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2021 (12) TMI 1410 - HC - Income TaxReopening of assessment - applicability of the provisions of sections 148 and 148 A of the Income Tax Act, the new provisions which have been inserted by Finance Act 2021 with effect from 01.04.2021 - According to the petitioner, the Financial Act has substituted the provision of section 147 with effect from 01.04.2021 and the time limit has been set to issue the notice under section 148 which is extended by Notification No.20 of 2021 and 38 of 2021, there cannot be two parallel provisions applicable simultaneously - validity of Notification No.20 of 21 issued by the CBDT by purportedly exercising the powers conferred by section 3 (1) of the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020. HELD THAT - Issue NOTICE to the respondents, returnable on 03.01.2022. Pleadings be completed and office of learned Additional Solicitor General shall be served through e-mail as well as speed post. As the petitioner has made out a prima facie case, ad-interim order in terms of paragraph 7(d) till the returnable date. Direct service is permitted. Service be effected directly by the petitioner through speed post. Soft copy shall be served upon the offices of the learned senior advocate, Mr.Manish Bhatt and learned Additional Solicitor General of India.
Issues: Challenge to the constitutional validity and vires of Explanation in Notifications, applicability of new provisions inserted by Finance Act 2021, question on parallel applicability of provisions, validity of notice issued under Section 148, challenge to Notification No.20 of 2021.
Analysis: The petitioner has approached the High Court challenging the constitutional validity and vires of the Explanation contained in Notification No.20/2021 dated 31.03.2021 and Notification No.38/2021 dated 27.04.2021. These notifications extend the time limit specified in Section 149 or sanction under Section 151 of the Income Tax Act, 1961 for issuing notices under Section 148. The petitioner also contests the consequential notice dated 30.06.2021 issued under Section 148 seeking to reopen the Income Tax Assessment for the assessment year 2014-2015. The petitioner raises concerns about the applicability of the provisions of Sections 148 and 148A of the Income Tax Act, which were newly inserted by the Finance Act 2021 with effect from 01.04.2021. The petitioner argues that with the substitution of Section 147 by the Finance Act 2021, and the extension of the time limit to issue notices under Section 148 through the aforementioned notifications, there cannot be two parallel provisions in effect simultaneously. The petitioner specifically challenges the validity of the notice issued under Section 148 and Notification No.20 of 2021 issued by the CBDT. The petitioner's counsel contends that even the Revenue Authorities were not authorized to extend the operation of the repealed provision of Section 148 beyond 31.03.2021 under the guise of a clarificatory explanation in the notifications. The High Court, after hearing the petitioner's senior advocate, directs the issuance of notice to the respondents, returnable on 03.01.2022. The court orders the completion of pleadings and service of the notice to the office of the learned Additional Solicitor General through e-mail and speed post. Considering that the petitioner has established a prima facie case, the court grants an ad-interim order until the returnable date. Direct service is permitted, to be carried out by the petitioner through speed post, and soft copies are to be served to the offices of the learned senior advocate and the Additional Solicitor General of India. The case is to be tagged with Special Civil Applications No.12621 of 2021 for further proceedings.
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