Facts of the Case

  • Multiple petitioners, including ATS Infrastructure Pvt. Ltd., challenged reassessment notices issued after 01.04.2021.
  • The notices were issued under the unamended provisions of Section 148 without complying with newly introduced Section 148A procedure.
  • Petitioners argued that the law had undergone a substantial change, making prior provisions inapplicable post 01.04.2021.
  • Revenue relied on TOLA and contended that extended timelines allowed issuance under the old provisions.

Issues Involved

  1. Whether reassessment notices issued after 01 April 2021 under old Section 148 are valid?
  2. Whether TOLA permits continuation of old reassessment provisions despite statutory amendment?
  3. Whether new reassessment scheme under Finance Act, 2021 has overriding effect 

Petitioner’s Arguments

  • The impugned notices were invalid from inception as they were issued under repealed provisions.
  • After 01.04.2021, reassessment must strictly comply with Section 148A procedure.
  • Old provisions ceased to exist and cannot be revived through executive notifications.
  • TOLA only extends limitation periods and does not revive repealed law.

Respondent’s Arguments

  • The Revenue argued that TOLA extended limitation periods, allowing issuance of notices under old provisions.
  • Notifications dated 31 March 2021 permitted continuation of old reassessment framework.
  • It was contended that time for issuance stood extended till 30 June 2021, thereby validating notices.

Court’s Findings / Order

  • The Court held that the new reassessment regime is applicable from 01 April 2021.
  • Notices issued under old Section 148 after this date are prima facie invalid.
  • TOLA cannot override substantive statutory amendments introduced by Parliament.
  • The Court restrained the Revenue from proceeding with reassessment pursuant to impugned notices.
  • Interim protection granted; reassessment proceedings stayed. 

Important Clarification by Court

  • Delegated legislation (notifications) cannot override statutory amendments.
  • Section 6 of the General Clauses Act does not save the old reassessment provisions in this context.
  • The new procedure under Section 148A is mandatory and must be followed.

Relevant Sections Involved

  • Section 147, Income Tax Act, 1961
  • Section 148, Income Tax Act, 1961
  • Section 148A (Newly Introduced)
  • Section 149, Income Tax Act, 1961
  • Section 151, Income Tax Act, 1961
  • Section 6, General Clauses Act, 1897
  • Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 (TOLA)

Link to download the order -

https://delhihighcourt.nic.in/app/case_number_pdf/2021:DHC:4493-DB/MMH02092021CW93302021_163051.pdf.

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