The Bombay High Court, while concurring with the views taken by the Allahabad High Court, Rajasthan High Court, Delhi High Court and Madras High Court has quashed the re-assessment notices issued on or after 1st April,2021 without following new procedure laid down under section 148A of the Income Tax Act, 1961.
A bench comprising Justice K.R. Shriram and Justice N.J. Jamadar was considering a bunch of litigations whereby the petitioners challenging the initiation of assessment proceedings under Section 148 of the Income Tax Act, 1961 issued after 1st April 2021.
“In any case, Relaxation Act is not applicable for Assessment Years 2015-2016 or any subsequent year and, hence, the question of applicability of the Notification Nos.20 and 38 of 2021 does not arise. The time limit to issue notice under Section 148 of the Act for the Assessment Years 2015-2016 onwards was not expiring within the period for which Section 3(1) of Relaxation Act was applicable and, hence, Relaxation Act could never apply for these assessment years. As a consequence, there can be no question of extending the period of limitation for such assessment years,” the Court said.
According to the division bench, the reopening notices issued after 1st April, 2021 are unsustainable and bad in law even if one was to apply the Explanations to the Notification Nos.20 of 2021 and 38 of 2021.
“The Explanation seeks to extend the applicability of erstwhile Sections 148, 149 and 151. The impugned Explanation does not cover Section 147, which (as amended) empowers the revenue to reopen an assessment subject to Sections 148 to 153, which includes Section 148A. Thus, even if Explanations are valid, the mandatory procedure laid down by Section 148A has not been followed and hence, without anything further, the notices under Section 148 of the Act are invalid and must be struck down for this reason as well. This proposition has also been upheld by the Delhi High Court,” the Court said.
While concluding the order in favour of the assesses, the held that the explanations to the Notification No.20 of 2021 dated 31st March 2021 and Notification No.38 of 2021 dated 27th April 2021 are ultra vires and are, therefore, bad in law and null and void.
Tata Communications Transformation Services Ltd vs Assistant Commissioner of Income Tax 14(1)
CITATION: 2022 TAXSCAN (HC) 241
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan AdFree. Follow us on Telegram for quick updates.
