The Supreme Court on Wednesday held that the reassessment notices issued below the unamended Section 148 of the Income Tax Act on or after April 1, 2021, is not going to be deemed to be invalid simply because they had been issued below the previous legislation.
While modifying the related orders of assorted excessive courts that quashed the reassessment notices issued below the Section after the deadline, the SC mentioned that these notices can be deemed as show-cause notices issued to the respective assessees below the brand new Section 148A of the Act.
The SC order would imply that the the change in legislation can’t be an alibi for taxpayers to flee the proceedings initiated by way of the notices. The uncommon step taken by the apex court docket invoking the Constitution will assist clear the backlog of over 9,000 appeals filed by the finance ministry on this connection. The apex court docket dominated that its order shall additionally govern the related pending instances earlier than varied HCs.
A Bench led by Justice MR Shah handed the judgment in a batch of instances led by Union of India vs Ashish Agarwal. In this batch of 24 instances, the excessive courts had dominated in favour of the assessees by quashing a number of reassessment notices issued by the division below Section 148 on the bottom that the identical had been dangerous in legislation in view of the modification by the Finance Act, 2021.
Partly permitting the appeals filed by the federal government, the apex court docket mentioned that the requirement of conducting any enquiry, if required, with the prior approval of specified authority below part 148A(a) is hereby allotted with as a one-time measure vis a vis these notices which have been issued below part 148 of the unamended Act from April 1, 2021 until date, together with these which have been quashed by the HCs.
“All defences which may be available to the assessees, including those available under Section 149 of the IT Act, and all rights and contentions which may be available to the concerned assessees and the Revenue under the Finance Act, 2021, and in law shall continue to be available,” the judgment said.
The assessing officer has to offer respective assessees data and materials relied upon by the Revenue inside 30 days from immediately in order that the latter can reply to the presenttrigger notices inside two weeks thereafter, the highest court docket dominated.
Welcoming the SC determination, Rakesh Nangia, chairman, Nangia Andersen India, mentioned whereas reversing/ modifying the orders the SC has acknowledged that the HC orders on this challenge was appropriate, primarily based on interpretation of statutory provisions. “However, the SC has also noted that while change in law for reassessment has been made by the legislature for the benefit of taxpayers and department cannot be left remediless due to a bona-fide mistake of extending time limits by extension notification and issuing such reassessment notices on/ after 01.04.2021 under old reassessment law, when new law had become applicable.”
Nangia added that the apex court docket has struck a stability between the rights of the division and taxpayers and brought care to forestall the loss to public exchequer. According to the tax skilled, until now, the SC had been refraining from invoking extraordinary constitutional energy in tax issues and decoding tax legal guidelines primarily based on statute guide, because it stands.
Source: www.financialexpress.com”