V.K. Singhal, J.
1. The validity of Section 148 of the Income-tax Act, 1961, has been challenged in this petition as violative of Articles 14 and 19(1)(g) of the Constitution. Section 148 refers to the escaped assessment and earlier the notice could have been served upon the assessee requiring him to furnish the return in not less than 30 days as may be specified in the notice. The words “not being less than 30 days” were deemed to be omitted by the Finance (No. 2) Act, 1996, with effect from April 1, 1989. This court in the case of Winter Care Pvt. Ltd. W. P. No. 33832 of 1992 DD 15-2-1993, held that the. assessee has to be allowed a minimum period of 30 days and the notice calling for filing of the returns within 30 days is, not in conformity with the provisions of Section 148. The assessee was issued a notice under Section 148 on November 25, 1991, requiring him to furnish the return of income within 30 days of service of notice. Assessment was also framed which was challenged in appeal. The Commissioner of Income-tax (Appeals) vide order dated May 27, 1996, held that the proceedings are vitiated because the time as contemplated by Section 148 was not given in the notice. Subsequently, vide order dated April 30, 1997, it was found that the words “not being less than 30 days” in Section 148 were omitted by the retrospective amendment with effect from April 1, 1989, therefore, the order passed on May 27, 1996, has become erroneous. The said order was cancelled by invoking the power under Section 154(2)(b). The submission of learned counsel for the petitioner that the power exercised to amend the law retrospectively was not fair or reasonable and that now the assessing authorities are left with no guidelines.
2. Arguments of learned counsel for the parties have been heard. Parliament has the power to enact the law which may be prospective or retrospective. It is only the unreasonableness which could be examined when a retrospective amendment of law is challenged. If such retrospective amendment is violative of any other provision of the Constitution that would also be considered. The memorandum explaining the provisions as
attached to the Finance (No. 2) Bill, 1996, are as under (see [1996] 220 ITR (St.) 269) :
“Under the existing provisions of the Income-tax Act, in cases where the Assessing Officer has reason to believe that income has escaped assessment, a notice can be issued to an assessee for filing a return of his income within a specified period, not being less than thirty days. In the printed form of notice under Section 148, the assessee was required to furnish a return of his income within thirty days. The above position in law was in force from April 1, 1989.
Notices issued under Section 148 have been held to be invalid by the Income-tax Appellate Tribunal on the ground that whereas the statute allows the taxpayer a time, ‘not being less than thirty days’, the notice gives the direction to file a return ‘within a period of thirty days’. The Bombay High Court in the case of CIT v. Ekbal and Co. [1945] 13 ITR 154, decided a similar issue by laying down that ‘the expressions “within thirty days” and “not less than thirty days” are two quite different things’. In view of the aforesaid decisions of the Bombay High Court and of the Income-tax Appellate Tribunal, it is proposed to provide in Section 148 that the Assessing Officer may require the assessee to furnish the return within the period specified in the notice.
The proposed amendment will take effect retrospectively from April 1, 1989, and will, accordingly, apply in relation to notices issued under Section 148 on or after that date.”
3. It is the wisdom of Parliament to enact the law prospectively or retrospectively. This court cannot in exercise of its extraordinary jurisdiction interfere with such a power which vests with Parliament. It appears that it was because of certain interpretations taken by the different courts, Parliament deleted the requirement of 50 days in furnishing of the return. It is no doubt true that the discretion is left with the assessing authority. But if the action in a particular case is arbitrary that would not make the provision of the Act arbitrary. In an appropriate case, the assessee could challenge the action of the assessing authority where unreasonable time is given for furnishing the return. But normally on that ground the provisions of Section 148 cannot be construed as unreasonable. Once the power of Parliament to enact the law with retrospective effect is upheld, orders which are not in conformity with such retrospective law could be rectified under Section 154. It is admitted that the provision came into existence on April 1, 1989, and therefore any order which has been passed after April 1, 1989, contrary to the retrospective amendment of law can be rectified by the taxation authorities.
4. No illegality is committed.
5. Petition having no force is accordingly dismissed.
