Sita Devi Kakwani vs. Central Board Of Direct Taxes

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WP/9099/2023HC Madhya Pradesh25 April 2023Bench: HON'BLE SHRI JUSTICE ROHIT ARYA3 pages
For Petitioner: Prashant Sharma
AI SummaryDismissed

What did the High Court hold?

The High Court held that the jurisdiction conferred upon the Assessing Officer under Section 148A(d) is solely for recording satisfaction as to whether reassessment proceedings may be initiated. This jurisdiction is not a substitute for the substantive jurisdiction under Section 148. The AO is not obliged to record detailed reasons touching the merits of the reassessment issue at this stage. The Court found that the AO had considered the petitioner's objection regarding the time-bar in paragraphs 7.1 and 7.2 of the impugned order and, with reference to the Supreme Court's judgment in Shri Ashish Agarwal, directed that all objections could be raised in response to the notice under Section 148. Therefore, no illegality or jurisdictional error was found in the impugned order, considering the limited scope of Section 148A(d). The Court also observed that the detailed impugned order suggested a bonafide exercise of power. The petitioner was granted liberty to raise all factual and legal grounds before the AO while responding to the notice under Section 148. Consequently, the writ petition was dismissed.

What were the facts?

The petitioner, Sita Devi Kakwani, filed a writ petition under Article 226 of the Constitution of India challenging an order passed by the Assessing Officer (AO) under Section 148A(d) of the Income Tax Act, 1961. The petition was directed against the respondents: the Central Board of Direct Taxes, the Principal Chief Commissioner of Income Tax (MP and CG), and the Deputy Commissioner/Assistant Commissioner of Income Tax-1, Gwalior. The petitioner argued that the reassessment notice related to assessment year 2013-2014, issued in 2021, was time-barred. The AO, in the impugned order, considered this objection and referred to the Supreme Court's decision in Union of India vs. Shri Ashish Agarwal, holding that all objections can be raised in response to a notice under Section 148.

What were the issues?

1. Whether the order passed by the Assessing Officer under Section 148A(d) of the Income Tax Act, 1961, suffers from illegality or jurisdictional error, considering the nature and scope of the AO's jurisdiction under this provision. Assessee's Contention: The reassessment notice pertains to assessment year 2013-2014 and was issued in 2021, making it time-barred. Revenue's Contention: The Assessing Officer, in the impugned order, relied on the Supreme Court's decision in Union of India and Others vs. Shri Ashish Agarwal and Others, which held that all objections can be raised in response to a notice under Section 148. Therefore, the AO's order was not illegal or erroneous as it correctly directed the assessee to raise all objections at the appropriate stage.

Which sections of the Income-tax Act were involved?

Section 148A,Section 148

AI-generated summary — verify with the full judgment below

Before: HONBLE SHRI JUSTICE ROHIT ARYA & HONBLE SHRI JUSTICE SATYENDRA KUMAR SINGH

IN THE HIGH COURT OF MADHYA PRADESH AT GWALIOR BEFORE HON'BLE SHRI JUSTICE ROHIT ARYA & HON'BLE SHRI JUSTICE SATYENDRA KUMAR SINGH ON THE 25th OF APRIL, 2023 WRIT PETITION No. 9099 of 2023 BETWEEN:- SITA DEVI KAKWANI, W/O LATE SHRI KISHORE KAKWANI, AGED : 49 YEARS, OCCUPATION : HOUSEWIFE R/O YADAV COLONY, KATORATAL ROAD, LASHKAR, GWALIOR AT PRESENT 76, PRAGATI VIHAR, BICHOLI, MARDANA, NEAR VIDHYA SAGAR COLLEGE INDORE (MADHYA PRADESH) .....PETITIONER (BY SHRI SIDDHARTH SHARMA-ADVOCATE) AND 1. CENTRAL BOARD OF DIRECT TAXES THROUGH IT'S CHAIRMAN, MINISTRY OF FINANCE DEPARTMENT OF REVENUE, D-1/35, NORTH BLOCK NEW DELHI - 110001. 2. PR. CHIEF COMMISSIONER OF INCOME TAX (MP AND CG), AAYAKAR BHAGWAN, HOSHANGABAD ROAD, BHOPAL, (MADHYA PRADESH) 3. DEPUTY COMMISSIONER OF INCOME TAX/ ASSISTANT COMMISSIONER OF INCOME TAX- 1 (1), GWALIOR, AAYAKAR BHAWAN CENTER, TULSI VIHAR COLONY, GWALIOR, M.P.-474002 .....RESPONDENTS (SHRI HARSHAVARDHAN TOPRE - ADVOCATE FOR RESPONDENTS NO.2 & 3) This petition coming on for admission this day, JUSTICE ROHIT ARYA passed the following: ORDER 1 This writ petition under Article 226 of the Constitution of India is directed against the order passed by the Assessing Officer in exercise of powers under Section 148 (A)(d) of the Income Tax Act. As a matter of fact, the jurisdiction conferred upon Assessing Officer under said Section is only for recording his satisfaction as to whether reassessment proceedings may be initiated against an Assessee for a given assessment year. The nature, scope and dimension of the said jurisdiction is not the substitute of the substantive jurisdiction of Assessing Officer under Section 148 of the Income Tax Act. Indeed, the formation of the opinion of Assessing Officer must be based on relevant facts, however, Assessing Officer is not obliged to record a detailed reason touching the merits of the issue related to reassessment. Otherwise, subtle distinction between the scope of jurisdiction under Section 148 (A)(d) and 148 shall be blurred and the same may give rise to patent jurisdictional errors polluting the course of action intended to be taken for reassessment. This is a distinctive nature of power under Section 148 (A) (d). Now, turning to the facts of the case in hand, learned counsel for petitioner tried to impress upon this Court that notices issued for reassessment relates to assessment year 2013-2014, whereas the notice has been issued in 2021. According to learned counsel, reassessment notice is time barred. This Court has perused the part of the impugned order, where the said objection has been considered particularly Para 7.1 & 7.2. The Assessing Officer with reference to the judgment passed by the Supreme Court in case of Union of India and Others vs. Shri Ashish Agarwal and Others on 04.05.2022 in Civil Appeal No.3005/2022 has found that all objections may be raised in response to the notice under Section 148. Therefore, in our 2 (ROHIT ARYA) JUDGE (SATYENDRA KUMAR SINGH) JUDGE considered view, no illegality or jurisdictional error has crept in the order impugned regard being had to the nature of the jurisdiction of the Assessing Officer under Section 148(A)(d) of the Income Tax Act. Incidentally, it may also be observed that the detailed impugned order itself suggests the bonafide exercise of power under Section 148 (A)(d). Hence, no interference is warranted under Article 226 of the Constitution of India for want of any illegality or jurisdictional error. Nevertheless, before parting with the case, it is considered apposite to observe that petitioner shall have full liberty to raise all grounds based on facts and law before the Assessing Officer while responding to the notice which may be issued under Section 148 of the Income Tax Act. Consequently, writ petition is dismissed with the aforesaid observations. Aman

3 AMAN TIWARI 2023.04.26 18:02:21 +05'30'

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