High Court voids re-assessment notices under Section 148 of Income Tax Act post 31st March, 2021

The High Court of Calcutta allowed all Writ Petitions challenging re-assessment notices under Section 148 of the Income Tax Act post 31st March, 2021. The Court declared certain explanations in Notifications as ultra vires the Relaxation Act, 2020, quashing all impugned notices and allowing Assessing Officers to initiate fresh re-assessment proceedings in compliance with amended provisions post the Finance Act, 2021. The Court also dismissed a notice issued in the name of a non-existing company, acknowledging its amalgamation before the notice was issued.

---

---

Issues:
- Validity of notices under Section 148 of the Income Tax Act, 1961 post 31st March, 2021.
- Compliance with statutory formalities under Section 148 A of the Income Tax Act.
- Declaration of certain explanations in Notifications as ultra vires the parent legislation.
- Quashing of impugned re-assessment notices.
- Dismissal of notice issued in the name of a non-existing company.

Analysis:

The judgment by the High Court of Calcutta addressed various legal issues arising from a group of Writ Petitions challenging the validity of re-assessment notices issued post 31st March, 2021 under Section 148 of the Income Tax Act, 1961. The petitioners contended that the notices were time-barred and that the Income Tax Authority failed to comply with the statutory formalities under Section 148 A of the Income Tax Act as mandated by the Finance Act, 2021, effective from 1st April, 2021. The petitioners sought relief by quashing the impugned notices and declaring certain explanations in Notifications extending the applicability of specific sections of the Act as ultra vires the parent legislation, the Relaxation Act, 2020.

The Court noted that all Writ Petitions raised purely legal issues seeking the quashing of re-assessment notices and a declaration regarding the validity of certain explanations in Notifications. The counsels for both parties jointly referred to decisions by other High Courts in similar cases, including the Allahabad High Court, Rajasthan High Court, and Delhi High Court, which were in favor of the assessees/petitioners. Citing a previous judgment by the Calcutta High Court, the Court disposed of all Writ Petitions by allowing them. The Court declared the explanations in the Notifications as ultra vires the Relaxation Act, 2020, rendering them invalid. Consequently, all impugned notices under Section 148 of the Income Tax Act were quashed, granting Assessing Officers the liberty to initiate fresh re-assessment proceedings in compliance with the amended provisions of the Act post the Finance Act, 2021.

Additionally, the Court dismissed an impugned notice issued in the name of a non-existing company, as the noticee had been amalgamated before the notice was issued, a fact officially communicated to the Income Tax Authorities and undisputed by the respondent's counsel. The Court ordered the provision of urgent certified copies of the order to the parties upon completion of necessary formalities, concluding the judgment on a comprehensive note addressing the legal and factual intricacies involved in the case.

---