ORION BOOK BINDERS PVT LTD vs. INCOME TAX OFFICER, WARD NO 7(1),KOL AND ORS

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WPA/6665/2022HC CalcuttaWBCHCA013952202221 April 2022Bench: HON'BLE JUSTICE MD. NIZAMUDDIN3 pages
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What did the High Court hold?

The Court held that the impugned notice under Section 148 of the Income Tax Act, 1961, and all subsequent proceedings are quashed. The reasoning is based on the mandatory requirement of issuing a notice under Section 148A before issuing a notice under Section 148, especially for cases falling under the amended provisions applicable after April 8, 2021. The Court found that this mandatory procedure was not followed by the Assessing Officer. The Court also noted that the petitioner had delayed filing the writ petition by approximately eleven months without explanation. Despite the delay, the Court quashed the notice and proceedings but clarified that this would not prevent the Assessing Officer from issuing a fresh notice in accordance with the law. The writ petition was allowed subject to the petitioner paying costs of Rs. 5,000/- to the High Court Legal Services Committee.

What were the facts?

The petitioner, Orion Book Binders Pvt. Ltd., challenged a notice issued under Section 148 of the Income Tax Act, 1961. The notice was issued after April 8, 2021. The petitioner argued that the notice was invalid because it was issued without complying with the mandatory procedure under Section 148A of the Act, which requires a prior inquiry and opportunity to be heard before issuing a Section 148 notice. The petitioner also relied on previous judgments of the Calcutta High Court in similar cases. The writ petition was filed approximately eleven months after the receipt of the impugned notice, with no explanation for the delay.

What were the issues?

1. Whether the notice issued under Section 148 of the Income Tax Act, 1961, is invalid for non-compliance with the mandatory procedure prescribed under Section 148A of the Act, particularly when issued after April 8, 2021. Assessee's Contentions: - The notice under Section 148 was issued in violation of Section 148A of the Act, as the Assessing Officer failed to conduct the mandatory inquiry and provide an opportunity of being heard before issuing the notice. - The case is squarely covered by the decisions of this Court in Bagaria Properties and Investment Private Limited & Anr. v. Union of India & Ors. and Monoj Jain v. Union of India & Ors. Revenue's Contentions: - No specific contentions for the revenue are recorded in the judgment.

Which sections of the Income-tax Act were involved?

Section 148,Section 148A,Section 147

AI-generated summary — verify with the full judgment below

21.04.2022. p.b. Sl. No.55. W.P.A. 6665 of 2022 Orion Book Binders Pvt. Ltd. Vs. Union of India & Ors. Mr. Avra Mazumder, Mr. Md. Bilwal Hossain, Mr. Binayak Gupta. ……..for the petitioner. Mr. P. Dudharia. …….for the respondents. Heard learned advocates appearing for the parties. In this writ petition, petitioner has challenged the impugned notice under section 148 of the Income Tax, 1961 which was issued after 8th April, 2021 with supporting documents on the grounds that this case clearly falls under the newly amended Act relating to proceedings under section 147 of the Act and under which there is a mandatory obligation on the part of the assessing officer to issue notice under section 148A of the Act before issuing any notice under section 148 of the Act and which has admittedly not done by the assessing officer and that the impugned notice under section 148 of the Act has been issued violation of section 148 of the Act. Furthermore, this case is directly covered by the orders of this court in the case of Bagaria Properties and Investment Private Limited & Anr. v. Union of India &

2 Ors. reported in (2022) 134 taxman.com 196 (Calcutta) and also in the case of Monoj Jain v. Union of India & Ors. reported in (2022) 134 taxman.com 173 (Calcutta). Considering the facts, the impugned notice under section 148 of the Act and all subsequent proceedings are quashed. However, quashing of the impugned notice and subsequent proceedings will not debar the assessing officer concerned to issue any fresh notice in future in accordance with law. With the above observations, this writ petition being WPA No.6665 of 2022 stands disposed of. This writ petition is allowed subject to payment of costs of Rs.5,000/- to the High Court Legal Services Committee, since the impugned notice under section 148 of the Income Tax Act, 1961 has been issued on 25th June, 2021 as appears from record and this writ petition has been filed in April, 2022, that is, almost after Eleven months from receipt of the impugned notice, without any explanation for such delay in filing this writ petition. Such costs has to be paid by the petitioner to the Calcutta High Court Bar Association Lawyers’ Benevolent Fund within seven days from date. Receipt of payment is to be produced before this court.

3 List this writ petition under the heading “To Be Mentioned” on 2nd May, 2022 for compliance. (Md. Nizamuddin, J.)

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