Breaking: Supreme Court rules in favour of Revenue in Sec 148A re-assessment controversy

Supreme Court has ruled in favor of Revenue in the re-assessment controversy. The Apex Court held that all notices issued under Section 148 will be deemed to have been issued under Section 148A of the Income Tax Act.

The Income-tax Officer will therefore follow the procedure laid down as per amendments made via Finance Act, 2021.

Now since the notices have been held valid, the Revenue & Assessee will now as per the procedure of law.

Thus all High Court orders stand modified & this judgment of the Supreme Court is to substitute the same.

Relevant Extract:

10. In view of the above and for the reasons stated above, the present Appeals are ALLOWED IN PART. The impugned common judgments and orders passed by the High Court of Judicature at Allahabad in W.T. No. 524/2021 and other allied tax appeals/petitions, is/are hereby modified and substituted as under: ­

(i) The impugned section 148 notices issued to the respective assessees which were issued under unamended section 148 of the IT Act, which were the subject matter of writ petitions before the various respective High Courts shall be deemed to have been issued under section 148A of the IT Act as substituted by the Finance Act, 2021 and construed or treated to be show­cause notices in terms of section 148A(b). The assessing officer shall, within thirty days from today provide to the respective assessees information and material relied upon by the Revenue, so that the assesees can reply to the show­cause notices within two weeks thereafter;

(ii) The requirement of conducting any enquiry, if required, with the prior approval of specified authority under section 148A(a) is hereby dispensed with as a one­time measure vis­à­vis those notices which have been issued under section 148 of the unamended Act from 01.04.2021 till date, including those which have been quashed by the High Courts.

Even otherwise as observed hereinabove holding any enquiry with the prior approval of specified authority is not mandatory but it is for the concerned Assessing Officers to hold any enquiry, if required;

(iii) The assessing officers shall thereafter pass orders in terms of section 148A(d) in respect of each of the concerned assessees; Thereafter after following the procedure as required under section 148A may issue notice under section 148 (as substituted);

(iv) All defences which may be available to the assesses including those available under section 149 of the IT Act and all rights and contentions which may be available to the concerned assessees and Revenue under the Finance Act, 2021 and in law shall continue to be available.

This Judgement was pronounced by Justice M. R. SHAH and Justice B.V. NAGARATHNA

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