SHAILESH SHIVPRASAD KABRA vs. THE PRINCIPAL CHIEF COMMISSIONER OF INCOME TAX AND ANOTHER

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WP/9848/2022HC BombayHCBM03031791202220 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 raised by the petitioner was no longer res integra (undecided). The court found that the revenue's 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. Consequently, the court allowed the writ petition. The ratio decidendi is that a notice under Section 148, issued beyond three years for an escaped assessment of less than Rs. 50,00,000, is invalid under Section 149(1)(b) of the Income Tax Act, 1961, unless the revenue can demonstrate otherwise from the record. The operative direction was to allow the petition in terms of prayer clause 'C', which was the substantive prayer to quash the notice.

What were the facts?

The petitioner, Shailesh Shivprasad Kabra, 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 2016-2017 and concerned an alleged escaped assessment. The petitioner argued that the notice was invalid because it was issued beyond three years from the end of the relevant assessment year, and the amount of escaped income was less than Rs. 50,00,000. The revenue, represented by the Principal Chief Commissioner of Income Tax and another, contended that the notice was valid. The court was informed that the substantive prayer was for quashing the notice.

What were the issues?

1. Whether a notice under Section 148 of the Income Tax Act, 1961, for escaped assessment for Assessment Year 2016-2017, issued beyond three years from the end of the said assessment year, is valid when the amount of escaped assessment is less than Rs. 50,00,000, as per Section 149(1)(b) of the Act? Assessee's Contention: The petitioner argued that the notice under Section 148 was invalid. This was because it was issued beyond the three-year period stipulated in Section 149(1)(b) of the Income Tax Act, 1961, and the alleged escaped income was below Rs. 50,00,000. The petitioner relied on the provisions of Section 149(1)(b) to support this argument. Revenue's Contention: The revenue, through its learned advocate, argued that the impugned notice was valid. However, the judgment does not record specific authorities, circulars, or precedents relied upon by the revenue.

Which sections of the Income-tax Act were involved?

Section 148,Section 149(1)(b)

AI-generated summary — verify with the full judgment below

904-WP-9848-2022.odt IN THE HIGH COURT OF JUDICATURE AT BOMBAY BENCH AT AURANGABAD WRIT PETITION NO. 9848 OF 2022 Shailesh Shivprasad Kabra 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 2016-2017. Hence, the grievance of the Petitioner is that the notice under 2024:BHC-AUG:6485-DB

904-WP-9848-2022.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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