The Delhi High Court while allowing as many as 1346 writ petitions, quashed old law Reassessment notices issued after April 1st, 2021.
Facts of the case:-
Various issues arise for consideration in the present batch of 1346 writ petitions, yet in essence, the questions of law that arise for consideration are whether the Government/Executive can make or change law of the land by way of Explanations to Notifications without specific authority from the Legislature to do so and whether the Government/Executive can impede the implementation of law made by the Legislature.
The petitioners-assessees have sought to quash of the re-assessment Notices issued post 31st March 2021 by the Respondents-Revenue under Section 148 of the Income Tax Act, 1961. The petitioners-assessees also seek a declaration declaring Explanations A(a)(ii)/A(b) to the Notification No.20 [S.O.1432(E)] dated 31st March 2021 and Notification No.38 [S.O.1703(E)] dated 27th April 2021 to the extent that the same extent the applicability of the “provisions of Section 148, Section 149 and Section 151 of the Act, as the case may be, as they stood as on the 31st day of March 2021, before the commencement of the Finance Act, 2021” to the period beyond 31st March 2021 as ultra vires the parent legislation, viz., The Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020.
The division bench of Justice Manmohan and Justice Navin Chawla held that revenue cannot rely on Covid-19 for contending that the new provisions Sections 147 to 151 of the Income Tax Act, 1961 should not operate during the period 1st April 2021 to 30th June 2021 as Parliament was fully aware of Covid-19 Pandemic when it passed the Finance Act, 2021. Also, the arguments of the respondents qua non-obstante clause in Section 3(1) of the Relaxation Act, ‘legal fiction’ and ‘stop the clock provision’ are contrary to facts and untenable in law.
“This Court is of the view that the 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,” the order read.