Case Note & Summary
The petitioner, Keyur Mukeshbhai Vora, challenged a notice issued under Section 148 of the Income Tax Act, 1961 for Assessment Year 2015-2016. The notice was issued on 01.04.2021 under the old regime by relying on the Taxation and Other Laws (Relaxation of Certain Provisions) Ordinance, 2020 (TOLA) to extend the time limit. The petitioner contended that the notice was issued without complying with Section 148A(b) of the Act, which came into effect from 01.04.2021, requiring a prior notice and opportunity of hearing before reopening. The respondent Assessing Officer argued that due to TOLA, the time limit for issuance of notice was extended up to 30.06.2021, and following the Supreme Court's decision in Union of India v. Ashish Agarwal (2022) 444 ITR 1 (SC), the notice was deemed to be under Section 148A(b) and subsequently, after inviting reply and passing order under Section 148A(d), a fresh notice under Section 148 was issued between July and August 2022. The court noted that similar notices for Assessment Years 2013-2014 to 2017-2018 were considered in Keenara Industries (P.) Ltd v. ITO [2023] 147 taxmann.com 585 (Guj), where such petitions were allowed. The matter was carried to the Supreme Court in Union of India v. Rajeev Bansal (2024) 469 ITR 46 (SC), which decided the issues regarding delay under Section 149 of the Act. The court held that the reassessment notice was invalid due to non-compliance with Section 148A procedure and lack of valid sanction under Section 151 of the Act. The petition was allowed, and the impugned notice was quashed.
Headnote
A) Income Tax - Reassessment - Section 148, 148A, 149, 151 of Income Tax Act, 1961 - Validity of Notice - Notice under Section 148 issued on 01.04.2021 for AY 2015-2016 without prior notice under Section 148A(b) is invalid - The Taxation and Other Laws (Relaxation of Certain Provisions) Ordinance, 2020 cannot extend time for issuance of notice under old regime after 31.03.2021 - Following Union of India v. Ashish Agarwal (2022) 444 ITR 1 (SC), notices issued between 01.04.2021 and 30.06.2021 are deemed to be under Section 148A(b) but subsequent compliance must be within time - Held that the reassessment notice is quashed for non-compliance with Section 148A and lack of valid sanction (Paras 1-6). B) Income Tax - Sanction - Section 151 of Income Tax Act, 1961 - Invalid Sanction - Sanction for issuance of reassessment notice must be by the specified authority as per amended Section 151 with effect from 01.04.2021 - In the present case, sanction was not obtained from the competent authority as required - Held that the notice is invalid for want of proper sanction (Paras 5-6).
Issue of Consideration
Whether the reassessment notice issued under Section 148 of the Income Tax Act, 1961 for Assessment Year 2015-2016 after 31.03.2021 is valid without complying with Section 148A procedure and without proper sanction under Section 151 of the Act
Final Decision
The petition is allowed. The impugned notice under Section 148 of the Income Tax Act, 1961 for Assessment Year 2015-2016 is quashed and set aside.
Law Points
- Reassessment notice under Section 148 of Income Tax Act
- 1961 issued after 31.03.2021 must comply with Section 148A procedure
- TOLA cannot extend time for notice under old regime
- sanction under Section 151 must be by specified authority as per amended provisions
- delay in issuing notice beyond time limit renders notice invalid
