May 2022
Reassessment — Notice u/s 148 — Validity — Law applicable — Effect of amendments to sections 147 to 151 by Finance Act, 2021 — Notice of reassessment under unamended law after 01/04/2021 — Not valid
By K. B. Bhujle
Advocate
12 Vellore Institute of Technology vs. CBDT [2022] 442 ITR 233 (Mad) Date of order: 4th February, 2022 Ss.147 and 148 of ITA, 1961
Reassessment — Notice u/s 148 — Validity — Law applicable — Effect of amendments to sections 147 to 151 by Finance Act, 2021 — Notice of reassessment under unamended law after 01/04/2021 — Not valid
The validity of notices issued after 1st April, 2021 u/s 148 of the Income-tax Act, 1961 for reopening the assessment under the unamended provisions was challenged before the Madras High Court. The High Court held as under:
“i) A reassessment proceeding emanating from a simple show-cause notice must arise only upon jurisdiction being validly assumed by the assessing authority. Till such time as jurisdiction is validly assumed by the assessing authority, evidenced by issuance of the jurisdictional notice u/s. 148 of the Act, no reassessment proceeding may ever be said to be pending before the assessing authority.
ii) It is settled law that the law prevailing on the date of issuance of the notice u/s. 148 has to be applied. On 1st April, by virtue of the plain effect of section 1(2)(a) of the Finance Act, 2021, the provisions of sections 147, 148, 149, 151 (as those provisions existed up to March 31, 2021), stood substituted, along with a new provision enacted by way of section 148A of that Act. In the absence of any saving clause, to save the pre-existing (and now substituted) provis
