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The High Court held that all reassessment notices issued after April 1, 2021, must be in accordance with the newly introduced provisions under the Finance Act, 2021. The Court found that the explanations introduced by the CBDT in its notifications dated March 31, 2021, and April 27, 2021, which provided that for the purpose of issuing notice under Section 148, the provisions as they stood on March 31, 2021, would apply, exceeded the delegated powers. The Court reasoned that subordinate legislation cannot travel beyond the powers vested in it by the parent Act and that an explanation cannot amend the provisions of the parent Act. Therefore, these explanations were declared unconstitutional and invalid. The Court followed the view taken by the Allahabad and Delhi High Courts and independently arrived at the same conclusion, disagreeing with the Chhattisgarh High Court's view in Palak Khatuja. Consequently, the impugned notices were found to be invalid and bad in law and were quashed. The writ petitions were allowed.
The High Court disposed of the appeal as 'not pressed'. This decision was based on a circular dated 08.08.2019 issued by the Ministry of Finance, Department of Revenue, Central Board of Direct Taxes (Judicial Section). This circular fixed the monetary limit for the Department to pursue matters before the High Court at Rs. 1,00,00,000/-. In the present case, the tax effect was Rs. 50,00,000/-, which fell below the prescribed monetary limit. Therefore, the appeal was not pressed by the Revenue. No decision was made on the merits of the case.
The Tribunal held that all reassessment notices issued after April 1, 2021, must comply with the newly introduced provisions of the Finance Act, 2021, including the procedure under Section 148A. The court reasoned that there was no indication that the old provisions would continue to apply after the substitution. The Finance Act, 2021, brought significant changes to the reassessment scheme, including modified time limits under Section 149. The first proviso to Section 149(1) further clarifies that notices issued after April 1, 2021, cannot be revived by resorting to extended time limits if they were already time-barred under the old provisions. Regarding the CBDT notifications, the Tribunal held that the explanations provided therein, which sought to apply the pre-amendment provisions for issuance of notice under Section 148, plainly exceeded the jurisdiction of the CBDT as a subordinate legislation. Such subordinate legislation cannot amend or override the provisions of the parent Act. Therefore, these explanations were declared unconstitutional and invalid. Consequently, the reassessment notices impugned in the petitions were found to be invalid and bad in law and were quashed and set aside. The appeals of the revenue were dismissed.
The Tribunal held that all reassessment notices issued after April 1, 2021, must comply with the newly introduced provisions of the Finance Act, 2021, including the procedure under Section 148A. The court reasoned that there was no indication that the old provisions would continue to apply after the substitution and, in fact, found strong indications to the contrary, particularly from the first proviso to Section 149(1). The Tribunal further held that the explanations in the CBDT notifications dated March 31, 2021, and April 27, 2021, were unconstitutional and invalid. These explanations, by providing that the pre-amendment provisions of Section 148 would apply for issuing notices under Section 148, exceeded the delegated powers under the Relaxation Act, 2020, and attempted to alter the parent Act's provisions. The Tribunal quashed the impugned notice, finding it invalid and bad in law. The ratio decidendi is that any action of issuing a notice under Section 148 after April 1, 2021, must be in accordance with the newly introduced provisions, and subordinate legislation cannot override statutory provisions.
The High Court held that the explanation introduced by the CBDT notifications dated March 31, 2021, and April 27, 2021, was unconstitutional and invalid. The Court reasoned that under Section 3(1) of the Relaxation Act, 2020, the Central Government was authorized only to extend time limits by issuing notifications. Introducing an explanation that provided a clarification on the applicability of Section 148, as it stood before the Finance Act, 2021, plainly exceeded the delegated jurisdiction. Subordinate legislation must remain within the confines of the powers granted by the parent Act and cannot amend the provisions of the parent Act, even under the guise of clarification. The Court found the interpretation that the notifications deferred the application of the reassessment provisions framed under the Finance Act, 2021, to be incorrect. Consequently, the notices impugned in the respective petitions were declared invalid and bad in law and were quashed and set aside. The Court allowed all the writ petitions and dismissed the appeals of the revenue. Any issue expressly left undecided was not recorded.
The High Court held that the explanations introduced by the CBDT notifications dated 31.03.2021 and 27.04.2021, which stated that for the purposes of issuance of notice under Section 148, the provisions as they stood on 31.03.2021 before the commencement of the Finance Act, 2021, shall apply, were unconstitutional and invalid. The Court reasoned that under Section 3(1) of the Relaxation Act, 2020, the Central Government was authorized only to extend time limits by issuing notifications. Issuing an explanation touching upon the provisions of the Income Tax Act was not part of this delegation. The CBDT, by introducing such an explanation, plainly exceeded its jurisdiction as a subordinate legislation. The Court found that subordinate legislation could not travel beyond the powers vested by the parent Act and that an explanation, even if termed clarificatory, could not amend the provisions of the parent Act. The Court disagreed with the view of the Chhattisgarh High Court in Palak Khatuja (supra), stating that the substitution of reassessment provisions under the Finance Act, 2021, were not deferred and their effective date remained 01.04.2021. Consequently, the notices impugned in the petitions were found to be invalid and bad in law and were quashed and set aside. All writ petitions were allowed.
The High Court held that the explanations introduced by the CBDT notifications dated 31.03.2021 and 27.04.2021, stating that for the purpose of issuing notice under Section 148, the provisions as they stood on 31.03.2021 before the commencement of the Finance Act, 2021 shall apply, plainly exceeded the jurisdiction of the CBDT as a subordinate legislation. The Court reasoned that the parent Act, specifically Section 3(1) of the Relaxation Act, 2020, only empowered the Central Government to extend time limits by issuing notifications. Issuing an explanation touching upon the provisions of the Income Tax Act was not part of this delegation. The Court found it doubtful that an explanation, even if termed clarificatory, could change the basis of statutory provisions or amend the parent Act. Therefore, these explanations were declared unconstitutional and invalid. The Court disagreed with the view of the Chhattisgarh High Court and held that the substitution of reassessment provisions under the Finance Act, 2021 were not deferred by these notifications, and their effective date remained 01.04.2021. Consequently, the notices impugned in the petitions were found to be invalid and bad in law and were quashed and set aside. All writ petitions were allowed.
The High Court held that the explanations introduced by the CBDT notifications dated 31.03.2021 and 27.04.2021 were unconstitutional and invalid. The Court reasoned that the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020, under Section 3(1), only empowered the Central Government to extend time limits for actions and compliances, not to issue explanations that altered the substantive provisions of the Income Tax Act. The CBDT, as a subordinate legislation, exceeded its jurisdiction by introducing an explanation that provided a clarification which, in effect, changed the basis of statutory provisions. The Court found that such subordinate legislation could not travel beyond the powers vested by the parent Act and could not amend the provisions of the parent Act under the guise of clarification. The Court disagreed with the view taken by the Chhattisgarh High Court in Palak Khatuja, finding that the notifications did not defer the substitution of reassessment provisions framed under the Finance Act, 2021, and the amendments coming into effect on 01.04.2021 remained applicable. Consequently, the notices impugned in the petitions were quashed and set aside.
The High Court held that the explanations introduced by the CBDT notifications dated March 31, 2021, and April 27, 2021, were unconstitutional and invalid. The Court reasoned that the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020, specifically Section 3(1), only granted the Central Government the power to extend time limits for actions and compliances. Introducing an explanation that clarified or altered the applicability of statutory provisions, particularly concerning the reassessment provisions under Section 148, exceeded the delegated power. The Court found that the subordinate legislation (the notifications) could not travel beyond the powers vested in it by the parent Act. The Court disagreed with the view that the notifications deferred the substitution of reassessment provisions, holding that the amendments under the Finance Act, 2021, still came into effect on April 1, 2021. Consequently, the notices impugned in the writ petitions were declared invalid and quashed. The appeals of the revenue were dismissed.
The High Court held that the explanations introduced by the CBDT notifications dated March 31, 2021, and April 27, 2021, were unconstitutional and invalid. The Court reasoned that the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020, specifically Section 3(1), empowered the Central Government only to extend time limits for actions and compliances. Introducing an explanation that altered the basis of statutory provisions, particularly regarding the application of Section 148, 149, and 151, exceeded the scope of this delegated power. The Court found that the subordinate legislation could not travel beyond the powers vested by the parent Act and that an explanation, even if termed clarificatory, could not amend the provisions of the parent Act. The Court disagreed with the view of the Chhattisgarh High Court and held that the substitution of reassessment provisions under the Finance Act, 2021, was not deferred by these notifications; the amendments came into effect from April 1, 2021. Consequently, the notices impugned in the petitions were found to be invalid and bad in law. The Court quashed and set aside these notices. All writ petitions were allowed.
The High Court held that the explanations introduced by the CBDT notifications dated 31.03.2021 and 27.04.2021 were unconstitutional and invalid. The Court reasoned that the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020, only empowered the Central Government to extend time limits, not to issue explanations that altered the basis of statutory provisions. The CBDT, as a subordinate legislation, exceeded its jurisdiction by introducing an explanation that, in the guise of clarification, sought to change the fundamental provisions of the Income Tax Act. The Court disagreed with the Chhattisgarh High Court's view, stating that the notifications did not defer the substitution of reassessment provisions framed under the Finance Act, 2021, and their effective date remained 01.04.2021. Consequently, the notices impugned in the petitions were found to be invalid and bad in law and were quashed and set aside. The appeals of the revenue were dismissed.
The High Court held that the explanations introduced by the CBDT notifications dated 31.03.2021 and 27.04.2021 were unconstitutional and invalid. The Court reasoned that the power vested in the Central Government under Section 3(1) of the Relaxation Act, 2020, was solely to extend time limits for actions and compliances. Issuing an explanation that touched upon the provisions of the Income Tax Act, particularly regarding the applicability of Section 148, exceeded the scope of this delegated power. The Court found that the subordinate legislation (the notifications) had travelled beyond the powers vested by the parent Act. Furthermore, the Court observed that an explanation, even if termed clarificatory, cannot amend the provisions of the parent Act if the plain meaning of the statutory provision is clear. The Court disagreed with the view taken by the Chhattisgarh High Court in Palak Khatuja, stating that the substitution of reassessment provisions under the Finance Act, 2021, were not deferred by the CBDT notifications, and their effective date remained 01.04.2021. Consequently, the notices impugned in the petitions were declared invalid and quashed. The appeals of the revenue were dismissed.
The High Court held that the explanations introduced by the CBDT notifications dated March 31, 2021, and April 27, 2021, were unconstitutional and invalid. The Court reasoned that the Taxation and Other Laws (Relaxation of Certain Provisions) Act, 2020, specifically Section 3(1), only empowered the Central Government to extend time limits for actions and compliances. Issuing an explanation that provided for the application of pre-amendment provisions of Section 148, 149, and 151 plainly exceeded this delegated power. The Court emphasized that subordinate legislation cannot travel beyond the powers vested by the parent Act and that an explanation, even if termed clarificatory, cannot amend the provisions of the parent Act if the plain meaning is clear. The Court disagreed with the view taken by the Chhattisgarh High Court in Palak Khatuja, stating that the substitution of reassessment provisions under the Finance Act, 2021, were not deferred by the notifications. Consequently, the impugned notices issued under Section 148 were quashed and set aside. All writ petitions were allowed, and the appeals of the revenue were dismissed.
The High Court held that the explanation introduced by the CBDT notifications dated March 31, 2021, and April 27, 2021, was unconstitutional and invalid. The Court reasoned that the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020, under Section 3(1), only empowered the Central Government to extend time limits for actions and compliances. Issuing an explanation that provided a clarification on the application of Section 148, Section 149, or Section 151, by stating that the provisions as they stood before the Finance Act, 2021, would apply, plainly exceeded the CBDT's jurisdiction as a subordinate legislation. The Court found that the subordinate legislation could not travel beyond the powers vested by the parent Act. Furthermore, the Court disagreed with the view that such an explanation, even if termed clarificatory, could change the plain meaning of statutory provisions or amend the parent Act. The Court noted that the effective date of the amendments to the reassessment provisions under the Finance Act, 2021, remained April 1, 2021, and could not have been deferred by the CBDT notifications. Consequently, the notices impugned in the petitions were declared invalid and quashed. The Court allowed all the writ petitions and dismissed the appeals of the revenue.
The High Court held that the explanations introduced by the CBDT notifications dated March 31, 2021, and April 27, 2021, were unconstitutional and invalid. The Court reasoned that under Section 3(1) of the Relaxation Act, 2020, the Central Government was empowered only to extend time limits for action and compliance by issuing notifications. Issuing an explanation touching upon the provisions of the Income Tax Act was not part of this delegated power. The CBDT, by introducing an explanation that provided for the application of pre-amendment provisions for issuing notices under Section 148, plainly exceeded its jurisdiction as a subordinate legislation. The Court found that subordinate legislation cannot travel beyond the powers vested by the parent Act and that an explanation cannot amend the provisions of the parent Act if its plain meaning is clear. The Court disagreed with the view taken by the Chhattisgarh High Court in Palak Khatuja, stating that the substitution of reassessment provisions under the Finance Act, 2021, were not deferred and the amendments came into effect from April 1, 2021. Consequently, the notices impugned in the petitions were held to be invalid and bad in law and were quashed. The appeals of the revenue were dismissed.
The High Court held that the explanations introduced by the CBDT notifications dated 31.03.2021 and 27.04.2021 were unconstitutional and invalid. The Court reasoned that the Relaxation Act, 2020, under Section 3(1), only empowered the Central Government to extend time limits for actions and compliances, not to issue explanations that altered the interpretation or application of statutory provisions. The CBDT, as a subordinate legislation, had exceeded its jurisdiction by introducing an explanation that, in the guise of clarification, sought to change the basis of statutory provisions related to reassessment notices. The Court found it doubtful that an explanation could alter the plain meaning of a statutory provision. The Court disagreed with the view that the notifications deferred the substitution of reassessment provisions under the Finance Act, 2021, stating that the effective date of amendments remained 01.04.2021. Consequently, the notices impugned in the writ petitions were declared invalid and quashed.
The High Court held that the explanations introduced by the CBDT notifications dated 31.03.2021 and 27.04.2021 were unconstitutional and invalid. The Court reasoned that the Relaxation Act, 2020, under Section 3(1), only empowered the Central Government to extend time limits for actions and compliances. Issuing an explanation that clarified the applicability of pre-amendment provisions for Section 148 notices, in the guise of clarification, plainly exceeded the CBDT's jurisdiction as a subordinate legislation. The subordinate legislation could not travel beyond the powers vested by the parent Act. The Court found it extremely doubtful that an explanation could change the basis of statutory provisions if their plain meaning was clear. The Court disagreed with the view taken by the Chhattisgarh High Court in Palak Khatuja, stating that the substitution of reassessment provisions under the Finance Act, 2021, were not deferred by the notifications, and their effective date remained 01.04.2021. Consequently, the notices impugned in the petitions were held to be invalid and quashed. All writ petitions were allowed, and the revenue's appeals were dismissed.
The High Court held that the explanations introduced by the CBDT notifications dated 31.03.2021 and 27.04.2021 were unconstitutional and invalid. The Court reasoned that the power vested in the Central Government under Section 3(1) of the Relaxation Act, 2020, was limited to extending time limits for actions and compliances. Issuing an explanation that touched upon the provisions of the Income Tax Act, particularly by providing a clarification that altered the basis of statutory provisions for reassessment notices under Section 148, exceeded the scope of this delegated power. The Court found that the subordinate legislation could not travel beyond the powers granted by the parent Act. It disagreed with the view that the notifications deferred the application of the amended Section 148 provisions, stating that the date of amendments coming into effect remained 01.04.2021. Consequently, the impugned notices were quashed and set aside. The Court noted that similar views were taken by the Allahabad and Delhi High Courts, and some Single Judges of the Calcutta and Rajasthan High Courts, while acknowledging a differing view from the Chhattisgarh High Court.
The High Court held that the explanations introduced by the CBDT notifications dated 31.03.2021 and 27.04.2021 were unconstitutional and invalid. The Court reasoned that the power vested in the Central Government under Section 3(1) of the Relaxation Act, 2020, was limited to extending time limits for actions and compliances. Issuing an explanation that altered the basis of statutory provisions, particularly by providing that pre-amended Section 148 provisions would apply, plainly exceeded the jurisdiction of subordinate legislation. The Court found that such an explanation, in the guise of clarification, could not amend the provisions of the parent Act. The Court disagreed with the Chhattisgarh High Court's view that the notifications had deferred the substitution of reassessment provisions. Consequently, the notices impugned in the petitions were declared invalid and quashed. The Court noted that two Division Benches of the Allahabad and Delhi High Courts had taken a similar view, which it independently endorsed.
The High Court held that the explanations introduced by the CBDT notifications dated March 31, 2021, and April 27, 2021, were unconstitutional and invalid. The Court reasoned that under Section 3(1) of the Relaxation Act, 2020, the Central Government was authorized only to extend time limits by issuing notifications. Issuing an explanation that provided clarification on the application of Section 148, effectively altering the statutory provisions, was beyond the scope of the delegated power. The Court found that the subordinate legislation had travelled beyond the powers vested in the government by the parent Act. It also noted that an explanation, even if termed clarificatory, cannot amend the provisions of the parent Act if the plain meaning of the statutory provision is clear. The Court disagreed with the view of the Chhattisgarh High Court, stating that the substitution of reassessment provisions under the Finance Act, 2021, were not deferred by the notifications, and their effective date remained April 1, 2021. Consequently, the notices impugned in the petitions were found to be invalid and bad in law and were quashed and set aside. The appeals of the revenue were dismissed.
The Tribunal held that all reassessment notices issued after 01.04.2021 must be in accordance with the newly introduced provisions of the Finance Act, 2021, including the procedure under Section 148A. The court reiterated its reasoning from the Sudesh Taneja case, emphasizing that there was no indication that the old provisions would continue to apply after the substitution. The court found that the explanations in the CBDT notifications dated 31.03.2021 and 27.04.2021 were unconstitutional and invalid. The Tribunal reasoned that these explanations, in the guise of clarification, exceeded the delegated powers under the Relaxation Act, 2020, and attempted to alter the plain meaning of the statutory provisions. The subordinate legislation could not travel beyond the powers vested by the parent Act. Therefore, the notices impugned in the writ petitions were invalid and bad in law. The ratio is that reassessment notices issued after 01.04.2021 must strictly adhere to the new procedures and provisions introduced by the Finance Act, 2021, and any attempt by subordinate legislation to circumvent these provisions is invalid. The impugned notice was quashed and set aside. All writ petitions were allowed, and appeals of the revenue were dismissed.
The High Court held that all reassessment notices issued after April 1, 2021, must be in accordance with the newly introduced provisions of the Finance Act, 2021, including the procedure under Section 148A. The court reasoned that there is no indication that the old provisions would continue to apply after the substitution, and in fact, there are strong indications to the contrary, such as the modified time limits in Section 149. The first proviso to Section 149(1) further clarifies that notices that had become time-barred prior to April 1, 2021, would not be revived. Therefore, notices issued after April 1, 2021, without following Section 148A are invalid. Regarding the CBDT notifications, the court found that the explanations provided therein exceeded the delegated powers under the Taxation and other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020. Subordinate legislation cannot alter the parent Act's provisions. Consequently, these explanations were declared unconstitutional and invalid. The court followed the views of the Allahabad and Delhi High Courts and some Single Judges of the Calcutta and Rajasthan High Courts, disagreeing with the Chhattisgarh High Court's contrary view. The impugned notice was quashed. The ratio is that any action of issuing a notice under Section 148 after April 1, 2021, must adhere to the newly introduced provisions of the Finance Act, 2021, and subordinate legislation cannot override statutory provisions.
The High Court held that any action of issuing a notice under Section 148 after April 1, 2021, must be in accordance with the newly introduced provisions under the Finance Act, 2021. The court reasoned that there was no indication that the old provisions would continue to apply after the substitution and, in fact, there were strong indications to the contrary, such as the modified time limits in Section 149. The court further held that the explanations in the CBDT notifications dated March 31, 2021, and April 27, 2021, were unconstitutional and invalid. The court found that these explanations, by providing that the provisions as they stood on March 31, 2021, would apply for issuing notices under Section 148, exceeded the jurisdiction of the subordinate legislation. The court concluded that the notices impugned were invalid and bad in law. The writ petition was allowed, and the notice was quashed.
The High Court held that all reassessment notices issued after April 1, 2021, must comply with the newly introduced provisions of the Finance Act, 2021, including the procedure under Section 148A. The Court reasoned that there was no indication that the old provisions would continue to apply after the substitution. The first proviso to Section 149(1) further supports this, indicating that notices issued after April 1, 2021, must adhere to the new scheme. Regarding the CBDT notifications, the Court found that the explanations provided therein, which sought to apply pre-amendment provisions, were unconstitutional and invalid. The Court held that subordinate legislation cannot travel beyond the powers vested by the parent Act and cannot amend the provisions of the parent Act under the guise of clarification. Therefore, the explanations were declared invalid. The Court followed its previous judgment in Sudesh Taneja Vs. Income Tax Officer and other connected matters, quashing the impugned notice. The operative direction was to quash the notice and dispose of the petition.
The High Court held that reassessment notices issued after April 1, 2021, must strictly adhere to the new provisions introduced by the Finance Act, 2021, including the procedure under Section 148A. The court reasoned that there was no indication that the old provisions would survive the substitution, and strong indications pointed to the contrary. The court found that the extended time limits under the new Section 149(1)(b) could not be used to revive time-barred notices from the past. Furthermore, the court declared the explanations in the CBDT notifications dated March 31, 2021, and April 27, 2021, as unconstitutional and invalid. The court reasoned that these explanations, by seeking to apply the pre-amendment provisions of Section 148 and 149, exceeded the delegated powers granted under the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020, and could not amend the parent Act. Consequently, the impugned reassessment notice was quashed and set aside. The court did not need to decide on the issue of the notice being issued against a dead person due to the primary finding on procedural invalidity.
The High Court held that all reassessment notices issued after April 1, 2021, must comply with the newly introduced provisions of the Finance Act, 2021, including the procedure under Section 148A. The court reiterated its reasoning from the Sudesh Taneja case, emphasizing that there is no indication that the old provisions would continue to apply after the substitution. The court found that the time limits for issuing notices under Section 148 were modified by the substituted Section 149, and the first proviso to Section 149(1) clarifies that no notice could be issued if it was time-barred under the old provisions. Regarding the CBDT notifications, the court held that the explanations provided in them, which attempted to apply the pre-amendment provisions of Section 148, were unconstitutional and invalid as they exceeded the delegated powers under the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020. Such explanations could not override the plain meaning of the statutory provisions. Consequently, the impugned notices were quashed and set aside.
The Tribunal held that all reassessment notices issued after 01.04.2021 must strictly adhere to the newly introduced provisions of the Income Tax Act, 1961, as amended by the Finance Act, 2021. This includes the mandatory procedure under Section 148A. The court found no indication that the legislature intended for the old provisions to continue applying after the substitution. Furthermore, the Tribunal declared the explanations in CBDT notifications dated 31.03.2021 and 27.04.2021 as unconstitutional and invalid. The court reasoned that these explanations, in the guise of clarification, exceeded the delegated powers granted under the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020, by attempting to alter the plain meaning of the statutory provisions. The ratio is that subordinate legislation cannot override or amend parent legislation, and any notice issued after 01.04.2021 without following Section 148A is invalid. The impugned notice was quashed.
The Tribunal held that any action of issuing a notice under Section 148 after 01.04.2021 must be in accordance with the newly introduced provisions of the Finance Act, 2021. The court found no indication that the old provisions would continue to apply after the substitution. The extended time limits under the substituted Section 149(1) cannot be pressed into service for reopening assessments for past periods if the notice could not have been issued under the old provisions. Regarding the CBDT notifications, the Tribunal held that the explanations provided by the CBDT in its notifications dated 31.03.2021 and 27.04.2021 exceeded its jurisdiction as subordinate legislation. The parent Act only authorized extending time limits, not introducing explanations that altered the basis of statutory provisions. Therefore, these explanations were declared unconstitutional and invalid. Consequently, the reassessment notices impugned in the petitions were found to be invalid and bad in law. The High Court quashed the notices and allowed the writ petitions.
The High Court held that the conclusions reached by the ITAT were based on a thorough assessment of the evidence on record and were purely factual in nature. The Tribunal had confirmed the view of the CIT(A) that the additions made by the Assessing Officer were not sustainable. The Tribunal observed that the companies involved in alleged bogus accommodation entries were not managed or controlled by the alleged kingpin, and there was no link found between the documents and the financial statements of the companies. The assessee had produced affidavits, and the creditors had complied with notices under Sections 131 and 133(6). The statement of a director of one company confirmed the loan transaction. The Tribunal also noted that the assessment order was based solely on a report from the Investigation Wing, Kolkata, without the assessee being privy to it or having an opportunity to cross-examine the persons whose statements were recorded. Since no question of law arose from the deletion of additions, the Court did not examine the correctness of the ITAT's view on the validity of reassessment. Therefore, the appeals were dismissed.
The High Court held that the conclusions reached by the ITAT were based on a thorough assessment of the evidence on record and were purely factual in nature. The Tribunal had confirmed the view of the CIT(A) that the additions made by the Assessing Officer were not sustainable. The Tribunal observed that the companies involved in alleged bogus accommodation entries were not managed or controlled by the alleged kingpin, and there was no link found between the documents and the financial statements of the companies. The assessee had produced affidavits, and the creditors had complied with notices under Sections 131 and 133(6). The statement of a director of one company confirmed the loan transaction. The Tribunal also noted that the assessment order was based solely on a report from the Investigation Wing, Kolkata, without the assessee being privy to it or having an opportunity to cross-examine the persons whose statements were recorded. Since no question of law arose from the deletion of additions, the Court did not examine the correctness of the ITAT's view on the validity of reassessment. Therefore, the appeals were dismissed.
The High Court allowed the Civil Misc. Restoration Application. The Court considered the grounds mentioned in the application and, in the interest of justice, ordered the restoration of S.B. Civil Writ Petition No. 10516/2018 to its original number. This restoration is subject to the petitioner depositing a cost of Rs. 1,000/- with the Rajasthan High Court Munshi Association, Jaipur. The judgment does not delve into the merits of the original writ petition or any specific issues that were to be decided therein; it solely addresses the procedural aspect of restoring the dismissed petition.
The High Court allowed the oral request for correction. It directed that in the second line at page 2 of the order dated 24.11.2023, the figures '2005-06' appearing after the words 'assessment year' be deleted and the figures '2004-05' be substituted in their place. The Court noted that the order dated 24.11.2023 had been corrected accordingly. The office was also directed to correct the certified copy of the order dated 24.11.2023, if already issued. The principle derived from this decision is that procedural corrections to judgments, when agreed upon by both parties, will be allowed by the Court to ensure accuracy.
The High Court noted the submission by the revenue's counsel that the amount of income tax involved in the appeal was less than ₹ 1 crore, which is below the minimum limit prescribed for filing or pursuing appeals in the High Court as per Circular No. 17/2019. In view of this submission, the Court permitted the revenue to withdraw the present appeal. The appeal was accordingly dismissed as withdrawn. However, the Court explicitly stated that the questions of law raised in the appeal were kept open. No specific findings were made on the merits of the case, and no operative directions for remand or deletion were issued.
The High Court held that the conclusions of the ITAT were based on an assessment of the evidence on record and were purely factual in nature. The Tribunal had confirmed the CIT(A)'s view that the additions made by the AO were unsustainable. The ITAT observed that the companies through which the assessees allegedly indulged in bogus accommodation entries were not managed or controlled by the alleged kingpin, Mr. Anand Sharma, and there was no link found in the documents and financial statements of the concerned companies. The assessee had produced affidavits, complied with notices under Sections 131 and 133(6), and the director of one company had confirmed the loan transaction. The ITAT further observed that the assessment order was passed solely on the report of the Investigation Wing, Kolkata, and the AO had only the statement of Anand Sharma. The ITAT was of the opinion that the AO could not have made additions based on the Investigation Wing's report without the assessee being privy to it and without granting an opportunity for cross-examination. The High Court noted that in some cases, the ITAT had also held reassessment to be invalid. Since no question of law arose from the deletion of additions, the High Court did not examine the correctness of the ITAT's view on the validity of reassessment. All appeals were dismissed.
The High Court held that the conclusions of the ITAT were based on an assessment of the evidence on record and were purely factual in nature. The Tribunal had confirmed the CIT(A)'s view that the additions made by the AO were unsustainable. The ITAT observed that the companies through which the assessees allegedly indulged in bogus accommodation entries were not managed or controlled by the alleged kingpin, Mr. Anand Sharma, and there was no link found in the documents and financial statements of the concerned companies. The assessee had produced affidavits, complied with notices under Sections 131 and 133(6), and the director of one company had confirmed the loan transaction. The ITAT further observed that the assessment order was passed solely on the report of the Investigation Wing, Kolkata, and the AO had only the statement of Anand Sharma. The ITAT was of the opinion that the AO could not have made additions based on the Investigation Wing's report without the assessee being privy to it and without granting an opportunity for cross-examination. The High Court noted that in some cases, the ITAT had also held reassessment to be invalid. Since no question of law arose from the deletion of additions, the High Court did not examine the correctness of the ITAT's view on the validity of reassessment. All appeals were dismissed.
The High Court held that the conclusions of the ITAT were based on an assessment of the evidence on record and were purely factual in nature. The Tribunal had confirmed the CIT(A)'s view that the additions made by the AO were unsustainable. The ITAT observed that the companies through which the assessees allegedly indulged in bogus accommodation entries were not managed or controlled by the alleged kingpin, Mr. Anand Sharma, and there was no link found in the documents and financial statements of the concerned companies. The assessee had produced affidavits, complied with notices under Sections 131 and 133(6), and the director of one company had confirmed the loan transaction. The ITAT further observed that the assessment order was passed solely on the report of the Investigation Wing, Kolkata, and the AO had only the statement of Anand Sharma. The ITAT was of the opinion that the AO could not have made additions based on the Investigation Wing's report without the assessee being privy to it and without granting an opportunity for cross-examination. The High Court noted that in some cases, the ITAT had also held reassessment to be invalid. Since no question of law arose from the deletion of additions, the High Court did not examine the correctness of the ITAT's view on the validity of reassessment. All appeals were dismissed.
The High Court held that the conclusions of the ITAT were based on an assessment of the evidence on record and were purely factual in nature. The Tribunal had confirmed the CIT(A)'s view that the additions made by the AO were unsustainable. The ITAT observed that the companies through which the assessees allegedly indulged in bogus accommodation entries were not managed or controlled by the alleged kingpin, Mr. Anand Sharma, and there was no link found in the documents and financial statements of the concerned companies. The assessee had produced affidavits, complied with notices under Sections 131 and 133(6), and the director of one company had confirmed the loan transaction. The ITAT further observed that the assessment order was passed solely on the report of the Investigation Wing, Kolkata, and the AO had only the statement of Anand Sharma. The ITAT was of the opinion that the AO could not have made additions based on the Investigation Wing's report without the assessee being privy to it and without granting an opportunity for cross-examination. The High Court noted that in some cases, the ITAT had also held reassessment to be invalid. Since no question of law arose from the deletion of additions, the High Court did not examine the correctness of the ITAT's view on the validity of reassessment. All appeals were dismissed.
The Tribunal held that all notices issued after April 1, 2021, must be in accordance with the newly introduced provisions under the Finance Act, 2021, including the procedure under Section 148A. The court reasoned that there was no indication that the old provisions would continue to apply after the substitution. The first proviso to Section 149(1) further supported this, indicating that notices issued after April 1, 2021, would be governed by the substituted Section 149(1) without breaching the upper time limit of the original Section 149(1). Regarding the CBDT notifications, the Tribunal found that the explanations provided in them exceeded the delegated powers under the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020. The subordinate legislation could not travel beyond the powers vested by the parent Act, nor could an explanation alter the plain meaning of statutory provisions. Therefore, these explanations were declared unconstitutional and invalid. The Tribunal followed the view of the Allahabad and Delhi High Courts and disagreed with the Chhattisgarh High Court's differing view. Consequently, the impugned notices were found to be invalid and bad in law and were quashed.
The Tribunal held that all reassessment notices issued after 01.04.2021 must be in accordance with the newly introduced provisions under the Finance Act, 2021, including the procedure under Section 148A. The court reasoned that there was no indication that the old provisions would continue to apply after the substitution, and in fact, there were strong indications to the contrary, such as the modified time limits in Section 149 and the first proviso to Section 149(1). The Tribunal further held that the explanations in the CBDT notifications dated 31.03.2021 and 27.04.2021, which sought to apply the pre-amendment provisions of Section 148, were unconstitutional and invalid. The court found that these explanations exceeded the delegated powers granted by the Relaxation Act, 2020, and attempted to alter the parent Act's provisions. Consequently, the reassessment notices impugned in the petitions were declared invalid and quashed. The appeals of the revenue were dismissed.
The Tribunal held that all reassessment notices issued after April 1, 2021, must be in accordance with the newly introduced provisions of the Finance Act, 2021. The procedure prescribed under Section 148A of the Act is mandatory for such notices. The court found that the notice in question was issued without following this procedure and was therefore invalid. Regarding the CBDT notifications, the Tribunal held that the explanations provided therein, which sought to apply pre-amendment provisions for issuance of notice under Section 148, were unconstitutional and invalid. The court reasoned that subordinate legislation cannot exceed the powers vested in the parent Act and cannot amend the provisions of the parent Act by way of an explanation. The Tribunal noted that similar views were taken by the Allahabad and Delhi High Courts, while disagreeing with a contrary view of the Chhattisgarh High Court. Consequently, the impugned notice was quashed.
The High Court held that all reassessment notices issued after April 1, 2021, must comply with the newly introduced provisions of the Finance Act, 2021, including the procedure under Section 148A. The court reasoned that there was no indication that the old provisions would continue to apply after the substitution and, in fact, strong indications to the contrary, such as the modified time limits in Section 149. The court further held that the explanations inserted by the CBDT notifications dated March 31, 2021, and April 27, 2021, were unconstitutional and invalid. The court found that these explanations, by providing that the provisions as they stood on March 31, 2021, would apply for issuance of notice under Section 148, plainly exceeded the jurisdiction of the subordinate legislation. The subordinate legislation could not travel beyond the powers vested by the parent Act and could not amend the provisions of the parent Act. Consequently, the impugned reassessment notice was quashed and set aside. The ratio is that any action of issuing a notice under Section 148 after April 1, 2021, must be in accordance with the newly introduced provisions of the Finance Act, 2021, and any subordinate legislation attempting to circumvent this will be invalid.
The High Court held that the conclusions of the ITAT were based on an assessment of the evidence on record, making them purely factual. The ITAT had confirmed the CIT(A)'s view that the additions were not sustainable. The Tribunal observed that the companies involved in alleged bogus accommodation entries were not managed or controlled by the alleged kingpin, Mr. Anand Sharma, and there was no link found between the documents and the financial statements of these companies. The assessee had produced affidavits and complied with notices under Sections 131 and 133(6), and the creditors had complied. The statement of a director confirming a loan transaction was also recorded. The ITAT found that the AO's assessment order was based solely on a report from the Investigation Wing, Kolkata, to which the assessee was not privy and was not given an opportunity to cross-examine the individuals whose statements were recorded. The Court noted that in some cases, the ITAT had also held reassessment to be invalid. Since no question of law arose from the deletion of additions, the High Court did not examine the correctness of the ITAT's view on the validity of reassessment. Therefore, all appeals were dismissed.
The Tribunal held that reassessment notices issued after 01.04.2021 must strictly adhere to the newly introduced provisions of the Income Tax Act, 1961, including the procedural requirements of Section 148A. The Court found that the Finance Act, 2021, introduced a significant departure in reassessment procedures, and there was no indication that the old scheme should survive post-01.04.2021. The Court further held that the explanations in the CBDT notifications dated 31.03.2021 and 27.04.2021, which sought to apply the pre-amendment provisions of Section 148, were unconstitutional and invalid. The Court reasoned that these explanations, as a piece of delegated legislation, exceeded the powers vested in the Central Government by the parent Act (Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020) and could not amend the parent Act's provisions. Consequently, the reassessment notices issued without following Section 148A were quashed. The ratio is that any action of issuing a notice under Section 148 after 01.04.2021 must be in accordance with the newly introduced provisions, and subordinate legislation cannot override statutory provisions.
The High Court held that all reassessment notices issued after April 1, 2021, must be in accordance with the newly introduced provisions of the Finance Act, 2021, including the procedure under Section 148A. The court reiterated its reasoning from the Sudesh Taneja case, emphasizing that there was no indication that the old scheme of reassessment would survive the substitution of provisions by the Finance Act, 2021. The court found strong indications to the contrary, including changes in time limits under Section 149. Regarding the CBDT notifications, the court declared the explanations provided therein as unconstitutional and invalid. It reasoned that the CBDT, as a subordinate legislation, exceeded its jurisdiction by issuing explanations that sought to alter the application of statutory provisions. The court noted that these explanations could not amend the parent Act and were not within the powers delegated by the Taxation and other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020. Consequently, the impugned notice was quashed and set aside. The court allowed the writ petition, dismissing the revenue's appeals.
The High Court held that the conclusions of the ITAT were based on an assessment of the evidence on record, making them purely factual. The ITAT had confirmed the CIT(A)'s view that the additions were not sustainable. The Tribunal observed that the companies involved in alleged bogus accommodation entries were not managed or controlled by the alleged kingpin, Mr. Anand Sharma, and there was no link found between the documents and the financial statements of these companies. The assessee had produced affidavits and complied with notices under Sections 131 and 133(6), and the creditors had complied. The statement of a director confirming a loan transaction was also recorded. The ITAT found that the AO's assessment order was based solely on a report from the Investigation Wing, Kolkata, to which the assessee was not privy and was not given an opportunity to cross-examine the individuals whose statements were recorded. The Court noted that in some cases, the ITAT had also held reassessment to be invalid. Since no question of law arose from the deletion of additions, the High Court did not examine the correctness of the ITAT's view on the validity of reassessment. Therefore, all appeals were dismissed.