The Finance Act 2021 got assent of the President of India on 28TH March 2021 and has become final law very much in force on or after 1st April 2021. Each & every section is applicable and legally enforceable. Section 3 of THE TAXATION AND OTHER LAWS (RELAXATION AND AMENDMENT OF CERTAIN PROVISIONS) ACT, 2020 dated 29th September 2020 gave certain powers to Central Government to extend various dates as per Section 3. Section 3 of this Act is reproduced below :
3. (1) Where, any time-limit has been specified in, or prescribed or notified under, the specified Act which falls during the period from the 20th day of March, 2020 to the 31st day of December, 2020, or such other date after the 31st day of December, 2020, as the Central Government may, by notification, specify in this behalf, for the completion or compliance of such action as—
(a) completion of any proceeding or passing of any order or issuance of any notice, intimation, notification, sanction or approval, or such other action, by whatever name called, by any authority, commission or tribunal, by whatever name called, under the provisions of the specified Act; or
On the authority of above Act the Ministry of Finance through Central Board of Direct Taxes issued following notification on 31st March 2021. The relevant portion of this notification is reproduced below :
S.O. 1432(E).—In exercise of the powers conferred by sub-section (1) of section 3 of the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 (38 of 2020) (hereinafter referred to as the said Act), and in partial modification of the notification of the Government of India in the Ministry of Finance, (Department of Revenue) No.93/2020 dated the 31st December, 2020, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (ii), vide number S.O. 4805(E), dated the 31st December, 2020, the Central Government hereby specifies that,––
(A) where the specified Act is the Income-tax Act, 1961 (43 of 1961) (hereinafter referred to as the Income-tax Act) and, —
(a) the completion of any action referred to in clause (a) of sub-section (1) of section 3 of the Act relates to passing of an order under sub-section (13) of section 144C or issuance of notice under section 148 as per time-limit specified in section 149 or sanction under section 151 of the Income-tax Act, —
(i) the 31st day of March, 2021 shall be the end date of the period during which the time limit, Specified in, or prescribed or notified under, the Income-tax Act falls for the completion of such action; and
(ii) the 30th day of April, 2021 shall be the end date to which the time-limit for the completion of such action shall stand extended.
Explanation.— For the removal of doubts, it is hereby clarified that for the purposes of issuance of notice under section 148 as per time-limit specified in section 149 or sanction under section 151 of the Income-tax Act, under this sub-clause, the provisions of section 148, section 149 and section 151 of the Income-tax Act, as the case may be, as they stood as on the 31st day of March 2021, before the commencement of the Finance Act, 2021, shall apply.
Similar notification was also issued by Ministry of Finance through CBDT on on 27th April 2021 extending the dates for issue of notices as above to 30th June 2021. Similar explanation is also there is the said notification.
Now the moot question is that the powers given to Central Government was only to extend dates for issue of various notices where last dates were falling before 31st March 2020 and 31st March 2021. Does the Central Government has powers to decide which Finance Act shall be applicable. In my opinion Central Government has no such legal mandate and this is without jurisdiction.
Now if a notice under section 148 is issued by department for AY 2013-14 or 2014-15 on the strength of some cash deposit information of say Rs. 15.00 Lakhs, the assessee can very much raise the question that this is time barred and Income Tax Act only provides for issue of notice within 3 years from end of assessment year. Now the department will say the Central Government has already extended the dates then Assessee can definitely say that procedure as prescribed in Section 148A should be followed before issue of Notice under Section 148. The department will say that there was no such requirement under old law to issue notice under section 148A and so on. The validity of notices is highly debatable in view of Finance Act 2021 very much in force and Central Government has not power to decide which Finance Act will be applicable. The law existing as on date has to be followed. Till there comes any further amendment in law the validity of notices issued by income tax is very much debatable.
I hope the above article shall be useful to readers.