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2021 (12) TMI 570 - HC - Income TaxReopening of assessment u/s 148 - scope of section u/s 148A - period of limitation in respect of issuance of notice under section 148 - HELD THAT - As the prima facie opinion of the Court, for the purpose of interim order, is that by virtue of notifications dated 27.02.2021 and 31.03.2021 issued by the Central Board of Direct Taxes, as referred herein before, though extends the period of limitation in respect of issuance of notice under section 148 of the Income Tax, Act, but the said notification is not found to empower the Central Board of Direct Taxes to put into oblivion the provision of section 148A of the Income Tax Act, which was inserted by virtue of the Finance Act, 2021 and was notified w.e.f. 01.04.2021, as if the said section 148A would not apply till limitation prescribed under section 148 does not lapse or expire. The implementation of the effective date of section 148A which is notified to be 01.04.2021, was certainly not extended by virtue of notification dated 27.02.2021 and 31.03.2021 and therefore, the Court finds that the decision rendered by the Allahabad High Court 2021 (10) TMI 517 - ALLAHABAD HIGH COURT as well as Rajasthan High Court 2021 (12) TMI 207 - RAJASTHAN HIGH COURT to have more persuasive value in respect of the issue raised by the petitioner with all respect to the decision rendered by the Chhattisgarh High Court 2021 (9) TMI 199 - CHHATTISGARH HIGH COURT . The opinion expressed herein before is only for the purpose of granting interim relief to the petitioner and is not a conclusive opinion of the Court on the merit of the writ petition. Accordingly, the Court is inclined to stay the operation of the impugned notice issued under section 148 of the Income Tax Act bearing DIN Notice issued by the ACIT/DCIT CIR1 DIB dated 30.06.2021 (Annexure XV).
Issues:
Challenge to notice issued under section 148 of the Income Tax Act, 1961 based on the newly inserted provision of section 148A. Interpretation of the effect of notifications dated 27.02.2021 and 31.03.2021 issued by the Central Board of Direct Taxes on the applicability of section 148A. Comparison of decisions from different High Courts on the issue. Analysis: The petitioner challenged a notice issued under section 148 of the Income Tax Act, 1961, invoking the newly inserted provision of section 148A. The petitioner argued that the Assistant Commissioner of Income Tax did not comply with the mandatory requirements of section 148A, which include conducting an inquiry with prior approval and providing an opportunity for the assessee to be heard before issuing the notice. The petitioner relied on judgments from the Allahabad High Court and the Rajasthan High Court, emphasizing the importance of following the procedural requirements laid down in section 148A before issuing notices under section 148 of the Income Tax Act. The petitioner's contention was that the notice issued was not in accordance with the law due to non-compliance with section 148A. On the other hand, the Departmental Senior counsel referred to notifications issued by the Central Board of Direct Taxes, extending the time limit for compliance with various provisions, including the issuance of notices under section 148. The counsel argued that despite the insertion of section 148A, the notice issued under section 148 was lawful and sustainable under the pre-amendment regime of the Income Tax Act. The Senior Standing counsel for the respondents further argued that the notifications issued by the Central Board of Direct Taxes and the extensions granted by the Supreme Court in light of the pandemic situation empowered the respondent to issue the impugned notice under section 148, even after the insertion of section 148A. In considering the arguments and relevant case laws, the Court opined that the notifications extending the time limit for issuing notices under section 148 did not negate the applicability of section 148A, which was inserted by the Finance Act, 2021. The Court found the decisions of the Allahabad High Court and Rajasthan High Court more persuasive on the issue raised by the petitioner, granting interim relief by staying the operation of the impugned notice until further proceedings. The Court's decision to stay the notice was based on the interpretation of the law and the procedural requirements under section 148A, emphasizing the importance of complying with the new provisions introduced by the Finance Act, 2021. The matter was listed for further hearing, allowing the respondents to file an affidavit-in-opposition before the next date of listing.
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