Issuance of notice after 1-4-2021 without following procedures of section 148A- Stay granted by Delhi High Court

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Issuance of notice after 1-4-2021 without following procedures of section 148A- Stay granted by Delhi High Court

 

Notices under section 48 issued after 01/04/2021 are an issue of the litigation and disputes. It is one of the highest disputable issues in the present time.
Recently, in Tarun Goel & Ors. V. ITO & Anr. [W.P. Nos. 8810,8811,8813,8816,8818,8819 etc./2021, dt.24-8-2021] (Del HC), petitioners stated that the notices under section 148 are invalid in the eyes of law and void from inception as they were issued without following the process of issuance of prior notice under section 148A of the Act.
It was submitted that the impugned notices were invalid as they had been issued under the pre-amended provisions of the Act, which were no longer in force on the date of the impugned notices. It was emphasised that the amendments made by section 148A are applicable to all the notices issued under section 148 of the Act post 1-4-2021. According to him, section 3(1) of the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act,2020 authorises the Central Government to only extend the time limits and nothing more. But the Government issued notifications which contain the ‘explanation’ clarifying that the pre-amended section 148,149 and 151 of the Act shall govern the issue of notice under section 148 post 1-4-2021. It was argued that the revenue cannot indirectly extend the operation of the old provisions of the Act beyond 31-3-2021in the guise of a clarification under delegated legislation. Till further orders revenue authorises are restrained from continuing with reassessment proceedings< in any manner, pursuant to impugned notices which were issued on or after 1-4-2021 without following procedure prescribed under section 148A.
In Armada D1 Pte. Ltd. V. Dy. CIT [Wit Petition (L) No. 11766 of 2021, dt.3-6-2021]: 2021 TaxPub(DT) 4842 (Bom-HC), the petitioners challenged notice, dt.7-4-2021 issued under section 148 on ground of violation of the mandatory provision for issuance of notice effective from 1-4-2021. The petitioner prayed for stay of proceedings because the provision of section 148A which require AO to conduct enquiry and to provide an opportunity of being heard, have not been followed. The Mumbai High Court granted stay on the proceedings in connection with notice issued on 7-4-2021 under section 148.
In Tata Communications Transformations Services Ltd. V. Asstt. CIT [Writ Petition No. 1344 of 2021, dt. 5-7-2021]: 2021 TaxPub(DT) 3811 (Bom-HC) assessee has challenged constitutional validity of section 3 of Taxation and Other Laws (Relaxations and Amendment of Certain Provisions) Act,2020 [TLA Act,2020] and Notification No.20/2021, dated 31-3-201.
Notification No. 20/2021 has allowed revenue to issue reassessment notice under old provisions of section 148 even after the expiry of 31-3-2021. ParaA(a) of notification No. 20/2021 provides that 30-4-2021 (later further extended to 30-6-2021) shall be the last date of issuance of notice under section 148 if, on account of various extension notifications, the due date is getting expired on 31-3-2021.
The assessee contended that several provisions of the Act including section 148 have been substituted by Finance Act, 2021 w.e.f 1-4-2021. Thus, reassessment notice cannot be issued based on earlier provisions of the Act, on or after 1-4-2021. The Mumbai High Court has issued notice to the revenue and Attorney General of India.
The issue of validity of notices issued U/s 148 after 01.04.2021 has become highly controversial as the Chhatisgarh HC has decided the issue in favour of the assessee whereas Allhabad HC had decided the issue in favour of the assessee. It is worth mentioning here that the Allhabad HC has passed the order after the judgement of Chhatisgarh HC and it is passed after considering the judgement of the Chhatisgarh Hc.
Let us hold on and wait for the final decision of the Supreme Court on this isssue.
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