Facts of the Case

The petitioners, including ATS Infrastructure Pvt. Ltd. and several other assessees, challenged reassessment notices issued under Section 148 of the Income Tax Act. These notices were issued after 1st April 2021 but were based on the old reassessment regime.

The petitioners contended that the Finance Act, 2021 introduced a new reassessment framework, replacing Sections 147 to 151, and therefore, any notice issued post 1st April 2021 must comply with the amended provisions.

The Revenue authorities, however, relied on extensions granted under the Relaxation Act, 2020 to justify issuance of notices under the old provisions.

 

Issues Involved

  1. Whether reassessment notices issued after 01.04.2021 under the old provisions of Section 148 are valid.
  2. Whether the Relaxation Act, 2020 extends the applicability of the old reassessment regime beyond 31.03.2021.
  3. Whether Section 6 of the General Clauses Act saves such notices.

 

Petitioner’s Arguments

  • The impugned notices are invalid in law as they were issued under repealed provisions.
  • The Finance Act, 2021 introduced a completely new reassessment scheme, which must be followed for all notices issued after 01.04.2021.
  • The Relaxation Act only extended time limits, not the substantive provisions of law.
  • Section 6 of the General Clauses Act cannot be invoked to override the clear legislative intent of substitution of provisions.

 Respondent’s Arguments


  • The Revenue argued that the Relaxation Act extended the time limit for issuing notices under the old provisions till 30th June 2021.
  • It was contended that Section 6 of the General Clauses Act preserves the operation of the old provisions.
  • The department relied on earlier interim orders of the Court in similar matters to justify continuation of reassessment proceedings.

 Court’s Findings / Order


  • The Court observed that the issue is prima facie covered by earlier decisions of the Delhi High Court.
  • It noted that the new reassessment scheme introduced by the Finance Act, 2021 applies from 01.04.2021.
  • The Court found that:
    • The Relaxation Act does not extend the applicability of old provisions, but only timelines.
    • Notices issued under old Section 148 after 01.04.2021 are legally questionable.
  • Interim Relief Granted:
    • The respondents were restrained from taking any coercive reassessment steps pursuant to the impugned notices. 

Important Clarification by the Court

  • The Court clarified that:
    • Issuance of reassessment notices must strictly comply with the new statutory framework post 01.04.2021.
    • Mere extension of limitation cannot revive repealed provisions.
    • The matter will be subject to final adjudication, but prima facie protection was justified. 

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
  • Section 6 – General Clauses Act
  • Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020

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