Bombay High Court Judgments — 2022

The High Court held that the Explanations to Notification No. 20 of 2021 and Notification No. 38 of 2021 were ultra vires, bad in law, and null and void. The Court agreed with the petitioners' submission that Section 3 of the Relaxation Act, 2020, was a relaxation provision dealing with time limits and did not empower the Central Government to amend the substantive provisions of the Income Tax Act, 1961. Only Section 4 of the Relaxation Act amended the Act. The Court further found that even if the Explanations were considered valid, the impugned notices were bad in law because the Assessing Officers had assumed jurisdiction based on the 'reason to believe' concept, which is no longer recognized in the amended Section 147. Moreover, the mandatory procedure under Section 148A was not followed. The Court also noted that the Relaxation Act was not applicable for Assessment Years 2015-2016 or subsequent years. Consequently, all impugned notices issued under Section 148 of the Act were quashed and set aside. The Assessing Officers were permitted to initiate fresh reassessment proceedings in accordance with the amended provisions of the Act.

The High Court held that the Explanations to Notification No. 20/2021 and Notification No. 38/2021 were ultra vires and therefore bad in law and void. The Court agreed with the assessee's submission that Section 3 of the Relaxation Act was a relaxation provision dealing with time limits and did not empower the Central Government to amend substantive provisions of the Income Tax Act. Only Section 4 of the Relaxation Act contained such amendments. Furthermore, the Court found that even if the Explanations were considered valid, the impugned notices were still invalid because they did not comply with the amended Section 147 of the Act, which requires adherence to procedures like Section 148A. The 'reason to believe' basis for assuming jurisdiction was also found to be obsolete under the amended provisions. The Court also noted that the Relaxation Act was not applicable to Assessment Years 2015-2016 onwards. Consequently, all impugned notices issued under Section 148 were quashed and set aside. The Assessing Officers were permitted to initiate fresh reassessment proceedings in accordance with the amended provisions of the Act.

The High Court held that the Explanations to Notification No. 20/2021 and Notification No. 38/2021 were ultra vires, bad in law, and void. The Court agreed with the petitioners that Section 3 of the Relaxation Act was a relaxation provision for time limits and did not empower amendments to substantive provisions of the Income Tax Act, unlike Section 4. Furthermore, the Court found that the notices were invalid because they were issued based on the 'reason to believe' criterion, which is no longer recognized under the amended Section 147, and because the mandatory procedure under Section 148A was not followed. The Court also noted that the Relaxation Act was not applicable to Assessment Years 2015-2016 onwards. Consequently, all impugned notices issued under Section 148 were quashed and set aside. The Assessing Officers were permitted to initiate fresh reassessment proceedings in accordance with the amended provisions of the Act, strictly complying with the statutory requirements.

The High Court held that the Explanations to Notification No. 20/2021 and Notification No. 38/2021 were ultra vires and therefore bad in law and null and void. The Court agreed with the petitioners that Section 3 of the Relaxation Act was a relaxation provision dealing with time limits and did not amend the substantive provisions of the Income Tax Act. It noted that Section 4 of the Relaxation Act was the provision that amended the Act. The Court further held that even if the Explanations were valid, the impugned notices were bad in law because they were issued based on the 'reason to believe' concept, which is no longer recognized in the amended Section 147, and because the mandatory procedure under Section 148A was not followed. The Court also found that the Relaxation Act was not applicable to Assessment Years 2015-2016 onwards, as the time limit for issuing notices for these years was not expiring within the period for which Section 3(1) of the Relaxation Act was applicable. Consequently, all the impugned notices issued under Section 148 of the Act were quashed and set aside. The Assessing Officers were permitted to initiate fresh reassessment proceedings in accordance with the amended provisions of the Act, strictly complying with the statutory requirements.

The High Court held that the Explanations to Notification No. 20/2021 and Notification No. 38/2021 are ultra vires and therefore bad in law and null and void. The Court agreed with the assessee's submission that Section 3 of the Relaxation Act was a relaxation provision dealing with time limits and did not empower the Central Government to amend the substantive provisions of the Income Tax Act. Only Section 4 of the Relaxation Act contained such amendments made by the legislature. Furthermore, the Court found that even if the Explanations were considered valid, the impugned notices were still bad in law because they were issued based on the 'reason to believe' concept, which is no longer recognized under the amended Section 147, and the mandatory procedure under Section 148A was not followed. The Court also noted that the Relaxation Act was not applicable for Assessment Years 2015-2016 or subsequent years. Consequently, all impugned notices issued under Section 148 were quashed and set aside. The Assessing Officers were permitted to initiate fresh reassessment proceedings in accordance with the amended provisions of the Act, strictly complying with the statutory requirements.

The High Court held that the Explanations to Notification No. 20/2021 and Notification No. 38/2021 were ultra vires and therefore bad in law and null and void. The Court agreed with the petitioners that Section 3 of the Relaxation Act was a relaxation provision dealing with time limits and did not empower the Central Government to amend substantive provisions of the Income Tax Act. Section 4 of the Relaxation Act was the provision that amended the Act, and it did not delegate power to the Central Government to make such amendments. The Court further found that even if the Explanations were considered valid, the impugned notices were bad in law as they did not comply with the amended Section 147, which is subject to Sections 148 to 153, including the mandatory procedure under Section 148A. The Court also noted that the Relaxation Act was not applicable for Assessment Years 2015-2016 onwards. Consequently, all impugned notices issued under Section 148 were quashed and set aside. The Assessing Officers were permitted to initiate fresh reassessment proceedings in accordance with the amended provisions of the Act, strictly complying with the statutory requirements. The Court was in respectful agreement with the views of the Allahabad High Court, Rajasthan High Court, Delhi High Court, and Madras High Court.

The High Court held that the Explanations to Notification No. 20/2021 and Notification No. 38/2021 were ultra vires and therefore bad in law and null and void. The Court agreed with the petitioners that Section 3 of the Relaxation Act was a relaxation provision dealing with time limits and did not empower the Central Government to amend the substantive provisions of the Income Tax Act, 1961. Section 4 of the Relaxation Act was the provision that amended the Act. The Court found that the impugned notices were bad in law for multiple reasons. Firstly, the Explanations to the notifications were declared invalid. Secondly, even if the Explanations were valid, the notices did not comply with the amended Section 147, as they were based on the 'reason to believe' concept, which is no longer recognized. Thirdly, the procedure under Section 148A, which is mandatory under the amended provisions, was not followed. Fourthly, the Relaxation Act was not applicable to Assessment Years 2015-2016 and subsequent years, as the time limits for issuing notices for these years were not expiring within the period covered by Section 3(1) of the Relaxation Act. Consequently, all impugned notices issued under Section 148 of the Act were quashed and set aside. The Assessing Officers were permitted to initiate fresh reassessment proceedings in accordance with the relevant provisions of the Act as amended by the Finance Act, 2021, after strictly complying with the statutory provisions.

The High Court held that the Explanations to Notification No. 20 of 2021 and Notification No. 38 of 2021 were ultra vires and therefore bad in law and null and void. The Court agreed with the petitioners that Section 3 of the Relaxation Act was a provision dealing with time limits and did not grant the power to amend the substantive provisions of the Income Tax Act, unlike Section 4. The Court found that the Assessing Officers' assumption of jurisdiction was based on the 'reason to believe' concept, which is no longer recognized under the amended Section 147. Furthermore, the amended Section 147 is subject to Sections 148 to 153, which include the procedure under Section 148A, a procedure that was not followed. The Court also noted that the Relaxation Act was not applicable for Assessment Years 2015-2016 or any subsequent year, as the time limits for issuing notices for these years were not expiring within the period for which Section 3(1) of the Relaxation Act was applicable. Consequently, all impugned notices issued under Section 148 of the Act were quashed and set aside. The Assessing Officers were permitted to initiate fresh reassessment proceedings in accordance with the relevant amended provisions of the Act.

The High Court allowed the writ petitions, declaring the Explanations to Notification No. 20 of 2021 and Notification No. 38 of 2021 as ultra vires, bad in law, and void. The Court reasoned that Section 3 of the Relaxation Act, which falls under Chapter II ('Relaxation of Certain Provisions of Specified Act'), was only a relaxation provision for time limits and did not grant the Central Government the power to amend substantive provisions of the Income Tax Act. Such amendments were made by the Legislature itself under Section 4 of the Relaxation Act. The Court agreed with the assessee that Section 3 did not envisage amendments to the substantive provisions. Additionally, the Court found that the impugned notices were bad in law as they did not comply with the amended Section 147, which requires adherence to Sections 148 to 153, including the procedure under Section 148A. The Court also noted that the Relaxation Act was not applicable for Assessment Years 2015-2016 onwards. Consequently, all impugned notices issued under Section 148 were quashed and set aside, with liberty to the Assessing Officers to initiate fresh proceedings in accordance with the amended provisions of the Act.

The High Court held that the Explanations to Notification No. 20 of 2021 and Notification No. 38 of 2021 were ultra vires and therefore bad in law and null and void. The Court agreed with the petitioners that Section 3 of the Relaxation Act was a relaxation provision dealing with time limits and did not empower amendments to substantive provisions of the Income Tax Act, unlike Section 4. The Court found that the notices were invalid for multiple reasons: (a) the Explanations were declared ultra vires; (b) even if the Explanations were valid, they did not cover Section 147, and the procedure under the amended Section 147 and Section 148A was not followed; and (c) the Relaxation Act was not applicable to Assessment Years 2015-2016 and subsequent years as the time limits for issuing notices for these years were not expiring within the period for which Section 3(1) of the Relaxation Act was applicable. Consequently, all impugned notices issued under Section 148 of the Act were quashed and set aside. The Assessing Officers were permitted to initiate fresh reassessment proceedings in accordance with the amended provisions of the Act and by strictly complying with the statutory procedures.

The High Court held that the Explanations to Notification No. 20/2021 and Notification No. 38/2021 were ultra vires and therefore bad in law and null and void. The Court agreed with the assessee's submission that Section 3 of the Relaxation Act was a relaxation provision dealing with time limits and did not empower the Central Government to amend substantive provisions of the Income Tax Act, unlike Section 4 which made legislative amendments. The Court found that the notices were bad in law for multiple reasons: (a) the Explanations did not cover Section 147, which is subject to Sections 148 to 153, including Section 148A, meaning the procedure under Section 148A was not followed; (b) the assumption of jurisdiction was based on 'reason to believe,' a concept no longer recognized in the amended Section 147; and (c) the Relaxation Act was not applicable for Assessment Years 2015-2016 onwards. Consequently, all impugned notices issued under Section 148 of the Act were quashed and set aside. The Assessing Officers were permitted to initiate fresh reassessment proceedings in accordance with the relevant provisions of the Act as amended by the Finance Act, 2021, after strictly complying with the statutory provisions. The Court relied on decisions of the Allahabad High Court, Rajasthan High Court, Delhi High Court, and Madras High Court.

The High Court held that the Explanations to Notification No. 20/2021 and Notification No. 38/2021 are ultra vires and therefore bad in law and null and void. The Court reasoned that Section 3 of the Relaxation Act, which falls under Chapter II titled ‘Relaxation of Certain Provisions of Specified Act’, only deals with time limits and does not grant the power to amend substantive provisions of the Income Tax Act. In contrast, Section 4 of the Relaxation Act, which amends the Act, falls under Chapter III. The Court agreed with the assessee that only Section 4 amended the Act, and no such amendments to substantive provisions were envisaged under Section 3. Furthermore, the Court found that even if the Explanations were considered valid, the impugned notices were still bad in law because they were issued based on the 'reason to believe' concept, which is no longer recognized in the amended Section 147, and the mandatory procedure under Section 148A was not followed. The Court also noted that the Relaxation Act was not applicable for Assessment Years 2015-2016 onwards. Consequently, all impugned notices issued under Section 148 were quashed and set aside. The Assessing Officers were permitted to initiate fresh reassessment proceedings in accordance with the amended provisions of the Act.

The High Court held that the Explanations to Notification No. 20/2021 and Notification No. 38/2021 are ultra vires and therefore bad in law and null and void. The Court reasoned that Section 3 of the Relaxation Act, which falls under Chapter II titled ‘Relaxation of Certain Provisions of Specified Act’, only deals with relaxation of time limits and does not grant the power to amend substantive provisions or revive repealed sections of the Income Tax Act. Section 4 of the Relaxation Act, which falls under Chapter III titled ‘Amendments to the Income Tax Act, 1961’, is where legislative amendments were made. The Court agreed with the assessee that only Section 4 amended the Act, not Section 3. Furthermore, the Court found that even if the Explanations were considered valid, the impugned notices were still invalid because they failed to comply with the amended Section 147 (which no longer uses 'reason to believe') and the mandatory procedure under Section 148A. The Court also noted that the Relaxation Act was not applicable to Assessment Years 2015-2016 onwards. Consequently, all impugned notices issued under Section 148 were quashed and set aside. The Assessing Officers were permitted to initiate fresh reassessment proceedings in accordance with the amended provisions of the Act.

The High Court allowed the writ petitions, holding that the Explanations to Notification No. 20 of 2021 and Notification No. 38 of 2021 were ultra vires, bad in law, and null and void. The Court agreed with the petitioners that Section 3 of the Relaxation Act was a relaxation provision for time limits and did not empower the Central Government to amend substantive provisions of the Income Tax Act; only Section 4 did so. Furthermore, the Court found that even if the Explanations were valid, the impugned notices were invalid because they did not comply with the amended Section 147, which requires adherence to Sections 148 to 153, including the procedure under Section 148A, and the 'reason to believe' concept is no longer recognized. The Court also noted that the Relaxation Act was not applicable to Assessment Years 2015-2016 onwards. Consequently, all impugned notices issued under Section 148 were quashed and set aside. The Assessing Officers were permitted to initiate fresh reassessment proceedings in accordance with the amended provisions of the Act, strictly complying with the statutory requirements.

The Bombay High Court held that the Explanations to Notification No. 20/2021 and Notification No. 38/2021 are ultra vires, bad in law, and null and void. The Court agreed with the petitioners' submission that Section 3 of the Relaxation Act, which falls under Chapter II titled ‘Relaxation of Certain Provisions of Specified Act’, only deals with time limits and does not grant power to amend substantive provisions of the Income Tax Act. Chapter III, titled ‘Amendments to the Income Tax Act, 1961’, deals with actual amendments, and such power was not delegated to the Central Government. The Court further noted that even if the Explanations were valid, they did not cover Section 147, which empowers revenue to reopen subject to Sections 148 to 153, including the mandatory procedure under Section 148A, which was not followed. The Court also found that the Relaxation Act was not applicable for Assessment Years 2015-2016 onwards. Consequently, all impugned notices issued under Section 148 of the Act were quashed and set aside. The Assessing Officers were permitted to initiate fresh reassessment proceedings in accordance with the amended provisions of the Act, strictly complying with the statutory requirements.

The High Court held that the Explanations to Notification No. 20 of 2021 and Notification No. 38 of 2021 were ultra vires and therefore bad in law and null and void. The Court agreed with the assessee that Section 3 of the Relaxation Act was a provision for relaxing time limits and did not empower the Central Government to amend substantive provisions of the Income Tax Act, unlike Section 4 which contained legislative amendments. The Court found that the impugned notices were bad in law because they were issued based on the 'reason to believe' concept, which is no longer recognized in the amended Section 147, and because the mandatory procedure under the amended Section 147, including Section 148A, was not followed. The Court also noted that the Relaxation Act was not applicable for Assessment Years 2015-2016 onwards. Consequently, all impugned notices issued under Section 148 of the Act were quashed and set aside. The Assessing Officers were permitted to initiate fresh reassessment proceedings in accordance with the amended provisions of the Act, strictly complying with its provisions. The Court was in respectful agreement with the High Courts of Allahabad, Rajasthan, Delhi, and Madras on these issues.

The High Court held that the Explanations to Notification No. 20/2021 and Notification No. 38/2021 were ultra vires and therefore bad in law and null and void. The Court reasoned that Section 3 of the Relaxation Act, which falls under Chapter II titled ‘Relaxation of Certain Provisions of Specified Act’, only deals with relaxation of time limits and does not grant the power to amend substantive provisions of the Income Tax Act. Such amendments, if any, would typically be made under Chapter III of the Relaxation Act, as was done by Section 4. The Court agreed with the assessee's submission that Section 3 did not envisage amendments to the substantive provisions of the Act. Furthermore, even if the Explanations were considered valid, the impugned notices were still bad in law because they were issued based on the erstwhile Section 147 ('reason to believe') which is no longer recognized in the amended Section 147, and the mandatory procedure under the amended Section 147, including Section 148A, was not followed. The Court also noted that the Relaxation Act was not applicable for Assessment Years 2015-2016 or subsequent years. Consequently, all impugned notices issued under Section 148 of the Act were quashed and set aside, with liberty to the Assessing Officers to initiate fresh reassessment proceedings in accordance with the amended provisions of the Act.

The High Court held that the Explanations to Notification No. 20 of 2021 and Notification No. 38 of 2021 were ultra vires and therefore bad in law and null and void. The Court agreed with the Assessee's submission that Section 3 of the Relaxation Act was a relaxation provision dealing with time limits and did not empower the Central Government to amend substantive provisions of the Income Tax Act. Section 4 of the Relaxation Act, which did amend provisions, was distinct. The Court also found that the impugned notices were bad in law because the Explanations did not cover Section 147 of the Act, which empowers the revenue to reopen assessments subject to Sections 148 to 153, including the mandatory procedure under Section 148A. This procedure was not followed. Additionally, the Court noted that the Relaxation Act was not applicable for Assessment Years 2015-2016 or subsequent years, as the time limits for issuing notices for these years did not fall within the scope of Section 3(1) of the Relaxation Act. Consequently, all impugned notices issued under Section 148 of the Act were quashed and set aside. The Assessing Officers were permitted to initiate fresh reassessment proceedings in accordance with the amended provisions of the Act, strictly complying with all statutory requirements.

The High Court held that the Explanations to Notification No. 20 of 2021 and Notification No. 38 of 2021 were ultra vires and therefore bad in law and null and void. The Court agreed with the assessee's submission that Section 3 of the Relaxation Act was a relaxation provision dealing with time limits and did not empower the Central Government to amend substantive provisions of the Income Tax Act. Section 4 of the Relaxation Act, which did amend provisions, was distinct. The Court found that the impugned notices were bad in law for multiple reasons. Firstly, the Explanations did not cover the erstwhile Section 147, which empowers revenue to reopen subject to Sections 148 to 153, including Section 148A. Therefore, even if the Explanations were valid, the procedure under Section 148A was not followed. Secondly, the notices were issued on the basis of 'reason to believe,' a concept no longer recognized in the amended Section 147. Thirdly, the Relaxation Act was not applicable for Assessment Years 2015-2016 or subsequent years as the time limits for issuing notices for these years were not expiring within the period for which Section 3(1) of the Relaxation Act was applicable. Consequently, all impugned notices were quashed and set aside. The Assessing Officers were permitted to initiate fresh reassessment proceedings in accordance with the amended provisions of the Act, strictly complying with the statutory requirements.

The High Court held that the Explanations to Notification No. 20/2021 and Notification No. 38/2021 were ultra vires the Relaxation Act and therefore bad in law and void. The Court agreed with the assessee's submission that Section 3 of the Relaxation Act was a provision for relaxing time limits and did not grant the Central Government the power to amend substantive provisions of the Income Tax Act. Section 4 of the Relaxation Act, which did amend provisions, was a legislative act, not a delegated power. The Court found that the Explanations did not cover Section 147, which is crucial for assuming jurisdiction. Furthermore, even if the Explanations were valid, the impugned notices were bad in law because the Assessing Officer assumed jurisdiction based on the 'reason to believe' concept, which is no longer recognized under the amended Section 147. The mandatory procedure under the amended Section 147, including Section 148A, was not followed. The Court also noted that the Relaxation Act was not applicable for Assessment Years 2015-2016 onwards. Consequently, all impugned notices issued under Section 148 were quashed and set aside. The Assessing Officers were permitted to initiate fresh reassessment proceedings in accordance with the amended provisions of the Act, strictly complying with the statutory requirements. The Court relied on decisions from the Allahabad High Court, Rajasthan High Court, Delhi High Court, and Madras High Court.

The High Court held that the Explanations to Notification No. 20/2021 and Notification No. 38/2021 are ultra vires, bad in law, and null and void. The Court agreed with the assessee's submission that Section 3 of the Relaxation Act was a provision for relaxing time limits and did not empower the Central Government to amend the substantive provisions of the Income Tax Act. Section 4 of the Relaxation Act was the provision that amended the Act, and no such amendments were made through the impugned notifications. Furthermore, the Court found that even if the Explanations were considered valid, they did not cover Section 147 of the Act, and the mandatory procedure under the amended Section 147, including Section 148A, was not followed. The Court also noted that the Relaxation Act was not applicable for Assessment Years 2015-2016 onwards. Consequently, all impugned notices issued under Section 148 of the Act were quashed and set aside. The Assessing Officers were permitted to initiate fresh reassessment proceedings in accordance with the amended provisions of the Act.

The Bombay High Court held that the Explanations to Notification No. 20/2021 and Notification No. 38/2021 were ultra vires, bad in law, and void. The Court agreed with the assessee's contention that Section 3 of the Relaxation Act was only a relaxation provision for time limits and did not empower the revival of repealed substantive provisions of the Income Tax Act. It reasoned that Section 4 of the Relaxation Act, which dealt with amendments to the Act, was the relevant section for legislative changes, and no such power was delegated to the Central Government under Section 3. Furthermore, the Court found that even if the Explanations were considered valid, the notices were still invalid because they were issued based on the erstwhile 'reason to believe' criterion under Section 147, which is no longer recognized in the amended Section 147, and because the mandatory procedure under Section 148A was not followed. The Court also noted that the Relaxation Act was not applicable to Assessment Years 2015-2016 onwards. Consequently, all impugned notices issued under Section 148 were quashed and set aside, with liberty to the Assessing Officers to initiate fresh reassessment proceedings in accordance with the amended provisions of the Act.

The High Court held that the Explanations to Notification No. 20/2021 and Notification No. 38/2021 were ultra vires and therefore bad in law and void. The Court agreed with the assessee's submission that Section 3 of the Relaxation Act was a relaxation provision dealing with time limits and did not empower the Central Government to amend the substantive provisions of the Income Tax Act. Section 4 of the Relaxation Act, which did amend provisions, was distinct. The Court further noted that even if the Explanations were considered valid, they did not cover Section 147, and the mandatory procedure under the amended Section 147 and Section 148A had not been followed. Additionally, the Court found that the Relaxation Act was not applicable to the Assessment Years in question. Consequently, all impugned notices issued under Section 148 of the Act were quashed and set aside. The Assessing Officers were permitted to initiate fresh reassessment proceedings in accordance with the relevant amended provisions of the Act.

The High Court held that the Explanations to Notification No. 20 of 2021 and Notification No. 38 of 2021 are ultra vires, bad in law, and null and void. The Court agreed with the petitioners that Section 3 of the Relaxation Act was a relaxation provision dealing with time limits and did not empower the Central Government to amend the substantive provisions of the Income Tax Act. Section 4 of the Relaxation Act, which amended the Act, was distinct and made by the Legislature itself. Furthermore, the Court found that even if the Explanations were valid, the impugned notices were bad in law because they did not comply with the amended Section 147, which is subject to Sections 148 to 153, including the mandatory procedure under Section 148A. The 'reason to believe' clause, no longer recognized in the amended Section 147, was also wrongly invoked. The Court also held that the Relaxation Act was not applicable to assessment years 2015-2016 onwards, as the time limits for these years did not fall within the scope of Section 3(1) of the Relaxation Act. Consequently, all impugned notices issued under Section 148 were quashed and set aside. The Assessing Officers were permitted to initiate fresh reassessment proceedings in accordance with the amended provisions of the Act, strictly complying with the law. The Court relied on decisions from the Allahabad, Rajasthan, Delhi, and Madras High Courts.

The High Court held that the Explanations to Notification No. 20/2021 and Notification No. 38/2021 are ultra vires, bad in law, and null and void. The Court agreed with the assessee's submission that Section 3 of the Relaxation Act is a relaxation provision dealing with time limits and does not amend substantive provisions of the Income Tax Act, unlike Section 4. The Court found that the Explanations sought to extend the applicability of erstwhile Sections 148, 149, and 151 but did not cover Section 147, which is subject to Sections 148 to 153, including Section 148A. Therefore, even if the Explanations were valid, the procedure under Section 148A was not followed, rendering the notices invalid. The Court also noted that the Relaxation Act is not applicable for assessment years 2015-2016 onwards. Consequently, all impugned notices issued under Section 148 were quashed and set aside. The Assessing Officers were permitted to initiate fresh reassessment proceedings in accordance with the amended provisions of the Act, strictly complying with the law. The Court relied on decisions of the Allahabad, Rajasthan, Delhi, and Madras High Courts.

The High Court held that the Explanations to Notification No. 20/2021 and Notification No. 38/2021 were ultra vires and therefore bad in law and null and void. The Court reasoned that Section 3 of the Relaxation Act, which fell under the chapter titled 'Relaxation of Certain Provisions of Specified Act', was only a relaxation provision dealing with time limits and did not grant the power to amend substantive provisions of the Income Tax Act. In contrast, Section 4 of the Relaxation Act, which amended provisions of the Income Tax Act, was enacted by the legislature itself. The Court agreed with the petitioners that only Section 4 amended the Act, and no such amendments were envisaged under Section 3. Furthermore, the Court found that even if the Explanations were valid, the impugned notices were bad in law because they did not comply with the amended Section 147, which no longer recognizes the 'reason to believe' concept, and the mandatory procedure under Section 148A was not followed. The Court also held that the Relaxation Act was not applicable for Assessment Years 2015-2016 or any subsequent year, as the time limit for issuing notices for these years was not expiring within the period for which Section 3(1) of the Relaxation Act was applicable. Consequently, all impugned notices were quashed and set aside. The Assessing Officers were permitted to initiate fresh reassessment proceedings in accordance with the relevant amended provisions of the Act.

The High Court held that the Explanations to Notification No. 20/2021 and Notification No. 38/2021 were ultra vires and therefore bad in law and void. The Court agreed with the petitioners' submission that Section 3 of the Relaxation Act was a relaxation provision dealing with time limits and did not empower the Central Government to amend substantive provisions of the Income Tax Act. Section 4 of the Relaxation Act, which amended the Act, was made by the legislature itself. The Court found that the impugned notices were bad in law for multiple reasons: (a) the Explanations to the notifications were invalid; (b) even if the Explanations were valid, they did not cover Section 147, and the procedure under the amended Section 147, including Section 148A, was not followed; and (c) the Relaxation Act was not applicable for Assessment Years 2015-2016 or subsequent years. Consequently, all impugned notices issued under Section 148 were quashed and set aside. The Assessing Officers were permitted to initiate fresh reassessment proceedings in accordance with the relevant amended provisions of the Act, strictly complying with the statutory requirements.

The High Court held that the Explanations to Notification No. 20/2021 and Notification No. 38/2021 were ultra vires and therefore bad in law and null and void. The Court agreed with the petitioners that Section 3 of the Relaxation Act was a provision dealing with time limits and did not grant the power to amend substantive provisions of the Income Tax Act, unlike Section 4. The Court found that the notices were invalid for multiple reasons: (a) the Explanations were ultra vires, (b) the notices relied on the repealed 'reason to believe' concept from the erstwhile Section 147, (c) the mandatory procedure under the amended Section 148A was not followed, and (d) the Relaxation Act was not applicable to Assessment Years 2015-2016 onwards. Consequently, all impugned notices issued under Section 148 were quashed and set aside. The Assessing Officers were permitted to initiate fresh reassessment proceedings in accordance with the amended provisions of the Act, strictly complying with the statutory requirements. The ratio decidendi is that statutory notifications cannot override or amend substantive provisions of an Act, and procedural requirements, especially those introduced by subsequent amendments, must be strictly adhered to.

The High Court held that the Explanations to Notification No. 20 of 2021 and Notification No. 38 of 2021 were ultra vires and therefore bad in law and null and void. The Court agreed with the petitioners' submission that Section 3 of the Relaxation Act was merely a provision for relaxing time limits and did not empower the Central Government to amend the substantive provisions of the Income Tax Act, 1961. It noted that Section 4 of the Relaxation Act was the provision that amended the Act. The Court further held that even if the Explanations were considered valid, the impugned notices were still bad in law because they did not comply with the amended Section 147 of the Act, which no longer recognized the 'reason to believe' standard, and also failed to adhere to the mandatory procedure under Section 148A. Additionally, the Court found that the Relaxation Act was not applicable to Assessment Years 2015-2016 and subsequent years. Consequently, all the impugned notices issued under Section 148 of the Act were quashed and set aside. The Assessing Officers were permitted to initiate fresh reassessment proceedings in accordance with the amended provisions of the Act, strictly complying with the statutory requirements. The Court relied on decisions of the Allahabad High Court, Rajasthan High Court, Delhi High Court, and Madras High Court.

The High Court held that Section 3 of the Relaxation Act, 2020, did not empower the Central Government to amend the substantive provisions of the Income Tax Act, 1961. Section 3 falls under Chapter II ('Relaxation of Certain Provisions of Specified Act'), while Section 4, which amends the Act, falls under Chapter III ('Amendments to the Income Tax Act, 1961'). Therefore, the Explanations to Notification Nos. 20 of 2021 and 38 of 2021, which sought to extend the applicability of erstwhile Sections 148, 149, and 151, were declared ultra vires and bad in law. The Court agreed with the assessee that even if the Explanations were valid, the notices were invalid because they did not comply with the amended Section 147 (which requires compliance with Sections 148 to 153, including Section 148A) and the procedure under Section 148A was not followed. Additionally, the Relaxation Act was not applicable for Assessment Years 2015-2016 onwards. Consequently, all impugned notices were quashed and set aside, with liberty to the Assessing Officers to initiate fresh proceedings in accordance with the amended provisions of the Act.

The High Court held that the Explanations to Notification No. 20/2021 and Notification No. 38/2021 are ultra vires and therefore bad in law and null and void. The Court agreed with the assessee's submission that Section 3 of the Relaxation Act, 2020, which falls under Chapter II titled ‘Relaxation of Certain Provisions of Specified Act’, was only a relaxation provision dealing with time limits and did not grant the power to amend substantive provisions of the Income Tax Act. Chapter III, specifically Section 4, was the one that amended the Act. The Court further found that even if the Explanations were considered valid, the impugned notices were still bad in law because they failed to comply with the amended Section 147 of the Income Tax Act, which is subject to Sections 148 to 153, including the mandatory procedure under Section 148A. The Court also noted that the Relaxation Act was not applicable for Assessment Years 2015-2016 or subsequent years. Consequently, all impugned notices issued under Section 148 of the Act were quashed and set aside. The Assessing Officers were permitted to initiate fresh reassessment proceedings in accordance with the relevant provisions of the Act as amended by the Finance Act, 2021, after strictly complying with the statutory requirements.

The High Court held that the Explanations to Notification No. 20 of 2021 and Notification No. 38 of 2021 were ultra vires, bad in law, and void. The Court agreed with the assessee that Section 3 of the Relaxation Act was a provision for relaxing time limits and did not grant the power to amend the substantive provisions of the Income Tax Act, unlike Section 4. The Court found that the Explanations sought to give effect to the erstwhile Sections 148, 149, and 151 but did not cover the erstwhile Section 147. Consequently, the assumption of jurisdiction by the Assessing Officers was based on the 'reason to believe' concept, which is no longer recognized in the amended Section 147. Furthermore, the Court noted that the amended Section 147 is subject to Sections 148 to 153, including Section 148A, the procedure for which was not followed. The Court also held that the Relaxation Act was not applicable to Assessment Years 2015-2016 onwards. Therefore, all impugned notices issued under Section 148 of the Act were quashed and set aside. The Assessing Officers were permitted to initiate fresh reassessment proceedings in accordance with the amended provisions of the Act, strictly complying with the law.

The High Court held that the Explanations to Notification No. 20 of 2021 and Notification No. 38 of 2021 were ultra vires, bad in law, and null and void. The Court agreed with the petitioners that Section 3 of the Relaxation Act was a relaxation provision for time limits and did not empower amendments to substantive provisions of the Income Tax Act, unlike Section 4. The Court found that the notices were indeed bad in law because they were issued based on the repealed 'reason to believe' concept under the erstwhile Section 147 and failed to comply with the mandatory procedure under the amended Section 147 and Section 148A. The Court also held that the Relaxation Act was not applicable for Assessment Years 2015-2016 and subsequent years, as the time limits for these years were not expiring within the period of applicability of Section 3(1) of the Relaxation Act. Consequently, all impugned notices were quashed and set aside. The Assessing Officers were permitted to initiate fresh reassessment proceedings in accordance with the amended provisions of the Act, strictly complying with the procedure.

The High Court held that the Explanations to Notification No. 20 of 2021 and Notification No. 38 of 2021 were ultra vires, bad in law, and null and void. The Court agreed with the petitioners that Section 3 of the Relaxation Act was a relaxation provision dealing with time limits and did not empower the Central Government to amend the substantive provisions of the Income Tax Act. Section 4 of the Relaxation Act, which did amend provisions, was distinct and did not grant such power. The Court found that the impugned notices were invalid for multiple reasons: (a) the Explanations were ultra vires; (b) even if the Explanations were valid, they did not cover Section 147, and the procedure under the amended Section 147 and Section 148A was not followed; and (c) the Relaxation Act was not applicable for Assessment Years 2015-2016 onwards. Consequently, all impugned notices issued under Section 148 were quashed and set aside. The Assessing Officers were permitted to initiate fresh reassessment proceedings in accordance with the amended provisions of the Act.

The High Court held that the Explanations to Notification Nos. 20/2021 and 38/2021 were ultra vires and therefore bad in law and null and void. The Court agreed with the petitioners that Section 3 of the Taxation and Other Laws (Relaxation of Certain Provisions) Act, 2020, was a relaxation provision dealing with time limits and did not empower amendments to the substantive provisions of the Income Tax Act, 1961. Section 4 of the Relaxation Act was the provision that amended the Act. The Court further found that even if the Explanations were considered valid, the impugned notices were still invalid because they did not comply with the amended Section 147 of the Act, which no longer recognized the 'reason to believe' concept, and the mandatory procedure under Section 148A was not followed. Additionally, the Court noted that the Relaxation Act was not applicable for Assessment Years 2015-2016 onwards. Consequently, all impugned notices issued under Section 148 were quashed and set aside. The Assessing Officers were permitted to initiate fresh reassessment proceedings in accordance with the relevant provisions of the Act as amended by the Finance Act, 2021, strictly complying with the statutory requirements.

The High Court held that the Explanations to Notification No. 20/2021 and Notification No. 38/2021 were ultra vires and therefore bad in law and null and void. The Court agreed with the assessee's submission that Section 3 of the Relaxation Act was a relaxation provision dealing with time limits and did not empower the Central Government to amend substantive provisions of the Income Tax Act, 1961. Section 4 of the Relaxation Act, which did amend provisions, was distinct and made by the legislature. The Court further found that even if the Explanations were considered valid, the impugned notices were invalid because they were issued on the basis of the assessee's 'reason to believe' (a concept no longer recognized in the amended Section 147) and failed to comply with the mandatory procedure under Section 148A. Additionally, the Court held that the Relaxation Act was not applicable to the assessment years 2015-2016 and subsequent years as the time limits for issuing notices for these years were not expiring within the period of applicability of Section 3(1) of the Relaxation Act. Consequently, all the impugned notices issued under Section 148 of the Act were quashed and set aside. The Assessing Officers were permitted to initiate fresh reassessment proceedings in accordance with the relevant provisions of the Act as amended by the Finance Act, 2021, strictly complying with the statutory requirements.

The Bombay High Court held that the Explanations to Notification No. 20 of 2021 and Notification No. 38 of 2021 were ultra vires and therefore bad in law and null and void. The Court agreed with the petitioners' submission that Section 3 of the Relaxation Act was a relaxation provision dealing with time limits and did not empower amendments to the substantive provisions of the Income Tax Act, unlike Section 4 which was enacted by the legislature itself. The Court found that the Explanations sought to apply the erstwhile Sections 148, 149, and 151 but did not cover Section 147, which requires compliance with Sections 148 to 153, including Section 148A. Therefore, even if the Explanations were valid, the procedure under Section 148A had not been followed. Additionally, the Court noted that the Relaxation Act was not applicable for Assessment Years 2015-2016 onwards. Consequently, all impugned notices issued under Section 148 of the Act were quashed and set aside. The Assessing Officers were permitted to initiate fresh reassessment proceedings in accordance with the relevant provisions of the Act as amended by the Finance Act, 2021, strictly complying with the statutory requirements.

The High Court held that the Explanations to Notification No. 20/2021 and Notification No. 38/2021 were ultra vires and therefore bad in law and void. The Court agreed with the petitioners that Section 3 of the Relaxation Act was a relaxation provision dealing with time limits and did not empower the Central Government to amend the substantive provisions of the Income Tax Act. Section 4 of the Relaxation Act, which did amend the Act, was distinct and did not delegate such power. Furthermore, the Court found that even if the Explanations were considered valid, the impugned notices were still invalid because they did not comply with the amended Section 147, as they relied on the 'reason to believe' concept (which is no longer recognized) and failed to follow the mandatory procedure under Section 148A. The Court also noted that the Relaxation Act was not applicable for Assessment Years 2015-2016 onwards. Consequently, all impugned notices issued under Section 148 were quashed and set aside. The Assessing Officers were permitted to initiate fresh reassessment proceedings in accordance with the amended provisions of the Act.

The High Court held that the Explanations to Notification No. 20 of 2021 and Notification No. 38 of 2021 are ultra vires and therefore bad in law and null and void. The Court agreed with the assessee's contention that Section 3 of the Relaxation Act was a relaxation provision dealing with time limits and did not empower the Central Government to amend substantive provisions of the Income Tax Act. Only Section 4 of the Relaxation Act amended the Act. Furthermore, the Court found that even if the Explanations were considered valid, the impugned notices were still bad in law as they did not comply with the amended Section 147 (which replaced 'reason to believe' with a different basis for assumption of jurisdiction) and the mandatory procedure under Section 148A. The Court also noted that the Relaxation Act was not applicable for Assessment Years 2015-2016 onwards. Consequently, all the impugned notices issued under Section 148 of the Act were quashed and set aside. The Assessing Officers were permitted to initiate fresh reassessment proceedings in accordance with the amended provisions of the Act, strictly complying with the statutory procedures.

The High Court held that the Explanations to Notification No. 20/2021 and Notification No. 38/2021 were ultra vires and therefore bad in law and null and void. The Court reasoned that Section 3 of the Relaxation Act, which falls under Chapter II titled 'Relaxation of Certain Provisions of Specified Act', was a provision dealing with time limits and did not empower the Central Government to amend the substantive provisions of the Income Tax Act. Section 4 of the Relaxation Act, which did amend the Act, fell under Chapter III and was enacted by the legislature itself. The Court further found that even if the Explanations were considered valid, the reassessment notices were invalid because they were issued based on the erstwhile 'reason to believe' concept, which is no longer recognized under the amended Section 147, and the mandatory procedure under Section 148A was not followed. The Court also noted that the Relaxation Act was not applicable for Assessment Years 2015-2016 onwards. Consequently, all impugned notices issued under Section 148 were quashed and set aside, with liberty to the Assessing Officers to initiate fresh proceedings in accordance with the amended provisions of the Act.

The High Court held that the Explanations to Notification No. 20/2021 and Notification No. 38/2021 were ultra vires and therefore bad in law and null and void. The Court agreed with the assessee's submission that Section 3 of the Relaxation Act was a relaxation provision dealing with time limits and did not empower amendments to substantive provisions of the Income Tax Act, unlike Section 4. The Court found that the Explanations sought to extend the applicability of erstwhile Sections 148, 149, and 151, but not Section 147, which is the primary section empowering revenue to reopen assessments. Consequently, the assumption of jurisdiction by the Assessing Officers was based on the 'reason to believe' clause, which is no longer recognized in the amended Section 147. Furthermore, the procedure under the amended Section 147, including Section 148A, was not followed. The Court also noted that the Relaxation Act was not applicable for Assessment Years 2015-2016 onwards. All impugned notices issued under Section 148 were quashed and set aside. The Assessing Officers were permitted to initiate fresh reassessment proceedings in accordance with the amended provisions of the Act, strictly complying with the law. The Court was in respectful agreement with the High Courts of Allahabad, Rajasthan, Delhi, and Madras.

The High Court held that the Explanations to Notification No. 20/2021 and Notification No. 38/2021 were ultra vires and therefore bad in law and null and void. The Court agreed with the petitioners' submission that Section 3 of the Relaxation Act was a relaxation provision dealing with time limits and did not empower amendments to substantive provisions of the Income Tax Act, unlike Section 4. The Court found that the Explanations sought to give effect to the erstwhile Sections 148, 149, and 151 but did not cover the erstwhile Section 147. Consequently, the assumption of jurisdiction by the Assessing Officer was based on the 'reason to believe' concept, which is no longer recognized in the amended Section 147. Moreover, the amended Section 147 is subject to Sections 148 to 153, including the procedure in Section 148A, which was not followed. The Court also held that the Relaxation Act was not applicable to Assessment Years 2015-2016 and subsequent years. Therefore, all impugned notices issued under Section 148 were quashed and set aside. The Assessing Officers were permitted to initiate fresh reassessment proceedings in accordance with the relevant provisions of the Act as amended by the Finance Act, 2021, strictly complying with the statutory provisions.

The High Court held that the Explanations to Notification No. 20 of 2021 and Notification No. 38 of 2021 were ultra vires and therefore bad in law and void. The Court agreed with the petitioners that Section 3 of the Relaxation Act was a relaxation provision dealing with time limits and did not empower the Central Government to amend substantive provisions of the Income Tax Act. Section 4 of the Relaxation Act, which amended the Act, was distinct from Section 3. The Court found that the impugned notices were bad in law for multiple reasons: (a) the Explanations did not cover Section 147, which requires compliance with Sections 148 to 153, including Section 148A; (b) the assumption of jurisdiction was based on the 'reason to believe' criterion, which is no longer recognized in the amended Section 147; and (c) the Relaxation Act was not applicable to Assessment Years 2015-2016 onwards. Consequently, all impugned notices issued under Section 148 were quashed and set aside. The Assessing Officers were permitted to initiate fresh reassessment proceedings in accordance with the amended provisions of the Act.

The High Court allowed the writ petitions, holding that the Explanations to Notification No. 20 of 2021 and Notification No. 38 of 2021 are ultra vires, bad in law, and void. The Court agreed with the Assessee's submission that Section 3 of the Relaxation Act did not grant the power to amend substantive provisions of the Income Tax Act, but only to relax time limits. Furthermore, the Court found that even if the Explanations were considered valid, the impugned notices were still invalid because they were issued based on the repealed concept of 'reason to believe' under Section 147 and failed to comply with the mandatory procedural requirements of the amended Section 147 and Section 148A, as also noted by the Delhi High Court in Mon Mohan Kohli. The Court also noted that the Relaxation Act was not applicable for Assessment Years 2015-2016 onwards. Consequently, all impugned notices issued under Section 148 of the Act were quashed and set aside. The Assessing Officers were permitted to initiate fresh reassessment proceedings in accordance with the amended provisions of the Act, strictly complying with the statutory requirements.

The High Court held that the Explanations to Notification No. 20/2021 and Notification No. 38/2021 were ultra vires and therefore bad in law and null and void. The Court agreed with the petitioners' submission that Section 3 of the Relaxation Act was a relaxation provision dealing with time limits and did not empower the Central Government to amend substantive provisions of the Income Tax Act. Section 4 of the Relaxation Act, which amended the Act, was distinct and made by the legislature itself. The Court further found that even if the Explanations were considered valid, the impugned notices were bad in law because they did not comply with the amended Section 147, which is subject to Sections 148 to 153, including the mandatory procedure under Section 148A. The Court also noted that the Relaxation Act was not applicable for Assessment Years 2015-2016 onwards. Consequently, all impugned notices issued under Section 148 were quashed and set aside. The Assessing Officers were permitted to initiate fresh reassessment proceedings in accordance with the amended provisions of the Act, strictly complying with the statutory procedures.

The High Court allowed the writ petitions. It declared the Explanations to Notification No. 20 of 2021 and Notification No. 38 of 2021 as ultra vires, bad in law, and null and void. The Court agreed with the assessee's submission that Section 3 of the Relaxation Act was a relaxation provision for time limits and did not empower amendments to substantive provisions of the Income Tax Act, unlike Section 4. The Court found that the Explanations did not cover Section 147, which is crucial for assuming reassessment jurisdiction. Furthermore, even if the Explanations were valid, the procedure under the amended Section 147, including Section 148A, was not followed. The Court also held that the Relaxation Act was not applicable to Assessment Years 2015-2016 onwards. Consequently, all impugned notices issued under Section 148 of the Act were quashed and set aside. The Assessing Officers were permitted to initiate fresh reassessment proceedings in accordance with the relevant provisions of the Act as amended by the Finance Act, 2021, strictly complying with the statutory procedures.

The High Court held that the Explanations to Notification No. 20/2021 and Notification No. 38/2021 were ultra vires and therefore bad in law and null and void. The Court agreed with the assessee's submission that Section 3 of the Relaxation Act was only a relaxation provision dealing with time limits and did not empower the Central Government to amend the substantive provisions of the Income Tax Act. Section 4 of the Relaxation Act, which amended the Act, was enacted by the legislature. The Court also found that the impugned notices were invalid for failing to comply with the amended Section 147, which no longer recognizes the 'reason to believe' principle, and for not following the procedure under Section 148A. Furthermore, the Relaxation Act was not applicable to Assessment Years 2015-2016 onwards. Consequently, all impugned notices issued under Section 148 were quashed and set aside. The Assessing Officers were permitted to initiate fresh reassessment proceedings in accordance with the amended provisions of the Act, strictly complying with the procedure. The ratio decidendi is that legislative power to amend substantive provisions of the Income Tax Act cannot be delegated to the executive through notifications under a relaxation provision, and reassessment proceedings must strictly adhere to the amended statutory framework.

The High Court held that the Explanations to Notification No. 20/2021 and Notification No. 38/2021 were ultra vires and therefore bad in law and null and void. The Court agreed with the assessee's submission that Section 3 of the Relaxation Act was only a relaxation provision dealing with time limits and did not empower the Central Government to amend the substantive provisions of the Income Tax Act. Section 4 of the Relaxation Act, which amended the Act, was distinct and made by the Legislature itself. The Court further found that even if the Explanations were considered valid, the notices were still invalid because the Assessing Officers assumed jurisdiction based on the 'reason to believe' concept from the erstwhile Section 147, which is not recognized in the amended Section 147. Moreover, the mandatory procedure under the amended Section 148A was not followed. The Court also noted that the Relaxation Act was not applicable for Assessment Years 2015-2016 or subsequent years. Consequently, all impugned notices issued under Section 148 of the Act were quashed and set aside. The Assessing Officers were permitted to initiate fresh reassessment proceedings in accordance with the amended provisions of the Act, strictly complying with the procedure.

The High Court allowed the writ petitions. It held that the Explanations to Notification No. 20/2021 and Notification No. 38/2021 were ultra vires and therefore bad in law and void. The Court reasoned that Section 3 of the Relaxation Act, which falls under Chapter II titled 'Relaxation of Certain Provisions of Specified Act', was only a relaxation provision dealing with time limits and did not grant the power to amend substantive provisions of the Income Tax Act. Section 4 of the Relaxation Act, which falls under Chapter III titled 'Amendments to the Income Tax Act, 1961', was the provision that amended the Act, and this power was exercised by the legislature itself, not delegated to the Central Government. The Court agreed with the petitioners that Section 3 did not envisage amendments to substantive provisions. Furthermore, the Court found that even if the Explanations were considered valid, the impugned notices were still bad in law because they were issued based on the erstwhile 'reason to believe' concept, which is no longer recognized in the amended Section 147, and because the mandatory procedure under Section 148A was not followed. The Court also held that the Relaxation Act was not applicable to Assessment Years 2015-2016 and subsequent years, as the time limits for issuing notices for these years did not fall within the scope of Section 3(1) of the Relaxation Act. Consequently, all impugned notices were quashed and set aside, with liberty to the Assessing Officers to initiate fresh proceedings in accordance with the amended provisions of the Act.

The High Court allowed the writ petitions. It held that the Explanations to Notification No. 20 of 2021 and Notification No. 38 of 2021 were ultra vires, bad in law, and void. The Court agreed with the petitioners' submission that Section 3 of the Relaxation Act was a relaxation provision for time limits and did not empower the Central Government to amend substantive provisions of the Income Tax Act, unlike Section 4 which made legislative amendments. The Court found that the Explanations sought to give effect to the erstwhile Sections 148, 149, and 151 but did not cover Section 147, which is subject to Sections 148 to 153, including Section 148A. Therefore, even if the Explanations were valid, the procedure under Section 148A was not followed, rendering the notices invalid. The Court also held that the Relaxation Act was not applicable to Assessment Years 2015-2016 and subsequent years, as the time limits for these years were not expiring within the period specified in Section 3(1) of the Relaxation Act. Consequently, all impugned notices issued under Section 148 were quashed and set aside. The Assessing Officers were permitted to initiate fresh reassessment proceedings in accordance with the amended provisions of the Act, strictly complying with the statutory requirements.