UNION OF INDIA & ORS. versus ASHISH AGARWAL

UNION OF INDIA & ORS. versus ASHISH AGARWAL

The substituted provisions (sections 147-151) of the Income Tax Act as enacted by the Finance Act, 2021 apply to notices issued on or after 01.04.2021; High Courts were correct that benefit of new provisions applies to such notices, but instead of quashing notices issued under the unamended section 148 after...

Source-derived case information.

Parties
Appellant: UNION OF INDIA & ORS.; Respondent: ASHISH AGARWAL
Jurisdiction
India
Judgment Date
04 May 2022
Procedural Posture
Civil Appeal / Appeal From the Judgment and Order of the High Court of Judicature at Allahabad (writ Tax No. 524/2021 and Allied Petitions) Quashing Reassessment Notices Under Section 148
Outcome
Appeal partly allowed
Legal Topics
Reassessment Proceedings, Reopening of Assessment, Section 148 a Procedure, Limitation for Reassessment (section 149), Finance Act, 2021 Amendments, Article 142 PAN India Relief
Income Tax Taxation Constitutional Law Administrative Law Reassessment Proceedings Reopening of Assessment Section 148 a Procedure Limitation for Reassessment (section 149) +2 more

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Parties

UNION OF INDIA & ORS.

Appellant

ASHISH AGARWAL

Respondent

Procedural Posture

Civil Appeal / Appeal From the Judgment and Order of the High Court of Judicature at Allahabad (writ Tax No. 524/2021 and Allied Petitions) Quashing Reassessment Notices Under Section 148

Legal Issues

  1. 1 Whether notices issued under unamended section 148 after 01.04.2021 are governed by substituted sections 147-151 (Finance Act, 2021)
  2. 2 Whether no notice under section 148 can be issued without following procedure in section 148A
  3. 3 Whether High Courts erred in quashing reassessment notices instead of construing them as issued under section 148A and permitting reassessment under substituted provisions

Ratio Decidendi

The substituted provisions (sections 147-151) of the Income Tax Act as enacted by the Finance Act, 2021 apply to notices issued on or after 01.04.2021; High Courts were correct that benefit of new provisions applies to such notices, but instead of quashing notices issued under the unamended section 148 after 01.04.2021, courts should construe those notices as deemed to have been issued under section 148A and permit the Revenue to proceed under the substituted provisions subject to compliance with procedural requirements and available defences; a PAN-India remedial order under Article 142 is appropriate to avoid multiplicity of appeals.

Court Disposition

Appeal partly allowed

Orders

  • All impugned notices under section 148 of the unamended IT Act issued on or after 01.04.2021 shall be deemed to have been issued under section 148A of the Income Tax Act as substituted by the Finance Act, 2021 and treated as show-cause notices in terms of section 148A(b).
  • Assessing Officers shall within thirty days provide assessees the information and material relied upon by the Revenue so assessees can reply within two weeks thereafter.