The Allahabad High Court will examine the issue whether Finance Act (No.2) 2024 will be applicable on reassessment proceedings initiated prior to 01.09.2024.
The bench of Justice Brij Raj Singh and Justice Rajan Roy has stayed the proceedings and asked the department to respond to the question as to how the proceedings under Section 148A(b) initiated prior to 01.09.2024, if at all, would be saved after coming into force of the Finance (No.2) Act, 2024 w.e.f. 01.09.2024 especially in view of Section 152(4) of the Income Tax Act, 1961 which has been inserted by the Finance (No.2) Act, 2024.
The petitioner contended that only such cases where notice under Section 148 had been issued or an order under clause (d) of sub-Section-148A had been issued prior to the 1 September, 2024 which is the date of coming into force of the Finance (No.2) Act, 2024 , the assessment, reassessment or recomputation in such case shall be governed as per the provisions of Sections 147 to 151, as they stood immediately before the commencement of Finance (No.2) Act, 2024.
In other words, if the eventualities are not satisfied then the earlier provisions be inoperative and will not apply and any action could be taken only under the substituted or new provisions which have come into effect from 01.09.2024 and as there is specific saving clause in the Finance (No.2) Act, 2024, the contention is that Section 6 of General Clause Act, 1897 will not apply because the intention in the specific saving clause contained under the Finance (No.2) Act, 2024 is different.
The court listed the matter on 16.01.2025.
Changes Under Reassessment Proceedings Vide Finance Act (No.2) 2024
The Finance Bill, 2024 revamped the reassessment provisions with effect from 1 September 2024. The time limit for issue of notice for reassessment proceedings was proposed to be reduced from ten years to five years three months.
The amendments now provide that assessing officers can issue a notice for reassessment based on the information received under the notified scheme and hence tax officers can initiate reopening of proceedings based on the scheme notified for faceless collection of information.
In order to make the procedure of assessment of search cases cost effective and efficient, a new scheme of block assessment was introduced for search and seizure conducted on or after 1 September 2024. The block period7 would be six assessment years preceding the year in which the search was initiated or any requisition was made. As per the scheme, undisclosed income would be taxed at 60%.
The Finance Bill 2024 had included incorrect claims of any expenditure, deduction or allowance in the definition of undisclosed income. The definition of “undisclosed income” 10 has been expanded now. “Undisclosed income” would now include any exemption claimed by the taxpayer, which is found to be incorrect.
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Case Details
Case Title: Ravish Rastogi Versus UOI
Case No.: Writ Tax No. – 359 Of 2024
Date: 03.01.2025
Counsel For Petitioner: Aakash Prasad, Himanshu Singh
Counsel For Respondent: A.S.G.I., Kushagra Dikshit
