I got a section 148 notice after 1 April 2021 under the old reassessment provisions. Could the department still use them because of the COVID relaxation notifications?
No, on this decision. The Delhi High Court held that the substitution of sections 147 to 151 by the Finance Act 2021 repealed the old provisions and replaced them, and that the Explanations in the notifications of 31 March 2021 and 27 April 2021, purporting to keep the old procedure alive until 30 June 2021, could not do so. Section 3(1) of the relaxation Act allows the Central Government to extend time limits and no more; a delegated legislation cannot vary the date on which Parliament's provisions take effect. Section 6 of the General Clauses Act does not save the old notices, because the new Act manifests an intention to destroy the old procedure.
Decided by the High Court (High Court of Delhi at New Delhi - Manmohan and Navin Chawla JJ; judgment by Manmohan J) on 2021-12-15, reported as W.P.(C) 6176/2021 and connected matters, High Court of Delhi. It bears on section 148, section 147, section 148A, section 149, section 151 of the Income Tax Act 1961, in Reassessment & Reopening matters.
This is the Delhi judgment that led the first wave of the reassessment litigation and that the Supreme Court engaged with in Ashish Agarwal. Its central proposition is a general one worth keeping: where the legislature has permitted a thing to be done in a particular manner, it can be done in that manner or not at all, so a substituted procedure cannot be bypassed by executive notification. Two subsidiary points recur in argument. First, substitution is a combination of repeal and fresh enactment, so the pre-amendment sections had no continuing life after 1 April 2021 - the Court took that from PTC India. Second, COVID is no answer, because Parliament passed the Finance Act 2021 with the pandemic before it. The Court differed from the Chhattisgarh view and agreed with the Allahabad and Rajasthan High Courts in Ashok Kumar Agarwal and Bpip Infra.
Binding within that High Court's jurisdiction. Persuasive elsewhere.
Read aloud by your device. Press again to stop.
The Finance Act 2021 received the President's assent on 28 March 2021 and, by sections 40 to 45, substituted sections 147, 148, 149 and 151 of the Income-tax Act and inserted section 148A with effect from 1 April 2021. The new scheme requires the Assessing Officer to have information suggesting escapement, to conduct an enquiry if required, to give the assessee a show cause notice and an opportunity of being heard, and to pass an order under section 148A(d) with the approval of the specified authority before issuing a notice under section 148; it reduces the ordinary limitation to three years, with ten years only where the officer has books, documents or evidence revealing escaped income represented in the form of an asset of Rs 50 lakh or more. Notwithstanding those provisions coming into force on 1 April 2021, the department issued reassessment notices to the petitioners under the erstwhile sections 148 to 151, relying on Explanations in notifications dated 31 March 2021 and 27 April 2021 issued under section 3(1) of the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020, which stated that the pre-amendment provisions would govern notices issued up to 30 June 2021. Around thirteen hundred writ petitions were filed challenging those Explanations and the notices issued under them. The Court had granted interim stays, taking the prima facie view that a delegated legislation cannot vary the date on which a statutory provision takes effect and that section 6 of the General Clauses Act gave the Revenue no assistance because section 148A shows an intent to destroy the old procedure.
The portions of the judgment available to me record these conclusions. The Revenue's submission that section 6 of the General Clauses Act saves notices issued under section 148 after 31 March 2021 is untenable in law: the repeal is followed by fresh legislation on the same subject and the new Act manifests an intention to destroy the old procedure, so if the legislature has permitted reassessment to be made in a particular manner it can only be in that manner or not at all. The argument that the substitution made by the Finance Act 2021 does not apply to past assessment years because it is substantive is contradicted by the Revenue's own Circular 549 of 1989 and by its own submission that the substitution applies from 1 July 2021. The Revenue cannot rely on COVID-19 to contend that the new sections 147 to 151 should not operate between 1 April and 30 June 2021, Parliament having been fully aware of the pandemic when it passed the Finance Act 2021, and its arguments on the non obstante clause in section 3(1) of the relaxation Act, on legal fiction and on a stop the clock provision are contrary to facts and untenable. The executive cannot use the administrative power to issue notifications under section 3(1) to undermine the expression of parliamentary supremacy in an Act of Parliament, nor frustrate the purpose of substituted provisions by emptying them of content or postponing their effectual operation. The Court agreed with the Allahabad and Rajasthan High Courts in Ashok Kumar Agarwal and Bpip Infra.
On the material before me the reasoning runs as follows. Substitution of a provision results in repeal of the earlier provision and its replacement by the new one - it is a combination of repeal and fresh enactment - so after 1 April 2021 the pre-amendment sections 147 to 151 no longer existed to be acted upon; the Court took that principle from the Supreme Court in PTC India Limited v Central Electricity Regulatory Commission. Section 3(1) of the relaxation Act authorises the Central Government to extend time limits and nothing more, and the Explanations in the notifications went beyond that by prescribing which procedure should be followed, which is to amend the statute by delegated legislation. Section 6 of the General Clauses Act preserves rights and proceedings under a repealed enactment only where a contrary intention does not appear; here the repeal was followed by fresh legislation on the same subject which manifests an intention to destroy the old procedure, section 148A being the clearest indication. The pandemic could not supply the justification, because the Finance Act 2021 was itself passed with the pandemic in view. And the new section 149 fixes three years as the ordinary limit, with the longer period conditioned on evidence of escaped income of Rs 50 lakh or more represented in the form of an asset, so allowing the old provisions to run to 30 June 2021 would empty the new scheme of content.
if the Legislature has permitted reassessment to be made in a particular manner, it can only be in this manner, or not at all
Upload it and we will read it, work out your deadline and draft the reply. A CA reviews before anything is filed.
Handle my notice → Ask a CA on WhatsAppNo, on this decision. The Delhi High Court held that the substitution of sections 147 to 151 by the Finance Act 2021 repealed the old provisions and replaced them, and that the Explanations in the notifications of 31 March 2021 and 27 April 2021, purporting to keep the old procedure alive until 30 June 2021, could not do so. Section 3(1) of the relaxation Act allows the Central Government to extend time limits and no more; a delegated legislation cannot vary the date on which Parliament's provisions take effect. Section 6 of the General Clauses Act does not save the old notices, because the new Act manifests an intention to destroy the old procedure. This was decided by the High Court (High Court of Delhi at New Delhi - Manmohan and Navin Chawla JJ; judgment by Manmohan J) and bears on section 148, section 147, section 148A, section 149, section 151 of the Income Tax Act 1961. It is reported as W.P.(C) 6176/2021 and connected matters, High Court of Delhi. This is the Delhi judgment that led the first wave of the reassessment litigation and that the Supreme Court engaged with in Ashish Agarwal. Its central proposition is a general one worth keeping: where the legislature has permitted a thing to be done in a particular manner, it can be done in that manner or not at all, so a substituted procedure cannot be bypassed by executive notification. Two subsidiary points recur in argument. First, substitution is a combination of repeal and fresh enactment, so the pre-amendment sections had no continuing life after 1 April 2021 - the Court took that from PTC India. Second, COVID is no answer, because Parliament passed the Finance Act 2021 with the pandemic before it. The Court differed from the Chhattisgarh view and agreed with the Allahabad and Rajasthan High Courts in Ashok Kumar Agarwal and Bpip Infra. If it applies to you, the first step is this: Date the notice against 1 April 2021 and identify which set of provisions it was issued under; that is the whole enquiry on this ground.
The Finance Act 2021 received the President's assent on 28 March 2021 and, by sections 40 to 45, substituted sections 147, 148, 149 and 151 of the Income-tax Act and inserted section 148A with effect from 1 April 2021. The new scheme requires the Assessing Officer to have information suggesting escapement, to conduct an enquiry if required, to give the assessee a show cause notice and an opportunity of being heard, and to pass an order under section 148A(d) with the approval of the specified authority before issuing a notice under section 148; it reduces the ordinary limitation to three years, with ten years only where the officer has books, documents or evidence revealing escaped income represented in the form of an asset of Rs 50 lakh or more. Notwithstanding those provisions coming into force on 1 April 2021, the department issued reassessment notices to the petitioners under the erstwhile sections 148 to 151, relying on Explanations in notifications dated 31 March 2021 and 27 April 2021 issued under section 3(1) of the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020, which stated that the pre-amendment provisions would govern notices issued up to 30 June 2021. Around thirteen hundred writ petitions were filed challenging those Explanations and the notices issued under them. The Court had granted interim stays, taking the prima facie view that a delegated legislation cannot vary the date on which a statutory provision takes effect and that section 6 of the General Clauses Act gave the Revenue no assistance because section 148A shows an intent to destroy the old procedure. The matter was decided on 2021-12-15 by the High Court (High Court of Delhi at New Delhi - Manmohan and Navin Chawla JJ; judgment by Manmohan J). On those facts the High Court held as follows. The portions of the judgment available to me record these conclusions. The Revenue's submission that section 6 of the General Clauses Act saves notices issued under section 148 after 31 March 2021 is untenable in law: the repeal is followed by fresh legislation on the same subject and the new Act manifests an intention to destroy the old procedure, so if the legislature has permitted reassessment to be made in a particular manner it can only be in that manner or not at all. The argument that the substitution made by the Finance Act 2021 does not apply to past assessment years because it is substantive is contradicted by the Revenue's own Circular 549 of 1989 and by its own submission that the substitution applies from 1 July 2021. The Revenue cannot rely on COVID-19 to contend that the new sections 147 to 151 should not operate between 1 April and 30 June 2021, Parliament having been fully aware of the pandemic when it passed the Finance Act 2021, and its arguments on the non obstante clause in section 3(1) of the relaxation Act, on legal fiction and on a stop the clock provision are contrary to facts and untenable. The executive cannot use the administrative power to issue notifications under section 3(1) to undermine the expression of parliamentary supremacy in an Act of Parliament, nor frustrate the purpose of substituted provisions by emptying them of content or postponing their effectual operation. The Court agreed with the Allahabad and Rajasthan High Courts in Ashok Kumar Agarwal and Bpip Infra.
On the material before me the reasoning runs as follows. Substitution of a provision results in repeal of the earlier provision and its replacement by the new one - it is a combination of repeal and fresh enactment - so after 1 April 2021 the pre-amendment sections 147 to 151 no longer existed to be acted upon; the Court took that principle from the Supreme Court in PTC India Limited v Central Electricity Regulatory Commission. Section 3(1) of the relaxation Act authorises the Central Government to extend time limits and nothing more, and the Explanations in the notifications went beyond that by prescribing which procedure should be followed, which is to amend the statute by delegated legislation. Section 6 of the General Clauses Act preserves rights and proceedings under a repealed enactment only where a contrary intention does not appear; here the repeal was followed by fresh legislation on the same subject which manifests an intention to destroy the old procedure, section 148A being the clearest indication. The pandemic could not supply the justification, because the Finance Act 2021 was itself passed with the pandemic in view. And the new section 149 fixes three years as the ordinary limit, with the longer period conditioned on evidence of escaped income of Rs 50 lakh or more represented in the form of an asset, so allowing the old provisions to run to 30 June 2021 would empty the new scheme of content. In the words reproduced by the source cited on this page: "if the Legislature has permitted reassessment to be made in a particular manner, it can only be in this manner, or not at all"
It was decided by the High Court on 2021-12-15 and is reported as W.P.(C) 6176/2021 and connected matters, High Court of Delhi. Binding within that High Court's jurisdiction. Persuasive elsewhere. A High Court decision binds the assessing officer, the Commissioner (Appeals) and the Income Tax Appellate Tribunal within that state, and is persuasive elsewhere. If your assessment is in a different jurisdiction, check whether your own High Court has taken the same view before relying on it. On section 148, section 147, section 148A, section 149, section 151, the practical question is whether the facts of your own notice match the facts of this case closely enough for the same rule to apply.
It helps the taxpayer. The portions of the judgment available to me record these conclusions. The Revenue's submission that section 6 of the General Clauses Act saves notices issued under section 148 after 31 March 2021 is untenable in law: the repeal is followed by fresh legislation on the same subject and the new Act manifests an intention to destroy the old procedure, so if the legislature has permitted reassessment to be made in a particular manner it can only be in that manner or not at all. The argument that the substitution made by the Finance Act 2021 does not apply to past assessment years because it is substantive is contradicted by the Revenue's own Circular 549 of 1989 and by its own submission that the substitution applies from 1 July 2021. The Revenue cannot rely on COVID-19 to contend that the new sections 147 to 151 should not operate between 1 April and 30 June 2021, Parliament having been fully aware of the pandemic when it passed the Finance Act 2021, and its arguments on the non obstante clause in section 3(1) of the relaxation Act, on legal fiction and on a stop the clock provision are contrary to facts and untenable. The executive cannot use the administrative power to issue notifications under section 3(1) to undermine the expression of parliamentary supremacy in an Act of Parliament, nor frustrate the purpose of substituted provisions by emptying them of content or postponing their effectual operation. The Court agreed with the Allahabad and Rajasthan High Courts in Ashok Kumar Agarwal and Bpip Infra. It arises in Reassessment & Reopening matters, on section 148, section 147, section 148A, section 149, section 151 of the Income Tax Act 1961, and was decided by High Court of Delhi at New Delhi - Manmohan and Navin Chawla JJ; judgment by Manmohan J. Before relying on it, read the source linked on this page and check whether it has since been distinguished, overruled or overtaken by an amendment to the Income Tax Act. In practice the steps that follow from it are these. If the Revenue invokes the relaxation Act, confine section 3(1) to what it says - an extension of time limits - and resist any reading that extends the life of repealed provisions. Meet the General Clauses Act point by showing that the new sections, and section 148A in particular, replace the old procedure rather than supplement it. Read this judgment together with what the Supreme Court later did on these notices and with the subsequent limitation rulings, because the relief actually available to a taxpayer in this position has moved on since December 2021.
Partly overruled — read this first. First, a data correction: the doc id held for this entry (151980861) is indiankanoon's page for Ganesh Dass Khanna v ITO (10 November 2023), not this judgment, which is at doc 106138032. On that id the citator returns 809 later decisions - among the most-cited High Court judgments in the library. What a reader must know is what the Supreme Court then did. In Union of India v Ashish Agarwal (4 May 2022) the Supreme Court agreed with the High Courts on the merits but, in exercise of its powers under Article 142, directed that 'The impugned common judgments and orders passed by the High Court ... is/are hereby modified and substituted', that 'The impugned section 148 notices issued to the respective assessees ... shall be deemed to have been issued under section 148A of the IT Act as substituted by the Finance Act, 2021 and construed or treated to be show-cause notices in terms of section 148A(b)', and that 'The present order shall be applicable PAN INDIA and all judgments and orders passed by different High Courts on the issue ... shall stand modified to the aforesaid extent.' So this judgment's reasoning survives, but the relief it gave - quashing the notices outright - does not. Before Ashish Agarwal it had been followed: the Rajasthan High Court in Kapil Taneja v ACIT and Anand Lal Lalpuria v ITO (both 27 January 2022) recorded that the 'Division Bench of Delhi High Court in case of Mon Mohan Kohli decided such issue in favour of the assessee', and the Madras High Court noted the concurrence of the Delhi, Allahabad and Rajasthan Courts in Vellore Institute of Technology v CBDT (4 February 2022). Do not cite it today for the remedy. No source could be cited for that finding. Checking whether an authority still stands matters as much as knowing what it held: a decision may be overruled on one point and survive on another, or the provision it interprets may have been amended since. Read the source and the editor's note on this page before relying on it in a reply to an Assessing Officer or in an appeal.
The harvested page is badly incomplete. About 65,000 characters from the middle are not reproduced, and the remainder is cut off at 110,000 characters part-way through the petitioners' arguments at paragraph 13 - so the whole of the Revenue's arguments, the Court's own analysis, its concluding paragraphs and its operative order are absent from this page. In particular I have not seen what relief the Court granted or how it disposed of the writ petitions. What is recorded above as held is taken from paragraphs 101 to 104 of this judgment as reproduced verbatim in the Delhi High Court's later judgment in Ganesh Dass Khanna v ITO, which I read at the corroborating URL and from which the quotation is also taken; the reasoning is reconstructed from those paragraphs together with the statutory extracts, the recital of the challenge and the interim order that are present on this page. The batch line also listed section 3 of the relaxation Act, which is discussed in the judgment but is not a provision of the Income-tax Act. The batch line gave no reporter citations, so the writ petition number is used. This library shows the verification state of every entry openly. This entry has not yet been read in full by a chartered accountant. The summary reflects the sources listed on this page. Read the source before you rely on it in a reply to an Assessing Officer or in an appeal before the Commissioner (Appeals) or the Income Tax Appellate Tribunal.
The portions of the judgment available to me record these conclusions. The Revenue's submission that section 6 of the General Clauses Act saves notices issued under section 148 after 31 March 2021 is untenable in law: the repeal is followed by fresh legislation on the same subject and the new Act manifests an intention to destroy the old procedure, so if the legislature has permitted reassessment to be made in a particular manner it can only be in that manner or not at all. The argument that the substitution made by the Finance Act 2021 does not apply to past assessment years because it is substantive is contradicted by the Revenue's own Circular 549 of 1989 and by its own submission that the substitution applies from 1 July 2021. The Revenue cannot rely on COVID-19 to contend that the new sections 147 to 151 should not operate between 1 April and 30 June 2021, Parliament having been fully aware of the pandemic when it passed the Finance Act 2021, and its arguments on the non obstante clause in section 3(1) of the relaxation Act, on legal fiction and on a stop the clock provision are contrary to facts and untenable. The executive cannot use the administrative power to issue notifications under section 3(1) to undermine the expression of parliamentary supremacy in an Act of Parliament, nor frustrate the purpose of substituted provisions by emptying them of content or postponing their effectual operation. The Court agreed with the Allahabad and Rajasthan High Courts in Ashok Kumar Agarwal and Bpip Infra.
TaxSphere, “Mon Mohan Kohli v ACIT”, https://taxnotice.vittsphere.com/caselaw/case/mon-mohan-kohli-v-acit/ (validity last checked 2026-08-29)
The judgment itself is a government work and may be quoted freely. The summary, the validity note and the reasoning on this page are this library's own writing: quote them with attribution, and please do not present either as the words of the court — this page keeps the two apart and so should a quotation of it.
Every entry in this library links to where it was found, so you can check it yourself rather than take our word for it.
What happened to the thousands of s.148 notices issued under the old rules after the law changed in 2021?
Your notice was issued in the 1 April to 30 June 2021 window. Was it saved by TOLA, or is it dead?
Your s.148 notice came from your own local officer, not from the faceless unit. Does that matter?
They reopened AY 2016-17 in 2022 for under Rs 50 lakh. Is the notice time-barred?
