Bombay High Court Quashes Notices Issued Under Old Reassessment Regime: Dhruva Advisors

Dhruva Advisors Update

In a recent ruling , the Bombay High Court quashed the reassessment notices issued under section 148 of the Income-tax Act, 1961 ('the Act’) on or after April, 01 2021 as the Income Tax department had not complied with the procedure laid down under the new reassessment regime (applicable from April 01, 2021).

The entire scheme of reassessment provided in the Act underwent major changes under the new regime, brought in by the Finance Act, 2021 (applicable with effect from April 01, 2021).

The major amendments include:

• change in time limits for the issue of notice under section 148 (from four/six/sixteen years previously to three/ten years now),

• insertion of new section 148A for conducting an inquiry by the assessing officer and passing an order prior to issuing notice under section 148.

While the Finance Act, 2021 was introduced only a year ago, revamping the entire scheme of reassessment provisions, the controversies and numerous issues arising from it have already knocked on the doors of the judiciary.

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