Facts of the Case

  • The petitioners filed multiple writ petitions challenging reassessment notices issued after 01 April 2021.
  • These notices were issued under the old provisions of Section 148, without following the newly introduced procedure under Section 148A.
  • Petitioners contended that the Finance Act, 2021 had overhauled the reassessment mechanism, making compliance with new provisions mandatory.
  • The Revenue relied on TOLA to justify extension of timelines and continuation of old provisions.

Issues Involved

  1. Whether reassessment notices issued after 01.04.2021 under old Section 148 are valid.
  2. Whether TOLA permits extension of old reassessment provisions beyond 31.03.2021.
  3. Whether the new procedure under Section 148A is mandatory for all reassessment proceedings post amendment.

Petitioner’s Arguments

  • The Finance Act, 2021 substituted Sections 147–151 entirely, making the new regime mandatory from 01.04.2021.
  • Notices issued under old provisions are ultra vires and void ab initio.
  • TOLA only extends timelines, not the applicability of repealed provisions.
  • Failure to follow Section 148A violates principles of natural justice.

Respondent’s Arguments

  • The Revenue argued that due to COVID-19 disruptions, TOLA extended the time limits for issuing notices.
  • It was contended that the old provisions continued to apply during the extended period.
  • Notifications issued under TOLA permitted continuation of reassessment under the old regime.

Court Findings / Order

  • The Court held that Finance Act, 2021 brought a substantive change in law, not merely procedural.
  • Once the new law came into force on 01.04.2021, old provisions ceased to exist.
  • TOLA cannot override or defer the applicability of substituted statutory provisions.
  • Reassessment notices issued under old Section 148 after 01.04.2021 were invalid.
  • The Court granted interim protection and restrained reassessment proceedings pursuant to such notices.

Important Clarifications by Court

  • Delegated legislation (notifications under TOLA) cannot override parent statute amendments.
  • Any reassessment initiated post 01.04.2021 must strictly comply with Section 148A.
  • Extension of limitation does not mean extension of repealed law.
  • The new reassessment framework is mandatory and not optional.

Link to download the order -https://delhihighcourt.nic.in/app/case_number_pdf/2021:DHC:4492-DB/MMH06082021CW75092021_155145.pdf

Disclaimer

This content is shared strictly for general information and knowledge purposes only. Readers should independently verify the information from reliable sources. It is not intended to provide legal, professional, or advisory guidance. The author and the organisation disclaim all liability arising from the use of this content. The material has been prepared with the assistance of AI tools.