MANOJ JAIPRAKASH KABRA vs. THE INCOME TAX OFFICER AND OTHERS

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WP/1/2023HC BombayHCBM03046538202212 September 2024Bench: HON'BLE SHRI JUSTICE RAVINDRA V. GHUGE,HON'BLE SHRI JUSTICE Y. G. KHOBRAGADE3 pages
AI SummaryAllowed

What did the High Court hold?

The Bombay High Court, Aurangabad Bench, allowed the writ petitions. The Court found that the issue concerning the validity of notices issued under Section 148 of the Income Tax Act, 1961, in circumstances where they are issued beyond three years and the escaped income is less than Rs. 50,00,000/-, is no longer res integra. The Court noted that the revenue was unable to demonstrate from the record that the notices were issued within the three-year period or that the escaped assessment amount exceeded Rs. 50,00,000/-. Consequently, the Court held that the notices were not in conformity with the provisions of Section 149(1)(b) of the Act. The petitions were allowed in terms of prayer clause 'C', implying the quashing of the impugned notices. No issue was expressly left undecided.

What were the facts?

The petitioners, Manoj Jaiprakash Kabra and Kanchan Manoj Kabra, filed writ petitions challenging notices issued under Section 148 of the Income Tax Act, 1961, for escaped assessment for the Assessment Year 2016-2017. The core of their grievance was that the notices were issued beyond three years from the end of the relevant assessment year, and the alleged escaped income was less than Rs. 50,00,000/-. The petitioners contended that under Section 149(1)(b) of the Act, such notices could only be issued within ten years if the escaped income exceeded Rs. 50,00,000/-, and within three years otherwise. The revenue, represented by the Income Tax Officer and others, was unable to demonstrate from the record that the notices were issued within the three-year period or that the escaped assessment amount was above Rs. 50,00,000/-.

What were the issues?

1. Whether the notices issued under Section 148 of the Income Tax Act, 1961, for the Assessment Year 2016-2017 are valid, considering they were issued beyond three years and the alleged escaped income is less than Rs. 50,00,000/-, in light of Section 149(1)(b) of the Act? Assessee's Contentions: The learned Advocate for the petitioners argued that the notices under Section 148 are invalid because they were issued beyond the three-year period from the end of the Assessment Year 2016-2017, and the amount of escaped assessment is less than Rs. 50,00,000/-. They relied on Section 149(1)(b) of the Income Tax Act, 1961, which stipulates that for escaped income less than Rs. 50,00,000/-, notices for reassessment can only be issued within three years from the end of the relevant assessment year. The petitioners asserted that the issue is no longer res integra. Revenue's Contentions: The learned Advocate for the Department was unable to indicate from the record that the impugned notices were issued within three years and that the amount of escaped assessment was more than Rs. 50,00,000/-.

Which sections of the Income-tax Act were involved?

Section 147,Section 148,Section 149(1)(b)

AI-generated summary — verify with the full judgment below

- 1 - IN THE HIGH COURT OF JUDICATURE AT BOMBAY

BENCH AT AURANGABAD 913 WRIT PETITION NO. 1 OF 2023 MANOJ JAIPRAKASH KABRA VERSUS THE INCOME TAX OFFICER AND OTHERS AND 914 WRIT PETITION NO. 2 OF 2023 KANCHAN MANOJ KABRA VERSUS THE INCOME TAX OFFICER AND OTHERS Mr.D.R.Jethliya, Advocate for the Petitioners. Mr.Alok Sharma, Advocate for Respondent Nos. 1 and 2. ( CORAM : RAVINDRA V. GHUGE AND Y.G.KHOBRAGADE, JJ.) DATE : SEPTEMBER 12, 2024 PER COURT : 1. The substantive prayers put forth by the Petitioners is in terms of clauses A, B and C. 2. The only issue raised in these Petitions is as regards the escaped assessment of an amount, which is less than Rs.50,00,000/- (Rs. Fifty Lakhs). As regards the issuance of notices for reassessment or khs/Sep.2024/1 2024:BHC-AUG:22064-DB

- 2 - re-computation under Section 147 of the Income Tax Act, 1961, it is undisputed that the notices were issued under Section 148 of the Income Tax Act, 1961. 3. The Petitioners have filed the income tax returns for the Assessment Year 2016-2017. Hence, the grievance of the Petitioners is that the notices under Section 148 cannot be issued in the light of Section 149(1)(b) of the Income Tax Act, 1961, with reference to the escaped assessment, if the notices are issued beyond three years of the Assessment Year and if the amount is less than Rs.50,00,000/- (Rs. Fifty lakhs). The notices in such peculiar circumstances could be issued even within ten years, provided the escaped income is more than Rs.50,00,000/- (Rs. Fifty lakhs). 4. This issue is no longer res-integra. Despite the vehement submissions of the learned Advocate Shri. Sharma, for the Department, he is unable to indicate from the record that the impugned notices were issued within three years and that the amount of escaped assessment was more than Rs.50,00,000/-. khs/Sep.2024/1

- 3 - 5. Therefore, these Writ Petitions are allowed in terms of prayer clause ‘C’. ( Y.G.KHOBRAGADE, J. ) ( RAVINDRA V. GHUGE, J.) khs/Sep.2024/1

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