W.P.(C)/6176/2021 of MON MOHAN KOHLI Vs ASSISTANT COMMISSIONER OF INCOME TAX & ANR.

Signature Not Verified

IN THE HIGH COURT OF DELHI AT NEW DELHI

+W.P.(C) 6176/2021

MON MOHAN KOHLI

..... Petitioner

Versus

ASSISTANT COMMISSIONER OF INCOME TAX & ANR..

..... Respondents

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, 6931/2021,6950/20216954/2021, 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,

6954/2021, 6955/2021, 6962/2021,

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,

Signature Not Verified

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,

Signature Not Verified

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, 8262/2021, 8263/2021, 8264/2021,8265/2021, 8266/2021, 8268/2021, 8269/2021, 8270/2021, 8271/2021,8272/2021, 8273/2021, 8275/2021, 8276/2021, 8277/2021, 8278/2021,8279/2021, 8281/2021, 8283/2021, 8284/2021, 8285/2021, 8286/2021,8287/2021, 8288/2021, 8298/2021, 8299/2021, 8300/2021, 8302/2021,8303/2021, 8304/2021, 8305/2021, 8306/2021, 8307/2021, 8309/2021,8310/2021, 8312/2021, 8313/2021, 8314/2021, 8315/2021, 8316/2021,8317/2021, 8318/2021, 8319/2021, 8320/2021, 8321/2021, 8322/2021,8323/2021, 8354/2021, 8355/2021, 8356/2021, 8357/2021, 8359/2021,8361/2021, 8362/2021, 8363/2021, 8364/2021, 8365/2021, 8368/2021,8369/2021, 8370/2021, 8372/2021, 8373/2021, 8374/2021, 8376/2021,8378/2021, 8380/2021, 8383/2021, 8384/2021, 8386/2021, 8387/2021,

W.P.(C) 6176/2021 & connected matters

Signature Not Verified

8388/2021, 8389/2021, 8390/2021, 8416/2021, 8431/2021, 8436/2021,8438/2021, 8441/2021, 8443/2021, 8444/2021, 8446/2021, 8448/2021,8450/2021, 8462/2021, 8463/2021, 8464/2021, 8465/2021, 8466/2021,8467/2021, 8468/2021, 8469/2021, 8475/2021, 8476/2021, 8478/2021,8480/2021, 8492/2021, 8499/2021, 8501/2021, 8502/2021, 8503/2021,8505/2021, 8506/2021, 8511/2021, 8512/2021, 8513/2021, 8514/2021,8517/2021, 8518/2021, 8519/2021, 8523/2021, 8525/2021, 8526/2021,8527/2021, 8530/2021, 8531/2021, 8533/2021, 8534/2021, 8535/2021,8536/2021, 8537/2021, 8538/2021, 8539/2021, 8541/2021, 8542/2021,8543/2021, 8544/2021, 8545/2021, 8546/2021, 8550/2021, 8574/2021,8575/2021, 8583/2021, 8584/2021, 8585/2021, 8586/2021, 8589/2021,8590/2021, 8591/2021, 8593/2021, 8594/2021, 8595/2021, 8596/2021,8600/2021, 8604/2021, 8607/2021, 8608/2021, 8616/2021, 8619/2021,8622/2021, 8627/2021, 8629/2021, 8631/2021, 8633/2021, 8634/2021,8636/2021, 8637/2021, 8638/2021, 8639/2021, 8641/2021, 8642/2021,8644/2021, 8646/2021, 8647/2021, 8648/2021, 8660/2021, 8661/2021,8662/2021, 8667/2021, 8668/2021, 8671/2021, 8688/2021, 8690/2021,8693/2021, 8694/2021, 8695/2021, 8698/2021, 8699/2021, 8700/2021,8701/2021, 8702/2021, 8705/2021, 8706/2021, 8707/2021, 8717/2021,8721/2021, 8722/2021, 8723/2021, 8725/2021, 8727/2021, 8728/2021,8734/2021, 8739/2021, 8741/2021, 8747/2021, 8752/2021, 8754/2021,8755/2021, 8756/2021, 8757/2021, 8758/2021, 8760/2021, 8761/2021,8763/2021, 8764/2021, 8766/2021, 8774/2021, 8776/2021, 8786/2021,8788/2021, 8789/2021, 8795/2021, 8806/2021, 8810/2021, 8811/2021,8813/2021, 8816/2021, 8818/2021, 8819/2021, 8822/2021, 8823/2021,8824/2021, 8825/2021, 8827/2021, 8828/2021, 8829/2021, 8831/2021,8836/2021, 8838/2021, 8846/2021, 8847/2021, 8849/2021, 8850/2021,8851/2021, 8852/2021, 8854/2021, 8855/2021, 8856/2021, 8857/2021,8858/2021, 8859/2021, 8860/2021, 8863/2021, 8864/2021, 8872/2021,8874/2021, 8877/2021, 8880/2021, 8881/2021, 8889/2021, 8890/2021,8891/2021, 8899/2021, 8913/2021, 8920/2021, 8921/2021, 8925/2021,8930/2021, 8936/2021, 8939/2021, 8943/2021, 8944/2021, 8945/2021,8949/2021, 8956/2021, 8958/2021, 8961/2021, 8965/2021, 8970/2021,8975/2021, 8980/2021, 8981/2021, 8985/2021, 8987/2021, 8988/2021,8999/2021, 9001/2021, 9006/2021, 9016/2021, 9024/2021, 9025/2021,9026/2021, 9028/2021, 9030/2021, 9032/2021, 9034/2021, 9035/2021,9036/2021, 9037/2021, 9039/2021, 9040/2021, 9041/2021, 9045/2021,9047/2021, 9050/2021, 9052/2021, 9059/2021, 9060/2021, 9061/2021,

W.P.(C) 6176/2021 & connected matters

Signature Not Verified

9064/2021, 9066/2021, 9067/2021, 9068/2021, 9069/2021, 9070/2021,9071/2021, 9075/2021, 9097/2021, 9098/2021, 9099/2021, 9100/2021,9103/2021, 9104/2021, 9106/2021, 9107/2021, 9108/2021, 9109/2021,9111/2021, 9113/2021, 9114/2021, 9117/2021, 9119/2021, 9121/2021,9122/2021, 9123/2021, 9125/2021, 9127/2021, 9130/2021, 9131/2021,9133/2021, 9134/2021, 9136/2021, 9137/2021, 9138/2021, 9146/2021,9147/2021, 9151/2021, 9152/2021, 9157/2021, 9160/2021, 9164/2021,9165/2021, 9166/2021, 9167/2021, 9176/2021, 9196/2021, 9197/2021,9198/2021, 9200/2021, 9204/2021, 9205/2021, 9207/2021, 9208/2021,9213/2021, 9215/2021, 9216/2021, 9221/2021, 9222/2021, 9225/2021,9228/2021, 9231/2021, 9232/2021, 9233/2021, 9234/2021, 9235/2021,9238/2021, 9240/2021, 9241/2021, 9242/2021, 9243/2021, 9244/2021,9245/2021, 9246/2021, 9247/2021, 9248/2021, 9251/2021, 9252/2021,9253/2021, 9264/2021, 9265/2021, 9266/2021, 9268/2021, 9270/2021,9295/2021,9300/2021, 9301/2021, 9303/2021, 9306/2021, 9310/2021,9311/2021, 9315/2021, 9316/2021, 9317/2021, 9319/2021, 9321/2021,9322/2021, 9323/2021, 9325/2021, 9327/2021, 9329/2021, 9330/2021,9331/2021, 9332/2021, 9333/2021, 9334/2021, 9335/2021, 9337/2021,9339/2021, 9340/2021, 9341/2021, 9342/2021, 9348/2021, 9350/2021,9351/2021, 9353/2021, 9355/2021, 9356/2021, 9379/2021, 9391/2021,9396/2021, 9397/2021, 9398/2021, 9399/2021, 9402/2021, 9403/2021,9404/2021, 9406/2021, 9408/2021, 9414/2021, 9416/2021, 9422/2021,9424/2021, 9431/2021, 9433/2021, 9434/2021, 9437/2021, 9439/2021,9441/2021, 9443/2021, 9445/2021, 9446/2021, 9447/2021, 9449/2021,9451/2021, 9453/2021, 9456/2021, 9458/2021, 9459/2021, 9488/2021,

9489/2021, 9490/2021, 9491/2021, 9492/2021, 9493/2021, 9494/2021,9495/2021, 9497/2021, 9500/2021, 9501/2021, 9503/2021, 9506/2021,9510/2021, 9513/2021, 9516/2021, 9517/2021, 9519/2021, 9520/2021,9521/2021, 9524/2021, 9526/2021, 9527/2021, 9528/2021, 9532/2021,9533/2021, 9534/2021, 9535/2021, 9536/2021, 9538/2021, 9542/2021,9543/2021, 9544/2021, 9545/2021, 9546/2021, 9547/2021, 9548/2021,9549/2021, 9550/2021, 9551/2021, 9552/2021, 9553/2021, 9554/2021,

9555/2021, 9557/2021, 9567/2021, 9569/2021, 9571/2021, 9572/2021,

9573/2021, 9599/2021, 9600/2021, 9601/2021, 9602/2021, 9603/2021,9604/2021, 9605/2021, 9606/2021, 9607/2021, 9609/2021, 9610/2021,9612/2021, 9613/2021, 9615/2021, 9616/2021, 9617/2021, 9618/2021,9619/2021, 9620/2021, 9621/2021, 9623/2021, 9624/2021, 9625/2021,9629/2021, 9632/2021, 9634/2021, 9635/2021, 9636/2021, 9641/2021,

W.P.(C) 6176/2021 & connected matters

Signature Not Verified

9642/2021, 9647/2021, 9648/2021, 9649/2021, 9650/2021, 9652/2021,9654/2021, 9655/2021, 9656/2021, 9658/2021, 9660/2021, 9663/2021,9664/2021, 9665/2021, 9668/2021, 9669/2021, 9672/2021, 9673/2021,9674/2021, 9675/2021, 9676/2021, 9677/2021, 9678/2021, 9679/2021,9680/2021, 9682/2021, 9686/2021, 9689/2021, 9696/2021, 9720/2021,9722/2021, 9726/2021, 9727/2021, 9728/2021, 9729/2021, 9731/2021,9732/2021, 9733/2021, 9736/2021, 9737/2021, 9738/2021, 9739/2021,9741/2021, 9742/2021, 9757/2021, 9758/2021, 9759/2021, 9760/2021,9807/2021 9810/2021, 9819/2021, 9820/2021, 9821/2021, 9822/2021,9823/2021, 9824/2021, 9825/2021, 9826/2021, 9827/2021, 9828/2021,9830/2021, 9831/2021, 9832/2021, 9839/2021, 9842/2021, 9843/2021,9850/2021, 9851/2021, 9862/2021, 9863/2021, 9865/2021, 9879/2021,9884/2021, 9886/2021, 9910/2021, 9911/2021, 9913/2021, 9919/2021,9924/2021, 9927/2021, 9944/2021, 9945/2021, 9949/2021, 9953/2021,9954/2021, 9955/2021, 9978/2021, 9979/2021, 9981/2021, 9982/2021,9984/2021, 10035/2021,10036/2021, 10038/2021, 10039/2021, 10046/2021,10055/2021, 10059/2021, 10062/2021, 10076/2021, 10099/2021, 10100/2021,10101/2021, 10102/2021, 10108/2021, 10116/2021, 10117/2021, 10130/2021,10131/2021, 10132/2021, 10134/2021, 10137/2021, 10138/2021, 10139/2021,10140/2021, 10142/2021, 10143/2021, 10144/2021, 10147/2021, 10148/2021,10150/2021, 10151/2021, 10192/2021, 10194/2021, 10195/2021, 10198/2021,10199/2021, 10200/2021, 10201/2021, 10202/2021, 10203/2021, 10207/2021,10208/2021, 10209/2021, 10210/2021, 10211/2021, 10212/2021, 10214/2021,10217/2021, 10224/2021, 10226/2021, 10228/2021, 10234/2021, 10236/2021,10269/2021, 10271/2021, 10300/2021, 10301/2021, 10313/2021, 10315/2021,10316/2021, 10321/2021, 10323/2021, 10325/2021, 10337/2021, 10338/2021,10340/2021, 10341/2021, 10342/2021, 10346/2021, 10382/2021, 10386/2021,10388/2021, 10391/2021, 10404/2021, 10407/2021, 10408/2021, 10413/2021,10419/2021, 10420/2021, 10437/2021, 10465/2021, 10468/2021, 10469/2021,10470/2021, 10474/2021, 10475/2021, 10476/2021, 10477/2021, 10478/2021,10479/2021, 10480/2021, 10481/2021, 10483/2021, 10484/2021, 10485/2021,10487/2021, 10488/2021, 10491/2021, 10512/2021, 10515/2021, 10516/2021,10521/2021, 10526/2021, 10527/2021, 10541/2021, 10542/2021, 10544/2021,10547/2021, 10548/2021, 10549/2021, 10550/2021, 10551/2021, 10553/2021,10555/2021, 10557/2021, 10564/2021, 10568/2021, 10570/2021, 10572/2021,10580/2021, 10581/2021, 10588/2021, 10626/2021, 10627/2021, 10628/2021,10640/2021, 10643/2021, 10650/2021, 10653/2021,6152/2021, 10396/2021,10414/2021, 10533/2021, 10565/2021, 10587/2021, 10608/2021, 10609/2021,10612/2021, 10613/2021, 10615/2021, 10618/2021, 10619/2021, 10620/2021,10621/2021, 10642/2021, 10661/2021, 10662/2021, 10663/2021, 10683/2021,

10684/2021, 10685/2021, 10687/2021, 10688/2021, 10692/2021, 10693/2021,10694/2021, 10695/2021, 10696/2021, 10697/2021, 10700/2021, 10702/2021,10704/2021, 10706/2021, 10734/2021, 10735/2021, 10739/2021, 10741/2021,10744/2021, 10748/2021, 10752/2021, 10756/2021, 10757/2021, 10761/2021,10764/2021, 10766/2021, 10767/2021, 10783/2021, 10799/2021, 10802/2021,10803/2021, 10811/2021, 10819/2021, 10820/2021, 10827/2021, 10829/2021,10841/2021, 10843/2021

PRESENT FOR THE PETITIONERS:

Mr. S. Ganesh, Senior Advocate with Ms. Archana Sahadeva, Advocate.

Mr. Percy Pardiwalla, Senior Advocate with Mr. Salil Kapoor, Ms. AnanyaKapoor, Mr. Sumit Lalchandani, Ms. Soumya Singh, Mr. Sanat Kapoor,Advocates.Kapoor, Mr. Sumit Lalchandani, Ms. Soumya Singh, Mr. Sanat Kapoor,Advocates.

Ms. Kavita Jha, Mr. Vaibhav Kulkarni, Mr. Udit Naresh, Mr. Anant Mann,

Mr. Aditeya Bali, Mr. Rahul Unnikrishnan, Mr. Himanshu Aggarwal and

Ms. Shwetha Prabhakar, Advocates.

Mr. Ved Jain, Ms. Richa Mishra, Advocates.

Mr. Rohit Jain with Mr. Neeraj Jain, Mr. Aniket D. Agrawal, Ms. ManishaSharma, Advocates.Sharma, Advocates.

Mr. Aseem Chawla, Mr. Manu K. Giri, Mr. Ashish Dhunna & Ms. SoniyaDodeja, Advocates.Dodeja, Advocates.

Mr. Piyush Kaushik, Advocate.

Mr. Sachit Jolly, Ms. Anuradha Dutt, Mr. Rohit Garg, Ms. Disha Jham,

Ms. Mehak Sachdeva, Mr. Sohum Dua, Advocates .

Mr. Kapil Gupta, Advocate.

Mr. Puneet Agarwal, Mr. Yuvraj Singh, Mr. Prem Kandpal, Mr. ChetanKumar Shukla, Ms. Hemlata Rawat, Advocates.Kumar Shukla, Ms. Hemlata Rawat, Advocates.

Mr. Gaurav Gupta, Mr. Jaspal Singh Sethi, Mr. Gaurav Gupta & Ms. SahibaPantel, Advocates.Pantel, Advocates.

Mr. T.M. Shivakumar, Advocate.

Mr. Manibhadra Jain, Advocate.

Dr. Rakesh Gupta, Mr. Somil Agarwal, Mr. Tani Malik, Mr. Anshul MittalAdvocates.Advocates.

Mr. Mayank Nagi, Advocate.

Mr. Arvind Kumar & Ms. Devina Sharma, Advocates.

Mr. Sunil K.Mukhi, Mr. Ishan Garg, Mr.T.S Nerwal, Advocates.

Mr. P.C. Yadav, Advocate.

Mr. Raghvendra Singh and Mr Satish kumar, Advocates.

Mr. Rahul Chaudhary, Mr. Avesh Chaudhary, Mr. Abhay Shankar Dubey,Advocates.Mr. Navin Kumar with Mr. Deepak and Mr. Rohit Pal, Advs.

Mr. Kamal Sawhney with Mr. Prashant Meharchandani, Mr. NikhilAgarwal, Mr. Arun Bhaduria, Mr. Divyansh Singh, Advocates .

Mr. Inder Paul Bansal and Mr. Vivek Bansal. Adv.

Mr. Suresh Chandra Sati, Advocate.

Mr.Sushil Tekriwal & Dr. Mamta Tekriwal, Advs.

Mr. Piyush Singhal, Mr. Risabh Sharma, Advs.

Mr. Rajiv Kumar Virmani, Mr. Abhinav Agrawal, Mr. Rishi Vohar, Ms.Swati Bhardwaj, Advs.

Mr.Rishabh Ostwal, Adv.

Mr. Rano Jain with Mr. Venketesh Chaurasia, Advs.

Mr.Sourav Vig and Mr.Tushar Gupta, Advs.Mr. Virender Mehta Adv.

Mr. Manish Paliwal, Mr. Vikas Kumar, Mr. Vishal Aggarwal, Advs.

Mr.Anish Sarna, Adv.Mr. Pankaj Gupta and Ms. Rimpy Gupta, Advs.

Mr. Harshit Batra and Mr. Ritesh Bajaj, Advs.

Mr. A.K. Babbar, Mr. V.K. Sabharwal, Mr. Surendra Kumar, Mr. B.K.Tripathi, Advs.

Ms. Vanita Bhargava, Mr. Ajay Bhargava, Ms. Shweta Kabra, Ms. PrernaSingh, Advs.Ms. Rashmi Chopra, AdvocateMr. Kishore Kunal, Mr. Manish Rastogi, Mr. Parth and Mr. Sumit Khadaria,Advs.Mr. Amol Sinha, Mr. Anshum Jain, Mr. Ashvini Kumar, Advs.Mr. Ashvini Kumar, Mr. Rahul Kochar, Mr. Kshitiz Garg, Mr. AbhinavArya, Advs.Ms. Shreya Jain & Mr. Gaurav Tanwar, Advs.Mr. Pulkit Deora with Mr. Arnav Vidyarthi, Advs.

Sh. Pankaj Jain, Sr. Advocate with Mr. Gaurav Mittal, Ms. Divya Suri andMr. Sachin Bhardwaj, AdvsMr. Bhupinder Jit Kumar, Adv.Ms. Jyoti Taneja, Mr. Vidur Kamra Advoacte Advs.Mr. Neeraj Jain, Mr. Aditya Vohra, Advs.

Mr. Divyanshu Agrawal, Ms. Ritika Chawla and Mr. Vaibhav Niti, Advs.

Mr. Jitesh Talwani, Mr. Abhimanyu Goyal, Mr. Sahil Mahajan andMs. Anjali, Advs.Mr Krishna kumar Agarwal, Mr. Sharad Agarwal, Ms. Monika Ghai, Advs.Ms. Poonam Ahuja, Adv.

Mr. R. Madhav Bera, Mr. Divyansh Jain, Mr. Dennis T Panmei, Mr. AakashBhardwaj, Mr. Rishi Jaiswal, Mr. Keshav Maheshwari, Ms. Akansha Guptaand Ms. Tanya Minocha, Advs.

Mr.Udai Khanna, Adv.

Mr. Ritambhara Narang and Mr. Pranay Mohan Govil, Advs.

Mr. Sagar Rohatgi, Adv.

Mr. Manuj Sabharwal, Adv.

Mr. Ankur Bansal alongwith Mr. Mukul Rawal and Mr. Devendra Dang,Advs.

Mr. Mukesh Gupta and Mr. Shashi Gandhi, Advs.

Mr. Prakash Kumar along with Mrs. Rashmi Singh, Advs.

Mr. Ansh Singh Luthra, Mr. Harmanpreet Singh Kohli and Mr. AbhishekSamal, Advs.

Mr. Nitin Gulati, Adv.

Mr. Arnav Kumar, Mr. Rajat Mittal, Mr. Devrath Arora and Mr. LakshayVirmani, Advs.

Mr. Sagar Rohatgi, Mr. Anil Kumar Chunduru & Mr. Neeraj Kumar Jha,Advs.Mr. Kapil Hirani, & Mr. Shakul R. Ghatole, Mr. Sumit K Batra, Mr. ManishKhurana, Advocates.

Mr. Bharat Beriwal, Ms. Priyadarshini Dewan, Mr.Shankari Mishra,

Priyesh Srivastava, Advs.

Ms. Jaya Goyal & Ms. Manpreet Kaur, Advs.

Mr. Yogesh K. Jagia, Mr. Amit Sood, Mr. Rishabh Nangia, Advs.

Mr. Gautam Jain and Mr. Piyush Kumar Kamal, Advs.

Mr. Nagesh Kumar Behl, Mr.Mayank Pachauri & Mr. Vishal Gourav, Advs.

Mr. Simran Mehta, Adv.

Shri Tejasvi Goel, Adv.Mr. K. Sampath & Mr. S. Krishnan, Advs.

Mr. S. Krishnan & Mr. Rakesh Kumar, Adv.

Mr. Mayank Nagi, Mr.Tarun Singh & Mr.Pulkit Verma, Advs.

Mr. Ruchesh Sinha, Mr. Gautam Khaitan, Mr. AT Patra, Mr. Aditya

Ghadge, Mr. Ramaditya Tiwari & Ms.Divya, Advs.

Ms.Priamvada Surolia, Ms.Lakshita Arora & Mr. Abhishek Parmar, Advs.

Mr. Shafiq Khan, Adv.

Ms. Ranjana Roy Gawai, Mr. Ujjwal Jain & Mr. Shikher Upadhyay, Advs.

Mr. P.R Rajhans, Mr. Ankur Vats & Mr. Vivek Singh, Advs.

Mr. Sekhar Gupta & Mr. Mehendra Pratap, Advs.

Mr. Deepanshu Jain & Mr. Shaantanu Jain, Advs.

Mr. Gagan Kumar, Adv.

Mr. Abhimanyu, Mr. Ankit Panwar, Mr. Parth Dixit & Mr. Abhishek Singh

& Ms. Leena Kalra, AR of the Company.

Mr. Hemant Shah and Saurabh Pal, Advs.

Mr. R. K. Handoo, Mr.Yoginder Handoo, Mr.Ashwin Kataria, Mr.AdityaChaudhary and Mr.Raghav Bhalla, Advs.Chaudhary and Mr.Raghav Bhalla, Advs.

Mr. Rahul Malhotra, Mr. Manas Tripathi and Ms. Diksha Singh Dhakre,Advocates.Advocates.

Mr. K.R. Manjani & Mr.Tarun Aswani, Advs.

Mr. Vishal Kalra, Mr. S.S. Tomar and Mr. Ankit Sahni, Advs.

Mr. Rajeev Sharma, Adv.

Mr. Kapil Goel and Mr.Sandeep Goel, Advocates

Mr. Rohit Bansal, Adv.

Mr. Amit Kaushik, Adv.

Mr. Vikas Arora, Ms. Radhika Arora and Mr. Mohit Dagar, Advocates

Mr. Satyen Sethi & Mr. Arta Trana Panda, Advs.

Mr. Rupesh Kumar with Ms. Neelam Sharma, Mr. Pankhuri Shrivastava,

Mr. Pravesh Bahuguna, Mr. Alekshendra Sharma, Advs.

Mr. Sougat Sinha & Mr. Manoj Kumar, Advs.

Mr. Hemant Singh, Mridul Chakravarty, Mr. Tushar Srivastava, Ms. Shruti

Gupta, Lavanya Panwar, Advs.

Dr. Shashwat Bajpai with Mr Vishal Aggarwal, Advs.

Mr. Rakesh Jain, Adv.

Mr. Pragyan Pradip Sharma and Ms. Gurnoor Kaur, Advs.

Ms. Surbhi Chandra, Adv.

Mr. Kanishk Agarwal with Mr. Mayank Patni, Ms. Nidhi Bhuwania Advs.

Mr. Rajiv K. Garg and Mr. Ashish Garg, Advs.

Mr. R. K. Handoo, Mr. Garvit Solanki, Advs.

Mr. Deepak Chopra with Mr. Harpreet Singh Ajmani, Mr. Rashi Khanna,

Ms. Priya Tandon and Mr. Manasvine Bajpai, Advs.

Mr. Shekhar Gupta, Adv.

Mr. Mani Bhadra Jain, Adv.

Mr. Vishnu Langwat with Ms. Nidhi Tomar & Mr. Vinay Pal, Advs.

Mr. Vaibhav Sharma, Adv.

Ms. Bandana Grover, Adv.

Mr. Sumit Singh, Adv.

Mr. Debesh Panda & Ms. Anandita Sharma, Advs.

Mrs. Harvinder Oberoi, Adv.

Mr. Purav Middha, Adv.

Mr. Akarsh Garg, Mr. Parth Davar, Mr. Sushant Singhal & Mr. HimanshuAggarwal, Advs.

Mr. Sabhay Choudhary, Adv.

Mr. Harpreet Singh & Mr. Gagan Kumar Singhal, Advs.

Mr. Gaurav Jain & Mr.Gautam Jain, Advs.

Mr. Anirudh Bakhru, Mr. Ayush Puri, Mr. Umang Tyagi & Mr. TejaswiniChandrasekhar, Adv.

PRESENT FOR THE RESPONDENTS:

Mr Zoheb Hossain, Sr. Standing Counsel with Mr. Vipul Agarwal,Jr. Standing Counsel, Mr. Parth Semwal, Jr. Standing Counsel for Revenue.

Mr. Sunil Agarwal, Sr. Standing Counsel, Tushar Gupta, Jr. StandingCounsel and Mr. Samarth Chaudhari, Adv.

Mr. Puneet Rai, Sr. Standing Counsel along with Adeeba Mujahid, Jr.Standing Counsel.

Mr. Ruchir Bhatia, Sr Standing Counsel.

Mr. Abhishek Maratha, Sr. Standing Counsel.

Mr. Sanjay Kumar, Sr. Standing Counsel with Ms. Easha Kadiyan, Jr.Standing Counsel for Revenue.

Ms. Vibhooti Malhotra, Sr. Standing counsel Mr Shailender Singh, Jr Stcounsel and Mr.Udit Sharma, Adv.

Mr. Harpreet Singh, Sr SC with Mr. Arunesh Sharma & Ms.Suhani Mathur,Advs.

Mr. Kunal Sharma, Sr. Standing Counsel with Ms. Zehra Khan, Jr. StandingCounsel and Mr. Shubhendu Bhattacharya, Adv.

Mr. Ajit Sharma, Sr. Standing Counsel with Mr. Anant Ram Mishra, Adv.

Mr. Sanjeev Sabharwal, Sr. panel counsel for UOI.

Mr. Avnish Singh with Ms. Pushplata Singh, Advs. for UOI.

Mr. P.C Yadav, Sr Panel Counsel, UOI.

Mr. Vivek Goyal, CGSC for UOI.

Mr. Nawal Kishore Jha, Adv. for Respondents/UOI.

Mr. Dilbag Singh Sr. CGC for Respondents/UOI.

Mr. Kamal Kant Jha, Senior Panel Counsel for UOI.

Mr. Ranvir Singh, (CGSC) for UOI.

Mr. D.S.Mehandru, Sr. Panel Counsel for UOI.

Mr. Anil Dabas, Adv. for UOI.

Mr. Praveen Kumar Jain, Adv.

Ms. Richa Dhawan, Senior Panel counsel for UOI.

Ms. Aakanksha Kaul, Mr. Manek Singh, Mr. Aman Sahani, Advs.

Mr. Nitin Khanna, Advocate for R-4/UOI.

Ms. Arti Bansal for Respondent No.3/ UOI.

Mr. Prakash Kumar, Sr. Central Govt. Counsel.

Mr. Narendra Kumar Srivastava Senior Panel Counsel for the respondent

Mr. Praveen Kumar Jain, Adv.

Ms. Talish Ray, Adv. for UOI.

Ms. Sunieta Ojha, Adv. for UOI.

Mr. Neeraj, Mr. Sahaj Garg , Mr. Vedansh Anand, Mr. Rudra Paliwal and

Mr. Sanjay Pal, Advs.

Mr.Ajay Digpaul CGSC with Kamal R. Digpaul Adv.

Mr. Ravi Prakash CGSC with Mr. Gurtejpal Singh, Ms. Shruti Shivkumar,

Advs.

Mr. Ashwani Kumar Sharma, CGSC.

Mr.Sushil Kumar Pandey, Adv. with Mr. Rahul Mourya, Ms. Sweety Singh

Chauhan & Ms. Anjum Kaur, Advs.

Mr. Jitesh Vikram Srivastava, Mr. Prajesh Vikram Srivastava, Adv.

Ms. Aakanksha Kaul, Mr. Manek Singh, Mr. Aman Sahani, Advs.

Mr. Ajay Digpaul, Adv.

Mr. Vivekanand Mishra, Senior Panel Counsel UOI.

Mr. Ruchir Mishra and Mr. Mukesh Kumar Tiwari, Advs.

Mr. Shankar Kumar Jha, Adv.

Mr. Manoj Kumar Tyagi, Adv.

Mr. Chiranjiv Kumar, Adv.

Mr. Tanveer Ahmed Ansari, Adv.

Mr. Pradeep Kumar Sharma, Adv.

Mr. Siddharth Khatana, Adv.

Ms. Leena Tuteja, Adv.

Mr. T. P.Singh, Adv.

Mr. Bhagvan Swarup Shukla (CGSC) with Mr. Sarvan Kumar, Advs.

Mr. Dev P Bhardwaj, CGSC with Ms. Anubha Bhardwaj, Adv.

Mr. Satyendra Kumar, Adv.

Mr. Satya Ranjan Swain, Senior Panel Counsel, Mr. Kautilya Birat, Adv.

Mr. Farman Ali, Senior Panel Counsel and Mr.Athar Raza Farooquei, Adv.

Mr. Sushil Kumar Pandey, Senior Panel Counsel for respondent No.1/UOI.

Mr. Aman Malik, Senior Panel Counsel.

Mr. Jivesh Tiwari, Adv. for UOI.

Mr. Manisha Agrawal Narain, Mr. Rakshita Goyal, Mr. Aditya Deshwal,Advs.Advs.

Ms. Suman Chauhan, Adv.

Mr. Rishabh Sahu, Adv.

Mr. Gigi George, Adv.

Mr Ayush Agrawal, Senior Panel Counsel (UOI), Mr. Vikrant Singh Bloria,

and Mr. Sushant Tomar, Advs.

Mr. Naginder Benipal, SPC with Mr. Naveen Chawla and Mr. HarithiKambiri, Advs.

Mr. B.N.P. Pathak Sr. Central Govt. Counsel for UOI.

Mr. Vikrant N Goyal, Adv.

Mr. Jaswant Rai Aggarwal, Adv.

Mr. Akshay Amritanshu, Adv.with Mr. Kartikey Singh, Adv.

Mr. Ghanshyam Mishra & Ms. Vinita Sharma, Advs. for UOI/R-3.

Mr. Satyanand, SPC for UOI.

Mr. Rajesh Kumar, Adv. for UOI.

Mr. Harish Kumar Garg, Adv.

Mr. Rajesh Gogna, CGSC with Mr. Vaibhav Anand, Adv.

Mr. Chiranjiv Kumar, Adv. for UOI.

Mr. Sandeep Tyagi, SPC for UOI.

Mr. Akhilesh Kumar, Adv.

Ms. Nidhi Banga, Senior Panel Counsel for UOI with Ms. Kirti Arora, Adv.

Ms. Anju Gupta, Adv. for UOI.

Mr. Shashank Bajpai, SPC, Mrs. Shakun Sudha Shukla, Mr. Dhananjay

Tiwari, Advs. for UOI.

Mr. Niraj Kumar, Sr. Central Govt. Counsel for UOI/R-4.

Mr. S.S. Rai, SPC for UOIfor R-3 & R-4 alongwith Mrs. Roopam Rai, Adv.Mr. Alok Singh, SPC for UOI along with Ms. Sonam Awasthi, Mr. GauravBhardwaj, Advs.

Mr. Prasanta Varma, Sr. PC, Government Counsel with Mrs. Prativa Varma,Mr. Amrit Singh Khalsa, Ms. Hiteshi Kakkar, Advocates.

Mr. G. D. Sharma, Adv.

Mr. Asheesh Jain, CGSC with Mr. Adarsh Kr. Gupta, Advocates.

Mr. Saroj Bidawat, Sr. Panel counsel

Ms. Archana Gaur, Adv.

Mr. Ayush Agrawal, Senior Panel Counsel (UOI), Vikrant Singh Bloria,Adv.

Mr. P. S. Singh, Advocate

Mr. Ashish Verma and Mr. Debopriyo Moulik, Advs.

Ms. Sonu Bhatnagar, Sr. SC with Ms. Venus Mehrotra, Ms. Kanak Grover,Advs.

Mr. Rajesh Gogna, CGSC with Mr. Arihant Jain, Adv.

Mr. Kirtiman Singh CGSC with Mr. Taha Yasin, Adv.

Ms. Sarika Singh, Adv.

Mr. Rahul Sharma, Central Government Counsel Panel and Mr. C.K.Bhatt,Adv.

Mr.Virender Pratap Singh Charak with Ms.Shubhra Parashar,

Mr. Pushpender Singh Charak, Mr. Kapil Gaur, Mr. Vaishnav Kirti Singh,

Mr. Shubham Ahuja, Mr. Sanjay Singh Chauhan, Mr. Ram Pal SinghTomar, Mr. Gyanwardhan Singh & Mr. Vivek Nagar, Advs. for UOI.Mr.Nirvikar Verma, Adv. for UOI.

Mr.Rajesh Kumar, Adv. for UOI.

Mr. Manish Mohan, CGSC with Ms. Manisha Saroha, Adv.

Mr. Shyam Sundar Rai, Adv.

Reserved on:- 30[th]October, 2021

Date of decision:- 15[th]December, 2021

CORAM:HON'BLE MR. JUSTICE MANMOHANHON'BLE MR. JUSTICE NAVIN CHAWLA

J U M N T

MANMOHAN, J:

1.Various issues arise for consideration in the present batch of onethousand three hundred and forty six (1346) writ petitions, yet in essence,the questions of law that arise for consideration are whether theGovernment/Executive can make or change law of the land by way ofExplanationstoNotificationswithoutspecificAuthorityfromthe

Legislature to do so and whether the Government/Executive can impede theimplementation of law made by the Legislature.

2.It is pertinent to mention that in the present batch of matters, thepetitioners-assessees have sought quashing of the re-assessment Noticesissued post 31[st]March, 2021 by the Respondents-Revenue under Section148 of the Income Tax Act, 1961. The petitioners-assesseesalso seek adeclaration declaring Explanations A(a)(ii)/A(b) to the Notification No.20[S.O.1432(E)] dated 31[st]March, 2021 and Notification No.38 [S.O.1703(E)]dated 27[th]April, 2021 to the extent that the same extend the applicability ofthe “provisions of Section 148, Section 149 and Section 151 of the Act, asthe case may be, as they stood as on the 31[st]day of March, 2021, before thecommencement of the Finance Act, 2021” to the period beyond 31[st]March,2021 as ultra vires the parent legislation, viz., The Taxation and Other Laws(Relaxation and Amendment of Certain Provisions) Act, 2020 (hereinafterreferred to as ‘Relaxation Act, 2020’).

ADMITTED FACTS

3.The procedure governing initiation of reassessment proceedings priorto coming into force of the Finance Act, 2021 was governed by thefollowing provisions:-

“Income escaping assessment.

147. If the Assessing Officer has reason to believe thatany income chargeable to tax has escaped assessment forany assessment year, he may, subject to the provisions ofsections 148 to 153, assess or reassess such income andalso any other income chargeable to tax which hasescaped assessment and which comes to his noticesubsequently in the course of the proceedings under this

section, or recomputed the loss or the depreciationallowance or any other allowance, as the case may be,for the assessment year concerned (hereafter in thissection and in sections 148 to 153 referred to as therelevant assessment year):

Provided that where an assessment under sub-section (3)of section 143 or this section has been made for therelevant assessment year, no action shall be taken underthis section after the expiry of four years from the end oftherelevantassessmentyear,unlessanyincomechargeable to tax has escaped assessment for suchassessment year by reason of the failure on the part of theassessee to make return under section 139 or inresponse to notice issued under sub-section (1) ofsection 142 or section 148 or to disclose fully and trulyall material facts necessary for his assessment, for thatassessment year:Provided further that nothing contained in the firstproviso shall apply in case where any income inrelation to any asset (including financial interest in anyentity) located outside India, chargeable to tax, hasescaped assessment for any assessment year:

Provided also that the Assessing Officer may assess orreassess such income, other than the income involvingmatters which are the subject matters of any appeal,reference or revision, which is chargeable to tax and hasescaped assessment.

Explanation 1.—Production before the Assessing Officerof account books or other evidence from which materialevidence could with due diligence have been discoveredby the Assessing Officer will not necessarily amount todisclosure within the meaning of the foregoing proviso.

Explanation 2.—For the purposes of this section, thefollowing shall also be deemed to be cases where incomechargeable to tax has escaped assessment, namely :—

(a) where no return of income has been furnishedby the assessee although his total income or thetotal income of any other person in respect ofwhich he is assessable under this Act during theprevious year exceeded the maximum amountwhich is not chargeable to income-tax;

(b) where return of income has been furnished bythe assessee but no assessment has been made andit is noticed by the Assessing Officer that theassesseehasunderstatedtheincomeorhasclaimed excessive loss, deduction, allowance orrelief in the return;

(ba) where the assessee has failed to furnish areport in respect of any international transactionwhich he was so required under section 92E;

(c) where an assessment has been made, but—

(i) income chargeable to tax has beenunderassessed ; orunderassessed ; or

(ii) such income has been assessed at toolow rate ; or

(iii) such income has been made thesubject of excessive relief under this Act;or(iv)excessivelossordepreciationallowance or any other allowance underthis Act has been computed;

(ca) where return of income has not beenfurnished by the assessee or return of income hasbeen furnished by him and on the basis ofinformationordocumentreceivedfromtheprescribed income-tax authority, under sub-section(2) of section 133C, it is noticed by the AssessingOfficer that the income of the assessee exceeds themaximum amount not chargeable to tax, or as thecase may be, the assessee has understated the

income or has claimed excessive loss, deduction,allowance or relief in the return;

(d) where person is found to have any asset(including financial interest in any entity) locatedoutside India.

Explanation 3.—For the purpose of assessment orreassessment under this section, the Assessing Officermay assess or reassess the income in respect of any issue,which has escaped assessment, and such issue comes tohis notice subsequently in the course of the proceedingsunder this section, notwithstanding that the reasons forsuch issue have not been included in the reasonsrecorded under sub-section (2) of section 148.

Explanation 4.—For the removal of doubts, it is herebyclarified that the provisions of this section, as amendedby the Finance Act, 2012, shall also be applicable for anyassessment year beginning on or before the 1[st]day ofApril, 2012.

Issue of notice where income has escaped assessment.

148.(1) Before making the assessment, reassessment orrecomputation under section 147, the Assessing Officershall serve on the assessee notice requiring him tofurnish within such period, as may be specified in thenotice, return of his income or the income of any otherperson in respect of which he is assessable under this Actduring the previous year corresponding to the relevantassessment year, in the prescribed form and verified inthe prescribed manner and setting forth such otherparticulars as may be prescribed; and the provisions ofthis Act shall, so far as may be, apply accordingly as ifsuch return were return required to be furnished undersection 139:

Provided that in case—

(a) where return has been furnished during theperiod commencing on the 1st day of October,

1991 and ending on the 30[th]day of September,2005 in response to notice served under thissection, and

(b) subsequently notice has been served undersub-section (2) of section 143 after the expiry oftwelve months specified in the proviso to sub-section (2) of section 143, as it stood immediatelybefore the amendment of said sub-section by theFinance Act, 2002 (20 of 2002) but before theexpiry of the time limit for making the assessment,re-assessment or recomputation as specified insub-section (2) of section 153, every such noticereferred to in this clause shall be deemed to be avalid notice:

Provided further that in case—

(a) where return has been furnished during theperiod commencing on the 1st day of October,1991 and ending on the 30th day of September,2005, in response to notice served under thissection, and

(b) subsequently notice has been served underclause (ii) of sub-section (2) of section 143 after theexpiry of twelve months specified in the proviso toclause (ii) of sub-section (2) of section 143, butbefore the expiry of the time limit for making theassessment, reassessment or recomputation asspecified in sub-section (2) of section 153, everysuch notice referred to in this clause shall bedeemed to be valid notice.

Explanation.—For the removal of doubts, it is herebydeclared that nothing contained in the first proviso or thesecond proviso shall apply to any return which has beenfurnished on or after the 1[st]day of October, 2005 inresponse to notice served under this section.

(2) The Assessing Officer shall, before issuing any noticeunder this section, record his reasons for doing so.

Time limit for notice.

149. (1) No notice under section 148 shall be issued forthe relevant assessment year,—the relevant assessment year,—

(a) if four years have elapsed from the end of the relevantassessment year, unless the case falls under clause (b) orclause (c);assessment year, unless the case falls under clause (b) orclause (c);

(b) if four years, but not more than six years, have elapsed fromthe end of the relevant assessment year unless the incomechargeable to tax which has escaped assessment amounts to oris likely to amount to one lakh rupees or more for that year;(c) if four years, but not more than sixteen years, have elapsedfrom the end of the relevant assessment year unless the incomein relation to any asset (including financial interest in anyentity) located outside India, chargeable to tax, has escapedassessment.the end of the relevant assessment year unless the incomechargeable to tax which has escaped assessment amounts to oris likely to amount to one lakh rupees or more for that year;(c) if four years, but not more than sixteen years, have elapsedfrom the end of the relevant assessment year unless the incomein relation to any asset (including financial interest in anyentity) located outside India, chargeable to tax, has escapedassessment.

Explanation.—In determining income chargeable to taxwhich has escaped assessment for the purposes of thissub-section, the provisions of Explanation 2 of section147 shall apply as they apply for the purposes of thatsection.

(2) The provisions of sub-section (1) as to the issue ofnotice shall be subject to the provisions of section 151.

(3) If the person on whom notice under section 148 is tobe served is person treated as the agent of non-residentundersection163andtheassessment,reassessment or recomputation to be made in pursuanceof the notice is to be made on him as the agent of suchnon-resident, the notice shall not be issued after theexpiry of period of six years from the end of the relevantassessment year.

Explanation.—For the removal of doubts, it is herebyclarified that the provisions of sub-sections (1) and (3), asamended by the Finance Act, 2012, shall also beapplicable for any assessment year beginning on orbefore the 1[st]day of April, 2012.

Sanction for issue of notice.

151. (1) No notice shall be issued under section 148 by anAssessing Officer, after the expiry of period of fouryears from the end of the relevant assessment year, unlessthe Principal Chief Commissioner or Chief Commissioneror Principal Commissioner or Commissioner is satisfied,on the reasons recorded by the Assessing Officer, that itis fit case for the issue of such notice.

(2) In case other than case falling under sub-section(1), no notice shall be issued under section 148 by anAssessing Officer, who is below the rank of JointCommissioner, unless the Joint Commissioner is satisfied,on the reasons recorded by such Assessing Officer, that itis fit case for the issue of such notice.

(3) For the purposes of sub-section (1) and sub-section(2), the Principal Chief Commissioner or the ChiefCommissioner or the Principal Commissioner or theCommissioner or the Joint Commissioner, as the casemay be, being satisfied on the reasons recorded by theAssessing Officer about fitness of case for the issue ofnotice under section 148, need not issue such noticehimself.”

4.Due to the onset of Covid-19 pandemic followed by nationwidelockdown in March, 2020, the citizens and authorities inter alia faceddifficulties in complying with the statutory time limits. To providerelaxation as well as to avoid any adverse consequence to either party, theGovernment of India announced various relaxations by way of The Taxationand Other Laws (Relaxation of Certain Provisions) Ordinance, 2020(hereinafter referred to as the ‘Relaxation Ordinance, 2020’). The objectsand reasons as well as the relevant portion of the Relaxation Ordinance,2020 are reproduced herein below:-

“THE TAXATION AND OTHER LAWS (RELAXATION OFCERTAIN PROVISIONS) ORDINANCE, 2020NO. 2 of 2020, DATED 31-3-2020

Promulgated by the President in the Seventy-first Year of the Republicof India.

An Ordinance to provide relaxation in the provisions of certain Actsand for matters connected therewith or incidental thereto.

WHEREAS, in view of the spread of pandemic COVID-19 acrossmany countries of the world including India, causing immense loss tothe lives of people, it has become imperative to relax certainprovisions, including extension of time limit, in the taxation and otherlaws;

AND WHEREAS, Parliament is not in session and the President issatisfied that circumstances exist which render it necessary for him totake immediate action;

NOW, THEREFORE, in exercise of the powers conferred by clause(1) of article 123 of the Constitution, the President is pleased topromulgate the following Ordinance: —

CHAPTER IPRELIMINARY

Short title and commencement

1. (1) This Ordinance may be called the Taxation and Other Lawscommencement. (Relaxation of Certain Provisions) Ordinance, 2020.(2) Save as otherwise provided, it shall come into force at once.

Definitions

2. (1) In this Ordinance, unless the context otherwise requires,—

(a) “specified Act” means—

(i) the Wealth-tax Act, 1957 (27 of 1957);

(ii) the Income-tax Act, 1961 (43 of 1961);

(iii) the Prohibition of Benami Property Transactions Act, 1988

(45 of 1988);

(iv) Chapter VII of the Finance (No. 2) Act, 2004 (22 of 2004);

(v) Chapter VII of the Finance Act, 2013 (17 of 2013);

(vi) the Black Money (Undisclosed Foreign Income and Assets)and Imposition of Tax Act, 2015 (22 of 2015);and Imposition of Tax Act, 2015 (22 of 2015);

(vii) Chapter VIII of the Finance Act, 2016; (28 of 2016) or

(viii) the Direct Tax Vivad se Vishwas Act, 2020 (3 of 2020);

(b) "notification" means the notification published in the OfficialGazette.

(2) The words and expressions used herein and not defined, butdefined in the specified Act, the Central Excise Act, 1944 (1 of 1944),the Customs Act, 1962 (52 of 1962), the Customs Tariff Act, 1975 (51of 1975) or the Finance Act, 1994 (32 of 1994), as the case may be,shall have the meaning respectively assigned to them in that Act.

CHAPTER II

RELAXATION OF CERTAIN PROVISIONS OF SPECIFIED ACT

Relaxation of certain provision of specified Act

3. (1) Where, anytime limit has been specified in, or prescribed ornotified under, the specified Act which falls during the period from the20[th]day of March, 2020 to the 29[th]day of June, 2020 or such otherdate after the 29[th]day of June, 2020 as the Central Government may,by notification, specify in this behalf, for the completion orcompliance of such action as—

(a) completion of any proceeding or passing of any order orissuance of any notice, intimation, notification, sanction orapproval or such other action, by whatever name called, by anyauthority, commission or tribunal, by whatever name called,under the provisions of the specified Act; or

(b) filing of any appeal, reply or application or furnishing ofany report, document, return, statement or such other record,by whatever name called, under the provisions of the specifiedAct; or

(c) in case where the specified Act is the Income-tax Act, 1961(43 of 1961), —

(i) making of investment, deposit, payment, acquisition,purchase, construction or such other action, by whateverpurchase, construction or such other action, by whatever

name called, for the purposes of claiming any deduction,exemption or allowance under the provisions containedin—

(I) sections 54 to 54GB or under any provisions ofChapter VI-A under the heading "B.—Deductionsin respect of certain payments" thereof; or(II) such other provisions of that Act, subject tofulfillment of such conditions, as the CentralGovernment may, by notification, specify; orChapter VI-A under the heading "B.—Deductionsin respect of certain payments" thereof; or(II) such other provisions of that Act, subject tofulfillment of such conditions, as the CentralGovernment may, by notification, specify; or

(ii) beginning of manufacture or production of articles orthings or providing any services referred to in section10AA of that Act, in case where the letter of approval,required to be issued in accordance with the provisionsof the Special Economic Zones Act, 2005 (28 of 2005),has been issued on or before the 31[st]day of March, 2020(28 of 2005),things or providing any services referred to in section10AA of that Act, in case where the letter of approval,required to be issued in accordance with the provisionsof the Special Economic Zones Act, 2005 (28 of 2005),has been issued on or before the 31[st]day of March, 2020(28 of 2005),

and where completion or compliance of such action has not beenmade within such time, then, the time limit for completion orcompliance of such action shall, notwithstanding anything containedin the specified Act, stand extended to the 30th day of June, 2020, orsuch other date after the 30th day of June, 2020, as the CentralGovernment may, by notification, specify in this behalf:

Provided that the Central Government may specify different dates forcompletion or compliance of different actions.

Provided further that such action shall not include payment of anyamount as is referred to in sub-section (2).”

5.As the pandemic and problems arising therefrom did not show anysign of abatement, the Legislature enacted Relaxation Act, 2020 inSeptember, 2020. By way of Relaxation Act, 2020, various due dates/timelimits/limitations prescribed in different Central Acts, including the IncomeTax Act, 1961, were relaxed. Additionally, Section 3 of Relaxation Act,2020 enabled the Central Government to issue Notifications for further

relaxing the time limits/limitations prescribed in the ‘Specified Acts’. TheStatement of Objects and Reasons as well as the relevant portion of theRelaxation Act, 2020 are reproduced herein below:-

“STATEMENT OF OBJECTS AND REASONS

The outbreak of Novel Corona Virus (COVID-19) pandemic acrossmany countries of the world, including India, has caused immenseloss to lives of people and given rise to unprecedented humanitarianand economic crisis in the country. Due to vagaries of pandemic, anational lockdown was imposed which had to be further extended.Due to very rapid spread of pandemic, social distancing had to beensured immediately to prevent society at large from its disastrousconsequences. This necessitated ease of compliance under certain taxand other laws.

2. As Parliament was not in session and in view of the urgency, theTaxation and OtherLaws (Relaxation of CertainProvisions)Ordinance, 2020 (Ord. 2 of 2020) was promulgated on the 31[st]day ofMarch, 2020 which, inter alia, relaxed certain provisions of thespecified Acts relating to direct taxes, indirect taxes and prohibitionof Benami property transactions. Further, certain notifications werealso issued under the said Ordinance.

3. In view of stakeholders’ representations received after enactment ofthe Finance Act, 2020, and due to need for further rationalisation ofsome provisions of certain Acts, further amendments are considerednecessary to be incorporated in the proposed Bill replacing theOrdinance.

4. The Taxation and Other Laws (Relaxation and Amendment ofCertain Provisions) Bill, 2020 which seeks to replace the saidOrdinance, inter alia, provides for extension of various time limits forcompletion or compliance of actions under the specified Acts andreduction in interest, waiver of penalty and prosecution for delay inpayment of certain taxes or levies during the specified period.

5. Further, the Bill proposes amendments to the Income-tax Act, 1961which, inter alia, include providing of tax incentive for Category-IIIAlternative Investment Funds located in the International FinancialServices Centre (IFSC) to encourage relocation of foreign funds tothe IFSC, deferment of new procedure of registration and approval ofcertain entities introduced through the Finance Act, 2020, providingfor deduction for donation made to the Prime Minister’s CitizenAssistance and Relief in Emergency Situations Fund (PM CARESFUND) and exemption to its income, incorporation of FacelessAssessmentScheme,2019therein,empoweringtheCentralGovernment to notify schemes for faceless processes under certainprovisionsbyeliminatingphysicalinterfacetotheextenttechnologically feasible and to provide deduction or collection atsource in respect of certain transactions at threefourth’s rate for theperiod from 14[th]May, 2020 to 31[st]March, 2021.

6. The Bill also proposes to amend the Direct Tax Vivad se ViswasAct, 2020 to extend the date for payment without additional amount to31[st]December, 2020 and to empower the Central Government tonotify certain dates relating to filing of declaration and making ofpayment.

7. The Finance Act, 2020 is also proposed to be amended to clarifyregarding capping of surcharge at 15 per cent on dividend income ofthe Foreign Portfolio Investor.

8. The Bill also proposes to empower the Central Government toremove any difficulty up to period of two years and provide forrepeal and savings of the Taxation and Other Laws (Relaxation ofCertain Provisions) Ordinance, 2020.

9. The Bill seeks to achieve the aforesaid objectives.

NEW DELHI;

The 11[th]September, 2020.

NIRMALA SITHARAMAN

THE TAXATION AND OTHER LAWS (RELAXATION ANDAMENDMENT OF CERTAIN PROVISIONS) ACT, 2020NO. 38 OF 2020

[29[th]September, 2020.]

AN ACT to provide for relaxation and amendment of provisions ofcertain Acts and for matters connected therewith or incidentalthereto.

BE it enacted by Parliament in the Seventy-first Year of theRepublic of India as follows:—

CHAPTER IPRELIMINARY

1. (1) This Act may be called the Taxation and Other Laws(Relaxation and Amendment of Certain Provisions) Act, 2020.

(2) Save as otherwise provided, it shall be deemed to have come intoforce on the 31[st]day of March, 2020.

2. (1) In this Act, unless the context otherwise requires,—

(a) "notification" means the notification published in theOfficial Gazette;

(b) "specified Act" means—

(i) the Wealth-tax Act, 1957;

(ii) the Income-tax Act, 1961;

(iii) the Prohibition of Benami Property Transactions

Act, 1988;

(iv) Chapter VII of the Finance (No. 2) Act, 2004;

(v) Chapter VII of the Finance Act, 2013;

(vi) the Black Money (Undisclosed Foreign Income and

Assets) and Imposition of Tax Act, 2015;

(vii) Chapter VIII of the Finance Act, 2016; or

(viii) the Direct Tax Vivad se Vishwas Act, 2020.

(2) The words and expressions used herein and not defined, butdefined in the specified Act, the Central Excise Act,1944, the Customs

Act, 1962, the Customs Tariff Act,1975 or the Finance Act,1994, asthe case may be, shall have the same meaning respectively assigned tothem in that Act.

CHAPTER II

RELAXATION OF CERTAIN PROVISIONS OF SPECIFIED ACT

3. (1) Where, any time-limit has been specified in, or prescribed ornotified under, the specified Act which falls during the period from the20[th]day of March, 2020 to the 31[st]day of December, 2020, or suchother date after the 31[st]day of December, 2020, as the CentralGovernment may, by notification, specify in this behalf, for thecompletion or compliance of such action as—

(a) completion of any proceeding or passing of any order orissuance of any notice, intimation, notification, sanction orapproval, or such other action, by whatever name called, byany authority, commission or tribunal, by whatever namecalled, under the provisions of the specified Act; or

(b) filing of any appeal, reply or application or furnishing ofany report, document, return or statement or such other record,by whatever name called, under the provisions of the specifiedAct; or

(c) in case where the specified Act is the Income-tax Act,1961,—

(i) making of investment, deposit, payment, acquisition,purchase, construction or such other action, by whatevername called, for the purposes of claiming any deduction,exemption or allowance under the provisions containedpurchase, construction or such other action, by whatevername called, for the purposes of claiming any deduction,exemption or allowance under the provisions contained

(I) sections 54 to 54GB, or under any provisions ofChapter VI-A under the heading "B.—Deductionsin respect of certain payments" thereof; or

(II) such other provisions of that Act, subject tofulfilment of such conditions, as the CentralGovernment may, by notification, specify; orfulfilment of such conditions, as the CentralGovernment may, by notification, specify; or

(ii) beginning of manufacture or production of articles orthings or providing any services referred to in section10AA of that Act, in case where the letter of approval,required to be issued in accordance with the provisionsof the Special Economic Zones Act, 2005, has beenissued on or before the 31[st]day of March, 2020,

and where completion or compliance of such action hasnot been made within such time, then, the time-limit forcompletionorcomplianceofsuchactionshall,notwithstanding anything contained in the specified Act,stand extended to the 31[st]day of March, 2021, or suchother date after the 31[st]day of March, 2021, as theCentral Government may, by notification, specify in thisbehalf:

Provided that the Central Government may specifydifferent dates for completion or compliance of differentactions:

xxxxxxxxxxxxxxxx

10. (1) If any difficulty arises in giving effect to the provisions of thisAct, the Central Government may, by order, not inconsistent with theprovisions of this Act, remove the difficulty:

Provided that no such order shall be made after the expiry of aperiod of two years from the end of the month in which this Act hasreceived the assent of the President.

(2) Every order made under this section shall be laid before eachHouse of Parliament.

11. (1) The Taxation and Other Laws (Relaxation of CertainProvisions) Ordinance, 2020 is hereby repealed.

(2) Notwithstanding such repeal, anything done, any notificationissued or any action taken under the said Ordinance, shall be deemedto have been done, issued or taken under the correspondingprovisions of this Act.”

6.In pursuance to the power vested under Section 3 of Relaxation Act,2020, the Central Government issued following Notifications inter-aliaextending the time lines prescribed under Section 149 for issuance ofreassessment notices under Section 148 of the Income Tax Act, 1961:

7.The Explanations to the Notifications dated 31[st]March, 2021 and 27[th]April, 2021 issued under Section 3 of Relaxation Act, 2020 also stipulatedthat the provisions, as existed prior to amendment by Finance Act, 2021,shall apply to the reassessment proceedings initiated thereunder. TheExplanations to the Notifications dated 31[st]March, 2021 and 27[th]April,2021 are impugned in the present proceedings. The said Notifications arereproduced hereinbelow:-

“A.NOTIFICATIONS.O.1432(E)[NO.20/2021/F.NO.370142/35/2020-TPL]

SECTION3OFTHETAXATIONANDOTHERLAWS(RELAXATIONANDAMENDMENTOFCERTAINPROVISIONS) ACT, 2020, READ WITH SECTIONS 139AA,144C, 148, 149 AND 151 OF THE INCOME-TAX ACT, 1961 ANDSECTION 168 OF THE FINANCE ACT, 2016 – RELAXATIONOFCERTAINPROVISIONSOFSPECIFIEDACT-

EXTENSION OF DUE DATE FOR COMPLETION OF ACTIONUNDER SPECIFIED ACTS

NOTIFICATION S.O.1432(E) [NO.20/2021/F.NO.370142 /35/2020-TPL], DATED 31-3-2021

In exercise of the powers conferred by sub-section (1) of section 3 ofthe Taxation and Other Laws (Relaxation and Amendment of CertainProvisions) Act, 2020 (38 of 2020) (hereinafter referred to as the saidAct), and in partial modification of the notification of the Governmentof India in the Ministry of Finance, (Department of Revenue) No.93/2020 dated the 31[st]December, 2020, published in the Gazette ofIndia, Extraordinary, Part II, Section 3, Sub-section (ii), vide numberS.O. 4805(E), dated the 31[st]December, 2020, the Central Governmenthereby specifies that,—

(A) where the specified Act is the Income-tax Act, 1961 (43 of 1961)(hereinafter referred to as the Income-tax Act) and, —(hereinafter referred to as the Income-tax Act) and, —

(a) the completion of any action referred to in clause (a) of sub-section (1) of section 3 of the Act relates to passing of an orderunder sub-section (13) of section 144C or issuance of noticeunder section 148 as per time-limit specified in section 149 orsanction under section 151 of the Income-tax Act, —section (1) of section 3 of the Act relates to passing of an orderunder sub-section (13) of section 144C or issuance of noticeunder section 148 as per time-limit specified in section 149 orsanction under section 151 of the Income-tax Act, —

(i) the 31[st]day of March, 2021 shall be the end date ofthe period during which the time-limit, specified in, orprescribed or notified under, the Income-tax Act falls forthe completion of such action; andthe period during which the time-limit, specified in, orprescribed or notified under, the Income-tax Act falls forthe completion of such action; and

(ii) the 30[th]day of April, 2021 shall be the end date towhich the time-limit for the completion of such actionshall stand extended.which the time-limit for the completion of such actionshall stand extended.

—Explanation. For the removal of doubts, it is herebyclarified that for the purposes of issuance of notice under-section 148 as per timelimit specified in section 149 or-sanction under section 151 of the Incometax Act, under thissub-clause, the provisions of section 148, section 149 and-section 151 of the Incometax Act, as the case may be, as theystood as on the 31[st]day of March 2021, before the

commencement of the Finance Act, 2021, shall apply.

(b) the compliance of any action referred to in clause (b) ofsub-section (1) of section 3 of the said Act relates to intimationof Aadhaar number to the prescribed authority under sub-section (2) of section 139AA of the Income-tax Act, the time-limit for compliance of such action shall stand extended to the30[th]day of June, 2021.

(B) where the specified Act is the Chapter VIII of the Finance Act,2016 (28 of 2016) (hereinafter referred to as the Finance Act) and thecompletion of any action referred to in clause (a) of sub-section (1) ofsection 3 of the said Act relates to sending an intimation under sub-section (1) of section 168 of the Finance Act, —

(i) the 31[st]day of March, 2021 shall be the end date of theperiod during which the time-limit, specified in, or prescribedor notified under, the Finance Act falls for the completion ofsuch action; and

(ii) the 30[th]day of April, 2021 shall be the end date to which thetime-limit for the completion of such action shall standextended.

B. NOTIFICATION S.O.1703(E)[NO.38/2021/F.NO. 370142/ 35/2020-TPL]

SECTION3OFTHETAXATIONANDOTHERLAWS(RELAXATIONANDAMENDMENTOFCERTAINPROVISIONS)ACT,2020-RELAXATIONOFCERTAINPROVISIONS OF SPECIFIED ACT - EXTENSION OF DUEDATE FOR COMPLETION OF ACTION UNDER SPECIFIEDACTS

NOTIFICATION S.O. 1703 (E) [NO. 38 /2021/ F. NO. 370142/35/2020-TPL], DATED 27-4-2021

In exercise of the powers conferred by sub-section (1) of section 3 ofthe Taxation and Other Laws (Relaxation and Amendment of CertainProvisions) Act, 2020 (38 of 2020) (hereinafter referred to as the saidAct),and in partialmodification of the notifications of theGovernment of India in the Ministry of Finance, (Department ofRevenue) No. 93/2020 dated the 31[st]December, 2020, No. 10/2021

dated the 27[th]February, 2021 and No. 20/2021 dated the 31[st]March,2021, published in the Gazette of India, Extraordinary, Part-II,Section 3, Subsection (ii), vide number S.O. 4805(E), dated the 31[st]December, 2020, vide number S.O. 966(E) dated the 27[th]February,2021 and vide number S.O. 1432(E) dated the 31[st]March, 2021,respectively (hereinafter referred to as the said notifications), theCentral Government hereby specifies for the purpose of sub-section(1) of section 3 of the said Act that, —

(A) where the specified Act is the Income-tax Act, 1961 (43 of 1961)(hereinafter referred to as the Income-tax Act) and, —

(a) the completion of any action, referred to in clause (a) ofsub-section (1) of section 3 of the said Act, relates to passing ofany order for assessment or reassessment under the Income-taxAct, and the time limit for completion of such action undersection 153 or section 153B thereof, expires on the 30[th]day ofApril, 2021 due to its extension by the said notifications, suchtime limit shall further stand extended to the 30[th]day of June,2021;

(b) the completion of any action, referred to in clause (a) ofsub-section (1) of section 3 of the said Act, relates to passing ofan order under sub-section (13) of section 144C of the Income-tax Act or issuance of notice under section 148 as per time-limitspecified in section 149 or sanction under section 151 of theIncome-tax Act, and the time limit for completion of such actionexpires on the 30[th]day of April, 2021 due to its extension by thesaid notifications, such time limit shall further stand extendedto the 30[th]day of June, 2021.

—Explanation. For the removal of doubts, it is hereby clarifiedthat for the purposes of issuance of notice under section 148 as-per timelimit specified in section 149 or sanction under section--151 of the Incometax Act, under this subclause, the provisionsof section 148, section 149 and section 151 of the Income-taxAct, as the case may be, as they stood as on the 31[st]day ofMarch 2021, before the commencement of the Finance Act,2021, shall apply.

(B) where the specified Act is the Chapter VIII of the Finance Act,2016 (28 of 2016) (hereinafter referred to as the Finance Act) and thecompletion of any action, referred to in clause (a) of sub-section (1) ofsection 3 of the said Act, relates to sending an intimation under sub-section (1) of section 168 of the Finance Act, and the time limit forcompletion of such action expires on the 30[th]day of April, 2021 due toits extension by the said notifications, such time limit shall furtherstand extended to the 30[th]day of June, 2021.”

(emphasis supplied)

8.Parliament introduced reformative changes to Sections 147 to 151 ofthe Income Tax Act, 1961 governing reassessment proceedings by way ofthe Finance Act, 2021, which was passed on 28[th]March, 2021. The relevantportions of the Budget Speech 2021-2022 of the Minister of Finance, Unionof India as well as Memorandum explaining the provisions in the FinanceBill, 2021, the Notes on clauses to the Finance Bill, 2021 and the FinanceAct, 2021 are reproduced hereinbelow:-

“A. BUDGET SPEECH 2021-2022 OF THE MINISTER OFFINANCE

Direct Tax Proposals

149. Keeping this in mind, our Government introduced series ofreforms in the Direct tax system for the benefit of our taxpayers andeconomy. Few months prior to the pandemic, in order to attractinvestments we slashed our Corporate tax rate to make it among thelowest in the world. The Dividend Distribution Tax too was abolished.The burden of taxation on small taxpayers was eased by increasingrebates. In 2020, the return filers saw dramatic increase to 6.48crore from 3.31 crore in 2014.

150. In the Direct Tax administration, we had recently introduced theFaceless Assessment and Faceless Appeal. I now seek to take furthersteps to simplify the tax administration, ease compliance, and reducelitigation.

“Annex to Part of Budget SpeechDirect Tax Proposals

B. MEMORANDUM EXPLAINING THE PROVISIONS IN THEFINANCE BILL, 2021

Income escaping assessment and search assessments

Under the Act, the provisions related to income escaping assessmentprovide that if the Assessing Officer has reason to believe that anyincome chargeable to tax has escaped assessment for any assessmentyear, he may assess or reassess or recompute the total income forsuch year under section 147 of the Act by issuing notice undersection 148 of the Act. However, such reopening is subject to the timelimits prescribed in section 149 of the Act.

In cases where search is initiated u/s 132 of the Act or books ofaccount, other documents or any assets are requisitioned undersection 132A of the Act, assessment is made in the case of theassessee, or any other person, in accordance with the specialprovisions of sections 153A, 153B, 153C and 153D, of the Act thatdeal specifically with such cases. These provisions were introduced bythe Finance Act, 2003 to replace the block assessment under ChapterXIV-B of the Act. This was done due to failure of block assessment inits objective of early resolution of search assessments. Also, theprocedural issues related to block assessment were proving to behighly litigation-prone. However, the experience with this procedurehas been no different. Like the provisions for block assessment, theseprovisions have also resulted in number of litigations.

Due to advancement of technology, the department is now collectingall relevant information related to transactions of taxpayers fromthird parties under section 285BA of the Act (statement of financialtransaction or reportable account). Similarly, information is alsoreceived from other law enforcement agencies. This information isalso shared with the taxpayer through Annual Information Statementunder section 285BB of the Act. Department uses this information toverify the information declared by taxpayer in the return and todetect non-filers or or those who have not disclosed the correctamount of total income. Therefore, assessment or reassessment or re-computation of income escaping assessment, to large extent, isinformation-driven.

In view of above, there is need to completely reform the system ofassessment or reassessment or re-computation of income escapingassessment and the assessment of search related cases.

The Bill proposes completely new procedure of assessment of suchcases. It is expected that the new system would result in less litigationand would provide ease of doing business to taxpayers as there is areduction in time limit by which notice for assessment orreassessment or re-computation can be issued. The salient features ofnew procedure are as under:-

(i) The provisions of section 153A and section 153C, of the Actare proposed to be made applicable to only search initiatedunder section 132 of the Act or books of accounts, otherdocuments or any assets requisitioned under section 132A ofthe Act, on or before 31[st]March 2021.under section 132 of the Act or books of accounts, otherdocuments or any assets requisitioned under section 132A ofthe Act, on or before 31[st]March 2021.

(ii) Assessments or reassessments or in re-computation in cases

where search is initiated under section 132 or requisition ismade under 132A, after 31[st]March 2021, shall be under thenew procedure.made under 132A, after 31[st]March 2021, shall be under thenew procedure.

(iii) Section 147 proposes to allow the Assessing Officer toassess or reassess or re-compute any income escapingassessment for any assessment year (called relevant assessment

year).

(iii)Beforesuchassessmentorreassessmentorre-computation, notice is required to be issued under section148 of the Act, which can be issued only when there isinformation with the Assessing officer which suggests that theincome chargeable to tax has escaped assessment in the case ofthe assessee for the relevant assessment year. Prior approval ofspecified authority is also required to be obtained beforeissuance of such notice by the Assessing Officer.

(iv) It is proposed to provide that any information which hasbeen flagged in the case of the assessee for the relevantassessment year in accordance with the risk managementstrategy formulated by the Board shall be considered asinformation which suggests that the income chargeable to taxhas escaped assessment. The flagging would largely be done bythe computer based system.been flagged in the case of the assessee for the relevantassessment year in accordance with the risk managementstrategy formulated by the Board shall be considered asinformation which suggests that the income chargeable to taxhas escaped assessment. The flagging would largely be done bythe computer based system.

(v) Further, final objection raised by the Comptroller andAuditor General of India to the effect that the assessment in thecase of the assessee for the relevant assessment year has notbeen in accordance with the provisions of the Act shall also beconsidered as information which suggests that the incomechargeable to tax has escaped assessment.

(vi) Further, in search, survey or requisition cases initiated ormade or conducted, on or after 1[st]April, 2021, it shall bedeemed that the Assessing officer has information whichsuggests that the income chargeable to tax has escapedassessment in the case of the assessee for the three assessmentyears immediately preceding the assessment year relevant tothe previous year in which the search is initiated or requisitionis made or any material is seized or requisitioned or survey isconducted.

(vii) New Section 148A of the Act proposes that before issuanceof notice the Assessing Officer shall conduct enquiries, ifrequired, and provide an opportunity of being heard to theassessee. After considering his reply, the Assessing Office shalldecide, by passing an order, whether it is fit case for issue ofnotice under section 148 and serve copy of such order alongwith such notice on the assessee. The Assessing Officer shallbefore conducting any such enquiries or providing opportunityto the assessee or passing such order obtain the approval ofspecified authority. However, this procedure of enquiry,providing opportunity and passing order, before issuing noticeunder section 148 of the Act, shall not be applicable in searchor requisition cases.

(viii) The time limitation for issuance of notice under section148 of the Act is proposed to be provided in section 149 of theAct and is as below:

in normal cases, no notice shall be issued if three yearshave elapsed from the end of the relevant assessmentyear. Notice beyond the period of three years from theend of the relevant assessment year can be taken only ina few specific cases.in normal cases, no notice shall be issued if three yearshave elapsed from the end of the relevant assessmentyear. Notice beyond the period of three years from theend of the relevant assessment year can be taken only ina few specific cases.

in specific cases where the Assessing Officer has in hispossession evidence which reveal that the incomein specific cases where the Assessing Officer has in hispossession evidence which reveal that the income

escaping assessment, represented in the form of asset,amounts to or is likely to amount to fifty lakh rupees ormore, notice can be issued beyond the period of threeyear but not beyond the period of ten years from the endof the relevant assessment year;

Another restriction has been provided that the noticeunder section 148 of the Act cannot be issued at any timein case for the relevant assessment year beginning onor before 1st day of April, 2021, if such notice could nothave been issued at that time on account of being beyondthe time limit prescribed under the provisions of clause(b), as they stood immediately before the proposedamendment.Another restriction has been provided that the noticeunder section 148 of the Act cannot be issued at any timein case for the relevant assessment year beginning onor before 1st day of April, 2021, if such notice could nothave been issued at that time on account of being beyondthe time limit prescribed under the provisions of clause(b), as they stood immediately before the proposedamendment.

Since the assessment or reassessment or re-computationin search or requisition cases (where such search orrequisition is initiated or made on or before 31[st]March2021) are to be carried out as per the provision ofsection 153A, 153B, 153C and 153D of the Act, theaforesaid time limitation shall not apply to such cases.Since the assessment or reassessment or re-computationin search or requisition cases (where such search orrequisition is initiated or made on or before 31[st]March2021) are to be carried out as per the provision ofsection 153A, 153B, 153C and 153D of the Act, theaforesaid time limitation shall not apply to such cases.

It is also proposed that for the purposes of computing theperiod of limitation for issue of section 148 notice, thetime or extended time allowed to the assessee inproviding opportunity of being heard or period duringwhich such proceedings before issuance of notice undersection 148 are stayed by an order or injunction of anycourt, shall be excluded. If after excluding such period,time available to the Assessing Officer for passing order,about fitness of case for issue of 148 notice, is less thanseven days, the remaining time shall be extended to sevendays.It is also proposed that for the purposes of computing theperiod of limitation for issue of section 148 notice, thetime or extended time allowed to the assessee inproviding opportunity of being heard or period duringwhich such proceedings before issuance of notice undersection 148 are stayed by an order or injunction of anycourt, shall be excluded. If after excluding such period,time available to the Assessing Officer for passing order,about fitness of case for issue of 148 notice, is less thanseven days, the remaining time shall be extended to sevendays.

(ix) The specified authority for approving enquiries, providingopportunity, passing order under section 148A of the Act andfor issuance of notice under section 148 of the Act are proposedto be—

(a) Principal Commissioner or Principal Director orCommissioner or Director, if three years or less thanCommissioner or Director, if three years or less than

three years have elapsed from the end of the relevantassessment year;assessment year;

(b) Principal Chief Commissioner or Principal DirectorGeneral or where there is no Principal ChiefCommissioner or Principal Director General, ChiefCommissioner or Director General, if more thanthree years have elapsed from the end of the relevantassessment year.General or where there is no Principal ChiefCommissioner or Principal Director General, ChiefCommissioner or Director General, if more thanthree years have elapsed from the end of the relevantassessment year.

(x) Once assessment or reassessment or re-computation hasstarted the Assessing officer is proposed to be empowered (asat present) to assess or reassess the income in respect of anyissue which has escaped assessment and which comes to hisnotice subsequently in the course of the proceeding under thisprocedure notwithstanding that the procedure prescribed insection 148A was not followed before issuing such notice forsuch income.

These amendments will take effect from 1[st]April, 2021.

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C. NOTES ON CLAUSES TO THE FINANCE BILL, 2021

Clause 35 of the Bill seeks to amend section 147 of the Income-tax Act relating to income escaping assessment.

It is proposed to substitute the said section so as to provide thatif any income chargeable to tax, in the case of an assessee, hasescaped assessment for any assessment year, the Assessing officermay, subject to the provisions of sections 148 to 153, assess orreassess such income and also any other income chargeable to taxwhich has escaped assessment and which comes to his noticesubsequently in the course of the proceedings under this section, orrecompute the loss or the depreciation allowance or any otherallowance, as the case may be, for such assessment year.

This amendment will take effect from 1st April, 2021.

Clause 36 of the Bill seeks to amend section 148 of the Income-tax Act relating to issue of notice where income has escapedassessment.

It is proposed to substitute the said section so as to provide thatbefore making the assessment, reassessment or recomputation undersection 147, and subject to the provisions of section 148A, theAssessing Officer shall serve on the assessee notice along with acopy of order passed under clause (d) of section 148A, requiring himto furnish within such period, as may be specified in such notice, areturn of his income or the income of any other person in respect ofwhich he is assessable under this Act during the previous yearcorresponding to the relevant assessment year, in the prescribed formand verified in the prescribed manner and setting forth such otherparticulars as may be prescribed; and the provisions of this Act shall,so far as may be, apply accordingly as if such return were returnrequired to be furnished under section 139, provided that no noticeunder the said section shall be issued unless there is information withthe Assessing Officer which suggests that the income chargeable totax has escaped assessment in the case of the assessee for the relevantassessment year and prior approval of the specified authority to issuesuch notice has been obtained by the Assessing Officer. The proposedExplanation 1 to the said section provides for the purposes of the saidsection and section 148A, that information which suggests that theincome chargeable to tax has escaped assessment means anyinformation flagged in the case of the assessee for the relevantassessment year in accordance with the risk management strategyformulated by the Board from time to time or any final objectionraised by the Comptroller and Auditor General of India to the effectthat the assessment in the case of the assessee for the relevantassessment year has not been made in accordance with the provisionsof this Act. The proposed Explanation 2 provides that where (i) asearch is initiated under section 132 or books of account, otherdocuments or any assets are requisitioned under section 132A, on orafter the 1st day of April, 2021, in the case of the assessee; or (ii)survey is conducted under section 133A in the case of the assessee; or(iii) the Assessing Officer is satisfied, with the prior approval ofPrincipal Commissioner or Commissioner, that any money, bullion,jewellery or other valuable article or thing, seized or requisitioned incase of any other person on or after the 1st day of April, 2021,belongs to the assessee; or (iv) the Assessing officer is satisfied, withthe prior approval of Principal Commissioner or Commissioner, thatany books of account or documents, seized or requisitioned in case ofany other person on or after the 1st day of April, 2021, pertains orpertain to, or any information contained therein, relate to, theassessee, the Assessing officer shall be deemed to have informationwhich suggests that the income chargeable to tax has escapedassessment in the case of the assessee for the three assessment yearsimmediately preceding the assessment year relevant to the previousyear in which the search is initiated or books of account, otherdocuments or any assets are requisitioned or survey is conducted ormoney, bullion, jewellery or other valuable article or thing or booksof account or documents are seized or requisitioned in case of anyother person. The proposed Explanation 3 provides that the“specified authority” shall mean the specified authority referred to insection 151.

This amendment will take effect from 1st April, 2021.

Clause 37 of the Bill seeks to insert new section 148A in theIncome-tax Act relating to Conducting inquiry, providing opportunitybefore issue of notice under section 148.

It is proposed to insert new section 148A, which seeks toprovide that the Assessing Officer shall, before issuing any noticeunder section 148, - (a) conduct any enquiry, if required, with theprior approval of specified authority, with respect to the informationwhichsuggeststhatincomechargeabletotaxhasescapedassessment; (b) provide an opportunity of being heard to the assessee,with the prior approval of specified authority, by serving upon him anotice to show cause within such time, as may be specified in thenotice, being not less than seven days but not exceeding thirty daysfrom the date on which such notice is issued, or such time, as may beextended by him on the basis of an application in this behalf, as towhy notice under section 148 should not be issued on the basis ofinformation which suggests that income chargeable to tax hasescaped assessment in his case for the relevant assessment year andresults of enquiry conducted, if any, as per clause (a); (c) consider thereply of assessee furnished, if any, in response to the show-cause

notice referred to in clause (b); and (d) decide, on the basis ofmaterial available on record including reply of the assessee, whetheror not it is fit case to issue notice under section 148, by passing anorder, with the prior approval of specified authority, within onemonth from the end of the month in which the reply referred to inclause (c) is received by him, or where no such reply is furnished,within one month from the end of the month in which time or extendedtime allowed to furnish reply as per clause (b) expires, providedthat the provisions of this sub-section shall not apply in case, wherea search is initiated under section 132 or books of account, otherdocuments or any assets are requisitioned under section 132A in thecase of the assessee on or after the 1st day of April, 2021 or theAssessing officer is satisfied, with the prior approval of the PrincipalCommissioner or Commissioner that any money, bullion, jewellery orother valuable article or thing, seized in search under section 132or requisitioned under section 132A, in the case of any other personon or after the 1st day of April, 2021, belongs to the assessee; or theAssessing officer is satisfied, with the prior approval of the PrincipalCommissioner or Commissioner that any books of account ordocuments, seized in search under section 132 or requisitionedunder section 132A, in case of any other person on or after the 1[st]dayof April, 2021, pertains or pertain to, or any information containedtherein, relates to, the assessee. Explanation 3 to the said sectionprovides that “Specified authority” shall mean specified authorityreferred to in section 151.

This amendment will take effect from 1st April, 2021.

Clause 38 of the Bill seeks to amend section 149 of the Income-tax Act relating to time limit for notice.

It is proposed to substitute the said section so as to provide thatno notice under section 148 shall be issued for the relevantassessment year - (a) if three years have elapsed from the end of therelevant assessment year, unless the case falls under clause (b); (b) ifthree years, but not more than ten years, have elapsed from the end ofthe relevant assessment year unless the Assessing Officer has in hispossession books of accounts or other documents or evidence whichreveal that the income chargeable to tax, represented in the form ofasset, which has escaped assessment amounts to or is likely to amount

to fifty lakh rupees or more for that year. Provided that no noticeunder section 148 shall be issued at any time in case for the relevantassessment year beginning on or before 1st day of April, 2021, if suchnotice could not have been issued at that time on account of beingbeyond the time limit prescribed under the provisions of clause (b), asthey stood immediately before the commencement of the Finance Act,2021. Further, the provisions of this section shall not apply to caseswhere notice under section 153A or section 153C read with section153A is required to be issued in relation to search initiated undersection 132 or books of account, other documents or any assetsrequisitioned under section 132A on or before the 31st day of March,2021 and for the purposes of computing the period of limitation as perthis section, the time or extended time allowed to the assessee, as pershow-cause notice under clause (b) of section 148A; or the periodduring which the proceeding under section 148A is stayed by an orderor injunction of any court shall be excluded and also whereimmediately after the exclusion of such period, the period oflimitation available to the Assessing Officer for passing an orderunder clause (d) of section 148A is less than seven days, suchremaining period shall be extended to seven days and the period oflimitation in sub-section (1) shall be deemed to be extendedaccordingly.

This amendment will take effect from 1st April, 2021.

Clause 39 of the Bill seeks to substitute of new section forsection 151 relating to sanction for issue of notice.

It is proposed to substitute the said section so as to provide thatfor the purpose of section 148, specified authority shall be (i)Principal Commissioner of Income-tax or Principal Director ofIncome-tax or Commissioner of Income-tax or Director of Income-tax, if three years or less than three years have elapsed from the endof the relevant assessment year; (ii) Principal Chief Commissioner ofIncome-tax or Principal Director General of Income-tax, or wherethere is no Principal Chief Commissioner of Income-tax or PrincipalDirector General of Income-tax, Chief Commissioner of Income-taxor Director General of Income-tax, if more than three years haveelapsed from the end of the relevant assessment year.

This amendment will take effect from 1st April, 2021...

D. RELEVANT EXTRACT OF THE FINANCE ACT, 2021

MINISTRY OF LAW AND JUSTICE(Legislative Department)

New Delhi, the 28th March, 2021/Chaitra 7, 1943 (Saka)

The following Act of Parliament received the assent of thePresident on the 28th March, 2021, and is hereby published forgeneral information:—THE FINANCE ACT, 2021

NO. 13 OF 2021

An Act to give effect to the financial proposals of the CentralGovernment for the financial year 2021-2022.BE it enacted by Parliament in the Seventy-second Year of theRepublic of India as follows:––

CHAPTER I

PRELIMINARY

1. (1) This Act may be called the Finance Act, 2021.

(2) Save as otherwise provided in this Act,––

(a) sections 2 to 88 shall come into force on the 1st day of

April, 2021;

(b) sections 108 to 123 shall come into force on such date asthe Central Government may, by notification in the OfficialGazette, appoint.

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40. For section 147 of the Income-tax Act, the following section shallbe substituted, namely:—

“147. If any income chargeable to tax, in the case of anassessee, has escaped assessment for any assessment year, theAssessing Officer may, subject to the provisions of sections 148to 153, assess or reassess such income or recompute the loss orthedepreciationallowanceoranyotherallowanceordeduction for such assessment year (hereafter in this section

and in sections 148 to 153 referred to as the relevantassessment year).

Explanation.—For the purposes of assessment or reassessmentor recomputation under this section, the Assessing Officer mayassess or reassess the income in respect of any issue, which hasescaped assessment, and such issue comes to his noticesubsequently in the course of the proceedings under thissection, irrespective of the fact that the provisions of section148A have not been complied with.”.

41. For section 148 of the Income-tax Act, the following section shallbe substituted, namely:—

“148.Beforemakingtheassessment,reassessmentorrecomputation under section 147, and subject to the provisionsof section 148A, the Assessing Officer shall serve on theassessee notice, along with copy of the order passed, ifrequired, under clause (d) of section 148A, requiring him tofurnish within such period, as may be specified in such notice, areturn of his income or the income of any other person inrespect of which he is assessable under this Act during theprevious year corresponding to the relevant assessment year, inthe prescribed form and verified in the prescribed manner andsetting forth such other particulars as may be prescribed; andthe provisions of this Act shall, so far as may be, applyaccordingly as if such return were return required to befurnished under section 139:

Provided that no notice under this section shall be issuedunless there is information with the Assessing Officer whichsuggests that the income chargeable to tax has escapedassessment in the case of the assessee for the relevantassessment year and the Assessing Officer has obtained priorapproval of the specified authority to issue such notice.

Explanation 1.—For the purposes of this section andsection 148A, the information with the Assessing Officer whichsuggests that the income chargeable to tax has escapedassessment means,—

(i) any information flagged in the case of the assessee forthe relevant assessment year in accordance with the riskmanagement strategy formulated by the Board from time totime;

(ii) any final objection raised by the Comptroller andAuditor-General of India to the effect that the assessment inthe case of the assessee for the relevant assessment year hasnot been made in accordance with the provisions of this Act.

Explanation2.—Forthepurposesofthissection,where,—(i) search is initiated under section 132 or books ofaccount, other documents or any assets are requisitionedunder section 132A, on or after the 1st day of April, 2021,in the case of the assessee; or

(ii) survey is conducted under section 133A, other thanunder sub-section (2A) or sub-section (5) of that section, onor after the 1st day of April, 2021, in the case of theassessee; or

(iii) the Assessing Officer is satisfied, with the priorapproval of the Principal Commissioner or Commissioner,that any money, bullion, jewellery or other valuable articleor thing, seized or requisitioned under section 132 or undersection 132A in case of any other person on or after the 1stday of April, 2021, belongs to the assessee; or

(iv) the Assessing Officer is satisfied, with the priorapproval of Principal Commissioner or Commissioner, thatany books of account or documents, seized or requisitionedunder section 132 or section 132A in case of any otherperson on or after the 1[st]day of April, 2021, pertains orpertain to, or any information contained therein, relate to,the assessee,

the Assessing Officer shall be deemed to have informationwhich suggests that the income chargeable to tax has escapedassessment in the case of the assessee for the three assessmentyears immediately preceding the assessment year relevant tothe previous year in which the search is initiated or books ofaccount, other documents or any assets are requisitioned or

survey is conducted in the case of the assessee or money,bullion, jewellery or other valuable article or thing or books ofaccount or documents are seized or requisitioned in case of anyother person.

Explanation3.—Forthepurposesofthissection,specified authority means the specified authority referred to insection 151.”

42. After section 148 of the Income-tax Act, the following section shallbe inserted, namely:—

“148A. The Assessing Officer shall, before issuing any noticeunder section 148,—

(a) conduct any enquiry, if required, with the priorapprovalofspecifiedauthority,withrespecttotheinformation which suggests that the income chargeable totax has escaped assessment;approvalofspecifiedauthority,withrespecttotheinformation which suggests that the income chargeable totax has escaped assessment;

(b) provide an opportunity of being heard to the assessee,with the prior approval of specified authority, by servingupon him notice to show cause within such time, as maybe specified in the notice, being not less than seven daysand but not exceeding thirty days from the date on whichsuch notice is issued, or such time, as may be extended byhim on the basis of an application in this behalf, as to why anotice under section 148 should not be issued on the basisof information which suggests that income chargeable to taxhas escaped assessment in his case for the relevantassessment year and results of enquiry conducted, if any, asper clause (a);

(c) consider the reply of assessee furnished, if any, inresponse to the show-cause notice referred to in clause (b);(d) decide, on the basis of material available on recordincluding reply of the assessee, whether or not it is fit caseto issue notice under section 148, by passing an order,with the prior approval of specified authority, within onemonth from the end of the month in which the reply referredto in clause (c) is received by him, or where no such reply isfurnished, within one month from the end of the month in

which time or extended time allowed to furnish reply asper clause (b) expires:

Provided that the provisions of this section shall notapply in case where,—

(a) search is initiated under section 132 or books ofaccount, other documents or any assets are requisitionedunder section 132A in the case of the assessee on or afterthe 1st day of April, 2021; oraccount, other documents or any assets are requisitionedunder section 132A in the case of the assessee on or afterthe 1st day of April, 2021; or

(b) the Assessing Officer is satisfied, with the priorapproval of the Principal Commissioner or Commissionerthat any money, bullion, jewellery or other valuable articleor thing, seized in search under section 132 orrequisitioned under section 132A, in the case of any otherperson on or after the 1st day of April, 2021, belongs tothe assessee; orapproval of the Principal Commissioner or Commissionerthat any money, bullion, jewellery or other valuable articleor thing, seized in search under section 132 orrequisitioned under section 132A, in the case of any otherperson on or after the 1st day of April, 2021, belongs tothe assessee; or

(c) the Assessing Officer is satisfied, with the priorapproval of the Principal Commissioner or Commissionerthat any books of account or documents, seized in searchunder section 132 or requisitioned under section 132A, incase of any other person on or after the 1st day of April,2021, pertains or pertain to, or any information containedtherein, relate to, the assessee.approval of the Principal Commissioner or Commissionerthat any books of account or documents, seized in searchunder section 132 or requisitioned under section 132A, incase of any other person on or after the 1st day of April,2021, pertains or pertain to, or any information containedtherein, relate to, the assessee.

Explanation.—For the purposes of this section, specifiedauthority means the specified authority referred to in section151.”

43. For section 149 of the Income-tax Act, the following section shallbe substituted, namely:––

‘149. (1) No notice under section 148 shall be issued for therelevant assessment year,—relevant assessment year,—

(a) if three years have elapsed from the end of the relevantassessment year, unless the case falls under clause (b);assessment year, unless the case falls under clause (b);

(b) if three years, but not more than ten years, have elapsedfrom the end of the relevant assessment year unless theAssessing Officer has in his possession books of account orother documents or evidence which reveal that the incomechargeable to tax, represented in the form of asset, whichfrom the end of the relevant assessment year unless theAssessing Officer has in his possession books of account orother documents or evidence which reveal that the incomechargeable to tax, represented in the form of asset, which

has escaped assessment amounts to or is likely to amount tofifty lakh rupees or more for that year:

Provided that no notice under section 148 shall be issuedat any time in case for the relevant assessment yearbeginning on or before 1st day of April, 2021, if such noticecould not have been issued at that time on account of beingbeyond the time limit specified under the provisions ofclause (b) of sub-section (1) of this section, as they stoodimmediately before the commencement of the Finance Act,2021:

Provided further that the provisions of this sub-sectionshall not apply in case, where notice under section153A, or section 153C read with section 153A, is requiredto be issued in relation to search initiated under section132 or books of account, other documents or any assetsrequisitioned under section 132A, on or before the 31st dayof March, 2021:

Provided also that for the purposes of computing theperiod of limitation as per this section, the time or extendedtime allowed to the assessee, as per show-cause noticeissued under clause (b) of section 148A or the period duringwhich the proceeding under section 148A is stayed by anorder or injunction of any court, shall be excluded:

Provided also that where immediately after the exclusionof the period referred to in the immediately precedingproviso, the period of limitation available to the AssessingOfficer for passing an order under clause (d) of section148A is less than seven days, such remaining period shallbe extended to seven days and the period of limitation underthissub-sectionshallbedeemedtobeextendedaccordingly.

Explanation.—For the purposes of clause (b) of this sub-section, “asset” shall include immovable property, being landor building or both, shares and securities, loans and advances,deposits in bank account.

(2) The provisions of sub-section (1) as to the issue of noticeshall be subject to the provisions of section 151.’

44. For section 151 of the Income-tax Act, the following section shallbe substituted, namely:—

“151. Specified authority for the purposes of section 148 andsection 148A shall be,—

(i) Principal Commissioner or Principal Director orCommissioner or Director, if three years or less than threeyears have elapsed from the end of the relevant assessmentyear;Commissioner or Director, if three years or less than threeyears have elapsed from the end of the relevant assessmentyear;

(ii) Principal Chief Commissioner or Principal DirectorGeneral or where there is no Principal Chief Commissioneror Principal Director General, Chief Commissioner orDirector General, if more than three years have elapsedfrom the end of the relevant assessment year.”General or where there is no Principal Chief Commissioneror Principal Director General, Chief Commissioner orDirector General, if more than three years have elapsedfrom the end of the relevant assessment year.”

45. In section 151A of the Income-tax Act, in sub-section (1), in theopening portion, after the words and figures “issuance of noticeunder section 148”, the words, figures and letter “or conducting ofenquiries or issuance of show-cause notice or passing of order undersection 148A” shall be inserted.”

9.As, despite the substituted Sections 147 to 151 of the Income Tax Act,1961 coming into force on 1[st]April, 2021, the respondents issuedreassessment notices to the petitioners-assessees under the erstwhileSections 148 to 151 of the Income Tax Act, 1961 relying on Explanations inthe Notifications dated 31[st]March, 2021 and 27[th]April, 2021, the petitionersfiled the present writ petitions challenging the legality and validity of thesaid Explanations as well as the reassessment notices issued pursuantthereto.

10.In the present batch of writ petitions, this Court passed interim stayorders. The relevant portion of one such interim order passed in W.P.(C)6442/2021 is reproduced hereinbelow:-

“.......Learned counsel for the petitioners states that the impugnednotices are invalid in the eyes of law and void from inception asthey were issued without following the process of issuance ofprior notice under section 148A of the Act. He submits that theimpugned notices are invalid as they have been issued under thepre-amended provisions of the Act, which were no longer in forceon the date of the impugned notices. He emphasises that theamendments are applicable to all the notices issued underSection 148 of the Act post 01[st]April, 2021.

Learnedcounselfor thepetitioners states thattheimpugned notifications issued by the Respondent-2 are ultravires the Act insofar as they contain the ‘explanation’ clarifyingthat the pre-amended Sections 148, 149 and 151 of the Act shallgovern the issue of notice under Section 148 post 01[st]April,2021. According to him, Section 3(1) of the Taxation and OtherLaws (Relaxation and Amendment of Certain Provisions) Act,2020 authorizes the Central Government to only extend the timelimits and nothing more.

He further states that the respondents cannot indirectlyextend the operation of the old provisions of the Act beyond31[st]March, 2021 in the guise of clarification under delegatedlegislation.

He also relies upon interim stay orders passed by theBombay High Court as well as by the learned predecessorDivision Bench of this Court in Mon Mohan Kohli vs. AssistantCommissioner of Income Tax & Anr., W.P. (C) 6176/2021 dated07[th]July, 2021.

Issue Notice. Mr. Sanjay Kumar, Advocate, Mr.AjitSharma, Advocateand Mr.Kunal Sharma, Advocate acceptnotice on behalf of the respondents in W.P.(C) Nos.6442/2021,6443/2021 and 6451/2021 respectively.

Learned counsel for the respondents state that in thepresent cases, the time limit for issuing the notices under Section148 of the Act stood expired and, therefore, any action underSection 148 would have been time barred by virtue of the provisoto Section 149(1) of the Act. They submit that by virtue ofintroduction of Section 3(1) of the Taxation and Other Laws(Relaxation and Amendment of Certain Provisions) Act, 2020,the time limit for taking action under Section 148 has beenextended till 30[th]June, 2021. Consequently, according to them,the impugned notifications only provide that as the time limit forissuing notice under Section 148A of the Act has been extendedby deemed fiction, the procedure to be followed till 30[th]June,2021 would be the old procedure mentioned under the Act. Insupport of their submission, they also rely upon Section 6 of theGeneral Clauses Act, 1897.

Having heard learned counsel for the parties, this Court isof the prima facie view that the impugned notification is contraryto settled principle of statutory interpretation, namely, that anyaction taken post the amendment of procedural section wouldhave to abide by the new procedures stipulated in the amendedAct.

Further, this Court is of the prima facie view that by virtueof notification, which is delegated legislation, the date forimplementation of statutory provision, as stipulated in the Act,cannot be varied or changed.

This Court is also of the prima facie opinion that Section 6of the General Clauses Act, 1897 offers no assistance to therespondents as the new Section 148A demonstrates an intent ‘todestroy’ the old procedure.

Consequently, following the interim orders passed by thelearned predecessor Division Bench in Mon Mohan Kohli vs.Assistant Commissioner of Income Tax & Anr., W.P. (C)6176/2021 dated 07[th]July, 2021 as well as similar interim orderpassed by the Bombay High Court, this Court directs that thereshall be stay of the operation of the impugned notices dated09[th]June, 2021, 30[th]June, 2020 and 28[th]June, 2020 passed inW.P. (C) 6442/2021, 6443/2021 and 6451/2021 respectively...”

ARGUMENTS ON BEHALF OF THE PETITIONERS

11.Mr. S. Ganesh and Mr. Percy Pardiwalla, learned Senior counsel aswell as Ms. Kavita Jha, Mr. Ved Jain, Mr. Rohit Jain, Mr. Neeraj Jain, Mr.Aseem Chawla, Mr. Piyush Kaushik, Mr. Sachit Jolly, Mr. Salil Kapur, Mr.KapilGupta,Mr.PuneetAgrawal,Mr.GauravGupta,Mr.T.M.Shivakumar, Mr. Manibhadra Jain, Dr. Rakesh Gupta, Mr. Mayank Nagi,Mr. Arvind Kumar, Mr. Mukhi, Mr. P.C. Yadav, Mr. Raghvendra Singh andMr. Rahul Chaudhary, learned counsel addressed arguments on behalf of thepetitioners.

12.Learned counsel for the petitioners submitted that as the Finance Act,2021 had substituted / replaced the earlier provisions, being Sections 147,148, 149 & 151 of the Income Tax Act, 1961, with the new provisions, thesame would result in repeal of the earlier provisions and, therefore, theearlier provisions could not be relied upon or referred to. In support of theirsubmission, they relied upon the judgment passed by the Supreme Court inPTC India Limited Vs. Central Electricity Regulatory Commission,Through Secretary, (2010) 4 SCC 603. The relevant portion of the saidjudgment is reproduced hereinbelow:-

“91. In this connection, it may be seen that Section 121 of theoriginal Act stood substituted by Amendment Act 57 of 2003.Substitution of provision results in repeal of the earlierprovision and its replacement by the new provision. Substitutionis combination of repeal and fresh enactment. (See Principlesof Statutory Interpretation by G.P. Singh, 11th Edn., p. 638.)Section 121 of the original Electricity Act, 2003 was neverbrought into force. It was substituted by new Section 121 byAmendment Act 57 of 2003 which was brought into force by aNotification dated 27-1-2004. Substitution, as stated above,results in repeal of the old provision and replacement by new

provision. Applying these tests to the facts of the present case,we find that the Electricity (Amendment) Act, 2003 (57 of 2003)was brought into force by Notification dated 27-1-2004. That,notification was issued under Section 1(2) of the Electricity(Amendment) Act, 2003 (57 of 2003). If one reads Section 1(2)of the Electricity (Amendment) Act, 2003 (57 of 2003) withNotification dated 27-1-2004 issued under Section 1(2) of theamended Act, 2003, it becomes clear that on coming into forceof the Electricity (Amendment) Act, 2003 (57 of 2003) allprovisions amended by it also came into force. Hence, therewas no requirement for further notification under Section1(3), consequently, Section 121 in its amended form came intoforce with effect from 27-1-2004.”

13.Learned counsel for petitioners pointed out that as per clause (a) ofthe new Section 149, reassessment proceedings could be initiated withinthree years from the end of relevant Assessment Year and as per clause (b),the reassessment proceedings, in exceptional circumstances, could beinitiated within ten years from the end of relevant year; however, theextended time limit of ten years was fettered with preconditions, as under:

a. The Assessing Officer has in his possession books of accountsor other documents or evidence;

b. Such documents/evidence in possession of the AssessingOfficer reveal escapement of income chargeable to tax in theform of an ‘asset’;

c. Such ‘asset’, as defined, amounts to Rs. 50 lakhs or more.

14.Learned counsel for petitioners pointed out that this Court in C.B.Richards Ellis Mauritius Ltd. vs. Assistant Director of Income-Tax: 208Taxman 322 (Delhi), while interpreting the applicability of an earlieramendment to Section 149 of the Income Tax Act, 1961 vide Finance Act,

2001, (whereby the earlier existing time limit of ten years was reduced to sixyears), has held that the reduced time limit applied with effect from theFinance Act coming into force.

15.Thus, according to them, under Section 149 clause (a) prescribingthree years’ time limit, reassessment from Assessment Year 2018-19onwards could only be reopened on or after 1[st]April, 2021 and prior yearswere barred. Further, for initiation of reassessment proceedings for anyAssessment Year prior to Assessment Year 2018-19, exceptional conditionsof Section 149 clause (b) were required to be satisfied by the Revenue.Importantly, satisfaction of the aforesaid preconditions prescribed by clause(b) could be ascertained only when the procedure prescribed under Section148A had been followed prior to issuance of notice under Section 148 of theIncome Tax Act, 1961.

16.Learned counsel for petitioners submitted that once the Parliamenthad exercised its powers of legislation (enactment of Finance Act, 2021),then any action, such as issuance of Notifications dated 31[st]March, 2021and 27[th]April, 2021 contrary to said legislation, taken by any otheragency/wing of the Government was bad in law as the same fell foul of thedoctrine of ‘Occupied Field’. They submitted that the entire law stoodsubstituted and was specifically made applicable from particular date.Accordingly pursuant to the Legislature occupying the field governinginitiationofreassessmentproceedings,noauthoritywasvestedinGovernment to issue the Notifications dated 31[st]March, 2021 and 27[th]April,2021, so as to disturb/intrude into the field occupied by the Legislature.

17.Learned counsel for petitioners also submitted that the impugnedNotifications were subservient to the substituted Sections 147 to 151 by the

Finance Act, 2021 and the Notifications to the extent they contradictedSection 149 were deemed to have been impliedly repealed by operation ofthe Finance Act, 2021. In support of their submission, they relied upon theJudgment passed by this Court in Fibre Boards (P.) Ltd., Bangalore vs.Commissioner of Income-tax, Bangalore: (2015) 376 ITR 596 (SC),wherein it has been held as under:

“13. Repeal by implication has been dealt with by at least twojudgments of this Court. In State of Orissa v. M.A. Tulloch &Co. [1964] 4 SCR 461, this Court considered the question as towhether the expression "repeal" in Section 6 of the GeneralClauses Act would be of sufficient amplitude to cover cases ofimplied repeal. This Court stated:

"The next question is whether the application of that principlecould or ought to be limited to cases where particular form ofwords is used to indicate that the earlier law has beenrepealed. The entire theory underlying implied repeals is thatthere is no need for the later enactment to state in expressterms that an earlier enactment has been repealed by using anyparticular set of words or form of drafting but that if thelegislative intent to supersede the earlier law is manifested bythe enactment of provisions as to effect such supersession, thenthere is in law repeal notwithstanding the absence of theword 'repeal' in the later statute." (at page 483)

Similarly in Ratan Lal Adukia v. Union of India, [1989] 3 SCC537, this Court held that the substituted Section 80 of the Code ofCivil Procedure repealed by implication, insofar as the railwaysare concerned, Section 20 of the self-same code. In so holding,this Court stated:—

"The doctrine of implied repeal is based on the postulate thatthe legislature which is presumed to know the existing state ofthe law did not intend to create any confusion by retainingconflicting provisions. Courts, in applying this doctrine, aresupposed merely to give effect to the legislative intent by

examining the object and scope of the two enactments. But in aconceivable case, the very existence of two provisions may byitself, and without more, lead to an inference of mutualirreconcilability if the later set of provisions is by itself acomplete code with respect to the same matter. In such casethe actual detailed comparison of the two sets of provisionsmay not be necessary. It is matter of legislative intent that thetwo sets of provisions were not expected to be appliedsimultaneously. Section 80 is special provision. It deals withcertain class of suits distinguishable on the basis of theirparticular subject matters." (at para 18)”

18.Learned counsel for petitioners further submitted that Notificationsdated 31[st]March, 2021 and 27[th]April, 2021 were ultra vires the Income TaxAct, 1961 as amended by Finance Act, 2021 and in excess of the enablingpowers prescribed under Section 3 of Relaxation Act, 2020. They stated thatLegislature by virtue of Section 3 of Relaxation Act, 2020 had bestowedupon the Central Government very specific and limited power to issueNotifications extending time limits which fell during the period specifiedtherein. They further stated that Explanation (A)(a)(ii) of Notification dated31[st]March, 2021 and Explanation to clause (A)(b) of Notification dated 27[th]April, 2021 had illegally prescribed that the repealed Sections 148, 149 &151 of the Income Tax Act, 1961 would be applicable. According to them,the following points were apparent on face of the said Notifications:-

a. The Notifications were in excess of the enabling powersprescribed under Section 3 of Relaxation Act 2020, asRelaxation Act 2020 did not delegate the power to legislate onprovisionstobefollowedforinitiationofreassessmentproceedings; andprescribed under Section 3 of Relaxation Act 2020, asRelaxation Act 2020 did not delegate the power to legislate onprovisionstobefollowedforinitiationofreassessmentproceedings; and

b. The Notifications were ultra vires the provisions of Sections147, 148, 148A, 149 & 151 of the Income Tax Act, 1961, asamended by the Finance Act, 2021, as the said provisions hadbeen substituted /inserted with effect from 1[st]April, 2021,effectively repealing old provisions that existed prior thereto.

19.LearnedcounselforpetitionerssubmittedthattheimpugnedExplanations had attempted to revive and keep in existence two differentschemes governing the initiation of reassessment proceedings, which weresubstantially different from each other and thus could not co-exist at thesame time.

20.Learned counsel for the petitioners submitted that the impugnedreassessment notices issued between 1[st]April, 2021 and 30[th]June, 2021 hadbeen issued in violation of the mandatory procedure prescribed underSection 148A of the Income Tax Act, 1961, as substituted by the FinanceAct, 2021. They submitted that though the new Section 148A gave alegislative recognition to the procedure laid down in various judicialprecedents such as GKN Driveshafts (India) Ltd. v. Income Tax Officer &Ors., 259 ITR 19 (SC) and created vested right in favour of the assessee ofbeing heard prior to issuance of notice under Section 148 as well as receiptof formal order considering the objections with inbuilt check in the form ofmandatory sanction by the prescribed authority under Section 151 of theIncome Tax Act, 1961, yet the impugned notices had been issued inviolation of the same.

21.They emphasised that in the present batch of cases, the Revenue hadnot followed the procedure prescribed under Section 148A and no books ofaccounts/ evidence/ documents had been revealed to be in possession of the

W.P.(C) 6176/2021 & connected matters

Assessing Officer. Additionally, the other preconditions prescribed forinvoking clause (b) had not been stated to be satisfied and thus, it was clearthat the Assessing Officer had no ground to invoke clause (b) of the newlyincorporated Section 149 of the Income Tax Act, 1961.

22.In the alternative, learned counsel for the petitioners submitted thatSections 147 to 151 were procedural provisions, inasmuch as, they primarilyamended limitation period and therefore applied retrospectively i.e. toreassessment notices deemed to have been issued within the limitationperiod.

ARGUMENTS ON BEHALF OF THE RESPONDENTS

23.Per contra, Mr. Sunil Agarwal, Mr. Zoheb Hossain, Mr. Puneet Rai,Mr. Sanjay Kumar, Mr. Shailender Singh, Mr. Ruchir Bhatia, learnedcounsel for the respondents, contended that the present batch of writpetitions challenged the legality and validity of only the Explanations to thetwo Notifications, being Notification No.20/2021 dated 31[st]March, 2021and Notification No.38/2021 dated 27[th]April, 2021, issued by CentralGovernment in exercise of powers vested under Section 3(1) of RelaxationAct, 2020. They emphasized that petitioners had not challenged either themain Clause of the said Notifications to which ‘Explanations’ wereappended or the Relaxation Ordinance, 2020 or Relaxation Act, 2020, whichenabled the Central Government to extend dates as measure of reliefcontingent upon on-ground analysis of Covid-19 situation.

24.They stated that the arguments advanced by the petitioners were incomplete ignorance of the background of once-in-hundred years emergencycalled Global Covid-19 pandemic and the fact that all the three organs of theState and also the world at large were unanimous in their perception of the

threat to human life which was continuing with severe intensity [secondwave] at the time when the impugned Notifications were issued.Theypointed out that the Supreme Court by way of series of orders in‘CognizanceofLimitation’extendedlimitationandLegislaturebypromulgating Relaxation ordinance in March, 2020 and conversion ofRelaxation Ordinance into Relaxation Act, 2020 had extended dates forcompliance and issuance of notices. They submitted that management ofCovid-19 was akin to war-time emergency measure and therefore had tobe construed more liberally in favour of the State than peace timelegislations. They stated that in State of Bombay vs. Virkumar Gulabchand

Shah, AIR 1952 SC 335, the Supreme Court had held as under:-

“16. It is also perhaps relevant to note that the term which wasunder consideration in those cases occurred in war-timemeasure, namely, Proclamation promulgated on the 4th ofAugust, 1914, the day on which the first world war started. Thereis authority for the view that war-time measures, which oftenhave to be enacted hastily to meet grave pressing nationalemergency in which the very existence of the State is at stake,should be construed more liberally in favour of the Crown or theState than peace time legislation.....”

25.Learned counsel for respondents submitted that Section 3(1) ofRelaxation Act, 2020 was an example of conditional legislation and notdelegated legislation. They emphasised that jurisprudentially, conditionallegislation is treated at par with plenary legislation and therefore is immunefrom attack on grounds on which delegated legislation can be attacked.According to them, the petitioners had failed to keep the said distinction inmind in the instant petitions.In support of their submission, they reliedupon the judgments passed by the Supreme Court in Re Delhi Laws Act,

1912, Ajmer-Merwara (Extension of Laws) Act, 1947 Vs. The Part ‘C’States (Laws) Act, 1950, 1951 SCR 747 and I.T.C. BhadrachalamPaperboards & Anr. vs. Mandal Revenue Officer, Andhra Pradesh & Ors.,(1996) 6 SCC 634.The relevant portions of the said judgments arereproduced hereinbelow:-

A. Re Delhi Laws Act, 1912, Ajmer-Merwara (Extension of Laws)Act, 1947 (supra)

“301. Broadly speaking, the question of delegated legislationhas come up for consideration before courts of law in twodistinct classes of cases. One of these classes comprises whatis known as cases of “conditional legislation”, whereaccording to the generally accepted view, the element ofdelegation that is present relates not to any legislativefunction at all, but to the determination of contingency orevent, upon the happening of which the legislative provisionsare made to operate. The other class comprises cases ofdelegation proper, where admittedly some portion of thelegislative power has been conferred by the legislative bodyupon what is described as subordinate agent or authority.xxxxxxxxx

306. Thus, conditional legislation has all along been treatedin judicial pronouncements not to be species of delegatedlegislation at all. It comes under separate category, and, ifin particular case all the elements of conditionallegislation exist, the question does not arise as to whether inleaving the task of determining the condition to an outsideauthority, the legislature acted beyond the scope of itspowers…

B. I.T.C. Bhadrachalam Paperboards & Anr. (supra)

“24. We may in this connection refer to the decision of theSupreme Court of United States in Field v. Clark [143 US649 : 36 L Ed 294 (1892)]. The Tariff Act of 1890 empoweredthe President to suspend the operation of the Act, permittingfree import of certain products within United States, on beingsatisfied that the duties imposed upon such products were

reciprocally unequal and unreasonable. It was submitted thatthe said power transfers the legislative and treaty-makingpower to the President and, hence, unlawful. The attack wasrepelled holding that the President was mere agent of theCongress to ascertain and declare the contingency uponwhich the will of the Congress was to take effect....

26. What is, however, relevant is that the power to bring anAct into force as well as the power to grant exemption areboth treated, without doubt, as belonging to the category ofconditional legislation. Very often the legislature makes alaw but leaves it to the executive to prescribe date witheffect from which date the Act shall come into force. As amatter of fact, such course has been adopted even in thecase of constitutional amendment, to wit, the Constitution(Forty-fourth Amendment) Act, 1978, insofar as it pertains toamendment of Article 22 of the Constitution. The power givento the executive to bring an Act into force as also the powerconferred upon the Government to exempt persons orproperties from the operation of the enactment are bothinstances of conditional legislation and cannot be describedas delegated legislation.”

26.They further submitted that Section 3(1) of Relaxation Act, 2020creates legal fiction by virtue of which the Revenue was entitled to invokeSection 148 of the Income Tax Act, 1961, as it existed prior to 31[st]March,2021 during the extended period between 1[st]April, 2021 and 30[th]June,2021. They submitted that the fiction under Section 3(1) of Relaxation Act,2020 was evident from its object namely, ‘In view of the spread of pandemicCovid-19 across many countries of the world including India, causingimmense loss to the lives of people, it had become imperative to relaxcertain provisions, including extension of time-limit’. They submitted thatthe limited fiction which came into play by virtue of Section 3(1) ofRelaxation Act, 2020 was that ‘such action’ which was due for completion

or compliance between 20[th]March, 2020 and 31[st]December, 2020 or suchother date after 31[st]December, 2020 as the Central Government may byNotification specify, which in this case is 31[st]March, 2021 [later modifiedto 30[th]April, 2021] stood ‘extended’ for the purpose of compliance orcompletion of ‘such action’ [which could not be completed] to datebeyond 31[st]March, 2021, which was finally specified by the CentralGovernment to be 30[th]June, 2021. They submitted that it was this liminalperiod of 1[st]April, 2021 till 30[th]June, 2021 that the fiction came into play.27.According to them, the two expressions vital for the purpose ofunderstanding the fiction at play were ‘such action’ and ‘extended’. Theysubmitted that one could not be read in isolation of the other without doingviolence to the plain language of Section 3(1) of Relaxation Act, 2020. Theypointed out that neither the vires of Section 3(1) of Relaxation Act, 2020 northe power conferred by Section 3(1) of Relaxation Act, 2020 upon theCentral Government to fix the terminal dates were under challenge. Theyemphasized that the Central Government was conferred with the power tofix two terminal dates or outer time limits under Section 3(1) – the expirydate by which compliance was required to be made under the specified Actbut could not be made and the extended date by which such compliancecould be made.28.They submitted that legal fiction must be taken to its logicalconclusion with all its natural corollaries and consequences. Therefore,according to them, the expressions ‘such action’ under the specified Act and‘extension’ used in Relaxation Act, 2020 meant that the power to issuenotice under Section 148 [as it existed prior to the coming into force of theFinance Act, 2021] was available to the Revenue by way of the fiction in

Relaxation Act, 2020, which extended the time limit for completion orcompliance of ‘such action’ which would have otherwise expired between20[th]March, 2020 and 31[st]March, 2021. In support of their submission, theyrelied upon the judgment passed by the Supreme Court in M. Venugopal vs.

DivisionalManager,LifeInsuranceCorporationofIndia,Machilipatnam, A.P. & Anr., (1994) 2 SCC 323, wherein it has been heldas under:-

“11.The effect of deeming clause is well-known. Legislaturecan introduce statutory fiction and courts have to proceed on theassumption that such state of affairs exists on the relevant date. Inthis connection, one is often reminded of what was said by LordAsquith in the case of East End Dwellings Co. Ltd. v. FinsburyBorough Council that when one is bidden to treat an imaginarystate of affairs as real, he must surely, unless prohibited fromdoing so, also imagine as real the consequences and incidentswhich inevitably have flowed from it — one must not permit his“imagination to boggle” when it comes to the inevitablecorollaries of that state of affairs. In view of the amendmentsaforesaid introduced in Section 48 it has to be held thatRegulation 14 referred to above in respect of termination of theservice of an employee of the Corporation within the period ofprobation shall be deemed to be rule framed under Section48(2)(cc) having overriding effect over Section 2(oo) and Section25-F of the Industrial Disputes Act.”

29.They submitted that as result of the fiction created by Section 3 ofRelaxation Act, 2020, the Revenue had available to it the “power” in caseswhere the limitation for issuance of notice was expiring between 20[th]March,2020 and 31[st]March, 2021 [later modified to 30[th]April, 2021], to take “suchaction” i.e. the issuance of Notice under Section 148, on or before 30[th]June,2021.The jural co-relative of “power”, as per Hohfeld’s theory on JuralRelations, is “liability”. Therefore, where there is power, it follows that

there is liability imposed on the person against whom the power exists. Ifthe power under the erstwhile Section 148 existed, then consequently, thecorresponding liability to be reopened under unamended Section 148continued.

30.They also submitted that there was no conflict between RelaxationAct, 2020 and Finance Act, 2021 due to their specific text, context, schemeand object. They submitted that the principles of harmonious constructionand ut res magis valeat quam pereat lead to an inexorable conclusion that ifthere was some conflict, alleged or real, between two provisions of law, theCourts were enjoined to make all out efforts to save both the provisions,rather than declaring any of them as useless lumber.

31.In the alternative, they further submitted that if there was conflictbetween the two statutes, Relaxation Act, 2020 would override the FinanceAct, 2021, not only on ground of being special Act but also for the reasonthat Section 3(1) of Relaxation Act contains non-obstante clause giving theenacting part of Section 3(1) an overriding effect over the Income Tax Act,1961. In support of their submission, they relied upon the judgment passedby the Supreme Court in Union of India & Ors. vs. Exide IndustriesLimited & Anr., (2020) 5 SCC 274, wherein it has been held as under:-

“21. Section 43-B bears heading “certain deductions to beonly on actual payment”. It opens with non obstanteclause. As per settled principles of interpretation, nonobstante clause assumes an overriding character against anyother provision of general application. It declares that withinthe sphere allotted to it by Parliament, it shall not becontrolled or overridden by any other provision unlessspecifically provided for. Out of the allowable deductions,the legislature consciously earmarked certain deductionsfrom time to time and included them in the ambit of Section

43-B so as to subject such deductions to conditionality ofactual payment. Such conditionality may have the inevitableeffect of being different from the theme of mercantile systemof accounting on accrual of liability basis qua the specifichead of deduction covered therein and not to other heads.But that is matter for the legislature and its wisdom indoing so.”

32.Consequently, according to them, in case of conflict between theRelaxation Act, 2020 and the Income Tax Act, 1961, Relaxation Act, 2020would prevail.

33.They submitted that even the Finance Act, 2021 did not apply to thesubstituted Sections 147 to 151 of the Income Tax Act, 1961 retrospectivelyand was applicable only with effect from 1[st]April, 2021. They furthersubmitted that Section 147, being right to assess, is substantive right,while Sections 148 to 151 are the machinery provisions. According to them,Finance Act, 2021 had amended the entire scheme of reassessment fromSections 147 to 151 making both substantive and procedural amendmentsand, therefore, could not apply retrospectively. They submitted that there isa vested right in favour of the Revenue under the old regime of Sections 147to 151, which could not be taken away by applying retrospectively shorterperiod of limitation in new provision i.e., the substituted Section 149. Insupport of their submissions, they relied upon the judgment passed by theSupreme Court in M.P Steel Corporation vs. Commissioner of CentralExcise (2015) 7 SCC 58, wherein it has been held, “….The new law oflimitation providing longer period cannot revive dead remedy. Nor canit suddenly extinguish vested right of action by providing for shorterperiod of limitation…a new law of limitation providing for shorter periodcannot certainly extinguish vested right of action.”

W.P.(C) 6176/2021 & connected matters

34.Learned counsel for the respondents contended that the RelaxationAct, 2020 maintains equality ensuring that notices under old Section 148were issued to all similarly placed assessees i.e. the assessees to whomnotices were issued prior to March, 2020 and those to whom notices couldnot be issued due to the pandemic. According to them, if the assessees’arguments were accepted, it would lead to unreasonable classificationbetween those assessees who could not be issued notices only due topandemic, who would be treated more favourably and unequally than thoseset of assessees in whose favour notices stood issued prior to March, 2020,for escapement of income for the same set of assessment years.

35.In the alternative, they submitted that Section 3(1) of Relaxation Act,2020 is ‘stop-the-clock’ provision somewhat similar to the U.S. legaldoctrine known as ‘Tolling’ which allows for the pausing or delaying of therunning of the period of time set forth by statute containing limitation. Insupport of their submission, they relied upon the judgment passed by theSupreme Court of United States in Carlos CHARDON etc. et al. vs. JuanFumero SOTO, et al., 1983 SCC OnLine US Sc 135 : 462 US 650 (1983),wherein it has been held as under:-

“1. Petitioners, Puerto Rican educational officials, demotedrespondents from nontenured supervisory positions to teaching orlower-level administrative posts in the public school systembecause of respondents' political affiliations. Shortly beforePuerto Rico's one-year statute of limitations would have expired, aclass action was filed against petitioners on respondents' behalfunder 42 U.S.C. § 1983. Subsequently class certification wasdenied because the class was not sufficiently numerous. Theparties agree that the statute of limitations was tolled during thependency of the § 1983 class action, but they disagree as to theeffect of the tolling. [This opinion uses the word "tolling" to mean

that, during the relevant period, the statute of limitations ceases torun. "Tolling effect" refers to the method of calculating theamount of time available to file suit after tolling has ended. Thestatute of limitations might merely be suspended; if so, the plaintiffmust file within the amount of time left in the limitations period. Ifthe limitations period is renewed, then the plaintiff has the benefitof new period as long as the original. It is also possible toestablish fixed period such as six months or one year duringwhich the plaintiff may file suit, without regard to the length of theoriginal limitations period or the amount of time left when tollingbegan.] Did the one-year period begin to run anew when classcertification was denied, or was it merely suspended during thependency of the class action? We must decide whether the answeris provided by Puerto Rican law or by federal law.

21. In American Pipe the Court rejected the claim that antitrustclaimsbroughtbyvariousUtahpublicagenciesandmunicipalities was barred by the four-year limitations period of §4B of the Clayton Act, reasoning that the running of this periodhad been tolled on three occasions. As to two of these occasions,involving periods during which federal litigation was pending, theCourt's reasoning simply applied § 5(b) of the Clayton Act.Section 5(b) explicitly addressed the effect of pending federallitigation, stating unambiguously that "Whenever any civil orcriminal proceeding is instituted by the United States to prevent,restrain, or punish violations of any of the antitrust laws, . . . therunning of the statute of limitations in respect of every privateright of action arising under said laws . . . shall be suspendedduring the pendency thereof and for one year thereafter." 15U.S.C. § 16(b). The first two periods in which American Pipe heldthat § 4B had been tolled followed simply from straightforwardapplication of § 5(b).….The more orthodox inquiry, however, would seem to be whatthe Court actually decided then, not what we now think it neededtodecide.And,asthediscussionaboveplainlydemonstrates, American Pipe concluded that Rule 23 contains atolling rule that suspends (but does nothing more) the running of

limitations periods during the pendency of class actions. [TheCourt correctly recognizes that Board of Regents v. Tomanio, 446U.S.478,100S.Ct.1790,64L.Ed.2d440(1980),isdistinguishable. That case did not involve class action, and, thusthe Court had no occasion to consider whether Rule 23 creates afederal tolling rule, or the character of that rule. Thus, there was"a void . . . in federal statutory law," id., at 483, 100 S.Ct., at1794, and state aw was called upon to fill the void. Owingto American Pipe and its interpretation of Rule 23, there is nocomparable void in this case, and federal law is thereforeapplicable.]”

36.Without prejudice and in the alternative to all of the above, theysubmitted that even Section 6 of the General Clauses Act, 1897 would allownotices to be issued and proceedings to be instituted, since by operation ofSection 3(1) of Relaxation Act, 2020, right had accrued in favour of theRevenue to re-open the assessment within an extended time period in suchcases where limitation to reopen under Section 148/149 expired on 31[st]March, 2021. They submitted that by virtue of Section 6(c) of the GeneralClauses Act, 1897, the mere substitution of the erstwhile Section 148 did nottake away the aforesaid incurred right.According to them, by virtue ofSection 6(c) of the General Clauses Act, 1897, in all such cases wherein thelimitation for issuance of notice under Section 148 was expiring on 31[st]March, 2021, the Revenue could initiate proceedings for the re-opening ofassessment under the erstwhile Section 148, as if the same had not beensubstituted. In support of their submission, learned counsel for therespondents relied upon the judgment passed by the Supreme Court in T.S.Baliah vs. T.S. Rangachari, Income Tax Officer, Central Circle VI,Madras, (1969) 3 SCR 65 wherein it has been held as under:-

“….But when the repeal is followed by fresh legislation on thesame subject the Court would undoubtedly have to look to theprovisions of the new Act, but only for the purpose of determiningwhether they indicate different intention. The question is notwhether the new Act expressly keeps alive old rights and liabilitiesbut whether it manifests an intention to destroy them. Section 6 ofthe General clauses Act therefore will be applicable unless thenew legislation manifests an intention incompatible with orcontrary to the provisions of the section. Such incompatibilitywould have to be ascertained from consideration of all therelevant provisions of the new statute and the mere absence of asaving clause is by itself not material....”

37.Learned counsel for respondents lastly relied upon the judgmentpassed by the High Court of Chhattisgarh in Palak Khatuja vs. Union ofIndia and Ors., W.P.(T) No. 149 of 2021 upholding the legality and validityof similarly issued reassessment notices. In the said judgment, theChhattisgarh High Court has held, “….legislative delegation which isexercised by the Central Government by notification to uphold themechanism as prevailed prior to March, 2021 is not in conflict with any Actand notification by executive i.e. Ministry of Finance would be the part oflegislative function.”

REJOINDER

38.In rejoinder, learned counsel for the petitioners submitted that thereasoning given by the Chhattisgarh High Court in the case of PalakKhatuja (supra) that the impugned Notifications issued under RelaxationAct, 2020 deferred the operation of Section 148A of the Income Tax Act,1961 was startling conclusion, apart from repeated references in the saidjudgments to the Covid-19 pandemic.

39.Learned counsel for the petitioners pointed out that the DivisionBench of Allahabad High Court had taken diametrically opposite view inits judgment dated 30[th]September, 2021 passed in Writ Tax No. 524/2021titled Ashok Kumar Agarwal Vs. Union of India through its RevenueSecretary North Block. In the said judgment, the Allahabad High Court hasupheld the submission of the petitioner-assessee that Section 148 noticesissued after 1[st]April, 2021, which did not comply with post 31[st]March,2021 provisions of the Income Tax Act, 1961, were illegal, bad in law aswell as null and void.

40.Theyre-emphasisedthattheRelaxationAct,2020andtheNotifications issued thereunder only extended the time limits for initiatingre-assessment, but did not otherwise touch or affect the applicableprovisions which mandatorily had to be complied with in respect of such re-assessment.

SUR-REJOINDER

41.In sur-rejoinder, learned counsel for the respondents submitted thatAllahabad High Court in Ashok Kumar Agarwal Vs. Union of Indiathrough its Revenue Secretary North Block (supra) had erroneously heldthat Section 3(1) of Relaxation Act, 2020 was meant to protect proceedingsalready underway or that may have become time-barred between 20[th]March,2021 and 30[th]June, 2021. They pointed out that it was not the impugnedNotifications but Section 3(1) of Relaxation Act, 2020 which permittedextension of time for compliance or completion of action which expiredbetween 20[th]March, 2020 and 31[st]March, 2021 to be extended to datebeyond 31[st]March, 2021. Therefore, according to them, fixation of date

beyond 31[st]March, 2021 was, in fact, permitted by the principle legislation– the Relaxation Act, 2020 itself.

COURT’S REASONING

AS THE LEGISLATURE HAS PERMITTED RE-ASSESSMENT TO BEMADEONLYINACCORDANCEWITHTHESUBSTITUTEDPROVISIONS, IT CAN ONLY BE DONE IN THIS MANNER, OR NOT ATALL.

42.Having heard learned counsel for the parties, this Court is of the viewthat by virtue of Section 1(2)(a) of the Finance Act, 2021, the substitutedSections 147, 148, 149 and 151 of the Income Tax Act, 1961 pertaining toreopening of assessments came into force on 1[st]April, 2021. Thesignificance of the expression ‘shall’ in Section 1(2)(a) of the Finance Act,2021 cannot be lost sight of. This is in contrast to the language underSection 1(2)(b) which states that Sections 108 to 123 of the Finance Act,2021 shall come into force on such date, as the Central Government may, byNotification in the Official Gazette, appoint. The Memorandum to theFinance Bill, 2021, too, clarifies that its Sections 2 to 88 which included thesubstituted Sections 147 to 151 of the Income Tax Act, 1961 will take effectfrom1[st]April,2021.ThereisalsonopowerwiththeExecutive/Respondents/Revenue to defer/postpone the implementation ofSections 2 to 88 of the Finance Act, 2021 which includes the substitutedSections 147 to 151 of the Income Tax Act, 1961.43.It is settled law that the law prevailing on the date of issuance of thenotice under Section 148 has to be applied. [See: Foramer Vs. CIT (2001)247 ITR 436 (All.), affirmed by the Supreme Court in (2003) 264 ITR 566(SC), Varkey Jacob Co. Vs. CIT and Anr. (2002) 257 ITR 231 (Ker), Smt.

N.Illamathy vs. ITO (2020) 275 taxman 25/195 CTR 543 (Mad)(HC), RKUpadhyay v Shanabhai, (1987) 166 ITR 163 (SC); CIT v RameshwarPrasad, (1991) 188 ITR 291 (All HC); Dr. Onkar Dutt Sharma v CIT,(1967) 65 ITR 359 (All HC)].

44.This Court is of the view that had the intention of the Legislature beento keep the erstwhile provisions alive, it would have introduced the newprovisions with effect from 1[st]July, 2021, which has not been done.Accordingly, the notices relating to any assessment year issued underSection 148 on or after 1[st]April, 2021 have to comply with the provisions ofSections 147, 148, 148A, 149 and 151 of the Income Tax Act, 1961 asspecifically substituted by the Finance Act, 2021 with effect from 1[st]April,2021.

45.Consequently, this Court is of the opinion that as the Legislature haspermitted re-assessment to be made in this manner only, it can be done inthis manner, or not at all[1].

SECTION3(1)OFRELAXATIONACTEMPOWERSTHEGOVERNMENT/EXECUTIVE TO EXTEND ONLY THE TIME LINES.CONSEQUENTLY, THE GOVERNMENT/EXECUTIVE CAN NEITHERMAKE OR CHANGE LAW OF THE LAND NOR CAN IT IMPEDE THEIMPLEMENTATION OF LAW MADE BY THE PARLIAMENT.

46.Upon perusal of Section 3(1) of Relaxation Act, 2020, this Court is ofthe view that it extends only the time lines. Section 3(1) of the RelaxationAct, 2020 stipulates that where, any time limit has been stipulated in

1 This Court in Principal Commissioner of Income Tax-4 Vs. Headstrong Services India (P.) Ltd.,[2021] 125 taxman.com 262 (Del), has held, “It is further settled law that when power is given to docertain thing in certain way, the thing must be done in that way or not at all and other methods ofperformance are forbidden. [See: Taylor Vs. Taylor,1875) 1 Ch.D.426; Nazir Ahmad Vs. King Emperor,AIR 1936 PC 253, AIR 1975 SC 985; Babu Verghese Vs. Bar Council of Kerala, (1999) 3 SCC 422].”[2021] 125 taxman.com 262 (Del), has held, “It is further settled law that when power is given to docertain thing in certain way, the thing must be done in that way or not at all and other methods ofperformance are forbidden. [See: Taylor Vs. Taylor,1875) 1 Ch.D.426; Nazir Ahmad Vs. King Emperor,AIR 1936 PC 253, AIR 1975 SC 985; Babu Verghese Vs. Bar Council of Kerala, (1999) 3 SCC 422].”

specified Act which falls between the period 20[th]day of March, 2020 and31[st]day of December, 2020 for the completion or compliance of such actionas issuance of any notice under the provisions of the specified Acts andwhere completion or compliance of such action has not been made withinsuch time, then the time limit for completion or compliance of such actionshall, notwithstanding anything contained in the specified Acts, standextended. It is important to bear in mind that Section 3(1) of the RelaxationAct, 2020 does not empower the Central Government to postpone theapplicability of any provision which has been enacted from particular date.There is difference between extension of time of an action which is gettingtime barred and applicability of provision which has been enacted andnotified by the Legislature. Relaxation Act, 2020 nowhere delegates powerto the Central Government to postpone the date of applicability of new lawenacted by the Legislature. Relaxation Act, 2020 also does not put anyembargo on the power of the Legislature to legislate.

47.Also, the impugned Explanations in the Notifications dated 31[st]March, 2021 and 27[th]April, 2021 are beyond the power delegated to theGovernment, as the Relaxation Act does not give power to Government toextend the erstwhile Sections 147 to 151 beyond 31[st]March, 2021 and/ordefer the operation of substituted provisions enacted by the Finance Act,2021. Accordingly, the provisions of Section 148A had to be complied withbefore issuing notices under Section 147 of the Income Tax Act, 1961 andthe submission of the respondents-Revenue based on the judgment passedby Chhattisgarh High Court in Palak Khatuja Vs. UOI (supra) does not findfavour with this Court. After all, it is settled law that Executive cannot make

or change law of the land without specific Authority from Parliament to doso.[2]

48.Consequently, the Relaxation Act, 2020 and Notifications issuedthereunder can only change the time-lines applicable to the issuance of aSection 148 notice, but they cannot change the statutory provisionsapplicable thereto which are required to be strictly complied with. Further,just as the Executive cannot legislate, it cannot impede the implementationof law made by the Legislature.

THE IMPUGNED EXPLANATIONS IN THE NOTIFICATIONS DATED31[ST]MARCH, 2021 AND 27[TH]APRIL, 2021 ARE ULTRA VIRES THEPARENT STATUTE I.E. THE RELAXATION ACT. THIS COURT ISRESPECTFULLY NOT IN AGREEMENT WITH THE VIEW OF THECHHATTISGARH HIGH COURT IN PALAK KHATUJA (SUPRA), BUTWITH THE VIEWS EXPRESSED BY THE ALLAHABAD HIGH COURT INASHOK KUMAR AGARWAL (SUPRA) AND RAJASTHAN HIGH COURTIN BPIP INFRA PRIVATE LIMITED VS. INCOME TAX OFFICER,WARD 4(1), S.B. CIVIL WRIT PETITION 13297/2021

49.Further, the impugned Explanation is not only beyond the powerdelegated to the Government, but also in conflict with the provisions of theIncome Tax Act, 1961 which had specifically made the new reassessmentscheme applicable from 1[st]April, 2021. It is settled law that the delegationof authority must be express. There is no scope for any implied delegation ofauthority. The delegated authority must act strictly within the parameters ofthe authority delegated to it. The delegated authority cannot override the Acteither by exceeding the authority or by making provisions inconsistent withthe Act. The distinction between conditional legislation or delegatedlegislation is irrelevant to the controversy at hand, as the person to whom the

2R (on the application of Miller and Another) V. Secretary of State for Exiting the European Union(2017) UKSC 5) popularly known as Miller No.1.(2017) UKSC 5) popularly known as Miller No.1.

power is entrusted in either situation can do nothing beyond the limits whichcircumscribe the power.[3]Subordinate legislation cannot be contrary to theparent statute[4]. Consequently, this Court is respectfully not in agreementwith the finding of Chhattisgarh High Court in Palak Khatuja (supra) thatthe legislative delegation exercised by the Central Government by impugnedNotifications to uphold the mechanism as prevailing prior to March, 2021 isnot in conflict with any Act. To be fair to Chhattisgarh High Court, therewas no challenge in the petitions filed before it to the legality and validity ofthe impugned Notifications dated 31[st]March, 2021 and 27[th]April, 2021. Onthe contrary, this Court is in agreement with the views of the AllahabadHigh Court and Rajasthan High Court (Bench at Jaipur) in Ashok KumarAgarwal (supra) and Bpip Infra Private Limited vs. Income Tax Officer,Ward 4(1), S.B. Civil Writ Petition 13297/2021, respectively.

50.Consequently, Explanations A(a)(ii)/A(b) to the Notifications dated31[st]March, 2021 and 27[th]April, 2021 are ultra vires the Relaxation Act,2020 and are therefore, bad in law and null and void.

FINANCE ACT, 2021 HAS MERELY CHANGED THE PROCEDURE OFISSUINGNOTICE.CONSEQUENTLY,THE“POWER”OFREASSESSMENTTHATEXISTEDPRIORTO31[ST]MARCH,2021CONTINUES TO EXIST EVEN THEREAFTER.

51.Hohfeld’s theory on Jural Relations does not come to the aid of theRevenue. It is not disputed that as per Hohfeld’s theory, the jural correlativeof “power” is “liability”. Where there is power, there is correspondingliability imposed upon the person against whom such power exists.

3Lachmi Narain vs. UOI AIR 1976 SC 714, St. John’s Teachers Training Institute vs. RegionalDirector (2003) 3 SCC 321.Director (2003) 3 SCC 321.

4 Indian Express Newspapers vs. UOI AIR 1986 SC 515, State of Tamil Nadu vs. P Krishnamurthy(2006) 4 SCC 517.

However, with the coming into force of the Finance Act, 2021 w.e.f. 1[st]April, 2021, there has been no curtailing or taking away the power of theRevenue.Ithasmerelychangedtheprocedureofissuingnotice.Consequently, the “power” as per Hohfeld’s theory that existed prior to 31[st]March, 2021 continues to exist even thereafter.

TO IGNORE THE LEGISLATIVE INTENT OF FINANCE ACT, 2021WOULD NOT BE IN ACCORDANCE WITH PAST PRACTICE.52.It is pertinent to mention that the Legislature had even prior toFinance Act, 2021 enhanced/reduced time limit specified in Section 149 ofthe Income Tax Act, 1961, by way of Finance Acts, 1961, 1989, 2001, 2012and pertinently such enhancement/reduction to the time limit was madeeffective from different dates of the relevant financial year. tabular chartshowing previous changes to time limits under Section 149 is reproducedhereinbelow:-

Amendments to Section 149 of the Income Tax Act, 1961

53.This Court in C.B. Richards Ellis Mauritius Ltd. (supra), whileinterpreting the applicability of an earlier amendment to Section 149 of theIncome Tax Act, 1961 vide Finance Act, 2001, whereby the earlier existingtime limit of ten years was reduced to six years, has held that the reducedtime limit applied with effect from the Finance Act coming into force. Therelevant portion of the said judgment is reproduced hereinbelow:-

“7. Having considered the contentions of the parties and thelegal issues raised therein, we feel that the petitioner isentitled to succeed. Section 6 of General Clauses Act dealswith effect of repeal of an enactment and stipulates thatunless different intention appears, the repeal will notaffect the previous operation of any enactment so repealedor any right, privilege, obligation or liability acquired,accruedoraffectanypenalty,investigation,legalproceedingorremedy.ThesaidSectiondealswithsubstantive rights and liabilities. It is also subject tointention to the contrary. Intention can be implied. Theprocedural law when it is repealed should be applied fromthe date the new provision or procedure comes into force.The reason is that no person has vested right or anaccrued right in the procedure. No obligation or liability isnormally imposed by procedure. Sometime distinction isdrawn between the right acquired or accrued and legalproceedings to acquire right. In the latter case, there is

only hope which is destroyed by the repeal. What isprotected is the preserved right and privileges acquired andaccrued and corresponding obligation and liability incurredon the other party. The legal process or the procedure forthe enjoyment of the said right is not protected. Section 6,normally does not apply to procedural law. The procedurallaw when amended or substituted is generally retroactiveand applies from the day of its enforcement and to thisextent it can be retrospective. The question raised iswhether the amendment/substitution of the period witheffect from 1.6.2001 in Section 149 of the Act, is proceduralor substantive....

11. Law of limitation, therefore, being procedural law hastobeappliedtotheproceedingsonthedateofinstitution/filing. No person can have vested right in theprocedure. Therefore, the procedural law on the date whenit was enforced is applied. Bennion Statutory interpretation(1st addition page 446 para 191) has elucidated:-

"Because change made by the legislator inprocedural provisions is expected to be for thegeneral benefit of litigants and others, it ispresumed that it applies to pending as well asfuture proceedings."

12. Law of limitation does not create any right in favour ofa person or define or create any cause of action, but simplyprescribes that the remedy can be exercised or availed of byor within the period stated and not thereafter. Subsequently,the right continues to exist but cannot be enforced. Theliability to tax under the Act is created by the chargingSectionreadwiththecomputationprovisions.Theassessment proceedings crystallize the said liability so thatit can be enforced and the tax if short paid or unpaid can becollected. If this difference between liability to tax and theprocedure prescribed under the Act for computation of theliability (i.e. the procedure of assessment), is kept in mind,therewouldbenodifficultyinunderstandingand

appreciating the fallacy and the error in the primaryargument raised by the Revenue. It is settled position thatliability to tax as levy is normally determined as perstatute as it exists on the first day of the assessment year,but this is not the issue or question in the present case. Theissue or question in the present case relates to assessmenti.e. initiation of re-assessment proceedings and whether thetime/limitationforinitiationofthere-assessmentproceedingsspecifiedbytheFinanceAct,2001isapplicable. We are not determining/deciding the liability totax but have to adjudicate and decide whether the re-assessment notice is beyond the time period stipulated. Thisis matter/issue of procedure i.e. the time period in whichthe assessment or re-assessment proceedings can beinitiated. Thus the time period/limitation period prescribedon the date of issue of notice will apply. In our opinion, theanswer is clear and has to be in affirmative, i.e. in favour ofthe assessee.

13. This question is not debatable or res integra and wasexamined and answered with lucid and clear reasoning inthe opinion expressed by Hidayatullah, J. on behalf ofhimselfandRaghubarDayal,J.in S.C.Prashar v.Vasantsen Dwarkadas Hunger for InvestmentTrust Ltd. [1963] 49 ITR 1 (SC). The relevant portionreads:-

"93. ....If the 1948 Amendment could be treatedas enabling the Income Tax Officer to takeaction at any point of time in respect of backassessment years within eight years of March 30,1948 then such cases were within his power totax. We have such case here in CA No. 509 of1958 where the notice was issued in 1949 to thelady whose husband had remitted Rs 9180 to herfrom Bangkok in the year relative to AssessmentYear 1942-43. That lady was assessable inrespect of this sum under Section 4(2) of theIncome Tax Act. She did not file return. If thecase stood governed by the 1939 Amendment theas enabling the Income Tax Officer to takeaction at any point of time in respect of backassessment years within eight years of March 30,1948 then such cases were within his power totax. We have such case here in CA No. 509 of1958 where the notice was issued in 1949 to thelady whose husband had remitted Rs 9180 to herfrom Bangkok in the year relative to AssessmentYear 1942-43. That lady was assessable inrespect of this sum under Section 4(2) of theIncome Tax Act. She did not file return. If thecase stood governed by the 1939 Amendment the

period applicable would have been four years ifshe had not concealed the particulars of theincome. She had of course not deliberatelyfurnished inaccurate particulars thereof. If thecase was governed by the 1948 Amendment shewould come within the eight-year rule becauseshe had failed to furnish return. Now, we donot think that we can treat the different periodsindicatedunderSection34asperiodsoflimitation, the expiry of which grant prescriptivetitle to defaulting tax-payers It may be said thatan assessment once made is final and conclusiveexcept for the provisions of Sections 34 and 35but it is quite different matter to say that a"vested right" arises in the assessee. On theexpiry of the period the assessments, if any, mayalso become final and conclusive but only solong as the law is not altered retrospectively.Under the scheme of the Income Tax Act aliability to pay tax is incurred when according tothe Finance Act in force the amount of income,profits or gains is above the exempted. Thatliability to the State is independent of anyconsideration of time and, in the absence of anyprovision restricting action by time limit, it canbe enforced at any time. What the law does is toprevent harassment of assessees to the end oftime by prescribing limit of time for its ownofficers to take action. This limit of time isbinding upon the officers, but the liability underthe charging section can only be said to beunenforceable after the expiry of the periodunder the law as it stands. In other words,though the liability to pay tax remains it cannotbe enforced by the officers administering the taxlaws. If the disability is removed or according toanewlawanewtimelimitiscreatedretrospectively, there is no reason why the

liabilityshouldnotbetreatedasstillenforceable.Thelawdoesnotdealwithconcluded claims or their revival but with theenforcement of liability to the State whichthough existing remained to be enforced.”

54.Consequently, in the present cases to ignore the legislative intent ofFinance Act, 2021 would neither be legal nor reasonable.

55.It is cardinal principle of construction that every statute is primafacie prospective, unless it is expressly or by necessary implication made tohave retrospective operation.[5]There is presumption of prospectivityarticulated in the legal maxim ‘nova constitutio futuris formam imponeredebet non praeteritis’, i.e., ‘a new law ought to regulate what is to follow,not the past’, and this presumption operates unless shown to be contrary byexpress provision in the statute or is otherwise discernible by necessaryimplication[6].

56.In contrast to statutes dealing with substantive rights, statutes dealingwith merely matters of procedure are presumed to be retrospective, unless

5 Keshavan Madhava Menon v. State of Bombay, 1951 SCR 228; Janardan Reddy and Others v. State,1950 SCR 940; Mahadeolal Kanodia v. Administrator General of W.B., (1960) 3 SCR 578; State ofBombay v. Vishnu Ramchandra, (1961) 2 SCR 924; Rafiquennessa (Mst.) v. Lal Bahadur Chetri, (1964)6 SCR 876; Arjan Singh v. State of Punjab, (1969) 2 SCR 347; Ex,-Capt. K.C. Arora and Another v.State of Haryana and Others, (1984) 3 SCC 281; Mithilesh Kumari and Another v. Prem BahadurKhare, (1989) 2 SCC 95; State of Madhya Pradesh and Others v. Rameshwar Rathod, (1990) 4 SCC 21;Shyam Sunder and Others v. Ram Kumar and Another, (2001) 8 SCC 24; Zile Singh v. State of Haryanaand Others, (2004) 8 SCC 1; Gem Granites v. Commr. of Income Tax, (2005) 1 SCC 229; C. Gupta v.Glaxo-Smithkline Pharmaceuticals Ltd., (2007) 7 SCC 171; J.S. Yadav v. State of Uttar Pradesh andAnother, (2011) 6 SCC 570

6 Monnet Ispat & Energy Ltd. v. Union of India & Ors., (2012) 11 SCC 1

such construction is textually inadmissible.[7]As stated by Lord Denning:“The rule that an Act of Parliament is not to be given retrospective effectapplies only to statutes which affect vested rights. It does not apply tostatutes which only alter the form of procedure or the admissibility ofevidence, or the effect which the courts give to evidence”.[8]If the new Actaffects matters of procedure only, then, prima facie, “it applies to all actionspending as well as future”.[9]In fact, there is line of authority to the effectthat, in the absence of contrary intention, procedural changes apply topending as well as future proceedings[10]. The nature of the exception wasalso clearly encapsulated in R. v. Makanjuola, (1995) 2 Cr. App. R. 469 at472A-B, where Lord Taylor of Gosforth CJ held, “The general rule againstthe retrospective operation of statutes does not apply to proceduralprovisions…Indeed, general presumption is that statutory change inprocedure applies to pending as well as future proceedings.”[11]

RATIONALEBEHINDTHEPRINCIPLETHATCHANGEINPROCEDURAL LAW OPERATES RETROSPECTIVELY

57.In stating the principle that “a change in the law of procedureoperates retrospectively and unlike the law relating to vested right is not

7 Gardner v. Lucas (1878) 3 AC 582 (HL); Delhi Cloth & General Mills Co. Ltd. v. CIT, Delhi, AIR 1927PC 242; Jose De Costa v. Bascora Sadashiva Sinai Narcornim, (1976) 2 SCC 917; Gurbachan Singh v.Satpal Singh, (1990) 1 SCC 445

8 Blyth v. Blyth, (1966) 1 All ER 524

9 A.G. v. Vernazza, (1960) 3 All ER 97; K. Eapin Chako v. Provident Fund Investment Company (P)Ltd., (1977) 1 SCC 583

10 Athlumney, Re, ex p Wilson [1898] 2 QB 54 per R S Wright J at 551-552; Kensinghton InternationalLtd. v. Republic of the Congo [2007] EWHC, 1632 (Comm), [2007] All ER (D) 209 (Jul) at [74]11 See also: R. v. Bradley [2005] EWCA Crim. 20. Also Justice GP Singh in his treatise Principles ofStatutory Interpretation states, “Fiscal legislation imposing liability is generally governed by the normalpresumption that it is not retrospective and it is cardinal principle of the tax law that the law to beapplied is that in force in the assessment year unless otherwise provided expressly or by necessaryimplication. The above rule applies to the charging section and other substantive provisions such as aprovision imposing penalty and does not apply to machinery or procedural provisions of taxing Actwhich are generally retrospective and apply even to pending proceedings.”

only prospective”[12], the Supreme Court has quoted with approval the reasonof the rule as expressed in MAXWELL.[MAXWELL: Interpretation ofStatutes, 11[th]Edition, p. 216]. “No person has vested right in any courseof procedure. He has only the right of prosecution or defence in the mannerprescribed for the time being by or for the Court in which the case ispending, and if, by an Act of Parliament the mode of procedure is altered, hehas no other right than to proceed according to the altered mode”. In theopinion of this Court, this is because procedural change is expected toimprove matters for everyone concerned (or at least to improve matters forsome, without inflicting detriment on anyone else who uses ordinary care,vigilance and promptness).

58.Though the Black’s Law Dictionary defines procedural law as “thatwhich prescribes method of enforcing rights or obtaining redress for theirinvasion” and substantive law is one that which “fixes duties, establishrights and responsibilities among and for persons natural or otherwise”, yetthe question whether legislation is procedural or substantive in the context ofretrospectivity needs to be considered by the reference to the facts of eachparticular case.

59.The same provision may be procedural in one context and substantivein another. Lord Brightman said in Yew Bon Tew v. Kenderaan Bas Mara.

12 Anant Gopal Sheorey v. State of Bombay, 1959 SCR 919; Union of India v. Sukumar Pyne, 1966 (2) SCR 34;Tikaram & Sons v. Commr. of Sales Tax, U.P., (1968) 3 SCR 512; State of Madras v. Lateef Hamid & Co. (1971) 3SCC 560; Balumal Jamnadas Batra v. State of Maharashtra, (1975) 4 SCC 645; Rai Bahadur Seth SriramDurgaprasad v. Director of Enforcement, (1987) 3 SCC 27; Gurbachan Singh v. Satpal Singh, (1990) 1 SCC 445Tikaram & Sons v. Commr. of Sales Tax, U.P., (1968) 3 SCR 512; State of Madras v. Lateef Hamid & Co. (1971) 3SCC 560; Balumal Jamnadas Batra v. State of Maharashtra, (1975) 4 SCC 645; Rai Bahadur Seth SriramDurgaprasad v. Director of Enforcement, (1987) 3 SCC 27; Gurbachan Singh v. Satpal Singh, (1990) 1 SCC 445

[1983] 1 AC 553 at 558, ‘….these expressions “retrospective” and“procedural,” though useful in particular context, are equivocal andtherefore can be misleading … and an Act which is procedural in one sensemay in particular circumstances do far more than regulate the course ofproceedings, because it may, on one interpretation, revive or destroy thecause of action itself….’ Consequently, the Court will have to examine theintent, purpose and scope of the amendments.

THEINTENT,PURPOSEANDSCOPEOFTHEAMENDMENTSINTRODUCED BY THE FINANCE ACT, 2021 WAS TO PROTECT THERIGHTS AND INTERESTS OF ASSESSEES AS WELL AS PROMOTEPUBLIC INTEREST. IT IS SETTLED LAW THAT IF LEGISLATION ISINTRODUCED TO REMEDY THE DEFECTIVE RULE AND NO ONESUFFERS THEREBY, IT IS SENSIBLE TO APPLY IT TO PENDINGPROCEEDINGS.

60.The Finance Minister in her Budget Speech clearly stated that theobject behind the amendment to the Income Tax Act, 1961 was “to simplifythe tax administration, ease compliance, and reduce litigation.”

61.In the memorandum explaining the provisions in the Finance Bill,2021, it was categorically admitted that it “proposes completely newprocedure of assessment of such cases. It is expected that the new systemwould result in less litigation and would provide ease of doing business totaxpayers as there is reduction in time limit by which notice forassessment or reassessment or re-computation can be issued…”

62.In fact, the unamended Sections 147 to 149 and 151 of the IncomeTax Act, 1961 prescribed the procedure governing initiation of reassessmentproceedings. However, the same gave rise to numerous litigations,particularly on the issues that reassessment proceedings were often initiated:

(a) without recording any valid ‘reason to believe’, (b) in absence of anytangible/reliable material/information in possession the Assessing Officerleading to formation of belief that income has escaped assessment, (c)without any enquiry being conducted by the Assessing Officer prior to theissuance of notice, (d) without following the mandatory procedure laid downby the Supreme Court in the case of GKN Driversafts (India) Ltd. Vs. ITO(supra) etc. Further, since reopening was permissible maximum up to sixyears and in some cases up to sixteen years, there was continuinguncertainty for considerable long time.

63.The Legislature, being conscious of the shortcomings in theunamended Sections 147 to 151 of the Income Tax Act, 1961, which wererelaxed by the aforesaid provisions of the Relaxation Act and theNotifications issued thereunder, introduced reformative changes to the saidSections governing the procedure for reassessment proceedings by way ofthe Finance Act, 2021 passed on 28[th]March, 2021.

64.The reformative substitutions carried out by the Finance Act, 2021with effect from 1[st]April, 2021 can be summarized as under:-

a. Section 147: The earlier existing concept of income escapingassessment was simplified by substituting new provision;assessment was simplified by substituting new provision;

b. Section 148: The provision governing issuance of notice forinitiation of reassessment proceedings was substituted with anew provision, inter alia, prohibiting issuance of such notice, (a)in absence of any ‘information’ [as explained in Explanation 1]with the Assessing Officer suggesting escapement of income;(b) in absence of approval from the specified authority & (c)without following the procedure prescribed under Section 148Ainitiation of reassessment proceedings was substituted with anew provision, inter alia, prohibiting issuance of such notice, (a)in absence of any ‘information’ [as explained in Explanation 1]with the Assessing Officer suggesting escapement of income;(b) in absence of approval from the specified authority & (c)without following the procedure prescribed under Section 148A

of the Income Tax Act, 1961. Moreover, the said notice issuedunder Section 148 was now required to be served along withorder passed under Section 148A of the Income Tax Act, 1961;

c. Section 148A: New provision was introduced in the Income TaxAct, 1961, inter alia prescribing, (a) Assessing Officer toconduct inquiry, if required, with prior approval; (b) opportunityof heard to be given to the assessee, with prior approval; (c)Assessing Officer to consider reply of assessee; and (d) order tobe passed as to whether it was fit case for issuance of noticeunder Section 148 of the Income Tax Act, 1961;Act, 1961, inter alia prescribing, (a) Assessing Officer toconduct inquiry, if required, with prior approval; (b) opportunityof heard to be given to the assessee, with prior approval; (c)Assessing Officer to consider reply of assessee; and (d) order tobe passed as to whether it was fit case for issuance of noticeunder Section 148 of the Income Tax Act, 1961;

d. Section 149: The provisions governing time limit for issuance ofnotice under Section 148 of the Income Tax Act, 1961 werereplacedwithnewprovisions,interalia,reducingthepermissible time limit for issuance of such notice to three years[and ten years only in exceptional cases] and further changingthe earlier existing criteria governing such time limit;notice under Section 148 of the Income Tax Act, 1961 werereplacedwithnewprovisions,interalia,reducingthepermissible time limit for issuance of such notice to three years[and ten years only in exceptional cases] and further changingthe earlier existing criteria governing such time limit;

e. Section 151: The earlier existing provision prescribing thesanctioning authorities for issuance of notice under Section 148was replaced with new provisions prescribing the sanctioningauthorities for the purposes of Sections 148 & 148A; pertinentlyfor issuance of notice after three years from the end of relevantAssessment Year, wherein reopening is permitted in exceptionalcases,sanctionfromthehighestlevelofIncomeTaxDepartment is required to be obtained.sanctioning authorities for issuance of notice under Section 148was replaced with new provisions prescribing the sanctioningauthorities for the purposes of Sections 148 & 148A; pertinentlyfor issuance of notice after three years from the end of relevantAssessment Year, wherein reopening is permitted in exceptionalcases,sanctionfromthehighestlevelofIncomeTaxDepartment is required to be obtained.

65.Based on the aforesaid substituted provisions as well as the speech ofFinance Minister and the Memorandum explaining the provisions in theFinance Bill, 2021, it is apparent that the legislative intent behind theaforesaid substitutions/amendments is to reduce the time limit in ordinarycases to three years and to increase the threshold amount of income havingescaped assessment to Rs.50 lakhs for invoking extended time limit of tenyears is to reduce litigation and compliance burden, remove discretion,impart certainty and promote ease of doing business.

66.This Court is of the opinion that the new provisions are remedial andbenevolent provisions which are meant and intended to protect the rights andinterests of assessees as well as promote public interest. In ImperialTobacco Ltd v. Attorney General [1979] QB 555 at 581, Omrod LJ said,‘The object of all procedural rules is to enable justice to be done betweenthe parties consistently with the public interest’. If the procedural rules aredefective, the legal apparatus works less efficiently and the public interestsuffers. If legislation is introduced to remedy the defective rule and no onesuffers thereby, it is sensible to apply it to pending proceedings.

67.Consequently, this Court is of the view that the Finance Act, 2021introduces new regime regarding the procedure to be complied with inrespect of the re-opening of an Income-tax assessment and accordingly, thebenefit of the new provisions must necessarily be made available even inrespect of proceedings relating to past Assessment Years provided,of course, Section 148 notice has been issued on or after 1[st]April, 2021.[13]

13 M.D. Frozen Foods Exports Private Limited and Others Vs. Hero Fincorp Limited, (2017) 16 SCC741.

NEITHER THE CONCEPT OF VESTED RIGHT IN FAVOUR OF THEREVENUE NOR THE JUDGMENT OF THE SUPREME COURT IN M.P.STEELCORPORATIONV.CCE(2015)7SCC58HASANYAPPLICATION.

68.In the opinion of this Court, neither the concept of vested right infavour of the Revenue nor the judgment passed by the Supreme Court inM.P. Steel Corporation v. CCE (2015) 7 SCC 58 has any application to thepresent batch of matters.

69.Admittedly, time limit to issue notices for re-assessment under theIncome Tax Act, 1961 stood expired long time ago. The Legislature byvirtue of the Relaxation Act, 2020 had extended the time limit till 31[st]December, 2020 and had given discretion to the executive to issueNotification to extend the timeline alone. However, extending the time limitor giving power to issue Notification to extend the time cannot be taken tobe vested right of the respondents.

70.Consequently, this Court is of the view that vested right in favour ofthe Revenue stood exhausted/expired long ago and no vested right of therespondents has been infringed leave alone violated.

THE ARGUMENT OF THE RESPONDENT THAT THE SUBSTITUTIONSMADE BY THE FINANCE ACT, 2021 IS NOT APPLICABLE TO PASTASSESSMENTYEARS,ASITISSUBSTANTIALINNATUREISCONTRADICTED BY ITS OWN CIRCULAR 549 OF 1989 AND ITS OWNSUBMISSION THAT FROM 1[ST]JULY, 2021, THE SUBSTITUTIONSMADE BY THE FINANCE ACT, 2021 WILL BE APPLICABLE.

71.Circular 549 of 1989 issued by the CBDT explaining the provisions ofthe Direct Tax Laws (Amendment Act), 1989 amending erstwhile Sections147 to 152 clarified that the said provisions were procedural in nature andwould have retrospective effect, unless the amending statute provides

otherwise. The relevant provisions of Circular 549 of 1989 issued by theCBDT is reproduced hereinbelow:-

“…7.13 Amendments to have retrospective effect. - Theseamendments come into force with effect from the 1st day ofApril, 1989. However, it may be clarified that since theprovisions of sections 147 to 152 lay down procedural law,these have retrospective effect, unless the amending statuteprovides otherwise. Therefore, the amendments made tothese sections by the Amending Acts, 1987 and 1989,discussed in the preceding paragraphs, which came intoforce with effect from 1[st]April, 1989, will be retrospectivein the sense that these will apply to all matters which werepending on 1[st]April, 1989 and had not become closed ordead on this date.

7.14 Thus, from 1[st]April, 1989 onwards, any action foropening or re-opening an assessment for the assessmentyear 1988-89 and earlier assessment years will have to betaken in accordance with the amended provisions. Thefollowing examples will clarify the position:-

(i) No notice under section 148 can now be issued for theassessment years 1973-74 to 1978-79 even if the escapedincome is Rs. 50,000 or more in each year, although underthe old provisions this could have been done with Board’sapproval.

(ii) Notice under section 148 can now be issued for any ofthe assessment years 1979-80 to 1981-82 if the followingconditions are ful-filled:-

(#) In scrutiny case [i.e., where an assessmentorder had been passed under section 143(3) or 147],if the escaped income is Rs. 1 lakh or more in eachyear and approval of the Chief Commissioner orCommissioner has been obtained.

(c) In non-scrutiny case, if the escaped income isRs. 50,000 or more in each year, and approval ofthe Deputy Commissioner has been obtained.Rs. 50,000 or more in each year, and approval ofthe Deputy Commissioner has been obtained.

(Under the old provisions, there was no distinction betweena scrutiny and non-scrutiny case. Action could have beentaken in respect of both types of cases for the assessmentyear 1981-82, with the approval of the Chief Commissioneror Commissioner, whatever be the amount of escapedincome, while for the assessment years 1979-80 and 1980-81, action could have been taken with Board’s approval ifthe escaped income was Rs. 50,000 or more in each year.These old provisions, however, have no application nowfrom 1-4-1989 onwards).”

72.On the one hand, the Respondents are contending that the amendmentmade by the Finance Act, 2021 shall not be applicable to past assessmentyears, while on the other hand, they are contending that from 1[st]July, 2021,the amendments made by the Finance Act, 2021 will be applicable. This iscontradictory inasmuch as for three months starting on or after 1[st]April,2021, the amendment made by the Finance Act, 2021 shall be considered assubstantive in nature and hence applicable prospectively, while from 1[st]July, 2021, the amendment made by the Finance Act, 2021 will beconsidered as procedural and hence will be applicable retrospectively forany assessment year including earlier years.

73.Keeping in view its own submission and past precedent to treatSections 147 to 152 of the Income Tax Act, 1961 as procedural, therespondents are estopped from contending to the contrary.

IFTHEARGUMENTOFTHERESPONDENTSTHATTHEEXPLANATION IN NOTIFICATION NO. 20 DATED 31[ST]MARCH, 2021EXTENDEDTHEAPPLICABILITYOFOLDPROCEDUREOFREASSESSMENT BEYOND 31[ST]MARCH, 2021 IS ACCEPTED, THESAME SHALL LEAD TO MANIFEST ARBITRARINESS AND CONFLICT.

74.Further, if the argument of learned counsel for the respondents thatthe Explanation in Notification No. 20 dated 31[st]March, 2021 extended the

applicability of old procedure of reassessment beyond 31[st]March, 2021 isaccepted the same shall lead to patent arbitrariness since:

a. during the period from 1[st]April, 2021 to 30[th]June, 2021, bothold as well as new procedure as enacted by Finance Act, 2021shall simultaneously operate [more so, since there is no statutoryprovision deferring the implementation of the new/mandatoryprocedure];old as well as new procedure as enacted by Finance Act, 2021shall simultaneously operate [more so, since there is no statutoryprovision deferring the implementation of the new/mandatoryprocedure];

b. for example: For A.Y.’s 2015-16 to 2017-18 [with limitationupto March, 22 to 24], in case of two identically placedtaxpayers (say & B) with “information” of having asset aboveRs.50 lakh, Assessing Officer shall have absolute discretion tochoose either the old or the new mechanism;upto March, 22 to 24], in case of two identically placedtaxpayers (say & B) with “information” of having asset aboveRs.50 lakh, Assessing Officer shall have absolute discretion tochoose either the old or the new mechanism;

c. ‘doctrine of election’ normally confers two separate alternativestatutory powers/remedies (like Sections 154, 147, 263) forsame/similar cause, but same provision (Section 147) with twoopposite procedure for same cause can never be envisaged andshall necessarily lead to manifest arbitrariness and conflict.statutory powers/remedies (like Sections 154, 147, 263) forsame/similar cause, but same provision (Section 147) with twoopposite procedure for same cause can never be envisaged andshall necessarily lead to manifest arbitrariness and conflict.

75.Also, the new scheme of reassessment provides for uniform mannerof reassessment of two categories of cases, namely, regular reassessmentsand search/survey cases. Insofar as search/survey cases are concerned, theprovisions are clear that the new scheme is to apply where the proceedingsare initiated after 1[st]April, 2021 as Explanation 2 to Section 148 states thatthe Assessing Officer will be deemed to have ‘information’ for the purposesof Section 148/148A when search/survey is initiated on or after 1[st]April,2021 and the first proviso to Section 148A states that the procedure in

Section 148A will not apply to cases where search/survey is initiated after1[st]April, 2021. Also, the second proviso to Section 149 states that the newlimitation will not apply where search/survey is initiated on or before 1[st]April, 2021. In fact, the department’s interpretation would also make theprovisions relating to search cases completely unworkable. As per Sections153A and 153C, the provisions of these two sections will not apply wheresearch/survey is done after 1[st]April, 2021. Department contends that theerstwhile law continues to apply from 1[st]April, 2021 to 30[th]June, 2021. Theerstwhile law on reopening did not cover search/survey cases. Consequently,for the search/survey done from 1[st]April to 30[th]June, there can neither be anassessment under sections 153A/153C or under 147, which cannot be thecase. Further, Sections 148, 148A and 149 specifically cover cases wheresearch/survey is done after 1[st]April, 2021. If department’s interpretation isaccepted, this specific date in all three Sections will have to be changed andread as 1[st]July, 2021, which cannot be done. Moreover, as the newprovisions seek to bring uniformity between regular reassessments andsearch/survey cases, it follows that the cut off date for initiation ofreassessment proceedings even for regular reassessment is 1[st]April, 2021.

REVENUE CANNOT RELY ON COVID-19 FOR CONTENDING THATTHE NEW PROVISIONS SHOULD NOT OPERATE DURING THEPERIOD 1[st]APRIL, 2021 TO 30[th]JUNE, 2021.

76.When Finance Minister moved the Finance Bill, 2021 in Parliamenton 1[st]February, 2021 and the Finance Act, 2021 was enacted in March,2021, COVID-19 was widely prevalent and Parliament was fully aware ofthe same.Nevertheless, with the objective of promoting ease of doingbusiness and reducing litigation, Parliament specifically enacted that the

new reassessment provisions would come into operation on 1[st]April, 2021.The Revenue cannot, therefore, rely on COVID-19 for contending that thenew provisions should not operate during the period 1[st]April, 2021 to 30[th]June, 2021 or that Relaxation Act, 2020 deals with the situation arising outof Covid-19 and the Finance Act, 2021 was passed being oblivious of theCovid-19 Pandemic.

NON-OBSTANTECLAUSEHASTOBECONSTRUEDSTRICTLY.SECTION 3(1) OF RELAXATION ACT IS EXPRESSLY CONFINED TOAND ONLY SUPERSEDES THE TIME LIMITS. IT DOES NOT EXCLUDETHE APPLICABILITY OF PROVISIONS SUBSTITUTED BY FINANCEACT, 2021.

77.It is settled law that the non-obstante clause in statute has to begiven contextual interpretation and cannot be interpreted in way whichdefeats or extends the object and purpose of the enactment. In Nawal Singhvs. State of U.P. & Anr.[14], the Supreme Court has held that the non-obstanteclause has to be construed strictly and has an overriding effect over the otherstatutes only to the limited extent that it expressly so provides. In other

14 2003(8) SCC 117. In this case, the Supreme Court held, “…However, we would refer to the decisionin A.G. Varadarajulu v. State of T.N. [(1998) 4 SCC 231] which was relied upon by the learned SeniorCounsel Mr Dwivedi, wherein (in para 16) this Court held as under: (SCC p. 236)in A.G. Varadarajulu v. State of T.N. [(1998) 4 SCC 231] which was relied upon by the learned SeniorCounsel Mr Dwivedi, wherein (in para 16) this Court held as under: (SCC p. 236)

“16. It is well settled that while dealing with non obstante clause under which the legislaturewants to give overriding effect to section, the court must try to find out the extent to which thelegislature had intended to give one provision overriding effect over another provision. Suchintention of the legislature in this behalf is to be gathered from the enacting part of the section.In Aswini Kumar Ghose v. Arabinda Bose [AIR 1952 SC 369] Patanjali Sastri, J. observed:wants to give overriding effect to section, the court must try to find out the extent to which thelegislature had intended to give one provision overriding effect over another provision. Suchintention of the legislature in this behalf is to be gathered from the enacting part of the section.In Aswini Kumar Ghose v. Arabinda Bose [AIR 1952 SC 369] Patanjali Sastri, J. observed:

‘The enacting part of statute must, where it is clear, be taken to control the non obstanteclause where both cannot be read harmoniously.’clause where both cannot be read harmoniously.’

In Madhav Rao Scindia v. Union of India [(1971) 1 SCC 85] (SCC at p. 139) Hidayatullah, C.J.observed that the non obstante clause is no doubt very potent clause intended to exclude everyconsideration arising from other provisions of the same statute or other statute but ‘for that reason alonewe must determine the scope’ of that provision strictly. When the section containing the said clause doesnot refer to any particular provisions which it intends to override but refers to the provisions of thestatute generally, it is not permissible to hold that it excludes the whole Act and stands all alone by itself.‘A search has, therefore, to be made with view to determining which provision answers the descriptionand which does not.’ ”

words, the remaining parts of the other statutes are left untouched by thenon-obstante clause.

78.In the present case, the ambit of the non-obstante clause in Section3(1) of Relaxation Act, 2020 is expressly confined to and supersedes thetime limits only for the completion or compliance of actions which are laiddown in the specified Acts and Relaxation Act, 2020 only provides thatthese time limits shall stand extended as provided. The intent and purposebehind enactment of Section 3 of Relaxation Act, 2020 is relaxation ofstatutory timelines in various provisions of the specified Acts and thus, as anatural corollary the relaxation provided in Section 3 of Relaxation Act,2020 inherently conflicts with various timelines provided in the specifiedActs. To get over this inherent conflict between Section 3 of Relaxation Act,2020 and various timelines provided in provisions prescribed in thespecified Acts, the legislature has carefully incorporated the non-obstanteclause in the said Section. Consequently, this non-obstante provision onlyoperates to prevail over the time lines laid down in the specified Act. Apartfrom these timelines, no other provision of any specified Act is suspended oroverridden. This non-obstante clause cannot, therefore, possibly be reliedupon by the Revenue to contend that Notification issued under Section 3 ofRelaxation Act, 2020 overrides any provision of the Income-tax Act, 1961other than the applicable time-lines. Any Notification issued underRelaxation Act, 2020 cannot possibly have reach and ambit wider than theRelaxation Act, 2020 itself for that would be contrary to the settled canonsof construction of statutes.

79.It is also necessary to appreciate that the Relaxation Act, 2020 wasenacted long before the Finance Act, 2021. Consequently, it cannot possibly

be contended that any provision of Relaxation Act, much less of anyNotification issued thereunder, can be so construed as amending ormodifying or excluding the applicability of the yet to be enacted FinanceAct, 2021. Further, as the Petitioners are not questioning any of the timeextensions made by or under Relaxation Act, 2020, the said non-obstanteclause is totally irrelevant to controversy at hand.

THE REVENUE’S CHOOSING AND PICKING OF TWO TERMS VIZ.“SUCH ACTION” & “EXTENSION/EXTENDED” IS CONTRARY TOBASICPRINCIPLESOFINTERPRETATIONSWHICHPROHIBITSSELECTIVELYCHOOSING/IGNORINGWORDSFROMTHESTATUTORYLANGUAGEASWELLASTHEFACTTHATTHERELAXATION ACT, 2020 WAS ENACTED LONG BEFORE FINANCEACT, 2021.

80.To substantiate its stand that the impugned notices are not barred bylimitation,theRevenuewithoutevenconsideringthepre-conditionprescribed by Section 3 of Relaxation Act, 2020 has selectively chosen andpicked up two terms viz. “such action” & “stand extended” to put forwardan interpretation which could not have been contemplated by the Legislatureat the time of enactment of the said provision, namely, that notices underSection 148 will relate back and be governed by old law. In the opinion ofthis Court, the submission of the Revenue is completely flawed, as the sameis contrary to basic principles of interpretations, which prohibits selectivelychoosing/ignoring words from the statutory language.

81.It is settled law that when the words of statute are clear andunambiguous, it is not permissible for the Court to read words into the

statute[15]. In fact, the principle of interpretation of taxing statutes was bestenunciated by Rowlatt J. in his classic statement in Cape Brandy Syndicatev I.R.C. (1 KB 64, 71), “In taxing statute one has to look merely at what isclearly said. There is no room for any intendment. There is no equity abouta tax. There is no presumption as to tax. Nothing is to be read in, nothingis to be implied. One can look fairly at the language used.”

82.The Judiciary cannot transgress into the domain of policy making byre-writing statute, however strong the temptations maybe[16]. The SupremeCourt in A.V Fernandez vs. State of Kerala (AIR 1957 SC 657) has held,

“In construing fiscal statutes and in determining the liability of subject totax one must have regard to the strict letter of law. If the revenue satisfiesthe court that the case falls strictly within the provisions of the law, thesubject can be taxed. If, on the other hand, the case is not covered within thefour corners of the provisions of the taxing statute, no tax can be imposed byinference or by analogy or by trying to probe into the intentions of thelegislature and by considering what was the substance of the matter”.83.Further, the Relaxation Act, 2020 received the President’s assent on29[th]September, 2020, whereas the Finance Act, 2021 received the assent on31[st]March, 2021. Consequently, it cannot be contended that any provisionof the Relaxation Act, 2020, much less of any Notification issued

15 Constitution Bench of the Supreme Court in Padma Sundara Rao and Others v State of TamilNadu and Others (2002) 3 SCC 533 has observed: “12…..the court cannot read anything into statutoryprovision which is plain and unambiguous. statute is an edict of the legislature. The languageemployed in the statute is determinative factor of legislative intent. The first and primary rule ofconstruction is that the intention of the legislation must be found in the words used by the legislatureitself. The question is not what may be supposed and has been intended but what has beensaid…....14.While interpreting provision the court only interprets the law and cannot legislate it. If aprovision of law is misused and subjected to the abuse of process of law, it is for the legislature toamend, modify or repeal it, if deemed necessary…..”16 Saregama India Ltd. vs. Next Radio Limited & Ors., 2021 SCC OnLine SC 817

thereunder, should be so construed as amending or modifying or excludingthe applicability of the yet to be enacted Finance Act, 2021.

THE CONSEQUENCE OF NOT MENTIONING SUBSTITUTED SECTION147OFTHEINCOMETAXACT,1961INTHEIMPUGNEDEXPLANATIONS.

84.Even if it is assumed that the impugned Explanations in the twoNotifications are valid, still the impugned notices are bad in law, as theimpugned Explanations only seek to effectuate the erstwhile Sections 148,149 and 151 and they do not cover Section 147. However, the conditionsprovided for in the substituted Section 147 were not considered whileissuing notices by the Assessing Officer. In fact, the said Section 147 isitself subject to Sections 148 to 153, which would include Section 148A.

THE “LEGAL FICTION” ARGUMENT IS WITHOUT ANY FOUNDATION.THERE IS NO PROVISION IN RELAXATION ACT STATING THAT IFTHE “ACTION” IS TAKEN WITHIN THE EXTENDED TIME LIMIT, ITWOULD BE DEEMED TO HAVE BEEN TAKEN BEFORE THE EXPIRYOF THE ORIGINAL (UN-EXTENDED) TIME LIMIT.

85.The “legal fiction” argument is without any foundation. statute canbe said to enact legal fiction when it assumes the existence of somethingwhich is known not to exist. The extension of time for completing anassessment or issuing Section 148 notice has no element of legal fiction init. The only effect and consequence of this extension of the time limit is thatif the act in question is performed within the extended time limit, it will beconsidered to be legally compliant. However, there is no assumption that theact in question is deemed to have been performed within the original timelimit, as wrongly contended by the learned counsel for the Respondents. Forachieving that result, clear and unequivocal language was required in the

Relaxation Act, 2020 – which is missing. In fact, there is no provision inRelaxation Act, 2020 laying down that if the “action” is taken within theextended time limit, it would be deemed to have been taken before theexpiry of the original (un-extended) time limit.

THE ESSENTIAL CONDITION FOR PROVISION TO BE TERMED ASSTOP THE CLOCK PROVISION IS ABSENT INASMUCH AS THE TIMEDURING WHICH SUCH CLOCK IS STOPPED HAS NOTBEENSTIPULATED TO BE EXCLUDED.

86.Section 3 of the Relaxation Act, 2020 is not ‘stop the clock’provision, as it only relaxes the time limit, so as to facilitate the cases inwhich the Revenue/assessee has not been able to take the specified actionwithin the statutory timelines. The essential condition for provision to betermed as stop the clock provision is that the time during which such clockis stopped, such period has to be excluded. In the present instance, time limitis extended, not excluded or stopped.

IT CANNOT BE THAT FICTION IS CREATED OR CLOCK STOPPEDONLY FOR REASSESSMENT AND NOT FOR ASSESSMENT AND/ORFACELESS PENALTY SCHEME.

87.Further, if the interpretation being placed by the Respondent thatSection 3(1)(a) creates fiction and the clock gets stopped because ofSection 3(1) of Relaxation Act, 2020 is correct, then all the actions andprocedures should have been under that law and procedure which were onthe day when the fiction was created or the clock stopped.

88.It may be relevant to point out that Section 144B was inserted in theIncome Tax Act, 1961 by Relaxation Act, 2020 w.e.f. 1[st]April, 2021 formaking faceless assessment. By virtue of Section 144B, the entire procedurefor assessment under Sections 143(3) and 144 has changed. The time period

forbothassessmentaswellasreassessmentwasextendedunderNotifications issued under Relaxation Act, 2020 itself. If the Respondent’sstand is to be accepted that all such assessments had to be made under theunamended law, then assessments orders should not have been passed underthe amended Section 144B of the Act. However, all the assessments after31[st]March, 2021 have been made following the new procedure prescribedfor the assessment after the amendment. In fact, it is pertinent to mentionthat CBDT itself vide its order No. 187/3/2020-ITA-1 dated 31[st]March,2021 has directed that all pending assessments as on 31[st]March, 2021 are tobe completed under Section 144 i.e. the new procedure applicable w.e.f.01[st]April, 2021.

89.Similar to assessment and reassessment, the time limit for levyingpenalty was also extended under Relaxation Act itself even up to 31[st]March,2022. If the clock has stopped or fiction has been created as is beingcontended by the Respondents, then all the penalty orders passed underSection 274(2A) – Faceless Penalty Scheme till 31[st]March, 2022, followingthe new procedure will be bad in law. Consequently, it cannot be said that afiction is created or clock stopped only for reassessment and not forassessment and/or Faceless Penalty Scheme.

90.In fact, wherever the Legislature intended that the old procedure is to befollowed in respect of any assessment year as against the new procedure postthe amendment, then it has specifically provided so. For instance, the DirectLaws (Amendment) Act, 1987 had introduced new scheme for best judgmentassessment (ex parte) under Section 144 w.e.f. 1[st]April 1989. However, inorder to ensure that the assessments for years before coming into force of thenew law is done under the old law, specific sub-Section (2) was inserted in

Section 144 to provide that the provisions of this Section as they stoodimmediately before their amendment by the Direct Tax Laws (Amendment)Act, 1987, shall apply to and in relation to any assessment for the assessmentyear commencing on the 1[st]day of April, 1988, or any earlier assessment year.

THE PRINCIPLE THAT SPECIAL ACT OVERRIDES GENERAL ACTHAS NO APPLICATION TO THE PRESENT CASE BECAUSE RELAXATIONACT AND THE FINANCE ACT OPERATE IN DISTINCT AND SEPARATESPHERES.

91.It is equally well-settled law that special Act overrides generalAct. But this principle has no application whatsoever in the present casebecause Relaxation Act, 2021 and the Finance Act, 2021 operate in theirdistinct and separate spheres. Consequently, the question whether oneprevails over and supersedes the other does not arise at all.

THE ARGUMENT OF THE RESPONDENTS THAT RELAXATION ACTPROMOTES THE EQUALITY PRINCIPLES UNDER ARTICLE 14 OF THECONSTITUTION IS UNTENABLE IN LAW.

92.The argument of the Respondents that Relaxation Act, 2020,promotes the equality principles under Article 14 of the Constitution andthat if Petitioner’s arguments are accepted, it would lead to unreasonableclassification with those assessees who could not be issued notices earlier isuntenable in law. If this is taken to the logical end, then any amendment inthe procedural law will create inequality since procedural law will beapplicable for all pending assessments as on that date. In UOI vs. VKCFootsteps India Pvt. Ltd.: CA No.4810/2021, the Supreme Court has held,“‘Perfect uniformity and perfect equality of taxation’ in all aspects in which"the human mind can view it, is baseless dream”.

THE SUBMISSION OF THE REVENUE THAT SECTION 6 OF THEGENERAL CLAUSES ACT SAVES NOTICES ISSUED UNDER SECTION148 POST 1[ST]APRIL, 2021 IS UNTENABLE IN LAW, AS IN THEPRESENTCASE,THEREPEALISFOLLOWEDBYAFRESHLEGISLATIONONTHESAMESUBJECTANDTHENEWACTMANIFESTS AN INTENTION TO DESTROY THE OLD PROCEDURE.

93.The provisions of the Finance Act, 2021 have not only repealed theerstwhile provisions of Sections 147, 148, 149 and 151 of the Income TaxAct, 1961 but also “substituted” them by new provisions. The process of‘substitution’ consists of two steps: first, the rule is made to cease and thenext, the new rule is brought into existence in its place.

94.‘Substitution’ has to be distinguished from ‘suppression’ or mererepeal of an existing provision. Substitution of provision results in repealof the earlier provision and its replacement by the new provision.[17]

95.Consequently, the submission of the revenue that Section 6 of theGeneral Clauses Act saves notices issued under Section 148 of the IncomeTax Act, 1961 is untenable in law, as in the present case, the repeal isfollowed by fresh legislation on the same subject and the new Actmanifests an intention to destroy the old procedure.[18]

APPRECIATION

96.Before parting with this case, this Court places on record its deepappreciation for the assistance rendered by all the learned counsel, whoappeared in the present batch of matters, in particular, Ms.Kavita Jha,Mr.Ved Jain, Mr.Sunil Agarwal and Mr.Zoheb Hossain, as they filed not

17 Zile Singh vs. State of Haryana, (2004) 8 SCC 1. Zile Singh vs. State of Haryana, (2004) 8 SCC 1.

18 State of Punjab vs. Mohar Singh: AIR 1955 SC 84; Jayantilal Amrathlal vs UOI: (1972) 4 SCC 174;Brihan Maharashtra Sugar Syndicate Limited vs. Janardan Ramachandran Kulkarni: AIR 1960 SC794.Brihan Maharashtra Sugar Syndicate Limited vs. Janardan Ramachandran Kulkarni: AIR 1960 SC794.

only compilation of documents and judgments but they also ensured that thevirtual hearing was conducted in an organized and proper manner.CONCLUSION

97.This Court is of the view that as the Legislature has introduced thenew provisions, Sections 147 to 151 of the Income Tax Act, 1961 by way ofthe Finance Act, 2021 with effect from 1[st]April, 2021 and as the saidSection 147 is not even mentioned in the impugned Explanations, thereassessment notices relating to any Assessment Year issued under Section148 after 31[st]March, 2021 had to comply with the substituted Sections.98.It is clarified that the power of reassessment that existed prior to 31[st]March, 2021 continued to exist till the extended period i.e. till 30[th]June,2021; however, the Finance Act, 2021 has merely changed the procedure tobe followed prior to issuance of notice with effect from 1[st]April, 2021.

99.This Court is of the opinion that Section 3(1) of Relaxation Actempowers the Government/Executive to extend only the time limits and itdoes not delegate the power to legislate on provisions to be followed forinitiation of reassessment proceedings. In fact, the Relaxation Act does notgive power to Government to extend the erstwhile Sections 147 to 151beyond 31[st]March, 2021 and/or defer the operation of substituted provisionsenactedbytheFinanceAct,2021.Consequently,theimpugnedExplanations in the Notifications dated 31[st]March, 2021 and 27[th]April,2021 are not conditional legislation and are beyond the power delegated tothe Government as well as ultra vires the parent statute i.e. the RelaxationAct. Accordingly, this Court is respectfully not in agreement with the viewof the Chhattisgarh High Court in Palak Khatuja (supra), but with the views

of the Allahabad High Court and Rajasthan High Court in Ashok KumarAgarwal (supra) and Bpip Infra Private Limited (supra) respectively.

100.The submission of the Revenue that Section 6 of the General ClausesAct saves notices issued under Section 148 post 31[st]March, 2021 isuntenable in law, as in the present case, the repeal is followed by freshlegislation on the same subject and the new Act manifests an intention todestroy the old procedure. Consequently, if the Legislature has permittedreassessment to be made in particular manner, it can only be in thismanner, or not at all.

101.The argument of the respondents that the substitution made by theFinance Act, 2021 is not applicable to past Assessment Years, as it issubstantial in nature is contradicted by Respondents’ own Circular 549 of1989 and its own submission that from 1[st]July, 2021, the substitution madeby the Finance Act, 2021 will be applicable.

102.Revenue cannot rely on Covid-19 for contending that the newprovisions Sections 147 to 151 of the Income Tax Act, 1961 should notoperate during the period 1[st]April, 2021 to 30[th]June, 2021 as Parliamentwas fully aware of Covid-19 Pandemic when it passed the Finance Act,2021. Also, the arguments of the respondents qua non-obstante clause inSection 3(1) of the Relaxation Act, ‘legal fiction’ and ‘stop the clockprovision’ are contrary to facts and untenable in law.

103.Consequently,thisCourtisoftheviewthattheExecutive/Respondents/Revenue cannot use the administrative power toissue Notifications under Section 3(1) of the Relaxation Act, 2020 toundermine the expression of Parliamentary supremacy in the form of an Actof Parliament, namely, the Finance Act, 2021. This Court is also

W.P.(C) 6176/2021 & connected matters

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of the opinion that the Executive/Respondents/Revenue cannot frustrate thepurpose of substituted statutory provisions, like Sections 147 to 151 ofIncome Tax Act, 1961 in the present instance, by emptying it of content orimpeding or postponing their effectual operation.

RELIEF:

104.Keeping in view the aforesaid conclusions, Explanations A(a)(ii)/A(b)to the Notifications dated 31[st]March, 2021 and 27[th]April, 2021 are declaredto be ultra vires the Relaxation Act, 2020 and are therefore bad in law andnull and void.

105.Consequently, the impugned reassessment notices issued underSection 148 of the Income Tax Act, 1961 are quashed and the present writpetitions are allowed. If the law permits the respondents/revenue to takefurther steps in the matter, they shall be at liberty to do so. Needless to statethat if and when such steps are taken and if the petitioners have grievance,they shall be at liberty to take their remedies in accordance with law.

MANMOHAN, J

DECEMBER 15, 2021rn/KA/js/TS/AS

NAVIN CHAWLA, J

W.P.(C) 6176/2021 & connected matters