2022 (4) TMI 1554 - HC - Income Tax

Reopening of assessment - Initiation of assessment proceedings u/s 148 - Scope of new Section 148A - notices issued u/s 148 are after 31st March 2021 but the procedure followed is the old procedure which came to be replaced by the Finance Act, 2021 with effect from 1st April 2021. HELD THAT - Counsel state that they do not have any instructions of any assessment order having been communicated to petitioner. Statement accepted. Even if the assessment order is passed, still it will be non-est as the notice issued under Section 148 of the Act itself is being set aside. As already held in Tata Communications Transformation Services Limited 2022 (4) TMI 44 - BOMBAY HIGH COURT that such notices are bad in law and have to be quashed. Accordingly, notice impugned in these petitions are hereby quashed and set aside.

Summary

Issues:
1. Notices issued under Section 148 of the Income Tax Act, 1961 post 31st March 2021 following the old procedure replaced by the Finance Act, 2021 effective from 1st April 2021.
2. Lack of communication regarding any assessment order to the petitioner.
3. Validity of the notices issued under Section 148 of the Act.
4. Application of the judgment in Tata Communications Transformation Services Limited Vs. Assistant Commissioner of Income Tax 14(1) & Ors. Writ Petition No.1334 of 2021.

Analysis:
1. The High Court addressed the issue of notices issued under Section 148 of the Income Tax Act, 1961 post 31st March 2021, following the old procedure that was replaced by the Finance Act, 2021 from 1st April 2021. The Court noted the discrepancy in the procedure followed and the effective date of the new Act, highlighting the need for alignment with the updated legislation.

2. The Court acknowledged the lack of communication regarding any assessment order to the petitioner. Counsel for the petitioner confirmed the absence of instructions regarding the communication of any assessment order. The Court accepted this statement, indicating a potential procedural irregularity in the assessment process.

3. Regarding the validity of the notices issued under Section 148 of the Act, the Court referenced a previous judgment in Tata Communications Transformation Services Limited Vs. Assistant Commissioner of Income Tax 14(1) & Ors. The Court had previously ruled that such notices were legally flawed and should be quashed. In line with this precedent, the Court in the present case quashed and set aside the impugned notices, emphasizing the importance of legal compliance in issuing such notices.

4. The judgment concluded by disposing of the petitions in accordance with the decision to quash the notices. The Court's decision was based on the legal principles established in previous cases and aimed to ensure adherence to the statutory requirements and procedural fairness in tax assessment matters.