Rajasthan High Court quashes Reassessment Notice issued under Income Tax Act after April 01, 2021 [Read Judgment]

The Rajasthan High Court quashed the Reassessment Notice issued under  Income Tax Act after April 01, 2021.

A batch of petitions was filed assailing issuance of the reassessment notice u/s.148 of the Income Tax Act, 1961, which according to the petitioners is barred by limitation and that the respondent before issuing the notice under Section 148 of the Act has not followed the mandatory procedure prescribed under Section 148A of the Act as prescribed by the Finance Act, 2021 and applicable w.e.f. 01.04.2021 before issuance of notice under Section 148 of the Act.

The single-judge bench of Justice Inderjeet Singh in the light of the Division Bench of the Allahabad High Court in the matter of ‘Ashok Kumar Agarwal Vs. Union of India wherein it was held that the Ordinance, the Enabling Act, and Sections 2 to 88 of the Finance Act 2021, as enforced w.e.f. 01.04.2021, are not conflicted. Insofar as the Explanation appended to Clause A(a), A(b), and the impugned Notifications dated 31.03.2021 and 27.04.2021 (respectively) are concerned, we declare that the said Explanations must be read, as applicable to reassessment proceedings as may have been in existence on 31.03.2021 i.e. before the substitution of Sections 147, 148, 148A, 149, 151 & 151A of the Act. Consequently, the reassessment notices in all the writ petitions are quashed. It is left open to the respective assessing authorities to initiate reassessment proceedings in accordance with the provisions of the Act as amended by Finance Act, 2021, after making all compliances, as required by law.

“The re-assessment notice issued to the petitioners under Section 148 of the Income Tax Act is quashed. However, it is left open to the assessing authority to initiate reassessment proceedings in accordance with the provisions of the Act, as amended by the Finance Act, 2021 after making due compliance as required under the law,” the court said.

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