NIRMAL KUMAR BARDIYA SON OF SAGARMAL KALYANMAL JAIN vs. ASSISTANT COMMISSIONER OF INCOME TAX

Facts

The petitioner, Nirmal Kumar Bardiya, challenged two notices issued under Section 148 of the Income Tax Act, 1961, dated March 25, 2023, and March 26, 2023. The petitioner argued that the first notice failed to comply with the requirements of stating reasons and obtaining prior approval as mandated by Circular No. 19/2019 dated August 14, 2019. The second notice, while containing a DIN number, allegedly lacked a signature. The petitioner contended that non-compliance with the circular rendered the notices illegal. However, the respondent revenue pointed out that the petitioner did not challenge the notices immediately but participated in subsequent proceedings, including receiving notices under Section 143(2) on June 22, 2023, and Section 142(1) on July 21, 2023.

Held

The High Court dismissed the petition on the grounds of delay in approaching the Court. The Court observed that the notices impugned were issued on March 25, 2023, and March 26, 2023. The petitioner did not challenge these notices at that time but instead participated in the subsequent proceedings. Notices under Section 143(2) of the Act were issued on June 22, 2023, followed by a notice under Section 142(1) of the Act on July 21, 2023, wherein materials relied upon and the petitioners were disclosed. Given these circumstances and the delay in challenging the notices, the Court was not inclined to interfere with the ongoing proceedings. Therefore, the petition was dismissed without delving into the merits of the alleged non-compliance with the circular.

Key Issues

1. Whether the notices issued under Section 148 of the Income Tax Act, 1961, dated March 25, 2023, and March 26, 2023, are illegal due to non-compliance with Circular No. 19/2019 dated August 14, 2019, specifically regarding the requirement to state reasons and obtain prior approval, and the absence of a signature on the second notice. Assessee's Contentions: The petitioner argued that the first notice dated March 25, 2023, failed to comply with the mandate of stating reasons and prior approval as required by Circular No. 19/2019. The second notice dated March 26, 2023, though containing a DIN number, lacked a signature. Non-compliance with the circular renders the notices illegal. Reliance was placed on the High Court's order in Vikas Malpani Versus Income Tax Officer (D.B. Civil Writ Petition No. 3284/2022) and decisions in Ashok Commercial Enterprises Vs. Assistant Commissioner of Income Taxation (2023) 9 TMI 335 and The Commissioner of Income Tax (International Taxation) Vs. Brandix Mauritius Holdings Ltd. (2023) 4 TMI 579. Revenue's Contentions: The respondent revenue noted that the petitioner did not challenge the impugned notices immediately but participated in subsequent proceedings, including receiving notices under Section 143(2) and 142(1) of the Act.