Bombay High Court Judgments — 2022

The High Court held that the Explanations to Notification No. 20/2021 and Notification No. 38/2021 are ultra vires 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. The Court further noted that the Explanations did not cover Section 147, which requires compliance with Sections 148 to 153, including Section 148A. Therefore, even if the Explanations were valid, the procedure under Section 148A was not followed, rendering the notices invalid. The Court also 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 relevant statutory provisions, including Section 148A.

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 substantive amendments to the Act, which was the domain of Section 4. 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 'reason to believe' clause, which is no longer recognized under the amended Section 147, and had failed to comply with the mandatory procedure laid down in Section 148A. The Court also noted that the Relaxation Act was not applicable to assessment years 2015-2016 onwards. Consequently, all impugned notices issued under Section 148 were quashed and set aside. The Assessing Officers were permitted to initiate fresh reassessment proceedings in accordance with the relevant provisions of the Act as amended by the Finance Act, 2021, strictly complying with the statutory procedures. The ratio decidendi is that legislative power to amend substantive provisions of the Income Tax Act cannot be delegated to the executive through notifications under a relaxation provision, and procedural compliances under the amended Act are mandatory.

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 petitioners 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. Such amendments were made by the legislature itself under Section 4 of the Relaxation Act. Furthermore, the Court found that the impugned notices were bad in law for several reasons: (a) they were based on the 'reason to believe' clause of the repealed Section 147, which is no longer valid; (b) the procedure under the amended Section 147, including Section 148A, was not followed; and (c) the Relaxation Act was not applicable for Assessment Years 2015-2016 onwards. Consequently, all impugned notices issued under Section 148 were quashed and set aside. The Assessing Officers were permitted to initiate fresh reassessment proceedings in accordance with the relevant amended provisions of the Act, strictly complying with the statutory requirements. The Court was in respectful agreement with the views taken by other High Courts on similar issues.

The High Court held that the Explanations to Notification No. 20/2021 and Notification No. 38/2021 were ultra vires and therefore bad in law and null and void. The Court agreed with the petitioners that Section 3 of the Relaxation Act was a relaxation provision dealing with time limits and did not empower amendments to the substantive provisions of the Income Tax Act, unlike Section 4. The Court found that the Explanations sought to extend the applicability of erstwhile Sections 148, 149, and 151 but did not cover Section 147. Consequently, the mandatory procedure under Section 148A, which is part of the framework including Section 147, was not followed. The Court also noted that the Relaxation Act was not applicable for Assessment Years 2015-2016 onwards. Therefore, all impugned notices issued under Section 148 were quashed and set aside. The Assessing Officers were permitted to initiate fresh reassessment proceedings in accordance with the amended provisions of the Act, strictly complying with the relevant procedures. The ratio decidendi is that legislative power to amend substantive provisions of the Income Tax Act cannot be delegated to the executive through notifications under a relaxation provision, and procedural safeguards like Section 148A must be followed.

The High Court held that the Explanations to Notification No. 20/2021 and Notification No. 38/2021 were ultra vires and therefore bad in law and void. The Court agreed with the petitioners' submission that Section 3 of the Relaxation Act was a relaxation provision dealing with time limits and did not empower amendments to the substantive provisions of the Income Tax Act, unlike Section 4. The Court found that the Explanations sought to extend the applicability of erstwhile Sections 148, 149, and 151 but did not cover Section 147, which is subject to Sections 148 to 153, including Section 148A. Consequently, even if the Explanations were valid, the procedure under Section 148A was not followed, rendering the notices invalid. The Court also held that the Relaxation Act was not applicable for Assessment Years 2015-2016 or any subsequent year, as the time 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. The Court quashed and set aside all impugned notices issued under Section 148 of the Act. It was clarified that Assessing Officers could initiate fresh reassessment proceedings in accordance with the amended provisions of the Act after strictly complying with the relevant statutory provisions. 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 the substantive provisions of the Income Tax Act. It noted that Section 4 of the Relaxation Act, which amended provisions of the Act, was distinct and made by the legislature itself. The Court found that the impugned notices were bad in law because they relied on the repealed 'reason to believe' clause from the erstwhile Section 147 and failed to comply with the procedure under the amended Section 147, which includes Section 148A. The Court also held that the Relaxation Act was not applicable for Assessment Years 2015-2016 or any subsequent year, as the time limit for issuing notices for these years was not expiring within the period for which Section 3(1) of the Relaxation Act was applicable. Consequently, all impugned notices 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 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 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, bad in law, and null and void. The Court agreed with the assessee's submission that Section 3 of the Relaxation Act was a relaxation provision for time limits and did not amend the substantive provisions of the Income Tax Act. It 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 Explanations themselves were invalid; (b) even if valid, they did not cover Section 147, which requires compliance with 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 2015-2016 onwards, as the time limits for these years were not expiring within the period of applicability 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 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 are 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 only a relaxation provision for 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, which contained legislative amendments, was distinct and did not apply to the situation. 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, which requires adherence to Sections 148 to 153, including the procedure under Section 148A. The 'reason to believe' clause, a concept from the repealed provisions, was incorrectly used. The Court also noted that the Relaxation Act was not applicable to Assessment Years 2015-2016 onwards. Consequently, all impugned notices issued under Section 148 were quashed and set aside. The Assessing Officers were permitted to initiate fresh reassessment proceedings in accordance with the amended provisions of the Act.

The High Court held that the Explanations to Notification No. 20/2021 and Notification No. 38/2021 were ultra vires and therefore bad in law and null and void. The Court agreed with the assessee's submission that Section 3 of the Relaxation Act was a relaxation provision dealing with time limits and did not empower the Central Government to amend substantive provisions of the Income Tax Act or revive repealed sections. The Court noted that Section 4 of the Relaxation Act, which did amend provisions, was distinct from Section 3. 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, which no longer recognizes the 'reason to believe' concept, and the mandatory procedure under Section 148A was not followed. The Court also found that the Relaxation Act was not applicable to Assessment Years 2015-2016 and subsequent years. Consequently, all impugned notices issued under Section 148 were quashed and set aside, with liberty to the Assessing Officers to initiate fresh proceedings in accordance with the amended provisions.

The High Court held that the Explanations to Notification No. 20/2021 and Notification No. 38/2021 were ultra vires and therefore bad in law and void. The Court agreed with the assessee that Section 3 of the Relaxation Act was a relaxation provision dealing with time limits and did not amend the substantive provisions of the Income Tax Act. It noted that Section 4 of the Relaxation Act was the section that amended the Act. The Court further found that even if the Explanations were considered valid, the impugned notices were still invalid because they did not comply with the amended Section 147 of the Act. Specifically, the assumption of jurisdiction was based on the 'reason to believe' concept, which is no longer recognized in the amended Section 147, and the procedure under Section 148A, which is mandatory, was not followed. Additionally, the Court held that the Relaxation Act was not applicable for Assessment Years 2015-2016 or subsequent years. Consequently, all the impugned notices issued under Section 148 of the Act were quashed and set aside. The Assessing Officers were permitted to initiate fresh reassessment proceedings in accordance with the amended provisions of the Act, strictly complying with the statutory requirements.

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, 2020, was a relaxation provision dealing with time limits and did not empower the Central Government to amend the substantive provisions of the Income Tax Act, 1961. Such amendments were only provided for under Section 4 of the Relaxation Act, which was enacted by the legislature itself. Consequently, the Court found that the impugned notices issued under Section 148 of the Act after April 1, 2021, were invalid. This was because they were based on the repealed provisions and failed to comply with the amended Section 147, which no longer recognizes the 'reason to believe' criterion, and crucially, did not follow the mandatory procedure under Section 148A. The Court also noted that the Relaxation Act was not applicable to the assessment years in question. All the writ petitions were allowed, and the impugned notices were quashed and set aside, with liberty to the Assessing Officers to initiate fresh proceedings in accordance with the amended provisions of the Act.

The High Court held that the Explanations to Notification No. 20/2021 and Notification No. 38/2021 were ultra vires and therefore bad in law and null and void. The Court agreed with the 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 allowed the writ petitions. It held that the Explanations to Notification No. 20 of 2021 and Notification No. 38 of 2021 were ultra vires, bad in law, and null and void. The Court agreed with the assessee's submission that Section 3 of the Relaxation Act was a provision for relaxation of time limits and did not empower the Central Government to amend substantive provisions of the Income Tax Act. It noted that Section 4 of the Relaxation Act, which amended the Act, was distinct from Section 3. 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 and the procedural requirements of Section 148A, which were applicable. The Court also noted that the Relaxation Act was not applicable to Assessment Years 2015-2016 onwards. Consequently, all impugned notices issued under Section 148 were quashed and set aside. The Assessing Officers were permitted to initiate fresh reassessment proceedings in accordance with the 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, which amended the Act, was distinct. The Court found that the impugned notices were also invalid because they were issued based on the repealed Section 147, which required 'reason to believe' that income had escaped assessment, a concept no longer recognized in the amended Section 147. Moreover, the amended Section 147 is subject to Sections 148 to 153, including the mandatory procedure under Section 148A, which was not followed. The Court also noted that the Relaxation Act was not applicable 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 allowed the writ petitions, declaring the Explanations to Notification No. 20 of 2021 and Notification No. 38 of 2021 as ultra vires, and therefore, bad in law and null and void. The Court agreed with the petitioners that Section 3 of the Relaxation Act was a relaxation provision for time limits and did not empower the Central Government to amend substantive provisions of the Income Tax Act; only Section 4 of the Relaxation Act did so. 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 requires adherence to 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 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 contention that Section 3 of the Relaxation Act was a relaxation provision dealing with time limits and did not empower amendments to substantive provisions of the Act, unlike Section 4. The Court found that the Explanations did not cover Section 147, which requires compliance with Sections 148 to 153, including Section 148A. Therefore, even if the Explanations were valid, the procedure under Section 148A was not followed, rendering the notices invalid. The Court also held that the Relaxation Act was not applicable to 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 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 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 not Section 147, which empowered reopening subject to Sections 148 to 153, including Section 148A. Therefore, even if the Explanations were valid, the procedure under Section 148A was not followed, rendering the notices invalid. Furthermore, the Court noted that the Relaxation Act was not applicable for Assessment Years 2015-2016 or subsequent years. Consequently, all impugned notices issued under Section 148 were quashed and set aside, with liberty to the Assessing Officers to initiate fresh proceedings in accordance with the amended provisions of the Act.

The High Court held that the Explanations to Notification No. 20 of 2021 and Notification No. 38 of 2021 were ultra vires and therefore bad in law and void. The Court agreed with the 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. It noted that Section 4 of the Relaxation Act, which amended the Act, was distinct. The Court further found that even if the Explanations were considered valid, the impugned notices were invalid because the Assessing Officers had assumed jurisdiction based on the 'reason to believe' clause, which is no longer recognized under the amended Section 147, and had failed to comply with the procedure laid down in Section 148A. Additionally, the Court 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.

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 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 deals with time limits and does not grant power to amend substantive provisions or revive repealed sections. In contrast, Section 4 of the Relaxation Act, which amends provisions of the Income Tax Act, falls under Chapter III. The Court agreed with the assessee that only Section 4 amended the Act, not Section 3. Furthermore, the Court found that even if the Explanations were considered valid, the impugned notices were invalid because they did not comply with the amended Section 147, which is subject to Sections 148 to 153, including the mandatory procedure under Section 148A. The Court also noted that the Relaxation Act was not applicable for Assessment Years 2015-2016 and subsequent years. Consequently, all impugned notices issued under Section 148 were quashed and set aside, with liberty to the Assessing Officers to initiate fresh proceedings in accordance with the amended provisions.

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 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. 20/2021 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 relaxation of time limits and did not empower the Central Government to amend the substantive provisions of the Income Tax Act, 1961. Only Section 4 of the Relaxation Act introduced amendments. The Court found that the impugned notices were bad in law for multiple reasons: (a) the reliance on the 'reason to believe' clause from the erstwhile Section 147, which is no longer applicable under the amended Section 147; (b) the non-compliance with the mandatory procedure under the amended Section 148A; and (c) the inapplicability of the Relaxation Act and the subsequent notifications to Assessment Years 2015-2016 and subsequent years. Consequently, all impugned notices issued under Section 148 were quashed and set aside. The Assessing Officers were permitted to initiate fresh reassessment proceedings in accordance with the relevant amended provisions of the Act, strictly complying with the statutory requirements. The Court found itself in respectful agreement with the decisions of the Allahabad High Court, Rajasthan High Court, Delhi High Court, and Madras High Court on similar issues.

The High Court held that the Explanations to Notification No. 20 of 2021 and Notification No. 38 of 2021 are ultra vires the Taxation and Other Laws (Relaxation of Certain Provisions) Act, 2020, and therefore, bad in law and null and void. The Court agreed with the assessee's submission that Section 3 of the Relaxation Act only deals with relaxation of time limits and does not empower the Central Government to revive repealed substantive provisions of the Income Tax Act. It noted that Section 4 of the Relaxation Act, which amends the Income Tax Act, was enacted by the legislature itself. The Court further found that even if the Explanations were considered valid, the impugned notices were still invalid as they were issued based on the 'reason to believe' criterion, which is no longer recognized under the amended Section 147, and the mandatory procedure under Section 148A was not followed. Additionally, the Court 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.

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 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. Such amendments, if any, would typically be found in Chapter III, as exemplified by Section 4 of the Relaxation Act. The Court further noted that even if the Explanations were considered valid, they did not cover Section 147 of the Act, and the mandatory procedure under the amended Section 147 and Section 148A was not followed. The Court also found that the Relaxation Act was not applicable for Assessment Years 2015-2016 or subsequent years. Consequently, all impugned notices issued under Section 148 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 thus 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; only Section 4 of the Relaxation Act did so. The Court further found that even if the Explanations were considered valid, the impugned notices were still invalid because they did not comply with the amended Section 147 of the Act, as the 'reason to believe' clause was used and the mandatory procedure under Section 148A was not followed. Additionally, the Court noted that the Relaxation Act was not applicable to Assessment Years 2015-2016 onwards. Consequently, all impugned notices issued under Section 148 of the Act were quashed and set aside. The Assessing Officers were permitted to initiate fresh reassessment proceedings in accordance with the amended provisions of the Act.

The High Court held that the Explanations to Notification No. 20 of 2021 and Notification No. 38 of 2021 are ultra vires, bad in law, and void. The Court agreed with the assessee's submission that Section 3 of the Relaxation Act is a relaxation provision dealing with time limits and does not empower the Central Government to amend substantive provisions of the Income Tax Act. Section 4 of the Relaxation Act, which amends the Act, was legislated by Parliament. Therefore, the Explanations, which sought to extend the applicability of erstwhile Sections 148, 149, and 151, 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 the notices did not comply with the amended Section 147, which no longer recognizes the 'reason to believe' criterion for assuming jurisdiction. 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 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 Nos. 20/2021 and 38/2021 are ultra vires and therefore bad in law and void. The Court reasoned that Section 3 of the Relaxation Act, which falls under the chapter titled 'Relaxation of Certain Provisions of Specified Act', was intended 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 provisions, was legislatively enacted. The Court agreed with the assessee that the notices were invalid because they were based on the repealed 'reason to believe' concept under Section 147 and failed to comply with the mandatory procedure under the newly introduced Section 148A. Additionally, the Court found 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 Section 3 of the Relaxation Act, which falls under Chapter II titled ‘Relaxation of Certain Provisions of Specified Act’, is a provision dealing with time limits and does not empower the Central Government to revive repealed 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’, contains legislative amendments. Therefore, the Court agreed with the assessee that only Section 4 amended the Act, and Section 3 did not envisage amendments to substantive provisions. The Court further held that even if the Explanations in the notifications were valid, the impugned notices were bad in law because they did not comply with the amended Section 147, which no longer recognizes 'reason to believe', and failed to follow the mandatory procedure under Section 148A. The Court also noted that the Relaxation Act was not applicable for Assessment Years 2015-2016 onwards. Consequently, the Explanations to Notification No. 20/2021 and Notification No. 38/2021 were declared ultra vires, bad in law, and null and void. All impugned notices issued under Section 148 were quashed and set aside. The Assessing Officers were permitted to initiate fresh reassessment proceedings in accordance with the amended provisions of the Act, strictly complying with the statutory procedures. No issue was expressly left undecided.

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 merely a provision for relaxing time limits and did not grant the power to amend substantive provisions of the Income Tax Act, which was the domain of Section 4. The Court found that the notices were also invalid because they were issued based on the repealed 'reason to believe' concept under Section 147 and failed to comply with the mandatory procedure under 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 and set aside. The Assessing Officers were permitted to initiate fresh reassessment proceedings in accordance with the amended provisions of the Act, strictly complying with the statutory procedures.

The High Court held that the Explanations to Notification No. 20 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 grant the power to amend substantive provisions of the Income Tax Act, unlike Section 4. The Court found that the Explanations sought to extend the applicability of erstwhile Sections 148, 149, and 151 but did not cover Section 147, which is the enabling provision for reopening. Consequently, the notices were bad in law for failing to comply with the amended Section 147 and 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 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. 20/2021 and Notification No. 38/2021 were ultra vires and therefore bad in law and null and void. The Court agreed with the petitioners' submission that Section 3 of the Relaxation Act was a relaxation provision dealing with time limits and did not empower amendments to substantive provisions of the Income Tax Act, unlike Section 4. The Court found that the Explanations sought to extend the applicability of erstwhile Sections 148, 149, and 151, but not Section 147, which empowered reopening subject to Sections 148 to 153, including Section 148A. Therefore, even if the Explanations were valid, the procedure under Section 148A was not followed, rendering the notices invalid. The Court also noted that the Relaxation Act was not applicable for Assessment Years 2015-2016 onwards. Consequently, all impugned notices issued under Section 148 were quashed and set aside. The Assessing Officers were permitted to initiate fresh reassessment proceedings in accordance with the amended provisions of the Act, strictly complying with the procedure.

The Bombay High Court held that the Explanations to Notification No. 20/2021 and Notification No. 38/2021 were ultra vires and therefore bad in law and void. The Court agreed with the petitioners that Section 3 of the Relaxation Act was a relaxation provision for time limits and did not empower the Central Government to amend substantive provisions of the Income Tax Act, unlike Section 4 which contained legislative amendments. The Court found that the Explanations sought to revive repealed provisions without legislative sanction. Furthermore, the Court held that even if the Explanations were considered valid, the impugned notices were still bad in law because they were issued based on the erstwhile Section 147 ('reason to believe') 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 to Assessment Years 2015-2016 and onwards. 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 Court was in respectful agreement with the views of the Allahabad, Rajasthan, Delhi, and Madras High Courts.

The High Court held that the Explanations to Notification No. 20 of 2021 and Notification No. 38 of 2021 were ultra vires and therefore bad in law and null and void. The Court agreed with the assessee's submission that Section 3 of the Relaxation Act was a relaxation provision for time limits and did not empower the Central Government to amend substantive provisions of the Income Tax Act. Section 4 of the Relaxation Act, which did amend the Act, was enacted by the legislature itself, and no such power was delegated to the Central Government. 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 recognizes the 'reason to believe' concept, 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. The Assessing Officers were permitted to initiate fresh reassessment proceedings in accordance with the amended provisions of the Act, strictly complying with the statutory requirements.

The High Court held that the Explanations to Notification No. 20/2021 and Notification No. 38/2021 are ultra vires and therefore bad in law and null and void. The Court 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. It was noted that Section 4 of the Relaxation Act, which amends the Act, falls under Chapter III. The Court found that even if the Explanations were valid, the impugned notices would still be invalid because they were issued based on the erstwhile Section 147 ('reason to believe') and failed to comply with the procedure under the amended Section 147 and Section 148A. Additionally, the Court held that the Relaxation Act was not applicable for Assessment Years 2015-2016 onwards, as the time limits for these years did not fall within the relaxation period. 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 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, 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, unlike Section 4 which contained legislative amendments. The Court found that the impugned notices were bad in law for multiple reasons. Firstly, the assumption of jurisdiction by the Assessing Officer was based on the concept of 'reason to believe' which is no longer recognized in the amended Section 147. Secondly, 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. Thirdly, 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, the Court quashed and set aside all impugned notices issued under Section 148 of the Act. 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 assessee's 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 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 no longer recognizes the 'reason to believe' concept, and the mandatory procedure under Section 148A was not followed. Additionally, the Court found that the Relaxation Act was not applicable to assessment years 2015-2016 and subsequent years. Consequently, all impugned notices issued under Section 148 of the Act were quashed and set aside. The Assessing Officers were permitted to initiate fresh reassessment proceedings in accordance with the amended provisions of the Act.

The High Court held that the Explanations to Notification 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 solely a relaxation provision dealing with time limits and did not grant power to amend the 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. Moreover, even if the Explanations were 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 for Assessment Years 2015-2016 onwards. Consequently, all impugned notices issued under Section 148 were quashed and set aside. The Assessing Officers were permitted to initiate fresh reassessment proceedings in accordance with the amended provisions of the Act.

The High Court held that the Explanations to Notification No. 20 of 2021 and Notification No. 38 of 2021 are ultra vires, bad in law, and null and void. The Court agreed with the assessee that Section 3 of the Relaxation Act, which falls under the chapter titled 'Relaxation of Certain Provisions of Specified Act,' was only a relaxation provision dealing with time limits and did not grant the 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. 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 recognizes the concept of 'reason to believe,' 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. 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 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 relaxation of 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 the provision that amends the Act, and this power was exercised by the legislature itself, not delegated to the Central Government. 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 and Section 148A. The Court also noted that the Relaxation Act was not applicable to assessment years from 2015-2016 onwards. Consequently, all impugned notices issued under Section 148 were quashed and set aside. The Assessing Officers were permitted to initiate fresh reassessment proceedings in accordance with the amended provisions of the Act.

The High Court held that the Explanations to Notification No. 20/2021 and Notification No. 38/2021 were ultra vires and therefore bad in law and null and void. The Court agreed with the assessee's submission that Section 3 of the Relaxation Act was a relaxation provision dealing with time limits and did not empower the Central Government to amend the substantive provisions of the Income Tax Act. Section 4 of the Relaxation Act, which did amend provisions, was distinct. The Court also found that even if the Explanations were considered valid, they did not cover Section 147 of the Act, which empowers reopening subject to Sections 148 to 153, including Section 148A. Since the procedure under Section 148A was not followed, the notices were invalid. The Court further noted that the Relaxation Act was not applicable for Assessment Years 2015-2016 or subsequent years. Consequently, all impugned notices issued under Section 148 of the Act were quashed and set aside. The Assessing Officers were permitted to initiate fresh reassessment proceedings in accordance with the amended provisions of the Act, strictly complying with the statutory requirements.

The High Court held that the Explanations to Notification No. 20 of 2021 and Notification No. 38 of 2021 were ultra vires and therefore bad in law and null and void. The Court agreed with the assessee that Section 3 of the Relaxation Act was a relaxation provision dealing with time limits and did not grant power 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' criterion, which is no longer recognized in the amended Section 147. Moreover, even if the Explanations were considered valid, the procedure under the amended Section 147, including Section 148A, was not followed. The Court also noted that the Relaxation Act was not applicable 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 Court relied on decisions from the Allahabad, Rajasthan, Delhi, and Madras High Courts.

The High Court held that the Explanations to Notification No. 20/2021 and Notification No. 38/2021 were ultra vires and therefore bad in law and null and void. The Court agreed with the petitioners that Section 3 of the Relaxation Act was a relaxation provision for time limits and did not amend the substantive provisions of the Income Tax Act, unlike Section 4. The Court found that the notices were bad in law for multiple reasons: (a) the Explanations were invalid; (b) even if the Explanations were valid, they did not cover Section 147, and the procedure under the amended Section 147 and Section 148A was not followed; (c) the 'reason to believe' criterion, no longer recognized in the amended Section 147, was the basis for issuing the notices; and (d) the Relaxation Act was not applicable to Assessment Years 2015-2016 and subsequent years. Consequently, all impugned notices issued under Section 148 were quashed and set aside. The Assessing Officers were permitted to initiate fresh reassessment proceedings in accordance with the relevant provisions of the Act as amended by the Finance Act, 2021, after strictly complying with the statutory provisions. The Court was in respectful agreement with the views taken by the Allahabad High Court, Rajasthan High Court, Delhi High Court, and Madras High Court.

The High Court allowed the writ petitions. It held that the Explanations to Notification No. 20/2021 and Notification No. 38/2021 were ultra vires, bad in law, and void. The Court reasoned that Section 3 of the Relaxation Act, which falls under the chapter 'Relaxation of Certain Provisions of Specified Act', was a relaxation provision dealing with time limits and did not grant the power to amend the substantive provisions of the Income Tax Act. Section 4 of the Relaxation Act, which did amend provisions, was distinct. The Court also noted that even if the Explanations were valid, the procedure under the amended Section 147, including Section 148A, was not followed, and the 'reason to believe' clause, no longer recognized in the amended Section 147, was the basis for assumption of jurisdiction. Additionally, 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 of 2021 and Notification No. 38 of 2021 were ultra vires and therefore bad in law and null and void. The Court agreed with the petitioners' submission that Section 3 of the Relaxation Act was only a relaxation provision dealing with time limits and did not empower the Central Government to amend the substantive provisions of the Income Tax Act, 1961. Section 4 of the Relaxation Act, which did amend the Act, was distinct and its provisions were made by the Legislature itself. Furthermore, the Court found that even if the Explanations were valid, the impugned notices were bad in law because they were issued on the basis of the 'reason to believe' concept, which is no longer recognized in the amended Section 147, and because the mandatory procedure under Section 148A had not been followed. The Court also held that the Relaxation Act was not applicable to Assessment Years 2015-2016 and subsequent years. Consequently, all impugned notices issued under Section 148 were quashed and set aside. The Assessing Officers were permitted to initiate fresh reassessment proceedings in accordance with the 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 High Court, Rajasthan High Court, Delhi High Court, and Madras High Court.

The High Court held that the Explanations to Notification No. 20/2021 and Notification No. 38/2021 were ultra vires and therefore bad in law and void. The Court reasoned that Section 3 of the Relaxation Act, which falls under Chapter II titled 'Relaxation of Certain Provisions of Specified Act', was a provision dealing with time limits and did not grant the power to amend 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', contained legislative amendments. Therefore, the power to amend the Act was not delegated to the Central Government under Section 3. The Court also agreed with the petitioners that even if the Explanations were considered valid, the impugned notices were still invalid because they did not comply with the amended Section 147, which requires compliance with Section 148A, and the assumption of jurisdiction was based on the 'reason to believe' concept, which is obsolete. Furthermore, the Court found that the Relaxation Act was not applicable for Assessment Years 2015-2016 or subsequent years as the time limit for issuing notices under Section 148 for these years was not expiring within the period for which Section 3(1) of the Relaxation Act was applicable. Consequently, all impugned notices were quashed and set aside, with liberty to the Assessing Officers to initiate fresh proceedings in accordance with the amended provisions of the Act.

The High Court held that the Explanations to Notification No. 20/2021 and Notification No. 38/2021 are ultra vires and therefore bad in law and null and void. The Court agreed with the assessee's submission that Section 3 of the Relaxation Act was a 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 made amendments to the Act, and this power was not delegated to the Central Government. The Court further 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 issued based on the 'reason to believe' concept, which is not part of the amended Section 147, and the mandatory procedure under Section 148A was not followed. Additionally, the Court noted that the Relaxation Act was not applicable 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 void. The Court agreed with the assessee's submission that Section 3 of the Relaxation Act, 2020, dealt with time limits and did not empower the Central Government to amend substantive provisions of the Income Tax Act, 1961. 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 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. Additionally, 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 issued under Section 148 were quashed and set aside. The Assessing Officers were permitted to initiate fresh reassessment proceedings in accordance with the amended provisions of the Act, strictly complying with the statutory requirements. The Court relied on decisions from the Allahabad, Rajasthan, Delhi, and Madras High Courts.