Reassessment notice under unamended I-T Act not to be invalid: SC

The Supreme Court on Wednesday declared that the reassessment notices issued under the unamended Section 148, for reassessment or recomputation, under the Income Tax Act on or after April 1, 2021, will not be deemed to be invalid just because they were issued under the old law.

The decision is likely to ensure the court is not overburdened with around 9000 appeals by the Finance ministry.

A bench of Justices M R Shah and B V Nagarathna modified the orders of various high courts that quashed the reassessment notices issued under unamended Section 148 on or after April 1, 202.

The court said that these notices will be now deemed to be issued to the respective assesses under the new Section 148A of the Act as substituted by the Finance Act, 2021 and construed or treated to be show¬cause notices in terms of Section 148A(b).

The bench passed the order while using its powers under Article 142 of the Constitution, in order to avoid any further appeals by the department on the very issue by challenging similar judgements and orders and with a view not to burden it with approximately 9000 appeals.

In its judgement on a batch of matters, the court said its order would also govern the pending cases before the various high courts in which similar notices were issued after April 1, 2021.

Various High Courts had ruled in favour of the assesses in a batch of over two dozen matters by quashing several reassessment notices issued by the department under Section 148 on the ground that the same were bad in law in view of the amendment by the Finance Act, 2021.

Partly allowing the Centre's plea, the top court said all defences, available to the assesses including those under Section 149 of the I-T Act and all rights and contentions in law would continue to be available.