The Bench of Justices KR Shriram and NJ Jamadar held that notices issued under Section 148 of the Act after April 1, 2021 must comply with the amended provisions of law and cannot be sustained on the basis of the erstwhile provision.
“It is well settled that the validity of a notice issued under Section 148 of the Act must be judged on the basis of the law existing on the date on which such notice is issued. Even the Revenue accepts this well settled position. …Therefore, any notice issued after April 1, 2021 must comply with the amended provisions of the Act which was amended with effect from April 1, 2021” the judgment held.
The Bench also reasoned that the Relaxation Act merely extended the limitation provided in the specified Acts (including IT Act) for doing certain Acts which ought to be performed in accordance with the provisions of the specified Acts. Therefore, if there is an amendment in the specified Act, the amended provision of the specified Act would apply to the action of the authorities.
With these observations, the Bench quashed and set aside the notices under challenge, but clarified that it will be open to the Assessing Officers to initiate fresh reassessment proceedings in accordance with the relevant provisions of the Act as amended by the Finance Act, 2021.