Decoding Supreme Court judgement and CBDT instruction on re-assessment notices

The Finance Act, 2021 made significant changes to the procedure regulating the initiation of reassessment proceedings from 1 April 2021. However, the tax department issued reassessment notices under the old law during the period 1 April - 30 June 2021 relying on the extensions granted during the Covid pandemic by the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 (TOLA).

These reassessment notices under the Act read with TOLA were challenged by taxpayers before various high courts. After hearing both sides, several high courts quashed these reassessment notices holding that reassessment proceedings initiated on or after 1 April 2021 would have to comply with the requirements of the new provisions, including specific adherence to the procedure under Section 148A.

On further challenge by the tax department of the high court order(s), the Supreme Court laid down that the tax department cannot be left remediless. The Supreme Court invoked its powers under Article 142 of the Constitution of India and proceeded to give a fresh lease of life to reassessment notices quashed by high court(s) by deeming them to be issued and subjecting them to the new procedure of reassessment. The Supreme Court attempted to strike a balance between the rights of the Revenue as well as those of the taxpayers. This Supreme Court decision potentially impacts 90000 such notices issued by the tax department especially the 9000 notices challenged by taxpayers in various high courts.

Post the Supreme Court decision, the CBDT has issued its instruction clarifying its administration’s interpretation and laying down the uniform approach to be followed by field offices.

KPMG in India is pleased to invite you to join us for a live webinar exploring the impact of this historic judgement and CBDT instruction issued in this regard.

This session will broadly explore the following topics:

• The backdrop of the reassessment notices issued between 1 April 2021 to 30 June 2021

• The decision of the Supreme Court and way forward laid down for the extended reassessment notices

• The CBDT instruction on the uniform procedure to be adopted to give effect to the Supreme Court decision; and

• Panel discussion on some critical questions and issues that arise followed by Q&A

Who should attend: CFOs, tax and legal heads of corporates