Devika Fibres Private Limited Vs ACIT (Gujarat High Court)
The Gujarat High Court disposed of a batch of Special Civil Applications challenging notices issued under Section 148 and consequential orders passed under Section 148A(d) of the Income-tax Act, 1961 for Assessment Years 2013-14 and 2014-15. Since all petitions involved similar facts and identical legal issues relating to reopening of assessments, they were heard together and decided by a common judgment. The petitioners challenged the validity of the reassessment notices issued during July 2022 and the corresponding orders under Section 148A(d), contending that they were barred by limitation.
The petitioners argued that the impugned notices for Assessment Years 2013-14 and 2014-15 had been issued after expiry of the six-year limitation prescribed under the reassessment provisions applicable prior to the Finance Act, 2021. They relied upon the Gujarat High Court’s earlier decision in Keenara Industries Pvt. Ltd. v. Income Tax Officer, contending that the issue was already settled and that the notices were without jurisdiction. The Court revisited the evolution of the reassessment provisions, noting that prior to the Finance Act, 2021, Section 149 permitted issuance of notices within four years, or up to six years where the escaped income exceeded the prescribed monetary threshold. The Finance Act, 2021 substituted the reassessment regime by introducing Section 148A and recasting Section 149 with effect from 01.04.2021, while the first proviso to Section 149 preserved the bar against reopening cases that had already become time-barred under the earlier law.
