Calcutta HC Quashes Re-assessment Notices; Non-compliance with Amended Tax Formalities u/s 148A Cited.

The HC of Calcutta quashed the impugned re-assessment notices issued under Section 148 of the Income Tax Act post 31st March, 2021, citing non-compliance with statutory formalities under Section 148A as amended by the Finance Act, 2021. The court declared the Explanations in Notifications extending tax provisions beyond the specified period as ultra vires the Relaxation Act, 2020. The court ruled in favor of the petitioners, allowing for fresh re-assessment proceedings in accordance with the amended provisions, ensuring compliance with the revised statutory requirements.

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Issues:
Challenging impugned notices under Section 148 of the Income Tax Act issued post 31st March, 2021; Seeking quashing of re-assessment notices; Declaration against certain Notifications extending applicability of tax provisions; Legality of statutory formalities under Section 148A of the Income Tax Act.

Analysis:
The High Court of Calcutta heard multiple Writ Petitions together due to common legal questions and facts. The main contention was the issuance of impugned notices under Section 148 of the Income Tax Act post 31st March, 2021, with allegations of non-compliance with statutory formalities under Section 148A of the Income Tax Act as per the Finance Act, 2021 effective from 1st April, 2021. The petitioners sought relief by challenging the re-assessment notices and declaring certain Notifications extending the applicability of tax provisions as ultra vires the Relaxation Act, 2020.

The issues raised in the Writ Petitions were predominantly legal in nature, focusing on quashing the impugned re-assessment notices issued by the Income Tax Authority after 31st March, 2021. The petitioners also sought a declaration against specific Explanations in Notifications dated 31st March, 2021, and 27th April, 2021, extending the applicability of tax provisions beyond the specified period, alleging inconsistency with the parent legislation, the Relaxation Act, 2020.

The counsels for all parties collectively acknowledged that the legal matters in these Writ Petitions were addressed in previous judgments by different High Courts, including the Allahabad High Court, Rajasthan High Court, and Delhi High Court. Referring to these precedents, the High Court of Calcutta disposed of the Writ Petitions in favor of the petitioners based on the judgments delivered in similar cases. Consequently, the Explanations in the Notifications were declared ultra vires the Relaxation Act, 2020, rendering them invalid. The impugned notices under Section 148 of the Income Tax Act were quashed, allowing the Assessing Officers to initiate fresh re-assessment proceedings in compliance with the amended provisions of the Act post the Finance Act, 2021.

In conclusion, the High Court granted relief to the petitioners by declaring the challenged Notifications as legally invalid and quashing the impugned re-assessment notices. The judgment emphasized adherence to the revised provisions of the Income Tax Act post the Finance Act, 2021 for any future re-assessment proceedings, ensuring compliance with the statutory requirements.

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