Facts of the Case

  • Multiple writ petitions were filed challenging reassessment notices issued after 1 April 2021 under the old provisions of Section 148.
  • The Finance Act, 2021 introduced a new reassessment regime, including Section 148A mandating prior inquiry and opportunity of hearing.
  • Despite this, the Revenue issued notices under the old law, claiming benefit of extended limitation under TOLA.
  • Petitioners contended that such notices were invalid as they ignored the amended statutory framework.

Issues Involved

  1. Whether reassessment notices issued after 01.04.2021 under the old provisions of Section 148 are legally valid.
  2. Whether the benefit of extension under TOLA permits application of old reassessment provisions beyond 31.03.2021.
  3. Whether the amended provisions (Sections 147–151 as substituted) are mandatory and applicable to all notices issued after 01.04.2021.

Petitioner’s Arguments

  • Notices issued under old Section 148 are invalid and without jurisdiction post 01.04.2021.
  • The amended provisions introduced by Finance Act, 2021 are mandatory in nature, particularly Section 148A.
  • TOLA only extends time limits and does not revive or extend the applicability of repealed provisions.
  • Issuance of notices without following the new procedure violates principles of natural justice.

Respondent’s Arguments

  • The Revenue relied on TOLA, arguing that time limits for issuing notices were extended till 30.06.2021.
  • It was contended that the old provisions could still be invoked during the extended period.
  • The amendment was procedural and should not affect notices already permissible under earlier law.

Court Order / Findings

  • The Court observed that Finance Act, 2021 brought a complete substitution of reassessment provisions.
  • It held that any notice issued after 01.04.2021 must comply with the new regime, including Section 148A.
  • TOLA only extends limitation and cannot override or defer the operation of substituted statutory provisions.
  • The Court found prima facie that continuing to issue notices under the old law defeats legislative intent.
  • Interim protection was granted, and reassessment proceedings pursuant to impugned notices were stayed.

Important Clarification

  • Delegated legislation (notifications under TOLA) cannot override statutory amendments made by Parliament.
  • The substitution of provisions signifies a complete replacement, not mere amendment.
  • Section 6 of the General Clauses Act does not save actions under repealed provisions when a new regime replaces the old one entirely.

Link to download the order -https://delhihighcourt.nic.in/app/case_number_pdf/2021:DHC:4492-DB/MMH06082021CW75092021_155145.pdf

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