Delhi High Court quashed the reassessment notice U/s 148 issued after 01/04/2021
Here is a copy of the landmark judgment of the Hon’ble Delhi High Court which has quashed the reassessment notice U/s 148 issued after 01/04/2021. The copy of the judgement is as under:
DELHI HIGH COURTA
MON MOHAN KOHLI
vs.
ASSISTANT COMMISSIONER OF INCOME TAX & ANR.
MANMOHAN & NAVIN CHAWLA, JJ.
W.P.(C) 6176/2021 with W.P.(C) Nos. 6442/2021, 6443/2021, 6451/2021, 6465/2021, 6563/2021, 6531/2021, 6596/2021, 6607/2021, 6645/2021, 6665/2021, 6667/2021, 6668/2021, 6705/2021, 6717/2021, 6718/2021, 6777/2021, 6799/2021, 6800/2021, 6801/2021, 6805/2021, 6822/2021, 6830/2021, 6832/2021, 6857/2021, 6877/2021, 6880/2021, 6888/2021, 6889/2021, 6890/2021, 6894/2021, 6896/2021, 6897/2021, 6898/2021, 6904/2021, 6905/2021, 6906/2021, 6910/2021, 6917/2021, 6918/2021, 6920/2021, 6922/2021, 6924/2021, 6931/2021, 6950/2021 6954/2021, 6955/2021, 6962/2021, 6963/2021, 6965/2021, 6966/2021, 6968/2021, 6972/2021, 6976/2021, 7015/2021, 7016/2021, 7018/2021, 7027/2021, 7028/2021, 7030/2021, 7031/2021, 7037/2021, 7038/2021, 7039/2021, 7041/2021, 7047/2021, 7049/2021, 7054/2021, 7055/2021, 7058/2021, 7062/2021, 7066/2021, 7071/2021, 7072/2021, 7075/2021, 7076/2021, 7078/2021, 7079/2021, 7080/2021, 7083/2021, 7097/2021, 7098/2021, 7102/2021, 7104/2021, 7107/2021, 7109/2021, 7111/2021, 7130/2021, 7131/2021, 7132/2021, 7134/2021, 7138/2021, 7139/2021, 7140/2021, 7141/2021, 7143/2021, 7144/2021, 7145/2021, 7147/2021, 7158/2021, 7163/2021, 7165/2021, 7168/2021, 7169/2021, 7170/2021, 7171/2021, 7172/2021, 7173/2021, 7174/2021, 7175/2021, 7177/2021, 7178/2021, 7180/2021, 7181/2021, 7190/2021, 7191/2021, 7193/2021, 7196/2021, 7200/2021, 7201/2021, 7203/2021, 7205/2021, 7206/2021, 7208/2021, 7210/2021, 7211/2021, 7212/2021, 7213/2021, 7215/2021, 7217/2021, 7219/2021, 7220/2021, 7225/2021, 7229/2021, 7231/2021, 7257/2021, 7259/2021, 7262/2021, 7263/2021, 7267/2021, 7269/2021, 7273/2021, 7274/2021, 7275/2021, 7277/2021, 7278/2021, 7287/2021, 7292/2021, 7300/2021, 7301/2021, 7302/2021, 7303/2021, 7304/2021, 7305/2021, 7306/2021, 7307/2021, 7308/2021, 7309/2021, 7311/2021, 7312/2021, 7313/2021, 7317/2021, 7318/2021, 7319/2021, 7320/2021, 7321/2021, 7324/2021, 7327/2021, 7333/2021, 7337/2021, 7346/2021, 7348/2021, 7359/2021, 7361/2021, 7362/2021, 7363/2021, 7364/2021, 7366/2021, 7367/2021, 7368/2021, 7369/2021, 7370/2021, 7374/2021, 7378/2021, 7383/2021, 7385/2021, 7386/2021, 7387/2021, 7388/2021, 7389/2021, 7391/2021, 7392/2021, 7393/2021, 7394/2021, 7397/2021, 7398/2021, 7399/2021, 7400/2021, 7401/2021, 7402/2021, 7404/2021, 7405/2021, 7406/2021, 7408/2021, 7409/2021, 7410/2021, 7411/2021, 7412/2021, 7419/2021, 7420/2021, 7421/2021, 7423/2021, 7425/2021, 7428/2021, 7429/2021, 7430/2021, 7431/2021, 7433/2021, 7434/2021, 7435/2021, 7436/2021, 7438/2021, 7440/2021, 7442/2021, 7443/2021, 7447/2021, 7450/2021, 7451/2021, 7453/2021, 7455/2021, 7456/2021, 7457/2021, 7458/2021, 7460/2021, 7461/2021, 7462/2021, 7465/2021, 7466/2021, 7467/2021, 7471/2021, 7472/2021, 7473/2021, 7474/2021, 7476/2021, 7477/2021, 7479/2021, 7480/2021, 7481/2021, 7484/2021, 7485/2021, 7488/2021, 7492/2021, 7494/2021, 7495/2021, 7503/2021, 7509/2021, 7511/2021, 7516/2021, 7517/2021, 7520/2021, 7522/2021, 7524/2021, 7525/2021, 7526/2021, 7527/2021, 7530/2021, 7531/2021, 7533/2021, 7534/2021, 7535/2021, 7536/2021, 7537/2021, 7538/2021, 7539/2021, 7541/2021, 7543/2021, 7544/2021, 7545/2021, 7546/2021, 7549/2021, 7552/2021, 7554/2021, 7555/2021, 7556/2021, 7557/2021, 7561/2021, 7562/2021, 7563/2021, 7567/2021, 7568/2021, 7569/2021, 7570/2021, 7571/2021, 7573/2021, 7574/2021, 7576/2021, 7577/2021, 7582/2021, 7584/2021, 7585/2021, 7586/2021, 7588/2021, 7590/2021, 7591/2021, 7593/2021, 7594/2021, 7595/2021, 7596/2021, 7598/2021, 7599/2021, 7600/2021, 7603/2021, 7610/2021, 7622/2021, 7630/2021, 7631/2021, 7632/2021, 7636/2021, 7639/2021, 7643/2021, 7646/2021, 7647/2021, 7648/2021, 7650/2021, 7651/2021, 7654/2021, 7655/2021, 7656/2021, 7658/2021, 7659/2021, 7660/2021, 7661/2021, 7663/2021, 7664/2021, 7667/2021, 7668/2021, 7675/2021, 7677/2021, 7678/2021, 7679/2021, 7681/2021, 7682/2021, 7683/2021, 7684/2021, 7685/2021, 7686/2021, 7687/2021, 7688/2021, 7689/2021, 7690/2021, 7691/2021, 7692/2021, 7693/2021, 7694/2021, 7695/2021, 7696/2021, 7697/2021, 7698/2021, 7699/2021, 7730/2021, 7731/2021, 7732/2021, 7733/2021, 7734/2021, 7735/2021, 7736/2021, 7737/2021, 7738/2021, 7754/2021, 7763/2021, 7770/2021, 7771/2021, 7772/2021, 7773/2021, 7774/2021, 7775/2021, 7776/2021, 7777/2021, 7783/2021, 7786/2021, 7787/2021, 7789/2021, 7790/2021, 7791/2021, 7792/2021, 7793/2021, 7796/2021, 7797/2021, 7798/2021, 7801/2021, 7804/2021, 7808/2021, 7816/2021, 7821/2021, 7822/2021, 7862/2021, 7863/2021, 7864/2021, 7865/2021, 7866/2021, 7867/2021, 7868/2021, 7870/2021, 7871/2021, 7872/2021, 7873/2021, 7875/2021, 7876/2021, 7878/2021, 7879/2021, 7880/2021, 7889/2021, 7893/2021, 7894/2021, 7897/2021, 7898/2021, 7899/2021, 7901/2021, 7902/2021, 7903/2021, 7904/2021, 7908/2021, 7911/2021, 7912/2021, 7913/2021, 7914/2021, 7918/2021, 7919/2021, 7920/2021, 7921/2021, 7924/2021, 7925/2021, 7927/2021, 7929/2021, 7935/2021, 7938/2021, 7945/2021, 7946/2021, 7949/2021, 7950/2021, 7952/2021, 7953/2021, 7968/2021, 7969/2021, 7979/2021, 7986/2021, 7994/2021, 7995/2021, 7996/2021, 7998/2021, 7999/2021, 8005/2021, 8007/2021, 8009/2021, 8011/2021, 8012/2021, 8013/2021, 8016/2021, 8017/2021, 8018/2021, 8019/2021, 8021/2021, 8028/2021, 8032/2021, 8042/2021, 8050/2021, 8053/2021, 8056/2021, 8057/2021, 8059/2021, 8064/2021, 8070/2021, 8071/2021, 8074/2021, 8078/2021, 8080/2021, 8081/2021, 8082/2021, 8083/2021, 8084/2021, 8087/2021, 8088/2021, 8091/2021, 8093/2021, 8094/2021, 8097/2021, 8105/2021, 8106/2021, 8108/2021, 8116/2021, 8117/2021, 8123/2021, 8124/2021, 8126/2021, 8128/2021, 8129/2021, 8130/2021, 8134/2021, 8141/2021, 8143/2021, 8144/2021, 8146/2021, 8154/2021, 8165/2021, 8167/2021, 8168/2021, 8169/2021, 8170/2021, 8172/2021, 8173/2021, 8174/2021, 8175/2021, 8176/2021, 8178/2021, 8180/2021, 8182/2021, 8184/2021, 8185/2021, 8188/2021, 8190/2021, 8191/2021, 8192/2021, 8193/2021, 8196/2021, 8197/2021, 8198/2021, 8200/2021, 8201/2021, 8212/2021, 8215/2021, 8216/2021, 8217/2021, 8218/2021, 8219/2021, 8220/2021, 8221/2021, 8222/2021, 8223/2021, 8224/2021, 8225/2021, 8227/2021, 8260/2021, 8261/2021, 826
Dec 15, 2021
(2021) 112 CCH 0175 ISCC
Legislation Referred to
Section 148 and Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020
Case pertains to
Asst. Year-
Decision in favour of:
Assessee
Short Overview of the case:
Government’s power to change law of land by way of Explanations to Notifications without specific Authority from Legislature
Assessees have sought quashing of re-assessment Notices issued by Respondents revenue under Section 148
Assessees also seek a declaration declaring Explanations A(a)(ii)/A(b) to Notification No.20 [S.O.1432(E)] dated 31st March, 2021 and Notification No.38 [S.O.1703(E)] dated 27th April, 2021 to extent that same extend applicability of “provisions of Section 148, Section 149 and Section 151, as case may be, as they stood as on 31st day of March, 2021, before commencement of Finance Act, 2021” to period beyond 31st March, 2021 as ultra vires parent legislation, viz., Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 (hereinafter referred to as ‘Relaxation Act, 2020’)
Hon’ble Delhi High Court has held as under:
Legislature has introduced new provisions, Sections 147 to 151 by way of Finance Act, 2021 with effect from 1st April, 2021 and as said Section 147 is not even mentioned in impugned Explanations, reassessment notices relating to any Assessment Year issued under Section 148 after 31st March, 2021 had to comply with substituted Sections
It is clarified that power of reassessment that existed prior to 31st March, 2021 continued to exist till extended period i.e. till 30th June, 2021; however, Finance Act, 2021 has merely changed procedure to be followed prior to issuance of notice with effect from 1st April, 2021Section 3(1) of Relaxation Act empowers Government/Executive to extend only time limits and it does not delegate power to legislate on provisions to be followed for initiation of reassessment proceedings
In fact, Relaxation Act does not give power to Government to extend erstwhile Sections 147 to 151 beyond 31st March, 2021 and/or defer operation of substituted provisions enacted by Finance Act, 2021
Consequently, impugned Explanations in Notifications dated 31st March, 2021 and 27th April, 2021 are not conditional legislation and are beyond power delegated to Government as well as ultra vires parent statute i.e. Relaxation Act
Revenue cannot rely on Covid-19 for contending that new provisions Sections 147 to 151 should not operate during period 1st April, 2021 to 30th June, 2021 as Parliament was fully aware of Covid-19 Pandemic when it passed Finance Act, 2021
Also, arguments of respondents qua non-obstante clause in Section 3(1) of Relaxation Act, ‘legal fiction’ and ‘stop clock provision’ are contrary to facts and untenable in law
Executive/Respondents/Revenue cannot use administrative power to issue Notifications under Section 3(1) of Relaxation Act, 2020 to undermine expression of Parliamentary supremacy in form of an Act of Parliament, namely, Finance Act, 2021
Revenue cannot frustrate purpose of substituted statutory provisions, like Sections 147 to 151 in present instance, by emptying it of content or impeding or postponing their effectual operation
Keeping in view aforesaid conclusions, Explanations A(a)(ii)/A(b) to Notifications dated 31st March, 2021 and 27th April, 2021 are declared to be ultra vires Relaxation Act, 2020 and are therefore bad in law and null and void
Consequently, impugned reassessment notices issued under Section 148 are quashed & Assessee’s petitions allowed.
Now, what next?
There are two probable options which the Department may explore as under:
1. “The Biggest Retrospective Amendment on section 148 & Section 148A by Union Budget – 2022?” – Read at https://thetaxtalk.com/2021/12/16/union-budget-2022/
2. Approach to the Hon’ble Supreme Court. In our opinion, the Department has not approached the Supreme Court so far and waiting for the judgement of other High Courts.
