Court Invalidates Notices Under New Reassessment Provisions

The court held that the new reassessment provisions introduced by the Finance Act, 2021, were applicable for issuing notices for past assessment years after 01.04.2021. Notices issued without following the new procedures were deemed invalid. Additionally, the court declared the explanations in the CBDT circulars as unconstitutional and invalid, stating that subordinate legislation cannot alter statutory provisions. The court allowed the writ petition, deemed the notice invalid, and applied directions from a previous case. All pending applications were disposed of accordingly.

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Issues Involved:
1. Applicability of substituted reassessment provisions under the Finance Act, 2021 for past assessment years.
2. Legality and validity of CBDT circulars dated 31.03.2021 and 27.04.2021.

Detailed Analysis:

1. Applicability of Substituted Reassessment Provisions:
The petitioner challenged the notice issued by the Assessing Officer under Section 148 of the Income Tax Act, 1961, for reopening assessments for various years. The notice was issued after 01.04.2021 but pertained to periods before this date. The core issue was whether the new reassessment provisions introduced by the Finance Act, 2021, effective from 01.04.2021, could be used for issuing notices for past years.

The court referred to a previous judgment in "Sudesh Tanesh Vs. Income Tax Officer" where it was determined that the original provisions were repealed upon substitution and had no existence post-01.04.2021. The court emphasized that the new scheme of reassessment under the Finance Act, 2021, introduced significant changes, including revised time limits for issuing notices and new procedures under Section 148A. The court found no legislative intent indicating that the past provisions would continue to apply after substitution. Consequently, all notices issued after 01.04.2021 had to comply with the new provisions. The court concluded that notices issued without following the new procedures were invalid.

2. Legality and Validity of CBDT Circulars:
The second issue was the legality of the explanations in the CBDT circulars dated 31.03.2021 and 27.04.2021, which attempted to clarify that the old provisions of Section 148 would apply for notices issued for periods before the Finance Act, 2021.

The court reiterated the principle that subordinate legislation must conform to the statute under which it is made. It held that the CBDT exceeded its jurisdiction by issuing explanations that effectively altered the statutory provisions. The court declared these explanations unconstitutional and invalid, noting that subordinate legislation cannot amend the parent Act.

The court also reviewed similar judgments from other High Courts and found consistency in the view that the new provisions under the Finance Act, 2021, apply to all notices issued after 01.04.2021.

Conclusion:
The court agreed with the judgment in "Sudesh Tanesh Vs. Income Tax Officer" and found the impugned notice invalid and bad in law. The writ petition was allowed, and the directions from the Sudesh Tanesh case were applied to the present case. All pending applications were disposed of accordingly.

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