Reassessment notice u/s148 for A.Y. 2015-16 issued after 1 April 2021, later quashed with all proceedings set aside

For A.Y. 2015-16, the dominant issue was whether reassessment proceedings initiated by a notice issued under s.148 after 1 April 2021 could survive under the amended regime and TOLA. The HC noted the Revenue's concession before the SC that all s.148 notices issued after 1 April 2021 for A.Y. 2015-16 must be dropped, and that this position stood fortified by subsequent SC orders following the Larger Bench ruling. Consequently, the s.148 notice dated 23 April 2022 and all consequential proceedings, including the assessment order, demand, penalty actions, and recovery steps, were quashed and set aside.

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1. ISSUES PRESENTED AND CONSIDERED

(i) Whether a notice issued under Section 148 for A.Y. 2015-16 on 23 April 2022 (i.e., after 1 April 2021) was liable to be dropped as time-barred / without jurisdiction, in view of the Revenue's concession recorded by the Supreme Court for A.Y. 2015-16.

(ii) Whether, once the Section 148 notice for A.Y. 2015-16 issued after 1 April 2021 is invalid, the consequential reassessment order, notice of demand, penalty orders/notices, and recovery notices can survive.

(iii) Whether the Court should decline writ relief on the ground of an available alternate remedy, where an appeal against reassessment was already filed and pending, despite the challenge turning on the invalidity of the Section 148 notice itself.

2. ISSUE-WISE DETAILED ANALYSIS

Issue (i): Validity of Section 148 notice dated 23 April 2022 for A.Y. 2015-16 (post 1 April 2021)

Legal framework (as discussed by the Court): The Court treated the determinative legal position as flowing from the Revenue's categorical concession (as recorded in the Supreme Court decision relied upon by the Court) that, for A.Y. 2015-16, all notices issued on or after 1 April 2021 under Section 148 "will have to be dropped".

Interpretation and reasoning: The Court noted that two foundational facts were undisputed: (a) the reassessment proceedings related to A.Y. 2015-16; and (b) the Section 148 notice was dated 23 April 2022. Given these undisputed facts, the Court held that the Revenue's concession, as recorded and subsequently followed in later Supreme Court orders (also relied upon by the Court), directly governed the case and required dropping such notices for A.Y. 2015-16 if issued on or after 1 April 2021.

Conclusion: The Court conclusively held that the Section 148 notice dated 23 April 2022 for A.Y. 2015-16 "has to be dropped" and was liable to be quashed and set aside.

Issue (ii): Survival of consequential reassessment, demand, penalty, and recovery actions once the Section 148 notice is invalid

Legal framework (as discussed by the Court): The Court proceeded on the principle (as applied in its reasoning) that if the initiating notice under Section 148 is unsustainable, consequential proceedings and orders founded upon it cannot stand.

Interpretation and reasoning: After holding the initiating Section 148 notice invalid on the decisive ground applicable to A.Y. 2015-16 notices issued after 1 April 2021, the Court treated all subsequent actions-reassessment order, notice of demand, penalty notices/orders, and recovery notices-as consequential to an invalid initiation. Since the jurisdictional foundation failed, the superstructure of subsequent orders and enforcement measures could not survive.

Conclusion: The Court quashed and set aside the Section 148 notice and, consequentially, the reassessment order, notice of demand, penalty orders/notices, and recovery notices.

Issue (iii): Maintainability of writ petition despite pending appeal (alternate remedy objection)

Legal framework (as discussed by the Court): The Court considered the objection that the petitioner had already filed an appeal (pending), but evaluated it against the undisputed jurisdictional defect found in the Section 148 notice.

Interpretation and reasoning: Although the Revenue urged dismissal on the basis of alternate remedy, the Court proceeded to decide the writ on the solitary dispositive ground that the Section 148 notice itself was required to be dropped for A.Y. 2015-16 if issued after 1 April 2021. The Court considered it "appropriate" to grant writ relief quashing the notice and all consequential actions, notwithstanding the pending appeal, because the matter turned on the invalidity of the initiating notice on undisputed dates and the binding concession relied upon by the Court.

Conclusion: The Court entertained and allowed the writ petition, granting full relief of quashing the impugned notice and consequential orders, notwithstanding the pendency of an appeal.

Post-decision direction tied to relief granted (as decided by the Court)

The Court accepted the petitioner's undertaking to withdraw the pending appeal within two weeks. The Court further directed that if the present order is challenged by the Revenue and set aside, the appeal would automatically stand revived and would be prosecuted on its own merits in accordance with law.

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