2022 (5) TMI 1467 - HC - Income Tax

Reopening of assessment u/s 147 - Scope of amendment by the Finance Act 2021, which introduced the new amended provisions i.e., Sections 147 to 151 with effect from 1st April, 2021 - HELD THAT - In the present case, the notice under Section 148 of the Act pertaining to the Assessment Year (AY) 2013-14 was issued on 30th March 2021, i.e., prior to 1st April 2021. Also, it was beyond the period of six years after the expiry of the AY in question. Consequently, both in light of the Judgment of the Supreme Court in Union of India others v. Ashish Agarwal 2022 (5) TMI 240 - SUPREME COURT and the Order of this Court 2022 (1) TMI 1291 - ORISSA HIGH COURT and batch of writ petitions in M/s. Ambika Iron and Steel Pvt. Ltd. and others v. Principal Commissioner of Income Tax and others, the impugned notice is hereby quashed and all the subsequent orders and proceedings are also hereby quashed.

Summary

Issues:
Validity of notices issued by Income Tax Department under Section 148 of the Income Tax Act, 1961 in light of the amendment by the Finance Act 2021.

Analysis:
The High Court considered the Judgment passed by the Supreme Court of India in Civil Appeal No.3005 of 2022 regarding the validity of notices issued by the Income Tax Department under Section 148 of the Income Tax Act, 1961, post the amendment by the Finance Act 2021. The Supreme Court partially allowed the appeals of the Union of India and differentiated between notices issued before and after 1st April 2021. For notices issued after this date, the Supreme Court's order was made applicable PAN INDIA, setting aside previous High Court judgments on the issue. The order aimed to avoid multiple appeals by the Revenue and govern pending writ petitions challenging similar notices issued post 1st April 2021.

Regarding a specific case where a notice under Section 148 of the Act for Assessment Year 2013-14 was issued before 1st April 2021 and beyond the six-year period after the AY, the High Court, relying on the Supreme Court's judgment and its own previous order, quashed the notice and all subsequent proceedings. The High Court's decision was in line with the Supreme Court's directive and the principles established in previous cases.

In conclusion, the High Court upheld the Supreme Court's decision regarding the validity of notices issued by the Income Tax Department under Section 148 of the Income Tax Act, 1961, post the amendment by the Finance Act 2021. The High Court applied the Supreme Court's order to a specific case, quashing a notice issued before the amendment date and beyond the statutory period. The writ petition was disposed of accordingly, aligning with the legal principles established by the higher courts.