Indore (Madhya Pradesh)
In a decision that has far-reaching implications, the Supreme Court declared that notices served under Section 148 of the Income Tax Act, must be deemed to have been issued under 148A. The decision of the apex court has come as a great relief for the Union government which stood to lose crores of rupees in revenue had the judgement gone against it.
Section 148 empowered a tax assessing officer to reopen cases of taxpayers, but this section was abolished by the Union government effective from March 31, 2021, and in place of this a new section 148A was introduced, effective from April 1, 2021. However, the department, due to oversight, had continued to issue notices under Section 148, instead of Section 148 (A), till June 30, 2021, and had issued over 90,000 such notices during this period.
Those who had been served notice under Section 148 after March 31, 2021 challenged the department's notices and over 9,000 petitions were filed in various High Courts of the country, demanding to quash the notices issued under Section 148. In Madhya Pradesh itself, over 1000 petitions were filed, of which over 300 petitions were in the Indore bench of the MP High Court.
Chartered accountant Pankaj Shah, former chairman of the CA Indore Branch of the Institute
of Chartered Accountants of India (ICAI) said the case was first heard in several High Courts, and they declared that the notices were valid. The aggrieved parties reached the apex court against the various HC verdicts.
Shah said SC gave this judgement by exercising its power given under Article 142 of the Constitution, which gives it the power to use Article 142 to provide complete justice in a case. Shah said that SC in its judgement said that since a huge amount of potential government revenue is involved in these cases, the notices issued under Section 148 should be deemed to have been issued under Section 148A. The decision is likely to have an adverse effect on taxpayers who were served notice under this section and were hoping that it would be quashed.