M/S SUMEET GEMS AND JEWELLERS PRIVATE LIMITED vs. UNION OF INDIA

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WPT/144/2023HC ChhattisgarhCGHC01015618202304 December 2023Bench: HON'BLE SHRI JUSTICE NARENDRA KUMAR VYAS4 pages
AI SummaryWithdrawn

What did the High Court hold?

The High Court disposed of the writ petitions. The revenue, through its counsel, informed the Court that an application had been filed before the Income Tax Settlement Commission (ITSC) to recall its earlier order dated 15.01.2019. The revenue also stated that they had withdrawn the notices issued to the petitioner. The Court noted that the withdrawal memo dated 06.11.2023, issued by the Principal Commissioner of Income Tax, clearly demonstrated the department's decision not to proceed further with the impugned notices. Consequently, as the department had decided to withdraw the notices and not pursue the reassessment proceedings, there was nothing left to adjudicate in the writ petitions. The Court found that the withdrawal of notices rendered the petitions infructuous.

What were the facts?

The petitioner, M/s Sumeet Gems And Jewellers Private Limited, filed three writ petitions challenging proceedings initiated under Sections 147, 148, and 148A of the Income Tax Act for assessment year 2016-17. The challenges were against notices dated 30.06.2021, 23.05.2022, 15.07.2022, and 18.07.2022, and an order dated 15.07.2022 passed under Section 148A(d). These proceedings followed a search and seizure operation on 17.12.2015 and subsequent statements recorded under Section 132(4). The petitioner had previously approached the Income Tax Settlement Commissioner (ITSC) Kolkata, which passed a final settlement order on 16.01.2019. The Income Tax Department, through the Deputy Commissioner and Principal Commissioner, issued the impugned notices.

What were the issues?

1. Whether the Income Tax Department can initiate reassessment proceedings under Section 147 of the Income Tax Act, 1961, when the assessment year was already covered by a final settlement order passed by the Income Tax Settlement Commission (ITSC) under Section 245D(4) of the Act? Assessee's Contention: The petitioner argued that the reassessment proceedings were invalid as the matter had already been settled by the ITSC. The notices were issued after a settlement order had been passed, and therefore, the department could not reopen the case. Revenue's Contention: The revenue, through the learned counsel, submitted that they had filed an application under Section 245D(6) read with Section 245D(7) of the Income Tax Act before the ITSC to recall its order dated 15.01.2019. The initiation of proceedings under Section 147 was based on new findings, and to address the assessee's plea that reopening could not be initiated afresh, a parallel petition was being filed with the ITSC to recall its order and decide the issues accordingly. The department also stated that they had withdrawn the notices.

Which sections of the Income-tax Act were involved?

Section 147,Section 148,Section 148A,Section 132(4),Section 245D(4),Section 245D(6),Section 245D(7)

AI-generated summary — verify with the full judgment below

Page 1 of 4 NAFR HIGH COURT OF CHHATTISGARH, BILASPUR WPT No. 140 of 2023 M/s Sumeet Gems And Jewellers Private Limited A Company Within The Meaning Of The Companies Act, 2013, Through Its Authorized Signatory And Director Shri Ankit Kankariya S/o Shri Ashok Kumar Kankariya, Aged About 33 Years, Having Its Registered Office At Tahir Plaza, Malviya Road, Raipur, Chhattisgarh 492001. ---- Petitioner Versus 1. Union Of India Through The Secretary, Ministry Of Finance, Department Of Revenue, Having His Office At The Central Secretariat, North Block, New Delhi- 110001. 2. Central Board Of Direct Taxes Having Its Office At The North Block, Secretariat Building, New Delhi- 110002. 3. Deputy Commissioner Of Income Tax Circle-1(1) Raipur, Having His Office At Aayakar Bhawan, Central Revenue Building, Civil Lines, Raipur, Chhattisgarh- 492001 4. Principal Commissioner Of Income Tax-1 Raipur, Having His Office At Aayakar Bhawan, Central Revenue Building, Civil Lines, Raipur, Chhattisgarh- 492001. 5. Principal Chief Commissioner Of Income Tax Madhya Pradesh And Chhattisgarh, Having His Office At Aaykar Bhawan, Hoshangabad Road, Arera Colony, Bhopal Madhya Pradesh 462026. ---- Respondents WPT No. 142 of 2023 M/s Sumeet Gems And Jewellers Private Limited A Company Within The Meaning Of The Companies Act, 2013, Through Its Authorized Signatory And Director Shri Ankit Kankariya S/o Shri Ashok Kumar Kankariya, Aged About 33 Years, Having Its Registered Office At Tahir Plaza, Malviya Road, Raipur, Chhattisgarh 492001. ---- Petitioner Versus 1. Union Of India Through The Secretary, Ministry Of Finance, Department Of Revenue, Having His Office At The Central Secretariat, North Block, New Delhi- 110001. 2. Central Board Of Direct Taxes Having Its Office At The North Block, Secretariat Building, New Delhi- 110002. 3. Deputy Commissioner Of Income Tax Circle-1(1) Raipur, Having His Office At Aayakar Bhawan, Central Revenue Building, Civil Lines, Raipur, Chhattisgarh- 492001 4. Principal Commissioner Of Income Tax-1 Raipur, Having His Office At Aayakar Bhawan, Central Revenue Building, Civil Lines, Raipur,

Page 2 of 4 Chhattisgarh- 492001. 5. Chief Commissioner Of Income Tax Chhattisgarh, Having His Office At Aayakar Bhawan, Central Revenue Building, Civil Lines, Raipur, Chhattisgarh 4920001 6. Principal Chief Commissioner Of Income Tax Madhya Pradesh And Chhattisgarh, Having His Office At Aaykar Bhawan, Hoshangabad Road, Aaykar Bhawan, Hoshangabad Road, Arera Colony, Bhopal, Madhya Pradesh 462026. ---- Respondents WPT No. 144 of 2023 M/s Sumeet Gems And Jewellers Private Limited A Company Within The Meaning Of The Companies Act, 2013, Through Its Authorized Signatory And Director Shri Ankit Kankariya S/o Shri Ashok Kumar Kankariya, Aged About 33 Years, Having Its Registered Office At Tahir Plaza, Malviya Road, Raipur, Chhattisgarh- 492001 ---- Petitioner Versus 1. Union Of India Through The Secretary, Ministry Of Finance, Department Of Revenue, Having His Office At The Central Secretariat, North Block, New Delhi-110001. 2. Central Board Of Direct Taxes Having Its Office At The North Block, Secretariat Building, New Delhi - 110002 3. Deputy Commissioner Of Income Tax-1 Circle-1(1) Raipur, Having His Office At Aayakar Bhawan, Central Revenue Building, Civil Lines, Raipur, Chhattisgarh-492001 4. Principal Commissioner Of Income Tax -1 Raipur, Having His Office At Aayakar Bhawan, Central Revenue Building, Civil Lines, Raipur, Chhattisgarh-492001 5. Chief Commissioner Of Income Tax, Chhattisgarh Having His Office At Aayakar Bhawan, Central Revenue Building, Civil Lines, Raipur, Chhattisgarh-492001 6. Principal Chief Commissioner Of Income Tax Madhya Pradesh And Chhattisgarh, Having His Office At Aayakar Bhawan, Hoshangabad Road, Arera Colony, Bhopal, Madhya Pradesh - 462026 ---- Respondents For Petitioner : Mr. Abhishek Sinha, Senior Advocate with Mr. Apurv Goyal, Advocate For Respondent 3 to 5 : Mr. Amit Chaudhari, Advocate Hon'ble Shri Justice

Narendra Kumar Vyas

Order on Board

Page 3 of 4 05.12.2023 1. The petitioner has filed present petition under Article 226 of Constitution of India challenging the initiation of proceedings under Section 147, 148 and 148A of the Income Tax Act for assessment year 2016-17, notice dated 30.06.2021, communication dated 23.05.2022, order dated 15.07.2022 issued under Section 148A(d) and notice dated 18.07.2022 under Section 148 of Income Tax Act. 2. The brief facts as reflected from the record is that there was a search and seizure operations conducted on 17.12.2015 and on subsequent dates, the statements were recorded under Section 132(4) of the Income Tax Act. Thereafter the proceedings were drawn for assessment of tax. The petitioner has moved an application under Section 245D(4) of the Income Tax Act before the Income Tax Settlement Commissioner (IT&WT) Kolkata. The Settlement Commissioner vide its order dated 16.01.2019 has passed the final terms of settlement. Thereafter, respondent No. 3 & 4/Income Tax Department have issued notices on 30.06.201 (Annexure - P/3), Notice dated 23.05.2022 (Annexure - P/4), Notice dated 15.07.2022 and 18.07.2022 (Annexure - P/6). These notices have been assailed by the petitioner in the present writ petition. 3. The petitioner in other Writ Petition (T) no. 142/2023 has also assailed the notices issued to the petitioner - M/s. Sumit Jems and Jewellers Private Limited and in WP(T) No. 144/2023 M/s. Sumit Jems and Jewellers Private Limited have assailed the similar notices. 4. The learned counsel for the respondent Income Tax Mr. Amit Chaudhari has filed communication dated 06.11.2023 which reads as under:- “(i) Enclosed please find an application received from DCIT-1(1), Raipur u/s - 245(D)(6) r.w.s. 245(7) of the Income Tax Act, 1961 for recall of order dated 15.01.2019 passed by the Hon’ble Income Tax Settlement Commission (ITSC) in the case of Sumeet

Page 4 of 4 Gems & Jewellers for the Asstt. Year 2014-15. The same is sent herewith for vetting. (ii) It is pertinent to mention here that, the issue in respect of initiation of proceedings u/s - 147 of the Income Tax Act, 1961 is based on new findings. Now since the assessee pleaded that re-opening proceedings can’t be initiated afresh, the respective Asstt. Year were already covered under the order of Hon’ble ITSC vide order dated 15.01.2019. In order to address the plea of the assessee, a parallel petition is being filed with the Hon’ble ITSC to recall its order and decide the issues accordingly.” 5. He would further submit that after the order passed by the Settlement Commissioner, they have withdrawn the notices, however, they are in process of filing an application under Section 245D(6) read with Section 245D(7) of the Income Tax Act before the Interim Board of Settlement, Kolkata on the grounds mentioned in the application. 6. In view of the recalling of the notice vide memo dated 06.11.2023 issued by the Principal Commissioner, Income Tax, Raipur, nothing is required to adjudicated in the present writ petition as the withdrawal memo itself clearly demonstrates that the department has decided not to proceed further in the notices issued to the petitioner which are under challenged before this Court. 7. Since, the respondent Income Tax Department has already taken decision to withdraw the notices issued to the assessee/petitioner in WP(T) No. 142/2023 and WP(T) No. 144/2023 nothing is required to adjudicated in these petitions also. 8. Accordingly, these three petitions are disposed of. Sd/- (Narendra Kumar Vyas) Judge Manish

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