Facts of the Case

  • Multiple writ petitions were filed challenging reassessment notices issued after 01 April 2021.
  • Petitioners contended that such notices were issued under the old reassessment provisions, despite the introduction of a new regime under the Finance Act, 2021.
  • The Revenue relied upon TOLA, 2020, arguing that timelines for issuing notices stood extended.
  • The Court referred to earlier interim orders in similar matters where stay on reassessment proceedings had been granted.

Issues Involved

  1. Whether reassessment notices issued after 01 April 2021 under the old provisions are valid?
  2. Whether TOLA extends the applicability of old reassessment provisions beyond 31 March 2021?
  3. Whether the amended provisions under the Finance Act, 2021 override earlier provisions for reassessment?

Petitioner’s Arguments

  • Notices are invalid in law as they were issued under repealed provisions post 01 April 2021.
  • The Finance Act, 2021 introduced a new reassessment regime, which must be followed.
  • TOLA only extends time limits, not the applicability of repealed provisions.
  • Absence of compliance with new procedural safeguards renders notices illegal.

Respondent’s Arguments

  • TOLA allows extension of timelines for issuing reassessment notices.
  • The Revenue argued that old provisions continue to apply for such extended period.
  • Relied on Section 6 of the General Clauses Act to justify continuation of old provisions.

Court’s Findings / Order

  • The Court observed a prima facie case in favour of the petitioners.
  • It held that:
    • The impugned reassessment notices appear to be unsustainable under the law.
    • The argument that old provisions continue beyond 01 April 2021 is not convincing prima facie.
  • The Court restrained the Revenue from proceeding further with reassessment proceedings based on such notices.
  • Notices were issued and the matter was kept pending for further adjudication.

Important Clarifications

  • The Court clarified that:
    • Extension of limitation under TOLA does not extend the life of old provisions.
    • The new reassessment framework under Finance Act, 2021 must be considered.
  • Interim protection granted in earlier similar cases was extended to present petitions.

Sections Involved

  • Section 147 – Income Escaping Assessment
  • Section 148 – Issue of Notice for Reassessment
  • Section 149 – Time Limit for Notice
  • Section 151 – Sanction for Issue of Notice
  • Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 (TOLA)
  • Finance Act, 2021 (New reassessment regime)

Link to download the order -https://delhihighcourt.nic.in/app/case_number_pdf/2021:DHC:4493-DB/MMH02092021CW93302021_163051.pdf

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