Case: Union of India & Ors Vs. Ashish Agarwal

M. R. Shah, J. Leave granted in SLP (C) Nos. 6448/2022, 5381/2022, 5079/2022, 6092/2022, 6534/2022, 6158/2022, 6316/2022, 6281/2022, 6545/2022, 6038/2022. 1. Feeling aggrieved and dissatisfied with the impugned common judgment and order passed by the High Court of Judicature at Allahabad in Writ Tax No. 524/2021 and other allied writ tax petitions, by which the High Court has allowed the said writ petitions and has quashed several reassessment notices issued by the Revenue, issued under section 148 of the Income Tax Act, 1961, on the ground that the same are bad in law in view of the amendment by the Finance Act, 2021 which has amended Income Tax Act by introducing new provisions i.e. sections 147 to 151 w.e.f. 1st April, 2021, the Revenue has preferred the present appeals. 2. Similar judgments and orders are passed by various other High Courts including High Court of Delhi; High Court of Rajasthan; High Court of Calcutta; High Court of Madras; High Court of Bombay, the particulars of which are as under: - Sl. No. Particulars 1. Ashok Kumar Agarwal Vs. UOI (Allahabad HC) Judgment passed by the Honble High Court of Allahabad at Allahabad in Writ Tax No. 524/2021 dated 30.09.2021 2. Bpip Infra Pvt. Ltd. Vs. Income Tax Officer & Others (Rajasthan HC) Judgment in S.B. Civil Writ Petition No. 13297/2021 passed by the Honble High Court of Rajasthan at Jaipur dated 25.11.2021 3. Mon Mohan Kohli Vs. ACIT (Delhi HC) Judgment passed by the Honble High Court of Delhi in W.P.(C) No. 6176/2021 dated 15.12.2021 4. Bagaria Properties & Investment Pvt. Ltd. Vs. UOI (Calcutta HC) Judgment passed by the Honble High Court of Calcutta in W.P.O No. 244/2021 dated 17.01.2022 5. Manoj Jain Vs. UOI (Calcutta HC) Judgment passed by the Honble High Court of Calcutta in W.P.A. No. 11950 of 2021 dated 17.01.2022 6. Sudesh Taneja Vs. ITO (Rajasthan HC) Judgment passed by the Honble High Court of Rajasthan in D.B. Civil Writ Petition No. 969 of 2022 dated 27.01.2022 7. Vellore Institute of Technology Vs. CBDT (Madras HC) Judgment passed by the Honble High Court of Madras in W.P. No. 15019/2021 dated 04.02.2022. 8. Tata Communications Transformation Services Vs. ACIT (Bombay HC) Judgment passed by the Honble High Court of Bombay in Writ Petition No. 1334 of 2021 dated 29.03.2022 At this stage, it is required to be noted that approximately 90,000 such reassessment notices under section 148 of the unamended Income Tax Act were issued by the Revenue after 01.04.2021, which were the subject matter of more than 9000 writ petitions before various High Courts across the country and by different judgments and orders, the particulars of which are as above, the High Courts have taken a similar view and have set aside the respective reassessment notices issued under section 148 on similar grounds. 2.1 The common judgment and order passed by the Allahabad High Court is the subject matter of the present appeals. Shri N. Venkataraman, learned ASG, stated at the bar that the Revenue is contemplating to prefer appeals against the similar judgments and orders passed by various High Courts.

Decision:
1[ds]7. Thus, the new provisions substituted by the Finance Act, 2021 being remedial and benevolent in nature and substituted with a specific aim and object to protect the rights and interest of the assessee as well as and the same being in public interest, the respective High Courts have rightly held that the benefit of new provisions shall be made available even in respect of the proceedings relating to past assessment years, provided section 148 notice has been issued on or after 1st April, 2021. We are in complete agreement with the view taken by the various High Courts in holding so.8. However, at the same time, the judgments of the several High Courts would result in no reassessment proceedings at all, even if the same are permissible under the Finance Act, 2021 and as per substituted sections 147 to 151 of the IT Act. The Revenue cannot be made remediless and the object and purpose of reassessment proceedings cannot be frustrated. It is true that due to a bonafide mistake and in view of subsequent extension of time vide various notifications, the Revenue issued the impugned notices under section 148 after the amendment was enforced w.e.f. 01.04.2021, under the unamended section 148. In our view the same ought not to have been issued under the unamended Act and ought to have been issued under the substituted provisions of sections 147 to 151 of the IT Act as per the Finance Act, 2021. There appears to be genuinen of the amendments as the officers of the Revenue may have been under a bonafide belief that the amendments may not yet have been enforced. Therefore, we are of the opinion that some leeway must be shown in that regard which the High Courts could have done so. Therefore, instead of quashing and setting aside the reassessment notices issued under the unamended provision of IT Act, the High Courts ought to have passed an order construing the notices issued under unamended Act/unamended provision of the IT Act as those deemed to have been issued under section 148A of the IT Act as per the new provision section 148A and the Revenue ought to have been permitted to proceed further with the reassessment proceedings as per the substituted provisions of sections 147 to 151 of the IT Act as per the Finance Act, 2021, subject to compliance of all the procedural requirements and the defences, which may be available to the assessee under the substituted provisions of sections 147 to 151 of the IT Act and which may be available under the Finance Act, 2021 and in law.