2022 (3) TMI 1293 - HC - Income Tax

Reopening of assessment u/s 148 - Validity of reopening of assessment u/s 147 - re-assessment notice issued under the erstwhile section147/148 after 1.4.2001 without following the mandate of new section 148A - Notice as barred by limitation - enforcement of the Enabling Act and the Finance Act, 2021 - scope of provisions of Section 148 read with Section 148A as substituted by Finance Act, 2021 - HELD THAT - As relying on MANOJ JAIN VERSUS UNION OF INDIA AND ORS. 2022 (1) TMI 741 - CALCUTTA HIGH COURT and BAGARIA PROPERTIES AND INVESTMENT PVT. LTD. ANR. VERSUS U.O.I ORS. 2022 (1) TMI 742 - CALCUTTA HIGH COURT is disposed of by allowing the same. Explanations A(a)(ii)/A(b) to the Notifications dated 31st March, 2021 and 27th April, 2021 are declared to be ultra vires the Relaxation Act, 2020 and are therefore bad in law and null and void. Accordingly, impugned notice under Section 148 of the Income Tax Act is quashed with liberty to the Assessing Officers concerned to initiate fresh reassessment proceedings in accordance with the relevant provisions of the Act as amended by Finance Act, 2021 and after making compliance of the formalities as required by the law. This writ petition is being entertained subject to payment of cost of ₹ 5000/- to the High Court Legal Services Committee since the impugned notice under Section 148 of the Income Tax Act, 1961, has been issued on 20th April, 2021 as appears from record and this writ petition has been filed in March, 2022, that is, almost after ten months from receipt of the impugned notice, without any explanation for such delay in filing this writ petition.

Summary

Issues:
- Validity of impugned notice under Section 148 of the Income Tax Act, 1961
- Observance of statutory formalities under Section 148 A of the Income Tax Act
- Ultra vires declaration of Explanations A(a)(ii)/A(b) to certain notifications
- Applicability of provisions of Section 148, 149, and 151 of the Act post 31st March, 2021

Analysis:

The petitioner challenged the issuance of an impugned notice under Section 148 of the Income Tax Act, 1961, contending that it was time-barred and lacked observance of statutory formalities under Section 148 A of the Income Tax Act. The petitioner sought relief by quashing the re-assessment notice issued post 31st March, 2021, and declaring certain explanations to notifications as ultra vires the parent legislation, the Relaxation Act, 2020.

The Court noted that the issues raised in the Writ Petition were purely legal and aligned with previous decisions, such as the Division Bench of the Allahabad High Court and orders from Rajasthan High Court, Delhi High Court, and previous judgments of the Calcutta High Court. Citing these precedents, the Court disposed of the Writ Petition favorably, declaring the explanations to be ultra vires the Relaxation Act, 2020, and consequently quashing the impugned notice under Section 148 of the Income Tax Act.

Furthermore, the Court allowed Assessing Officers to initiate fresh reassessment proceedings in compliance with the relevant provisions of the Act as amended by the Finance Act, 2021. The petitioner was directed to pay a cost of ?5000 to the High Court Legal Services Committee due to the delay in filing the writ petition, without any explanation provided. The Court scheduled a compliance mention for the matter and instructed the parties to obtain urgent certified photocopies of the order upon fulfilling necessary formalities.