Oracle India P. Ltd. vs Deputy Commissioner of Income Tax

This writ petition is directed against the notice dated January 20, 2015, issued under section 201(1)/201(1A) of the Income-tax Act, 1961, pertaining to the financial year 2007-08 relating to the assessment year 2008-09. Earlier, for the same very financial year, a notice had been issued under the same provisions on February 17, 2014. The objections were taken by the petitioner-assessee and an order disposing of the objections was passed. Ultimately, the matter was brought to this court by way of W.P.(C.) No. 2061 of 2014 which was disposed of by an order dated December 5, 2014, to the following effect:

"In this writ petition, the petitioner challenges the notice dated February 17, 2014, issued by the Deputy Commissioner of Income-tax-Circle 51(1) under section 201 of the Income-tax Act in respect of the financial year 2007-08. The order dated March 14, 2014, pursuant to the said notice, is also under challenge.

One of the points raised by the petitioner was of limitation. The learned counsel for the petitioner drew our attention to section 201(3) which has been introduced in the said Act with effect from April 1, 2010. The proviso to sub-section (3) stipulates that an order can be passed at any time on or before March 31, 2011. This makes it clear that in so far as the financial year 2007-08 is concerned, in the circumstances of this case, no order can be made under sub-section (1) of section 201 after March 31, 2011. Since the notice itself had been issued on February 17, 2014, it is clearly time barred. Consequently, the impugned notice dated February 17, 2014, as also the order dated March 14, 2014, cannot survive. They are set aside.

The writ petition is allowed to the aforesaid extent. We make it clear that we have not examined the merits of the matter from any other stand-point. There shall be no order as to costs.

All pending applications also stand disposed of."

From the above order, it is clear that this court held that the said notice dated February 17, 2014, was time barred in view of the provisions of section 201(3) as it then existed.

The present impugned notice has been issued on January 20, 2015, in an attempt to take advantage of the amendment to section 201(3) which was brought into effect from October 1, 2014. Here, the period of limitation has been extended to seven years by the Finance (No. 2) Act, 2014.

Mr. Syali, the learned senior counsel appearing on behalf of the petitioner, relied upon the Supreme Court''s decision in the case of S.S. Gadgil, Income Tax Officer, Bombay Vs. Lal and Company, AIR 1965 SC 171 : (1964) 53 ITR 231 : (1964) 8 SCR 72 which has been subsequently followed in several other decisions of the Supreme Court including K.M. Sharma Vs. Income Tax Officer, Ward 13(7), New Delhi, AIR 2002 SC 1715 : (2002) 174 CTR 210 : (2002) 254 ITR 772 : (2002) 4 JT 10 : (2002) 3 SCALE 383 : (2002) 4 SCC 339 : (2002) 2 SCR 1047 : (2002) 122 TAXMAN 426 and National Agricultural Co-operative Marketing Federation of India Ltd. and Another Vs. Union of India and Others, (2003) 260 ITR 548 to submit that the limitation prescribed by the Income-tax Act was not mere a period of limitation but that it imposes a fetter upon the power of the Assessing Officer to take action under the said provisions. In this context, it was submitted that since the power in respect of the financial year 2007-08 expired on March 31, 2011, it could not be revived unless the Legislature specifically made a retrospective amendment to the same. The substitution of section 201(3) by the Finance (No. 2) Act, 2014, was with effect from October 1, 2014, and not with retrospective effect. Mr. Sahni, appearing on behalf of Revenue, submitted that if new information came to the knowledge of the Assessing Officer after the amendment of 2014 then the period of limitation would be seven years for completion of the assessment. However, we need not go into that aspect of the matter inasmuch as, in the present case, no new information has come and the impugned notice that was issued on January 20, 2015, was on the basis of the same information in respect of which the notice dated February 17, 2014, had been issued. Thus, those proceedings which had ended and attained finality with the passing of the order dated December 5, 2014, of this court in W.P.(C.) 2061 of 2014 cannot now be sought to be revived through this methodology adopted by the Assessing Officer. Even otherwise, in so far as the financial year 2007-08 is concerned, the period for completing the assessment under section 201(1)/201(1A) has expired on March 31, 2015.

Therefore, looked at from any point of view, in so far as the facts of the present case are concerned, the impugned notice dated January 20, 2015, and subsequent order dated March 17, 2015, cannot be sustained. The same are set aside. The writ petition is allowed. We make it clear that we have not expressed any view on the point raised by Mr. Sahni that in case fresh or new information is discovered then the limitation would, get extended up to seven years.