2021 (8) TMI 788 - HC - Income Tax

Reopening of assessment u/s 147 - applicability of the newly inserted provisions of Section 148A and the amendments brought inter alia in Section 149 - as argued before issuing notice under Section 148 of the Act, mandatory provisions of Section 148A of the Act which cast statutory obligation on the AO to comply the provisions of the same before issuing any notice under Section 148 of the Act has not been complied with by the AO - constitutional validity of the provisions of The Taxation And Other Laws (Relaxation And Amendment of Certain Provisions) Act, 2020 - Constitutionality of certain provisions of CBDT Notification No.20/2021 dated 31.03.2021 and Notification No.38/2021 dated 27.04.2021 - HELD THAT - As decided in one reported decision of Sahil International Vs. Assistant Commissioner of Income Tax, Circle-19(3) Ors. 2021 (8) TMI 198 - BOMBAY HIGH COURT and one unreported decision of Mon Mohan Kohli Vs. Assistant Commissioner of Income Tax Anr. 2021 (8) TMI 196 - DELHI HIGH COURT wherein have stayed the impugned notices under Section 148 of the Income Tax Act, 1961 for non compliance of the provisions of Section 148A of the Act. We had given an opportunity to Mr. Asok Bhowmik, learned Advocate appearing for the respondents to take instruction in the matter by my order dated 13th July, 2021. Today, when he was asked about the instruction pursuant to my aforesaid direction in this matter he simply made prayer for adjournment on the ground of learned Additional Solicitor General and could not submit anything about the aforesaid judgements relied on by the petitioners or on the facts of this case as to whether in this case before issuing notice under Section 148 of the Act, provisions under Section 148A was complied with or not. Mr. Bhowmik says that officer concerned has asked for further time and was not able to deny the allegations of the petitioners that Section 148A provisions of the Income Tax Act, 1961 was not complied with in this case before issuing notice under Section 148 of the said Act and was not able to distinguish the aforesaid unreported decisions. We direct the respondents to file affidavit-in-opeposition within six weeks from date. Petitioners to file reply thereto, if any, within two weeks thereafter. List the matter after eight weeks ( i.e. 09.09.2021) for Final Hearing. In the meanwhile, respondents are restrained from proceeding any further.

Summary

Issues:
Challenging impugned notices under Section 148 of the Income Tax Act, 1961 for assessment years 2014-15 and 2015-16. Constitutional validity of The Taxation And Other Laws (Relaxation And Amendment of Certain Provisions) Act, 2020.

Analysis:
The petitioners challenged the impugned notices dated 29th May, 2021, and 18th June, 2021, related to assessment years 2014-15 and 2015-16 under Section 148 of the Income Tax Act, 1961. They contended that the Assessing Officer did not comply with the mandatory provisions of Section 148A of the Act before issuing the notices. Additionally, the constitutional validity of The Taxation And Other Laws (Relaxation And Amendment of Certain Provisions) Act, 2020, was also challenged.

The petitioner's counsel relied on various court decisions to support their contention. They referred to unreported decisions of the Bombay High Court and the Delhi High Court, where impugned notices under Section 148 were stayed due to non-compliance with Section 148A provisions. The counsel for the respondents sought an adjournment and failed to provide any clarification on whether Section 148A provisions were adhered to before issuing the notice in this case.

In light of the submissions, the court directed the respondents to file an affidavit-in-opposition within six weeks and allowed the petitioners to file a reply within two weeks thereafter. The matter was listed for "Final Hearing" after eight weeks. Meanwhile, the respondents were restrained from taking further action based on the impugned notices dated 29th May, 2021, and 18th June, 2021.

This judgment highlights the importance of complying with statutory obligations before issuing notices under Section 148 of the Income Tax Act, 1961. It also underscores the significance of court decisions in similar cases where non-compliance with Section 148A provisions led to the stay of impugned notices. The court's decision to allow both parties to present their arguments and file necessary documents demonstrates a fair and procedural approach to resolving the issues raised in the petition.