Bombay High Court also quash 148 notices issued after 01 April 2021 under old regime

On 29th March 2022, the Hon'ble Bombay High Court also qushes the reassessment proceedings initiated under the old regime after the 01/04/2021.

The court announced the decision in the favour of assessee and disposed over 1000 writ petitions by following the rulings of Delhi High Court and Allahabad High Court.

On 30th September 2021, the Hon'ble Allahabad High pronounced its decision and held that "the Ordinance, the Enabling Act and Sections 2 to 88 of the Finance Act 2021, as enforced w.e.f. 01.04.2021, are not conflicted. Insofar as the Explanation appended to Clause A(a), A(b), and the impugned Notifications dated 31.03.2021 and 27.04.2021 (respectively) are concerned, we declare that the said Explanations must be read, as applicable to reassessment proceedings as may have been in existence on 31.03.2021 i.e. before the substitution of Sections 147, 148, 148A, 149, 151 & 151A of the Act. Consequently, the reassessment notices in all the writ petitions are quashed. It is left open to the respective assessing authorities to initiate reassessment proceedings in accordance with the provisions of the Act as amended by Finance Act, 2021, after making all compliances, as required by law."

Thereafter, on 15th December 2021, the Hon'ble Delhi High Court pronounce its decision and quashes the notices issued after the 01/04/2021 under the new regime. The Court held that "Executive/Respondents/Revenue cannot use the administrative power to issue Notifications under Section 3(1) of the Relaxation Act, 2020 to undermine the expression of Parliamentary supremacy in the form of an Act of Parliament, namely, the Finance Act, 2021. This Court is also of the opinion that the Executive/Respondents/Revenue cannot frustrate the purpose of substituted statutory provisions, like Sections 147 to 151 of Income Tax Act, 1961 in the present instance, by emptying it of content or impeding or postponing their effectual operation." 

However, the High Court of Chhattisgarh in Palak Khatuja vs. Union of India and Ors., W.P.(T) No. 149 of 2021 upholding the legality and validity of similarly issued reassessment notices. In the said judgment, the Chhattisgarh High Court has held, “….legislative delegation which is exercised by the Central Government by notification to uphold the mechanism as prevailed prior to March, 2021 is not in conflict with any Act and notification by executive i.e. Ministry of Finance would be the part of legislative function.”

In this background, the Hon'ble Bombay High Court also quashes reassessment notices issued under the old reassessment regime on or after 01/04/2021 and decides the controversy in favour of the Assessees.