Income Tax: High Court Quashes Notice Issued Under Section 148

The writ petition was directed against notice dated 29.07.2022 issued under Section 148 of the Income Tax Act, 1961 for the Assessment Year 2015-16 and consequential proceedings initiated thereafter. It was pointed out that an earlier notice dated 12.04.2021 had been issued without following the procedure prescribed under the Finance Act, 2021, and the matter regarding such notices had been finally settled by the Hon’ble Supreme Court. Acting on those instructions, a notice under Section 148A(b) was served, objection was presented by the petitioner, and order under Section 148A(d) dated 29.07.2022 was passed reinstating initiation of reassessment and serving impugned notice under Section 148. The petition was preferred on the grounds that said notice and proceedings were barred and not lawful.

The reasons on grounds of which the grounds urged were that the extension of reassessment for AY 2015-16 was against the statutory provisions amended and substituted by the Finance Act, 2021, and that the service of notice under Section 148 after 01.04.2021 needed to strictly adhere to the amended scheme. It was contended that the impugned notice dated 29.07.2022 was without jurisdiction and unsustainable. The respondents defended the issuance of notice but did not dispute that the controversy was covered by binding pronouncements of the Hon’ble Supreme Court. The Court examined the pleadings, statutory provisions and record while considering the challenge to the impugned action.

Issue Before Court
Whether the challenged notice dated 29.07.2022 passed under Section 148 for AY 2015-16 and follow-up proceedings were tenable in light of amended law and binding decisions of the Supreme Court.

Court’s Decision:

The Court observed that the entire scheme relating to reassessment under Sections 147 to 151 had been substituted by the Finance Act, 2021 with effect from 01.04.2021. It was observed that the validity of notices sent before and after the amendment had already been finally determined by the Supreme Court. The submissions advanced on behalf of the petitioner were accepted, and the Court concluded that the challenge to the notice was justified.
In consequence, the impugned notice dated 29.07.2022 issued under Section 148 and all consequential proceedings were quashed. The Court made it clear that the matter was squarely covered by authoritative pronouncements of the Supreme Court and no further adjudication was necessary. With these findings, the writ petition was allowed and disposed of.

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