2022 (6) TMI 571 - HC - Income Tax

Reopening of assessment u/s 148 - contravention of the amended Section 148-A - HELD THAT - Both the petitioner and learned Standing Counsel for the respondents state that the contentious issues relating to the provisions of reassessment were laid to rest in the recent Judgment of the Hon'ble Supreme Court in Union of India -vs- Ashish Agarwal 2022 (5) TMI 240 - SUPREME COURT In particular, it is stated that the amended procedure is made applicable both in respect of notices issued prior to 01.04.2021 and subsequent thereto. In view of the settled legal position, the impugned communication is quashed and the matter is remanded for further proceedings in accordance with paragraphs 26 and 27 of the Judgment in Union of India -vs- Ashish Agarwal cited supra.

Summary

Issues:
Challenge to communication rejecting objections to reopening of assessment under amended Section 148-A of the Income Tax Act, 1961.

Analysis:
The petitioner challenged a communication rejecting objections to the reopening of assessment, contending non-compliance with amended Section 148-A of the Income Tax Act, 1961. The petitioner argued that under Section 148-A, an inquiry should be conducted if necessary, and all materials and reasons for reopening the assessment should be provided along with an opportunity to respond. The petitioner claimed these requirements were not met in the impugned communication.

Legal Precedent:
Both the petitioner and the learned Standing Counsel for the respondents referred to a recent judgment of the Hon'ble Supreme Court in Union of India vs. Ashish Agarwal. The judgment clarified that the amended procedure under Section 148-A applies to notices issued both before and after 01.04.2021. The judgment specified the modified procedure for notices issued under the unamended Section 148 of the IT Act, emphasizing the need for the assessing officer to provide information and material relied upon by the Revenue to the assessee for a response within a specific timeframe.

Court Decision:
In light of the legal position established by the Supreme Court judgment, the High Court quashed the impugned communication and remanded the matter for further proceedings in accordance with the directives outlined in the Union of India vs. Ashish Agarwal judgment. Consequently, the writ petition was disposed of on these terms, and related motions were closed without costs. The High Court's decision aligned with the principles set forth in the Supreme Court ruling, ensuring compliance with the amended provisions of Section 148-A of the Income Tax Act, 1961.