HIMANI vs. ITO, WARD 71(3), DELHI & ANR.

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W.P.(C)/5946/2022HC DelhiDLHC01014216202212 April 2022Bench: HON'BLE MR. JUSTICE MANMOHAN,HON'BLE MR. JUSTICE DINESH KUMAR SHARMA5 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, without following the procedure prescribed in the substituted Sections 147 to 151 (w.e.f. April 1, 2021) are invalid. The Court reiterated its conclusion in Mon Mohan Kohli, stating that the Legislature introduced new provisions (Sections 147 to 151) effective April 1, 2021, and any reassessment notices issued after this date had to comply with these substituted sections. The Court found the Explanations A(a)(ii)/A(b) to the Notifications dated March 31, 2021, and April 27, 2021, to be ultra vires the Relaxation Act, 2020, and therefore bad in law and void. The Court rejected the revenue's arguments regarding the saving of old procedures under the General Clauses Act, the applicability of the Finance Act, 2021, to past assessment years, and the impact of Covid-19. The Court emphasized that the Executive cannot undermine Parliamentary supremacy by issuing notifications that impede the operation of substituted statutory provisions. Consequently, the impugned reassessment notices were quashed, and the writ petitions were allowed. The revenue was granted liberty to take further steps if permitted by law.

What were the facts?

The petitioners, Himani, Meru Minerals Private Limited, and Raj Kumar Jain, filed writ petitions before the Delhi High Court challenging reassessment notices issued under Section 148 of the Income Tax Act, 1961. The notices were issued post-March 31, 2021. The parties agreed that these matters were covered by the High Court's prior judgment in Mon Mohan Kohli vs. Assistant Commissioner of Income Tax & Anr. The core of the dispute revolved around the validity of reassessment notices issued after the substitution of Sections 147 to 151 of the Income Tax Act, 1961, by the Finance Act, 2021, effective from April 1, 2021, without adhering to the new procedural requirements.

What were the issues?

1. Whether reassessment notices issued under Section 148 of the Income Tax Act, 1961, after March 31, 2021, without following the procedure prescribed in the substituted Sections 147 to 151 (w.e.f. April 1, 2021) are valid? (Question of law) Assessee's Contention: The assessee argued that since the impugned notices were issued post-March 31, 2021, they must comply with the newly substituted Sections 147 to 151 of the Income Tax Act, 1961. They relied on the Delhi High Court's judgment in Mon Mohan Kohli vs. Assistant Commissioner of Income Tax & Anr. Revenue's Contention: The revenue contended that the power of reassessment that existed prior to March 31, 2021, continued to exist till June 30, 2021, and that Section 6 of the General Clauses Act saved notices issued under Section 148 post-March 31, 2021. They also argued that the substitution made by the Finance Act, 2021, was not applicable to past Assessment Years as it was substantial in nature, and that Covid-19 necessitated the operation of old provisions during April 1, 2021, to June 30, 2021. They further argued that Explanations to Notifications dated March 31, 2021, and April 27, 2021, were valid exercises of power under Section 3(1) of the Relaxation Act.

Which sections of the Income-tax Act were involved?

Section 147,Section 148,Section 151

AI-generated summary — verify with the full judgment below

Heard together (3 matters)

W.P.(C) 5942/2022
W.P.(C) 5943/2022
W.P.(C) 5945/2022

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

$~90, 91, 93 & 94 * IN THE HIGH COURT OF DELHI AT NEW DELHI + W.P.(C) 5942/2022 & CM APPL. 17867/2022

HIMANI

..... Petitioner

Through: Ms. Rano Jain with Mr. Venketesh

Chaurasia, Advocates.

versus

ITO, WARD 71(3), DELHI & ANR.

..... Respondents

Through: Mr. Ruchir Bhatia, Sr. Standing

Counsel with Ms. Mansie Jain,

Advocates. 91 + W.P.(C) 5943/2022 & CM APPL. 17868/2022

MERU MINERALS PRIVATE LIMITED ..... Petitioner

Through: Ms. Geeta Rani, Advocate.

versus

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

Through: Ms. Vibhooti Malhotra with

Mr. Shailendera Singh, Advocates. 93 + W.P.(C) 5945/2022, CM APPL. 17873/2022 & CM APPL. 17874/2022

RAJ KUMAR JAIN

..... Petitioner

Through: Mr. Gautam Jain with Mr. Piyush

Kumar Kamal and Ms. Shrinkhla

Baranswal, Advocates.

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 19/06/2026 at 15:12:07

INCOME TAX OFFICER WARD 28(1), DELHI & ANR. ..... Respondents

Through: Ms. Vibhooti Malhotra with

Mr. Shailendera Singh, Advocates. 94 + W.P.(C) 5946/2022 & CM APPL. 17875/2022

HIMANI

..... Petitioner

Through: Ms. Rano Jain with Mr. Venketesh

Chaurasia, Advocates.

versus

ITO, WARD 71(3), DELHI & ANR.

..... Respondents

Through: Mr. Ruchir Bhatia, Sr. Standing

Counsel with Ms. Mansie Jain,

Advocates.

CORAM:

HON'BLE MR. JUSTICE MANMOHAN

HON'BLE MR. JUSTICE DINESH KUMAR SHARMA

12.04.2022 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 2. The conclusion reached by this Court in Mon Mohan Kohli (supra) is reproduced hereinbelow:- 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 19/06/2026 at 15:12:07

“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. 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 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 19/06/2026 at 15:12:07

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.”

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 April, 2021 are declared to be ultra vires the Relaxation Act, 2020 and are therefore bad in law and null and void. 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 19/06/2026 at 15:12:07

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.

MANMOHAN, J

DINESH KUMAR SHARMA, J APRIL 12, 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 19/06/2026 at 15:12:07

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