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 therefore bad in law 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 actually amended the Act. The Court found that the Assessing Officers had failed to comply with the amended Section 147, as their assumption of jurisdiction was based on the 'reason to believe' concept, which is no longer recognized, and 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 procedure.

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 amendments to substantive provisions of the Income Tax Act, unlike Section 4. The Court found that the notices were invalid for multiple reasons: (a) they were issued based on the repealed concept of 'reason to believe' under the erstwhile Section 147, whereas the amended Section 147 did not recognize this; (b) the mandatory procedure under Section 148A, which is part of the amended provisions (Sections 148 to 153), 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 relaxation period. 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 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 that Section 3 of the Relaxation 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. It was noted that Section 4 of the Relaxation Act, which amended the Act, was distinct from Section 3. 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 requires compliance with Sections 148 to 153, including the procedure under Section 148A. The Court also noted that the 'reason to believe' clause, a concept from the repealed provisions, was wrongly invoked. 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, 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 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. Furthermore, the Court found that even if the Explanations were considered valid, the impugned notices were still invalid because the Assessing Officers had assumed jurisdiction based on the 'reason to believe' clause, which is no longer recognized under the amended Section 147, and had failed to comply with 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. 20/2021 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 provisions of 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. 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, with liberty to the Assessing Officers to initiate fresh proceedings in accordance with the amended provisions.

The Bombay 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 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. It noted that Section 4 of the Relaxation Act was the relevant section for amendments. 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, which no longer recognized the concept of 'reason to believe' for assuming jurisdiction, and also failed to comply with the procedure under Section 148A. Additionally, the Court held 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 decisions of the Allahabad, Rajasthan, Delhi, and Madras High Courts on similar issues.

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 only a relaxation provision dealing with time limits and did not empower amendments to the substantive provisions of the Income Tax Act. Chapter III, specifically Section 4, dealt with amendments to the Income Tax Act. The Court agreed with the assessee that Section 3 did not envisage amendments to the substantive provisions. Furthermore, the Court found that the Explanations in the notifications did not cover Section 147 of the Act, which is crucial for assuming jurisdiction. 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 procedure under the amended Section 147, including Section 148A, was not followed. The Court also noted that the Relaxation Act was not applicable to 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 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, 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 grant the power to amend substantive provisions of the Income Tax Act, 1961. 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 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 to 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 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 of 2021 and Notification No. 38 of 2021 were ultra vires the Relaxation Act 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 for time limits and did not grant the power to amend 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 Sections 148, 149, and 151 but did not cover Section 147, which empowers reopening subject to Sections 148 to 153, including Section 148A. Consequently, the procedure under Section 148A was not followed, rendering the notices invalid. The Court also noted that the Relaxation Act was not applicable to 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 statutory requirements. 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 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 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 noted that 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: (a) the Explanations to the notifications were invalid; (b) even if the Explanations were valid, the notices did not comply with the amended Section 147, which no longer relies on 'reason to believe', and the mandatory procedure under Section 148A was not followed; and (c) the Relaxation Act was not applicable to assessment years 2015-2016 onwards. 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 Court relied on decisions of the Allahabad, Rajasthan, Delhi, and Madras High Courts.

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 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 notices were bad in law for multiple reasons: (a) the Explanations did not cover the erstwhile Section 147, which empowers revenue to reopen subject to Sections 148 to 153, including Section 148A, and the procedure under Section 148A was not followed; (b) the assumption of jurisdiction was based on the 'reason to believe' concept, which is no longer recognized in the amended Section 147; 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 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 assessee 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) they were issued based on the repealed concept of 'reason to believe' under Section 147, which is no longer recognized in the amended Section 147; (b) the amended Section 147 is subject to Sections 148 to 153, including the mandatory procedure under Section 148A, which was not followed; (c) Section 297 of the Act, which provides a saving clause for the repealed 1922 Act, has no equivalent for the erstwhile Sections 147 to 151 of the 1961 Act; and (d) the Relaxation Act was not applicable for Assessment Years 2015-2016 onwards as the time limits 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, 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 reasoned that Section 3 of the Relaxation Act, which fell under the chapter '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. In contrast, Section 4 of the Relaxation Act, which amended provisions of the Act, fell under the chapter 'Amendments to the Income Tax Act, 1961', indicating that amendments were made by the legislature itself and not delegated to the Central Government. The Court agreed with the petitioners that only Section 4 amended the Act. Furthermore, the Court found that even if the Explanations were valid, the impugned notices were bad in law because they were issued based on the erstwhile Section 147's 'reason to believe' concept, which was no longer recognized in the amended Section 147. Additionally, the mandatory procedure under the amended Section 148A had not been followed. The Court also held that the Relaxation Act was not applicable to Assessment Years 2015-2016 or 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 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 petitioners' submission that Section 3 of the Relaxation Act was merely 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 provisions, was distinct and not applicable here. The Court found 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. 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 law. 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 procedural compliances under amended provisions must be strictly followed.

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. 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, not delegated to the Central Government. Furthermore, the Court found that even if the Explanations were considered valid, the impugned notices were still invalid because the procedure under the amended Section 147 and Section 148A had not been followed. The Court also noted that the Relaxation Act was not applicable for Assessment Years 2015-2016 or 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 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 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 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 requires compliance with Section 148A and no longer relies on the 'reason to believe' criterion. 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.

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 was the provision that amended the Act. The Court found that the Explanations sought to apply 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. 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 amended provisions of the Act, strictly complying with the statutory requirements, including Section 148A.

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 petitioners that Section 3 of the Relaxation Act was a provision for relaxing time limits and did not grant the power to amend or revive repealed substantive provisions of the Income Tax Act. It distinguished Section 3 from Section 4 of the Relaxation Act, which did introduce legislative amendments. The Court found that the Explanations attempted to give effect to the erstwhile Sections 148, 149, and 151, but crucially, did not cover the erstwhile Section 147. Therefore, even if the Explanations were valid, the assumption of jurisdiction by the Assessing Officer was based on the 'reason to believe' concept, which was no longer recognized in the amended Section 147. Moreover, the amended Section 147 is subject to Sections 148 to 153, including the mandatory procedure under Section 148A, which was not followed. The Court also noted that the Relaxation Act was not applicable to assessment years from 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 the Central Government to amend substantive provisions of the Income Tax Act, unlike Section 4 which contained legislative amendments. The Court found that the notices issued under Section 148 were bad in law for multiple reasons: (a) the Explanations did not cover the erstwhile Section 147, which is a substantive provision for reopening; (b) the amended Section 147 requires compliance with Sections 148 to 153, including the procedure under Section 148A, which was not followed; (c) the concept of 'reason to believe' used in the notices was no longer recognized under the amended Section 147; and (d) the Relaxation Act was not applicable to Assessment Years 2015-2016 onwards. 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 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 or revive repealed sections. The Court noted that Section 4 of the Relaxation Act, which did amend the Act, was enacted by the legislature directly. Furthermore, the Court found that even if the Explanations were considered valid, the impugned notices were still invalid as they did not comply with the amended Section 147 (which does not recognize 'reason to believe') and failed to follow the mandatory procedure under Section 148A. 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 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 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. It noted that Section 4 of the Relaxation Act, which did amend the Act, was enacted by the legislature itself. Furthermore, the Court found that even if the Explanations were considered valid, the impugned notices were invalid because they failed to comply with the amended Section 147 of the Act, which mandates adherence to Sections 148 to 153, including the 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, with liberty to the Assessing Officers to initiate fresh 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 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 empower the Central Government to amend the substantive provisions of the Income Tax Act. In contrast, Section 4 of the Relaxation Act, which amended the Act, was in a different chapter and was enacted by the legislature itself. The Court agreed with the petitioners 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 were issued based on the erstwhile Section 147 ('reason to believe') and 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 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, 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. Section 4 of the Relaxation Act was the provision that amended the Act, and no such power to amend was delegated to the Central Government under Section 3. The Court found that the impugned notices were invalid for multiple reasons: (a) the Explanations were declared ultra vires; (b) the notices were based on the 'reason to believe' concept, which is no longer recognized 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. The Court allowed the Assessing Officers 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 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, unlike Section 4 which did. The Court found that the impugned notices were bad in law because they were issued based on the repealed 'reason to believe' concept under Section 147 and failed to comply with the mandatory procedure under Section 148A, which is part of the amended provisions. 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. 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 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 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 grant the power to amend or revive 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 repealed provisions, including Section 147, which was not permissible. Furthermore, the Court noted that even if the Explanations were considered valid, the notices were still invalid as they did not comply with the amended Section 147 (which replaced 'reason to believe' with a different standard) and failed to follow the mandatory procedure under Section 148A. The Court also held 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 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 the substantive provisions of the Income Tax Act, unlike Section 4 which did so. The Court found that the impugned notices were bad in law for multiple reasons. Firstly, the assumption of jurisdiction was based on the 'reason to believe' clause from the repealed Section 147, which is no longer recognized in the amended Section 147. Secondly, the amended Section 147 is subject to Sections 148 to 153, including the mandatory procedure under Section 148A, which was not followed. Thirdly, 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, the Court quashed and set aside all impugned notices issued under Section 148. 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 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 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 was the provision 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 did not comply with the amended Section 147, which is subject to Sections 148 to 153, including the procedure under Section 148A, which 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, 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' submission that Section 3 of the Relaxation Act was merely 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 legislative 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 Act, as the concept of 'reason to believe' was no longer recognized and the procedure under Section 148A had not been 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 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 assessee's submission that Section 3 of the Relaxation Act was merely 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 was the only provision that amended the Act, and this was done by the legislature itself. 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 requires following 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 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, bad in law, and null and void. The Court agreed with the petitioners that Section 3 of the Relaxation Act was only a relaxation provision for time limits and did not empower the Central Government to amend substantive provisions of the Income Tax Act. It noted that Section 4 of the Relaxation Act, which did amend the Act, was distinct and made by the legislature. The Court found that the impugned notices were invalid because they were issued based on the 'reason to believe' under the repealed Section 147, and the mandatory procedure under the amended Section 147, including Section 148A, was not followed. The Court also held that the Relaxation Act was not applicable for Assessment Years 2015-2016 or subsequent years, as the time limit for issuing notices for these years was not expiring within the period covered by 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.

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 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 made 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. Additionally, the procedure under Section 148A, which is part of the amended provisions (Sections 148 to 153), 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 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 petitioners 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. 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 the empowering section for reopening. Consequently, the notices issued were bad in law because they were 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 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. 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 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 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 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 uses 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 or 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 law.

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 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 substantive provisions or revive repealed sections. Section 4 of the Relaxation Act, which amends the Income Tax Act, was made by the legislature itself, not delegated. The Court also found that the impugned notices were bad in law because the Explanations did not cover Section 147, which empowers the revenue to reopen subject to Sections 148 to 153, including Section 148A. The procedure under Section 148A was not followed. Additionally, the Court noted that the Relaxation Act is 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.

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', was 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 falls under Chapter III titled 'Amendments to the Income Tax Act, 1961', was the section that amended the Act, and such amendments were made by the legislature itself, not delegated to the Central Government. Therefore, 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 valid, the impugned notices were bad in law as they were issued based on the erstwhile Section 147's 'reason to believe' 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 noted that the Relaxation Act was not applicable for Assessment Years 2015-2016 onwards. 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. 20/2021 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 grant the power to amend or revive substantive provisions of the Income Tax Act. This power was distinct from Section 4 of the Relaxation Act, which did amend certain provisions. The Court further agreed with the petitioners 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 under Section 147, 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 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.

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 contention 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 substantive provisions of the Income Tax Act. 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, they did not cover Section 147 of the Act, which is the provision empowering the revenue to reopen assessments. The assumption of jurisdiction by the Assessing Officer was based on the repealed 'reason to believe' concept, 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 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, 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 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 found that the impugned notices were bad in law not only because the Explanations were invalid but also because the Assessing Officers had failed to 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 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 ratio decidendi is that notifications issued under Section 3 of the Relaxation Act cannot override or amend the substantive provisions of the Income Tax Act, and reassessment proceedings must strictly adhere to the applicable statutory provisions and 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 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 which did amend the Act. The Court found that the notices were invalid for multiple reasons: (a) the Explanations did not cover the erstwhile Section 147, which is the foundation for reopening; (b) even if the Explanations were valid, the procedure under the amended Section 147, including the mandatory compliance with 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 these years were not expiring within the period covered by 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.

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 void. The Court reasoned that Section 3 of the Relaxation Act, which falls under the chapter 'Relaxation of Certain Provisions of Specified Act,' was intended for time limits and did not grant the power to amend substantive provisions of the Income Tax Act. This power was not delegated to the Central Government. The Court agreed with the petitioners that only Section 4 of the Relaxation Act amended the Act. 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' 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 noted 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 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, strictly complying with the statutory requirements. The judgment was based on the reasoning of various High Courts, including Allahabad, Rajasthan, Delhi, and Madras.

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 reasoned that Section 3 of the Relaxation Act, which falls under Chapter II titled ‘Relaxation of Certain Provisions of Specified Act’, is a relaxation provision dealing with time limits and does not grant the Central Government the power to amend substantive provisions of the Income Tax Act. This power was vested in the legislature itself through Section 4 of the Relaxation Act. The Court further agreed with the assessee's submission that even if the Explanations were considered valid, they did not cover Section 147 of the Act, which empowers the revenue to reopen assessments. Consequently, the procedure under the amended Section 147, including Section 148A, was not followed. The Court also found 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, 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 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 the substantive provisions of the Income Tax Act, unlike Section 4 which contained legislative amendments. The Court found that the notices were also bad in law because they were issued based on the erstwhile Section 147's 'reason to believe' concept, which is no longer recognized in the amended Section 147. Additionally, the mandatory procedure under Section 148A, as part of the amended reassessment provisions, was not followed. The Court also held that the Relaxation Act was not applicable for Assessment Years 2015-2016 onwards, as the time limits 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 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. 20/2021 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 found that the impugned notices were bad in law for multiple reasons. Firstly, the Explanations did not cover the erstwhile Section 147, which is the foundation for reopening. Secondly, even if the Explanations were valid, the Assessing Officers failed to comply with the amended Section 147 (which replaced 'reason to believe' with a new regime) and the mandatory procedure under Section 148A. Thirdly, 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 were quashed and set aside. The Court permitted 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 the Relaxation Act and therefore bad in law and void. The Court agreed with the petitioners that Section 3 of the Relaxation Act was primarily for relaxing time limits and did not grant power to amend substantive provisions of the Income Tax Act. It noted that Section 4 of the Relaxation Act was the section that amended the Act. The Court found that the notices were also bad in law for non-compliance with the amended Section 147, which no longer recognized the concept of 'reason to believe,' and for failing to follow the procedure under Section 148A. Additionally, the Court 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. 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 that Section 3 of the Relaxation Act was a relaxation provision dealing with time limits and did not grant power to amend substantive provisions of the Income Tax Act, unlike Section 4 which contained 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 notices were still invalid as they did not comply with the amended Section 147, which replaced the 'reason to believe' requirement, and failed to adhere to the mandatory procedure under Section 148A. The Court also noted that the Relaxation Act was not applicable to Assessment Years 2015-2016 and subsequent years. 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 Bombay 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 amendments to substantive provisions of the Income Tax Act, unlike Section 4. The Court found that 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 Court noted that the procedure under the amended Section 147, which is subject to Sections 148 to 153 (including Section 148A), had not been followed. The Court also held 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 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 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 in Section 148A, which 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, 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 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, which was only done by Section 4 of the Relaxation 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, which no longer recognizes the 'reason to believe' concept, and failed to follow the procedure under Section 148A. 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, 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, 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 relaxation provision dealing with time limits and did not empower the Central Government 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 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' concept, which is no longer recognized in the amended Section 147, and because the mandatory procedure under the amended 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 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 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 relaxation of time limits and did not grant power to amend substantive provisions of the Income Tax Act, unlike Section 4. The Court found that even if the Explanations were valid, the impugned notices were invalid because they were issued based on the erstwhile Section 147 ('reason to believe') and failed to comply with the amended Section 147 and the mandatory procedure under Section 148A. Additionally, 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 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 Court was in respectful agreement with the views taken by the Allahabad, Rajasthan, Delhi, and Madras High Courts.