High Court upholds Income Tax notice post-March 2021; reassessment ordered per Supreme Court ruling.

The High Court dismissed the writ petition challenging a notice under section 148 of the Income Tax Act issued post-31st March 2021, following the Supreme Court's judgment in Union of India & Ors. v. Ashish Agarwal. The Supreme Court directed that such notices should be deemed to have been issued under amended section 148A, requiring assessing officers to provide information to assessees within thirty days. The order aimed to streamline proceedings and avoid further appeals, with pending cases to be governed by the Supreme Court's guidelines. The High Court instructed the assessing officer to proceed with reassessment in line with the Supreme Court's directives.

---

---

Issues:
Challenge to notice under section 148 of the Income Tax Act, 1961 post-31st March 2021 based on newly amended provisions.

Analysis:
The petitioner challenged the notice under section 148 of the Income Tax Act, 1961 issued post-31st March 2021, contending that the case should be governed by the newly amended provisions related to proceedings under section 147 of the Act. The petitioner argued that the formalities of the amended provisions were not observed, making the notice bad in law.

The High Court referred to a recent judgment of the Supreme Court in the case of Union of India & Ors. v. Ashish Agarwal, where certain guidelines and laws were laid down. The Supreme Court's judgment allowed the appeals in part and modified the orders passed by the High Court of Judicature at Allahabad. The Supreme Court directed that the notices issued under unamended section 148 of the IT Act should be deemed to have been issued under section 148A of the Act as substituted by the Finance Act, 2021. The assessing officer was required to provide information and material relied upon by the Revenue to the assessees within thirty days, allowing them to reply within two weeks.

The requirement of conducting any enquiry with the prior approval of a specified authority under section 148A(a) was dispensed with as a one-time measure for notices issued under the unamended Act from 01.04.2021 onwards. Assessing officers were directed to pass orders in terms of section 148A(d) for each assessee. The Supreme Court clarified that all defenses available to the assessees under section 149 of the IT Act and rights under the Finance Act, 2021, and in law would continue to be available.

The Supreme Court's order was applicable nationwide, modifying all judgments and orders passed by different High Courts on similar issues. The order aimed to avoid further appeals by the Revenue and reduce the burden on the courts. Pending writ petitions challenging notices issued after 01.04.2021 were also to be governed by the Supreme Court's order.

In light of the Supreme Court's judgment, the High Court dismissed the writ petition and directed the assessing officer to proceed with the reassessment proceedings in accordance with the guidelines and laws laid down by the Supreme Court.

---