Reassessment notices after 31 March 2021 had to follow the amended procedure; delegated notifications could not extend the old regime.

Reassessment notices issued after 31 March 2021 had to comply with the substituted procedure under Sections 147 to 151 of the Income-tax Act, 1961, because the Finance Act, 2021 brought the amended scheme into force from 1 April 2021; notices issued under the old procedure were therefore invalid. The explanations inserted through notifications under Section 3(1) of the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 were also ultra vires, as that provision authorised only extension of time limits and did not permit alteration of the reassessment procedure or deferment of the amended regime. The reassessment notices were quashed, with liberty to proceed in accordance with law if permissible.

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Issues: (i) Whether reassessment notices issued after 31 March 2021 were required to comply with the substituted procedure under Sections 147 to 151 of the Income-tax Act, 1961. (ii) Whether the explanations inserted in the notifications issued under Section 3(1) of the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 were valid.

Issue (i): Whether reassessment notices issued after 31 March 2021 were required to comply with the substituted procedure under Sections 147 to 151 of the Income-tax Act, 1961.

Analysis: The substituted reassessment scheme introduced by the Finance Act, 2021 operated from 1 April 2021. Notices issued after 31 March 2021 could not be sustained under the erstwhile procedure, because the legislative change altered the manner in which reassessment proceedings had to be initiated. The continued existence of the power to reassess during the relaxation period did not preserve the old procedure after the new provisions came into force.

Conclusion: Yes. Notices issued after 31 March 2021 had to comply with the substituted provisions, and notices issued without following that procedure were invalid.

Issue (ii): Whether the explanations inserted in the notifications issued under Section 3(1) of the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 were valid.

Analysis: Section 3(1) empowered the Executive only to extend time limits. It did not authorise alteration of the statutory procedure for initiation of reassessment proceedings or deferment of the operation of the substituted provisions. The notifications could not override the Finance Act, 2021 or postpone the effect of the amended reassessment regime, and therefore travelled beyond the delegated power.

Conclusion: No. The impugned explanations were ultra vires the parent statute and were void.

Final Conclusion: The reassessment notices were quashed and the writ petitions succeeded, with liberty reserved to the Revenue to proceed in accordance with law if permissible.

Ratio Decidendi: Where Parliament substitutes the reassessment provisions with effect from a specified date, notices issued thereafter must strictly follow the substituted statutory procedure, and delegated notifications cannot extend or modify that procedure beyond the authority conferred by the enabling Act.

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