📜 Supreme Court Clarifies Transitional Reassessment Notices under Section 148: Union of India v. Rajeev Bansal

Case Name: Union of India v. Rajeev Bansal & Ors.

Court: Supreme Court of India

Judgment Date: 3rd October 2024

🔍 Background: Reassessment Regime Overhauled

The Finance Act, 2021 introduced a new reassessment procedure under the Income Tax Act, effective from 1st April 2021. It replaced Sections 147 to 151 and mandated a pre-notice inquiry under Section 148A before issuance of any reassessment notice under Section 148.

Simultaneously, the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 (TOLA) extended statutory timelines owing to the pandemic.

Between 1st April 2021 and 30th June 2021, tax authorities issued reassessment notices under the old Section 148, relying on TOLA. These notices were challenged in various High Courts, which struck them down for non-compliance with the new procedure.

⚖️ Supreme Court’s Ruling

Hearing a batch of appeals filed by the Union of India, the Supreme Court delivered a crucial judgment on 3rd October 2024, addressing the validity of reassessment notices issued under the old law during the transition period.

🧾 Key Findings:

1. Deemed Conversion to New Law:All reassessment notices issued under the old Section 148 between 01.04.2021 and 30.06.2021 shall be treated as show-cause notices under Section 148A(b) of the amended Income Tax Act.

2. Opportunity for Assessee:Assessing Officers are directed to:

   • Furnish the information and material relied upon within 30 days.

   • Provide the assessee a minimum two-week period to respond before proceeding further.

3. Saving Revenue Action:Acknowledging the administrative confusion and the invocation of TOLA, the Court chose harmonisation over invalidation to protect both revenue interest and taxpayer rights.

💼 Impact on Taxpayers

• These notices are no longer automatically void; they must be answered as per the new law.

• The onus remains on the Department to establish a valid reason for reopening assessments.

• Legal remedy is still available in case of procedural lapses (e.g., non-provision of material, lack of proper sanction under Section 151A).

🧠 Conclusion

The judgment in Union of India v. Rajeev Bansal represents a practical resolution of a major procedural controversy. It respects the letter of the law without disregarding the reality of administrative operations during a pandemic-driven legislative transition.

Taxpayers are advised to review pending reassessment notices from the specified period carefully and respond within the permitted timelines, while preserving the right to appeal in case of any inconsistencies.