K K AGARWAL AND SONS HUF vs. INCOME TAX OFFICER,WARD NO 30(1) KOLKATA AND ORS

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WPA/25770/2022HC CalcuttaWBCHCA051754202214 December 2022Author: HON'BLE JUSTICE MD. NIZAMUDDIN2 pages
AI SummaryRemanded

What did the High Court hold?

The Tribunal held that the approval for the notice under Section 148A(b) was granted by the Principal CIT-9, Kolkata. It found that this authority does not fall under the purview of Section 151(ii) of the Income Tax Act, 1961, which specifies the competent authorities for granting such approval. Consequently, the Tribunal concluded that the approval was not authorized by law and was therefore not sustainable. Based on this finding, the impugned notice under Section 148A(b) and all subsequent proceedings were deemed unsustainable in law and were accordingly quashed. The Tribunal clarified that this quashing would not prevent the Income Tax authorities from initiating fresh proceedings in accordance with the law in the future. The writ petition was disposed of with this observation and direction.

What were the facts?

The petitioner, K K Agarwal and Sons HUF, challenged a notice issued under Section 148A(b) of the Income Tax Act, 1961, for the assessment year 2016-2017. The petitioner contended that the approval for issuing this notice was granted by the Principal CIT-9, Kolkata, who is not the competent authority as defined under Section 151(ii) of the Act. The Revenue, represented by Mr. Aryak Dutt, submitted written instructions and supporting documents concerning the approval obtained for the issuance of the notice. The court was to consider the validity of this approval and its impact on the impugned notice and subsequent proceedings.

What were the issues?

1. Whether the approval granted by the Principal CIT-9, Kolkata, for the issuance of a notice under Section 148A(b) of the Income Tax Act, 1961, for assessment year 2016-2017, is valid, considering the requirements of Section 151(ii) of the Act? Assessee's Contention: The petitioner argued that the Principal CIT-9, Kolkata, is not the appropriate authority under Section 151(ii) of the Income Tax Act, 1961, to grant approval for the issuance of the notice under Section 148A(b). Therefore, the approval obtained is not sustainable in law. Revenue's Contention: The Revenue submitted written instructions and supporting documents regarding the approval taken by the appropriate authority on the issuance of the notice under Section 148A(b).

Which sections of the Income-tax Act were involved?

Section 148A,Section 151

AI-generated summary — verify with the full judgment below

WPA 25770 OF 2022 14.12.2022

Sl no. 5

K K Agarwal and Sons HUF Ct no. 2

- Vs - P.M. Income Tax Officer, Ward No. 30(1), Kolkata & Ors.

Mr. Avra Mazumder,

Mr. Binayak Gupta,

Mr. Souman Bhowmik,

… for the petitioner Mr. Aryak Dutt

…. For Union of India

Pursuant to the order of this Court dated 30th November, 2022, Mr. Dutt learned advocate appearing for the respondent has filed a written instruction with supporting documents on the issue of approval taken by the appropriate authority on issuance of notice under Section 148A(b) of the Income Tax Act, 1961. It is the case of the petitioner that the assessment year involved for reopening of the assessment is assessment year 2016-2017 and the appropriate authority for grant of approval in such case are the authorities under Section 151(ii) of the Income Tax Act, 1961. It appears from record and instruction submitted by Mr. Dutt that in this said case approval has been granted by principal CIT -9, Kolkata who is not the authority falls under Section 151(ii) of the Act as such the approval in this case is not an authority authorized under the law and such approval is not

2 sustainable in law and in view of this factual and legal position the impugned notice under Section 148A(b) of the Act and all subsequent proceedings are not sustainable in law and accordingly quashed.

However, quashing of the impugned notice and subsequent proceedings will not be a bar on the part of the Income Tax authorities concerned to initiate any fresh proceeding in future in accordance with law.

With this observation and direction this writ petition being WPA 25770 of 2022 stands disposed of.

Let the record produced by Mr. Dutt be kept with the record.

(Md. Nizamuddin, J.)

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