We have earlier seen many High courts putting stay on the reassessment proceedings which have been initiated under section 148 of the Income tax act in the old provisions after 01.04.2021.
Finance Act, 2021 had substituted section 148 by new provisions of section 148 and also inserted new section 148A for conducting reassessment proceedings.
The above sections were made effective from 01.04.2021 and hence any notice issues under section 148 of the Act after 01.04.2021 were liable to follow the new provision of section 148 and 148A and the notices which were being issues by Income tax department were not following the same.
Income tax department were following the notification of CBDT which had extended the due date to issue notice under section 148 of the Act till 30.06.2021 under old provision.
The assessee was pleading that after the new provisions were made effective by Finance Act, 2021 notice cannot be issued under the old provision.
The same plea was made in a Writ petition before Rajasthan High court’s Jaipur bench in case of Uma Devi Gupta Vs. Income Tax Officer, Ward-1, Kishangarh, Ajmer and others where High court had heard various connected cases.
In the petition the counsel for petitioner had relied on various High court’s judgement such as Kolkata High court, Bombay High court etc wherein the proceedings were stayed wherein notice u/s 148 of the Act was issued in the old provision.
In the current cases also, Rajasthan High court has stayed the proceedings u/s 148 of the Act until proper reply is filed by the department.
Looking at the law it could be said that in the current scenario the proceedings would be dropped which have been started under the old provisions until the government amends Income tax act to extend the applicability of old provision of section 148 of the Act.
The extract from the judgement is as under:
“In all these writ petitions the issue is with regard to the application of amendment made in the Finance Act, 2021
published in the Official Gazette on 28.03.2021 whereby Section 148 of the Income Tax Act, 1961 has been substituted and 148-A has been inserted.
Learned counsel appearing for the petitioners submitted that impugned notices in all the cases have been issued under Section 148 of the Income Tax Act, 1961 without complying with the provisions of Section 148 of the Income Tax Act, 1961.
Learned counsel for the petitioners submitted that as per the amendment as introduced with effect from 01.04.2021 by the Central Government, it was incumbent on the Assessing Officer to first conduct an enquiry with the prior approval of the Specified Authority with respect to the information suggesting that income chargeable to tax has escaped assessment.
Learned counsel for the petitioners further submitted that opportunity is also required to be given to assessee under Section 148-A of the Income Tax Act by serving him with a notice to show cause within specified time, as why notice under Section 148 of the Income Tax Act, 1961 may not be issued on the basis of information suggesting that income chargeable to the tax has escaped assessment.
Learned counsel for the petitioners submitted that the different High Courts-Delhi High Court, Calcutta High Court and Bombay High Court, are also seized with the similar kind of matters and interim order has also been passed.
This Court instead of granting ex-parte interim order at first instance, thought it proper to serve copy of writ petitions in the office of counsel, representing Income Tax Department, and as such, copies were served in the office of Mr. Anuroop Singhi, Adv. and Ms. Parinitoo Jain, Adv.
Ms. Parinitoo Jain, Adv. is appearing and submits that some time may be granted to seek instructions as copies of the writ petitions, have been served to her only yesterday.
Ms. Parinitoo Jain, Adv. is granted four weeks time to seek necessary instructions and to file reply to the writ petitions as well as stay applications.
Ms. Parinitoo Jain, Adv. will also be free to make an application after filing of the reply for vacation of stay order, if department intends to do so.
Ms. Parinitoo Jain, Adv. submits that she will represent the Revenue-Department and as such her name be shown in the cause-list.
List all these cases on 06.09.2021.
In the meanwhile, the respondents are directed not to proceed further in response to notices issued to the petitioners under Section 148 of the Income Tax Act, 1961.
A copy of this order be separately placed in each petition.”
To download the order CLICK HERE.
Disclaimer: The views presented in the above article are personal views of our team and has no legal binding. For any legal opinion consult a tax professional.
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