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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 found that Section 3 of the Relaxation Act, which fell under the chapter titled 'Relaxation of Certain Provisions of Specified Act,' was a provision dealing with time limits and did not grant the power to amend the substantive provisions of the Income Tax Act. The amendments to the Act were made by the legislature itself under Section 4. The Court agreed with the assessee that only Section 4 amended the Act, not Section 3. Furthermore, the Court noted that even if the Explanations were considered valid, the notices were still invalid because they were issued based on the 'reason to believe' concept, which is no longer recognized under the amended Section 147, and the mandatory procedure under Section 148A was not followed. The Court also 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 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 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. The Court noted that Section 4 of the Relaxation Act was the provision that amended the Act. 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, which no longer recognized the 'reason to believe' concept, and failed to follow the procedure under Section 148A. The Court also held that the Relaxation Act was not applicable for Assessment Years 2015-2016 or subsequent years. Consequently, all impugned notices issued under Section 148 of the Act were quashed and set aside. The Assessing Officers were permitted to initiate fresh reassessment proceedings in accordance with the amended provisions of the Act, strictly complying with the statutory requirements.
The High Court held that the Explanations to Notification No. 20 of 2021 and Notification No. 38 of 2021 were ultra vires the Relaxation Act and therefore bad in law and void. The Court agreed with the assessee's submission that Section 3 of the Relaxation Act was a 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 was enacted by the legislature. The Court found that the Explanations did not cover the erstwhile Section 147, which empowers the revenue to reopen assessments subject to Sections 148 to 153, including the mandatory procedure under Section 148A. Consequently, the notices were invalid for non-compliance with the amended Section 147 and the procedural requirements of 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 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 relaxation provision dealing with time limits and did not grant the power to amend substantive provisions of the Income Tax Act, unlike Section 4. Furthermore, the Court found that even if the Explanations were considered valid, the impugned notices were still invalid because they did not comply with the amended Section 147, which no longer recognizes the 'reason to believe' concept, and failed to follow the mandatory procedure under Section 148A. The Court also noted that the Relaxation Act was not applicable to Assessment Years 2015-2016 and subsequent years. Consequently, all the impugned notices issued under Section 148 of the Act were quashed and set aside. The Assessing Officers were permitted to initiate fresh reassessment proceedings in accordance with the amended provisions of the Act, strictly complying with the statutory requirements.
The High Court held that the Explanations to Notification No. 20/2021 and Notification No. 38/2021 are ultra vires and consequently bad in law and void. The Court agreed with the assessee's submission that Section 3 of the Relaxation Act, which falls under Chapter II titled ‘Relaxation of Certain Provisions of Specified Act’, only deals with time limits and does not grant the power to amend substantive provisions of the Income Tax Act. Such amendments, if any, would be under Chapter III, which requires legislative action. 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 the newly introduced Section 148A. Therefore, even if the Explanations were considered 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 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 assessee's submission that Section 3 of the Relaxation Act was a relaxation provision dealing with time limits and did not empower the Central Government to amend substantive provisions of the Income Tax Act. Section 4 of the Relaxation Act, which did amend provisions, was distinct. The Court found that the impugned notices were bad in law for multiple reasons: (a) the Explanations did not cover Section 147, which is crucial for assuming jurisdiction, and the concept of 'reason to believe' was no longer recognized in the amended Section 147; (b) the procedure under the amended Section 147, including Section 148A, was not followed; and (c) the Relaxation Act was not applicable 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.
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 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 actually amended the Act. The Court further 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 requires adherence to Sections 148 to 153, including the procedure under Section 148A. The Court also agreed that the Relaxation Act was not applicable to assessment years 2015-2016 onwards. Consequently, all impugned notices issued under Section 148 were quashed and set aside, with liberty to the Assessing Officers to initiate fresh proceedings in accordance with the amended provisions of the Act.
The High Court held that the Explanations to Notification No. 20 of 2021 and Notification No. 38 of 2021 were ultra vires and consequently 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; only Section 4 of the Relaxation Act did so. The Court found that the impugned notices were bad in law for several reasons: (a) they were issued based on the 'reason to believe' clause, 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; and (c) the Relaxation Act was not applicable to assessment years from 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. Therefore, all impugned notices were quashed and set aside. The Assessing Officers were permitted to initiate fresh reassessment proceedings in accordance with the relevant amended provisions of the Act, strictly complying with the statutory procedures.
The High Court held that the Explanations to Notification No. 20/2021 and Notification No. 38/2021 were ultra vires and therefore bad in law and null and void. The Court agreed with the assessee's submission that Section 3 of the Relaxation Act was a relaxation provision dealing with time limits and did not empower the Central Government to amend substantive provisions of the Income Tax Act. Only Section 4 of the Relaxation Act amended the Act, and this was done by the legislature. 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 and the procedural requirements of 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 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 are 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 dealing with time limits and did not empower the Central Government to amend the substantive provisions of the Income Tax Act, 1961. Such amendments were only permissible under Section 4 of the Relaxation Act, which 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 they failed to comply with the amended Section 147 of the Act, particularly by relying on the 'reason to believe' criterion (which is no longer recognized) and by not following the mandatory procedure under Section 148A. The Court also noted that the Relaxation Act was not applicable to assessment years 2015-2016 and 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 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. Only Section 4 of the Relaxation Act contained such amendments. The Court further found that even if the Explanations were considered valid, they did not cover Section 147 of the Act, which requires compliance with Sections 148 to 153, including Section 148A. The procedure under Section 148A had not been 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. 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 are ultra vires and consequently bad in law and void. The Court reasoned that Section 3 of the Relaxation Act falls under Chapter II titled ‘Relaxation of Certain Provisions of Specified Act’ and deals with time limits, whereas Section 4, which amends the 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 revive repealed provisions, were beyond the scope of Section 3. The Court also agreed with the assessee that even if the Explanations were valid, the notices were invalid for non-compliance with the amended Section 147 and the mandatory procedure under Section 148A. The Court further noted that the Relaxation Act was not applicable to Assessment Years 2015-2016 onwards. Consequently, all impugned notices issued under Section 148 were quashed and set aside, with liberty to the Assessing Officers to initiate fresh proceedings in accordance with the amended provisions of the Act.
The High Court held that the Explanations to Notification No. 20 of 2021 and Notification No. 38 of 2021 were ultra vires and therefore bad in law and null and void. The Court agreed with the assessee's submission that Section 3 of the Relaxation Act was a relaxation provision dealing with time limits and did not empower the Central Government to amend substantive provisions of the Income Tax Act, unlike Section 4 which did so. The Court found that the impugned notices were bad in law for multiple reasons: (a) they were based on the 'reason to believe' concept, which is no longer recognized in the amended Section 147; (b) the procedure under the amended Section 147, which is subject to Sections 148 to 153 (including Section 148A), was not followed; and (c) the Relaxation Act was not applicable to Assessment Years 2015-2016 or subsequent years. Consequently, all impugned notices issued under Section 148 were quashed and set aside. The Assessing Officers were permitted to initiate fresh reassessment proceedings in accordance with the relevant amended provisions of the Act, strictly complying with the procedures.
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. It was noted that Section 4 of the Relaxation Act, which amended the Act, was distinct from Section 3. The Court found that the impugned notices were bad in law because they were issued based on the erstwhile Section 147, which relied on the 'reason to believe' clause no longer recognized in the amended Section 147. Furthermore, even if the Explanations were valid, the procedure under the amended Section 147, 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 were quashed and set aside, with liberty to the Assessing Officers to initiate fresh proceedings in accordance with the amended provisions of the Act.
The High Court held that the Explanations to Notification No. 20/2021 and Notification No. 38/2021 are ultra vires and therefore bad in law and null and void. The Court reasoned that Section 3 of the Relaxation Act falls under Chapter II, titled ‘Relaxation of Certain Provisions of Specified Act,’ and deals with time limits, while Section 4, which amends the Income Tax Act, falls under Chapter III. The Court agreed with the assessee that only Section 4 amended the Act, and Section 3 did not grant the power to amend substantive provisions. Furthermore, the Court found that the notices were bad in law because they relied on the concept of 'reason to believe' (erstwhile Section 147), which is no longer recognized in the amended Section 147, and 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 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 were ultra vires, bad in law, and null and void. The Court agreed with the petitioners' 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. Section 4 of the Relaxation Act, which did amend the Act, was made by the legislature itself. Furthermore, the Court found that the impugned notices were bad in law because they were issued based on the 'reason to believe' clause, which is no longer recognized under the amended Section 147, and because the procedure under Section 148A was not followed. The Court also held that the Relaxation Act was not applicable to Assessment Years 2015-2016 and subsequent years. 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 the Relaxation Act and therefore bad in law and void. The Court agreed with the petitioners that Section 3 of the Relaxation Act was a relaxation provision dealing with time limits and did not empower the Central Government to amend the substantive provisions of the Income Tax Act. Section 4 of the Relaxation Act, which did amend provisions, was separate and not applicable in this context. The Court found that the impugned notices were bad in law for multiple reasons: (a) the Explanations did not cover Section 147, which empowers reopening, and thus the amended Section 147, which requires compliance with Sections 148 to 153 (including Section 148A), was not followed; (b) the assumption of jurisdiction was based on the 'reason to believe' concept, which is obsolete under the amended Section 147; (c) the Relaxation Act was not applicable for Assessment Years 2015-2016 onwards as the time limits for those years were not expiring within the period covered by Section 3(1) of the Relaxation Act. Consequently, all impugned notices issued under Section 148 were quashed and set aside. The Assessing Officers were permitted to initiate fresh reassessment proceedings in accordance with the amended provisions of the Act.
The High Court allowed the writ petitions. It 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 the chapter titled 'Relaxation of Certain Provisions of Specified Act', only provides for relaxation of 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, 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 (erstwhile Section 147), which is not recognized in the amended Section 147. The Court also noted that the procedure under the amended Section 147, including Section 148A, was not followed. Additionally, the Relaxation Act was found to be inapplicable for Assessment Years 2015-2016 and subsequent years. Consequently, all impugned notices issued under Section 148 were quashed and set aside. The Assessing Officers were permitted to initiate fresh reassessment proceedings in accordance with the 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 consequently 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 amendments to substantive provisions of the Income Tax Act, unlike Section 4. The Court found that the notices were bad in law for multiple reasons: (a) they were issued on the basis of 'reason to believe' which is no longer recognized in the amended Section 147; (b) the procedure under Section 148A, which is mandatory under the amended provisions, was not followed; and (c) the Relaxation Act was not applicable for Assessment Years 2015-2016 and subsequent years as the time limits for issuing notices for these years were not expiring within the period for which Section 3(1) of the Relaxation Act was applicable. Consequently, all impugned notices issued under Section 148 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 assessee's contention 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, 1961, or revive repealed sections. Section 4 of the Relaxation Act, which did amend provisions, was distinct and made by the legislature itself. The Court found that even if the Explanations were considered valid, the impugned notices were still bad in law because they were issued based on the 'reason to believe' concept, which is no longer part of the amended Section 147, and because the mandatory procedure under Section 148A was not followed. 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 under Section 148 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, strictly complying with the statutory requirements.
The High Court held that the Explanations to Notification No. 20/2021 and Notification No. 38/2021 are ultra vires and therefore bad in law and 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 provisions, falls under Chapter III. The Court found that the Assessing Officers' assumption of jurisdiction 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 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, strictly complying with the statutory requirements.
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 assessee's contention 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 falls under Chapter III titled ‘Amendments to the Income Tax Act, 1961’, is where legislative amendments were made. The Court found that the impugned 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 (which does not recognize 'reason to believe') and the mandatory procedure under Section 148A. Furthermore, the Court noted that the Relaxation Act was not applicable for Assessment Years 2015-2016 onwards. Consequently, all impugned notices issued under Section 148 were quashed and set aside. The Assessing Officers were permitted to initiate fresh reassessment proceedings in accordance with the relevant provisions of the Act as amended by the Finance Act, 2021, strictly complying with the statutory provisions.
The High Court allowed the petition. The Court found significant discrepancies in the reasons recorded for reopening the assessment. The reasons stated that the information related to AY 2015-16, but the conclusion stated that income had escaped assessment for AY 2016-17. The AO's explanation of these inconsistencies as 'typographical errors' was not accepted, as the Court found it to be a casual excuse and noted that the AO did not read the reasons before signing. Furthermore, the Court observed that the approving authorities (Additional Commissioner and Respondent No. 3) also failed to apply their mind by not identifying these errors. The Court also noted that paragraph 2 of the reasons recorded lacked a demonstrable link between the information and the formation of belief, failing to specify the trading activity or the shares/derivatives involved, making the charges vague. Relying on the principle laid down in "Income Tax Office, I Ward, District VI Calcutta and Others vs. Lakhmani Mewal Das," the Court held that there must be a live link or close nexus between the material and the belief formed, and vague or remote material is insufficient. The Court emphasized that reasons for reopening cannot be improved or supplemented by affidavits or oral submissions. Consequently, the notice under Section 148 was vitiated on these grounds alone.
The High Court held that the Explanations to Notification No. 20 of 2021 and Notification No. 38 of 2021 were ultra vires and therefore bad in law and null and void. The Court agreed with the petitioners that Section 3 of the Relaxation Act was a relaxation provision dealing with time limits and did not empower the Central Government to amend substantive provisions of the Income Tax Act. 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 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 held that the Relaxation Act was not applicable to Assessment Years 2015-2016 onwards. Consequently, all impugned notices issued under Section 148 of the Act were quashed and set aside. The Assessing Officers were permitted to initiate fresh reassessment proceedings in accordance with the 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 allowed the writ petitions. It held that the Explanations to Notification No. 20/2021 and Notification No. 38/2021 were ultra vires and therefore 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 only a relaxation provision dealing with time limits. In contrast, Section 4 of the Relaxation Act, which amended substantive provisions of the Income Tax Act, was in Chapter III. The Court agreed with the assessee that Section 3 did not grant the power to amend substantive provisions or revive repealed sections. Furthermore, even if the Explanations were considered valid, they did not cover Section 147, and the mandatory procedure under Section 148A, as introduced by the Finance Act, 2021, was not followed. The Court also noted that the Relaxation Act was not applicable for Assessment Years 2015-2016 onwards. Consequently, all impugned notices issued under Section 148 were quashed and set aside, with liberty to the Assessing Officers to initiate fresh proceedings in accordance with the amended provisions of the Act.
The High Court held that the Explanations to Notification No. 20/2021 and Notification No. 38/2021 were ultra vires and therefore bad in law and 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 solely a relaxation provision dealing with time limits and did not empower the Central Government to amend the substantive provisions of the Income Tax Act. In contrast, Section 4 of the Relaxation Act, which falls under Chapter III titled 'Amendments to the Income Tax Act, 1961', was the provision that actually amended the Act, and this was done by the Legislature itself, 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 considered valid, the impugned notices were still invalid because they did not comply with the amended Section 147, which is subject to Sections 148 to 153, including the mandatory procedure under Section 148A. The 'reason to believe' basis for assumption of jurisdiction was also noted as being obsolete under the amended Section 147. 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 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 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, unlike Section 4 which contained legislative amendments. The Court found that the Explanations sought to give effect to the repealed provisions of Section 147 to 151, but failed to cover Section 147 itself, which is subject to Sections 148 to 153, including the mandatory Section 148A. Therefore, even if the Explanations were considered valid, the procedure under Section 148A had not been followed, rendering the notices invalid. 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 proceedings in accordance with the amended provisions of the Act.
The High Court held that the Explanations to Notification No. 20/2021 and Notification No. 38/2021 were ultra vires and therefore bad in law and null and void. The Court agreed with the Assessee's submission that Section 3 of the Relaxation Act was only a relaxation provision dealing with time limits and did not amend the substantive provisions of the Income Tax Act. 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 because they were issued based on the erstwhile Section 147 ('reason to believe') and failed to comply with the procedure laid down in the amended Section 147 and Section 148A. The Court also held that the Relaxation Act was not applicable to Assessment Years 2015-2016 or subsequent years. Consequently, all impugned notices issued under Section 148 were quashed and set aside. The Assessing Officers were permitted to initiate fresh reassessment proceedings in accordance with the amended provisions of the Act, strictly complying with the statutory requirements.
The High Court held that the Explanations to Notification No. 20/2021 and Notification No. 38/2021 were ultra vires 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 for time limits and did not grant the power to amend the substantive provisions of the Income Tax Act. Only Section 4 of the Relaxation Act contained such legislative amendments. The Court also found that the impugned notices were invalid for not complying with the amended Section 147, as the Assessing Officers relied on the 'reason to believe' clause, which was obsolete, and failed to follow the mandatory procedure under Section 148A. Additionally, the Court 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. The Assessing Officers were permitted to initiate fresh reassessment proceedings in accordance with the amended provisions of the Act, strictly complying with the statutory requirements.
The High Court held that the Explanations to Notification No. 20 of 2021 and Notification No. 38 of 2021 were ultra vires and therefore bad in law and null and void. The Court agreed with the assessee's submission that Section 3 of the Relaxation Act was a relaxation provision dealing with time limits and did not empower the Central Government to amend substantive provisions of the Income Tax Act. Section 4 of the Relaxation Act, which did amend provisions, was distinct and made by the legislature itself. The Court also found that even if the Explanations were considered valid, the impugned notices were still bad in law because they did not comply with the amended Section 147, which no longer recognizes 'reason to believe', and crucially, the mandatory procedure under Section 148A was not followed. The Court further noted that the Relaxation Act was not applicable for Assessment Years 2015-2016 onwards, as the time limits for those 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 Assessing Officers were permitted to initiate fresh reassessment proceedings in accordance with the relevant provisions of the Act as amended by the Finance Act, 2021, strictly complying with the statutory procedures.
The High Court held that the Explanations to Notification No. 20/2021 and Notification No. 38/2021 were ultra vires and therefore bad in law and void. The Court agreed with the petitioners that Section 3 of the Relaxation Act was a relaxation provision dealing with time limits and did not empower the Central Government to amend substantive provisions of the Income Tax Act. Section 4 of the Relaxation Act was the provision that amended the Act. The Court found that the impugned notices were bad in law for multiple reasons: (a) the Explanations were ultra vires; (b) the notices were issued based on the erstwhile Section 147 ('reason to believe') which is no longer recognized in the amended Section 147; (c) the procedure under the amended Section 147, which is subject to Sections 148 to 153 (including Section 148A), was not followed; and (d) the Relaxation Act was not applicable for Assessment Years 2015-2016 onwards. Consequently, all impugned notices issued under Section 148 were quashed and set aside. The Assessing Officers were permitted to initiate fresh reassessment proceedings in accordance with the amended provisions of the Act.
The High Court held that the Explanations to Notification No. 20/2021 and Notification No. 38/2021 were ultra vires and therefore bad in law and null and void. The Court agreed with the assessee's submission that Section 3 of the Relaxation Act was only a relaxation provision dealing with time limits and did not empower the Central Government to amend the substantive provisions of the Income Tax Act. Section 4 of the Relaxation Act was the provision that amended the Act. Furthermore, the Court found that even if the Explanations were considered valid, the impugned notices were still bad in law because they did not comply with the amended Section 147 of the Act, which no longer recognizes the concept of 'reason to believe', and crucially, the mandatory procedure under Section 148A was not followed. The Court also noted that the Relaxation Act was not applicable for Assessment Years 2015-2016 onwards. Consequently, all the impugned notices issued under Section 148 of the Act were quashed and set aside. The Assessing Officers were permitted to initiate fresh reassessment proceedings in accordance with the amended provisions of the Act, 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 the substantive provisions of the Income Tax Act. Section 4 of the Relaxation Act was the provision that amended the Act. The Court found that the impugned notices were bad in law for multiple reasons: (a) the Explanations sought to revive repealed provisions without legislative backing; (b) the notices were issued based on the 'reason to believe' criterion, which is no longer recognized under the amended Section 147; (c) the procedure under the amended Section 148A was not followed; and (d) the Relaxation Act was not applicable to Assessment Years 2015-2016 onwards. Consequently, all impugned notices issued under Section 148 of the Act were quashed and set aside. The Assessing Officers were permitted to initiate fresh reassessment proceedings in accordance with the amended provisions of the Act.
The High Court held that the Explanations to Notification No. 20 of 2021 and Notification No. 38 of 2021 were ultra vires, bad in law, and null and void. The Court agreed with the petitioners that Section 3 of the Relaxation Act was a relaxation provision dealing with time limits and did not empower the Central Government to amend the substantive provisions of the Income Tax Act. Section 4 of the Relaxation Act, which amended the Act, was distinct. The Court found that the impugned notices were bad in law for multiple reasons: (a) the Explanations were invalid; (b) the notices did not comply with the amended Section 147, as they relied on the 'reason to believe' concept and failed to follow the procedure under Section 148A; and (c) the Relaxation Act was not applicable to the assessment years in question. 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 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 petitioners' submission that Section 3 of the Relaxation Act was solely a provision dealing with time limits and did not grant 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. Consequently, the assumption of jurisdiction by Assessing Officers was based on the 'reason to believe' concept, which is no longer recognized in the amended Section 147. Furthermore, the amended Section 147 is subject to Sections 148 to 153, including the procedure under Section 148A, which was not followed. The Court also 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 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 provision for relaxing time limits and did not empower the amendment of substantive provisions of the Income Tax Act. Such amendments were provided for under Section 4 of the Relaxation Act. The Court also noted that the Assessing Officers' assumption of jurisdiction was based on the 'reason to believe' concept, which is no longer recognized in the amended Section 147, and that the procedure under Section 148A was not followed. Furthermore, the Relaxation Act was not applicable to Assessment Years 2015-2016 onwards. Consequently, all impugned notices issued under Section 148 were quashed and set aside. The Assessing Officers were granted liberty to initiate fresh reassessment proceedings in accordance with the amended provisions of the Act, strictly complying with the statutory requirements.
The Bombay High Court allowed the writ petitions. The 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 was a relaxation provision dealing with 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 agreed with the petitioners that the Explanations did not cover Section 147 and that the procedure under the amended Section 147 and Section 148A had not been 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 of the Act were quashed and set aside. The Assessing Officers were permitted to initiate fresh reassessment proceedings in accordance with the amended provisions of the Act, strictly complying with the statutory requirements.
The High Court held that the Explanations to Notification No. 20/2021 and Notification No. 38/2021 were ultra vires and therefore bad in law and void. The Court agreed with the 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, which was instead done by Section 4 of the Relaxation Act. Furthermore, the Court found that even if the Explanations were considered valid, the notices were still 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 for Assessment Years 2015-2016 onwards. Consequently, all impugned notices issued under Section 148 were quashed and set aside. The Assessing Officers were permitted to initiate fresh reassessment proceedings in accordance with the relevant provisions of the Act as amended by the Finance Act, 2021, after strictly complying with the statutory 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 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 substantive provisions of the Income Tax Act, unlike Section 4. It was noted that Section 3 fell under Chapter II ('Relaxation of Certain Provisions of Specified Act') while Section 4 fell under Chapter III ('Amendments to the Income Tax Act, 1961'), indicating no delegation of amendment power to the Central Government. The Court further found that even if the Explanations were valid, the impugned notices were bad in law because they were 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 held that the Relaxation Act was not applicable to Assessment Years 2015-2016 or subsequent years, as the time limit for issuing notices for these years was not expiring within the period for which Section 3(1) of the Relaxation Act was applicable. Consequently, all impugned notices were quashed and set aside, 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 are ultra vires and therefore bad in law and null and void. The Court agreed with the assessee's contention that Section 3 of the Relaxation Act was a relaxation provision dealing with time limits and did not grant the power to amend substantive provisions of the Income Tax Act. Such amendments were only provided for under Section 4 of the Relaxation Act, which was enacted by the legislature itself. Furthermore, the Court found that even if the Explanations were considered valid, the reassessment notices were still invalid because the Assessing Officers had assumed jurisdiction based on the erstwhile 'reason to believe' concept, which is no longer recognized under the amended Section 147. Additionally, the mandatory procedure under Section 148A, which is part of the amended provisions (Sections 148 to 153), was not followed. The Court also noted that the Relaxation Act was not applicable for Assessment Years 2015-2016 or subsequent years. Consequently, all impugned notices issued under Section 148 were quashed and set aside. The Assessing Officers were permitted to initiate fresh reassessment proceedings in accordance with the relevant 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' 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 amended the Act, was made by the Legislature itself and did not delegate amendment powers to the Central Government. The Court further found that even if the Explanations were considered valid, the impugned notices were invalid because they did not comply with the amended Section 147, which no longer uses the 'reason to believe' criterion, and failed to follow the mandatory procedure under Section 148A. Additionally, the Court noted that the Relaxation Act was not applicable for Assessment Years 2015-2016 or 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 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 of 2021 and Notification No. 38 of 2021 were ultra vires, bad in law, and null and void. The Court agreed with the petitioners that Section 3 of the Relaxation Act was a provision for relaxing time limits and did not empower the Central Government to revive repealed substantive provisions of the Income Tax Act. Section 4 of the Relaxation Act was the operative section for amending the Act. The Court found that the impugned notices were invalid for multiple reasons: (a) the Explanations were ultra vires; (b) the notices were issued based on the 'reason to believe' concept from the repealed Section 147, which is not recognized in the amended Section 147; (c) the mandatory procedure under the amended Section 147 and Section 148A was not followed; and (d) the Relaxation Act was not applicable to Assessment Years 2015-2016 onwards. Consequently, all impugned notices issued under Section 148 were quashed and set aside. The Assessing Officers were permitted to initiate fresh reassessment proceedings in accordance with the relevant provisions of the Act as amended by the Finance Act, 2021, strictly complying with the statutory procedures.
The High Court held that the Explanations to Notification No. 20/2021 and Notification No. 38/2021 were ultra vires, bad in law, and null and void. The Court agreed with the petitioners' submission that Section 3 of the Relaxation Act was a relaxation provision dealing with time limits and did not empower the Central Government to amend the substantive provisions of the Income Tax Act. Section 4 of the Relaxation Act, which did amend provisions, was enacted by the Legislature itself. Furthermore, even if the Explanations were considered valid, they did not cover Section 147, which is the enabling provision for reopening. The Court noted that the amended Section 147 is subject to Sections 148 to 153, including the procedure under Section 148A, which was not followed. The Court also found that the Relaxation Act was not applicable for Assessment Years 2015-2016 onwards. Consequently, all impugned notices issued under Section 148 of the Act were quashed and set aside. The Assessing Officers were permitted to initiate fresh reassessment proceedings in accordance with the amended provisions of the Act, strictly complying with the statutory requirements. The 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 are ultra vires, 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', only provides for relaxation of time limits and does not grant the Central Government the power to amend the substantive provisions of the Income Tax Act. Such amendments, as per Section 4 of the Relaxation Act, are made by the Legislature itself. Therefore, the Explanations, which attempted to extend the applicability of erstwhile sections, were beyond the scope of Section 3. Furthermore, the Court found that even if the Explanations were considered valid, the impugned notices were still bad in law because they failed to comply with the amended Section 147, which no longer recognizes the 'reason to believe' concept, and crucially, did not follow the mandatory procedure under Section 148A. The Court also agreed with the Assessee's contention that the Relaxation Act was not applicable to Assessment Years 2015-2016 and subsequent years. 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 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 notices issued were bad in law for multiple reasons: (a) the Explanations sought to revive repealed provisions without legislative authority; (b) the notices were based on the 'reason to believe' criterion, which is no longer recognized under the amended Section 147; (c) the procedure under the amended Section 147, including Section 148A, was not followed; and (d) 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.
The High Court held that the Explanations to Notification No. 20/2021 and Notification No. 38/2021 were ultra vires and therefore bad in law and null and void. The Court agreed with the petitioners that Section 3 of the Relaxation Act was a relaxation provision dealing with time limits and did not empower the Central Government to amend the substantive provisions of the Income Tax Act. Section 4 of the Relaxation Act, which did amend the Act, was made by the legislature itself. The Court found that the notices were also bad in law for failing to comply with the amended Section 147, which does not recognize the 'reason to believe' concept, and for not following 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 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 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. Furthermore, the Court found that even if the Explanations were considered valid, the reassessment notices were still 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 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.
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. Section 4 of the Relaxation Act was the provision that amended the Act. The Court found that the impugned notices were bad in law for multiple reasons. Firstly, the Explanations did not cover the erstwhile Section 147, which empowers the revenue to reopen assessments subject to Sections 148 to 153, including Section 148A. Thus, the procedure under Section 148A was not followed. Secondly, 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. Thirdly, the Relaxation Act was not applicable for Assessment Years 2015-2016 or 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, the Court quashed and set aside all the impugned notices. It was open to the Assessing Officers to initiate fresh reassessment proceedings in accordance with the amended provisions of the Act, strictly complying with the statutory requirements.
The High Court held that the Explanations to Notification No. 20/2021 and Notification No. 38/2021 were ultra vires, bad in law, and null and void. The Court agreed with the 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, 1961. It was noted that Section 4 of the Relaxation Act, which amended the Act, was distinct from Section 3. The Court found that the impugned notices were bad in law for multiple reasons: (a) the reliance on the 'reason to believe' clause, which is no longer recognized under the amended Section 147; (b) the non-compliance with the procedure under Section 148A, which is mandatory under the amended provisions; and (c) the inapplicability of the Relaxation Act for 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 relevant provisions of the Act as amended by the Finance Act, 2021, strictly complying with the statutory procedures. The Court was in respectful agreement with the views taken by the Allahabad, Rajasthan, Delhi, and Madras High Courts.
The High Court held that the Explanations to Notification No. 20/2021 and Notification No. 38/2021 were ultra vires and therefore bad in law and null and void. The Court agreed with the petitioners that Section 3 of the Relaxation Act was a relaxation provision dealing with time limits and did not empower the Central Government to amend substantive provisions of the Income Tax Act. Section 4 of the Relaxation Act was the provision that amended the Act. The Court found that the impugned notices were invalid 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 'reason to believe' concept, which is no longer recognized in the amended Section 147; and (c) the procedure under 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. 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 law. The Court relied on decisions of the Allahabad High Court, Rajasthan High Court, Delhi High Court, and Madras High Court.