Madhya Pradesh HC Quashed Notice Of Reassessment Issued On After 01.04.2021

The Madhya Pradesh High Court (MP High Court) in the matter of Mr. Yuvraj Vs. Income Tax Officer quashed the notice of reassessment issued on after 01.04.2021.

The contention of the petitioner is to the effect that a newly enacted provision i.e. Section 148-A has been inserted in Income Tax Act, 1961 (hereinafter referred as ‘the Act, 1961’) makes it mandatory for the Assessing Officer to give a notice requiring the concerned assessee to furnish the information as regards his income including returns. According to the petitioner the newly inserted section 148-A of the Act, 1961 has come into force with effect from 1/04/2021. The petitioner submits that an impugned notice has been issued to the petitioner which has been issued under the omitted section 148 of the Act, 1961. Though the same is dated 31/03/2021 but the same was served upon the petitioner on 16/04/2021 through Email. The contention of the petitioner is to the effect that since the proceedings for re-assessment were sought to be initiated after 1/04/2021 therefore, it was incumbent upon the Assessing Authority to first issue a notice under section 148-A upon the petitioner and thereafter dealing with the same in accordance with the procedure laid down in section 148-A, a full fledged enquiry ought to have been conducted by giving opportunity of hearing to the petitioner/assessee. Thus, according to the petitioner no notice directly under section 148 of the Act, 1961 could have been issued on 16/04/2021 when the old section 148 stood omitted upon insertion of new section 148-A which came into force with effect from 1/04/2021. Thus, the petitioner submits that the impugned notice which is contained in Annexure P/1 dated 31/03/2021 (served through Email on 16/04/2021) be quashed. The petitioner has also sought quashing of the notice dated 6/12/2021 which is contained in Annexure P/6 as well as the notification dated 31/03/2021 contained in Annexure P/2 and also the notification dated 27/04/2021 contained in Annexure P/3.

The Coram found that, “The counsel for respondent/revenue Shri Sanjay Lal produced a letter dated 24/02/2022 bearing no. 1002 issued by Income Tax Officer – 3 (1) of Bhopal which was addressed to the counsel for the revenue and in the said letter it was stated that though in the notice which was issued to the petitioner herein, the date was mentioned as 31/03/2021 but, the system of the office of the respondents revealed that the Email to the petitioner was infact sent on 16/04/2021. Thus, the counsel for respondent does not dispute that the notice which is impugned in the petition contained in Annexure P/1 infact was issued on 16/04/2021 though the date on the same was mentioned as 31/03/2021 but was issued later on 6/04/2021.”

The High Court Ruled out that, “In view of the aforesaid letter so produced before us dated 24/02/2022 and in view of the admission by the counsel for respondents, we have no hesitation to hold that the impugned notice is bad in the eye of law, contained in Annexure P/1 dated 31/03/2021 (received by the petitioner on 16/04/2021 through Email) inasmuch as after 1/04/2021, it is mandatory requirement that prior to re-assessment proceedings notice under section 148-A of Income Tax Act, 1961 should be issued to assesseee. Since now in view of the admission by the respondents the other reliefs as sought for by the petitioner in the relief clause have become redundant inasmuch as now there is no dispute about the date of issuance of the impugned notice.

Accordingly, the impugned notice dated 31/03/2021 (served through Email to the petitioner on 16/04/2021) stands quashed. However, it is left open for the respondents to take recourse to the procedure laid down in newly enacted section 148-A of the Income Tax Act, 1961 if it is required under the law.”

The Judgment was made by Hon’ble Shri Justice Maninder Singh Bhatti.

The Petitioner was represented by Shri Ashay Jain and Respondent was represented by Shri Sanjay Lal.

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