1. The Income Tax Act, 1961, specifically in Chapter XIV, titled "Procedure for Assessment," governs the procedures for assessment and re-assessment of the return submitted by the assessee(s). However, the Finance Act, 2021 introduced a significant procedural amendment by substituting the old provisions of the Income Tax Act, 1961 with new ones. These new provisions came into effect on April 1, 2021 and brought noteworthy changes to sections 147, 148, 149, and 151. Additionally, the Finance Act introduced a new section 148A, which outlines the steps the Assessing Officer must take before issuing a notice u/s 148.
    
2. Before the enactment of the Finance Act, 2021, the old regime remained in force until March 31, 2021. Under this regime, the income escaping assessmentcould be re-opened u/s 148 within six years from the end of the relevant assessment year. Consequently, notices for the assessment years 2013-14 and 2014-15 could have been issued on or before March 31, 2020, and March 31, 2021, respectively.
    
3. The Finance Act, 2021 replaced the old provisions with new ones, effective from April 1, 2021. Notably, one of the significant changes was the extension of the limitation period for re-opening assessments from six years to ten years u/s 149. This means that the tax department can now issue notices for re-opening assessments within ten years from the end of the relevant assessment year. But it doesn't mean that all the past assessment years will have the time of ten years for reopening. This is because the First Proviso of the amended section 149(1) specifically provides that for the Assessment Year 2021-22 and the earlier assessment years, the reopening can be made only within a period of 6 years from the end of the relevant assessment year.
   
    

4. Impact of Covid-19 pandemic and TOLA Act, 2020

   In response to the Covid-19 pandemic, the Parliament passed the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020. After which the Central Board of Direct Taxes (CBDT) issued two notifications that extended the limitation period for issuing reassessment notices u/s 148 during the period from April 1, 2021 to June 30, 2021. This extension applied where the time limit for issuing notice under unamended section 149 was falling between March 20, 2020 and March 31, 2021. Essentially, this provided the tax department with additional time to send notices u/s 148 for reopening the assessments that were falling between March 20, 2020 and March 31, 2021. Consequently,the tax department issued the reassessment notices u/s 148 in between April 1, 2021 and June 30, 2021, which were challenged before various High Courts.
    
5. Issue
   The main issue presented before the court was whether the tax department should adhere to the previous procedural requirements because of the extension of the limitation period or comply with the newly prescribed procedure outlined in the Finance Act of 2021, as mandated by law.
    
6. Decision by the High Courts
   A significant number of assesseesfiled writ petitions before the respective High Courts, challenging the validity of the notices issued under section 148. These notices were challenged, as the Finance Act 2021 amended the previous provisions with new provisions w.e.f. April 1, 2021. Consequently, the High Courts quashed these notices and ruled in favour of assessees that these notices were unlawful since the old provisions no longer held legal standing after their substitution by the new provisions and neither the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 (TOLA)nor the Finance Act of 2021, include any provisions allowing the continued application of the old provisions beyond March 31, 2021.
    
7. In the civil writ petition bearing W.P.(C) No. 8080/2021 before the Hon'ble High Court of Delhi challenging the notice under section 148 and vide order dated 15.12.2021 in Mon Mohan Kohli vs ACIT [2021] 133 taxmann.com 166 (Delhi), the Hon'ble High Court of Delhi held that:
   
   "…This Court is of the view that had the intention of the Legislature been tokeep the erstwhile provisions alive, it would have introduced the new provisions with effect from 1st July, 2021, which has not been done. Accordingly, thenotices relating to any assessment year issued under Section 148 on or after1st April, 2021 have to comply with the provisions of Sections147, 148, 148A, 149 and 151 of the Income Tax Act, 1961 as specifically substituted by the Finance Act, 2021 with effect from 1st April, 2021…"
   [Emphasis Supplied]
    
8. Ruling by the Apex Court
   The decisions of the High Courts were challenged by the tax department through an SLP filed before the Hon'ble Supreme Court of India and thus, in the case of Union of India vs Ashish Agarwal (2022) 138 taxmann.com 64 (SC), the Supreme Court has emphasized certain procedural safeguards that must be observed before initiating a reassessment of a taxpayer.
    
9. The court has highlighted that the amended provisions confer certain benefits upon the assesses like conducting a pre-notice inquiry, whenever necessary, prior to issuing a reassessment notice. This inquiry allows for the gathering of relevant information to assess the need for reassessment and ensures a well-informed decision.
    
10. Additionally, the court highlighted the significance of obtaining prior approval from senior officers within the tax department. This step ensures a higher level of scrutiny and expert oversight in the reassessment process, enhancing its credibility and fairness.
     
11. Furthermore, the court has stressed the need to provide the taxpayer with an opportunity to oppose the reassessment. This gives the taxpayer a fair chance to present their objections, concerns, or evidence against the proposed reassessment, safeguarding their rights and ensuring due process.
     
12. By reinforcing these procedural safeguards, as highlighted by the Supreme Court, the aim is to strike a balance between the tax department's responsibility to ensure compliance and the taxpayer's entitlement to a just and transparent reassessment procedure. The ruling serves as a reminder to uphold these procedures, preserving the integrity and fairness of the reassessment process.
     
13. The Hon'ble Supreme Court, in this case, held that:
    "…Therefore, we propose to modify the judgments and orders passed by the respective High Courts as under:
    
    1. he respective impugned section 148 notices issued to the respective assesses shall be deemed to have been issued under section 148A of the IT Act as substituted by the Finance Act, 2021 and treated to be show-¬cause notices in terms of section 148A(b). The respective assessing officers shall within thirty days from today provide to the assesses the information and material relied upon by the Revenue so that the assesses can reply to the notices within two weeks thereafter;
    2. The requirement of conducting any enquiry with the prior approval of the specified authority under section 148A(a) be dispensed with as a one¬time measure vis-à-vis those notices which have been issued under Section 148 of the unamended Act from 01.04.2021 till date, including those which have been quashed by the High Courts;.."
       [Emphasis Supplied]

    Hence, the Hon'ble Supreme Court in the above case held that all notices under section 148 of the Act, falling with the extended limitation granted by the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020, (TOLA) from 01.04.2021 to 30.06.2021, shall be deemed to have been issued as show cause notices under section 148A(b) and within 30 days from the date of judgement, the AO shall provide to the respective assesses information and material relied upon by the revenue, so that the assesses can reply to the show-cause notices within two weeks thereafter. Additionally, it was ordered that AOs will issue orders in accordance with section 148A(d) for each of the concerned assesses and after that, i.e. after following the procedure as required under section 148A, the AOs may issue notice under section 148 (As substituted).
     

14. All notices issued under Section 148 that were overturned by High Courts are reinstated as a result of the aforementioned Supreme Court of India decision by being converted to notices under Section 148A with instructions to follow the new provisions' procedure.
     

15. CBDT Notification after the Hon'ble Supreme Court's judgement

    Based upon the above judgment by the Hon'ble Supreme Court in the case of Union of India vs Ashish Agarwal [2022] 138 taxmann.com 64 (SC),the CBDT issued instruction no. 01/2022 dated 11th May, 2022, for the implementation of the judgment as:
    
    1. In accordance with Section 148A(b) of the Act, the extended reassessment notices are regarded as show-cause notices
    2. The AO must give the information and materials, based on which extended reassessment notices were issued, within 30 days to the assesses.
    3. After the notice by the AO has been issued, the assessee has two weeks to respond.
       The two-week timeframe will begin to run once the Assessing Officer last provided the Assessee with information and materials.
    4. All of the new law's defences are available to the assessee; however, if the assessee asks for more time to file a response to the show cause notice, the AO must consider the request on merit and may grant the additional time as specified in new section 148A of the Act's clause (b
    5. The AO will make a decision based on the information in the file, including the assessee's response, after receiving the reply. whether or not the situation qualifies for a notice to be issued under section 148 of the Act. With the previous consent of the specified authority of the new law, the AO must pass an order pursuant to clause (d) of section 148A of the Act to that effect. Within one month after the end of the month in which he receives the assessee's response, this order must be made. The order must be made within one month of the end of the month in which the time limit or additional time permitted to furnish a reply expires if the assessee fails to provide such a response.
    6. The AO must acquire the specified authority's approval under section 151 of the new law before serving the assessee with a notice under section 148 of the Act if it is appropriate to do so. The notice u/s 148A must also be served with a copy of the order made pursuant to clause (d) of section 148A of the Act.
        

16. Taxability: A.Y. 2015-16 onwards

    16. Under the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act (TOLA), the option for reassessment was available for the Assessment Years 2015-16 and 2016-17 until March 31, 2020 and March 31, 2021, respectively, provided that the amount of escaped assessment was less than one lakh. However, from the assessment year 2017-18 onwards, no further reassessment can be initiated and no notices for reassessment under section 148 of the Act can be issued, as per the provisions of the TOLA Act.

Conclusion
In conclusion, the saga of amended reassessment provisions and the legality of notices issued under section 148 for Assessment Year 2015-16 onwards has seen significant developments. The Finance Act, 2021 introduced new provisions for reassessment, which came into effect on April 1, 2021. These provisions extended the limitation period for re-opening assessments from six years to ten years, except for Assessment Year 2021-22 and earlier assessment years, which remained at six years.

Subsequent to the Supreme Court's judgment and the CBDT notification outlined the implementation of the court's decision, further clarified the process for extended reassessment notices under section 148A.

The taxability of Assessment Year 2015-16 onwards, the TOLA Act allowed reassessment for Assessment Years 2015-16 and 2016-17 until March 31, 2020, and March 31, 2021, respectively, if the amount of escaped assessment was less than one lakh. However, from Assessment Year 2017-18 onwards, no further reassessment can be initiated, and no notices for reassessment under section 148 can be issued, as per the provisions of the TOLA Act.

Therefore, it is crucial for taxpayers and tax authorities to adhere to the amended provisions and procedural safeguards outlined by the Finance Act, 2021, the Supreme Court, and the CBDT notification to ensure a fair and transparent reassessment process.