GOVIND RADHURAM JAIDHARA vs. INCOME TAX OFFICER WARD 28 1 1 MUMBAI AND ORS

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WP/12572/2024HC BombayHCBM01042450202430 September 2024Author: HON'BLE SHRI JUSTICE G. S. KULKARNI,HON'BLE SHRI JUSTICE SOMASEKHAR SUNDARESAN3 pages
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What did the High Court hold?

The High Court held that the notice issued under Section 148 of the Income Tax Act, 1961, dated March 30, 2024, for AY 2019-20, could not have been issued. The reasoning was based on the petitioner's submission regarding Section 149(1)(b)(3) of the Act. This provision stipulates that a notice under Section 148 can be issued if more than three years but not more than ten years have elapsed from the end of the relevant assessment year, provided the Assessing Officer possesses evidence revealing escaped income of Rs. 50,00,000/- or more. Since the notice was issued for an escaped income of Rs. 25,00,000/-, it did not meet the threshold stipulated in the said provision. The revenue's concession further supported this finding. The petition was allowed in terms of prayer clause (a), quashing the notice. No costs were awarded.

What were the facts?

The petitioner, Govind Radhuram Jaidhara, filed a writ petition before the Bombay High Court challenging a notice issued under Section 148 of the Income Tax Act, 1961, dated March 30, 2024. This notice pertained to Assessment Year (AY) 2019-20 and was issued by the Income Tax Officer, Ward 28(1)(1), Mumbai. The petitioner sought to quash this notice and prohibit the revenue from taking any further steps based on it. The core of the challenge revolved around the validity of issuing the Section 148 notice for the specified AY.

What were the issues?

1. Whether the notice issued under Section 148 of the Income Tax Act, 1961, dated March 30, 2024, for AY 2019-20 is valid, considering the provisions of Section 149(1)(b)(3) of the Act? (Question of law) The petitioner contended that the notice was invalid because it was issued for AY 2019-20 on the ground of escaped income amounting to Rs. 25,00,000/-. The petitioner argued that Section 149(1)(b)(3) contemplates such a notice only when the escaped income is Rs. 50,00,000/- or more. The petitioner relied on the specific wording of Section 149(1)(b)(3) of the Income Tax Act, 1961. The revenue, through its counsel, fairly conceded to the contentions raised by the petitioner.

Which sections of the Income-tax Act were involved?

Section 148,Section 149(1)(b)(3)

AI-generated summary — verify with the full judgment below

34-WP-12572-2024.DOC IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURISDICTION WRIT PETITION NO. 12572 OF 2024

Govind Radhuram Jaidhara ...Petitioner Versus Income Tax Officer Ward 28(1)(1), Mumbai & Ors. …Respondents ---- Ms. Rutuja Pawar a/w Sneha More for Petitioner. Mr. Arjun Gupta for Respondent Nos.1 to 3. _______________________ CORAM: G. S. KULKARNI & SOMASEKHAR SUNDARESAN, JJ. DATE 30 SEPTEMBER 2024 _______________________ P.C.

1.

Heard Ms. Rutuja Pawar, learned counsel for the petitioner and Mr. Gupta, learned counsel for respondent / revenue.

2.

This petition under Article 226 of the Constitution of India is filed praying for the following substantive reliefs: “a. That this Hon’ble Court may be pleased to issue a Writ of Certiorari or a Writ in the nature of Certiorari or any other appropriate Writ, Order or direction, calling for the records of the Petitioner’s case and after going into the legality and propriety thereof, to quash and set aside the said Notice u/s. 148 dated 30.03.2024 (Exh. F) for A. Y. 2019-20. b. That this Hon’ble Court may be pleased to issue a Writ of prohibition or a Writ in the nature of prohibition or any other appropriate Writ, Order or direction under Article 226 of the 30 September 2024 Kiran Kawre

34-WP-12572-2024.DOC Constitution of India prohibition Respondents from taking any steps in furtherance of the said Notice u/s. 148 of the Act dated 30.03.2024 for A. Y. 2019-20.”

3.

At the outset Ms. Pawar would contend that the petitioner would become entitled to the relief as prayed for, considering the provisions of Section 149(1)(b)(3) of the Income Tax Act, 1961, in as much as the case being for the assessment year 2019-20, no notice under Section 148 could have been issued for the relevant assessment year on the ground that the income has escaped assessment which is of an amount of Rs.25,00,000/- when the provisions itself contemplates that it could be issued when income has escaped assessment for the amount which is likely to be 50,00,000/- or more. For convenience, we note the said provisions which reads thus: “Section 149(1) in The Income Tax Act, 1961 (1)No notice under section 148 shall be issued for the relevant assessment year,— (a)…………... [(b) if three years, but not more than ten years, have elapsed from the end of the relevant assessment year unless the Assessing Officer has in his possession books of account or other documents or evidence which reveal that the income chargeable to tax, represented in the form of- (i) ………….. (ii) ………….. (iii) an entry or entries in the books of account,”

4.

Mr Gupta, learned counsel for the revnue would fairly conced to such 30 September 2024 Kiran Kawre

34-WP-12572-2024.DOC contentions as urged on behalf of the petitioner. In this view fo the matter, in our opinion, the notice under Section 148 could not have been issued.

5.

The petition is accordingly allowed in terms of prayer clause (a).

6.

Disposed of in the aforesaid terms. No costs. (SOMASEKHAR SUNDARESAN, J.) (G. S. KULKARNI , J.) 30 September 2024 Kiran Kawre

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