BANTU KUMAR AGRAWAL vs. PRINCIPAL COMMISSIONER OF INCOME TAX RAIPUR 2

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WPT/183/2021HC ChhattisgarhCGHC01021181202112 May 2022Author: HON'BLE SHRI JUSTICE SANJAY AGRAWAL5 pages
AI SummaryRemanded

What did the High Court hold?

The High Court held that the issue involved in these petitions had already been decided by a Division Bench of the same court in Writ Appeal No. 277/2021. This decision, in turn, was based on the Supreme Court's judgment in Union of India & Others v. Ashish Agarwal. The Supreme Court, in Ashish Agarwal, had modified and substituted its earlier orders concerning Section 148 notices issued under the unamended Act. The Supreme Court directed that such notices issued between April 1, 2021, and the date of its order should be deemed to have been issued under Section 148A of the Act and treated as show-cause notices. The Assessing Officer was directed to provide information to the assessees, who would then have two weeks to reply. The requirement of conducting an enquiry under Section 148A(a) was dispensed with as a one-time measure. The Assessing Officers were to pass orders under Section 148A(d) and thereafter issue notices under the substituted Section 148. All defenses available to the assessees and Revenue under the Finance Act, 2021, and law were preserved. The Supreme Court's order was made applicable PAN INDIA and governed pending writ petitions before various High Courts. Consequently, the High Court disposed of the present petitions in light of the Division Bench's observation, which followed the Supreme Court's directive.

What were the facts?

These are four writ petitions filed by different assessees (a partnership firm, an individual, another partnership firm, and a private limited company) challenging notices issued under Section 148 of the Income Tax Act, 1961. The notices were issued by the Income Tax Officer/Assistant Commissioner of Income Tax. The petitions were filed before the High Court of Chhattisgarh, Bilaspur. The core of the challenge relates to the validity of these notices. The High Court noted that the issue involved had already been decided by a Division Bench of the same court in Writ Appeal No. 277/2021, which followed a Supreme Court judgment.

What were the issues?

1. Whether the notices issued under Section 148 of the Income Tax Act, 1961, are legally valid and proper, particularly in light of amendments and Supreme Court pronouncements. The Assessee's contention, implied by the filing of the writ petitions, is that the Section 148 notices are invalid. The Revenue's position is not explicitly recorded in terms of arguments presented in this specific judgment, but their participation is evident through the presence of their counsel. The judgment relies on the Supreme Court's decision in Union of India & Others v. Ashish Agarwal, which addressed the validity of Section 148 notices issued under the unamended Act after April 1, 2021. The Division Bench of the Chhattisgarh High Court, in a connected matter, had already considered this 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

1 NAFR HIGH COURT OF CHHATTISGARH, BILASPUR WPT No. 179 of 2021 Satyanarayan Nathulal Gandhi Chowk, Neora, District Raipur Chhattisgarh A Partnership Firm, Through Its Late Shri Satya Narayan Agrawal Aged About 56 Years R/o Neora, District Raipur Chhattisgarh ---- Petitioner Versus

1.

Principal Commissioner of Income Tax Raipur 2 Aayakar Bhavan,civil Lines, Raipur Chhattisgarh

2.

The Income Tax Officer Ward-1(2) Civil Lines, Raipur Chhattisgarh ---- Respondents WPT No. 183 of 2021 Bantu Kumar Agrawal S/o Shri Subhashchand Agrawal Aged About 39 Years Resident Of C / 43, Devendra Nagar, Raipur Chhattisgarh. ---- Petitioner Versus

1.

Principal Commissioner Of Income Tax Raipur 2 Aaykar Bhavan, Civil Lines, Raipur Chhattisgarh.

2.

The Assistant Commissioner Of Income Tax Circle 1(1) , Civil Lines, Raipur Chhattisgarh. ---- Respondents WPT No. 185 of 2021 Kachrulal Jitendra Kumar Parboling Plant Ganghi Chowk, Neora, District Raipur Chhattisgarh. A Partnership Firm, Through Its Partner- Narendra Kumar Agrawal, Aged About 58 Years, S/o Late Shri Mangilal Agrawal, R/o Gandhi Chowk, Neora, District- Raipur Chhattisgarh. ---- Petitioner Versus

1.

Principal Commissioner Of Income Tax Raipur-2, Aayakar Bhavan, Civil Lines, Raipur Chhattisgarh.

2.

The Income Tax Officer Ward 1 (2), Civil Lines, Raipur Chhattisgarh. ---- Respondents WPT No. 201 of 2021 Karni Steels Private Limited Plot No. 618, Urla Industrial Area, Raipur (Chhattisgarh) A Co. Regd. Under The Indian Companies Act, 2003, Through Its Director - Ummed Kumar Baid Aged About 61 Years S/o Shri

2 Late Poonamchand Baid R/o Urla Industrial Area, Raipur (Chhattisgarh), ---- Petitioner Versus

1.

Principal Commissioner Of Income Tax Raipur 2 Aaykar Bhavan, Civil Lines, Raipur (Chhattisgarh), District : Raipur, Chhattisgarh

2.

The Assistant Commissioner Of Income Tax, Circle 1(1), Civil Lines, Raipur (Chhattisgarh), District : Raipur, Chhattisgarh ---- Respondents ________________________________________________________________________ For Petitioner : Shri Ashok Patil, Advocate For Respondents : Shri Amit Chaudhari, Shri Ajay Kumrani and Shri Topilal Bareth, Advocates ------------------------------------------------------------------------------------------------------------- Single Bench: Hon'ble Shri Justice Sanjay S. Agrawal Order On Board 13.05.2022

1.

By way of this petition, the Petitioners are questioning the legality and propriety of the notice issued by Respondent No.2- Income Tax Officer under Section 148 of the Income Tax Act, 1961. 2. At the outset, the issue involved herein has already been decided by the Division Bench of this Court in Writ Appeal No.277/2021 along with other connected matters, wherein it is observed at paragraphs 4 and 5 as under :

“4. As the Hon’ble Supreme Court had decided the matter, namely, Union of India & Others v. Ashish Agarwal, reported in (2022) SCC Online SC 543, and as certain time-lines are indicated therein, I.A. No. 2 of 2022 was filed.

5.

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

3 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 those notices which have been issued under section 148 of the unamended Act from 01.04.2021 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 assesses

4 including those available under section 149 of the IT Act and all rights and contentions which may be available to the concerned assesses 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 01.04.2021 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 not 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 01.04.2021 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.

29.

All these appeals are accordingly partly allowed to the aforesaid extent.

30.

In the facts of the case, there shall be no order as to costs.”

3.

In the light of the observation made by the Division Bench of this Court, the petitions stand disposed of.

(Sanjay S. Agrawal)

JUDGE

5 sunita

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