Substituted reassessment rules require compliant approval and notice procedures; defective old-regime approval invalidates consequential reassessment.

Reassessment proceedings for periods after 1 April 2021 must comply with the substituted provisions of the Income-tax Act, 1961, subject to the statutory extension under the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020. The approval and notice process must satisfy Sections 148A, 149 and 151 as interpreted by the Supreme Court. Where approval is granted under the pre-2021 regime, but the Section 148A(b) notice requires consideration under the substituted provisions, the reassessment process is legally defective. On the stated facts, the reopening notice was set aside and the consequential reassessment order was quashed.

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Issues: Whether the reopening of assessment and consequential reassessment were validly initiated under the substituted reassessment provisions of the Income-tax Act, 1961.

Analysis: For proceedings after 1 April 2021, the substituted reassessment provisions apply, subject to the extension available under the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020. The approval and issuance of reassessment notice had to comply with the applicable requirements of Sections 148A, 149 and 151 of the Income-tax Act, 1961, as interpreted by the Supreme Court. The approval in the present case was granted under the old regime, whereas the notice under Section 148A(b) required consideration under the applicable substituted provisions.

Conclusion: The notice reopening the assessment was set aside and the consequential reassessment order was quashed.

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