Section 148A of the Income Tax Act
The decision most relied on for Section 148A is Union of India v. Rajeev Bansal (469 ITR 46), cited in 666 of the 1,600 judgments on BharatTax that turn on this section.
Leading authorities on Section 148A
The legal fiction created by the Ashish Agarwal judgment stops the limitation clock for Section 148 notices from the date of the deemed notice. Orders issued without proper jurisdiction, or those inconsistent with statutory prescriptions, are a nullity, and there can be no waiver of such fundamental jurisdictional requirements.
For attracting Section 14A disallowance, there must be a proximate cause relating the expenditure to actual tax-exempt income, and such disallowance is not automatic but requires positive material. Additionally, Section 94(7) on dividend stripping only ignores losses to the extent of dividend received for assessment years post-April 1, 2002, allowing the remaining loss.
Notices issued under the unamended Section 148 of the Income-tax Act between April 1, 2021, and May 4, 2022, must be treated as notices issued under the new Section 148A(b) of the amended law. This requires the Assessing Officer to follow the procedure prescribed under the amended reassessment provisions, including issuing an order under Section 148A(d) before a fresh notice under Section 148.
An order refusing special leave to appeal to the Supreme Court, whether speaking or non-speaking, does not attract the doctrine of merger, meaning the order under challenge is not substituted.
A notice issued under section 148 of the Income Tax Act is invalid if the Income Tax Department fails to follow the prescribed procedures, including obtaining the necessary approvals under section 151 or adhering to the faceless assessment scheme mandates under section 151A.
Circulars issued by the Central Board of Direct Taxes (CBDT) under Section 119 of the Income Tax Act are legally binding on the revenue authorities in their administration and implementation. This binding character applies even if the circulars depart from the correct interpretation of the law and cannot be ignored to the prejudice of the assessee.
An act that is otherwise valid in law cannot be treated as non-existent or invalid merely because of an underlying motive to reduce tax liability or a perceived economic detriment to national interest; legitimate tax planning is permissible.
Reassessment notices issued on or after April 1, 2021, for Assessment Year 2015-2016, must be dropped as they fall outside the completion period prescribed by the Taxation and other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020, a position conceded by the Revenue.
The sanction of a specified authority under Section 151 is a mandatory procedural check before issuing a notice under Section 148. This procedural safeguard aims to prevent mechanical reopening of assessments and harassment of the assessee.
Judgments on Section 148A
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