SUNIL BHIMASHANKAR WALSE vs. THE PRINCIPAL COMMISSIONER INCOME TAX AND OTHERS

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WP/1865/2023HC BombayHCBM03006014202320 March 2024Author: HON'BLE SHRI JUSTICE RAVINDRA V. GHUGE,HON'BLE SHRI JUSTICE R. M. JOSHI2 pages
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What did the High Court hold?

The High Court held that the issue was no longer res-integra. The Court found that the revenue was unable to demonstrate from the record that the notice under Section 148 was issued within three years of the assessment year or that the amount of escaped assessment exceeded Rs. 50,00,000/-. Consequently, the notice was deemed invalid as per the conditions stipulated in Section 149(1)(b) of the Income Tax Act, 1961. The Court allowed the Writ Petition in terms of prayer Clause 'C', which likely sought the quashing of the notice. No other issues were expressly left undecided.

What were the facts?

The Petitioner, Sunil Bhimashankar Walse, filed a Writ Petition before the Bombay High Court at Aurangabad challenging a notice issued under Section 148 of the Income Tax Act, 1961. The notice pertained to the assessment year 2017-2018 and concerned an alleged escaped assessment of an amount less than Rs. 50,00,000/-. The Petitioner's grievance was that the notice, issued beyond three years from the assessment year, was invalid under Section 149(1)(b) of the Act, as the escaped income was below the threshold of Rs. 50,00,000/- for issuance beyond three years but within ten years.

What were the issues?

1. Whether a notice under Section 148 of the Income Tax Act, 1961, for escaped assessment of an amount less than Rs. 50,00,000/-, issued beyond three years from the end of the relevant assessment year, is valid in light of Section 149(1)(b) of the Act? Assessee's Contention: The Petitioner argued that the notice under Section 148 was invalid because it was issued beyond three years from the assessment year 2017-2018, and the amount of escaped assessment was less than Rs. 50,00,000/-. This contravened the provisions of Section 149(1)(b), which permits issuance beyond three years only if the escaped income exceeds Rs. 50,00,000/-. Revenue's Contention: The revenue, through its learned Advocate, was unable to indicate from the record that the impugned notice was issued within three years or that the amount of escaped assessment was more than Rs. 50,00,000/-.

Which sections of the Income-tax Act were involved?

Section 148,Section 149(1)(b)

AI-generated summary — verify with the full judgment below

908-WP-1865-2023.odt IN THE HIGH COURT OF JUDICATURE AT BOMBAY BENCH AT AURANGABAD WRIT PETITION NO. 1865 OF 2023 Sunil Bhimashankar Walse VERSUS The Principal Chief Commissioner Of Income Tax And Another ... Mr. R. R. Chandak, Advocate for the Petitioner Mr. A. M. Sharma, Advocate for Respondents ... CORAM : RAVINDRA V. GHUGE & R. M. JOSHI, JJ DATE : MARCH 20, 2024 PER COURT :

1.

The substantive prayer put-forth by the Petitioner is in terms of clause ‘C’.

2.

The only issue raised in this Petition is as regards the escaped assessment of an amount, which is less than Rs.50,00,000/- (Fifty Lakh). As regards the issuance of a notice for reassessment or re-computation under Section 147 of the Income Tax Act, 1961, it is undisputed that the notice was issued under Section 148 of the Income Tax Act, 1961. 3. The Petitioner had filed the income tax returns for the Assessment Year 2017-2018. Hence, the grievance of the Petitioner is that the notice under 2024:BHC-AUG:6489-DB

908-WP-1865-2023.odt 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 notice is issued beyond three years of the Assessment Year and if the amount is less than Rs.50,00,000/- (Fifty Lakhs). A notice in such peculiar circumstances could be issued even within ten years, provided the escaped income is more than Rs.50,00,000/- (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 notice was issued within three years and that the amount of escaped assessment was more than Rs.50,00,000/-.

5.

Therefore, this Writ Petition is allowed in terms of prayer Clause ‘C’. (R. M. JOSHI, J) (RAVINDRA V. GHUGE, J) Malani

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