Court invalidates reassessment notices post-01.04.2021 for non-compliance with Finance Act, 2021; CBDT explanations ruled unconstitutional.

The court deemed all reassessment notices issued after 01.04.2021 invalid for not complying with the new provisions under the Finance Act, 2021. It clarified that the new reassessment scheme applied to all notices post 01.04.2021, emphasizing adherence to the updated procedures. Additionally, the court declared explanations introduced by the CBDT as unconstitutional, holding that subordinate legislation cannot amend statutory provisions. Consequently, the court quashed the challenged reassessment notices, affirmed the new provisions' applicability, and dismissed the revenue's appeals.

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Issues Involved:
1. Validity of reassessment notices issued after 01.04.2021.
2. Applicability of the new reassessment scheme under the Finance Act, 2021.
3. Jurisdiction of CBDT in issuing notifications with explanations.

Detailed Analysis:

1. Validity of Reassessment Notices Issued After 01.04.2021:
The petitioners challenged the reassessment notices issued by the assessing officer after 01.04.2021, arguing that these notices were issued under the provisions for reassessment contained in the Income Tax Act, 1961, which prevailed before 01.04.2021. They contended that the procedure laid down under Section 148-A of the Income Tax Act, inserted with effect from 01.04.2021 by the Finance Act, was not followed. The revenue did not dispute these factual averments. The court concluded that all notices issued after 01.04.2021 must comply with the new provisions under the Finance Act, 2021. In the absence of compliance with Section 148A, the notices were deemed invalid.

2. Applicability of the New Reassessment Scheme Under the Finance Act, 2021:
The court examined the provisions of reassessment under the Finance Act, 2021, noting significant changes, such as the time limits for issuing reassessment notices and the procedures for making enquiries and issuing notices. The court observed that there was no indication that the new scheme of reassessment would apply only to periods post 01.04.2021. The court emphasized that all notices issued after 01.04.2021 had to adhere to the new provisions. The court highlighted that the first proviso to Section 149(1) restricted issuing notices for past assessment years by resorting to the extended limitation period under the new Section 149(1)(b). The court concluded that the new provisions applied to all actions of issuing notices under Section 148 after 01.04.2021.

3. Jurisdiction of CBDT in Issuing Notifications with Explanations:
The court scrutinized the Relaxation Act, 2020, and the two notifications issued by the CBDT on 31.03.2021 and 27.04.2021, which included explanations clarifying that the provisions as they stood on 31.03.2021 would apply for issuing notices under Section 148. The court held that the CBDT exceeded its jurisdiction as a subordinate legislature by introducing such explanations, as the power vested in the Government of India was limited to extending time limits. The court declared these explanations unconstitutional and invalid, emphasizing that subordinate legislation cannot amend the statutory provisions of the parent Act.

Conclusion:
The court quashed all the impugned reassessment notices challenged in the petitions, as they were issued after 01.04.2021 without following the procedure under Section 148A of the Act. The court reaffirmed the applicability of the new reassessment provisions under the Finance Act, 2021, to all notices issued after 01.04.2021. The petitions were disposed of accordingly, and the revenue's appeals were dismissed.

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