The court emphasized that reassessment notices must adhere to the amended provisions of the Income Tax Act, and notices issued beyond the stipulated limitation period are invalid.

JUDGMENT :

K.R. SHRIRAM, J.

1. This petition challenges (i) the notice dated 28th July 2022 issued under Section 148 of the INCOME TAX ACT , 1961 (the Act) seeking to reopen petitioner’s assessment for AY 2013-14, (ii) the order dated 27th July 2022 passed under Section 148 A(d) of the Act, and (iii) Central Board of Direct Taxes (CBDT) Instruction No.1 of 2022 dated 11th May 2022. According to petitioner, the said reopening notice, the order dated 27th July 2022 and the said Instruction are illegal, without jurisdiction, arbitrary, in violation of principles of natural justice, ultra vires the provisions of the Act and hence deserve to be set aside.

2. Petitioner is a Public Sector Undertaking operating under the control of Ministry of Finance, Government of India, viz., respondent no.3. Petitioner is engaged in the business of General Insurance in India and outside India. It is also a 'Public Finance Institution' under Section 4A of the erstwhile Companies Act, 1956.

For AY 2013-14, petitioner filed on 28th November 2013 its original return of income under Section 139(1) of the Act declaring total income of Rs. NIL. On 9th June 2014, petitioner filed revised return of income for the said assessment year, declaring a total loss of Rs.94,06,18,248/-. Petitioner’s return of income was picked up for scrutiny by respondent no.1 by issuing notice under Section 143(2) of the Act. During the assessment proceedings, various details/information/documents were sought, which petitioner furnished from time to time. After considering all submissions, details and evidences furnished by petitioner, respondent no.1 completed the assessment and passed the assessment order dated 29th February 2016 under Section 143(3) of the Act, assessing petitioner’s total income at Rs.8,70,72,56,878/-. Several additions aggregating to Rs.9,64,78,75,129/- were made by respondent no.1 in the assessment order.

3. Aggrieved by this order, petitioner filed an appeal under Section 246A of the Act before the Commissioner of Income Tax (Appeals), [CIT(A)]. The said appeal was disposed by CIT(A) vide order dated 19th March 2018, wherein petitioner got substantial relief. Against the said order of CIT(A), respondent no.1 preferred an appeal before the Income Tax Appellate Tribunal (ITAT) under Section 253 of the Act, which came to be dismissed by order dated 11th August 2020.

4. Petitioner’s assessment was reopened by notice dated 30th March 2017, issued under Section 148 of the Act (first reopening notice). Various details/information/documents were sought by respondent no.1 during the first reassessment proceedings, in compliance of which petitioner furnished all requisite submissions/details/information.

5. Reassessment proceedings under Section 147 of the Act for AY 2013-14 came to be repeated by an order dated 29th December 2017. In the said order, an addition of Rs.85,65,42,069/- was made by respondent no.1 and as a result, the total income of petitioner was reassessed at Rs.9,56,37,98,947/-. Against the said reassessment order, petitioner, on 29th January 2018, filed an appeal under Section 246A of the Act before the CIT(A). At the time of filing this petition, the said Appeal was still pending disposal before CIT(A).

6. With enactment of Finance Act, 2021 and the resulting substitution of Sections 147 , 148, 149 and 151 of the Act and insertion of Section 148 A, from 1st April 2021, the Assessing Officer, before assuming jurisdiction validly and before issuing any notice under Section 148 of the Act, was duty-bound to follow the stipulated mandatory procedure. As stated in the petition, respo