Reassessment notices under the Income Tax Act must comply with statutory requirements and limitations.

ORDER

This is the second round of litigation before this Court. Earlier, the petitioner was issued with a notice under Section 148 of the Income Tax Act, 1961 as per the provisions as stood till 31.03.2021. The petitioner has challenged the jurisdiction of the assessing officer for issuing the aforesaid notice before this Court in W.P. No.15567 of 2021.

2. By a common order dated 04.02.2022, the Division Bench of this Court quashed all notices in a batch of writ petitions. There, the Court had followed the views taken by the Allahabad High Court. Relevant portion from the order of the Division Bench dated 04.02.2022 is reproduced below:

"19. In view of the ratio propounded by the Allahabad and Delhi High Courts on the subject, the reassessment notices under Section 148 of the Act of 1961 served on the petitioners on or after 1.4.2021 are set aside having been issued in reference to the unamended provisions and the Explanations are to be read as applicable to reassessment proceedings if initiated on or prior to 31.3.2021, but it would be with liberty to the assessing authorities to initiate reassessment proceedings in accordance with the provisions of the Act of 1961, as amended by the Finance Act, 2021, after making all the compliances as required by law, if limitation for it survives."

3. Later, the Honourable Supreme Court passed order in Union of India Vs. Ashish Agarwal., (2023) 1 SCC 617 on 04.05.2022, had observed as under:

''26. In view of the above and for the reasons stated above, the present appeals are allowed in part. The impugned common judgments and orders [Ashok Kumar Agarwal v. Union of India, 2021 SCC OnLine All 799] passed by the High Court of Judicature at Allahabad in WT No. 524 of 2021 and other allied tax appeals/petitions, is/are hereby modified and substituted as under:

(i) The impugned Section 148 notices issued to the respective assessees which were issued under unamended Section 148 of the IT Act, which were the subject-matter of writ petitions before the various respective High Courts shall be deemed to have been issued under Section 148-A of the IT Act as substituted by the Finance Act, 2021 and construed or treated to be show-cause notices in terms of Section 148- A(b). The assessing officer shall, within thirty days from today provide to the respective assessees information and material relied upon by the Revenue, so that the assessees can reply to the show-cause notices within two weeks thereafter.

(ii) The requirement of conducting any enquiry, if required, with the prior approval of specified authority under Section 148-A(a) is hereby dispensed with as a one-time measure vis-à-vis those notices which have been issued under Section 148 of the unamended Act from 1-4-2021 till date, including those which have been quashed by the High Courts.

(iii) Even otherwise as observed hereinabove holding any enquiry with the prior approval of specified authority is not mandatory but it is for the assessing officers concerned to hold any enquiry, if required.

(iv) The assessing officers shall thereafter pass orders in terms of Section 148-A(d) in respect of each of the assessees concerned; Thereafter after following the procedure as required under Section 148-A may issue notice under Section 148 (as substituted).

(v) 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 assessees concerned and Revenue under the Finance Act, 2021 and in law shall continue to be available.''

4. It is in this background, the impugned notice has been issued to the petitioner on 23.05.2022 under Section 148A(b) of the Income Tax Act, 1961.

5. The above decision was later clarified b