Section 148 of the Income tax Act deals with issuing notice to the assessee in the case where income has escaped assessment which is also popularly known as reassessment proceedings.
Finance Act, 2021 has amended and substituted the proceedings in case of such reassessment proceedings, wherein the assessing officer can only conduct reassessment proceedings within 3 years from the end of relevant assessment year to which such income relates and 10 years in case where income escaping assessment exceeds Rs. 50 lakh.
In the earlier provision, this time limit mentioned under section 149 of the Income tax act was 6 years in a case where income escaping assessment was more than Rs. 1 lakh and 4 years in any other case.
As we know that due to the pandemic and due to upgrade of the Income tax e-filing website various due dates were extended which also includes extending due dates for issuing notice u/s 148 of the Income tax Act.
Now, the new provision of section 148 and 149 have been incorporated in the Income tax act from 01.04.2021, however Assessing officer were still issuing notices under the earlier provision of Income tax act even after 01.04.2021 to the assessee’s for AY 2013-14 to 2017-18 based on a notification issued by CBDT extending such due dates.
Aggrieved by this assessee started filing Writ petition before various High court’s stating that when a new provision or law has been enacted under Income tax act and substituted the old law, new notices cannot be issued under the old provision and hence all the notices issued u/s 148 of the Income tax Act under the old provision are void ab initio and needs to be quashed.
Against the above plea, Hon’ble High court has granted stay against the proceedings as the Income tax department needed some time to reply to such notices.
Various cases where such writ petition has been filed are as under:
(i) In the case of Sahil International Vs. Assistant Commissioner of Income Tax, Circle-19(3) & Ors. WP(L) No. 14687 of 2021 (Bombay) dated 9th July, 2021
(ii) In the case of Mon Mohan Kohli Vs. Assistant Commissioner of Income Tax & Anr. dated W.P.(C) 6176 of 2021 7th July, 2021.
(iii) Bagaria Properties and Investments Private Limited and Anr. Vs Union of India and Ors (Calcutta High Court)
Where most of the cases are unreported one such reported judgement by Bombay High Court in case of Tata Communications Transformation Services Limited Versus Assistant Commissioner of Income Tax 14(1)(2), Mumbai & Ors. WRIT PETITION NO.1334 OF 2021 is available in public domain.
To download the order CLICK HERE.
Although these are just interim stay on such notices/ proceedings by High Court’s as the department needed some time to reply but it is a welcoming order as such writ petition were not straight away quashed by Hon’ble High court.
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