2022 (3) TMI 484 - HC - Income Tax

Court invalidates notices under Income Tax Act, allows fresh re-assessment.

Really Dealcomm Private Limited Versus Union of India & Ors.

The court declared Explanations A(a)(ii)/A(b) to the notifications as ultra vires the Relaxation Act, 2020, and invalidated all impugned notices under ... Validity of the re-assessment proceedings initiated against the individual petitioners - enforcement of the Enabling Act and the Finance Act, 2021 - scope of provisions of Section 148 read with Section 148A as substituted by Finance Act, 2021 - substituting the provisions of the Act by means of the Finance Act, 2021 with effect from 01.04.2021, the old provisions were omitted from the statute book and replaced by fresh provisions with effect from 01.04.2021 - time limitation existing under the Act had been extended under the Ordinance - relaxation of limitation granted on account of general hardship existing upon the spread of pandemic COVID -19 - extension which was given one final push by the impugned Notification dated 27.04.2021 as it became necessary on account of the spread of the second wave of the pandemic COVID-19 - HELD THAT:- In view of the judgements and orders of this court in the case of Manoj Jain-vs-Union of India & Ors. [2022 (1) TMI 741 - CALCUTTA HIGH COURT] and in the case of Bagaria Properties and Investment Private Limited & Anr. [2022 (1) TMI 742 - CALCUTTA HIGH COURT], all these writ petitions herein are disposed of by allowing the same. Explanations A(a)(ii)/A(b) to the notifications dated March 31, 2021 and April 27, 2021 are declared to be ultra vires the Relaxation Act, 2020 and are, therefore, bad in law and null void. All the impugned notices under section 148 of the Income Tax, 1961 are quashed with liberty to the assessing officers concerned to initiate fresh re-assessment proceedings in accordance with the relevant provisions of the Act as amended by the Finance Act, 2021 and after making compliance of the formalities as required by the law. Issues:The issues involved in this case include the legality of impugned notices issued under section 148 of the Income Tax Act, 1961, the observance of statutory formalities under section 148A of the 1961 Act, the applicability of notifications extending the provisions of section 148, section 149, and section 151 of the Act beyond March 31, 2021, and the validity of Explanations A(a)(ii)/A(b) to the notifications in question.Analysis:The judgment addresses the common legal issues raised in multiple writ petitions concerning the issuance of impugned notices under section 148 of the Income Tax Act, 1961. The petitioners contended that the notices were time-barred and lacked compliance with statutory formalities under section 148A of the Act. Additionally, the petitioners challenged the validity of notifications extending the applicability of certain provisions beyond March 31, 2021, as ultra vires the parent legislation, the Relaxation Act, 2020.The court noted that the issues in the present writ petitions were similar to those addressed in previous judgments by different High Courts, including the Allahabad High Court, Rajasthan High Court, and Delhi High Court, which ruled in favor of the assessees/petitioners. Citing its own previous orders, the court disposed of the writ petitions in question based on the principles established in those cases.The court declared Explanations A(a)(ii)/A(b) to the notifications dated March 31, 2021, and April 27, 2021, as ultra vires the Relaxation Act, 2020, and therefore invalid. Consequently, all impugned notices under section 148 of the Income Tax Act, 1961, were quashed. The assessing officers were granted liberty to initiate fresh re-assessment proceedings in accordance with the amended provisions of the Act introduced by the Finance Act, 2021, ensuring compliance with the necessary formalities as required by law.In conclusion, the judgment reaffirmed the legal position established in previous decisions and provided relief to the petitioners by declaring the impugned notices as invalid and allowing for fresh re-assessment proceedings in compliance with the amended provisions of the Income Tax Act, 1961.