Facts of the Case

The Petitioner, Vikrant Suri, filed a writ petition challenging the validity of a reassessment notice dated 25.04.2021 issued under Section 148 of the Income Tax Act, 1961 for Assessment Year 2015–16. The Petitioner also sought to set aside certain Explanations contained in CBDT Notification Nos. 20/2021 dated 31.03.2021 and 38/2021 dated 27.04.2021, alleging that they were ultra vires the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 (TOL Act).

Issues Involved

  1. Whether the reassessment notice issued under Section 148 of the Income Tax Act, 1961 was legally sustainable.
  2. Whether the Explanations in CBDT Notification Nos. 20/2021 and 38/2021 were ultra vires the TOL Act.
  3. Whether the issue raised was already settled by prior judgment of the Delhi High Court.

Petitioner’s Arguments

  • The Petitioner contended that the issue involved in the present writ petition was squarely covered by an earlier judgment dated 15.12.2021 passed by the Delhi High Court in W.P.(C) 6176/2021.
  • It was argued that the impugned notice under Section 148 lacked legal validity in light of the settled position of law.
  • The Petitioner further challenged the legality of the Explanations inserted through the CBDT Notifications, asserting that they exceeded the authority granted under the TOL Act.

Respondent’s Arguments

  • The Respondents, representing the Income Tax Department, did not dispute that the issue raised in the present case was covered by the earlier judgment of the Delhi High Court.
  • They accepted that the legal position had already been settled by precedent.

Court’s Findings / Order

  • The Delhi High Court observed that the issue involved in the present writ petition was squarely covered by its earlier judgment.
  • Accordingly, the Court quashed the impugned notice dated 25.04.2021 issued under Section 148 of the Income Tax Act, 1961 for Assessment Year 2015–16.
  • The Court further noted that the Explanations in Notification Nos. 20/2021 and 38/2021 had already been declared ultra vires, thereby rendering the Petitioner’s second prayer infructuous.
  • The writ petition was allowed, with liberty granted to the Revenue to take further steps in accordance with law, if permissible.

Important Clarification

The Court clarified that although the impugned notice was quashed, the Revenue authorities retain the liberty to initiate fresh proceedings, if permitted under the law, and subject to legal remedies available to the Petitioner.

Sections Involved

  • Section 148, Income Tax Act, 1961
  • Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 (TOL Act)
  • CBDT Notification No. 20/2021 dated 31.03.2021
  • CBDT Notification No. 38/2021 dated 27.04.2021

Link to download the order -https://delhihighcourt.nic.in/app/case_number_pdf/2022:DHC:219-DB/JIS17012022CW73342021_175902.pdf

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