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2022 (7) TMI 64 - HC - Income TaxReopening of assessment u/s 147 - notice issued u/s new section 148A - Petitioner is aggrieved by issuance of impugned notice u/s 148 on the grounds that the same is barred by limitation - scope of statutory formalities under section 148A as prescribed by the Finance Act, 2021 which are applicable with effect from 1st April 2021 before issuance of notices under section 148 of the 1961 Act on or after 1st April 2021 - HELD THAT - In considered view that this case clearly falls under the amended Act relating to proceedings under section 147 of the Act under which issuance of notice under section 148A of the Act is mandatory before issuing any notice under section 148 of the amended Act which has not been complied with in this case. Considering the above facts and circumstances of the case and in view of the order of this court in the case of Bagaria Properties and Investment Private Limited Anr. v. Union of India Ors. 2022 (1) TMI 742 - CALCUTTA HIGH COURT and also in the case of Monoj Jain v. Union of India 2022 (1) TMI 741 - CALCUTTA HIGH COURT the impugned notice under section 148 of the Act and all subsequent proceedings are not sustainable in law and the same are quashed. However, quashing of the impugned notice and proceeding will not debar the respondent-authority concerned to issue any fresh notice in future in accordance with law.
Issues:
- Validity of notice under section 148 of the Income Tax Act, 1961 - Compliance with statutory formalities under section 148A of the Income Tax Act, 1961 - Date of issuance of the impugned notice - Applicability of the Finance Act, 2021 - Precedents set by previous court judgments Validity of Notice under Section 148: The petitioner challenged the notice issued under section 148 of the Income Tax Act, 1961, citing that it was barred by limitation and that the respondent had not followed the statutory formalities under section 148A of the Act as per the Finance Act, 2021. The respondent argued that a final assessment order had been passed, and although the notice was signed on March 31, 2021, it was uploaded for communication on April 1, 2021. The court noted that the amended Act required compliance with section 148A before issuing any notice under section 148, which had not been done in this case. Compliance with Statutory Formalities under Section 148A: The court emphasized the importance of adhering to the statutory formalities under section 148A of the Income Tax Act, 1961, as mandated by the Finance Act, 2021. It was observed that the respondent had failed to comply with these formalities before issuing the impugned notice under section 148, leading to the conclusion that the notice and subsequent proceedings were not sustainable in law. Date of Issuance of the Impugned Notice: The court determined that the date of issuance of the impugned notice should be considered as April 1, 2021, when it was uploaded for communication, rather than the date it was signed. This clarification was crucial in assessing the compliance with statutory requirements under the amended Act. Applicability of the Finance Act, 2021: The judgment highlighted the significance of the provisions introduced by the Finance Act, 2021, specifically regarding the issuance of notices under section 148 of the Income Tax Act, 1961. The court underscored the need for strict adherence to these provisions to ensure the legality and validity of such notices. Precedents Set by Previous Court Judgments: In reaching its decision, the court referred to previous judgments, including the cases of Bagaria Properties and Investment Private Limited v. Union of India and Monoj Jain v. Union of India. These precedents, along with the specific circumstances of the present case, guided the court in quashing the impugned notice and subsequent proceedings while allowing the respondent authority to issue a fresh notice in the future in compliance with the law. In conclusion, the High Court of Calcutta found that the impugned notice under section 148 of the Income Tax Act, 1961, and all subsequent proceedings were not legally sustainable due to non-compliance with statutory formalities under section 148A of the Act as mandated by the Finance Act, 2021. The judgment serves as a reminder of the importance of adhering to statutory requirements and legal provisions in tax proceedings to ensure procedural fairness and compliance with the law.
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