M/S GURUTEG BAHADUR RICE MILL vs. ASSISTANT COMMISSIONER OF INCOME TAX

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WPT/62/2022HC ChhattisgarhCGHC01007786202212 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 the petitions had already been decided by a Division Bench of the same court. This decision was based on the Supreme Court's judgment in Union of India & Others v. Ashish Agarwal. The Supreme Court, in its judgment, had modified and substituted the impugned notices issued under the unamended Section 148 of the IT Act. These notices were to be deemed as issued under Section 148A of the IT Act and construed 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 then to pass orders under Section 148A(d) and, thereafter, issue notices under the substituted Section 148. All defenses available to the assessees and the Revenue were preserved. The High Court, in light of this, disposed of the petitions.

What were the facts?

The petitioners, M/s Scania Steels And Powers Limited and M/s Guruteg Bahadur Rice Mill, filed writ petitions before the High Court of Chhattisgarh, Bilaspur. They challenged notices issued by the Income Tax Officer under Section 148 of the Income Tax Act, 1961. The assessment years are not explicitly stated for all petitioners, but the notices were issued after April 1, 2021. The High Court noted that the issue involved had already been decided by a Division Bench of the same court, which followed the Supreme Court's decision in Union of India & Others v. Ashish Agarwal. The Supreme Court had provided directions for notices issued under the unamended Section 148 of the Income Tax Act.

What were the issues?

1. Whether the notices issued by the Income Tax Officer under Section 148 of the Income Tax Act, 1961, are liable to be quashed. This is a question of law and fact, turning on the interpretation and application of Section 148 and Section 148A of the Income Tax Act, 1961, as amended by the Finance Act, 2021, and the Supreme Court's decision in Union of India & Others v. Ashish Agarwal. Assessee's contention: The petitioners are challenging the validity of the Section 148 notices. Revenue's contention: The revenue relies on the Supreme Court's decision in Union of India & Others v. Ashish Agarwal, which modified the High Courts' orders and provided a mechanism for treating such notices as show-cause notices under Section 148A(b).

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. 21 of 2022 M/s Scania Steels And Powers Limited A Company Registered Under Companies Act, 2013, Through Its Director Sanjay Gadodia Having Its Registered Office At 22-Km Mile Stone, Village Punjipatra, Gharghoda Road, Raigarh Chhattisgarh. ---- Petitioner Versus

1.

Union Of India Through Its Secretary, Ministry Of Finance, (Department Of Revenue), No. 137, North Block, New Delhi 110001. 2. Assistant Commissioner Of Income Tax Central Circle - 1(1), Aayakar Bhawan, Vyapar Vihar, Bilaspur, Chhattisgarh.

3.

Joint Commissioner Of Income Tax Range - 1, Bilaspur Mahima Complex, Income Tax Office, Vyapar Vihar Road, Bilaspur, Chhattisgarh. ---- Respondents WPT No. 20 of 2022 M/s Scania Steels And Powers Limited A Company Registered Under Companies Act, 2013, Through Its Director Sanjay Gadodia Having Its Registered Office At 22-Km Mile Stone, Village Punjipatra, Gharghoda Road, Raigarh, Chhattisgarh., District : Raigarh, Chhattisgarh ---- Petitioner Versus

1.

Union Of India Through Its Secretary, Ministry Of Finance, (Department Of Revenue), No.137, North Block, New Delhi - 110001. 2. Assistant Commissioner Of Income Tax Central Circle-1 (1), Aayakar Bhawan, Vyapar Vihar, Bilaspur, Chhattisgarh.

3.

Principal Commissioner Of Income Tax Raipur- 1, New C.R. Building, Civil Lines, Raipur, Chhattisgarh. ---- Respondents WPT No. 19 of 2022 M/s Scania Steels And Powers Limited A Company Registered Under Companies Act, 2013 Through Its Director Sanjay Gadodia Having Its Registered Office At 22 Km Mile Stone, Village Punjipatra, Gharghoda Road, Raigarh, Chhattisgarh. ---- Petitioner Versus

1.

Union Of India Through Its Secretary, Ministry Of Finance, (Department Of Revenue), No. 137, North Block New Delhi -110001

2.

Assistant Commissioner Of Income Tax, Central Circle-1(1), Aayakar

2 Bhawan, Vyapar Vihar, Bilaspur, Chhattisgarh.

3.

Joint Commissioner Of Income Tax, Range-1, Bilaspur Mahima Complex, Income Tax Officer, Vyapar Vihar Road, Bilaspur, Chhattisgarh. ---- Respondents WPT No. 62 of 2022 M/s Guruteg Bahadur Rice Mill A Partnership Firm, Through Its Partner Sunny Lunia, Aged About 36 Years, Having Its Office At Village Sirgiri, Jhalkhamaria, Mahasamund, Chhattisgarh. ---- Petitioner Versus

1.

Assistant Commissioner Of Income Tax Central Circle 1 (1), Aayakar Bhawan, Vyapar Vihar, Bilaspur, Chhattisgarh.

2.

Principal Commissioner Of Income Tax Raipur-1, New C.R. Building, Civil Lines, Raipur, Chhattisgarh. ---- Respondents ________________________________________________________________________ For Petitioners : Shri Apurv Goyal, Advocate For Respondent/Union of India : Shri Tushal Dhar Diwan and Ms. Anmol Sharma, Advocates For Respondent/Income Tax Authorities: 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 3 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 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;

4 (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 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.”

5

3.

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

(Sanjay S. Agrawal)

JUDGE sunita

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