Bombay High Court Judgments — 2022

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 the Central Government to amend substantive provisions of the Income Tax Act. Section 4 of the Relaxation Act, which did amend provisions, was distinct. The Court found that the impugned notices were bad in law for multiple reasons: (a) the Explanations were invalid; (b) even if valid, they did not cover Section 147, which requires compliance with Sections 148 to 153, including Section 148A, a procedure not followed; (c) the assumption of jurisdiction by the Assessing Officer was based on the 'reason to believe' concept, which is no longer recognized in the amended Section 147; and (d) the Relaxation Act was not applicable to the assessment years in question as the time limits for those 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.

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, unlike Section 4. The Court found that the notices were invalid for multiple reasons. Firstly, the assumption of jurisdiction by the Assessing Officer was based on the 'reason to believe' concept, which is no longer recognized in the amended Section 147. Secondly, the procedure under the amended Section 147, which is subject to Sections 148 to 153 (including Section 148A), was not followed. Thirdly, the Relaxation Act was not applicable to Assessment Years 2015-2016 and subsequent years, as the time limits for 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 relevant provisions of the Act as amended by the Finance Act, 2021, after strictly complying with the statutory procedures. The Court relied on decisions of the Allahabad, Rajasthan, Delhi, and Madras High Courts.

The High Court allowed the writ petitions, holding that the Explanations to Notification No. 20/2021 and Notification No. 38/2021 were ultra vires, bad in law, and null and void. The Court agreed with the 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 of the Income Tax Act. Only Section 4 of the Relaxation Act effected amendments. Furthermore, the Court found that even if the Explanations were considered valid, the impugned notices were still invalid because they did not comply with the amended Section 147, which requires adherence to Sections 148 to 153, including the procedure under Section 148A. The 'reason to believe' basis for assuming jurisdiction was also deemed invalid under the amended provisions. 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 consequently 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 did so. The Court found that the impugned notices were invalid for multiple reasons: (a) the Explanations did not cover the erstwhile Section 147, which empowers revenue to reopen subject to Sections 148 to 153, including Section 148A; (b) the procedure under the amended Section 147, which does not rely on 'reason to believe', was not followed; and (c) the procedure under Section 148A was not followed. The Court also held that the Relaxation Act was not applicable for Assessment Years 2015-2016 or any subsequent year, as the time limit for issuing notices for these years was not expiring within the period for which Section 3(1) of the Relaxation Act was applicable. 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 after strictly complying with the same.

The High Court held that the Explanations to Notification No. 20 of 2021 and Notification No. 38 of 2021 were ultra vires and therefore bad in law and null and void. The Court agreed with the assessee's submission that Section 3 of the Relaxation Act was a relaxation provision dealing with time limits and did not empower the Central Government to amend substantive provisions of the Income Tax Act. Section 4 of the Relaxation Act, which did amend the Act, was separate. The Court further found that even if the Explanations were considered valid, the impugned notices were bad in law as they did not comply with the amended Section 147, which no longer recognizes the 'reason to believe' concept, and the mandatory procedure under Section 148A. Additionally, 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.

The High Court held that the Explanations to Notification No. 20 of 2021 and Notification No. 38 of 2021 were ultra vires and therefore bad in law and null and void. The Court agreed with the petitioners that Section 3 of the Relaxation Act was a relaxation provision dealing with time limits and did not empower amendments to substantive provisions of the Income Tax Act, unlike Section 4. The Court found that the Assessing Officers' assumption of jurisdiction was based on the repealed concept of 'reason to believe' under the old Section 147, and that the amended Section 147, subject to Sections 148 to 153 (including Section 148A), had not been complied with. The Court also noted that the Relaxation Act was not applicable to assessment years 2015-2016 onwards. Consequently, all impugned notices issued under Section 148 were quashed and set aside. The Assessing Officers were permitted to initiate fresh reassessment proceedings in accordance with the amended provisions of the Act, strictly complying with the statutory procedures.

The 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. Only Section 4 of the Relaxation Act amended the Act. The Court further found that even if the Explanations were considered valid, the impugned notices were invalid as they did not comply with the amended Section 147 of the Act, which requires adherence to Sections 148 to 153, including the mandatory procedure under Section 148A. 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.

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 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, which falls under Chapter III. The Court also 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. 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. 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, 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 empower the Central Government to amend substantive provisions of the Income Tax Act. Section 4 of the Relaxation Act, which dealt with amendments, was made by the Legislature itself and did not delegate such power. 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 of the Act, which no longer recognizes the concept of 'reason to believe' for assuming jurisdiction, and crucially, did not follow the procedure prescribed 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.

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. Section 4 of the Relaxation Act was the provision that amended the Act. The Court found that the Explanations sought to extend the applicability of erstwhile Sections 148, 149, and 151 but did not cover Section 147. Consequently, the procedure under the amended Section 147, which includes Section 148A, was not followed. The Court also noted that the Relaxation Act was not applicable for Assessment Years 2015-2016 or subsequent years, as the time limit for issuing notices for these years was not expiring within the period for which Section 3(1) of the Relaxation Act was applicable. All impugned notices issued under Section 148 were quashed and set aside. The Assessing Officers were permitted to initiate fresh reassessment proceedings in accordance with the amended provisions of the Act after strictly complying with the relevant statutory 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 assessee's contention that Section 3 of the Relaxation Act was a relaxation provision dealing with time limits and did not empower the Central Government to revive repealed substantive provisions of the Income Tax Act. The Court noted that Section 4 of the Relaxation Act, which amended the Income Tax Act, was enacted by the legislature itself and did not delegate power to amend substantive provisions to the Central Government. Furthermore, the Court found that even if the Explanations were considered valid, the impugned notices were still bad in law as they did not comply with the amended Section 147 of the Act, which no longer recognizes the concept of 'reason to believe' for assumption of jurisdiction, and failed to follow the mandatory procedure under Section 148A. The Court also held that the Relaxation Act was not applicable for Assessment Years 2015-2016 onwards. Consequently, all impugned notices issued under Section 148 of the Act were quashed and set aside, with liberty to the Assessing Officers to initiate fresh reassessment proceedings in accordance with the amended provisions of the Act.

The High Court held that the Explanations to Notification No. 20 of 2021 and Notification No. 38 of 2021 were ultra vires, bad in law, and null and void. The Court agreed with the petitioners' 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 did so. Furthermore, the Court found that even if the Explanations were considered valid, the impugned notices were still invalid because they did not comply with the amended Section 147, which is subject to Sections 148 to 153, including the mandatory procedure under Section 148A. The 'reason to believe' basis for assumption of jurisdiction was also found to be obsolete under the amended Section 147. The Court also noted that the Relaxation Act was not applicable for Assessment Years 2015-2016 or subsequent years. Consequently, all impugned notices issued under Section 148 were quashed and set aside. 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 allowed the writ petitions. It declared the Explanations to Notification No. 20/2021 and Notification No. 38/2021 as ultra vires, bad in law, and null and void. The Court reasoned that Section 3 of the Relaxation Act, which falls under the chapter 'Relaxation of Certain Provisions of Specified Act,' only provides for relaxation of time limits and does not grant the power to amend the substantive provisions of the Income Tax Act. The power to amend the Act was vested in the Legislature itself, as seen in Section 4 of the Relaxation Act. Furthermore, the Court agreed with the assessee that even if the Explanations were considered valid, the impugned notices were still bad in law because they did not comply with the amended Section 147, which requires adherence to Sections 148 to 153, including the mandatory procedure under Section 148A. The Court also noted that the Relaxation Act was not applicable to Assessment Years 2015-2016 and subsequent years. Consequently, all impugned notices issued under Section 148 were quashed and set aside. 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 Nos. 20/2021 and 38/2021 are ultra vires and therefore bad in law and null and void. The Court agreed with the assessee's submission that Section 3 of the Relaxation Act is a relaxation provision dealing with time limits and does not empower the Central Government to amend substantive provisions of the Income Tax Act. Section 4 of the Relaxation Act, which amends the Act, is distinct. Furthermore, the Court found that even if the Explanations were considered valid, the impugned notices were invalid because the Assessing Officers failed to comply with the amended Section 147, which no longer uses the 'reason to believe' concept, and crucially, did not follow the mandatory procedure prescribed under Section 148A. The Court also noted that the Relaxation Act was not applicable to Assessment Years 2015-2016 onwards. Consequently, all impugned notices issued under Section 148 were quashed and set aside. The Assessing Officers were permitted to initiate fresh reassessment proceedings in accordance with the amended provisions of the Act, strictly complying with the statutory requirements.

The 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 provision for relaxing time limits and did not empower the Central Government to amend substantive provisions of the Income Tax Act. It noted that Section 4 of the Relaxation Act was the provision that amended the Act, and no such power was delegated to the Central Government under Section 3. The Court further held that even if the Explanations were considered valid, the impugned notices were invalid because they were issued based on the 'reason to believe' under the erstwhile Section 147, which is not recognized in the amended Section 147. Additionally, the mandatory procedure under the amended Section 148A was not followed. The Court also 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 relevant provisions of the Act as amended by the Finance Act, 2021, 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 held that the Explanations to Notification No. 20/2021 and Notification No. 38/2021 are ultra vires, bad in law, and void. The Court agreed with the assessee's contention that Section 3 of the Relaxation Act was merely a provision for relaxing time limits and did not grant the power to amend substantive provisions of the Income Tax Act. It noted that Section 4 of the Relaxation Act was the provision that 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 assumption of jurisdiction was flawed; (b) the 'reason to believe' standard, no longer recognized in the amended Section 147, was used; (c) the mandatory procedure under Section 148A was not followed; and (d) the Relaxation Act was not applicable to Assessment Years 2015-2016 and subsequent years as the time limits for these years were not expiring within the period covered by Section 3(1) of the Relaxation Act. Consequently, all impugned notices were quashed and set aside. The Assessing Officers were permitted to initiate fresh reassessment proceedings in accordance with the amended provisions of the Act.

The High Court 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 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 crucially, they 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 held that the Relaxation Act was not applicable for Assessment Years 2015-2016 or any subsequent year, as the time limits for issuing notices for these years were not expiring within the period for which Section 3(1) of the Relaxation Act was applicable. Consequently, the Court quashed and set aside all impugned notices issued under Section 148 of the Act. 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 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 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 the power to amend substantive provisions of the Income Tax Act, unlike Section 4 which contained legislative amendments. The Court found that the Explanations sought to 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. Therefore, even if the Explanations were valid, the procedure under Section 148A was not followed, rendering the notices invalid. Furthermore, the Court held that the Relaxation Act was not applicable to Assessment Years 2015-2016 and subsequent years, as the time limits for issuing notices for these years did not fall within the scope of Section 3(1) of the Relaxation Act. Consequently, all impugned notices issued under Section 148 were quashed and set aside. The Assessing Officers were permitted to initiate fresh reassessment proceedings in accordance with the amended provisions of the Act, strictly complying with the statutory requirements. The Court was in respectful agreement with the views taken by the Allahabad, Rajasthan, Delhi, and Madras High Courts.

The High Court held that the Explanations to Notification No. 20 of 2021 and Notification No. 38 of 2021 were ultra vires, bad in law, and null and void. The Court agreed with the assessee's submission that Section 3 of the Relaxation 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, 1961. 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 impugned notices were still invalid 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 onwards. Consequently, all the impugned notices issued under Section 148 of the Act were quashed and set aside. The Assessing Officers were permitted to initiate fresh reassessment proceedings in accordance with the relevant amended provisions of the Act.

The High Court held that the Explanations to Notification Nos. 20/2021 and 38/2021 are ultra vires and therefore bad in law and null and void. The Court agreed with the assessee's submission that Section 3 of the Relaxation Act is a relaxation provision dealing with time limits and does not empower the Central Government to amend substantive provisions of the Income Tax Act. Section 4 of the Relaxation Act, which amends provisions, falls under a different chapter and was made by the legislature itself. The Court also found that the impugned notices were bad in law because they were issued based on the concept of 'reason to believe' which is no longer recognized in the amended Section 147, and the procedure under the amended Section 147, including Section 148A, was not followed. Additionally, the Court noted that the Relaxation Act was not applicable for Assessment Years 2015-2016 or subsequent years. Consequently, all 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 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, which amended the Act, was made by the legislature itself, and no such power was delegated to the Central Government. The Court found that the notices were bad in law for multiple reasons: (a) the Explanations were ultra vires; (b) even if the Explanations were valid, the notices did not comply with the amended Section 147, as they were based on 'reason to believe' which is no longer recognized, and the procedure under 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 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, which falls under Chapter II titled ‘Relaxation of Certain Provisions of Specified Act’, does not empower the Central Government to amend substantive provisions of the Income Tax Act. Only Section 4 of the Relaxation Act, falling under Chapter III titled ‘Amendments to the Income Tax Act, 1961’, makes legislative amendments. Furthermore, the Court found that even if the Explanations were considered valid, the impugned notices were still invalid because they were issued based on the 'reason to believe' concept from the erstwhile Section 147, which is not recognized in the amended Section 147. Additionally, the mandatory procedure under the amended Section 147, including 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.

The High Court held that the Explanations to Notification No. 20/2021 and Notification No. 38/2021 were ultra vires, bad in law, and null and void. The Court agreed with the petitioners' submission that Section 3 of the Relaxation Act was a provision for relaxing time limits and did not empower the Central Government to amend the substantive provisions of the Income Tax Act, 1961. It noted that Section 4 of the Relaxation Act, which dealt with amendments, was distinct from Section 3. The Court found that the impugned notices were bad in law for multiple reasons. Firstly, the Explanations did not cover Section 147, which is subject to Sections 148 to 153, including the mandatory procedure under Section 148A. Therefore, even if the Explanations were valid, the procedure under Section 148A was not followed. Secondly, the Court noted that the Relaxation Act was not applicable for Assessment Years 2015-2016 or subsequent years, as the time limits for issuing notices for these years were not expiring within the period 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, permitting the Assessing Officers to initiate fresh reassessment proceedings in accordance with the amended provisions of the Act after strictly complying with them. 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 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 further found that even if the Explanations were considered valid, the impugned notices were still bad in law because they were issued on the basis of the erstwhile Section 147 ('reason to believe') and did not comply with the mandatory procedure under the amended Section 147, which is subject to Sections 148 to 153, including Section 148A. 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 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 of 2021 and Notification No. 38 of 2021 are 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, which did amend provisions, was enacted by the legislature itself. The Court further found that even if the Explanations were valid, the impugned notices were bad in law because they did not comply with the amended Section 147, which no longer recognizes the 'reason to believe' concept, and failed to follow the procedure under Section 148A. 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 were quashed and set aside, with liberty to the Assessing Officers to initiate fresh reassessment proceedings in accordance with the amended provisions of the Act.

The High Court held that the Explanations to Notification No. 20 of 2021 and Notification No. 38 of 2021 were ultra vires, bad in law, and void. The Court agreed with the petitioners that Section 3 of the Relaxation Act was a provision for relaxing time limits and did not grant the power to amend substantive provisions of the Income Tax Act, unlike Section 4. The Court found that the impugned notices were bad in law for multiple reasons. Firstly, they were issued based on the 'reason to believe' clause from the erstwhile Section 147, which is no longer a valid basis under the amended Section 147. Secondly, the mandatory procedure under the amended Section 148A was not followed. Thirdly, the Relaxation Act was not applicable to Assessment Years 2015-2016 and subsequent years, as the time limits for issuing notices for these years were not expiring within the period covered by Section 3(1) of the Relaxation Act. Consequently, the Court quashed and set aside all impugned notices. The Assessing Officers were permitted to initiate fresh reassessment proceedings in accordance with the amended provisions of the Act, 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 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 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 valid, the impugned notices were bad in law because they were issued based on the 'reason to believe' concept, which is no longer recognized in the amended Section 147, and the mandatory procedure under Section 148A was not followed. The Court also noted that the Relaxation Act was not applicable to Assessment Years 2015-2016 onwards. Consequently, all impugned notices issued under Section 148 of the Act were quashed and set aside. The Assessing Officers were permitted to initiate fresh reassessment proceedings in accordance with the amended provisions of the Act.

The High Court 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, which falls under the chapter titled 'Relaxation of Certain Provisions of Specified Act', was only intended to provide relaxation of time limits and did not grant the power to amend substantive provisions of the Income Tax Act. Chapter III of the Relaxation Act, which dealt with amendments to the Income Tax Act, was enacted by the Legislature itself, and no power to amend was delegated to the Central Government under 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 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 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 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. 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 procedure under Section 148A, which was not followed. Thirdly, the Relaxation Act was not applicable to Assessment Years 2015-2016 or subsequent years, as the time limits for these years were not expiring within the period for which Section 3(1) of the Relaxation Act was applicable. Consequently, the Court quashed and set aside all impugned notices issued under Section 148. The Assessing Officers were permitted to initiate fresh reassessment proceedings in accordance with the amended provisions of the Act, strictly complying with the procedure.

The High Court held that the Explanations to Notification No. 20/2021 and Notification No. 38/2021 were ultra vires and therefore bad in law and null and void. The Court agreed with the petitioners that Section 3 of the Relaxation Act was only 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 further found that even if the Explanations were valid, the impugned notices were invalid because they failed to comply with the amended Section 147, which no longer recognizes the 'reason to believe' criterion, and did not follow the mandatory procedure under Section 148A. Additionally, the Court held that the Relaxation Act was not applicable for Assessment Years 2015-2016 or any subsequent year, as the time limits for these years were not expiring within the period for which Section 3(1) of the Relaxation Act was applicable. Consequently, all impugned notices 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 the substantive provisions of the Income Tax Act, 1961. Section 4 of the Relaxation Act was the provision that amended the Act. The Court further found that even if the Explanations were considered valid, the impugned notices were bad in law because they were issued on the basis of 'reason to believe' which is no longer recognized under the amended Section 147, and 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 as the time limits for these years did not fall within the purview of Section 3(1) of the Relaxation Act. Consequently, all impugned notices issued under Section 148 were quashed and set aside. The Assessing Officers were permitted to initiate fresh reassessment proceedings in accordance with the amended provisions of the Act and by strictly complying with the statutory procedures.

The High Court held that the Explanations to Notification No. 20/2021 and Notification No. 38/2021 were ultra vires and therefore bad in law and null and void. The Court agreed with the 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, which amended the Act, was made by the legislature itself, and no such power was delegated to the Central Government. The Court found that the notices were bad in law for multiple reasons: (a) the Explanations were invalid; (b) the notices were issued on the basis of 'reason to believe,' a concept no longer recognized in the amended Section 147; (c) the procedure under the amended Section 147, including Section 148A, was not followed; and (d) the Relaxation Act was not applicable 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 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 merely a relaxation provision dealing with time limits and did not empower the revival of repealed 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 invalid because they did not comply with the amended Section 147, which requires adherence to Sections 148 to 153, including the procedure under Section 148A. The Court also noted that the Relaxation Act was not applicable for Assessment Years 2015-2016 onwards. 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 relevant provisions of the Act as amended by the Finance Act, 2021, after strictly complying with the statutory procedures. The Court was in respectful agreement with the High Courts of Allahabad, Rajasthan, Delhi, and Madras.

The High Court held that the Explanations to Notification No. 20/2021 and Notification No. 38/2021 were ultra vires the Taxation and Other Laws (Relaxation of Certain Provisions) Act, 2020, and thus declared them bad in law and void. The Court agreed with the assessee that Section 3 of the Relaxation Act was a relaxation provision for time limits and did not empower amendments to substantive provisions of the Income Tax Act, unlike Section 4. 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 part of the amended Section 147, and because the mandatory procedure under Section 148A was not followed. The Court also noted that the Relaxation Act was not applicable for AY 2015-2016 onwards. Consequently, all impugned notices were quashed and set aside. The Assessing Officers were permitted to initiate fresh reassessment proceedings in accordance with the amended provisions of the Act, strictly complying with the statutory requirements.

The High Court held that the Explanations to Notification No. 20/2021 and Notification No. 38/2021 were ultra vires and therefore bad in law and null and void. The Court agreed with the 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 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 subject to Sections 148 to 153, including Section 148A; (b) the procedure under Section 148A was not followed; (c) the assumption of jurisdiction was based on the 'reason to believe' principle, which is no longer recognized in the amended Section 147; and (d) the Relaxation Act was not applicable for Assessment Years 2015-2016 or any subsequent year. The Court quashed and set aside all impugned notices issued under Section 148 of the Act, allowing the Assessing Officers to initiate fresh reassessment proceedings in accordance with the amended provisions of the Act and strictly complying with them. 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 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 was a provision for relaxing time limits and did not empower the Central Government to amend substantive provisions of the Income Tax Act. It noted that Section 4 of the Relaxation Act, which did amend the Act, was distinct and its provisions were made by the legislature itself. The Court further 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 compliance with Sections 148 to 153, including the procedure under Section 148A. The Court also noted that the Relaxation Act was not applicable for Assessment Years 2015-2016 onwards, rendering the notifications inapplicable for those 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, bad in law, and therefore null and void. The Court agreed with the petitioners' submission that Section 3 of the Relaxation Act was a relaxation provision for time limits and did not empower the Central Government to amend substantive provisions of the Income Tax Act, unlike Section 4. The Court found that the Explanations sought to give effect to the erstwhile Sections 148, 149, and 151 but did not cover the erstwhile Section 147. Consequently, the assumption of jurisdiction by the Assessing Officers was based on the 'reason to believe' concept, which is no longer recognized in the amended Section 147. Moreover, the amended Section 147 is subject to Sections 148 to 153, including the procedure in Section 148A, which was not followed. The Court also held that the Relaxation Act was not applicable for Assessment Years 2015-2016 or any subsequent year as the time limits for issuing notices were not expiring within the period for which Section 3(1) of the Relaxation Act was applicable. All impugned notices issued under Section 148 were quashed and set aside. The Assessing Officers were permitted to initiate fresh reassessment proceedings in accordance with the amended provisions of the Act after strictly complying with them.

The High Court held that the Explanations to Notification No. 20 of 2021 and Notification No. 38 of 2021 are ultra vires, bad in law, and null and void. The Court agreed with the petitioners' submission that Section 3 of the Relaxation Act was a relaxation provision dealing with time limits and did not envisage amendments to 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 Assessing Officers' assumption of jurisdiction was based on the 'reason to believe' criterion, which is no longer recognized in the amended Section 147. Furthermore, even if the Explanations were valid, the procedure under the amended Section 147 and Section 148A had not been followed. The Court also noted that the Relaxation Act was not applicable for Assessment Years 2015-2016 or subsequent years. Consequently, all 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 Bombay High Court allowed the writ petitions, holding that the Explanations to Notification No. 20 of 2021 and Notification No. 38 of 2021 were ultra vires, bad in law, and void. The Court agreed with the petitioners that Section 3 of the Relaxation Act was a provision dealing with time limits and did not empower the Central Government to amend the substantive provisions of the Income Tax Act; only Section 4 of the Relaxation Act did so. The Court found that the Assessing Officers had not complied with the amended Section 147, as their assumption of jurisdiction was based on the 'reason to believe' concept, which is no longer recognized, and the procedure under Section 148A was not followed. Furthermore, the Court held that the Relaxation Act was not applicable to Assessment Years 2015-2016 onwards. Consequently, all impugned notices issued under Section 148 were quashed and set aside, with liberty to the Assessing Officers to initiate fresh proceedings in accordance with the amended provisions of the Act.

The High Court held that the Explanations to Notification No. 20/2021 and Notification No. 38/2021 were ultra vires, bad in law, and void. The Court agreed with the petitioners that Section 3 of the Relaxation Act was a provision for relaxing time limits and did not 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 Explanations attempted to give effect to the repealed provisions of Sections 148, 149, and 151, but crucially, did not cover Section 147, which is the basis for assuming jurisdiction for reassessment. Therefore, even if the Explanations were valid, the notices were invalid for failing to comply with the amended Section 147 and the mandatory procedure under Section 148A. The Court also noted that the Relaxation Act was not applicable to assessment years 2015-2016 onwards. Consequently, all impugned notices issued under Section 148 were quashed. 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 are ultra vires and consequently bad in law and void. The Court agreed with the petitioners 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. Chapter III, specifically Section 4, deals with amendments to the Act made by the legislature. The Court found that the notices were also bad in law for failing to comply with the amended Section 147, which no longer recognizes the 'reason to believe' concept, and for not following the mandatory procedure under Section 148A, as required by Sections 148 to 153. Furthermore, the Court held that the Relaxation Act is 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. Therefore, all impugned notices were quashed and set aside, with liberty to the Assessing Officers to initiate fresh proceedings in accordance with the relevant amended provisions of the Act.

The Bombay High Court allowed the writ petitions. The Court held that Section 3 of the Relaxation Act, which falls under Chapter II titled 'Relaxation of Certain Provisions of Specified Act', was only a relaxation provision dealing with time limits and did not empower the Central Government to amend substantive provisions of the Income Tax Act. It distinguished this from Section 4 of the Relaxation Act, which did amend the Act. The Court agreed with the assessee that only Section 4 amended the Act, and no such amendments to substantive provisions were envisaged under Section 3. Furthermore, the Court found that the impugned notices were bad in law because they were issued based on the erstwhile Section 147's 'reason to believe' concept, which is no longer recognized in the amended Section 147. Additionally, the mandatory procedure under Section 148A, which is part of the amended provisions governing reassessment, was not followed. The Court also held that the Relaxation Act was not applicable for Assessment Years 2015-2016 or subsequent years, as the time limits for these years did not fall within the period for which Section 3(1) of the Relaxation Act was applicable. 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 were quashed and set aside, with liberty to the Assessing Officers to initiate fresh proceedings in accordance with the amended provisions.

The High Court held that the Explanations to Notification No. 20/2021 and Notification No. 38/2021 are ultra vires and therefore bad in law and null and void. The Court agreed with the assessee's submission that Section 3 of the Relaxation Act 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 made by the Legislature itself under Section 4. Furthermore, the Court found that even if the Explanations were considered valid, the impugned notices were still bad in law because they did not comply with the amended Section 147, which requires adherence to Sections 148 to 153, including the procedure under Section 148A. The assumption of jurisdiction based on 'reason to believe' was also found to be contrary to the amended Section 147. The Court also noted that the Relaxation Act was not applicable for Assessment Years 2015-2016 onwards. Consequently, all impugned notices issued under Section 148 were quashed and set aside. Assessing Officers were permitted to initiate fresh reassessment proceedings in accordance with the amended provisions of the Act.

The High Court allowed the writ petitions, holding that the Explanations to Notification No. 20/2021 and Notification No. 38/2021 were ultra vires, bad in law, and void. The Court agreed with the petitioners' submission that Section 3 of the Relaxation Act was a relaxation provision dealing with time limits and did not empower the Central Government to amend substantive provisions of the Income Tax Act. It noted that Section 4 of the Relaxation Act, which did amend the Act, was distinct and made by the legislature itself. Furthermore, the Court found that even if the Explanations were considered valid, the impugned notices were still invalid as they did not comply with the amended Section 147, particularly by relying on the 'reason to believe' clause and failing to follow the mandatory procedure under Section 148A. The Court also held that the Relaxation Act was not applicable to Assessment Years 2015-2016 onwards. Consequently, all impugned notices issued under Section 148 were quashed and set aside, with liberty to the Assessing Officers to initiate fresh reassessment 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’, 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, which falls under Chapter III titled ‘Amendments to the Income Tax Act, 1961’, was the provision that amended the Act. Therefore, the Explanations to Notification Nos. 20/2021 and 38/2021 were declared ultra vires, bad in law, and null and void. The Court agreed with the assessee that even if the Explanations were considered valid, the notices were invalid because they were based on the 'reason to believe' concept from the repealed Section 147 and did not comply with the mandatory procedure under the amended Section 148A. The Court also noted that the Relaxation Act was not applicable for Assessment Years 2015-2016 onwards. Consequently, all impugned notices issued under Section 148 were quashed and set aside. The Assessing Officers were permitted to initiate fresh reassessment proceedings in accordance with the amended provisions of the Act, strictly complying with the 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 provision for relaxing time limits and did not grant the power to revive repealed substantive provisions of the Income Tax Act. Section 4 of the Relaxation Act, which amended the Act, was a legislative amendment, not a delegated power. The Court further found that even if the Explanations were considered valid, the impugned notices were invalid because they were issued based on the 'reason to believe' concept, which is no longer recognized under the amended Section 147, and the mandatory procedure under Section 148A was not followed. Additionally, the Court noted that the Relaxation Act was not applicable to Assessment Years 2015-2016 onwards. Consequently, all impugned notices issued under Section 148 were quashed and set aside. The Assessing Officers were permitted to initiate fresh reassessment proceedings in accordance with the amended provisions of the Act. 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 agreed with the petitioners that Section 3 of the Relaxation Act was a relaxation provision dealing with time limits and did not empower the Central Government to amend substantive provisions of the Income Tax Act. It noted that Section 4 of the Relaxation Act was the provision that amended the Act, and no such power was delegated to the Central Government. The Court further held that even if the Explanations were considered valid, the impugned notices were invalid because they were issued based on the erstwhile 'reason to believe' criterion, which is no longer recognized under the amended Section 147, and because the mandatory procedure under Section 148A was not followed. Additionally, the Court 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. 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 Bombay 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 amendments to the substantive provisions of the Income Tax Act; only Section 4 of the Relaxation Act amended the Act. Furthermore, the Court found that even if the Explanations were considered valid, the impugned notices were still invalid because they did not comply with the amended Section 147, which is subject to Sections 148 to 153, including the mandatory procedure under Section 148A. The Court also noted that the Relaxation Act was not applicable for Assessment Years 2015-2016 onwards. Consequently, all impugned notices issued under Section 148 were quashed and set aside. The Assessing Officers were permitted to initiate fresh reassessment proceedings in accordance with the amended provisions of the Act, strictly complying with the statutory requirements. The Court was in respectful agreement with the views taken by the Allahabad, Rajasthan, Delhi, and Madras High Courts.

The High Court held that the Explanations to Notification No. 20 of 2021 and Notification No. 38 of 2021 were ultra vires and therefore bad in law and null and void. The Court reasoned that Section 3 of the Relaxation Act, which falls under the chapter titled ‘Relaxation of Certain Provisions of Specified Act’, was a relaxation provision dealing with time limits and did not grant the power to amend substantive provisions of the Income Tax Act. This power was vested in Section 4 of the Relaxation Act, which dealt with amendments to the Income Tax Act. The Court agreed with the petitioners that only Section 4 amended the Act, not Section 3. Furthermore, the Court found that even if the Explanations were considered valid, the impugned notices were still bad in law as they relied on the repealed 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 for Assessment Years 2015-2016 onwards. Consequently, all impugned notices issued under Section 148 were quashed and set aside. The Assessing Officers were permitted to initiate fresh reassessment proceedings in accordance with the amended provisions of the Act.

The High Court held that the Explanations to Notification No. 20 of 2021 and Notification No. 38 of 2021 were ultra vires, 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.