Bombay High Court Judgments — 2022

The High Court held that the Explanations to Notification No. 20/2021 and Notification No. 38/2021 were ultra vires and consequently 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. Such amendments were made by the legislature itself under Section 4. The Court found that the Explanations did not cover 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 of Section 148A was not followed, making the notices invalid. Furthermore, 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, after strictly complying with the statutory provisions. The Court relied on the 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, bad in law, and null and void. The Court agreed with the assessee that Section 3 of the Relaxation Act is a relaxation provision for time limits and does not empower the Central Government to amend substantive provisions of the Income Tax Act. Only Section 4 of the Relaxation Act, which was enacted by the legislature itself, amended the Act. The Court found that the impugned notices were bad in law for multiple reasons: (a) the Explanations did not cover Section 147, which is the primary section empowering reopening; (b) the Assessing Officers assumed jurisdiction based on the 'reason to believe' concept, which is no longer recognized in the amended Section 147; (c) the procedure under the amended Section 147 and 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 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 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 or revive repealed sections. 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 considered valid, the impugned notices were invalid as they did not comply with the amended Section 147, which no longer recognized the 'reason to believe' clause, and crucially, 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, as the time limit for issuing notices under Section 148 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, with liberty to the Assessing Officers to initiate fresh proceedings in accordance with the amended 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 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. It noted that Section 4 of the Relaxation Act, which amended provisions of the Act, was distinct and did not involve delegation of amendment powers. The Court further found that even if the Explanations were considered valid, the impugned notices were invalid because the Assessing Officers had assumed jurisdiction based on the 'reason to believe' concept, which is no longer recognized in the amended Section 147, and the mandatory procedure under Section 148A had not been followed. Additionally, the Court held that the Relaxation Act was not applicable for Assessment Years 2015-2016 and 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 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. 20/2021 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 revival of repealed substantive provisions. It noted that Section 4 of the Relaxation Act, which amended the Act, was distinct from Section 3. 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 the empowering section for reopening. Consequently, the procedure under the amended Section 147 and Section 148A was not followed. The Court also held that the Relaxation Act was not applicable to Assessment Years 2015-2016 onwards. 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. 20/2021 and Notification No. 38/2021 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 substantive provisions of the Income Tax Act. Section 4 of the Relaxation Act, which amended the Act, was distinct and did not grant such delegated power. The Court found that the impugned notices were invalid because they were issued based on the repealed 'reason to believe' concept under Section 147 and failed to comply with the mandatory procedure under the amended Section 147 and Section 148A. Additionally, the Court held that the Relaxation Act was not applicable to the assessment years in question. 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.

The High Court held that the Explanations to Notification No. 20/2021 and Notification No. 38/2021 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, 1961. Section 4 of the Relaxation Act, which did amend provisions, was distinct. The Court found that the impugned notices were also invalid for failing to comply with the amended Section 147, which no longer uses the 'reason to believe' criterion, and for not following the mandatory procedure under Section 148A. Furthermore, the Court held that the Relaxation Act was not applicable to Assessment Years 2015-2016 and subsequent years, as the time limits for these years did not fall 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.

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 merely a relaxation provision dealing with time limits and did not empower the Central Government to amend the substantive provisions of the Income Tax Act. It noted that Section 4 of the Relaxation Act, which did amend the Act, was enacted by the legislature itself. The Court further held 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' criterion, which is no longer recognized under the amended Section 147. Additionally, the mandatory procedure under Section 148A, which is part of the amended provisions (Sections 148 to 153), had not been followed. The Court also found that the Relaxation Act was not applicable to 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 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 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. Such amendments were made by the legislature itself under Section 4. The Court agreed with the assessee that only Section 4 amended the Act. Furthermore, the Court 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 no longer recognized the 'reason to believe' concept, and also failed to follow 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 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 amend the 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 invalid because they did not comply with the amended Section 147, which no longer recognizes the concept of 'reason to believe' for assuming jurisdiction, 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 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, after 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 thus 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. Section 4 of the Relaxation Act, which did amend the Act, did not grant such power. The Court found that the notices were bad in law for multiple reasons: (a) the Explanations were invalid; (b) the notices were based on the 'reason to believe' concept, which is no longer in the amended Section 147; (c) the procedure under Section 148A was not followed; and (d) the Relaxation Act was not applicable to 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.

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 substantive provisions of the Income Tax Act, 1961. Section 4 of the Relaxation Act, which did amend provisions, was made by the legislature itself. The Court further noted that even if the Explanations were considered valid, they did not cover the erstwhile Section 147, and the procedure under the amended Section 147, including Section 148A, 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. 20/2021 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 for 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 made by the legislature. The Court further noted that even if the Explanations were considered valid, they did not cover Section 147 of the Act, which is subject to Sections 148 to 153, including the mandatory procedure under Section 148A. Since Section 148A was not followed, the notices were invalid. Additionally, the Court found 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 amended provisions of the Act, strictly complying with its 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 the substantive provisions of the 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 they relied on the 'reason to believe' concept from the erstwhile Section 147, which is no longer recognized in the amended Section 147. Additionally, 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. 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 agreed with the assessee's submission that Section 3 of the Relaxation Act is a relaxation provision dealing with time limits and does not empower the Central Government to amend the substantive provisions of the Income Tax Act. 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 still invalid because they did not comply with the amended Section 147 of the Act. Specifically, the assumption of jurisdiction was based on the 'reason to believe' concept, which is obsolete 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 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 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, 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 empower the Central Government 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. 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 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. The Court also noted that the Relaxation Act was not applicable for Assessment Years 2015-2016 onwards as the time limits for issuing notices 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 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. 20/2021 and Notification No. 38/2021 were 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 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 was the provision that amended the Act. The Court found that the impugned notices were bad in law because they were issued based on the repealed 'reason to believe' criterion under the erstwhile Section 147 and failed to comply with the mandatory procedure prescribed under the amended Section 147 and 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 were not expiring within the period of relaxation. 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.

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 a relaxation provision dealing with time limits and did not empower amendments to substantive provisions of the Income Tax Act, which was the domain of Section 4. The Court found that the Explanations sought to give effect to the erstwhile provisions of Sections 148, 149, and 151, but did not cover 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 under Section 148A, which 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 under Section 148 for these years was not expiring within the period for which Section 3(1) of the Relaxation Act was applicable. 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 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 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 of the Relaxation Act did so. The Court further found that even if the Explanations were considered 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. Additionally, the Court noted that the Relaxation Act was not applicable for Assessment Years 2015-2016 or subsequent years, as the time limits for those years were not expiring within the period covered by 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.

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 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 invalid because they did not comply with the amended Section 147 of the Income Tax Act, particularly by failing to follow the procedure under Section 148A and by relying on the 'reason to believe' concept. The Court also noted 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 provisions of the Act as amended by the Finance Act, 2021, after strictly complying with the statutory procedures. The Court was in respectful agreement with the views taken by 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, bad in law, and void. The Court agreed with the Assessee 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. The Court further held 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 requires compliance with 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 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 was only a provision for relaxing time limits and did not grant the power to amend substantive provisions of the Income Tax Act. Such amendments were only provided for under Section 4 of the Relaxation Act. Furthermore, the Court found 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 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 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 procedures. The ratio decidendi is that legislative amendments to the Income Tax Act cannot be effected through executive notifications purporting to relax provisions, and reassessment proceedings must strictly adhere to the amended statutory framework.

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, bad in law, and null and void. The Court agreed with the assessee's submission 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 empower the Central Government to amend substantive provisions of the Income Tax Act. It distinguished this from Section 4 of the Relaxation Act, which made legislative amendments. The Court found that the Explanations sought to revive repealed provisions without legislative backing. Furthermore, even if the Explanations were considered valid, the impugned notices were still invalid as they did not comply with the amended Section 147 (which removed the 'reason to believe' requirement) 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 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 of 2021 and Notification No. 38 of 2021 were ultra vires and therefore bad in law and void. The Court agreed with the assessees' submission that Section 3 of the Relaxation Act was a provision dealing with time limits and did not empower the Central Government to amend or revive substantive provisions of the Income Tax Act. Section 4 of the Relaxation Act was the provision that amended the Act, and no such power was delegated to the Central Government under Section 3. The Court further found that even if the Explanations were considered valid, the impugned notices were invalid because they failed to 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 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 provisions of the Act as amended by the Finance Act, 2021, strictly complying with the statutory provisions. The Court was in respectful agreement with the views taken by the Allahabad High Court, Rajasthan High Court, Delhi High Court, and Madras High Court in similar matters.

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. Section 4 of the Relaxation Act, which amended the Act, was legislatively enacted. The Court also found that even if the Explanations were considered valid, they did not cover Section 147, which is the basis for assuming jurisdiction for reopening. Consequently, the procedure under the amended Section 147 and Section 148A was not followed. The Court further noted that the Relaxation Act was not applicable for Assessment Years 2015-2016 or subsequent years. 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 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, which falls under the chapter titled 'Relaxation of Certain Provisions of Specified Act', is a relaxation provision dealing with time limits and does not empower the Central Government to amend the substantive provisions of the Income Tax Act. Only Section 4 of the Relaxation Act, which falls under the chapter titled 'Amendments to the Income Tax Act, 1961', was intended to amend the Act. The Court further 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' criterion, which is no longer recognized under the amended Section 147, 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 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 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 made by the Legislature itself, and no such power was delegated to the Central Government. 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 requires compliance with 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. Furthermore, 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 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 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 provisions, was distinct. Furthermore, the Court found 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 (which replaced 'reason to believe' with a new regime) 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 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 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 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 of the Act, which requires compliance with Section 148A and no longer relies on the 'reason to believe' criterion. Additionally, the Court 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 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 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 enacted by the legislature itself. The Court also found that the impugned notices were bad in law because they were issued on the basis of the Assessing Officer's 'reason to believe' (a concept no longer recognized in the amended Section 147) and failed to comply with the procedure under Section 148A, which is mandatory under the amended provisions. The Court further 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 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 the Central Government to amend the substantive provisions of the Income Tax Act. 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 they were issued based on the erstwhile Section 147 (requiring 'reason to believe') and failed to comply with the mandatory procedure under the amended Section 147 and 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 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 provisions. The Court was in respectful agreement with the High Courts of Allahabad, Rajasthan, Delhi, and Madras.

The High Court held that Section 3 of the Relaxation Act, which falls under Chapter II titled ‘Relaxation of Certain Provisions of Specified Act’, was solely 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. In contrast, 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 was done by the Legislature itself. Therefore, the Court agreed with the assessee that Section 3 did not envisage amendments to the substantive provisions. The Court further held that even if the Explanations in the notifications were considered valid, the impugned notices were bad in law because they did not cover the erstwhile Section 147 of the Act and failed to comply with the amended Section 147, which is subject to Sections 148 to 153, including the procedure under Section 148A. The Court also found that the Relaxation Act was not applicable for Assessment Years 2015-2016 or subsequent years. Consequently, the Explanations to Notification No. 20 of 2021 and Notification No. 38 of 2021 were declared ultra vires, bad in law, null, and void. 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 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 for relaxing time limits and did not grant the power to amend 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 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 crucially, the mandatory procedure under the amended Section 147, including Section 148A, had not been followed. The Court also found that the Relaxation Act was not applicable to Assessment Years 2015-2016 or subsequent years. 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, which falls under Chapter II titled ‘Relaxation of Certain Provisions of Specified Act’, only deals with relaxation of time limits and does not empower the Central Government to amend substantive provisions of the Income Tax Act. Chapter III, containing Section 4, is titled ‘Amendments to the Income Tax Act, 1961’, indicating that amendments were to be made by the Legislature itself. The Court found that the Explanations sought to give effect to the erstwhile provisions of Sections 148, 149, and 151, but did not cover Section 147, which is the enabling provision for reopening. Furthermore, even if the Explanations were valid, 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 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 provisions of the Act as amended by the Finance Act, 2021, after 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 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 the substantive provisions of the Income Tax Act. It noted that Section 4 of the Relaxation Act was the provision that amended the Act, and such amendments were made by the Legislature itself. The Court further found that even if the Explanations were considered valid, they did not cover the erstwhile Section 147, which is crucial for assuming jurisdiction to reopen assessments. The Court also noted that the procedure under the amended Section 147, including Section 148A, was not followed. Additionally, the Court held that the Relaxation Act was not applicable to Assessment Years 2015-2016 and 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 provisions. The Court was in respectful agreement with the views taken by the Allahabad High Court, Rajasthan High Court, Delhi High Court, and Madras High Court in similar matters.

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 reasoned that Section 3 of the Relaxation Act, which falls under the chapter titled 'Relaxation of Certain Provisions of Specified Act', was a provision dealing with time limits and did not grant the power to amend substantive provisions of the Income Tax Act. This power was vested in Section 4 of the Relaxation Act, which was enacted by the legislature itself. The Court agreed with the petitioners that Section 3 did not envisage amendments to the substantive provisions. Furthermore, the Court found that even if the Explanations were valid, the impugned 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 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.

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 reasoned that Section 3 of the Relaxation Act, which falls 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 Central Government the power to amend substantive provisions of the Act or revive repealed sections. In contrast, Section 4 of the Relaxation Act, which fell under the chapter titled ‘Amendments to the Income Tax Act, 1961’, was the provision that actually amended the Act, and this was done by the Legislature itself. 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 Section 147's 'reason to believe' criterion, 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 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.

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 assessee's 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 the power to amend substantive provisions of the Income Tax Act. Chapter III of the Relaxation Act, which contains amendments to the Income Tax Act, was enacted by the legislature itself, not delegated to the Central Government. Furthermore, the Court 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 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 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 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 amendments to substantive provisions of the Income Tax Act, unlike Section 4. The Court found that the Explanations sought to revive repealed provisions without legislative backing. Furthermore, the Court held that even if the Explanations were considered valid, the impugned notices were bad in law because they were issued based on the erstwhile 'reason to believe' concept 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 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 consequently 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 power to amend the substantive provisions of the Income Tax Act. Section 4 of the Relaxation Act, which made amendments, was enacted by the legislature. Furthermore, even if the Explanations were considered valid, the notices were still bad in law because they did not comply with the amended Section 147 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 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, 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 consequently bad in law and void. The Court reasoned 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. Such amendments were made by the legislature itself under Section 4 of the Relaxation Act. The Court also noted that the Explanations did not cover Section 147, which is crucial for assuming jurisdiction, and that the procedure under the amended Section 147, including Section 148A, was not followed. Additionally, the Court found that the Relaxation Act was not applicable for Assessment Years 2015-2016 onwards. 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 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 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. The Court found that the impugned notices were bad in law for multiple reasons: (a) they were issued based on the 'reason to believe' concept, which is no longer recognized in the amended Section 147; (b) 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 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 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 only a relaxation provision dealing with time limits and did not 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 provisions of Sections 148, 149, and 151 but did not cover 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. Furthermore, the amended Section 147 is subject to Sections 148 to 153, including the procedure under Section 148A, which 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 limits for these years were not expiring within the period for which Section 3(1) of the Relaxation Act was applicable. 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 amended provisions of the Act, strictly complying with the procedure.

The High Court allowed the writ petitions, holding that the Explanations to Notification No. 20/2021 and Notification No. 38/2021 are ultra vires, bad in law, and void. The Court agreed with the assessee's submission that Section 3 of the Relaxation Act is a relaxation provision for time limits and does not empower the Central Government to amend substantive provisions of the Income Tax Act. Section 4 of the Relaxation Act, which amends the Act, was enacted by the legislature. The Court found that the impugned notices were bad in law for multiple reasons: (a) the Explanations did not cover Section 147, which is the foundation for reopening, and thus the Assessing Officers could not assume jurisdiction based on the old 'reason to believe' concept; (b) the mandatory procedure under Section 148A was not followed, rendering the notices invalid even if the Explanations were valid; and (c) 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 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, unlike Section 4. The Court further held that even if the Explanations were considered valid, the impugned notices were invalid because they were issued without complying with the amended Section 147, which no longer recognizes the concept of 'reason to believe', and without following the mandatory procedure laid down in 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 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 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. 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, 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 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 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. 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 empowers reopening 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 for Assessment Years 2015-2016 or any subsequent year, as the time limit for issuing notices under Section 148 for these years was not expiring within the period for which Section 3(1) of the Relaxation Act was applicable. 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, bad in law, and null and void. The Court agreed with the assessee's submission that Section 3 of the Relaxation Act was merely a provision for relaxing 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 Explanations sought to extend the applicability of repealed provisions (erstwhile Sections 148, 149, and 151) without covering Section 147, which mandates compliance with Sections 148 to 153, including the procedure under Section 148A. Therefore, even if the Explanations were valid, the notices were invalid for not following the procedure under Section 148A. 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 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 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 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, and no such amendments 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 did not comply with the amended Section 147, which no longer recognizes the concept of 'reason to believe,' 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 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 allowed the writ petitions. It held that the Explanations to Notification No. 20/2021 and Notification No. 38/2021 were 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 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. Only Section 4 of the Relaxation Act contained such amendments. Furthermore, the Court found that the impugned notices were invalid for non-compliance with the amended Section 147, which no longer recognizes the 'reason to believe' concept, and for failing to follow the mandatory procedure under Section 148A. The Court also noted 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 amended provisions of the Act.