In a major relief for about 1.33 lakh taxpayers, who had got notices for the reassessment of their returns from FY14 till date, Delhi High Court on Wednesday quashed 1,353 such notices issued by the Income Tax Department issued under Section 148.
The notices were issued by the tax department under this section for reopening of assessment on the allegation that income has escaped assessment as the taxpayers did not declare correct income in their tax return filed for various assessment years starting from the assessment year 2013-14.
On receipt of such notices, several taxpayers had filed writ petitions in various state high courts across the country challenging these notices. Taxpayers had filed a large number of writ petitions challenging the validity of these reassessment notices issued under the old regime of reassessment without following the new procedure introduced by the Finance Act, 2021.
Taxpayers in their petition had pleaded that under the new law effective from April 1, 2021, which states that assessment cannot be reopened after three years from the end of relevant assessment year subject to only certain exceptions and these notices are not part of such exceptions.
Noting this, the Delhi High Court upheld the petitioner’s contention. The order, which is in favour of the taxpayers who had approached the court, was issued by a Division Bench, comprising Justices Manmohan and Navin Chawla.
In the new tax regime, it is mandatory for the department to provide a hearing to the taxpayers before issuing reassessment notices to them. Further, the notices can be sent only for reassessing records up to three years or 10 years.
On the other hand, the old regime allowed taxmen to issue reassessment notices for a period of four, six, or 16 years. Thus, these notices were in contradiction of the new regime and rather in tandem with the old regime, which has given an upper edge to the taxpayers.
Important to note is that another about 500 similar such petitions are listed before Delhi High Court for tomorrow and the notices issued in these cases are also of the same nature.
Not just this, similar writ petitions were ruled in favour of assesses by Rajasthan and Allahabad High Courts. However, only the petitions filed at Chhattisgarh High Court were decided against the taxpayers.
Similarly, about 3,000 odd similar petitions are also pending before various High Courts at Bombay, Calcutta, Madras etc, where a verdict is yet to be pronounced.
Source from: https://www.cnbctv18.com/economy/delhi-hc-quashes-1353-reassessment-notices-issued-by-income-tax-dept-11826002.htm