M/s BALAJEE LOHA PRIVATE LIMITED vs. UNION OF INDIA

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WPT/146/2022HC ChhattisgarhCGHC01014384202210 May 2022Bench: HON'BLE THE CHIEF JUSTICE,HON'BLE SHRI JUSTICE RAJENDRA CHANDRA SINGH SAMANT4 pages
AI SummaryRemanded

What did the High Court hold?

The High Court held that the petition stands disposed of in terms of the order of the Hon'ble Supreme Court in Union of India & Others v. Ashish Agarwal. The Supreme Court's order, which is binding, modified and substituted the impugned common judgment and orders. Specifically, notices issued under the unamended Section 148, 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, and construed as show-cause notices under Section 148A(b). The Assessing Officer is to provide information and material relied upon by the Revenue within thirty days, allowing assessees two weeks to reply. The requirement of conducting an enquiry under Section 148A(a) is dispensed with as a one-time measure for notices issued under the unamended Act from April 1, 2021, till the date of the order. The Assessing Officers shall thereafter pass orders under Section 148A(d) and then issue notice under Section 148 as substituted. All defenses available to the assessees, including under Section 149, and all rights and contentions available to both parties under the Finance Act, 2021, and in law, shall continue to be available. This order is applicable PAN INDIA and governs pending writ petitions.

What were the facts?

The petitioner, M/s Balajee Loha Private Limited, filed a writ petition before the High Court of Chhattisgarh, Bilaspur. The respondents were various authorities of the Union of India and the Income Tax Department. The petitioner and respondents jointly submitted that the matter was covered by the Supreme Court's judgment in Union of India & Others v. Ashish Agarwal. The Supreme Court had dealt with a batch of appeals concerning notices issued under Section 148 of the Income Tax Act, 1961, which were issued under the unamended provisions but after the substitution by the Finance Act, 2021. The High Court, in this case, disposed of the petition in terms of the Supreme Court's order.

What were the issues?

1. Whether notices issued under the unamended Section 148 of the Income Tax Act, 1961, after April 1, 2021, should be treated as show-cause notices under Section 148A(b) of the Act, as substituted by the Finance Act, 2021? (Question of law) Assessee's Contention: Not explicitly recorded, but the joint submission implies acceptance of the Supreme Court's modified approach. Revenue's Contention: Not explicitly recorded, but the joint submission implies acceptance of the Supreme Court's modified approach. 2. Whether the requirement of conducting an enquiry under Section 148A(a) is mandatory for notices issued under the unamended Section 148 after April 1, 2021? (Question of law) Assessee's Contention: Not explicitly recorded. Revenue's Contention: Not explicitly recorded. 3. What is the procedure to be followed by the Assessing Officer for such notices? (Question of mixed law and fact) Assessee's Contention: Not explicitly recorded. Revenue's Contention: Not explicitly recorded.

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. 146 of 2022 M/s Balajee Loha Private Limited A Company Incorporated Under Companies Act, 2013 Through Its Director Shri Suresh Kumar Agrawal Aged About 57 Years, Registered Office At 206, Bajrang Nagar, Near Agrasen Chowk, Raipur, Chhattisgarh ---- Petitioner Versus 1. Union Of India Through The Ld. Secretary, Ministry Of Finance, (Department Of Revenue) No. 137, North Block, New Delhi- 110001, Delhi 2. Central Board Of Direct Tax, Through Its Ld. Chairman Ministry Of Finance (Department Of Revenue)north Block, New Delhi 110002 3. Principal Commissioner Of Income Tax, Raipur -1 New C.R. Building, Civil Lines, Raipur, Chhatisgarh 4. Assistant Commissioner Of Income Tax 1(1), Raipur, Aayakar Bhawan, Central Revenue Building, Civil Lines, Raipur, Chhatisgarh 5. Additional/ Joint/deputy/assistant Commissioner Of Income Tax/income Tax Officer, National E- Assessment Centre, Delhi (Now Known As National Faceles Assessment Centre), Ministry Of Finance (Department Of Revenue), North Block, New Delhi- 110001 ---- Respondents (Cause-title taken from Case Information System) For Petitioner : Mr. Apurv Goyal, Advocate For Respondent No.1 : Mr. Ram Narayan Sahu, CGC For Respondent Nos. 2 to 5 : Mr. Amit Chaudhari, Advocate Hon'ble Shri Arup Kumar Goswami, Chief Justice Hon'ble Shri

Rajendra Chandra Singh Samant

, Judge

Order on Board Per Arup Kumar Goswami, Chief Justice 11.05.2022 Mr. Apurv Goyal, learned counsel for the petitioner, Mr. Ram Narayan Sahu, learned Central Government Counsel, appearing for respondent No.1 and Mr. Amit Chaudhari, learned counsel, appearing for respondent Nos. 2 to 5 submit that this matter is squarely covered by judgment of the

2 Hon’ble Supreme Court rendered in Union of India & Others v. Ashish Agarwal, reported in 2022 SCC Online SC 543. 2. The Hon’ble Supreme Court disposed of the same holding 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

3 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 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

4 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. 3. In view of the above submission, this petition stands disposed of in terms of the order of the Hon’ble Supreme Court.

Sd/- Sd/- (Arup Kumar Goswami) (Rajendra Chandra Singh Samant) Chief Justice Judge Chandra

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