New provisions of reassessment inserted by FA 2021 are applicable for prior AYs as well: HC

Case Details: Sudesh Taneja v. ITO - [2022] 135 taxmann.com 5 (Rajasthan)

Judiciary and Counsel Details

• • Akil Kureshi and Sameer Jain, JJ.
  • Javed Khan, Prateek Kedawat, Sarvesh Jain, P.K. Kasliwal, Priyesh Kasliwal , Aditya Bohra, Anant Kashliwal, Vaibhav Kasliwal, Shashank Kasliwal, Suresh Sahni, Gunjan Pathak, Ms. Ishita Rawat, Siddharth Ranka, M. Iqbal, Vedant Agrawal, Harish Agrawal, Sanjay Jhanwar, Prakul Khurana, Naresh Gupta, Ms. Abhilasha Sharma, Prateek Agarwal, Ashok Kumar Gupta, Sanjeev Johari, Rajeev Sogarwal, Sushil Daga, Anurag Kalavatiya, Mahendra Gargieya, Prateek Kasliwal, Rakesh Kumar, Vishal Tiwari, Sanjay Jhanwar, Nehpal Yogi, Jaideep Malik, Raghu Nandan Sharma, Prabhansh Sharma, Darshan Shree Verma, Suveer Gaur, Ajatshatru Mina, Harshvardhan Singh Chundawat, Pankaj Ghiya, Mohit Khandelwal, Prakhar Gupta, Aniroodh Mathur, Krishnaveer Singh, Rohit Solanki, S.L. Poddaur, M.S. Bhatia, Lalit Parihar, Subhankar Johari, Abhishek Mehta and Anjay Kothari for the Petitioner. 
  • R.B. Mathur, Nikhil Simlote, Sandeep Pathak, Anuroop Singhi, Ms. Parinitoo Jain and Kamal Kishore Bissa for the Respondent.

Facts of the Case

The assessee challenged the notices issued under section 148 for reopening assessments for different assessment years. All the notices were issued after 01.04.2021 and pertain to the relevant period before the said date.

The assessee contended that such notices could only be issued following new reassessment provisions effective from 01-04-2021. However, the Assessing Officer issued notices under the old provisions, which have already been substituted.

High Court Held 

The Rajasthan High Court held that new provisions substituted by Finance Act, 2021 shall apply to reassessment notices issued on or after 1-4-2021 for past assessment years. Original provisions upon their substitution stood repealed for all purposes and had no existence after introducing the substituting provisions.

As per section 6 of the General Clauses Act, 1897, which provides that where the State Act or Central Act or regulation repeals any enactment then, unless a different intention appears, the repeal shall not revive anything not in force or existing at the time at which the repeal takes effect.

Under the circumstances after the substitution, unless any intention is discernible in the statutory scheme, either pre-existing or newly introduced, the substituted provisions would not survive.

There is no indication of the past provisions surviving after the substitution by the Finance Act, 2021. There is an active indication to the contrary in the new first proviso to new section 149(1). Therefore, the inescapable conclusion that we must arrive at is that for any action of issuance of notice under Section 148 on or after 1-4-2021, the newly introduced provisions under the Finance Act, 2021 would apply.

Accordingly, all the notices issued after 1-4-2021 and were issued without following the procedure contained in Section 148A are to be held invalid.