LAXMANDAS SUNDRANI AND SONS HUF vs. PRINCIPAL COMMISSIONER OF INCOME TAX

PDF · subscribers
WPT/178/2021HC ChhattisgarhCGHC01021209202120 June 2022Author: HON'BLE SHRI JUSTICE ARVIND SINGH CHANDEL4 pages
AI SummaryRemanded

What did the High Court hold?

The High Court, in light of the Supreme Court's judgment in Union of India & others v. Ashish Agarwal, disposed of the instant petition. The Supreme Court had held that notices issued under the unamended Section 148 of the IT Act, which were the subject matter of writ petitions before various High Courts, shall be deemed to have been issued under Section 148A of the IT Act as substituted by the Finance Act, 2021. These notices were to be construed as show-cause notices under Section 148A(b). The Assessing Officer was directed to provide information and material relied upon within thirty days, allowing assessees two weeks to reply. The requirement of conducting an enquiry under Section 148A(a) was dispensed with as a one-time measure for notices issued from April 1, 2021, till the date of the order. The Assessing Officers were to pass orders under Section 148A(d) and thereafter issue notices under Section 148 as substituted. All defenses available to assessees, including under Section 149, were preserved. This order was made applicable PAN India and governed pending writ petitions.

What were the facts?

The petitioner, Laxmandas Sundrani & Sons HUF, challenged a notice issued by the Income Tax Officer under Section 148 of the Income Tax Act, 1961, for the assessment year 2015-16. The petitioner contended that the notice, issued on July 7, 2021, was beyond the extended limitation period up to June 30, 2021, as per a notification dated April 27, 2021, and was therefore barred by limitation. The respondents argued that the issue had been decided by a Co-ordinate Bench of the High Court in a previous writ petition. The High Court considered the Supreme Court's judgment in Union of India & others v. Ashish Agarwal.

What were the issues?

1. Whether the notice issued under Section 148 of the Income Tax Act, 1961, to the petitioner for assessment year 2015-16, dated July 7, 2021, is barred by limitation, considering the extended period up to June 30, 2021, by notification dated April 27, 2021? (Question of law) Assessee's Contention: The notice is barred by limitation as it was issued beyond the extended period. The petitioner relied on the notification dated April 27, 2021, extending the limitation period. Revenue's Contention: The issue is covered by a Co-ordinate Bench of the High Court, which followed the Supreme Court's decision in Union of India & others v. Ashish Agarwal. The revenue did not explicitly argue on the limitation aspect but pointed to the binding precedent.

Which sections of the Income-tax Act were involved?

Section 148,Section 148A,Section 149

AI-generated summary — verify with the full judgment below

NAFR HIGH COURT OF CHHATTISGARH, BILASPUR Writ Petition (T) No.178 of 2021 Laxmandas Sundrani & Sons HUF, Nawapara Rajim, District Raipur, Chhattisgarh through Karta Shri Laxmandas Sundrani, aged about 61 years, S/o Shri Aratmal Sundrani, Raipur, Chhattisgarh ---- Petitioner versus

1.

Principal Commissioner of Income Tax, Raipur-2, Aaykar Bhavan, Civil Lines, Raipur, Chhattisgarh

2.

The Income Tax Officer, Ward-1(1), Civil Lines, Raipur, Chhattisgarh --- Respondents ------------------------------------------------------------------------------------------------------- For Petitioner

: Shri V.S. Mishra, Advocate on behalf of Shri Mool Chand Jain, Advocate For Respondents : Shri Ajay Kumrani, Advocate on behalf of Shri Amit Chaudhary, Advocate ------------------------------------------------------------------------------------------------------- Hon'ble Shri Justice Arvind Singh Chandel Order on Board 21.6.2022

1.

With the consent of Learned Counsel appearing for the parties, the matter is heard finally.

2.

By way of the instant petition, the Petitioner has questioned legality and propriety of the notice issued by Respondent 2/Income Tax Officer under Section 148 of the Income Tax Act, 1961. 3. Learned Counsel appearing for the Petitioner submits that the notice under Section 148 of the Income Tax Act, 1961 has been issued to the Petitioner on 7.7.2021 for assessment year 2015-16 which is beyond the limitation extended upto 30.6.2021 by notification dated 27.4.2021 which is barred by limitation.

4.

Learned Counsel appearing for the Respondents submits that the issue involved herein has already been decided by a Co-ordinate

2 Bench of this Court in Writ Petition (T) No.135 of 2022 along with other connected matters.

5.

I have heard Learned Counsel appearing for the parties and perused the order passed by the Co-ordinate Bench of this Court in Writ Petition (T) No.135 of 2022, wherein it is observed as under:

“2. At the outset, Mr. Chaudhary submits that this case is squarely covered by the judgment of the Hon’ble Supreme Court rendered in Union of India & others v. Ashish Agarwal, reported in (2022) SCC OnLine SC 543. 3. Mr. Goyal, however, submits that the present case is not covered as the notice issued under Section 148 of the Income Tax Act, 1961 was not a valid notice as the same was time-barred and that the notice did not bear DIN number.

4.

The Hon’ble Supreme Court disposed of the aforesaid case as follows:

“26. In view of the above and for the reasons stated above, the present Appeals are ALLOWED IN PART. The impugned common judgment and orders passed by the High Court of Judicature at Allahabad in W.T. No.524/2021 and other allied tax appeals/petitions, is/are hereby modified and substituted as under:- (i) The impugned section 148 notices issued to the respective assessees which were issued under unamended section 148 of the IT Act, which were the subject matter of writ petitions before the various respective High Courts shall be deemed to have been issued under section 148A of the IT Act as substituted by the Finance Act, 2021 and construed or treated to be show- cause notices in terms of section 148A(b). The assessing officer shall, within thirty days from today provide to the respective assessees information and material relied upon by the Revenue, so that the assessees can reply to the show-cause notices within two weeks thereafter; (ii)The requirement of conducting any enquiry, if required, with the prior approval of specified authority under section 148A(a) is hereby dispensed with as a one-time measure vis-a-vis

3 those notices which have been issued under section 148 of the unamended Act from 1.4.2021 till date, including those which have been quashed by the High Courts. Even otherwise as observed hereinabove holding any enquiry with the prior approval of specified authority is not mandatory but it is for the concerned Assessing Officers to hold any enquiry, if required; (iii) The assessing officers shall thereafter pass orders in terms of section 148A(d) in respect of each of the concerned assessees; Thereafter after following the procedure as required under Section 148A may issue notice under section 148 (as substituted); (iv) All defences which may be available to the assessees including those available under section 149 of the IT Act and all rights and contentions which may be available to the concerned assessees and Revenue under the Finance Act, 2021 and in law shall continue to be available.

27.

The present order shall be applicable PAN INDIA and all judgments and orders passed by different High Courts on the issue and under which similar notices which were issued after 1.4.2021 issued under section 148 of the Act are set aside and shall be governed by the present order and shall stand modified to the aforesaid extent. The present order is passed in exercise of powers under Article 142 of the Constitution of India so as to avoid any further appeals by the Revenue on the very issue by challenging similar judgments and orders, with a view no to burden this Court with approximately 9000 appeals. We also observe that present order shall also govern the pending writ petitions, pending before various High Courts in which similar notices under section 148 of the Act issued after 1.4.2021 are under challenge.

28.

The impugned common judgments and orders passed by the High Court of Allahabad and the similar judgments and orders passed by various High Courts, more particularly, the respective judgments and orders passed by the various High Courts particulars of which are mentioned hereinabove, shall stand modified/ substituted to the aforesaid extent only.”

4

6.

In the light of the above observations made by the Division Bench of this Court, the instant petition stands disposed of.

(Arvind Singh Chandel)

JUDGE Gopal

More judgments on Section 148

All 35,022 judgments and leading authorities on Section 148 →

Recent GST High Court judgments

Search GST case law →