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The Finance Act, 2021 introduced a new set of reassessment proceedings from 1st April 2021.After such substitution, the Old provisions relating to Reassessment, do not survive.

The Central Board of Direct Taxes (C.B.D.T)  by way of various notifications had extended the time limit of issuing the notice U/s 148 of the Act up to  30th June, 2021.

The Income tax department has issued many Section 148 notices for several assessment years (A.Y. 2013-14 onwards) after 31st March 2021 ignoring the fact that the issuance of Notification extending the due date for issuance of Notice under the Act beyond the existence of relevant provisions would amount to excessive delegation.

Many writ petitions have been filed across the country challenging the notices issued u/s 148 after 31st march 2021 and notifications issued by CBDT to extend the time limits for issuing such notices. Further the courts have also stayed the reassessment proceedings.

How to deal with Section 148 Notice issued after 31st March 2021

A writ petition on similar line was recently filed before Hon. Delhi High Court in MUDRA FINANCE LIMITED vs. ITO W.P.(C) 6442/2021 where Hon. Court was of the prima facie opinion that the impugned notifications were contrary to settled principles of statutory interpretation that any action taken post the amendment of a procedural section would have to abide by the new procedures stipulated in the amended Act and further that by virtue of a notification, which is a delegated legislation, the date for implementation of statutory provision, as stipulated in the Act, cannot be varied or changed. The Hon. Court further stayed the proceedings of reassessment in the case of the assessee.

The finality of the Petitions cannot be decided at this stage. However, it is advised that while filing objections before the Assessing Officer following points must be raised:

1. The validity of the notice and reassessment proceedings must be challenged.

For ex. “That without prejudice to all our rights and contentions in the matter, the notice issued by your good self u/s 148 of the act is ab-initio or otherwise void, illegal and inoperative.”

2. A Prayer to apply the ratio of the such writ petitions to the assessee’s case be made.

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June 2024