TMI Blog2022 (1) TMI 741X X X X Extracts X X X X X X X X Extracts X X X X ..... il, 2021 before issuance of notices under Section 148 of the Act on or after 1st April, 2021 - HELD THAT:- As decided in Ashok Kumar Agarwal vs- Union of India [ 2021 (10) TMI 697 - ALLAHABAD HIGH COURT ] , Bpip Infra Private Limited vs- Income Tax Officer, Ward 4 (1), Jaipur [ 2021 (12) TMI 207 - RAJASTHAN HIGH COURT ] and Man Mohan Kohli vs- Assistant Commissioner of Income Tax Anr. [ 2021 (12) TMI 664 - DELHI HIGH COURT ] 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. Keeping in view the aforesaid conclusions, Explanations A(a)(ii)/A(b) to the Notifications dated 31st March, 2021 and 27th April, 2021 are declared to be ultra vires the Relax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... umar Mishra, Mr. A. K. Dey, Mr. Rajul Auddy, Mr. Ved Jain, Mr. D. B. Thakur, Mr. Himangshu Kr. Ray, Mr. Saumya Kejriwal, Mr. N. Mittal, Mr. Arujit Chakraborti, Mr. Nilotpal Chowdhury, Mr. Pramit bag, Ms. A. Kayan, Mr. Zubeen Panday, Mr. Prashant Agarwal, Mr. A. K. Upadhyay, Ms. S. Upadhyay, Mr. Ananda Sen, Mr. R. N. Dutt, Ms. Sutapa Roy Choudhury, Mr. Abhijat Das, Ms. Aratrika Roy, Mr. Anuj Kumar Mishra, Mr. Balaram Patra, Mr. Pratyush Jhunjhunwala, Mr. Samit Rudra, Mr. Piyal Gupta, Mr. Subash Agarwal, Mr. Brijesh Kumar Singh, Mr. Somak Basu For the Respondents : Mr. Y. J. Dastoor,(Ld. Additional Solicitor General) Mr. Asok Bhowmik, Mr. Manabendranath Bandyopadhyay, Mr. Soumen Bhattacharjee, Mr. M. Jana, Mr. S. N. Dutta, Mr. Tilak Mitra, Mr. Debasish Choudhury, Mr. P. K. Bhoumick, Mr. S. Biswas, Mr. Arunava Ganguly, Mr. Smarajit Roy Chowdhury, Ms. Sucharita Biswas, Mr. Avirup Chatterjee ORDER In view of involvement of common question of law and similarity of facts in all these Writ Petitions, with the consent of the parties all these Writ Petitions have been heard together and are being decided by the present common judgment and order. Common facts and issues invol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct by means of the Finance Act, 2021 with effect from 01.04.2021, the old provisions were omitted from the statute book and replaced by fresh provisions with effect from 01.04.2021. Relying on the principle substitution omits and thus obliterates the pre-existing provision, it has been further submitted, in absence of any saving clause shown to exist either under the Ordinance or the Enabling Act or the Finance Act 2021, there exists no presumption in favour of the old provision continuing to operate for any purpose, beyond 31.03.2021. (ii) The Act is a dynamic enactment that sustains through enactment of the Finance Act every year. Therefore, on 1st April every year, it is the Act as amended by the Finance Act, for that year which is applied. In the present case, it is the Act as amended by the Finance Act 2021, that confronted the Enabling Act as was pre-existing. In absence of any legislative intent expressed either under the Finance Act, 2021 or under the Enabling Act, to preserve any part of the pre-existing Act, plainly, reference to provisions of Sections 147 and 148 of the Act and the words assessment and reassessment appearing in the Notifications issued under t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sel for the petitioners also rely on the principle the delegated legislation can never defeat the principal legislation. (vi) Last, it has also been asserted, the nonobstante clause created under section 3(1) of the Enabling Act must be read in the context and for the purpose or intent for which it is created. It cannot be given a wider meaning or application as may defeat the other laws. 64. As to the first line of reasoning applied by the learned counsel for the petitioner, as noted above, there can be no exception to the principle an Act of legislative substitution is a composite act. Thereby, the legislature chooses to put in place another or, replace an existing provision of law. It involves simultaneous omission and re-enactment. By its very nature, once a new provision has been put in place of a pre-existing provision, the earlier provision cannot survive, except for things done or already undertaken to be done or things expressly saved to be done. In absence of any express saving clause and, since no reassessment proceeding had been initiated prior to the Act of legislative substitution, the second aspect of the matter does not require any further examination. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section 3(1) of the Enabling Act, read with the Notifications issued thereunder. 68. The submission of the learned Additional Solicitor General of India that the provision of Section 3(1) of the Enabling Act gave an overriding effect to that Act and therefore saved the provisions as existed under the unamended law, also cannot be accepted. That saving could arise only if jurisdiction had been validly assumed before the date 01.04.2021. In the first place Section 3(1) of the Enabling Act does not speak of saving any provision of law. It only speaks of saving or protecting certain proceedings from being hit by the rule of limitation. That provision also does not speak of saving any proceeding from any law that may be enacted by the Parliament, in future. For both reasons, the submission advanced by learned Additional Solicitor General of India is unacceptable. 69. Even otherwise the word notwithstanding creating the non obstante clause, does not govern the entire scope of Section 3(1) of the Enabling Act. It is confined to and may be employed only with reference to the second part of Section 3(1) of the Enabling Act i.e. to protect proceedings already under way. There is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on. Unless harmonized as above, those Notifications would remain invalid. 73. Unless specifically enabled under any law and unless that burden had been discharged by the respondents, we are unable to accept the further submission advanced by the learned Additional Solicitor General of India that practicality dictates that the reassessment proceedings be protected. Practicality, if any, may lead to legislation. Once the matter reaches Court, it is the legislation and its language, and the interpretation offered to that language as may primarily be decisive to govern the outcome of the proceeding. To read practicality into enacted law is dangerous. Also, it would involve legislation by the Court, an idea and exercise we carefully tread away from. 74. Similarly, the mischief rule has limited application in the present case. Only in case of any doubt existing as to which of the two interpretations may apply or to clear a doubt as to the true interpretation of a provision, the Court may look at the mischief rule to find the correct law. However, where plain legislative action exists, as in the present case (whereunder the Parliament has substituted the old provisions regarding ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hereby clarified that the provisions of this section shall not apply to any default committed under the said sections before 25th March, 2020.] 78. Plainly, in that case, the earlier provisions were not substituted rather they continued to exist. The parliamentary intervention by introducing Section 10A of that Act only provided no proceeding be instituted for any default arising after 21.3.2020, for a period of six months or such period not exceeding one year, as may be notified. Thus, in that case, by virtue of amendment made, delegated power created, could be exercised to relax the otherwise stringent provisions of the Act, in cases, wherein difficulties arose from the spread of the pandemic COVID-19. Thus, that ratio is plainly distinguishable. 79. As to the decision of the Chhattisgarh High Court, with all respect, we are unable to persuade ourselves to that view. According to us, it would be incorrect to look at the delegation legislation i.e. Notification dated 31.03.2021 issued under the Enabling Act, to interpret the principal legislation made by Parliament, being the Finance Act, 2021. A delegated legislation can never overreach any Act of the principal legis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t as amended by Finance Act, 2021, after making all compliances, as required by law. Following the aforesaid decision of the Division Bench of the Allahabad High Court, the Rajasthan High Court taking the similar view have allowed the Writ Petitions by quashing the impugned assessment notices under Section 148 of the Act by the order dated 25th November, 2021 in the case of Bpip Infra Private Limited vs- Income Tax Officer, Ward 4 (1), Jaipur (S.B. Civil Writ Petition No. 13297/2021). Taking a similar view the Delhi High Court by its judgment and order dated 15th December, 2021 in the case of Man Mohan Kohli vs- Assistant Commissioner of Income Tax Anr. (W.P. (C) 6176 of 2021) have allowed the Writ Petitions by quashing the impugned notices under Section 148 of the Income Tax Act. Paragraph Nos. 97 - 105 of the said judgment of Delhi High Court which are relevant are quoted hereinbelow: 97. This Court is of the view that as the Legislature has introduced the new provisions, Sections 147 to 151 of the Income Tax Act, 1961 by way of the Finance Act, 2021 with effect from 1st April, 2021 and as the said Section 147 is not even mentioned in the impugned Explanations, the r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. 103. Consequently, 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. 104. Keeping in view the aforesaid conclusions, Explanations A(a)(ii)/A(b) to the Notifications dated 31st March, 2021 and 27th April, 2021 are dec ..... 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