Facts of the Case

  • The Income Tax Department issued reassessment notices to multiple assessees under Section 148.
  • These notices were issued after 01 April 2021, when the new reassessment provisions had already come into force.
  • However, the notices were issued under the old provisions of the Act.
  • Petitioners challenged these notices as being without jurisdiction and contrary to law.

Issues Involved

  1. Whether reassessment notices issued after 01 April 2021 under the old provisions of Section 148 are valid?
  2. Whether the benefit of extended limitation under TOLA permits issuance of notices under the old regime?
  3. Whether Section 6 of the General Clauses Act can save such notices?

Petitioners’ Arguments

  • The impugned notices are void ab initio as they were issued under repealed provisions.
  • After 01 April 2021, reassessment must strictly comply with the new regime (Sections 147 to 151 as amended).
  • TOLA only extends timelines but does not revive or extend the applicability of old law.
  • The new provisions mandate prior inquiry, opportunity of hearing, and approval, which were not followed.

Respondent’s Arguments

  • The Revenue argued that time limits stood extended under TOLA up to 30 June 2021.
  • It was contended that old provisions continue to apply for such extended period.
  • Reliance was placed on Section 6 of the General Clauses Act to preserve prior proceedings.

Court’s Findings / Order

  • The Court held that the issue is covered by earlier judgments of the Delhi High Court in similar matters.
  • It observed that new reassessment provisions apply from 01 April 2021.
  • Prima facie, notices issued under old provisions do not satisfy the mandatory requirements of the new law.
  • The Court restrained the respondents from taking coercive reassessment action pursuant to such notices.
  • Notices were issued, and interim protection was granted to petitioners.

Important Clarifications by Court

  • Extension of limitation under TOLA does not extend the applicability of old reassessment provisions.
  • The new reassessment scheme introduces procedural safeguards, which must be followed.
  • The Court emphasized that statutory amendments cannot be bypassed by administrative extensions.

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

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