RADHESHYAM LALCHAND MANTRI vs. THE PRINCIPAL COMMISSIONER INCOME TAX 1 AND ANOTHER

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WP/10773/2022HC BombayHCBM03036429202220 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 issuance of the notice under Section 148 of the Income Tax Act, 1961, was invalid. The court found that the petitioner's grievance was that the notice was issued beyond three years from the end of the Assessment Year 2016-2017, and the amount of escaped assessment was less than Rs. 50,00,000/-. The court noted that Section 149(1)(b) permits issuance of such a notice within ten years only if the escaped income exceeds Rs. 50,00,000/-. Since the revenue could not demonstrate from the record that the notice was issued within three years or that the escaped assessment exceeded Rs. 50,00,000/-, the court concluded that the notice was not in conformity with the statutory provisions. Consequently, the writ petition was allowed in terms of prayer Clause ‘C’, implying the quashing of the impugned notice.

What were the facts?

The petitioner, Radheshyam Lalchand Mantri, 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 2016-2017 and concerned an alleged escaped assessment. The petitioner argued that the notice was issued beyond three years from the end of the relevant assessment year and that 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 validly issued. The court was asked to decide on the validity of the Section 148 notice under the given circumstances.

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, can be issued beyond three years from the end of the assessment year when the amount of escaped income is less than Rs. 50,00,000/-, in light of Section 149(1)(b) of the Act? Assessee's Contention: The petitioner argued that Section 149(1)(b) restricts the issuance of a Section 148 notice beyond three years if the escaped income is less than Rs. 50,00,000/-. Therefore, the impugned notice, issued beyond this period for an amount less than Rs. 50,00,000/-, is invalid. Revenue's Contention: The revenue contended that the notice was validly issued. However, the judgment notes that the learned Advocate for the Department was unable to indicate from the record that the 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 147,Section 148,Section 149(1)(b)

AI-generated summary — verify with the full judgment below

906-WP-10773-2022.odt IN THE HIGH COURT OF JUDICATURE AT BOMBAY BENCH AT AURANGABAD WRIT PETITION NO. 10773 OF 2022 Radheshyam Lalchand Mantri 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:6487-DB

906-WP-10773-2022.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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