2022 (1) TMI 842 - HC - Income Tax

Validity of 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 - onset of Covid-19 pandemic followed by nationwide lockdown in March, 2020 - Relaxation of certain provision of specified Act - scope of declaration declaring Explanations A(a)(ii)/A(b) to the Notification No.20 S.O.1432(E) dated 31st March, 2021 and Notification No.38 S.O.1703(E) dated 27th April, 2021 to the extent that the same extend the applicability of the provisions of Section 148, Section 149 and Section 151 of the Act, as the case may be, as they stood as on the 31st day of March, 2021, before the commencement of the Finance Act, 2021 to the period beyond 31st March, 2021 - whether the Government/Executive can make or change law of the land by way of Explanations to Notifications without specific Authority from the Legislature to do so and whether the Government/Executive can impede the implementation of law made by the Legislature - HELD THAT - As relying on MON MOHAN KOHLI VERSUS ASSISTANT COMMISSIONER OF INCOME TAX ANR. 2021 (12) TMI 664 - DELHI HIGH COURT we hereby quash the impugned Notice dated 29.06.2021, issued by Respondent No.1 under Section 148 of the Income Tax Act, 1961, for the Assessment Year 2015-16 (Annexure P-1 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. If the law permits the Respondents/Revenue to take further steps in the matter, they shall be at liberty to do so and, if and when such steps are taken, which give rise to any grievance/cause of action to the Petitioner, the Petitioner shall be at liberty to resort to remedies available in law. WP allowed.

Summary

Issues:
1. Writ petition challenging notice under Section 148 of the Income Tax Act, 1961 for Assessment Year 2015-16.
2. Legality of 'Explanation' in Notifications S.O. 1432(E) and S.O. 1703(E) issued by Respondent No. 3.

Analysis:

Issue 1:
The petitioner filed a writ petition seeking to quash the notice dated 29.06.2021 issued under Section 148 of the Income Tax Act, 1961 for the Assessment Year 2015-16. The court heard arguments from both parties and noted that the issue raised in the petition was similar to a previous judgment by a Division Bench of the same court. The respondents did not dispute this position. After examining the judgment referred to by the petitioner, the court found merit in the submission and proceeded to quash the impugned notice dated 29.06.2021 issued by Respondent No.1 under Section 148 of the Income Tax Act, 1961 for the Assessment Year 2015-16. The court's decision was based on the precedent set by the earlier judgment.

Issue 2:
Regarding the legality of the 'Explanation' provided in Notifications S.O. 1432(E) and S.O. 1703(E) issued by Respondent No. 3, the court noted that the Division Bench in the previous judgment had declared certain parts of the notifications as ultra vires. As a result, the relief sought by the petitioner in relation to these explanations was considered addressed by the previous judgment. The court stated that no further orders were required to be passed in this regard. However, the court clarified that if the law permitted the respondents to take further steps in the matter, they were at liberty to do so. The petitioner was also granted the right to seek remedies available in law if any further steps taken by the respondents caused grievance or a new cause of action. The writ petition was allowed, and the pending application was disposed of accordingly.