Kanwaljeet Kaur Vs ACIT (Delhi High Court)
In Kanwaljeet Kaur vs. Assistant Commissioner of Income Tax, the Delhi High Court examined the validity of reassessment notices issued under Section 148 of the Income Tax Act, 1961. These notices were issued after the amendments introduced by the Finance Act, 2021, which revamped the reassessment procedure. Central to the case was whether notices issued between April 1, 2021, and June 30, 2021, under the pre-amended provisions complied with the procedural requirements introduced by Section 148A.
The Finance Act, 2021, effective April 1, 2021, mandated a preliminary inquiry under Section 148A before issuing reassessment notices. Despite these changes, the Income Tax Department issued notices under the old regime during the transition period. These actions were challenged across various High Courts and often quashed for non-compliance with the updated legal framework. Referring to the Supreme Court decisions in Union of India vs. Ashish Agarwal and Union of India vs. Rajeev Bansal, the Delhi High Court clarified the computation of limitation periods for issuing such notices under Section 149.
The Court highlighted three critical periods to be excluded when determining the validity of reassessment notices: (1) March 20, 2020, to June 30, 2021, due to relaxations under the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 (TOLA); (2) the period between the issuance of impugned notices and May 4, 2022, when the Supreme Court delivered its decision in Ashish Agarwal; and (3) the time provided to the assessee to respond to show-cause notices and for the Assessing Officer to act under the new regime.
