2022 (5) TMI 1550 - HC - Income Tax

Validity of Reopening of assessment - order passed u/s 148A(d) as it stood amended - Period of limitation to issue notice issued u/s 148A(b) - validity of notices issued by the Income Tax Department (Department) u/s 148 in light of the 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 - Supreme Court of India in Union of India others v. Ashish Agarwal 2022 (5) TMI 240 - SUPREME COURT partly allowed the appeals of the Union of India and made a distinction between notices issued by the Department on or after 1st April, 2021 and those that have been issued prior thereto. In the present case, the notice under Section 148 of the Act pertaining to the Assessment Year (AY) 2015-16 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 dated 24th January 2022 in W.P.(C) No.20919 of 2021 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 prior to and after the amendment by the Finance Act 2021.

Analysis:
The High Court considered the Judgment dated 4th May 2022, 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. The Supreme Court distinguished between notices issued before and after 1st April 2021, the date when the new amended provisions (Sections 147 to 151) came into effect. The Supreme Court's order was made applicable PAN INDIA, setting aside judgments of various High Courts related to notices issued post 1st April 2021. The Supreme Court's order aimed to avoid further appeals and govern pending writ petitions challenging similar notices issued after the specified date.

Regarding a specific case where a notice under Section 148 of the Act for the Assessment Year 2015-16 was issued on 30th March 2021, prior to the amendment date and beyond the six-year period after the AY in question, the High Court, in light of the Supreme Court's judgment and its own previous order, quashed the notice and subsequent proceedings. The High Court disposed of the writ petition accordingly, emphasizing the quashing of the notice and subsequent orders. An urgent certified copy of the order was directed to be issued as per rules.