Poem on CBDT Instruction: Notices Travelling Back in Time, Triggering Litigation Bells to Chime!!

By Mayank Mohanka, FCA, Partner S M Mohanka & Associates & Founder Director, TaxAaram India Pvt Ltd

Executive Summary

In this Poem, the author has critically examined the underlying presumptions of time travel of reassessment notices, second time reliance on TOLA extensions and the perceived applicability of amended limitation period of section 149 of the Income Tax Act, from backdate, even when the Finance Act, 2021 has not come in force, in the CBDT Instruction No. 1/2022 dated 11.5.2022, in light of the judgement of the hon’ble Supreme Court, in the case of Union of India vs. Ashish Agarwal, on validity of reassessment notices issued under unamended section 148 on or after 1.4.2021 till 30.6.2021.

Continuing with his poetic spirit, the author has also explained the valid timelines of such impugned reassessment notices, as per the correct interpretation of the said SC judgment.

CBDT Instruction: A Second Bonafide Mistake or a Deliberate Take?
[By Mayank Mohanka]

On 11.5.2022, CBDT issues an Instruction,
Containing Guidelines for SC-148 Judgement Implementation.

Directing Instructions to be adopted in a Uniform Manner,
CBDT Instruction tries to serve as an Explainer.

However, on some aspects, Instruction appears to be Self-Serving,
Making the Assessees, again Nerving.

First Time it was a Bonafide Mistake,
Second Time it’s a Deliberate Take.

Notices for AYs 2013-14 & 2014, Restored
Proviso to Section 149, completely Ignored.

Notices for AYs 2013-14, 2014-15 & 2015-16 to Survive,
If Escaped Income in Asset, exceeding Rs.50 lakhs, is Derived.

Notices for AYs 2016-17 & 2017-18 will Travel Back in Time,
Triggering More Litigation Bells to Chime.
And will be considered as Issued within 3 Years,
With TOLA extensions getting Reappeared.

Let us Understand SC Judgement Interpretation,
Correctly, by way of an Easy Explanation.

Mandating Finance Act 2021 Provisions, as Applicable,
The SC Makes its Order Palatable.

Proviso to section 149, comes in support of Assessees’ Luck,
Notices for AY 2013-14 & 2014-15, shall get Struck.

Notices for AY 2015-16, 2016-17 & 2017-18 shall only Survive,
If Escaped Income in Asset, exceeding Rs. 50 lakhs, is Derived.

To Reduce Litigations, these Amendments, were Strived,
Ironically, increased Litigations, are now to be Contrived.

About the Author: Sh. Mayank Mohanka is a seasoned Tax Practitioner, a Fellow Member of the Institute of Chartered Accountants of India and a Bachelor of Commerce, in Honours Degree from Shree Ram College of Commerce (SRCC), Delhi University. He is a Senior Partner in a Noida based established and reputed CA Firm, M/s S M Mohanka & Associates. He is the Founder Director in M/s TaxAaram India Pvt Ltd, and has recently launched his unique Start-up Venture taxaaram.com, India’s first digital platform offering painless, seamless and cost-effective professional e-services in relation to faceless assessments, appeals and other statutory e-compliances. He has a 16+ years of rich and profound experience in the field of Taxation (Direct & Indirect), and Advisory. He makes Representations for a widely diversified cross section of industries including Power Sector, Banking & Finance, Real Estate, Food Processing, Infrastructure, Manufacturing, Education and Information Technology, before Authority for Advance Rulings, ITAT, Education Boards and other appropriate forums. He has authored ‘Best Seller’ Professional Books titled “Faceless Assessment, Appeals & Penalty Ready Reckoner with Real Time Case Studies” and “Case Studies & Procedures under Direct tax Vivad se Vishwas Act, 2020”, with Taxmann Publications, and the Book ‘SUPER 21’, treasuring his real-life winning representations on Income Tax, GST, PF, ESI, IBC & Banking Regulation Act, in his professional practice. He has also to his credit 100 distinguished, informative, useful and practically oriented published articles in reputed journals, sites and platforms including itatonline.org, and Taxmann, on wide ranging subjects including Income Tax, GST, PF, ESI, IBC, Corporate Laws, Education Acts & FEMA. He can be contacted at 9999981515 or mayankmohanka@gmail.com.

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Posted on: May 18th, 2022

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