deeming the reassessment notices \nissued under the old regime as show cause notices under the new \nregime was two-fold: (i) to strike a balance between the rights of \nthe assesses and the Revenue which issued approximately ninety \nthousand reassessment notices after 1 April 2021 under the old \nregime; and (ii) to avoid any further appeals before this Court by the \nRevenue on the same issue by challenging similar judgments and \norders of the High Courts (arising from approximately nine thousand \nwrit petitions).\n\n91. Ashish Agarwal (supra) was primarily concerned with the validity \nof the reassessment notices issued between 1 April 2021 and 30 \nJune 2021 under the old regime. The scope of the directions in \nAshish Agarwal (supra) applied PAN INDIA, including all the ninety \nthousand reassessment notices issued under the old regime during \nthe period 1 April 2021 and 30 June 2021, as is evident from the \nfollowing observation of this Court:\n\n“26. There is a broad consensus on the aforesaid aspects \namongst the learned ASG appearing on behalf of the \nRevenue and the learned Senior Advocates/learned \ncounsel appearing on behalf of the respective assessees. \nWe are also of the opinion that if the aforesaid order \nis passed, it will strike a balance between the rights \nof the Revenue as well as the respective assessees \nas because of a bona fide belief of the officers of \nthe Revenue in issuing approximately 90,000 such \n\nUnion of India & Ors. v. Rajeev Bansal\f1698 \n\n[2024] 10 S.C.R.\n\nnotices, the Revenue may not suffer as ultimately it \nis the public exchequer which would suffer.”\n\n(emphasis supplied)\n\n92. This Court specifically mentioned that its directions would also apply \nto three categories: (i) the judgment and order passed by the High \nCourt of Judicature at Allahabad; (ii) all judgments and orders passed \nby the different High Court on the issue where notices issued under \nSection 148 of the old regime after 1 April 2021 were set aside; \nand (iii) writ petitions pending before various High Courts in which \nnotices under Section 148 of the old regime issued after 1 April \n2021 are under challenge.152 The Court mentioned the above three \ncategories to clarify that the general nature of its directions will also \ngive a quiet us to the matters that have already been adjudicated or \nare pending adjudication before judicial forums. The operation of the \ndirections cannot be limited to the above three categories, especially \nwhen this Court has specifically held that “the present order shall \nbe applicable PAN INDIA.”\n\n93. \n\nIn Ashish Agarwal (supra), this Court was aware of the fact that \nit could not have used its jurisdiction under Article 142 to affect the \nvested rights of the assesses by deeming Section 148 notices under \nthe old regime as Section 148 notices under the new regime. Hence, \nit deemed the reassessment notices issued under the old regime \nas show cause notices under Section 148A(b) of the new regime. \nFurther, the Court directed the Revenue to provide all the relevant \nmaterial or information to the assesses and thereafter allowed the \nassesses to respond to the show cause notice by availing all the \ndefences, including those available under Section 149. Thus, the Court \nbalanced the equities between the Revenue and the assesses by \ngiving effect to the legislative scheme of reassessment as contained \nunder the new regime. It supplemented the existing legal framework \nof the procedure of reassessment under the Income Tax Act with a \nremedy grounded in equitable standards.\n\niii. Effect of the legal fiction\n\n94. Before we proceed, we need to bear in mind three important periods:\n\n152 Ashish Agarwal (supra) [27] and [29]\n\nDigital Supreme Court Reports\f[2024] 10 S.C.R. \n\n1699\n\ni. \n\nii. \n\nThe period up to 30 June 2021 – this period is covered by the \nprovisions of the Income Tax Act read with TOLA;\n\nThe period from 1 July 2021 to 3 May 2022 – the period before \nthe decision of this Court in Ashish Agarwal (supra); and\n\niii. The period after 4 May 2022 – the period after the decision of \nthis Court in Ashish Agarwal (supra). This period is covered by \nthe directions issued by this Court in Ashish Agarwal (supra) \nand the provisions of the Income Tax Act read with TOLA.\n\na. Third proviso to Section 149\n\n95. The third proviso to Section 149 reads thus:\n\n“Provided also that for the purposes of computing the period \nof limitation as per this section, the time or extended time \nallowed to the assessee, as per show-cause notice issued \nunder clause (b) of section 148A or the period during which \nthe proceeding under section 148A is stayed by an order \nor injunction of any court, shall be excluded.”\n\n96. The third proviso excludes the following periods to calculate the \nperiod of limitation: (i) the time allowed to the assessee under \nSection 148A(b); and (ii) the period during which the proceedings under \nSection 148A are “stayed by an order or injunction of any court.”\n\n97. A legal fiction is a supposition of law that a thing or event exists even \nthough, in reality, it does not exist.153 The word “deemed” is used \nto treat a thing or event as something, which otherwise it may not \nhave been, with all the attendant consequences.154 The effect of a \nlegal fiction is that “a position which otherwise would not obtain is \ndeemed to obtain under the circumstances.”155 In K Prabhakaran v. \nP Jayarajan,156 Chief Justice R C Lahoti, speaking for the majority, \nobserved that:\n\n“39. […] While pressing into service a legal fiction it \nshould not be forgotten that legal fictions are created only \n\n153 Gajraj Singh v. STAT (1997) 1 SCC 650 [22]\n\n154 CIT v. Calcutta Stock Exchange, 1959 SCC OnLine SC 126 [5]; Sudha Rani Garg v. Jagdish Kumar \n\n(2004) 8 SCC 329 [11]\n\n155 Gajraj Singh (supra) [22]\n\n156 \n\n[2016] 3 SCR 390 : (2005) 1 SCC 754\n\nUnion of India & Ors. v. Rajeev Bansal\f1700 \n\n[2024] 10 S.C.R.\n\nfor some definite purpose and the fiction is to be limited \nto the purpose for which it was created and should not \nbe extended beyond that legitimate field. A legal fiction \npresupposes the existence of the state of facts which may \nnot exist and then works out the consequences which \nflow from that state of facts. Such consequences have \ngot to be worked out only to their logical extent having \ndue regard to the purpose for which the legal fiction has \nbeen created. Stretching the consequences beyond what \nlogically flows amounts to an illegitimate extension of the \npurpose of the legal fiction.”\n\n98. A legal fiction is created for a definite purpose and it should be \nlimited to the purpose for which it is enacted or applied. It is a \nwell-established principle of interpretation that the courts must give \nfull effect to a legal fiction by having due regard to the purpose \nfor which the legal fiction is created.157 The consequences that \nfollow the creation of the legal fiction “have got to be worked out \nto their logical extent.”158 The court has to assume all the facts and \nconsequences that are incidental or inevitable corollaries to giving \neffect to the fiction.159\n\n99. \n\nIn Ashish Agarwal (supra), this Court created a legal fiction by \ndeeming the Section 148 notices issued under the old regime as \nshow cause notices under Section 148A(b) of the new regime. The \npurpose of the legal fiction was to enable the Revenue “to proceed \nfurther with the reassessment proceedings as per the substituted \nprovisions” of the Income Tax Act. Accordingly, all the reassessment \nnotices issued under the old regime were deemed to always have \nbeen show cause notices issued under Section 148A(b) of the \nnew regime. The fiction replaced Section 148 notices with Section \n148A(b) notices with effect from the date when the notices under \nSection 148 of the old regime were issued between 1 April 2021 and \n30 June 2021, as the case may be. This ensured the continuance \nof the reassessment process initiated by the Revenue from 1 April \n2021 to 30 June 2021 under the old regime.\n\n157 State of Maharashtra v. Laljit Rajshi Shah (2000) 2 SCC 699 [6].\n\n158 Bengal Immunity Company Ltd v. State of Bihar, 1955 SCC OnLine SC 2\n\n159 \n\nIndustrial Supplies (P) Ltd. v. Union of India (1980) 4 SCC 341 [25]\n\nDigital Supreme Court Reports\f[2024] 10 S.C.R. \n\n1701\n\n100. Importantly, this Court in Ashish Agarwal (supra) did not quash the \nreassessment notices issued under Section 148 of the old regime. \nIn Shree Chamundi Mopeds Ltd. v. Church of South India Trust \nAssociation,160 a three-Judge Bench of this Court explained the \ndistinction between quashing an order and staying the operation of \nan order thus:\n\n“10. […] Quashing of an order results in the restoration \nof the position as it stood on the date of the passing of \nthe order which has been quashed. The stay of operation \nof an order does not, however, lead to such a result. It \nonly means that the order which has been stayed would \nnot be operative from the date of the passing of the stay \norder and it does not mean that the said order has been \nwiped out from existence.”\n\nThe reassessment proceedings erroneously initiated by the \nRevenue under the old regime were not wiped out from existence. \nConsequently, the Revenue was not required to start the procedure \nof reassessment afresh after the decision of this Court in Ashish \nAgarwal (supra).\n\n101. Under Section 148A(b), the assessing officer has to comply with two \nrequirements: (i) issuance of a show cause notice; and (ii) supply of \nall the relevant information which forms the basis of the show cause \nnotice. The supply of the relevant material and information allows \nthe assessee to respond to the show cause notice. The deemed \nnotices were effectively incomplete because the other requirement \nof supplying the relevant material or information to the assesses \nwas not fulfilled. The second requirement could only have been \nfulfilled by the Revenue by an actual supply of the relevant material \nor information that formed the basis of the deemed notice.\n\n102. While creating the legal fiction in Ashish Agarwal (supra), this Court \nwas cognizant of the fact that the assessing officers were effectively \ninhibited from performing their responsibility under Section 148A until \nthe requirement of supply of relevant material and information to the \nassesses was fulfilled. This Court lifted the inhibition by directing the \n\n160 \n\n[1997] 3 SCR 931 : (1992) 3 SCC 1\n\nUnion of India & Ors. v. Rajeev Bansal\f1702 \n\n[2024] 10 S.C.R.\n\nassessing officers to supplythe assesses with the relevant material \nand information relied upon by the Revenue within thirty days from the \ndate of the judgment. Thus, during the period between the issuance \nof the deemed notices and the date of judgment in Ashish Agarwal \n(supra), the assessing officers were deemed to have been prohibited \nfrom proceeding with the reassessment proceedings.\n\n103. In VLS Finance Limited v. Commissioner of Income Tax,161 a \ntwo-Judge Bench of this Court was called upon to interpret Explanation \n1 to Section 158BE of the Income Tax Act. Section 158BE provides \nthe time limit for completion of block assessments. Explanation \n1 to the provision excludes“period during which the assessment \nproceedings is stayed by an order or injunction of any court” from \nthe period of limitation. This Court held that the exclusion of the \nperiod of limitation has to be computed “rationally and practically” \nin the following terms:\n\n“18. As a general rule, therefore, when there is no stay \nof the assessment proceedings passed by the court, \nExplanation 1 to Section 158-BE of the Act may not \nbe attracted. However, this general statement of legal \nprinciple has to be read subject to an exception in order \nto interpret it rationally and practically. In those cases \nwhere stay of some other nature is granted than the \nstay of the assessment proceedings but the effect \nof such stay is to prevent the assessing officer from \neffectively passing assessment order, even that kind \nof stay order may be treated as stay of the assessment \nproceedings because of the reason that such stay \norder becomes an obstacle for the assessing officer \nto pass an assessment order thereby preventing the \nassessing officer to proceed with the assessment \nproceedings and carry out appropriate assessment.”\n\n(emphasis supplied)\n\n104. Section 11-A of the Land Acquisition Act 1894 mandated the Collector \nto make an award under Section 11 within two years from the date \nof publication of the declaration. The explanation to the provision \n\n161 \n\n[2016] 3 SCR 390 : (2016) 12 SCC 32\n\nDigital Supreme Court Reports\f[2024] 10 S.C.R. \n\n1703\n\nallowed exclusion of “the period during which any action or proceeding \nto be taken in pursuance of the said declaration is stayed by an \norder of a court.”This Court has consistently interpreted the phrase \n“stay of action or proceedings” to mean any type of order passed \nby a court, which, in one way or another, prohibits or prevents the \nauthorities from passing an award.162 Therefore, any order of a court \nthat prevents or prohibits an authority from passing an order can be \ntreated as a stay order.\n\n105. A direction issued by this Court in the exercise of its jurisdiction \nunder Article 142 is an order of a court. The third proviso to Section \n149 of the new regime provides that the period during which the \nproceedings under Section 148A are stayed by an order or injunction \nof any court shall be excluded for computation of limitation. During \nthe period from the date of issuance of the deemed notice under \nSection 148A(b) and the date of the decision of this Court in Ashish \nAgarwal (supra), the assessing officers were deemed to have been \nprohibited from passing a reassessment order. Resultantly, the show \ncause notices were deemed to have been stayed by order of this \nCourt from the date of their issuance (somewhere from 1 April 2021 \ntill 30 June 2021) till the date of decision in Ashish Agarwal (supra), \nthat is, 4 May 2022.\n\n106. In Ashish Agarwal (supra), this Court directed the assessing \nofficers to provide relevant information and materials relied upon \nby the Revenue to the assesses within thirty days from the date of \nthe judgment. A show cause notice is effectively issued in terms of \nSection 148A(b) only if it is supplied along with the relevant information \nand material by the assessing officer. Due to the legal fiction, the \nassessing officers were deemed to have been inhibited from acting in \npursuance of the Section 148A(b) notice till the relevant material was \nsupplied to the assesses. Therefore, the show cause notices were \ndeemed to have been stayed until the assessing officers provided \nthe relevant information or material to the assesses in terms of the \ndirection issued in Ashish Agarwal (supra). To summarize, the \ncombined effect of the legal fiction and the directions issued by this \n\n162 Abhey Ram v. Union of India (1997) 5 SCC 421 [9]; Indore Development Authority v. Manoharlal (2020) \n4 SCC (Civ) 496 [301]; Maharashtra Vidarbha Irrigation Development Corporation v. Mahesh (2022) 2 \nSCC 772 [39].\n\nUnion of India & Ors. v. Rajeev Bansal\f1704 \n\n[2024] 10 S.C.R.\n\nCourt in Ashish Agarwal (supra) is that the show cause notices \nthat were deemed to have been issued during the period between \n1 April 2021 and 30 June 2021 were stayed till the date of supply of \nthe relevant information and material by the assessing officer to the \nassessee. After the supply of the relevant material and information \nto the assessee, time begins to run for the assesses to respond to \nthe show cause notices. \n\n107. The third proviso to Section 149 allows the exclusion of time allowed \nfor the assesses to respond to the show cause notice under Section \n149A(b)to compute the period of limitation. The third proviso excludes \n“the time or extended time allowed to the assessee.” Resultantly, the \nentire time allowed to the assessee to respond to the show cause \nnotice has to be excluded for computing the period of limitation.\nIn Ashish Agarwal (supra), this Court provided two weeks to the \nassesses to reply to the show cause notices. This period of two \nweeks is also liable to be excluded from the computation of limitation \ngiven the third proviso to Section 149. Hence, the total time that is \nexcluded for computation of limitation for the deemed notices is: (i) \nthe time during which the show cause notices were effectively stayed, \nthat is, from the date of issuance of the deemed notice between 1 \nApril 2021 and 30 June 2021 till the supply of relevant information \nor material by the assessing officers to the assesses in terms of the \ndirections in Ashish Agarwal (supra); and (ii) two weeks allowed to \nthe assesses to respond to the show cause notices.\n\nb. \n\nInterplay of Ashish Agarwal with TOLA\n\n108. The Income Tax Act read with TOLA extended the time limit for issuing \nreassessment notices under Section 148, which fell for completion \nfrom 20 March 2020 to 31 March 2021, till 30 June 2021. All the \nreassessment notices under challenge in the present appeals were \nissued from 1 April 2021 to 30 June 2021 under the old regime. \nAshish Agarwal (supra) deemed these reassessment notices under \nthe old regime as show cause notices under the new regime with \neffect from the date of issuance of the reassessment notices. The \neffect of creating the legal fiction is that this Court has to imagine as \nreal all the consequences and incidents that will inevitably flow from \nthe fiction.163 Therefore,the logical effect of the creation of the legal \n\n163 East End Dwellings Co. Ltd. v. Finsbury Borough Council, [1952] AC 109. [Lord Asquith, in his concurring \n\nDigital Supreme Court Reports\f[2024] 10 S.C.R. \n\n1705\n\nfiction by Ashish Agarwal (supra) is that the time surviving under \nthe Income Tax Act read with TOLA will be available to the Revenue \nto complete the remaining proceedings in furtherance of the deemed \nnotices, including issuance of reassessment notices under Section \n148 of the new regime. The surviving or balance time limit can be \ncalculated by computing the number of days between the date of \nissuance of the deemed notice and 30 June 2021. \n\n109. If this Court had not created the legal fiction and the original \nreassessment notices were validly issued according to the provisions \nof the new regime, the notices under Section 148 of the new regime \nwould have to be issued within the time limits extended by TOLA. \nAs a corollary, the reassessment notices to be issued in pursuance \nof the deemed notices must also be within the timelimit surviving \nunder the Income Tax Act read with TOLA. This construction gives \nfull effect to the legal fiction created in Ashish Agarwal (supra) and \nenables both the assesses and the Revenue to obtain the benefit \nof all consequences flowing from the fiction.164\n\n110. The effect of the creation of the legal fiction in Ashish Agarwal \n(supra) was that it stopped the clock of limitation with effect from the \ndate of issuance of Section 148 notices under the old regime [which \nis also the date of issuance of the deemed notices]. As discussed in \nthe preceding segments of this judgment, the period from the date \nof the issuance of the deemed notices till the supply of relevant \ninformation and material by the assessing officers to the assesses \nin terms of the directions issued by this Court in Ashish Agarwal \n(supra)has to be excluded from the computation of the period of \nlimitation. Moreover, the period of two weeks granted to the assesses \nto reply to the show cause notices must also be excluded in terms \nof the third proviso to Section 149. \n\n111. The clock started ticking for the Revenue only after it received the \nresponse of the assesses to the show causes notices. After the \nreceipt of the reply, the assessing officer had to perform the following \n\nopinion, observed: “If you are bidden to treat an imaginary state of affairs as real, you must surely, unless \nprohibited from doing so, also imagine as real the consequences and incidents which, if the putative \nstate of affairs had in fact existed, must inevitably have flowed from or accompanied it.”]\n\n164 See State of A P v. A P Pensioners Association (2005) 13 SCC 161 [28]. [This Court observed that the \n“legal fiction undoubtedly is to be construed in such a manner so as to enable a person, for whose benefit \nsuch legal fiction has been created, to obtain all consequences flowing therefrom.”]\n\nUnion of India & Ors. v. Rajeev Bansal\f1706 \n\n[2024] 10 S.C.R.\n\nresponsibilities: (i) consider the reply of the assessee under Section \n149A(c); (ii) take a decision under Section 149A(d) based on the \navailable material and the reply of the assessee; and (iii) issue a notice \nunder Section 148 if it was a fit case for reassessment. Once the \nclock started ticking, the assessing officer was required to complete \nthese procedures within the surviving time limit. The surviving time \nlimit, as prescribed under the Income Tax Act read with TOLA, was \navailable to the assessing officers to issue the reassessment notices \nunder Section 148 of the new regime.\n\n112. Let us take the instance of a notice issued on 1 May 2021 under \nthe old regime for a relevant assessment year. Because of the legal \nfiction, the deemed show cause notices will also come into effect from \n1 May 2021. After accounting for all the exclusions, the assessing \nofficer will have sixty-one days [days between 1 May 2021 and 30 \nJune 2021] to issue a notice under Section 148 of the new regime. \nThis time starts ticking for the assessing officer after receiving the \nresponse of the assessee. In this instance, if the assessee submits \nthe response on 18 June 2022, the assessing officer will have sixty-\none days from 18 June 2022 to issue a reassessment notice under \nSection 148 of the new regime. Thus, in this illustration, the time \nlimit for issuance of a notice under Section 148 of the new regime \nwill end on 18 August 2022. \n\n113. In Ashish Agarwal (supra), this Court allowed the assesses to \navail all the defences, including the defence of expiry of the time \nlimit specified under Section 149(1).In the instant appeals, the \nreassessment notices pertain to the assessment years 2013-2014, \n2014-2015, 2015-2016, 2016-2017, and 2017-2018. To assume \njurisdiction to issue notices under Section 148 with respect to the \nrelevant assessment years, an assessing officer has to: (i) issue \nthe notices within the period prescribed under Section 149(1) of the \nnew regime read with TOLA; and (ii) obtain the previous approval of \nthe authority specified under Section 151. A notice issued without \ncomplying with the preconditions is invalid as it affects the jurisdiction \nof the assessing officer. Therefore, the reassessment notices issued \nunder Section 148 of the new regime, which are in pursuance of the \ndeemed notices, ought to be issued within the time limit surviving \nunder the Income Tax Act read with TOLA. A reassessment notice \nissued beyond the surviving time limit will be time-barred.\n\nDigital Supreme Court Reports\f[2024] 10 S.C.R. \n\n1707\n\nG. Conclusions\n\n114. In view of the above discussion, we conclude that:\n\na. After 1 April 2021, the Income Tax Act has to be read along \n\nwith the substituted provisions;\n\nb. TOLA will continue to apply to the Income Tax Act after 1 April \n2021 if any action or proceeding specified under the substituted \nprovisions of the Income Tax Act falls for completion between \n20 March 2020 and 31 March 2021;\n\nc. Section 3(1) of TOLA overrides Section 149 of the Income Tax \nAct only to the extent of relaxing the time limit for issuance of \na reassessment notice under Section 148;\n\nd. TOLA will extend the time limit for the grant of sanction by the \nauthority specified under Section 151. The test to determine \nwhether TOLA will apply to Section 151 of the new regime is this: \nif the time limit of three years from the end of an assessment \nyear falls between 20 March 2020 and 31 March 2021, then \nthe specified authority under Section 151(i) has extended time \ntill 30 June 2021 to grant approval;\n\ne. \n\nf. \n\nIn the case of Section 151 of the old regime, the test is: if the \ntime limit of four years from the end of an assessment year \nfalls between 20 March 2020 and 31 March 2021, then the \nspecified authority under Section 151(2) has extended time till \n31 March 2021 to grant approval;\n\nThe directions in Ashish Agarwal (supra) will extend to all \nthe ninety thousand reassessment notices issued under the \nold regime during the period 1 April 2021 and 30 June 2021;\n\ng. The time during which the show cause notices were deemed \nto be stayed is from the date of issuance of the deemed notice \nbetween 1 April 2021 and 30 June 2021 till the supply of \nrelevant information and material by the assessing officers to \nthe assesses in terms of the directions issued by this Court in \nAshish Agarwal (supra), and the period of two weeks allowed \nto the assesses to respond to the show cause notices; and\n\nh. The assessing officers were required to issue the reassessment \nnotice under Section 148 of the new regime within the time limit \n\nUnion of India & Ors. v. Rajeev Bansal\f1708 \n\n[2024] 10 S.C.R.\n\nsurviving under the Income Tax Act read with TOLA. All notices \nissued beyond the surviving period are time barred and liable \nto be set aside;\n\n115. The judgments of the High Courts rendered in Union of India v. \nRajeev Bansal,165 Keenara Industries Pvt. Ltd. v. ITO, Surat,166 \nJ M Financial and Investment Consultancy Services Pvt. Ltd. v. \nACIT,167 Siemens Financial Services Pvt. Ltd. v. DCIT,168 Geeta \nAgarwal v. ITO,169 Ambika Iron and Steel Pvt Ltd v. PCIT,170 \nTwylight Infrastructure Pvt Ltd v. ITO,171 Ganesh Dass Khanna v. \nITO,172 and other judgments of the High Courts which relied on these \njudgments, are set aside to the extent of the observations made in \nthis judgment.\n\n116. The appeals filed by the Revenue are accordingly allowed. The \nappeals filed by the assesses will be governed by reasons discussed \nin this judgment.\n\n117. The transfer petitions are disposed of. \n\n118. Pending application(s), if any, stand disposed of. \n\nResult of the case: Matters disposed of.\n\n†Headnotes prepared by: Ankit Gyan\n\n165 Writ Tax No. 1086 of 2022 (Allahabad High Court)\n\n166 R/Special CA No. 17321 of 2022(High Court of Gujarat)\n\n167 WP No. 1050 of 2022 (High Court of Judicature at Bombay)\n\n168 \n\n[2023] 457 ITR 647 (High Court of Judicature at Bombay)\n\n169 DB Civil Writ Petition No. 14794 of 2022 (High Court of Judicature at Rajasthan)\n\n170 WP(C) No. 20919 of 2021 (High Court of Orissa)\n\n171 WP(C) No. 16524/2022 (High Court of Delhi)\n\n172 \n\n[2024] 460 ITR 546 (High Court of Delhi) \n\nDigital Supreme Court Reports\f"}