Suman Jeet Agarwal Vs ITO (Delhi High Court)
In this batch of petitions, the Delhi High Court examined the validity of reassessment notices issued under Section 148 of the Income Tax Act, 1961, as it existed before its amendment by the Finance Act, 2021, which came into effect on 1 April 2021. The dispute arose from a series of reassessment notices generated for Assessment Years (AYs) 2013-14 to 2017-18, all dated 31 March 2021, but electronically issued, dispatched, or received on or after 1 April 2021. The central question was whether these notices could be considered validly “issued” before 31 March 2021 under the unamended law, or whether they were issued after 1 April 2021, thereby falling within the new legal regime.
Before the amendment, unamended Section 149 permitted reassessment within four years under clause (a), within six years if escaped income exceeded one lakh rupees under clause (b), and within sixteen years for escaped income relating to foreign assets under clause (c). After 1 April 2021, the amended Section 149(1)(a) reduced the limitation period to three years, restricting reopening to AY 2018-19 onwards. For reopening earlier years after 1 April 2021, the conditions in the amended Section 149(1)(b) had to be satisfied. Furthermore, under the amended statute, issuance of a notice under Section 148 required compliance with the procedure in newly inserted Section 148A, including providing an opportunity of hearing and conducting inquiry where necessary.
