Facts of the Case

The present batch of writ petitions challenged reassessment notices issued under Section 148 of the Income Tax Act, 1961 after 1 April 2021. The petitioners contended that such notices were issued under the old reassessment regime, despite the substitution of Sections 147–151 by the Finance Act, 2021.

The Court referred to earlier interim orders in similar matters where reassessment notices were stayed. The impugned notices were issued without complying with the newly introduced procedure under Section 148A.

The relevant observations recorded that the notices appeared to have been issued under provisions that were no longer in force after the amendment.

Issues Involved

  1. Whether reassessment notices issued after 01.04.2021 under the old provisions of Section 148 are valid?
  2. Whether the Revenue can rely on TOLA, 2020 to extend applicability of the old reassessment provisions?
  3. Whether the newly inserted Section 148A procedure is mandatory for reassessment proceedings initiated after 01.04.2021?

Petitioner’s Arguments

  • The impugned notices are invalid as they were issued under the pre-amended provisions, which ceased to exist after 01.04.2021.
  • The Finance Act, 2021 introduced a new reassessment scheme, including Section 148A, making prior notice, inquiry, and opportunity mandatory.
  • The Revenue cannot rely on TOLA to override substantive statutory amendments.
  • The notices are without jurisdiction and violate principles of natural justice.

Respondent’s Arguments

  • The Revenue argued that TOLA, 2020 extended the time limits for issuance of reassessment notices.
  • It was contended that the old provisions continue to apply due to relaxation measures.
  • The Department relied on notifications issued under TOLA to justify issuance of notices beyond 31 March 2021.

Court Order / Findings

  • The Court noted that the issue is already under consideration in earlier similar matters and interim protection had been granted.
  • It observed that prima facie, reassessment notices issued after 01.04.2021 under the old provisions appear unsustainable.
  • The Court issued notice and granted time to respondents to file counter affidavits.
  • Interim Relief Granted:
    • The respondents were restrained from taking any coercive reassessment proceedings pursuant to the impugned notices.

Important Clarifications by the Court

  • The Court indicated that the new reassessment regime introduced by Finance Act, 2021 is applicable from 01.04.2021.
  • It expressed doubt over the validity of extending old provisions through delegated legislation or relaxation laws.
  • The Court emphasized that procedural safeguards introduced under Section 148A cannot be bypassed.

Sections Involved

  • Section 147 – Income escaping assessment
  • Section 148 – Issue of notice
  • Section 148A – Conducting inquiry before issuing notice
  • Section 149, 151 – Time limits and sanction
  • TOLA, 2020 – Relaxation of time limits

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

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