Bombay HC quashes reassessment notices under old regime to over 1,000 taxpayers – Times of India

MUMBAI: Bombay high court on Tuesday ruled in favour of assessees who had challenged the reopening of their assessments under the old regime when they claimed the new one had kicked in from April 1, 2021.
The HC bench of Justices K R Sriram and N J Jamadar quashed reassessment notices issued under section 148 of Income Tax Act orders and held that an extension of three months time beyond April 1, for such reassessment under the old regime is in violation of the law. The HC by this order disposed of over 1000 separate petitions challenging the respective notices issued by the Assessing Officers under Section 148 of the Income Tax Act, 1961 for reopening assessments for various assessment years.
The Taxpayers through senior counsel D. Mistri, Percy Pardiwalla, Firoze Andhyarujina, Beni Chatterji, K. Shivaram challenged the legality and maintainability of the circular issued by the CBDT extending the contours of old law upto June 30, 2021, despite the Legislature being clear that the new law shall set in from 01.04.21.
All these notices have been issued after 01.04.2021 and the petitioners said hence the new Act would apply. They also challenged portions of two notifications issued by the Central Board of Direct Taxes clarifying that provisions of Sections 148, 149 and 151 of the Act as they stood on 31.03.2021 shall apply for the purpose of issuance of notice under Section 148 for the past period. According to the petitioners, this explanation is beyond the jurisdiction of CBDT, and the HC agreed.
“Wherever the Parliament thought fit, the Parliament has itself amended the provision of the Income Tax Act, 1961 and not left it for the CBDT to make the amendment. Therefore, it is clear that no power is given under Relaxation Act to postpone the applicability of provisions of the Income Tax Act,” said the HC.
The Centre through ASG Anil Singh, counsel Shehnaz Bharucha, and Sham Walve opposed the petitions on law, saying Section 3 of the Relaxation Act enabled the Central Government to issue notifications which would permit the Assessing Officers to issue notices under Section 148 of the Act after 1st April 2021 in terms of the erstwhile provisions of Sections 147 to section 151, even though the said provisions were repealed with effect from 1st April 2021 by the Finance Act, 2021.
The HC after analysing the law said the reassessment and extension of time under the old regime are bad in law.