Notices issued under updated provisions of the Income Tax Act cannot stand when the initial notice was issued under the previous provisions and is valid.

Headnote:(A) Income Tax Act, 1961 - Sections 147, 144, 144B, 148, and 148A - Assessment order challenged based on the notice issued under the old regime, which was determined to be applicable due to its timing - The Tribunal ruled that the subsequent notices issued under the amended regime cannot be sustained. (Paras 2-7)

(B) Legality of Notices - The court held that the notice dated 02.06.2022 issued under Section 148(A)(b) was improper as the initial notice triggered under the old regime was valid. (Paras 5-7)

Facts of the case:
The assessment order against the petitioner was framed on 30.03.2022, following a notice issued on 31.03.2021, raising questions about the applicability of the amended provisions of Section 148A of the Act.

Findings of Court:
The assessment notices issued under the amended provisions could not be upheld when the original notice was issued under the old provisions, leading to the quashing of those subsequent notices.

Issues: The primary issue concerns whether the notices issued under the new provisions are valid when the initial notice was served under the old regime.

Ratio Decidendi: The court determined that notices issued under the amended law cannot stand if they were based on an initial valid notice under the previous law, thus emphasizing adherence to legislative timelines and procedural compliance.

Result: The impugned notice and orders were quashed.

Table of Content
1. assessment order context and procedure (Para 2 , 3 , 4)
2. immunity of notices from old regime (Para 5)
3. writ petition granted and notices quashed (Para 6 , 7 , 8 , 9)

JUDGMENT

[Physical Hearing/Hybrid Hearing (as per request)]

Rajiv Shakdher, J. (ORAL):

CM No.45973/2022

1. Allowed, subject to just exceptions.

W.P.(C) 14932/2022 & CM No.45972/2022 [Application filed on behalf of the petitioner seeking interim relief]

2. The record shows that the assessment order was framed qua the petitioner under Section 147 read with Sections 144 and 144B of the Income Tax Act, 1961 [in short, "Act"] on 30.03.2022.

3. The aforementioned assessment order was passed, in the backdrop of notice dated 31.03.2021 issued under Section 148 of the Act [unamended provision].

4. We are informed that Mr Abhishek Maratha, who appears on behalf of the respondents/revenue, was required to obtain instructions with regard to when the aforementioned notice was served on the petitioner. Depending on the date when the notice was served on the petitioner, it would be determined whether the new regime provided under Section 148A of the Act would apply to the petitioner.

4.1. Mr Maratha has obtained instructions to the effect that the notice issued under Section 148 of the Act i.e., the old regime was triggered qua the petitioner on 31.03.2021 at 7:32:02 P.M.

5. Given this position, Mr Maratha cannot but accept that the notice dated 02.06.2022 issued under Section 148A(b) and the impugned order dated 31.07.2022 passed thereafter, as also the consequent notice of even date, i.e., 31.07.2022 issued under amended Section 148 of the Act, cannot be sustained.

6. Accordingly, the prayer made in the writ petition is allowed.

7. The impugned notice dated 02.06.2022 issued under Section 148(A)(b), the order dated 31.07.2022 passed under Section 148A(d) and the consequent notice dated 31.07.2022 issued under Section 148 [amended Act], concerning Assessment Year (AY) 2017-18, shall stand quashed.

8. The writ petition is disposed of in the aforesaid terms.

9. Consequently, the pending application shall stand closed.

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IN THE HIGH COURT OF DELHIRajiv Shakdher, Tara Vitasta Ganju, JJ.Subhash Bhatia Huf - AppellantVersusIncome Tax Officer Ward-47(1) - Delhi - RespondentW.P.(C) 14932 of 2022 & CM Nos. 45972-73 of 2022Decided On : 20-12-2022

Notices issued under updated provisions of the Income Tax Act cannot stand when the initial notice was issued under the previous provisions and is valid.

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IN THE HIGH COURT OF DELHI
Rajiv Shakdher, Tara Vitasta Ganju, JJ.
Subhash Bhatia Huf - Appellant
Versus
Income Tax Officer Ward-47(1) - Delhi - Respondent
W.P.(C) 14932 of 2022 & CM Nos. 45972-73 of 2022
Decided On : 20-12-2022