2022 (4) TMI 1323 - HC - Income Tax

Reopening of assessment u/s 147 - scope of mandatory procedure prescribed u/s 148A - relation between Relaxation Act, 2020 and Finance Act, 2021 - enhanced/reduced time limit specified in Section 149 - initiation of reassessment proceedings prior to coming into force of the Finance Act, 2021 - substitution made by the Finance Act, 2021 - legality and validity of only the Explanations to the two Notifications, being Notification No.20/2021 dated 31st March, 2021 and Notification No.38/2021 dated 27th April, 2021, issued by Central Government in exercise of powers vested under Section 3(1) of Relaxation Act, 2020 - reformative changes to Sections 147 to 151 - income escaping assessment - onset of Covid-19 pandemic followed by nationwide lockdown in March, 2020 - Relaxation of certain provision of specified Act - HELD THAT - As relying on case MON MOHAN KOHLI VERSUS ASSISTANT COMMISSIONER OF INCOME TAX ANR. 2021 (12) TMI 664 - DELHI HIGH COURT we find merit in the submission that the judgment squarely covers the issue arising in the present writ petition. We hereby quash the impugned Notice dated 25.04.2021, issued by Respondent No.1 under Section 148 of the Income Tax Act, 1961, for the Assessment Year 2015-16 (Annexure-A1 to the memo of the writ petition). Keeping in view the fact that the Division Bench in the aforementioned judgment has declared Explanations A(a)(ii)/A(b) in the Notification No. 20/2021 dated 31.03.2021 and Notification No. 38/2021 dated 27.04.2021 as ultra vires, the relief sought by the Petitioner herein, in prayer (b) stands redressed and no further orders are required to be passed.

Summary

Issues:
1. Quashing of notice issued under Section 148 of the Income Tax Act, 1961
2. Legality of Explanations in Notifications No. 20/2021 and No. 38/2021

Analysis:
1. The petitioner sought relief through a writ petition to quash an impugned notice dated 25.04.2021 issued under Section 148 of the Income Tax Act, 1961. The court, after hearing counsels for both parties and considering the facts, noted that the issue raised was similar to a judgment dated 15.12.2021 by a Division Bench of the same court. The respondents did not dispute this position. The court examined the judgment referred to by the petitioner's counsel and agreed that it covered the issue at hand. Consequently, the court quashed the impugned notice dated 25.04.2021.

2. Additionally, the court addressed the legality of Explanations in Notifications No. 20/2021 dated 31.03.2021 and No. 38/2021 dated 27.04.2021. Referring to the Division Bench's judgment, the court found that the Explanations mentioned in the notifications were declared as ultra vires. As a result, the relief sought by the petitioner in this regard was considered addressed, and no further orders were deemed necessary. The court clarified that if the law allowed the respondents to take further steps in the matter, they were permitted to do so. The petitioner was also granted the liberty to seek remedies available in law if any future steps by the respondents caused grievance or a new cause of action. Ultimately, the writ petition was allowed, and the pending application was disposed of accordingly.