Case Note & Summary
The petitioner, Nirman Multiarts Pvt. Ltd., challenged a reassessment notice issued under section 148 of the Income Tax Act, 1961 for Assessment Year 2015-2016. The notice was issued on 25.06.2021 under the old regime, 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 invalid because it did not comply with the new procedure under section 148A(b) of the Act, which came into effect from 01.04.2021. The respondent Assessing Officer argued that due to TOLA, the time limit for issuance was extended to 30.06.2021, and after the Supreme Court's decision in Union of India v. Ashish Agarwal, the notice was deemed to be under section 148A(b), and a subsequent notice under section 148 was issued after following section 148A(d) procedure. The court noted that similar notices for other assessment years were considered in Keenara Industries (P.) Ltd v. ITO, where the Gujarat High Court allowed the petitions. The matter was appealed to the Supreme Court in Union of India v. Rajeev Bansal, which decided issues of delay under section 149 and validity of sanction under section 155. The court held that the reassessment notice was invalid as it was issued after 31.03.2021 without complying with section 148A(b), and TOLA could not extend the time limit for issuance under the old regime. The petition was allowed, and the impugned notices were quashed.
Headnote
A) Income Tax - Reassessment - Section 148, 148A, 149 of Income Tax Act, 1961 - Validity of Notice - The petitioner challenged reassessment notice issued on 25.06.2021 for AY 2015-2016 under old regime without complying with section 148A(b) which came into effect from 01.04.2021. The court held that the notice was invalid as it was issued after the new procedure came into force and TOLA could not extend the time limit for issuance under old regime. (Paras 2-4) B) Income Tax - Reassessment - Section 148A of Income Tax Act, 1961 - Deemed Notice - Following the Supreme Court decision in Union of India v. Ashish Agarwal, the notice under section 148 issued between 01.04.2021 and 30.06.2021 was deemed to be a notice under section 148A(b). The department subsequently issued a fresh notice under section 148 after following section 148A(d) procedure. (Paras 3-4) C) Income Tax - Reassessment - Delay and Sanction - Section 149, 155 of Income Tax Act, 1961 - The court considered the Supreme Court decision in Union of India v. Rajeev Bansal regarding delay and validity of sanction under section 155. The court allowed the petition following the decision in Keenara Industries (P.) Ltd v. ITO. (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 without complying with section 148A(b) is valid, and whether the extension of time under TOLA applies.
Final Decision
The petition is allowed. The impugned notices under section 148 and section 148A(b) of the Income Tax Act, 1961 for Assessment Year 2015-2016 are quashed and set aside.
Law Points
- Reassessment notice under section 148 of Income Tax Act
- 1961 issued after 01.04.2021 must comply with new procedure under section 148A
- TOLA cannot extend time limit for issuance of notice under old regime after 31.03.2021
- Notice under section 148 issued between 01.04.2021 and 30.06.2021 deemed to be notice under section 148A(b) as per Ashish Agarwal
- Subsequent notice under section 148 after following section 148A(d) is valid only if initial notice was validly issued
