Reassessment Notices Quashed for Non-Compliance with Finance Act 2021; Jurisdictional Objection Upheld.

The HC quashed the reassessment notices and consequential orders issued under Section 148 of the Income Tax Act, 1961, due to non-compliance with the Finance Act, 2021, and directives from the Hon'ble SC. The court sustained the jurisdictional objection, allowing the writ petitions and reserving the Revenue's right to proceed further. Both parties were granted liberty to take further legal action as per the previous SC order, with no costs imposed and pending interlocutory applications closed.

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Issues involved:
Reassessment process under Finance Act, 2021; Validity of notices issued under Section 148 of the Income Tax Act, 1961; Compliance with statutory provisions and directives; Jurisdictional issue; Consequential orders based on flawed notices; Liberty reserved for parties to proceed further.

Reassessment Process under Finance Act, 2021:
The petitioner contended that the reassessment process was modified under the Finance Act, 2021, but the respondents failed to adhere to these modifications. It was argued that the notices issued under Section 148 of the Income Tax Act, 1961, were legally unsustainable due to this non-compliance, rendering the consequential orders also invalid.

Validity of Notices under Section 148:
The court acknowledged the similarity of the issues raised and decided to hear the matters together. It was noted that the notices issued for reassessment under Section 148A required compliance with the substituted provisions of the Finance Act, 2021. The court held that the failure to follow these procedures rendered the notices and subsequent proceedings illegal and unsustainable, as per the directives of the Hon'ble Supreme Court in a previous case.

Compliance with Statutory Provisions and Directives:
Referring to a previous order, the court emphasized that the respondent department's actions contravened the Finance Act, 2021, and directives from the Hon'ble Supreme Court. The court declared the impugned notices and consequential orders as illegal and quashed them, nullifying subsequent orders automatically due to the procedural flaws in the initiation of proceedings.

Jurisdictional Issue:
The court sustained the petitioner's preliminary objection, allowing the writ petitions solely on the jurisdictional issue. By quashing the notices and orders on this basis, the court refrained from addressing other raised issues, leaving them to be contested in appropriate proceedings. The court clarified that the Revenue's right to proceed further remained reserved based on a previous Supreme Court order.

Consequential Orders based on Flawed Notices:
Given the consensus between the parties, the court set aside the impugned Show Cause notices and consequential orders in the batch of writ petitions. Both parties were granted liberty to proceed in accordance with the law, as outlined in a previous order, which specified the Revenue's reserved right to proceed further if desired.

Liberty Reserved for Parties to Proceed Further:
The court allowed the writ petitions, with no costs imposed. Any pending interlocutory applications were closed, and both parties were granted the liberty to take their respective stands and proceed according to the law, as per the directions provided in the previous order from a related case.

This comprehensive analysis of the judgment covers the issues involved, the arguments presented, and the court's decision on each aspect, ensuring clarity and understanding of the legal complexities addressed in the case.

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