Court Quashes Notices and Reassessment Order for Being Time-Barred and Lacking Jurisdiction

The court quashed the notices issued under Sections 148 and 144, along with the reassessment order, as they were found to be beyond the period of limitation and lacking jurisdiction. The writ petition was allowed, leaving other arguments open for future consideration.

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Issues Involved:
1. Validity of the notice issued under Section 148 of the Income Tax Act, 1961.
2. Validity of the notice issued under Section 144 of the Income Tax Act, 1961.
3. Jurisdiction and limitation period for reassessment proceedings.
4. Applicability of the Supreme Court judgment in the case of Ashish Agarwal.
5. Compliance with procedural requirements under the amended provisions of the Act.
6. Implementation of the Central Board of Direct Taxes (CBDT) instructions.

Detailed Analysis:

1. Validity of the Notice Issued Under Section 148:
The petitioner challenged the notice issued under Section 148 of the Income Tax Act, 1961 for the assessment year 2014-15, arguing that it was issued without jurisdiction and beyond the period of limitation. The court noted that the "reasons to believe" recorded by the respondent indicated an income of Rs. 2,63,324/- had escaped assessment. The court referenced the Supreme Court judgment in the case of Ashish Agarwal, which held that notices issued after 1.4.2021 under Section 148 should be treated as notices under Section 148A of the Act, 1961 as substituted by the Finance Act, 2021.

2. Validity of the Notice Issued Under Section 144:
The petitioner also sought to quash the notice issued under Section 144 of the Act, dated 13.01.2022. The court found that the re-assessment order dated 31.3.2022 was passed under Section 147 read with Section 144B of the Act, 1961 by the National Faceless Assessment Centre, Delhi.

3. Jurisdiction and Limitation Period for Reassessment Proceedings:
The court examined the unamended and amended provisions of Section 149 of the Act, which provide the time limit for issuing notices under Section 148. The unamended Section 149 allowed notices to be issued within four to six years, depending on the amount of income that escaped assessment. The amended Section 149, effective from 01.04.2021, reduced the time limit to three years, with an extension to ten years only if the escaped income exceeded Rs. 50 Lacs.

4. Applicability of the Supreme Court Judgment in the Case of Ashish Agarwal:
The court referred to the Supreme Court's judgment in Ashish Agarwal, which allowed notices issued under the unamended provisions to be treated as deemed notices under Section 148A of the amended Act. The judgment emphasized that the Revenue should not be left remediless and provided a framework for reassessment proceedings to continue under the new provisions.

5. Compliance with Procedural Requirements Under the Amended Provisions:
The court observed that the CBDT issued Instruction No.01/2022 to implement the Supreme Court's judgment uniformly. The instruction clarified that notices for assessment years 2013-14, 2014-15, and 2015-16 could only be issued if the escaped income exceeded Rs. 50 Lacs. The court noted that the impugned notice for the assessment year 2014-15 did not meet this threshold and was therefore barred by limitation.

6. Implementation of the Central Board of Direct Taxes (CBDT) Instructions:
The court acknowledged the statement made by the Additional Solicitor General, which aligned with the CBDT's circular stating that notices for the assessment years 2013-14, 2014-15, and 2015-16, where the escaped income was less than Rs. 50 Lacs, would not attract the judgment of the Supreme Court in Ashish Agarwal. Consequently, the court held that the impugned notice under Section 148 issued on 01.04.2021 and the subsequent proceedings were without jurisdiction and quashed them.

Conclusion:
The court quashed the impugned notices under Sections 148 and 144, as well as the reassessment order dated 31.03.2022, for being issued beyond the period of limitation and without jurisdiction. The writ petition was allowed, and all other arguments were left open for future consideration.

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