Validity of CBDT’s notification extending time to issue Sec. 148 notice after 31-03-2021 challenged before HC

Sahil International v. ACIT – [2021] 128 taxmann.com 161 (Bombay)

Assessee has challenged the validity of CBDT’s notification No. 20/2021, dated 31-03-2021, issued in exercise of the powers conferred by section 3(1) of the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 (TLA Act, 2020).

Notification no. 20/2021 has allowed revenue to issue reassessment notice under old provisions of section 148 even after 31-03-2021. Para A(a) of Notification no. 20/2021 provides that 30-04-2021 (later further extended to 30-06-2021) shall be the last date for issuance of notice under section 148 if, on account of various extension notifications, the due date is getting expired on 31-03-2021.

In the assessee’s case, the notice of reassessment was issued dated 07-06-2021 under the old provisions of section 148. The assessee contended that said act of revenue is in contravention of the provisions of Income-tax Act as the provisions of section 148 were substituted by the Finance Act, 2021 w.e.f. 01-04-2021. Thus, notice under old provisions of section 148 can’t be issued on or after 01-04-2021.

Considering the fact of the case, the Bombay High Court has issued notice to revenue and Attorney General of India.