TMI BlogNavigating the Nuances of Income Tax Reassessment Post-Finance Act 2021: Resetting the Clock in Tax ReassessmentsX X X X Extracts X X X X X X X X Extracts X X X X ..... al Issues and Analysis Applicability of Limitation Period under Section 149 : The judgment focuses on whether the shorter limitation period under Section 149(1)(a) or the extended period under Section 149(1)(b) applies for the issuance of notices under Section 148 . This determination hinges on the monetary threshold of the alleged escaped income and the impact of the Finance Act 2021 on these provisions. Retrospective Application of Amended Provisions : A crucial aspect of this case is the retrospective application of legislative amendments, particularly those introduced by the Finance Act 2021 and the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act 2020 (TOLA). The court examined ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rscores the importance of adhering to legislative mandates regarding limitation periods and the need for clarity in the application of retrospective amendments. It reinforces the principle that taxpayer rights and legal certainty are paramount in the interpretation and application of tax laws. The operation of Section 148A and the concept of 'travel back in time' in the context of reassessment notices. Section 148A and the Assessment Procedure Section 148A , introduced by the Finance Act of 2021 , plays a pivotal role in this case. It mandates a new procedure before issuing a notice under Section 148 . The court scrutinized whether the procedural requirements under Section 148A were duly followed. Specif ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erious tax evasion involving concealment of income of ₹50 lakh or more. Conclusion and Legal Implications The court concluded that the impugned actions, including orders passed under Section 148A(d) and consequent notices issued under Section 148 for the Assessment Years 2016-17 and 2017-18, were invalid due to non-compliance with the statutory limitation periods under Section 149(1)(a) of the amended Act. Furthermore, the court declared the 'travel back in time' theory, as propounded in the Instruction dated 11.05.2022, to be bad in law. This judgment is significant for several reasons. It clarifies the procedural requirements under the new regime of Section 148A , emphasizes the primacy of legal certainty in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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