Mon Mohan Kohli v. Assistant Commissioner of Income Tax: Reinforcing Parliamentary Supremacy and Procedural Compliance in Tax Reassessment Proceedings

Mon Mohan Kohli v. Assistant Commissioner of Income Tax: Reinforcing Parliamentary Supremacy and Procedural Compliance in Tax Reassessment Proceedings

Introduction

The case of Mon Mohan Kohli v. Assistant Commissioner of Income Tax & Another was adjudicated by the Delhi High Court on December 15, 2021. The petitioner, Mon Mohan Kohli, challenged the validity of reassessment notices issued under the Income Tax Act, 1961, arguing that these notices were based on provisions that had been superseded by amendments introduced through the Finance Act, 2021. The pivotal issue centered around whether the Government could issue notifications extending the applicability of old statutory provisions without specific legislative authority, thereby impinging on the legislative intent expressed through statutory amendments.

Summary of the Judgment

The Delhi High Court, presided over by Hon'ble Justices Manmohan and Navin Chawla, quashed the reassessment notices issued under the erstwhile Sections 148 to 151 of the Income Tax Act, 1961. The court held that the Finance Act, 2021 had effectively substituted these sections with new provisions effective from April 1, 2021. Consequently, any reassessment notices issued post this date without compliance with the new procedural requirements outlined in the amended sections were deemed ultra vires and invalid. The court emphasized the inviolability of legislative supremacy, asserting that executive bodies cannot unilaterally alter or extend the scope of statutory provisions through delegated legislation without explicit legislative backing.

Analysis

Precedents Cited

The judgment extensively referenced landmark cases to underpin its findings:

  • PTC India Limited vs. Central Electricity Regulatory Commission - Affirming the principle of implied repeal where substituted sections override earlier provisions.
  • Fibre Boards (P.) Ltd., Bangalore vs. Commissioner of Income-tax - Highlighting that substituted sections must be adhered to, nullifying reliance on old provisions.
  • State of Orissa v. M.A. Tulloch & Co. - Emphasizing that conditional legislation is distinct from delegated legislation.
  • Director v. Maxeon Intermediates and Smt. Onkar Dutt Sharma v. Income Tax Officer - Reinforcing that procedural changes apply retrospectively unless explicitly stated otherwise.

Legal Reasoning

The court delved into the constitutional framework, emphasizing the supremacy of Parliament in law-making. It underscored that once Parliament enacts a statute, executive bodies are bound to implement it as intended, without overstepping their delegated powers. The Finance Act, 2021, by substituting Sections 147 to 151, established a new procedural framework for reassessment proceedings. The court reasoned that any attempt by the Revenue to rely on old provisions, through interpretations or notifications extending their applicability, contravened the clear legislative intent expressed through the amendment.

Furthermore, the judgment dissected the role of delegated legislation, clarifying that while the executive can issue notifications to extend time limits under the Relaxation Act, 2020, it cannot modify substantive or procedural statutory provisions. The court also dismissed arguments based on Hohfeld's theory of jural relations and the notion of "legal fiction," asserting that such interpretations were misapplied.

Impact

This judgment reinforces the doctrine of parliamentary supremacy in India, particularly in the context of tax legislation. It serves as a precedent ensuring that executive bodies cannot undermine legislative amendments through unauthorized interpretations or notifications. Future cases involving statutory substitutions or amendments will likely reference this judgment to uphold the integrity of legislative intent against executive overreach.

Additionally, it accentuates the necessity for stringent compliance with newly enacted procedural requirements, thereby promoting transparency and fairness in tax reassessment processes.

Complex Concepts Simplified

Non-Obstante Clause: A clause in a statute that allows a provision to operate notwithstanding any other conflicting provisions.
Hohfeld's Theory: A legal framework that categorizes different types of legal relations, such as rights, duties, powers, and liabilities.
Implied Repeal: A legislative doctrine where a new statute implicitly repeals any existing statutes that conflict with it.

Conclusion

The Delhi High Court's judgment in Mon Mohan Kohli v. Assistant Commissioner of Income Tax & Another serves as a pivotal reaffirmation of legislative supremacy in India's constitutional landscape. By invalidating reassessment notices issued under obsolete statutory provisions, the court underscored the sanctity of parliamentary intent and the utmost importance of adhering to new legislative frameworks. This case sets a benchmark for future jurisprudence, emphasizing that executive bodies must operate within their delegated mandates and cannot contravene or dilute legislative amendments through unauthorized interpretations.

For taxpayers and legal practitioners, this judgment offers clarity on the procedural requisites post statutory amendments, ensuring that reassessment proceedings are conducted with due diligence and in strict accordance with the law. It also acts as a protective measure against arbitrary or capricious actions by tax authorities, thereby fostering a more accountable and equitable tax administration system.

Case Details

Year: 2021
Court: Delhi High Court

Judge(s)

ManmohanNavin Chawla, JJ.

Advocates

Mr. Nawal Kishore Jha, Adv. /UOI.Mr. Dilbag Singh Sr. CGC /UOI.Ms. Arti Bansal No. 3/UOI.Mr. Narendra Kumar Srivastava Senior Panel No. 3.Mr. Sushil Kumar Pandey, Senior Panel No. 1/UOI.Mr. S. Ganesh, Senior Advocate with Ms. Archana Sahadeva, Advocate.Mr. Percy Pardiwalla, Senior Advocate with Mr. Salil Kapoor, Ms. Ananya Kapoor, Mr. Sumit Lalchandani, Ms. Soumya Singh, Mr. Sanat Kapoor, Advocates.Ms. Kavita Jha, Mr. Vaibhav Kulkarni, Mr. Udit Naresh, Mr. Anant Mann,Mr. Aditeya Bali, Mr. Rahul Unnikrishnan, Mr. Himanshu Aggarwal andMs. Shwetha Prabhakar, Advocates.Mr. Ved Jain, Ms. Richa Mishra, Advocates.Mr. Rohit Jain with Mr. Neeraj Jain, Mr. Aniket D. Agrawal, Ms. Manisha Sharma, Advocates.Mr. Aseem Chawla, Mr. Manu K. Giri, Mr. Ashish Dhunna & Ms. Soniya Dodeja, Advocates.Mr. Piyush Kaushik, Advocate.Mr. Sachit Jolly, Ms. Anuradha Dutt, Mr. Rohit Garg, Ms. Disha Jham,Ms. Mehak Sachdeva, Mr. Sohum Dua, Advocates.Mr. Kapil Gupta, Advocate.Mr. Puneet Agarwal, Mr. Yuvraj Singh, Mr. Prem Kandpal, Mr. Chetan Kumar Shukla, Ms. Hemlata Rawat, Advocates.Mr. Gaurav Gupta, Mr. Jaspal Singh Sethi, Mr. Gaurav Gupta & Ms. Sahiba Pantel, Advocates.Mr. T.M. Shivakumar, Advocate.Mr. Manibhadra Jain, Advocate.Dr. Rakesh Gupta, Mr. Somil Agarwal, Mr. Tani Malik, Mr. Anshul Mittal Advocates.Mr. Mayank Nagi, Advocate.Mr. Arvind Kumar & Ms. Devina Sharma, Advocates.Mr. Sunil K. Mukhi, Mr. Ishan Garg, Mr. T.S Nerwal, Advocates.Mr. P.C. Yadav, Advocate.Mr. Raghvendra Singh and Mr. Satish kumar, Advocates.Mr. Rahul Chaudhary, Mr. Avesh Chaudhary, Mr. Abhay Shankar Dubey, Advocates.Mr. Navin Kumar with Mr. Deepak and Mr. Rohit Pal, Advs.Mr. Kamal Sawhney with Mr. Prashant Meharchandani, Mr. Nikhil Agarwal, Mr. Arun Bhaduria, Mr. Divyansh Singh, Advocates.Mr. Inder Paul Bansal and Mr. Vivek Bansal. Adv.Mr. Suresh Chandra Sati, Advocate.Mr. Sushil Tekriwal & Dr. Mamta Tekriwal, Advs.Mr. Piyush Singhal, Mr. Risabh Sharma, Advs.Mr. Rajiv Kumar Virmani, Mr. Abhinav Agrawal, Mr. Rishi Vohar, Ms. Swati Bhardwaj, Advs.Mr. Rishabh Ostwal, Adv.Mr. Rano Jain with Mr. Venketesh Chaurasia, Advs.Mr. Sourav Vig and Mr. Tushar Gupta, Advs.Mr. Virender Mehta Adv.Mr. Manish Paliwal, Mr. Vikas Kumar, Mr. Vishal Aggarwal, Advs.Mr. Anish Sarna, Adv.Mr. Pankaj Gupta and Ms. Rimpy Gupta, Advs.Mr. Harshit Batra and Mr. Ritesh Bajaj, Advs.Mr. A.K. Babbar, Mr. V.K. Sabharwal, Mr. Surendra Kumar, Mr. B.K. Tripathi, Advs.Ms. Vanita Bhargava, Mr. Ajay Bhargava, Ms. Shweta Kabra, Ms. Prerna Singh, Advs.Ms. Rashmi Chopra, AdvocateMr. Kishore Kunal, Mr. Manish Rastogi, Mr. Parth and Mr. Sumit Khadaria, Advs.Mr. Amol Sinha, Mr. Anshum Jain, Mr. Ashvini Kumar, Advs.Mr. Ashvini Kumar, Mr. Rahul Kochar, Mr. Kshitiz Garg, Mr. Abhinav Arya, Advs.Ms. Shreya Jain & Mr. Gaurav Tanwar, Advs.Mr. Pulkit Deora with Mr. Arnav Vidyarthi, Advs.Sh. Pankaj Jain, Sr. Advocate with Mr. Gaurav Mittal, Ms. Divya Suri andMr. Sachin Bhardwaj, AdvsMr. Bhupinder Jit Kumar, Adv.Ms. Jyoti Taneja, Mr. Vidur Kamra Advoacte Advs.Mr. Neeraj Jain, Mr. Aditya Vohra, Advs.Mr. Divyanshu Agrawal, Ms. Ritika Chawla and Mr. Vaibhav Niti, Advs.Mr. Jitesh Talwani, Mr. Abhimanyu Goyal, Mr. Sahil Mahajan andMs. Anjali, Advs.Mr. Krishna kumar Agarwal, Mr. Sharad Agarwal, Ms. Monika Ghai, Advs.Ms. Poonam Ahuja, Adv.Mr. R. Madhav Bera, Mr. Divyansh Jain, Mr. Dennis T Panmei, Mr. Aakash Bhardwaj, Mr. Rishi Jaiswal, Mr. Keshav Maheshwari, Ms. Akansha Gupta and Ms. Tanya Minocha, Advs.Mr. Udai Khanna, Adv.Mr. Ritambhara Narang and Mr. Pranay Mohan Govil, Advs.Mr. Sagar Rohatgi, Adv.Mr. Manuj Sabharwal, Adv.Mr. Ankur Bansal alongwith Mr. Mukul Rawal and Mr. Devendra Dang, Advs.Mr. Mukesh Gupta and Mr. Shashi Gandhi, Advs.Mr. Prakash Kumar along with Mrs. Rashmi Singh, Advs.Mr. Ansh Singh Luthra, Mr. Harmanpreet Singh Kohli and Mr. Abhishek Samal, Advs.Mr. Nitin Gulati, Adv.Mr. Arnav Kumar, Mr. Rajat Mittal, Mr. Devrath Arora and Mr. Lakshay Virmani, Advs.Mr. Sagar Rohatgi, Mr. Anil Kumar Chunduru & Mr. Neeraj Kumar Jha, Advs.Mr. Kapil Hirani, & Mr. Shakul R. Ghatole, Mr. Sumit K Batra, Mr. Manish Khurana, Advocates.Mr. Bharat Beriwal, Ms. Priyadarshini Dewan, Mr. Shankari Mishra, Priyesh Srivastava, Advs.Ms. Jaya Goyal & Ms. Manpreet Kaur, Advs.Mr. Yogesh K. Jagia, Mr. Amit Sood, Mr. Rishabh Nangia, Advs.Mr. Gautam Jain and Mr. Piyush Kumar Kamal, Advs.Mr. Nagesh Kumar Behl, Mr. Mayank Pachauri & Mr. Vishal Gourav, Advs.Mr. Simran Mehta, Adv.Shri. Tejasvi Goel, Adv.Mr. K. Sampath & Mr. S. Krishnan, Advs.Mr. S. Krishnan & Mr. Rakesh Kumar, Adv.Mr. Mayank Nagi, Mr. Tarun Singh & Mr. Pulkit Verma, Advs.Mr. Ruchesh Sinha, Mr. Gautam Khaitan, Mr. AT Patra, Mr. Aditya Ghadge, Mr. Ramaditya Tiwari & Ms. Divya, Advs.Ms. Priamvada Surolia, Ms. Lakshita Arora & Mr. Abhishek Parmar, Advs.Mr. Shafiq Khan, Adv.Ms. Ranjana Roy Gawai, Mr. Ujjwal Jain & Mr. Shikher Upadhyay, Advs.Mr. P.R Rajhans, Mr. Ankur Vats & Mr. Vivek Singh, Advs.Mr. Sekhar Gupta & Mr. Mehendra Pratap, Advs.Mr. Deepanshu Jain & Mr. Shaantanu Jain, Advs.Mr. Gagan Kumar, Adv.Mr. Abhimanyu, Mr. Ankit Panwar, Mr. Parth Dixit & Mr. Abhishek Singh & Ms. Leena Kalra, AR of the Company.Mr. Hemant Shah and Saurabh Pal, Advs.Mr. R. K. Handoo, Mr. Yoginder Handoo, Mr. Ashwin Kataria, Mr. Aditya Chaudhary and Mr. Raghav Bhalla, Advs.Mr. Rahul Malhotra, Mr. Manas Tripathi and Ms. Diksha Singh Dhakre, Advocates.Mr. K.R. Manjani & Mr. Tarun Aswani, Advs.Mr. Vishal Kalra, Mr. S.S. Tomar and Mr. Ankit Sahni, Advs.Mr. Rajeev Sharma, Adv.Mr. Kapil Goel and Mr. Sandeep Goel, AdvocatesMr. Rohit Bansal, Adv.Mr. Amit Kaushik, Adv.Mr. Vikas Arora, Ms. Radhika Arora and Mr. Mohit Dagar, AdvocatesMr. Satyen Sethi & Mr. Arta Trana Panda, Advs.Mr. Rupesh Kumar with Ms. Neelam Sharma, Mr. Pankhuri Shrivastava,Mr. Pravesh Bahuguna, Mr. Alekshendra Sharma, Advs.Mr. Sougat Sinha & Mr. Manoj Kumar, Advs.Mr. Hemant Singh, Mridul Chakravarty, Mr. Tushar Srivastava, Ms. Shruti Gupta, Lavanya Panwar, Advs.Dr. Shashwat Bajpai with Mr. Vishal Aggarwal, Advs.Mr. Rakesh Jain, Adv.Mr. Pragyan Pradip Sharma and Ms. Gurnoor Kaur, Advs.Ms. Surbhi Chandra, Adv.Mr. Kanishk Agarwal with Mr. Mayank Patni, Ms. Nidhi Bhuwania Advs.Mr. Rajiv K. Garg and Mr. Ashish Garg, Advs.Mr. R. K. Handoo, Mr. Garvit Solanki, Advs.Mr. Deepak Chopra with Mr. Harpreet Singh Ajmani, Mr. Rashi Khanna,Ms. Priya Tandon and Mr. Manasvine Bajpai, Advs.Mr. Shekhar Gupta, Adv.Mr. Mani Bhadra Jain, Adv.Mr. Vishnu Langwat with Ms. Nidhi Tomar & Mr. Vinay Pal, Advs.Mr. Vaibhav Sharma, Adv.Ms. Bandana Grover, Adv.Mr. Sumit Singh, Adv.Mr. Debesh Panda & Ms. Anandita Sharma, Advs.Mrs. Harvinder Oberoi, Adv.Mr. Purav Middha, Adv.Mr. Akarsh Garg, Mr. Parth Davar, Mr. Sushant Singhal & Mr. Himanshu Aggarwal, Advs.Mr. Sabhay Choudhary, Adv.Mr. Harpreet Singh & Mr. Gagan Kumar Singhal, Advs.Mr. Gaurav Jain & Mr. Gautam Jain, Advs.Mr. Anirudh Bakhru, Mr. Ayush Puri, Mr. Umang Tyagi & Mr. Tejaswini Chandrasekhar, Adv.Mr. Zoheb Hossain, Sr. Standing Counsel with Mr. Vipul Agarwal, Jr. Standing Counsel, Mr. Parth Semwal, Jr. Standing Counsel for Revenue.Mr. Sunil Agarwal, Sr. Standing Counsel, Tushar Gupta, Jr. Standing Counsel and Mr. Samarth Chaudhari, Adv.Mr. Puneet Rai, Sr. Standing Counsel along with Adeeba Mujahid, Jr. Standing Counsel.Mr. Ruchir Bhatia, Sr. Standing Counsel.Mr. Abhishek Maratha, Sr. Standing Counsel.Mr. Sanjay Kumar, Sr. Standing Counsel with Ms. Easha Kadiyan, Jr. Standing Counsel for Revenue.Ms. Vibhooti Malhotra, Sr. Standing counsel Mr. Shailender Singh, Jr. St. counsel and Mr. Udit Sharma, Adv.Mr. Harpreet Singh, Sr. SC with Mr. Arunesh Sharma & Ms. Suhani Mathur, Advs.Mr. Kunal Sharma, Sr. Standing Counsel with Ms. Zehra Khan, Jr. Standing Counsel and Mr. Shubhendu Bhattacharya, Adv.Mr. Ajit Sharma, Sr. Standing Counsel with Mr. Anant Ram Mishra, Adv.Mr. Sanjeev Sabharwal, Sr. panel counsel for UOI.Mr. Avnish Singh with Ms. Pushplata Singh, Advs. for UOI.Mr. P.C Yadav, Sr. Panel Counsel, UOI.Mr. Vivek Goyal, CGSC for UOI.Mr. Kamal Kant Jha, Senior Panel Counsel for UOI.Mr. Ranvir Singh, (CGSC) for UOI.Mr. D.S. Mehandru Sr. Panel Counsel for UOI.Mr. Anil Dabas, Adv. for UOI.Mr. Praveen Kumar Jain, Adv.Ms. Richa Dhawan, Senior Panel counsel for UOI.Ms. Aakanksha Kaul, Mr. Manek Singh, Mr. Aman Sahani, Advs.Mr. Nitin Khanna, Advocate for R-4/UOI.Mr. Prakash Kumar, Sr. Central Govt. Counsel.Mr. Praveen Kumar Jain, Adv.Ms. Talish Ray, Adv. for UOI.Ms. Sunieta Ojha, Adv. for UOI.Mr. Neeraj, Mr. Sahaj Garg, Mr. Vedansh Anand, Mr. Rudra Paliwal andMr. Sanjay Pal, Advs.Mr. Ajay Digpaul CGSC with Kamal R. Digpaul Adv.Mr. Ravi Prakash CGSC with Mr. Gurtejpal Singh, Ms. Shruti Shivkumar, Advs.Mr. Ashwani Kumar Sharma, CGSC.Mr. Sushil Kumar Pandey, Adv. with Mr. Rahul Mourya, Ms. Sweety Singh Chauhan & Ms. Anjum Kaur, Advs.Mr. Jitesh Vikram Srivastava, Mr. Prajesh Vikram Srivastava, Adv.Ms. Aakanksha Kaul, Mr. Manek Singh, Mr. Aman Sahani, Advs.Mr. Ajay Digpaul, Adv.Mr. Vivekanand Mishra, Senior Panel Counsel UOI.Mr. Ruchir Mishra and Mr. Mukesh Kumar Tiwari, Advs.Mr. Shankar Kumar Jha, Adv.Mr. Manoj Kumar Tyagi, Adv.Mr. Chiranjiv Kumar, Adv.Mr. Tanveer Ahmed Ansari, Adv.Mr. Pradeep Kumar Sharma, Adv.Mr. Siddharth Khatana, Adv.Ms. Leena Tuteja, Adv.Mr. T. P. Singh, Adv.Mr. Bhagvan Swarup Shukla (CGSC) with Mr. Sarvan Kumar, Advs.Mr. Dev P Bhardwaj, CGSC with Ms. Anubha Bhardwaj, Adv.Mr. Satyendra Kumar, Adv.Mr. Satya Ranjan Swain, Senior Panel Counsel, Mr. Kautilya Birat, Adv.Mr. Farman Ali, Senior Panel Counsel and Mr. Athar Raza Farooquei, Adv.Mr. Aman Malik, Senior Panel Counsel.Mr. Jivesh Tiwari, Adv. for UOI.Mr. Manisha Agrawal Narain, Mr. Rakshita Goyal, Mr. Aditya Deshwal, Advs.Ms. Suman Chauhan, Adv.Mr. Rishabh Sahu, Adv.Mr. Gigi C George, Adv.Mr. Ayush Agrawal, Senior Panel Counsel (UOI), Mr. Vikrant Singh Bloria, and Mr. Sushant Tomar, Advs.Mr. Naginder Benipal, SPC with Mr. Naveen Chawla and Mr. Harithi Kambiri, Advs.Mr. B.N.P. Pathak Sr. Central Govt. Counsel for UOI.Mr. Vikrant N Goyal, Adv.Mr. Jaswant Rai Aggarwal, Adv.Mr. Akshay Amritanshu, Adv. with Mr. Kartikey Singh, Adv.Mr. Ghanshyam Mishra & Ms. Vinita Sharma, Advs. for UOI/R-3.Mr. Satyanand, SPC for UOI.Mr. Rajesh Kumar, Adv. for UOI.Mr. Harish Kumar Garg, Adv.Mr. Rajesh Gogna, CGSC with Mr. Vaibhav Anand, Adv.Mr. Chiranjiv Kumar, Adv. for UOI.Mr. Sandeep Tyagi, SPC for UOI.Mr. Akhilesh Kumar, Adv.Ms. Nidhi Banga, Senior Panel Counsel for UOI with Ms. Kirti Arora, Adv.Ms. Anju Gupta, Adv. for UOI.Mr. Shashank Bajpai, SPC, Mrs. Shakun Sudha Shukla, Mr. Dhananjay Tiwari, Advs. for UOI.Mr. Niraj Kumar, Sr. Central Govt. Counsel for UOI/R-4.Mr. S.S. Rai, SPC for UOIfor R-3 & R-4 alongwith Mrs. Roopam Rai, Adv.Mr. Alok Singh, SPC for UOI along with Ms. Sonam Awasthi, Mr. Gaurav Bhardwaj, Advs.Mr. Prasanta Varma, Sr. PC, Government Counsel with Mrs. Prativa Varma,Mr. Amrit Singh Khalsa, Ms. Hiteshi Kakkar, Advocates.Mr. G. D. Sharma, Adv.Mr. Asheesh Jain, CGSC with Mr. Adarsh Kr. Gupta, Advocates.Mr. Saroj Bidawat, Sr. Panel counselMs. Archana Gaur, Adv.Mr. Ayush Agrawal, Senior Panel Counsel (UOI), Vikrant Singh Bloria, Adv.Mr. P. S. Singh, AdvocateMr. Ashish Verma and Mr. Debopriyo Moulik, Advs.Ms. Sonu Bhatnagar, Sr. SC with Ms. Venus Mehrotra, Ms. Kanak Grover, Advs.Mr. Rajesh Gogna, CGSC with Mr. Arihant Jain, Adv.Mr. Kirtiman Singh CGSC with Mr. Taha Yasin, Adv.Ms. Sarika Singh, Adv.Mr. Rahul Sharma, Central Government Counsel Panel and Mr. C.K. Bhatt, Adv.Mr. Virender Pratap Singh Charak with Ms. Shubhra Parashar,Mr. Pushpender Singh Charak, Mr. Kapil Gaur, Mr. Vaishnav Kirti Singh,Mr. Shubham Ahuja, Mr. Sanjay Singh Chauhan, Mr. Ram Pal Singh Tomar, Mr. Gyanwardhan Singh & Mr. Vivek Nagar, Advs. for UOI.Mr. Nirvikar Verma, Adv. for UOI.Mr. Rajesh Kumar, Adv. for UOI.Mr. Manish Mohan, CGSC with Ms. Manisha Saroha, Adv.Mr. Shyam Sundar Rai, Adv.

Comments