YOGESH VAIJANATH DAHIWAL vs. MINISTRY OF FINANCE THROUGH CENTRAL BOARD OF DIRECT TAXES AND OTHERS

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WP/2107/2023HC BombayHCBM03007157202320 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's counsel was unable to demonstrate from the record that the impugned 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 Court concluded that the notice was issued in contravention of Section 149(1)(b) of the Income Tax Act, 1961. The ratio decidendi is that a notice for reassessment under Section 148, for an escaped income below Rs. 50,00,000/-, cannot be issued beyond three years from the end of the relevant assessment year unless the escaped income is more than Rs. 50,00,000/-. The Writ Petition was allowed in terms of prayer Clause ‘E’, implying the quashing of the impugned notice.

What were the facts?

The petitioner, Yogesh Vaijanath Dahiwal, filed a writ petition before the Bombay High Court, Aurangabad Bench, challenging a notice issued under Section 148 of the Income Tax Act, 1961. The notice pertained to the assessment year 2017-2018. The core of the petitioner's grievance was that the notice for reassessment, concerning an amount less than Rs. 50,00,000/-, was issued beyond three years from the end of the relevant assessment year. The petitioner argued that Section 149(1)(b) of the Act restricts such notices beyond three years if the escaped income is below Rs. 50,00,000/-, unless the escaped income exceeds Rs. 50,00,000/-, in which case a notice could be issued 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/- can be issued beyond three years from the end of the relevant assessment year, in light of Section 149(1)(b) of the Act? (Question of law) Assessee's contention: The notice under Section 148 is invalid as it was issued beyond three years for an escaped assessment amount less than Rs. 50,00,000/-, violating the conditions stipulated in Section 149(1)(b). Revenue's contention: The learned Advocate for the Department was 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/-.

Which sections of the Income-tax Act were involved?

Section 148,Section 149(1)(b)

AI-generated summary — verify with the full judgment below

909-WP-2107-2023.odt IN THE HIGH COURT OF JUDICATURE AT BOMBAY BENCH AT AURANGABAD WRIT PETITION NO. 2107 OF 2023 Yogesh Vaijanath Dahiwal VERSUS The Ministry of Finance And Other ... 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 ‘E’.

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:6490-DB

909-WP-2107-2023.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 ‘E’. (R. M. JOSHI, J) (RAVINDRA V. GHUGE, J) Malani

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