2022 (6) TMI 1282 - HC - Income Tax

Reopening of assessment u/s 147 - Scope of amended Sections 148 and 148A - mandation of prior approval of specified authority - conducting of enquiries or issuance of show-cause notice or passing of order under section 148A - revenue submitted that by virtue of the order passed by the Apex Court 2022 (5) TMI 240 - SUPREME COURT , all such impugned notices under un-amended Section 148 of the Income Tax Act are deemed to have been issued u/s 148A as substituted by the Finance Act, 2021 and construed and treated to be show cause notices in terms of Section 148A (b) - HELD THAT - The requirement of conducting any enquiry, if required with the prior approval of specified authority under Section 148A(a) has been dispensed with as a onetime measure vis-a-vis those notices which have been issued under Section 148 of the un-amended Act from 01.04.2021 till date. The assessing officers have been directed to pass orders in terms of Section 148A (d) in respect of each of the concerned assessees. Thereafter, after following the procedure as required under Section 148A, the assessing officer may issue notice under section 148 (as substituted). The Apex Court has also made it clear that all defences which may be available to the assesees including those available under Section 149 of the I.T. Act and all rights and contentions which may be available to the concerned assessees and Revenue under the Finance Act, 2021 and in law shall continue to be available. As abundantly made clear at para 11 of the judgment, the order passed by the Apex Court under article 142 of the Constitution of India shall also govern the writ petitions pending before various High Courts in which similar notices under un-amended Section 148 issued after 01.04.2021 are under challenge. As such, nothing survives in the instant writ petitions to be adjudicated upon.

Summary

Issues:
Challenge to notices issued under un-amended section 148 of the Income Tax Act, 1961 after 01.04.2021.

Analysis:
The High Court considered writ petitions challenging notices under the un-amended section 148 of the Income Tax Act, 1961 issued after 01.04.2021. The Court referred to an interim order from a previous case and restrained the Revenue from further action based on the impugned notices. The Apex Court's judgment in Civil Appeal No. 3005/2022 addressed approximately 90,000 reassessment notices issued post-01.04.2021. The Apex Court modified the High Court judgments, deeming the notices to have been issued under the amended section 148A and allowing assessees to reply within a specified timeframe. The Apex Court's directions applied nationwide and to pending cases challenging similar notices.

The Revenue was directed to provide information to assessees within thirty days for them to respond within two weeks. The Apex Court dispensed with the requirement of prior approval for conducting any inquiry as a one-time measure. The assessing officers were instructed to pass orders under section 148A(d) and issue notices accordingly. Assessees retained all defenses available under the IT Act and the Finance Act, 2021. The Apex Court's order aimed to avoid multiple appeals and govern all similar cases across High Courts.

The High Court acknowledged the Apex Court's judgment and its applicability to pending writ petitions challenging similar notices issued post-01.04.2021. Consequently, the Court disposed of the writ petitions as nothing remained to be adjudicated upon. The interim orders were vacated, and all writ petitions were accordingly disposed of, including the related application.

In conclusion, the High Court addressed the challenge to notices issued under the un-amended section 148 of the Income Tax Act, 1961 after 01.04.2021. The Apex Court's judgment modified the High Court decisions, providing a framework for addressing the issued notices. The High Court, in line with the Apex Court's directions, disposed of the writ petitions as the challenge was no longer relevant post the Apex Court's decision.