Caps Gold Pvt.Ltd. vs. Dy. Commissioner of Income-tax and another

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WP/10997/2022HC TelanganaHBHC01014169202209 March 2022Author: UJJAL BHUYAN,A.VENKATESHWARA REDDY5 pages
AI SummaryRemanded

What did the High Court hold?

The High Court, in view of the Supreme Court's decision in C.K.N. Driveshafts (India) Ltd. v. Income Tax Officer, did not delve into the merits of the reasons recorded for issuing the notice at that stage. Instead, the Court directed that since the reasons have now been furnished to the petitioner, the petitioner shall file objections to the impugned notice within fifteen days from the date of the order. Upon receipt of these objections, respondent No. 1 shall dispose of them by passing a speaking order within fifteen days from the date of receipt of the objections, and this order should be communicated to the petitioner. All contentions of both parties are kept open. The writ petition was disposed of with these directions.

What were the facts?

The petitioner, Caps Gold Pvt. Ltd., filed a writ petition challenging a notice dated March 31, 2021, issued under Section 148 of the Income Tax Act, 1961, by the Deputy Commissioner of Income-tax (respondent No. 1) for assessment year 2014-15. The notice indicated that the respondent had reasons to believe that the petitioner's income chargeable to tax had escaped assessment. The petitioner was asked to submit a return within thirty days. Initially, the petitioner stated that no reasons for the notice had been furnished. The respondents sought time to obtain the recorded reasons. Subsequently, the petitioner was served with the reasons recorded by the assessing officer on March 8, 2022, which was produced before the High Court.

What were the issues?

1. Whether the impugned notice issued under Section 148 of the Income Tax Act, 1961, for assessment year 2014-15 is illegal, arbitrary, and in violation of statutory provisions? (Question of law and fact) Assessee's contention: The primary contention, though not fully articulated due to the procedural stage, was that the notice was illegal and arbitrary, implicitly questioning the validity of its issuance, particularly concerning the non-furnishing of reasons initially. The assessee relied on the principle that reasons must be provided before proceeding with reassessment. Revenue's contention: The revenue, through its counsel, sought time to produce the reasons recorded for issuing the notice and subsequently produced them. The revenue's stance was that the issuance of the notice was based on recorded reasons, which were now being provided.

Which sections of the Income-tax Act were involved?

Section 148,Section 147

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances
HIGH COURT FOR THE STATE OF TELANGANA . AT HYDERABAD (SPecial Original Jurisdiction) WEDNESDAY, THE NINTH DAY OF IVARCH TWO THOUSAND AND TWENTY TWO PRESENT THE HON'BLE SRI JUSTICE UJJAL BHUYAN AND THE HON'BLE SRI JUSTICE A. VENKATESHWARA REDDY WRIT PETITIO N NO: 1099 7 0F 2022 Betwee n AND 1. 2. Caps Gold Pvt.Ltd., Secunderabad rep by its tr,4anaging Director Chanda Venkatesh ,,.PETITIONER Dy. Commissioner of lncome-tax Ci Hvderabad. 46ditional /Joint /Deputy/ AC of lnco Ficeless Assessmeht Centre' Delhi rcle -1(1), I .T.Towers, A.G.Guards, me tax, lncome-tax Officer, National ...RESPONDENTS Petition under Article 226 of lhe Constitution of lndia praying that in the circumstances stated in the affidavit filed therewith' the High Court may be pleased to issue a writ in the nature of mandamus or any other writ' or order or direction declaring the impugned notice on the petitioner bearing PAN - AADCC65BIE, uls. 148 dated 31 .3.2021 for assessment year 2014-15 as illegal', arbitrary and as in violation of the statutory provisions IA NO :1 OF 2022 Petition under Section 151 CPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High Court may be pleased to stay all further proceedings pursuant to the impugned notice on the petitioner bearing pAN -AADCC65B1E, uis.148 dated 31 .3.2021 for assessment year 2014-15 pending disposal of the above writ petition Counsel for the Petitioner: SRI Y' RATNAKAR Counsel for Respondents: SRI B. NARASIMHA SARMA

The Court made the following: ORDER

THE HON'BLE SRI JUSTICE UJJAL BHUYAN AND THE HON'BLE SRI JUSTICE A.VENKATESHITARA REDDY Writ Pe trrion No. 10997 of2022 ORDER: (Per Hon'ble Si.lrt/irc Llial llh,yln) Heard Mr. Y.Ratnakar. leamed cotLnsel for petitioner, and Mr. B.Narasimha Sanna, learaed Standing C,.ounsel for the Income Tax Depanment for the respondents.

2.

B,v filing this petition under futicle 226 of tlie C-onstitution o[ Indi:.r. petitioner h,rs challenged the legaliw ,rnd validity oi notice dated 31.03.2021, issued by respondent No.1 under Section 148 of the Income Tax Act, 1961' piefly 'the Act' hereinafter) for the assessment yar2074-15. 3. Bythe impugned notice, respondent No.1 has recorded that he has reasons to believe that income of the petitioner, chargeable to tax for the assessment }ear under consideration, has escaped assessment within the meaning of Section 147 of the Act' He has, therefore, proposed to re-assess the incorne of the petitioner for the said assessment par' In this comection, Petitioner h,rs been called upon to s r-rbmit a rttum in the I

U B,] & AVR,] W. P. No.1o997 of 2022 prescribed form for the said assessment year within thiny dap from the service of notice. 4. \X/ten the rurtter was aken up on 02.03.2022, we had queried leamed counsel for the petitioner as to whether reasons for issuance of impugned notice were fumished to the petitioner to which, learned cotLnsel for the petitioner submitted that no such reasons were fumished. At that stage. learned counsel for the respondents prayed for time to obtain the lrasons rtcorded byrespondent No.1 for issuing the impugned nouce.

5.

Today, u'hen the rnatter is called upon, leamed counsel for the petitioner submits that petitioner was served lesterday, with a copy of the reasons recorded by the assessing officer 2.e., respondent No.1 for issuance of impugned notice.

6.

Learned counsel for the respondent has also produced before us a copy of the reasons recorded dated 08.03.2022, which has been communicated to the petitioner.

7.

Though leamed counsel for the respondents would lilre us to go thrcugh the rcasons recorded, we are not inclrred to do so ar this stage in view of the order which ue propose to pass in temx of the decision of UB,J & AVR,J W.P.No.1o997 of 2022 the Supreme C-oun in cKN DRIVESHAFTS (INDIA) LTD. v. Income Tax Olficerl.

8.

Since the reasons have now been fumished to the petitioner, petitioner shall file objections to the impugned notice within a period of fifteen dap from today.

9.

Upon receipt of such objections, r-esponclent No.1 sh.rll dispose o1' the same by passing a speaking order within a period of fifteen dals from the date of receipt of the objections, which should be communicated to the petitioner.

10.

With the above directions, Writ Petition is disposed of. Related interlocutoryapplications, pending if any, stand disposed of. 11,. All contentions are kept open.

12.

No costs. SD/.K.SAILESHI ASSISTANT REGISTRAR Ll!) //' SECTION OFFICER To, [/BC BS 1 2 /) 4 5 6 The Deputy Commissioner of lncome-tax, Circle -1(1 ), LT.Towers, A.G.Guards, Hyderabad, The AdditionalTJoint /Deputy/ AC of lncome tax, lncome{ax Officer, National Faceless Assessment Centre, Delhi One CC to Sri Y Ratnakar Advocate IOPUC] One CC to Sri B Narasimha Sarma Advocate [OPUC] . Two CD Copies . One Spare Copy I -\.y

TIME LIMIT HiGH COURT DATED: 0910312022 z?::::4-. ORDER DISPOSING OF THE WRIT PETITION WITHOUT COSTS WP.No.10997 of 2022

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