LINK TRACOM PVT LTD vs. INCOME TAX OFFICER,WARD NO 1(1) ASANSOL AND ORS

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WPA/5191/2022HC CalcuttaWBCHCA010904202219 April 2022Author: HON'BLE JUSTICE MD. NIZAMUDDIN3 pages
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What did the High Court hold?

The Tribunal quashed the impugned notice under Section 148 of the Income Tax Act, 1961, and all subsequent proceedings. The reasoning was based on the petitioner's argument that the notice was issued in violation of the amended provisions, specifically the mandatory requirement to issue a notice under Section 148A before issuing a notice under Section 148. The court found that this procedural lapse rendered the notice invalid. The quashing of the notice and proceedings does not prevent the assessing officer from issuing a fresh notice in accordance with the law. The writ petition was allowed, subject to the petitioner paying costs of Rs. 5,000/- to the High Court Legal Services Committee, due to the delay of approximately ten months in filing the writ petition without explanation. The costs were to be paid to the Calcutta High Court Bar Association Lawyers’ Benevolent Fund for the welfare of street children.

What were the facts?

The petitioner, Link Tracom Private Limited, challenged a notice issued under Section 148 of the Income Tax Act, 1961, by the Income Tax Officer, Ward No.1(1), Asansol. The notice was issued after March 31, 2021. The petitioner argued that the notice was invalid because it was issued in violation of the newly amended provisions relating to Section 147, specifically the mandatory requirement to issue a notice under Section 148A before issuing a Section 148 notice. The petitioner also relied on previous judgments from the Calcutta High Court in similar cases. The writ petition was filed approximately ten months after receiving the impugned notice, without explanation for the delay.

What were the issues?

1. Whether the notice issued under Section 148 of the Income Tax Act, 1961, is invalid for non-compliance with the mandatory requirement of issuing a notice under Section 148A prior to its issuance, as per the amended provisions governing reassessment proceedings? Assessee's contentions: The petitioner contended that the impugned notice under Section 148 was issued in violation of the amended Act. They argued that there is a mandatory obligation on the assessing officer to issue a notice under Section 148A before issuing a notice under Section 148, which was admittedly not done. The petitioner relied on the cases of Bagaria Properties and Investment Private Limited & Anr. v. Union of India & Ors. and Monoj Jain v. Union of India & Ors. Revenue's contentions: The judgment does not record any specific contentions from the respondents (revenue).

Which sections of the Income-tax Act were involved?

Section 148,Section 147,Section 148A

AI-generated summary — verify with the full judgment below

19.04.

2022. assansol & Ors. Mr. Avra Mazumder, Mr. Sk. Md. Bilwal Hossain. ……..for the petitioner. Mr. Soumen Bhattacharjee. ……..for the respondents. The supplementary affidavit filed by the petitioner which supporting document to show that no final assessment order has been passed in the matter be kept with the record. Heard both the parties. In this writ petition, petitioner has challenged the impugned notice under section 148 of the Income Tax, 1961 which was issued after 31st March 2021 with supporting documents on the grounds that this case clearly falls under the newly amended Act relating to proceedings under section 147 of the Act and under which there is a mandatory obligation on the part of the assessing officer to issue notice under section 148A of the Act before issuing any notice under section 148 of the Act and which has admittedly not done by the assessing officer

2 and that the impugned notice under section 148 of the Act has been issued violation of section 148 of the Act. Furthermore, this case is directly covered by the orders of this court in the case of Bagaria Properties and Investment Private Limited & Anr. v. Union of India & Ors. reported in (2022) 134 taxman.com 196 (Calcutta) and also in the case of Monoj Jain v. Union of India & Ors. reported in (2022) 134 taxman.com 173 (Calcutta). Considering the facts, the impugned notice under section 148 of the Act and all subsequent proceedings are quashed. However, quashing of the impugned notice and subsequent proceedings will not debar the assessing officer concerned to issue any fresh notice in future in accordance with law. With the above observations, this writ petition being WPA No.5191 of 2022 stands disposed of. This writ petition is allowed subject to payment of costs of Rs.5,000/- to the High Court Legal Services Committee, since the impugned notice under section 148 of the Income Tax Act, 1961 has been issued on April 21, 2021 as appears from record and this writ petition has been filed in March 2022, that is, almost after ten months from receipt of the impugned notice, without any explanation for such delay in filing this writ petition. Such 3 costs has to be paid by the petitioner to the Calcutta High Court Bar Association Lawyers’ Benevolent Fund within seven days from date and such costs is to be utilised by it for the welfare of street children. Receipt of payment is to be produced before this court. List this writ petition under the heading “To Be Mentioned” on April 28, 2022 for compliance. (Md. Nizamuddin, J.)

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