SATYANARAYAN NATHULAL GANDHI CHOWK , NEORA , DISTRICT RAIPUR CHHATTISGARH vs. PRINCIPAL COMMISSIONEROF INCOME TAX RAIPUR 2

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WPT/179/2021HC ChhattisgarhCGHC01021174202112 May 2022Bench: HON'BLE SHRI JUSTICE SANJAY AGRAWAL5 pages
AI SummaryRemanded

What did the High Court hold?

The High Court of Chhattisgarh, Bilaspur, disposed of the writ petitions in light of the observations made by a Division Bench of the same court in Writ Appeal No. 277/2021. This Division Bench's decision was based on the Supreme Court's ruling in Union of India & Others v. Ashish Agarwal. The Supreme Court had directed that Section 148 notices issued under the unamended Act, which were the subject of writ petitions before various High Courts, shall be deemed to have been issued under Section 148A of the Act as substituted by the Finance Act, 2021. These notices are to be construed as show-cause notices under Section 148A(b). The Assessing Officer is required to provide information and material relied upon to the assessees within thirty days, allowing them two weeks to reply. The requirement of conducting an enquiry under Section 148A(a) was dispensed with as a one-time measure for notices issued from April 1, 2021, till the date of the order. The Assessing Officers are to pass orders under Section 148A(d) and thereafter issue notices under the substituted Section 148, following the prescribed procedure. All defenses available to the assessees and the Revenue under the Finance Act, 2021, and other laws remain available. The Supreme Court's order was applicable pan-India and modified or substituted similar judgments and orders of various High Courts, including pending writ petitions.

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, by the Income Tax Officer/Assistant Commissioner. The petitions were filed before the High Court of Chhattisgarh, Bilaspur. The core issue revolves around the validity of these Section 148 notices. The High Court noted that a Division Bench of the same court had already decided a similar issue in Writ Appeal No. 277/2021, which dealt with the implications of the Supreme Court's decision in Union of India & Others v. Ashish Agarwal.

What were the issues?

1. Whether the Section 148 notices issued under the unamended provisions of the Income Tax Act, 1961, prior to the substitution by the Finance Act, 2021, are valid and should be treated as show-cause notices under Section 148A(b) of the Act, as per the Supreme Court's directions in Union of India & Others v. Ashish Agarwal. Assessee's Contention: The assessees are challenging the legality and propriety of the notices issued under Section 148. While not explicitly stated in this excerpt, the challenge is implied by the filing of writ petitions. The assessees would likely argue that the notices are invalid if not issued in accordance with the law applicable at the time or if procedural requirements were not met. Revenue's Contention: The revenue, through the Principal Commissioner and Income Tax Officer/Assistant Commissioner, issued the notices. Their stance would be that the notices are valid, or if found to be procedurally flawed, they should be treated in accordance with the Supreme Court's directions to allow for proper adjudication.

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. Sd/-

(Sanjay S. Agrawal)

JUDGE

5 sunita

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