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The High Court held that the Explanations to Notification No. 20/2021 and Notification No. 38/2021 were ultra vires and therefore bad in law and void. The Court reasoned that Section 3 of the Relaxation Act, which falls under the chapter 'Relaxation of Certain Provisions of Specified Act', was a provision dealing with time limits and did not grant the power to amend substantive provisions of the Income Tax Act. This power was not delegated to the Central Government. The Court agreed with the petitioners that only Section 4 of the Relaxation Act amended the Act. Furthermore, the Court found that even if the Explanations were considered valid, the impugned notices were still bad in law as they were issued based on the 'reason to believe' concept from the repealed Section 147, which is no longer recognized in the amended Section 147. Additionally, the procedure under the amended Section 147, which is subject to Sections 148 to 153 (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 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 the Central Government to amend substantive provisions of the Income Tax Act. It was Section 4 of the Relaxation Act that amended the Act. 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 recognized the concept of 'reason to believe' for assumption of jurisdiction, and crucially, failed to adhere to the mandatory procedure under Section 148A. The Court also noted that the Relaxation Act was not applicable for Assessment Years 2015-2016 onwards. Consequently, all impugned notices issued under Section 148 of the Act were quashed and set aside. The Assessing Officers were permitted to initiate fresh reassessment proceedings in accordance with the relevant provisions of the Act as amended by the Finance Act, 2021, 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 was a relaxation provision dealing with time limits and did not empower the Central Government to amend substantive provisions of the Act; only Section 4 of the Relaxation Act amended the Act. Furthermore, the Court found that even if the Explanations were valid, the impugned notices were bad in law because the Assessing Officers assumed jurisdiction based on the 'reason to believe' concept, which is no longer recognized in the amended Section 147. Additionally, the procedure under Section 148A, which is part of the amended provisions and must be followed, was not complied with. 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 of 2021 and Notification No. 38 of 2021 are 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 provision for relaxation of time limits and did not empower the Central Government to amend the substantive provisions of the Income Tax Act. Only Section 4 of the Relaxation Act contained such amendments. Furthermore, the Court found that even if the Explanations were considered valid, the impugned notices were still bad in law because the Assessing Officers had assumed jurisdiction based on the 'reason to believe' clause, which is no longer recognized under the amended Section 147. Additionally, the procedure under Section 148A, which is mandatory under the amended Act, 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 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 submission that Section 3 of the Relaxation Act was a relaxation provision dealing with time limits and did not empower the Central Government to amend substantive provisions of the Income Tax Act. Such amendments were made by the legislature itself under Section 4 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' criterion for assumption of jurisdiction. Additionally, the procedure under the amended Section 148A, which is now part of the reassessment regime, 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 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 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 did not cover Section 147, which empowers reopening, and thus the amended Section 147, including the procedure under Section 148A, was not followed; (b) Section 297 of the Act, which provides a saving clause for the 1922 Act, did not provide a similar saving clause for the erstwhile Sections 147 to 151 of the 1961 Act, meaning the amended provisions applied from April 1, 2021; and (c) the Relaxation Act was not applicable for Assessment Years 2015-2016 onwards as the time limits for these years were not expiring within the period for which Section 3(1) of the Relaxation Act was applicable. Consequently, all impugned notices 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 reasoned that Section 3 of the Relaxation Act, which falls under the chapter titled ‘Relaxation of Certain Provisions of Specified Act’, was intended only for relaxing 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 Income Tax Act, was in a different chapter and its provisions were made by the legislature itself, not delegated. The Court also found that the impugned notices were bad in law because they were issued based on the 'reason to believe' under the erstwhile Section 147, which is no longer recognized in the amended Section 147. Furthermore, the procedure under the amended Section 147, including Section 148A, was not followed. The Court also noted that the Relaxation Act was not applicable for Assessment Years 2015-2016 onwards, 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 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 bad in law. The Court reasoned 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 Central Government the power to amend the substantive provisions of the Income Tax Act. In contrast, Section 4 of the Relaxation Act, which amended the Act, fell under a different chapter. The Court agreed with the petitioners 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, they did not cover Section 147 of the Act, which is crucial for assuming jurisdiction. The notices were also found to be invalid because the Assessing Officers relied on the 'reason to believe' clause, 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 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. 20/2021 and Notification No. 38/2021 are ultra vires, bad in law, and null and void. The Court agreed with the petitioners that Section 3 of the Relaxation Act was a relaxation provision dealing with time limits and did not empower the Central Government to amend the substantive provisions of the Income Tax Act. Section 4 of the Relaxation Act was the provision that amended the Act, and it was done by the legislature itself. Furthermore, the Court found that the impugned notices were bad in law for multiple reasons. Firstly, the assumption of jurisdiction was based on the 'reason to believe' 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. The Court also noted that the Relaxation Act was not applicable to 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 granted liberty 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, bad in law, and null and void. The Court agreed with the petitioners that Section 3 of the Relaxation Act was a relaxation provision for time limits and did not empower amendments to substantive provisions of the Income Tax Act, unlike Section 4. The Court found that the Explanations sought to revive repealed provisions without legislative sanction. Furthermore, the Court noted that even if the Explanations were valid, the notices were invalid as they did not comply with the amended Section 147, which requires compliance with Section 148A, and the 'reason to believe' prerequisite was no longer applicable. 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. 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, unlike Section 4 which contained legislative amendments. The Court found that the Explanations sought to extend the applicability of erstwhile Sections 148, 149, and 151 but did not cover Section 147, which empowers revenue to reopen subject to Sections 148 to 153, including Section 148A. Therefore, even if the Explanations were valid, the procedure under Section 148A was not followed, rendering the notices invalid. The Court also noted that the Relaxation Act was not applicable for Assessment Years 2015-2016 or subsequent years. Consequently, all impugned notices issued under Section 148 were quashed and set aside. The Assessing Officers were permitted to initiate fresh reassessment proceedings in accordance with the amended provisions of the Act, strictly complying with the statutory requirements. The Court relied on decisions of the Allahabad, Rajasthan, Delhi, and Madras High Courts.
The High Court held that the Explanations to Notification No. 20 of 2021 and Notification No. 38 of 2021 were ultra vires and therefore bad in law and null and void. The Court agreed with the petitioners' submission that Section 3 of the Relaxation Act was merely a relaxation provision dealing with 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 further found that even if the Explanations were considered valid, the impugned notices were still bad in law because they failed to comply with the amended Section 147, which no longer relies on the 'reason to believe' criterion, and did not follow the mandatory procedure under Section 148A. The Court also observed 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.
The High Court held that the Explanations to Notification No. 20/2021 and Notification No. 38/2021 were ultra vires and consequently bad in law and void. The Court agreed with the petitioners that Section 3 of the Relaxation Act was a relaxation provision dealing with time limits and did not envisage amendments to 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, and no such power to amend was delegated to the Central Government under Section 3. The Court also found that the impugned notices were bad in law because they were issued on the basis of the Assessing Officer's 'reason to believe' (a concept no longer recognized in the amended Section 147) and failed to comply with the procedure under Section 148A, which is mandated by the amended Section 147. The Court further noted that the Relaxation Act was not applicable for Assessment Years 2015-2016 or subsequent years. Therefore, 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 relevant amended provisions of the Act.
The High Court held that the Explanations to Notification No. 20/2021 and Notification No. 38/2021 were ultra vires and therefore bad in law and void. The Court agreed with the 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 the Act, was distinct and did not grant such delegated power. Furthermore, the Court found that even if the Explanations were valid, the impugned notices were bad in law because they were issued based on the repealed concept of 'reason to believe' under Section 147 and failed to comply with the mandatory procedure under the amended Section 147 and Section 148A. The Court also noted that the Relaxation Act was not applicable for Assessment Years 2015-2016 onwards. Consequently, all impugned notices 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, 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. The Court further 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 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 or subsequent years. Consequently, all impugned notices issued under Section 148 were quashed and set aside. The Assessing Officers were permitted to initiate fresh reassessment proceedings in accordance with the amended provisions of the Act.
The High Court held that the Explanations to Notification No. 20/2021 and Notification No. 38/2021 were ultra vires and therefore bad in law and null and void. The Court agreed with the petitioners' submission that Section 3 of the Relaxation Act was only a relaxation provision dealing with time limits and did not empower amendments to the substantive provisions of the Income Tax Act, unlike Section 4. The Court found that the Assessing Officers had assumed jurisdiction based on the 'reason to believe' concept, which is no longer recognized under the amended Section 147. Moreover, the procedure under Section 148A, which is part of the amended provisions and must be followed, was not complied with. The Court also held that the Relaxation Act was not applicable to Assessment Years 2015-2016 or subsequent years, as the time limits for issuing notices under Section 148 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 relevant amended provisions of the Act, strictly complying with the procedure.
The High Court held that the Explanations to Notification No. 20 of 2021 and Notification No. 38 of 2021 were ultra vires 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 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, which did amend provisions, was distinct. The Court found that the impugned notices were invalid for multiple reasons: (a) the Explanations were ultra vires; (b) the notices were based on the repealed 'reason to believe' concept under Section 147; (c) the procedure under the amended Section 148A was not followed; and (d) the Relaxation Act was not applicable to the assessment years in question. Consequently, all the impugned notices were quashed and set aside. The Assessing Officers were permitted to initiate fresh reassessment proceedings in accordance with the amended provisions of the Act, strictly complying with the statutory requirements. The Court relied on decisions 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 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 made amendments to the Act. The Court found that the impugned notices were bad in law for multiple reasons: (a) the Explanations did not cover Section 147, which empowers reopening subject to Sections 148 to 153, including Section 148A, and the procedure under Section 148A was not followed; (b) the assumption of jurisdiction was based on the 'reason to believe' concept, which is no longer recognized in the amended Section 147; and (c) the Relaxation Act was not applicable for Assessment Years 2015-2016 or subsequent years as the time limits for these years were not expiring within the period for which Section 3(1) of the Relaxation Act was applicable. Consequently, all impugned notices were quashed and set aside. The Assessing Officers were permitted to initiate fresh reassessment proceedings in accordance with the amended provisions of the Act.
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 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 the substantive provisions of the Income Tax Act. Only Section 4 of the Relaxation Act contained such amendments. Furthermore, the Court found that even if the Explanations were considered valid, the impugned notices were still invalid because the Assessing Officers assumed jurisdiction based on the 'reason to believe' clause from the erstwhile Section 147, which is no longer applicable. 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, 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, 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 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 because they were issued based on the erstwhile Section 147, which relied on the 'reason to believe' concept, a concept no longer recognized in the amended Section 147. Furthermore, the amended Section 147 is subject to Sections 148 to 153, which include the mandatory procedure under Section 148A, a procedure that was not followed. The Court also held that the Relaxation Act was not applicable to Assessment Years 2015-2016 onwards, as the time limits for these years did not fall within the scope of Section 3(1) of the Relaxation Act. Consequently, all impugned notices 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 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 assessee 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 substantive provisions of the Income Tax Act, 1961. Section 4 of the Relaxation Act, which amended certain provisions, was distinct and made by the legislature itself. 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 subject to Sections 148 to 153, including Section 148A; (b) the procedure under Section 148A was not followed; (c) the 'reason to believe' standard, no longer recognized in amended Section 147, was the basis for assumption of jurisdiction; and (d) the Relaxation Act was not applicable to Assessment Years 2015-2016 onwards. Consequently, all impugned notices were quashed and set aside, with liberty to the Assessing Officers to initiate fresh proceedings in accordance with the amended provisions.
The High Court allowed the writ petitions. The Court held that the Explanations to Notification No. 20/2021 and Notification No. 38/2021 were ultra vires, bad in law, and void. The reasoning was that Section 3 of the Relaxation Act, which deals with relaxation of time limits, does not empower the Central Government to amend substantive provisions of the Income Tax Act. Such amendments are to be made by the legislature itself, as seen in Section 4 of the Relaxation Act. Therefore, the Explanations attempting to revive the repealed provisions 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. This was because they were issued based on the 'reason to believe' principle from the erstwhile Section 147, which is not part of the amended Section 147. Additionally, the mandatory procedure under the amended Section 147, including the requirement to follow Section 148A, was not complied with. The Court also noted that the Relaxation Act was not applicable to Assessment Years 2015-2016 and subsequent years. Consequently, all impugned notices issued under Section 148 were quashed and set aside, with liberty to the Assessing Officers to initiate fresh reassessment proceedings in accordance with the relevant amended provisions of the Act.
The High Court held that the Explanations to Notification No. 20/2021 and Notification No. 38/2021 are ultra vires, bad in law, and void. The Court agreed with the assessee's submission that Section 3 of the Relaxation Act is a relaxation provision dealing with time limits and does not empower amendments to the substantive provisions of the Income Tax Act, 1961. Section 4 of the Relaxation Act, which amends the Act, was made by the Legislature itself, and no such power was delegated to the Central Government. Furthermore, even if the Explanations were considered valid, they did not cover Section 147, which empowers reopening subject to Sections 148 to 153, including the mandatory procedure under Section 148A. The Court also noted that the Relaxation Act is not applicable for Assessment Years 2015-2016 or subsequent years as the time limits for issuing notices were not expiring within the period for which Section 3(1) of the Relaxation Act was applicable. Consequently, all impugned notices issued under Section 148 of the Act were quashed and set aside. The Assessing Officers were permitted to initiate fresh reassessment proceedings in accordance with the 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, bad in law, and null and void. The Court agreed with the assessee's submission that Section 3 of the Relaxation Act, which falls under Chapter II titled ‘Relaxation of Certain Provisions of Specified Act’, only deals with time limits and does not grant power to amend substantive provisions of the Income Tax Act. Section 4 of the Relaxation Act, which amends the Act, falls under Chapter III. Therefore, the Explanations, by attempting to revive repealed provisions for reassessment, exceeded the scope of Section 3. Furthermore, the Court found that even if the Explanations were considered valid, the impugned notices were still invalid as they failed to comply with the amended Section 147 of the Act, specifically by not following the procedure under Section 148A and by relying on the 'reason to believe' concept, which is no longer recognized. The Court also noted that the Relaxation Act was not applicable to Assessment Years 2015-2016 onwards. Consequently, all impugned notices issued under Section 148 were quashed and set aside, with liberty to the Assessing Officers to initiate fresh proceedings in accordance with the amended provisions of the Act.
The High Court allowed the writ petitions, holding that the Explanations to Notification No. 20/2021 and Notification No. 38/2021 were ultra vires and therefore bad in law and null and void. The Court agreed with the petitioners that Section 3 of the Relaxation Act was a relaxation provision dealing with time limits and did not empower the Central Government to amend substantive provisions of the Income Tax Act, unlike Section 4. The Court 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. Furthermore, even if the Explanations were considered valid, the procedure under the amended Section 147, including Section 148A, had not been followed. The Court also noted 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 relevant amended provisions of the Act, strictly complying with the statutory requirements.
The High Court held that the Explanations to Notification No. 20/2021 and Notification No. 38/2021 were ultra vires, 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 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 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 further noted that even if the Explanations were valid, they did not cover Section 147, and the mandatory procedure under the amended Section 147 and Section 148A had not been followed. The Court also found that the Relaxation Act was not applicable to Assessment Years 2015-2016 onwards. Consequently, all impugned notices issued under Section 148 were quashed and set aside, with liberty to the Assessing Officers to initiate fresh proceedings in accordance with the amended provisions.
The High Court held that the Explanations to Notification No. 20/2021 and Notification No. 38/2021 were ultra vires and therefore bad in law and 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 or revive substantive provisions of the Income Tax Act, 1961. It noted that Section 4 of the Relaxation Act was the provision that amended the Act. The Court found that the Assessing Officers had assumed jurisdiction based on the 'reason to believe' that income had escaped assessment, a concept no longer recognized under the amended Section 147. Furthermore, even if the Explanations were considered valid, the procedure under the amended Section 147, which is subject to Sections 148 to 153 (including Section 148A), had not been followed. The Court also 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 procedures.
The High Court held that the Explanations to Notification No. 20/2021 and Notification No. 38/2021 were ultra vires and therefore bad in law and null and void. The Court agreed with the petitioners' submission that Section 3 of the Relaxation Act was a 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. 20/2021 and Notification No. 38/2021 were ultra vires and therefore bad in law and null and void. The Court agreed with the petitioners that Section 3 of the Relaxation Act was a relaxation provision dealing with time limits and did not empower the Central Government to amend the substantive provisions of the Income Tax Act, 1961. Section 4 of the Relaxation Act, which amended certain provisions, was the relevant provision for legislative amendments. The Court found that even if the Explanations were considered valid, they did not cover Section 147 of the Act, which is the basis for assuming jurisdiction for reassessment. Moreover, the mandatory procedure under the amended Section 147 and Section 148A had not been followed. The Court also noted that the Relaxation Act was not applicable for Assessment Years 2015-2016 onwards. Consequently, all impugned notices issued under Section 148 of the Act were quashed and set aside. The Assessing Officers were permitted to initiate fresh reassessment proceedings in accordance with the amended provisions of the Act, strictly complying with the statutory requirements.
The High Court held that the Explanations to Notification No. 20/2021 and Notification No. 38/2021 were ultra vires and therefore bad in law and null and void. The Court agreed with the petitioners' submission that Section 3 of the Relaxation Act was a relaxation provision dealing with time limits and did not envisage amendments to the substantive provisions of the Income Tax Act, unlike Section 4 of the Relaxation 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 adherence to Sections 148 to 153, including the procedure under Section 148A. The Court also noted that the Relaxation Act was not applicable to Assessment Years 2015-2016 onwards. Consequently, all impugned notices issued under Section 148 of the Act were quashed and set aside. The Assessing Officers were permitted to initiate fresh reassessment proceedings in accordance with the relevant provisions of the Act as amended by the Finance Act, 2021, strictly complying with the statutory provisions. The Court 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 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 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 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 and therefore bad in law and null and void. The Court agreed with the assessee's submission that Section 3 of the Relaxation Act was a relaxation provision dealing with time limits and did not empower the Central Government to amend substantive provisions of the Income Tax Act, unlike Section 4 which contained legislative amendments. The Court found that the Explanations sought to give effect to the repealed provisions of Sections 148, 149, and 151 but did not cover Section 147. Consequently, even if the Explanations were valid, the procedure under the amended Section 147, including Section 148A, was not followed, rendering the notices invalid. The Court also noted that the Relaxation Act was not applicable to assessment years 2015-2016 onwards. All impugned notices issued under Section 148 were quashed and set aside, with liberty to the Assessing Officers to initiate fresh proceedings in accordance with the amended provisions of the Act.
The High Court held that the Explanations to Notification No. 20 of 2021 and Notification No. 38 of 2021 were ultra vires and therefore bad in law and null and void. The Court agreed with the petitioners' submission that Section 3 of the Relaxation Act was a relaxation provision dealing with time limits and did not empower amendments to substantive provisions of the Income Tax Act, 1961. Section 4 of the Relaxation Act, which amended the Act, was distinct. The Court found that the impugned notices were bad in law because they were issued based on the 'reason to believe' concept, which is not part of the amended Section 147, and because the mandatory procedure under Section 148A was not followed. Furthermore, the Court held that the Relaxation Act was not applicable for Assessment Years 2015-2016 onwards. Consequently, all impugned notices issued under Section 148 were quashed and set aside. The Assessing Officers were permitted to initiate fresh reassessment proceedings in accordance with the amended provisions of the Act, strictly complying with the 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 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 were ultra vires and therefore 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 provisions, was distinct. Furthermore, the Court found that even if the Explanations were valid, the impugned notices were invalid because they were issued based on the erstwhile Section 147's 'reason to believe' concept, which is no longer recognized in the amended Section 147. Crucially, the procedure under the amended Section 147, which includes Section 148A, was not followed. The Court also held that the Relaxation Act was not applicable to Assessment Years 2015-2016 or any subsequent year, 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. 20/2021 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, bad in law, and null and void. The Court agreed with the petitioners that Section 3 of the Relaxation Act was a relaxation provision dealing with time limits and did not empower the Central Government to amend substantive provisions of the Income Tax Act, unlike Section 4. The Court found that the impugned notices were bad in law because they were issued based on the repealed 'reason to believe' concept and failed to comply with the amended Section 147, which mandates adherence to 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 and subsequent years, as the time limits for these years were not expiring within the period for which Section 3(1) of the Relaxation Act was applicable. Consequently, all the impugned notices issued under Section 148 of the Act were quashed and set aside. The Assessing Officers were permitted to initiate fresh reassessment proceedings in accordance with the relevant provisions of the Act as amended by the Finance Act, 2021, after strictly complying with the statutory requirements.
The High Court held that the Explanations to Notification No. 20/2021 and Notification No. 38/2021 were ultra vires and therefore bad in law and null and void. The Court agreed with the assessee 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 or revive repealed sections of the Income Tax Act. It distinguished Section 3 from Section 4 of the Relaxation Act, which did amend the Act. The Court further held that the impugned notices were bad in law because they 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. The Court also noted that the Relaxation Act was not applicable for Assessment Years 2015-2016 onwards. Consequently, all impugned notices were quashed and set aside. The Assessing Officers were permitted to initiate fresh reassessment proceedings in accordance with the amended provisions of the Act.
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 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 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. Section 4 of the Relaxation Act, which did amend provisions, was distinct and did not delegate amendment powers to the Central Government. Furthermore, the Court found that even if the Explanations were considered valid, the impugned notices were still bad in law because they were issued based on the 'reason to believe' concept, which is no longer recognized in the amended Section 147, and the procedure under the amended Section 147, including Section 148A, was not followed. The Court also noted that the Relaxation Act was not applicable 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 petitioners that Section 3 of the Relaxation Act was a relaxation provision dealing with time limits and did not empower the Central Government to amend substantive provisions of the Income Tax Act. Section 4 of the Relaxation Act, which amended certain provisions, was made by the Legislature itself. The Court found that the Explanations sought to give effect to erstwhile Sections 148, 149, and 151 but did not cover Section 147, which is subject to Sections 148 to 153, including Section 148A. Therefore, even if the Explanations were valid, the procedure under Section 148A was not followed. Additionally, the Court held that the Relaxation Act was not applicable for Assessment Years 2015-2016 or any subsequent year, as the time limit for issuing notices under Section 148 for these years was not expiring within the period for which Section 3(1) of the Relaxation Act was applicable. Consequently, all impugned notices issued under Section 148 were quashed and set aside. The Assessing Officers were permitted to initiate fresh reassessment proceedings in accordance with the amended provisions of the Act, strictly complying with the law. The ratio decidendi is that legislative power to amend substantive provisions of the Income Tax Act cannot be delegated to the executive, and reassessment proceedings must strictly adhere to the applicable statutory provisions, including procedural 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 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 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, bad in law, and null and void. The Court agreed with the assessee's submission that Section 3 of the Relaxation Act was a relaxation provision dealing with time limits and did not empower the Central Government to amend the substantive provisions of the Income Tax Act. Only Section 4 of the Relaxation Act contained such amendments made by the legislature. Furthermore, the Court found that even if the Explanations were considered valid, the impugned notices were still invalid because they did not comply with the amended Section 147 of the Act. Specifically, the notices were based on the 'reason to believe' concept, which is no longer recognized, and failed to follow the mandatory procedure under Section 148A. The Court also noted that the Relaxation Act was not applicable 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, strictly complying with the statutory requirements.
The High Court held that the Explanations to Notification No. 20/2021 and Notification No. 38/2021 were ultra vires and therefore bad in law and null and void. The Court agreed with the petitioners' submission that Section 3 of the Relaxation Act was a provision for relaxing 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 effected amendments to the Act. The Court further found that even if the Explanations were considered valid, the impugned notices were still bad in law because they were issued based on the erstwhile Section 147 (requiring 'reason to believe') and failed to comply with the mandatory procedure under the amended Section 147, which includes Section 148A. The Court also noted that the Relaxation Act was not applicable to Assessment Years 2015-2016 onwards. Consequently, all impugned notices issued under Section 148 of the Act were quashed and set aside. The Assessing Officers were permitted to initiate fresh reassessment proceedings in accordance with the 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 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 for time limits and did not grant the power to amend substantive provisions of the Income Tax Act, unlike Section 4. The Court found that the Explanations sought to give effect to the repealed provisions, including the 'reason to believe' clause in Section 147, which is no longer valid under the amended Act. Furthermore, the Court noted that the procedure under the amended Section 147, including Section 148A, was not followed. The Court also held that the Relaxation Act was not applicable for Assessment Years 2015-2016 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.