Bombay High Court Judgments — 2022

The High Court held 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 contention that Section 3 of the Relaxation Act, which falls under the chapter 'Relaxation of Certain Provisions of Specified Act', does not grant the power to amend substantive provisions of the Income Tax Act. Such power, if any, would be in Chapter III, which deals with 'Amendments to the Income Tax Act, 1961'. The Court found that Section 3 was only a relaxation provision for time limits. Furthermore, the Court held that even if the Explanations were valid, the notices would still be invalid because the Assessing Officers assumed jurisdiction based on 'reason to believe' (an erstwhile concept) and failed to follow the mandatory procedure under the amended Section 147 and Section 148A. The Court also noted that 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 of the Act.

The High Court held that the Explanations to Notification No. 20/2021 and Notification No. 38/2021 were ultra vires and bad in law. The Court agreed with the petitioners that Section 3 of the Relaxation Act was merely a provision for relaxing time limits and did not grant the power 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 The Court found that the impugned notices were invalid because they were issued based on the repealed provisions and failed to comply with the amended Section 147, which no longer requires 'reason to believe', and also did not follow the mandatory procedure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 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 of 2021 and Notification No. 38 of 2021 are ultra vires, bad in law, and null and void. The Court agreed with the petitioners' submission that Section 3 of the Relaxation Act 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 Assessing Officers assumed jurisdiction based on 'reason to believe,' which is no longer recognized under 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 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 High Court held that the Explanations to Notification No. 20/2021 and Notification No. 38/2021 were ultra vires and therefore bad in law and void. The Court agreed with the petitioners' submission that Section 3 of the Relaxation Act was a relaxation provision dealing with time limits and did not empower the Central Government to amend the 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 invalid because they were issued based on the 'reason to believe' concept from the erstwhile Section 147, which is not recognized in the amended Section 147. Additionally, the mandatory procedure under the amended Section 148A was not followed. 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 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 Nos. 20/2021 and 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 merely a relaxation provision dealing with time limits and did not grant the power to amend substantive provisions of the Income Tax Act. Section 4 of the Relaxation Act 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, which requires adherence to Sections 148 to 153, including the procedure under Section 148A. The Court also noted that the Relaxation Act was not applicable for Assessment Years 2015-2016 onwards, as the time limits for these years were not expiring within the period covered by Section 3(1) of the Relaxation Act. Consequently, all the impugned notices issued under Section 148 of the Act were quashed and set aside. The Assessing Officers were permitted to initiate fresh reassessment proceedings in accordance with the amended provisions of the Act, strictly complying with the statutory procedures.

The High Court held that the Explanations to Notification No. 20/2021 and Notification No. 38/2021 were ultra vires and therefore bad in law and null and void. The Court 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 or revive substantive provisions of the Income Tax Act that had been repealed. The Court 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 did not comply with the amended Section 147 of the Act, which mandates adherence to Sections 148 to 153, including the procedure under Section 148A. The 'reason to believe' basis for assumption of jurisdiction was also found to be obsolete under the amended provisions. 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 after strictly complying with them. The ratio decidendi is that statutory notifications cannot override or revive repealed substantive provisions of an Act, and reassessment proceedings must strictly follow the applicable 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 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 invalid because the Assessing Officers had assumed jurisdiction based on the 'reason to believe' clause, which is no longer recognized in the amended Section 147, and the mandatory procedure under Section 148A had not been followed. Additionally, the Court noted that the Relaxation Act was not applicable for Assessment Years 2015-2016 or any subsequent year. 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 Nos. 20/2021 and 38/2021 were ultra vires and therefore bad in law and null and void. The Court agreed with the petitioners that Section 3 of the Relaxation Act was a relaxation provision dealing with time limits and did not empower amendments to substantive provisions of the Act, which was done by Section 4. The Court found that the impugned notices were bad in law for multiple reasons: (a) the assumption of jurisdiction was based on the 'reason to believe' concept, which is no longer recognized in the amended Section 147; (b) the amended Section 147 is subject to Sections 148 to 153, including the procedure in Section 148A, which was not followed; and (c) the Relaxation Act was not applicable for Assessment Years 2015-2016 or subsequent years, 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. 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’, is a provision dealing with time limits and does not empower the Central Government to amend the substantive provisions of the Income Tax Act. Amendments to the Act are provided for in Section 4, which falls under Chapter III titled ‘Amendments to the Income Tax Act, 1961’, and these amendments were made by the Legislature itself. Therefore, 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 reassessment notices were invalid because they did not comply with the amended Section 147, which requires adherence to Sections 148 to 153, including the procedure under Section 148A. The assumption of jurisdiction based on 'reason to believe' was also found to be contrary to the amended Section 147. The Court also noted that the Relaxation Act was not applicable for Assessment Years 2015-2016 onwards. Consequently, all impugned notices issued under Section 148 were quashed and set aside. The Assessing Officers were permitted to initiate fresh reassessment proceedings in accordance with the amended provisions of the Act, strictly complying with the statutory requirements. The Court was in respectful agreement with the views taken by the Allahabad High Court, Rajasthan High Court, Delhi High Court, and Madras High Court.

The High Court held that the Explanations to Notification No. 20/2021 and Notification No. 38/2021 were ultra vires and therefore bad in law and null and void. The Court agreed with the assessee's submission that Section 3 of the Relaxation Act was only a relaxation provision dealing with time limits and did not envisage amendments to the substantive provisions of the Income Tax Act, unlike Section 4 of the Relaxation Act which was enacted by the legislature itself. 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 the revenue to reopen assessments subject to Sections 148 to 153, including Section 148A. Therefore, even if the Explanations were valid, the procedure under Section 148A was not followed, rendering the notices invalid. The Court also noted that the Relaxation Act was not applicable for Assessment Years 2015-2016 or any subsequent year, as the time limits for issuing notices for these years did not fall within the scope of Section 3(1) of the Relaxation Act. Consequently, all impugned notices issued under Section 148 of the Act were quashed and set aside. The Assessing Officers were permitted to initiate fresh reassessment proceedings in accordance with the amended provisions of the Act, strictly complying with the relevant 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 petitioners' submission that Section 3 of the Relaxation Act was a relaxation provision for time limits and did not empower the Central Government to amend substantive provisions of the Income Tax Act. Section 4 of the Relaxation Act, which amended the Act, did not delegate such power to the Central Government. The Court found that the notices were also invalid because they were issued based on the concept of 'reason to believe,' 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, strictly complying with its procedures. The Court was in respectful agreement with the views 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, bad in law, and null and void. The Court agreed with the Assessee's contention that Section 3 of the Relaxation Act was a relaxation provision dealing with time limits and did not empower the Central Government to amend substantive provisions of the Income Tax Act or revive repealed sections. Section 4 of the Relaxation Act, which did amend provisions, was enacted by the legislature itself. The Court also found that even if the Explanations were valid, the impugned notices were bad in law because they did not comply with the amended Section 147, which no longer recognizes the 'reason to believe' concept, and failed to follow the procedure under Section 148A. Furthermore, 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 amended provisions of the Act, strictly complying with the law. The Court relied on decisions from the Allahabad, Rajasthan, Delhi, and Madras High Courts.

The High Court held that the Explanations to Notification No. 20 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 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 the substantive provisions of the Income Tax Act. In contrast, Section 4 of the Relaxation Act, which fell under Chapter III titled ‘Amendments to the Income Tax Act, 1961’, was the provision that amended the Act. The Court agreed with the petitioners that only Section 4 amended the Act, and no such amendments were envisaged under Section 3. Furthermore, the Court found that even if the Explanations were considered valid, the impugned notices were still bad in law. This was because the Explanations did not cover Section 147 of the Act, which is the provision empowering the revenue to reopen assessments. The Court noted that the Assessing Officers assumed jurisdiction based on the 'reason to believe' concept, which is no longer recognized in the amended Section 147, and that the procedure under the amended Section 147 and Section 148A was not followed. Additionally, the Court held that the Relaxation Act was not applicable for Assessment Years 2015-2016 or any subsequent year, as the time limit for issuing notices for these years was not expiring within the period for which Section 3(1) of the Relaxation Act was applicable. Consequently, all impugned notices 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 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 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. Section 4 of the Relaxation Act, which did amend the Act, was enacted by the legislature directly. 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' concept, which is no longer recognized under the amended Section 147, and the procedure under Section 148A was not followed. Additionally, the Court noted that the Relaxation Act was not applicable to Assessment Years 2015-2016 onwards. Consequently, all impugned notices issued under Section 148 were quashed and set aside, with liberty to the Assessing Officers to initiate fresh reassessment proceedings in accordance with the amended provisions of the Act.

The High Court held that the Explanations to Notification No. 20/2021 and Notification No. 38/2021 were ultra vires and therefore bad in law and 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 contained such amendments. 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 Section 148A, which is part of the amended provisions and applicable to reassessment proceedings, was not followed; and (c) the Relaxation Act was not applicable for Assessment Years 2015-2016 onwards, meaning the extension of limitation periods under the Act did not apply to these years. Consequently, all impugned notices issued under Section 148 were quashed and set aside. The Assessing Officers were permitted to initiate fresh reassessment proceedings in accordance with the amended provisions of the Act, strictly complying with the statutory requirements.

The High Court held that the Explanations to Notification No. 20/2021 and Notification No. 38/2021 were ultra vires, bad in law, and null and void. The Court reasoned that Section 3 of the Relaxation Act fell under Chapter II titled 'Relaxation of Certain Provisions of Specified Act' and was merely a relaxation provision dealing with time limits. In contrast, Section 4 of the Relaxation Act, which amended the Income Tax Act, fell under Chapter III. The legislature had not delegated the power to amend the Act under Section 3. Therefore, the Court agreed with the assessee that only Section 4 amended the Act, and 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 invalid 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 were quashed and set aside. The Assessing Officers were permitted to initiate fresh reassessment proceedings in accordance with the amended provisions of the Act, strictly complying with the statutory requirements. The ratio decidendi is that statutory notifications cannot override or amend substantive provisions of an Act, and procedural compliances mandated by amended laws must be followed.

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 a provision for relaxing time limits and did not grant the power to amend substantive provisions of the Income Tax Act, which was instead done by Section 4 of the Relaxation Act. The Court found that the Explanations sought to give effect to the erstwhile provisions of Sections 148, 149, and 151, but crucially, they did not cover Section 147, which empowers the revenue to reopen assessments. The Court noted that the amended Section 147 is subject to Sections 148 to 153, including the mandatory procedure under Section 148A, which was not followed in issuing the impugned notices. Additionally, the Court held that the Relaxation Act was not applicable for Assessment Years 2015-2016 or subsequent years, as the time limits for issuing notices for these years 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 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. It noted that Section 4 of the Relaxation Act, which did amend provisions, was distinct. The Court found that the impugned notices were bad in law because they were issued based on the erstwhile Section 147, which required 'reason to believe' (a concept 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 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. 20/2021 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 Act, unlike Section 4 which did so. The Court found that the Explanations sought to give effect to the erstwhile Sections 148, 149, and 151, but did not cover the erstwhile Section 147. Consequently, the assumption of jurisdiction by the Assessing Officer was based on the 'reason to believe' concept, which is no longer recognized in the amended Section 147. Moreover, even if the Explanations were valid, the procedure under the amended Section 147, which is subject to Sections 148 to 153 (including Section 148A), was not followed. The Court also held that the Relaxation Act was not applicable to 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 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 grant the power to amend substantive provisions of the Income Tax Act, unlike Section 4 which did amend 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 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. Additionally, the Court noted that the Relaxation Act was not applicable to Assessment Years 2015-2016 onwards. Consequently, all impugned notices issued under Section 148 were quashed and set aside. The Assessing Officers were permitted to initiate fresh reassessment proceedings in accordance with the amended provisions of the Act, strictly complying with the statutory requirements.

The High Court held that the Explanations to Notification No. 20/2021 and Notification No. 38/2021 were ultra vires and therefore bad in law and 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. The Court found that the Explanations sought to revive repealed provisions, which was beyond the scope of Section 3. Furthermore, the Court noted that even if the Explanations were considered valid, the notices were still invalid as 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. The Court also found that 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 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, which was done by the Legislature itself under Section 4. Furthermore, the Court found that even if the Explanations were valid, the 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. The Court also noted that the Relaxation Act was not applicable to Assessment Years 2015-2016 onwards. Consequently, all impugned notices issued under Section 148 were quashed and set aside. The Assessing Officers were permitted to initiate fresh reassessment proceedings in accordance with the amended provisions of the Act, strictly complying with the statutory procedures. 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 and therefore bad in law and null and void. The Court agreed with the assessee's contention that Section 3 of the Relaxation Act, which falls under the chapter '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 dealt with amendments to the Income Tax Act, was made by the Legislature itself. 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 uses the 'reason to believe' criterion, 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 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, holding 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' 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. 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 governs the assumption of jurisdiction. Consequently, the notices issued were invalid as they did not comply with the amended Section 147, which requires adherence to Sections 148 to 153, including the procedure under Section 148A. The Court also noted that the Relaxation Act was not applicable for Assessment Years 2015-2016 onwards. All impugned notices 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 Section 3 of the Relaxation Act, which falls under the chapter 'Relaxation of Certain Provisions of Specified Act', was only a provision dealing with time limits and did not empower the Central Government to issue notifications that would revive repealed substantive provisions of the Income Tax Act. In contrast, Section 4 of the Relaxation Act, under the chapter 'Amendments to the Income Tax Act, 1961', contained legislative amendments. Therefore, the Court agreed with the petitioners that only Section 4 amended the Act, and Section 3 did not envisage amendments to 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 were issued based on the 'reason to believe' clause, which is no longer recognized in the amended Section 147, and because the mandatory procedure under Section 148A was not followed. The Court also found that the Relaxation Act was not applicable to Assessment Years 2015-2016 and subsequent years. Consequently, the Explanations to Notification No. 20/2021 and Notification No. 38/2021 were declared ultra vires, 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, which falls under Chapter II titled 'Relaxation of Certain Provisions of Specified Act', only deals with time limits and does not empower the Central Government to amend the substantive provisions of the Income Tax Act. Section 4 of the Relaxation Act, which amends the Act, falls under Chapter III and was enacted by the legislature itself. Therefore, the Revenue's reliance on these Explanations to issue notices under the repealed provisions was incorrect. 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 requires compliance with Sections 148 to 153, including the procedure under Section 148A. The assumption of jurisdiction based on 'reason to believe' was also found to be contrary to the amended Section 147. The Court also noted that the Relaxation Act was not applicable for Assessment Years 2015-2016 onwards. Consequently, all impugned notices issued under Section 148 were quashed and set aside, with liberty to the Assessing Officers to initiate fresh proceedings in accordance with the amended provisions of the Act.

The High Court held that the Explanations to Notification No. 20 of 2021 and Notification No. 38 of 2021 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 provision for relaxing time limits and did not empower the Central Government to amend the substantive provisions of the Income Tax Act. Section 4 of the Relaxation Act, which did amend provisions, was distinct. 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'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. 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. 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 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. 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 'reason to believe' clause, 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 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 the Relaxation Act and therefore bad in law and void. The Court agreed with the petitioners' submission that Section 3 of the Relaxation Act was merely a provision for relaxing time limits and did not grant power to amend substantive provisions of the Income Tax Act. It noted that Section 4 of the Relaxation Act, which amended the Act, was distinct. 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 still invalid because they were issued based on the 'reason to believe' criterion, which is no longer recognized under the amended Section 147, and because the mandatory procedure under Section 148A was not followed. The Court also noted that the Relaxation Act was not applicable to 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 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 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, which was the domain of Section 4. The Court found that the notices were invalid not only because the Explanations were ultra vires but also because the Assessing Officers failed to comply with the amended Section 147 and the mandatory procedure under Section 148A. Furthermore, the Court 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 Bombay High Court allowed the writ petitions. The Court held that the Explanations to Notification No. 20 of 2021 and Notification No. 38 of 2021 were ultra vires, bad in law, and null and void. The Court agreed with the petitioners' submission that Section 3 of the Relaxation Act 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 did so. Furthermore, the Court found that even if the Explanations were considered valid, the impugned notices were invalid because they were issued based on the erstwhile Section 147's 'reason to believe' concept, which is not 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, 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 Section 3 of the Relaxation Act fell under Chapter II titled ‘Relaxation of Certain Provisions of Specified Act’ and was merely a relaxation provision dealing with time limits. In contrast, Section 4 of the Relaxation Act, which amended provisions of the Income Tax Act, 1961, fell under Chapter III. The Court agreed with the assessee that Section 3 did not grant the power to amend substantive provisions of the Act. The Court further found that even if the Explanations in the notifications were considered valid, the impugned notices were bad in law because they did not comply with the amended Section 147, as the Assessing Officer's assumption of jurisdiction was based on the 'reason to believe' concept, which is no longer recognized. Additionally, the procedure under Section 148A, which is part of the amended provisions, was not followed. The Court also noted 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, and 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 of 2021 and Notification No. 38 of 2021 were ultra vires and therefore bad in law and null and void. The Court agreed with the petitioners that Section 3 of the Relaxation Act was a relaxation provision dealing with time limits and did not empower amendments to substantive provisions of the Income Tax Act, unlike Section 4. The Court found that the notices were bad in law as they were issued based on the erstwhile Section 147's 'reason to believe' concept, which is not recognized in the amended Section 147, and that the mandatory procedure under Section 148A was not followed. Additionally, the Court noted that the Relaxation Act was not applicable for Assessment Years 2015-2016 onwards. Consequently, all impugned notices issued under Section 148 were quashed and set aside. The Assessing Officers were permitted to initiate fresh reassessment proceedings in accordance with the 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 Chapter II titled 'Relaxation of Certain Provisions of Specified Act,' was only a relaxation provision dealing with time limits. In contrast, Section 4 of the Relaxation Act, which amends provisions of the Income Tax Act, falls under Chapter III. The Legislature did not delegate the power to amend substantive provisions of the Act to the Central Government under Section 3. Therefore, the Explanations, which sought to give effect to erstwhile provisions, were beyond the scope of Section 3. Furthermore, 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 the mandatory procedure under Section 148A was not followed. The Court also found that the Relaxation Act was not applicable to Assessment Years 2015-2016 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. 20/2021 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. It noted that Section 4 of the Relaxation Act, which amended the Act, was a legislative amendment and not a delegated power. The Court further held 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 relies on 'reason to believe') and the mandatory procedure under Section 148A. Additionally, the Court found that the Relaxation Act was not applicable to 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, the Court quashed and set aside all impugned notices issued under Section 148 of the Act, allowing the Assessing Officers to initiate fresh reassessment proceedings in accordance with the amended provisions of the Act.

The High Court held that the Explanations to Notification No. 20/2021 and Notification No. 38/2021 were ultra vires and therefore bad in law and void. The Court agreed with the 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. It noted that Section 4 of the Relaxation Act was the provision that amended the Act. The Court found that the impugned notices were invalid for multiple reasons: (a) the Explanations did not cover Section 147, which requires compliance with Sections 148 to 153, including the procedure under Section 148A, which was not followed; (b) the assumption of jurisdiction was based on 'reason to believe,' a concept no longer recognized in the amended Section 147; and (c) the Relaxation Act was not applicable for Assessment Years 2015-2016 onwards. Consequently, all impugned notices 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, which falls under Chapter II titled ‘Relaxation of Certain Provisions of Specified Act’, only deals with 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, falls under Chapter III. The Court further noted that even if the Explanations were considered valid, the impugned notices would still be 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. Moreover, the procedure under the amended Section 147, which is subject to Sections 148 to 153 (including Section 148A), was not followed. The Court also found 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. 20/2021 and Notification No. 38/2021 are ultra vires and therefore bad in law and null and void. The Court agreed with the assessee's contention that Section 3 of the Relaxation Act, which falls under the chapter '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. Such amendments were made by the Legislature itself under Section 4 of the Relaxation 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 requires adherence to Section 148A, and the 'reason to believe' standard was no longer applicable. 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 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 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 substantive provisions of the Income Tax Act or revive repealed provisions. It noted that Section 4 of the Relaxation Act, which deals with amendments, was made by the legislature itself. 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 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 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 only a relaxation provision dealing with time limits and did not envisage amendments to the substantive provisions of the Income Tax Act, unlike Section 4. The Court found that the impugned notices were bad in law for multiple reasons: (a) the Explanations did not cover Section 147, which empowers revenue to reopen subject to Sections 148 to 153, including Section 148A; (b) the assumption of jurisdiction was based on the repealed 'reason to believe' concept; and (c) the 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 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, which amended certain provisions, was distinct. The Court also found that the impugned notices were 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. Moreover, the procedure under the amended Section 147, which is subject to Sections 148 to 153 (including Section 148A), was not followed. The Court further noted that 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.

The High Court held that the Explanations to Notification No. 20/2021 and Notification No. 38/2021 were ultra vires, bad in law, and void. The Court agreed with the petitioners' submission that Section 3 of the Relaxation Act was merely a procedural provision for extending time limits and did not grant the power to amend substantive provisions of the Income Tax Act. Section 4 of the Relaxation Act, which did amend the Act, was distinct and its 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 they failed to comply with the amended Section 147 of the Act, particularly the mandatory procedure under Section 148A, and relied on the outdated 'reason to believe' concept. The Court also noted that the Relaxation Act was not applicable to Assessment Years 2015-2016 onwards. Consequently, all impugned notices issued under Section 148 were quashed and set aside. The Assessing Officers were permitted to initiate fresh reassessment proceedings in accordance with the amended provisions of the Act, strictly complying with the statutory requirements.

The High Court held that the Explanations to Notification No. 20 of 2021 and Notification No. 38 of 2021 were ultra vires, bad in law, and null 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; only Section 4 did. The Court found that the impugned notices were invalid for multiple reasons. Firstly, the assumption of jurisdiction was based on the 'reason to believe' concept, 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 or subsequent years as the time limits for issuing notices for these years were not expiring within the period for which Section 3(1) of the Relaxation Act was applicable. Consequently, all impugned notices issued under Section 148 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 procedure.

The High Court held that the Explanations to Notification No. 20/2021 and Notification No. 38/2021 were ultra vires and therefore null and void. The Court agreed with the petitioners that Section 3 of the Relaxation Act did not empower the Central Government to amend substantive provisions of the Income Tax Act; only Section 4 did. The Court found that the impugned notices were bad in law for multiple reasons. Firstly, they were issued based on the 'reason to believe' clause, which is no longer part of the amended Section 147. Secondly, the procedure under the amended Section 147, including Section 148A, was not followed. Thirdly, 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, the Court quashed and set aside all impugned notices. The Assessing Officers were permitted to initiate fresh reassessment proceedings in accordance with the amended provisions of the Act.

The High Court held that the Explanations to Notification No. 20/2021 and Notification No. 38/2021 were ultra vires and therefore bad in law and void. The Court agreed with the assessee's contention that Section 3 of the Relaxation Act was a relaxation provision dealing with time limits and did not empower the Central Government to amend the substantive provisions of the Income Tax Act; only Section 4 of the Relaxation Act did so. Furthermore, the Court found that even if the Explanations were 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' clause. 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 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 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; only Section 4 of the Relaxation Act amended the Act. The Court found that the impugned notices were bad in law because they were issued based on the erstwhile Section 147, which required 'reason to believe' that income had escaped assessment, a concept no longer recognized in the amended Section 147. Additionally, 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 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 scope of Section 3(1) of the Relaxation Act. Consequently, all impugned notices issued under Section 148 were quashed and set aside. The Assessing Officers were permitted to initiate fresh reassessment proceedings in accordance with the amended provisions of the Act, strictly complying with the law. The Court 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 void. The Court agreed with the assessee that Section 3 of the Relaxation Act was a provision for relaxation of time limits and did not empower the Central Government to amend the substantive provisions of the Income Tax Act, unlike Section 4 which did introduce amendments. 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 under the amended Section 147, and had failed to comply with the mandatory procedure laid down in 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 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 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 power to amend substantive provisions of the Income Tax Act, unlike Section 4. The Court found that the Explanations sought to give effect to the repealed Sections 148, 149, and 151, but crucially, 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 had not been followed, rendering the notices invalid. 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 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 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, 2020, was a relaxation provision dealing with time limits and did not empower the Central Government to amend the substantive provisions of the Income Tax Act. Section 4 of the Relaxation Act, which did amend provisions, was distinct. The Court found that the impugned notices were bad in law because they were issued based on the repealed provisions and failed to comply with the amended Section 147, which no longer recognizes the concept of 'reason to believe', and crucially, did not follow the mandatory procedure under Section 148A. Furthermore, the Court 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 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 merely a relaxation provision dealing with time limits and did not grant the Central Government the power to amend the substantive provisions of the Income Tax Act. Section 4 of the Relaxation Act, which did amend the Act, was enacted by the legislature. Furthermore, the Court found that even if the Explanations were considered valid, the reassessment notices were invalid because they did not comply with the amended Section 147, which no longer uses the 'reason to believe' criterion, 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 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.