In the light of the significant Supreme Court decision saving around 90,000 re-assessments by deeming compliance of section 148A of the Income Tax Act, 1961, the Calcutta High Court has directed the income tax department to proceed with the notices quashed earlier.
A two-judge bench of the Supreme Court comprising Justice M R Shah and Justice B V Nagaratna, on 4th May, upheld the reassessment notices under Section 148 of the unamended Income Tax Act which were issued beyond 01.04.2021 (the effective date of amendment of the said provision by the Finance Act, 2021) to be deemed to have been issued under Section 148A of the IT Act as substituted by the Finance Act, 2021 and be construed as show-cause notices in terms of section 148A(b).
While delivering the important ruling, the Apex Court opined that “The present order shall be applicable PAN INDIA and all judgments and orders passed by different High Courts on the issue and under which similar notices which were issued after 01.04.2021 issued under section 148 of the Act are set aside and shall be governed by the present order and shall stand modified to the aforesaid extent. The present order is passed in exercise of powers under Article 142 of the Constitution of India so as to avoid any further appeals by the Revenue on the very issue by challenging similar judgments and orders, with a view not to burden this Court with approximately 9000 appeals. We also observe that present order shall also govern the pending writ petitions, pending before various High Courts in which similar notices under Section 148 of the Act issued after 01.04.2021 are under challenge.”
Justice Md. Nizamuddin, based on the Apex Court ruling, held that “Taking note of a judgement of the Hon’ble Supreme Court dated May 4, 2022 in the case of Union of India & Ors. v. Ashish Agarwal in Civil Appeal No.3005 of 2022, it is clarified that by the earlier orders of this court, the impugned notices under section 148 of the Income Tax Act, 1961 and all proceedings under section 147 of the old Act, which were quashed with liberty to the assessing officer concerned to proceed in accordance with law, would now mean as per the law and guidelines laid down in the aforesaid judgement of the Hon’ble Supreme Court.”
“Accordingly, the respondent-assessing authorities concerned will now proceed with those quashed notices and proceedings in accordance with the law laid down and guidance as per aforesaid order of the Hon’ble Supreme Court. The Registrar General of this court shall forward a copy of this order to the Principal Chief Commissioner of Income Tax, West Bengal and Sikkim who will circulate the same to all the concerned subordinate authorities,” the High Court said.
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