GEETANJALI vs. INCOME TAX OFFICER WARD 34 (5) & ANR.

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W.P.(C)/5344/2022HC DelhiDLHC01012647202231 March 2022Bench: HON'BLE MR. JUSTICE MANMOHAN,HON'BLE MR. JUSTICE DINESH KUMAR SHARMA6 pages
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What did the High Court hold?

The Delhi High Court held that reassessment notices issued under Section 148 of the Income Tax Act, 1961, post-March 31, 2021, must comply with the substituted Sections 147 to 151 of the Act, which came into effect from April 1, 2021. The Court relied on its previous judgment in Mon Mohan Kohli vs. Assistant Commissioner of Income Tax & Anr. The Court found that the Legislature introduced new provisions (Sections 147 to 151) via the Finance Act, 2021, effective April 1, 2021. The Court clarified that while the power of reassessment existed until June 30, 2021, the procedure changed from April 1, 2021. The Court ruled that the Executive/Revenue cannot use administrative power under Section 3(1) of the Relaxation Act, 2020, to undermine parliamentary supremacy or frustrate the purpose of substituted statutory provisions. Consequently, Explanations to the Notifications dated March 31, 2021, and April 27, 2021, were declared ultra vires the Relaxation Act, 2020, and thus void. The impugned reassessment notices were quashed, and the writ petitions were allowed. The revenue was permitted to take further steps if the law allowed.

What were the facts?

The petitioners, including Komal Agrawal, Ramit Sethi, Geetanjali, Madhuban Promoters Private Limited, M/S Khas Foods Pvt. Ltd., Shri Sati Hosiery Pvt. Ltd., and Parmod Kumar, filed writ petitions before the Delhi High Court. The petitions challenged reassessment notices issued under Section 148 of the Income Tax Act, 1961. The common ground for challenge was that these notices were issued post-March 31, 2021, without adhering to the procedure prescribed in the substituted Sections 147 to 151 of the Income Tax Act, 1961, which became effective from April 1, 2021. The revenue authorities were the respondents in these petitions.

What were the issues?

1. Whether reassessment notices issued under Section 148 of the Income Tax Act, 1961, post-March 31, 2021, are valid if they do not comply with the substituted Sections 147 to 151 of the Act, effective from April 1, 2021? Assessee's Contention: The petitioners argued that since the impugned notices were issued after March 31, 2021, they must comply with the newly substituted Sections 147 to 151 of the Income Tax Act, 1961, as introduced by the Finance Act, 2021. They contended that the procedure prior to April 1, 2021, was no longer applicable. Revenue's Contention: The revenue contended that the power of reassessment existing prior to March 31, 2021, continued to exist till the extended period, i.e., June 30, 2021. They also argued that Section 6 of the General Clauses Act saves notices issued under Section 148 post-March 31, 2021, and that the substitution made by the Finance Act, 2021, is not applicable to past assessment years as it is substantial in nature. They further argued that the Covid-19 pandemic justified the operation of new provisions not being strictly followed during the period April 1, 2021, to June 30, 2021.

Which sections of the Income-tax Act were involved?

Section 148,Section 147,Section 151,Section 3(1)

AI-generated summary — verify with the full judgment below

Heard together (3 matters)

W.P.(C) 5342/2022
W.P.(C) 5343/2022
W.P.(C) 5344/2022

Read from the judgment's own cause title. This page is filed under one of them.

$~31, 32, 33, 35, 36, 37 & 40 * IN THE HIGH COURT OF DELHI AT NEW DELHI 31 + W.P.(C) 5342/2022 & CM APPL.15975/2022, CM APPL.15976/2022

KOMAL AGRAWAL

..... Petitioner

Through Mr. Amol Sinha with Mr. Ashwini

Kumar, Advocates.

versus

INCOME TAX OFFICER, WARD 14(1), DELHI & ANR. ..... Respondents

Through Mr. Ajit Sharma with Mr. Lugman S.

Hasan, Advocates.

32 + W.P.(C) 5343/2022 & CM APPL.15977/2022, CM APPL.15978/2022

RAMIT SETHI

..... Petitioner

Through Mr. Arav Kapoor, Advocate.

versus

ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE 70 (1)

& ANR.

..... Respondents

Through Mr. Sunil Kumar Agarwal, Sr.

Standing Counsel with Mr. Tushar

Gupta, Jr. Standing Counsel and

Mr. Samarth Chaudhari, Advocate. 33 + W.P.(C) 5344/2022 & CM APPL.15979/2022

GEETANJALI

..... Petitioner

Through Mr. Rishabh Nangia, Advocate.

versus

This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 17/06/2026 at 02:30:02

INCOME TAX OFFICER WARD 34 (5) & ANR. ..... Respondents

Through Mr. Kunal Sharma, Sr. Standing

Counsel with Ms. Zehra Khan, Jr.

Standing Counsel and Mr. Shray

Nargotia, Advocates.

35 + W.P.(C) 5346/2022 & CM APPL.16000/2022, CM APPL.16001/2022

MADHUBAN PROMOTERS PRIVATE LIMITED ..... Petitioner

Through Mr. Gaurav Jain with Ms. Akshita

Goyal and Mr. Shubham Gupta,

Advocates.

versus

INCOME TAX OFFICER, WARD 16(1), DELHI ..... Respondent

Through Mr. Abhishek Maratha, Advocate.

36 + W.P.(C) 5351/2022 & CM APPL.16011/2022

M/S KHAS FOODS PVT. LTD.

..... Petitioner

Through Mr. Javed Ahmad with Mr. Seraj

Ahmad and Ms. Aakriti Aditya,

Advocates.

versus

ASSISTANT COMMISSIONER OF INCOME TAX & ANR. ..... Respondents

Through Mr. Abhishek Maratha, Advocate.

37 + W.P.(C) 5361/2022 & CM APPL.16036/2022

SHRI SATI HOSIERY PVT. LTD

..... Petitioner

Through Mr. Mani Bhadra Jain, Advocate.

versus This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 17/06/2026 at 02:30:02

INCOME TAX OFFICER WARD 23(3), & ANR. ..... Respondents

Through Mr. Sunil Kumar Agarwal, Sr.

Standing Counsel with Mr. Tushar

Gupta, Jr. Standing Counsel and

Mr. Samarth Chaudhari, Advocate.

40 + W.P.(C) 5377/2022 & CM APPL.16084/2022, CM APPL.16085/2022

PARMOD KUMAR

..... Petitioner

Through Mr. Amit Kaushik with Mr. Bhateri,

Advocates.

versus

ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL

CIRCLE 18, DELHI

..... Respondent

Through Mr. Zoheb Hossain, Advocate.

CORAM:

HON'BLE MR. JUSTICE MANMOHAN

HON'BLE MR. JUSTICE DINESH KUMAR SHARMA

31.03.2022 O R D E R

1.

Learned counsel for the parties admit that as the impugned notices in the present matters have been issued post 31st March, 2021 without following the procedure prescribed in the substituted Sections 147 to 151 w.e.f. 01st April, 2021, the present matters are covered by the judgment dated 15th

December, 2021 passed by this Court in the case of Mon Mohan Kohli vs. Assistant Commissioner of Income Tax & Anr., W.P.(C) No.6176/2021. This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 17/06/2026 at 02:30:02

2.

The conclusion reached by this Court in Mon Mohan Kohli (supra) is reproduced hereinbelow:- “CONCLUSION 97. This Court is of the view that as the Legislature has introduced the new provisions, Sections 147 to 151 of the Income Tax Act, 1961 by way of the Finance Act, 2021 with effect from 1st April, 2021 and as the said Section 147 is not even mentioned in the impugned Explanations, the reassessment notices relating to any Assessment Year issued under Section 148 after 31st

March, 2021 had to comply with the substituted Sections. 98. It is clarified that the power of reassessment that existed prior to 31st March, 2021 continued to exist till the extended period i.e. till 30th June, 2021; however, the Finance Act, 2021 has merely changed the procedure to be followed prior to issuance of notice with effect from 1st

April, 2021. 99. This Court is of the opinion that Section 3(1) of Relaxation Act empowers the Government/Executive to extend only the time limits and it does not delegate the power to legislate on provisions to be followed for initiation of reassessment proceedings. In fact, the Relaxation Act does not give power to Government to extend the erstwhile Sections 147 to 151 beyond 31st March, 2021 and/or defer the operation of substituted provisions enacted by the Finance Act, 2021. Consequently, the impugned Explanations in the Notifications dated 31st March, 2021 and 27th

April, 2021 are not conditional legislation and are beyond the power delegated to the Government as well as ultra vires the parent statute i.e. the Relaxation Act. Accordingly, this Court is respectfully not in agreement with the view of the Chhattisgarh High Court in Palak Khatuja (supra), but with the views of the Allahabad High Court and Rajasthan High Court in Ashok Kumar Agarwal (supra) and Bpip Infra Private Limited (supra) respectively. This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 17/06/2026 at 02:30:02

100.

The submission of the Revenue that Section 6 of the General Clauses Act saves notices issued under Section 148 post 31st

March, 2021 is untenable in law, as in the present case, the repeal is followed by a fresh legislation on the same subject and the new Act manifests an intention to destroy the old procedure. Consequently, if the Legislature has permitted reassessment to be made in a particular manner, it can only be in this manner, or not at all. 101. The argument of the respondents that the substitution made by the Finance Act, 2021 is not applicable to past Assessment Years, as it is substantial in nature is contradicted by Respondents’ own Circular 549 of 1989 and its own submission that from 1st

July, 2021, the substitution made by the Finance Act, 2021 will be applicable. 102. Revenue cannot rely on Covid-19 for contending that the new provisions Sections 147 to 151 of the Income Tax Act, 1961 should not operate during the period 1st April, 2021 to 30th

June, 2021 as Parliament was fully aware of Covid-19 Pandemic when it passed the Finance Act, 2021. Also, the arguments of the respondents qua non-obstante clause in Section 3(1) of the Relaxation Act, ‘legal fiction’ and ‘stop the clock provision’ are contrary to facts and untenable in law. 103. Consequently, this Court is of the view that the Executive/Respondents/Revenue cannot use the administrative power to issue Notifications under Section 3(1) of the Relaxation Act, 2020 to undermine the expression of Parliamentary supremacy in the form of an Act of Parliament, namely, the Finance Act, 2021. This Court is also of the opinion that the Executive/Respondents/Revenue cannot frustrate the purpose of substituted statutory provisions, like Sections 147 to 151 of Income Tax Act, 1961 in the present instance, by emptying it of content or impeding or postponing their effectual operation.”

This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 17/06/2026 at 02:30:02

3.

Keeping in view the aforesaid, Explanations A(a)(ii)/A(b) to the Notifications dated 31st March, 2021 and 27th 4. Consequently, the impugned reassessment notices issued under Section 148 of the Income Tax Act, 1961 are quashed and the present writ petitions are allowed. If the law permits the respondents/revenue to take further steps in the matter, they shall be at liberty to do so. Needless to state that if and when such steps are taken and if the petitioners have a grievance, they shall be at liberty to take their remedies in accordance with law. April, 2021 are declared to be ultra vires the Relaxation Act, 2020 and are therefore bad in law and null and void.

MANMOHAN, J

DINESH KUMAR SHARMA, J MARCH 31, 2022 st This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 17/06/2026 at 02:30:02

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