Facts of the Case

  • The petitioners were issued reassessment notices under old Section 148 during the period April–June 2021.
  • This period was after the Finance Act, 2021 had substituted the entire reassessment scheme, introducing Section 148A (mandatory pre-notice inquiry and hearing).
  • The Revenue relied on Relaxation Acts and Notifications (issued due to COVID-19) to justify continuing with the old law.
  • Petitioners challenged the notices stating that new law must apply from 01.04.2021, making the old notices invalid.

Issues Involved

  1. Whether reassessment notices issued after 01.04.2021 under old Section 148 are valid?
  2. Whether Relaxation Act / notifications can override or defer the applicability of the amended provisions?
  3. Whether compliance with Section 148A procedure is mandatory before issuing notice?
  4. Whether executive notifications can extend applicability of repealed provisions?

Petitioner’s Arguments

  • The Finance Act, 2021 clearly replaced the reassessment regime w.e.f. 01.04.2021.
  • Section 148A mandates:
    • Inquiry
    • Show cause notice
    • Opportunity of hearing
  • Notices issued under old law bypass statutory safeguards.
  • Relaxation Act only extends time limits, not substantive provisions.
  • Delegated legislation (notifications) cannot override Parliament’s amendment.

Respondent’s Arguments (Revenue)

  • Due to COVID-19, time limits were extended via Relaxation Act and notifications.
  • Old reassessment provisions were temporarily continued.
  • Notices were valid as they were issued within extended timelines.
  • Practical difficulties justified continuation of the old regime.

Court Findings / Judgment

    • The new reassessment regime is applicable from 01.04.2021.
    • Old Section 148 cannot be invoked after this date.
    • Relaxation Act only extends limitation periods, not statutory framework.
    • Notifications cannot override or postpone parliamentary amendments.
    • Section 148A compliance is mandatory.

 Result:
All reassessment notices issued under old Section 148 after 01.04.2021 were declared invalid and quashed.

Important Clarifications by the Court

  • Delegated legislation cannot defeat primary legislation.
  • Procedural safeguards under Section 148A are not optional.
  • Executive cannot revive repealed provisions through notifications.
  • The ruling reinforces rule of law and legislative supremacy.

Link to download the order -https://delhihighcourt.nic.in/app/case_number_pdf/2022:DHC:3995-DB/58927092022CW2692022_184809.pdf

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