Invalid Income Tax Act notices under old provisions post-01.04.2021 quashed; CBDT explanations beyond jurisdiction deemed unconstitutional.

The court declared notices issued under Section 148 of the Income Tax Act after 01.04.2021, based on old provisions, as invalid for not complying with new provisions effective from that date. Additionally, explanations in CBDT notifications clarifying application of certain sections were deemed unconstitutional and beyond CBDT's jurisdiction. The court quashed the notices, emphasizing compliance with new provisions post-01.04.2021 and that CBDT explanations cannot alter statutory provisions. Appeals by revenue were dismissed, and writ petitions were allowed.

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Issues Involved:
1. Validity of notices issued under Section 148 of the Income Tax Act, 1961 after 01.04.2021.
2. Legality of explanations in CBDT notifications dated 31.03.2021 and 27.04.2021.

Detailed Analysis:

1. Validity of Notices Issued Under Section 148 After 01.04.2021:
The petitioners challenged the notices issued by the Assessing Officers under Section 148 of the Income Tax Act, 1961 for reopening assessments for various assessment years. These notices were issued after 01.04.2021, but pertained to periods before this date. The petitioners argued that since the notices were issued after 01.04.2021, they should comply with the provisions effective from 01.04.2021. The notices were issued under the old provisions which have been substituted, making them invalid. The court noted that the Finance Act, 2021 introduced new provisions for reassessment effective from 01.04.2021, which replaced the old provisions. The court emphasized that the new provisions must be followed for any action taken after 01.04.2021. The court concluded that the notices issued after 01.04.2021 under the old provisions were invalid as they did not comply with the new provisions, particularly the procedure under Section 148A.

2. Legality of Explanations in CBDT Notifications Dated 31.03.2021 and 27.04.2021:
The petitioners also challenged portions of two notifications issued by the Central Board of Direct Taxes (CBDT) clarifying that the provisions of Sections 148, 149, and 151 as they stood on 31.03.2021 would apply for issuing notices under Section 148 for the past period. The petitioners argued that this explanation was beyond the jurisdiction of CBDT. The court agreed, stating that the explanations in the notifications exceeded the jurisdiction of the CBDT as a subordinate legislation. The court held that the CBDT could not amend the statutory provisions through explanations and declared the explanations in the notifications as unconstitutional and invalid.

Judgment:
The court quashed and set aside the impugned notices, declaring them invalid and bad in law. The appeals of the revenue were dismissed, and the writ petitions were allowed. The court emphasized that any notice issued after 01.04.2021 must comply with the new provisions introduced by the Finance Act, 2021, and the explanations in the CBDT notifications could not override the statutory provisions.

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