Covid arrived in the first quarter of 2020 in India and remained even beyond march 2021. To make up for the compliance calendars the guidelines were issued in the form of ordinances/TOLA to extend time for issuing notices u/s 148 where the limitations were expiring before march 2020/2021 till 30.6.2021. In the meantime FA21 came into effect with new set of time limitations for reopening effective April 1, 2021. Thousands of notices issued during the extended period post April 2021 have come under challenge on the ground of limitations as well as for failing to match the new procedure outlined by FA21. The Supreme Court restored them to the authorities to reissue them in accordance with the new law and procedure without delving with an all important subject of period of limitation u/s149.
Now once again some of these have gone for writ on the sole ground of period of limitation u/s 149 before the Delhi High Court in a batch of 50 odd cases who vide judgement pronounced on 10.11.2023 held that in the absence of any income tax provision in section 149 enabling extension of time limit set by the 2020 ordinance followed by TOLA the notices issued in the extended time citing TOLA /board instruction cannot survive.
In this case the authorities have issued notices for AY 2016-17 and 2017-18 citing escapement of income of less than 50 lacs after coming into force of FA21 i.e. beyond 3 year limitation period bearing in mind extended period of limitation.
This decision is likely to push the government to think of a remedy and to bring a possible amendment by a proviso ( exception) in section 149 to reverse the effect of this decision to travel back in time history.