The Calcutta High Court in the case of Manoj Jain v/s Union of India & Ors. set aside around 42 Reassessment Notices as Income Tax Officer failed to follow statutory formalities.
The petitioners are aggrieved by the issuance of impugned notices under Section 148 of the Income Tax Act, 1961 on the ground that the same are barred by limitation and the respondent Income Tax Authority concerned, before issuing the impugned notices under Section 148 of the Income Tax Act, have not observed the statutory formalities under Section 148 A of the Income Tax Act as prescribed by the Finance Act, 2021.
In all the Writ Petitions the assessees/petitioners have sought relief of quashing of the impugned reassessment notices issued by the respondent Income Tax Authority concerned under Section 148 of the Income Tax Act, assessees/petitioners have also sought relief by way of a declaration declaring Explanations A(a)(ii)/A(b) to the Notification No. 20 [S.O. 1432 (E)] and Notification No. 38 [S.O.1703 (E)] to the extent that the same extend the applicability of the “provisions of Section 148, Section 149 and Section 151 of the Act, as the case may be, as they stood as on the 31st March, 2021, before the commencement of the Finance Act, 2021” to the period beyond 31st March, 2021 as ultra vires the parent legislation, viz., The Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020.
All the counsels appearing for the parties jointly contended that the issues involved in these Writ Petitions are covered by the decision of the Division Bench of the Allahabad High Court in the matter of ‘Ashok Kumar Agarwal v/s Union of India decided in favor of assessees/petitioners.
The single judge bench of Justice Md. Nizamuddin agreed with the reasoning and views taken by the Allahabad High Court, the Rajasthan High Court and Delhi High Court in cases referred in the petitions.
The court disposed of all the petitions and held that explanations A(a)(ii)/A(b) to the Notifications dated 31st March, 2021 and 27th April, 2021 ultra vires the Relaxation Act, 2020 and are therefore bad in law and null and void.
The court added that all the impugned notices under Section 148 of the Income Tax Act are quashed with liberty to the Assessing Officers concerned to initiate fresh re-assessment proceedings in accordance with the relevant provisions of the Act as amended by Finance Act, 2021 and after making compliance of the formalities as required by the law.