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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.

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I am a Chartered Accountant in Practice from last 32 years. Any one who wants to discuss something related to Income Tax can mail me at rajeevjain_ca@yahoo.com or call on 9810581427. View Full Profile

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11 Comments

  1. Sudhir Chintawar says:

    Validity of notice u/s 148 issued on 31-03-2021 on the strength of seized documents ,indicating cash deposits by the assessee ,in another case for AY 2013-14. Whether it is barred by limitation?

  2. subhash bains says:

    The extention of date to issue notice u/s 148 from 31/3/2021 to 30/06/2021 has been done under exceptional times, therefore,any such notice issued under old provisions till 30/06/2021 may be deemed to have been issued as per law.

  3. Sam kumar says:

    Notice under 148 section for AY 2015-16 issued on June 30, 2021. I have missed few earning to be shown during FY 2014-15. My taxable income was less than 50 lac, per new Income tax assessment (Issued by our FM on feb 2021) do you think we can challenge IT on my notice ?

  4. Anil Gupta says:

    What will happen if an assessee destroyed books of accounts and vouchers for financial year 2012-13 after 31st March 2021. How will he comply with notice u/s 148

  5. Abhishek Kanjilal says:

    How can old as well as amended law be applicable at same point of time… It is contradictory ..old law for some and new for some..

  6. Nem Singh says:

    If there is no clarification for issue of notice under the old provisions or new provisions and issued after 1.04.2021 you can challenged it under both old and new provisions. If it is issued before the 31.03.2021 then there should be no doubt on application. Further 31.03.20121 was the last due date for issue of notice for AY 2014-15, and the extended time is for the year ending 31.03.2021 due dates.

  7. Sathyanarayana Pothuru says:

    as the limitation period extended from 31/3/2021 to 30/06/2021, law applicable as on 31/03/2021 could become applicable for all acts done based on extension and it is deemed to have been done on or before 31/3/2021

  8. DEEPAK SONI says:

    IT IS NOT AT ALL USEFUL BUT HAS BEEN ABLE TO CREATE UTTER CONFUSION. THIS ARTICLE DOES NOT DESERVE PUBLICATION ON THEIS WEBSITE.

  9. MAHESHKUMAR MUGATLAL SOMPURA says:

    IS IT VALID NOTICE RECEIVED U/S.148 ? WHEN ANY ASSESSE FOR A PARTICULAR ASSESSMENT, WHICH WAS ALREADY SCRUTINISED, PENDING FOR CIT APPEAL AND/OR GONE FOR DTVSV AND TAX AS PER DTVSV PAID, ORDER UNDER DTVSV RECEIVED.

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