In Brief
This case examines the interplay between three tax laws: the Income Tax Act 1961, the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act 2020 (TOLA), and the Finance Act 2021. The Finance Act 2021 substantially reformed reassessment rules effective 1 April 2021. The Court held that TOLA's COVID-19 relief provisions continue to apply after 1 April 2021 to actions whose time limits fall between 20 March 2020 and 31 March 2021. Section 3(1) of TOLA extends time limits for issuing reassessment notices and obtaining required sanctions till 30 June 2021. The legal fiction created in Ashish Agarwal (treating notices issued under old rules as compliant with new rules) has the logical consequence that reassessment notices under the new regime must be issued within the surviving time period under TOLA. Notices issued beyond this period are time-barred and void. The Court balanced the interests of the Revenue and assesses by allowing reassessment to continue while protecting assesses through strict time limits.
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