Case Note & Summary
The petitioner, Vikash Mittal and Sons (HUF), challenged a notice issued under Section 148 of the Income Tax Act, 1961 for Assessment Year 2015-2016. The notice was issued after 31.03.2021 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 mandatory 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 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 subsequent notices were issued after following the procedure. The court examined the facts and found that the initial notice under Section 148 was issued without issuing a show cause notice under Section 148A(b) or passing an order under Section 148A(d). The court held that the mandatory procedure under Section 148A was not followed, rendering the notice invalid. The court also noted that similar issues regarding delay and sanction were addressed by the Supreme Court in Union of India v. Rajeev Bansal (2024) 469 ITR 46 (SC), but the present case was decided on the ground of non-compliance with Section 148A(b). Consequently, the court allowed the petition and quashed the reassessment notice.
Headnote
A) Income Tax - Reassessment - Section 148, 148A, 149 of Income Tax Act, 1961 - Validity of Notice - The petitioner challenged notice under Section 148 for AY 2015-2016 issued after 31.03.2021 without complying with Section 148A(b) procedure. The court held that the notice was invalid as the mandatory procedure under Section 148A was not followed, and the reliance on TOLA to extend time was not sufficient to cure the defect. (Paras 2-4) B) Income Tax - Reassessment - Section 148A of Income Tax Act, 1961 - Procedure - The court held that after 01.04.2021, any reopening notice must be preceded by a show cause notice under Section 148A(b) and an order under Section 148A(d). The notice issued without such procedure is void ab initio. (Paras 3-4) C) Income Tax - Reassessment - Delay and Sanction - Section 149, 155 of Income Tax Act, 1961 - The court noted that similar issues regarding delay and sanction were decided by the Supreme Court in Union of India v. Rajeev Bansal (2024) 469 ITR 46 (SC), but the present case was allowed on the ground of non-compliance with Section 148A(b). (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 without complying with Section 148A(b) of the Act is valid.
Final Decision
The court allowed the petition and quashed the reassessment notice issued under Section 148 of the Income Tax Act, 1961 for Assessment Year 2015-2016.
Law Points
- Reassessment notice under Section 148 of Income Tax Act
- 1961 must comply with Section 148A procedure after 01.04.2021
- TOLA cannot override mandatory provisions
- Notice issued without Section 148A(b) show cause is invalid
