All reassessment notices issued under the old provision are quashed by the Delhi High Court

Case Details: Mon Mohan Kohli v. ACIT - [2021] 133 taxmann.com 166 (Delhi)

Judiciary and Counsel Details

• • Manmohan and Navin Chawla, JJ.

Facts of the Case

A total of 1346 writ petitions are filed before the Delhi High Court on the question that whether Government can make or change the law of the land by way of Explanations to Notifications without specific Authority from the Legislature to do so.

Assessees sought quashing of the re-assessment Notices issued under section 148 post 31-03-2021. Assessees also seek a declaration declaring Explanations A(a)(ii)/A(b) to the Notification No. 20 dated 31-03-2021 and Notification No. 38 dated 27-04-2021 as ultra vires.

The Legislature has introduced the new provisions, Sections 147 to 151 by way of the Finance Act, 2021 with effect from 01-04-2021 and as the said Section 147 is not even mentioned in the impugned Explanations.

The Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 (TLA 2020) empowers the Government to extend only the time limits. It does not delegate the power to legislate on provisions to be followed for initiation of reassessment proceedings. The TLA 2020 does not give power to Government to extend the erstwhile Sections 147 to 151 beyond 31-03-2021 or defer the operation of substituted provisions enacted by the Finance Act, 2021.

Consequently, the impugned Explanations in the Notifications dated 31-03-2021 & 27-04-2021 are not conditional legislation and are beyond the power delegated to the Government as well as ultra vires the TLA 2020.

High Court Held

Revenue cannot rely on Covid-19 for contending that the new provisions Sections 147 to 151 should not operate during theperiod 01-04-2020 to 30-06-2021 as Parliament was fully aware of Covid-19 Pandemic when it passed the Finance Act, 2021.
Thus, Explanations A(a)(ii)/A(b) to the Notifications dated 31-03-2021 & 27-04-2021 are declared to be ultra vires the TLA 2020 and are therefore bad in law, null & void. All reassessment notices issued under old provisions of Section 148 are quashed.