RAMCHANDRA CHOUDHARY SON OF SHRI BHURA RAM CHOUDHARY vs. INCOME TAX OFFICER

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CW/18229/2023HC RajasthanRJHC02092847202322 November 2023Author: MANINDRA MOHAN SHRIVASTAVA,SHUBHA MEHTA5 pages
AI SummaryDismissed

What did the High Court hold?

The Court dismissed the writ petition in limine. It found that the petitioner's claim of not being served with the notice under Section 148A(b) dated 21.03.2023 and the subsequent order under Section 148A(d) dated 30.03.2023 was an afterthought, as evidenced by his own rectification application filed on 08.06.2023, which mentioned receiving the show cause notice and did not dispute service. The rectification application itself stated that the petitioner did not avail sufficient time to file explanations or documentary evidence. The order rejecting the rectification application noted that the case was pending before the Faceless Assessment Unit. The Court also noted that the petitioner's income declared for AY 2016-17 was Rs.3,36,670/-, while he claimed to have paid Rs.42,27,554/- for property purchase, indicating a potential discrepancy. The Court distinguished the present case from the cited judgment in Rajhans Processors Union of India & Others, finding the facts to be different. The Court clarified that the petitioner could raise all available grounds in the reassessment proceedings.

What were the facts?

The petitioner, Ramchandra Choudhary, challenged proceedings initiated under Section 148A(b) of the Income Tax Act, 1961, the order under Section 148A(d) dated 30.03.2023, and the notice under Section 148 dated 30.03.2023, for assessment year 2016-17. He contended these actions were illegal, arbitrary, and violated principles of natural justice and statutory provisions. He claimed he only learned of the proceedings upon receiving the Section 148 notice. He filed a Section 154 application, highlighting lack of proper inquiry and annexing a sale deed for property purchased for Rs.42,27,554/-. This application was rejected on 06.09.2023. The petitioner argued the proceedings should not have been initiated by the Jurisdictional Assessing Officer but by the Assessing Officer as per CBDT Notification dated 29.03.2022, violating Section 151A, and that the notice under Section 148 was issued in violation of Section 144B.

What were the issues?

1. Whether the initiation of proceedings under Section 148A(b), the order under Section 148A(d), and the notice under Section 148 for assessment year 2016-17 were illegal, arbitrary, and violative of principles of natural justice and statutory provisions, including Section 282 read with Rule 127 of the Income Tax Rules, 1962, and CBDT Notification No.04/2017. 2. Whether the proceedings were initiated by the wrong authority, violating Section 151A of the Act, and if the notice under Section 148 violated Section 144B of the Act. 3. Whether proper inquiry proceedings were conducted under Section 148A(a) prior to the issuance of the notice under Section 148A(b). Assessee's Contentions: The petitioner argued that the proceedings were illegal, arbitrary, and violative of natural justice and statutory provisions. He claimed lack of proper inquiry and violation of Section 151A and Section 144B due to the wrong authority initiating proceedings and the notice being issued incorrectly. He also contended that he only became aware of the proceedings upon receiving the Section 148 notice and that his Section 154 application was wrongly rejected. Revenue's Contentions: The respondent revenue did not explicitly record arguments in the judgment, but the court's findings indicate that the revenue's position was that the petitioner had been served with notices and had not provided a proper reply, and that the rectification application was rejected on these grounds.

Which sections of the Income-tax Act were involved?

Section 148A,Section 148A(b),Section 148A(d),Section 148,Section 282,Section 154,Section 151A,Section 144B,Section 148A(a)

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances
HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR D.B. Civil Writ Petition No. 18229/2023 Ramchandra Choudhary Son Of Shri Bhura Ram Choudhary, Aged About 63 Years, Resident Of Near Petrol Pump, Bhankrota, Ajmer Road, Jaipur 302026 ----Petitioner Versus Income Tax Officer, Ward 7(2), Jaipur Having Its Address At Sidhnath Bhawan, Jyoti Nagar Scheme, Lal Kothi Scheme, Behind New Vidhansabha, Janpath, Jaipur 302015 ----Respondent For Petitioner(s) : Ms. Apeksha Bapna Advocate on behalf of Mr. Siddharth Ranka Advocate. For Respondent(s) : Mr. Anuroop Singhi Advocate with Mr. N.S. Bhati Advocate. Mr. Sandeep Pathak Advocate. HON'BLE THE ACTING CHIEF JUSTICE MR. MANINDRA MOHAN SHRIVASTAVA HON'BLE MRS. JUSTICE SHUBHA MEHTA

Order 22/11/2023

1.

Heard on admission.

2.

Learned counsel for the petitioner would argue that initiation of proceedings under Section 148A(b) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act of 1961’), order dated 30.03.2023 passed under Section 148A(d) of the Act of 1961 as also notice under Section 148 of the Act of 1961 issued on 30.03.2023, re-opening assessment in relation to assessment year 2016-17 is illegal, arbitrary, violative of principles of natural justice as also against statutory provisions contained in Section 282 of the Act of 1961 read with Rule 127 of the Income Tax

(2 of 5) [CW-18229/2023] Rules, 1962. It is submitted that Notification No.04/2017 dated 03.04.2017 issued by the Central Board of Direct Taxes has also been violated. When the petitioner received notice under Section 148 of the Act of 1961 on his registered main address, he came to know about the proceedings initiated under Section 148A and order passed thereunder. The petitioner submitted a detailed application for rectification of mistake under Section 154 of the Act of 1961. In the application, it was highlighted that proper enquiry has not been conducted. It was also stated therein that petitioner had purchased an immovable property for a total sale consideration of Rs.42,27,554/- and copy of sale deed was also annexed. But there was no due consideration of the application and vide order dated 06.09.2023 that application has also been rejected. The proceedings could not have been initiated by the Jurisdictional Assessing Officer but only by the Assessing Officer as per Notification dated 29.03.2022 issued by the Central Board of Direct Taxes. Therefore, it is in violation of provisions contained in Section 151A of the Act of 1961. It is also the submission that as per the Notification dated 29.03.2022, the Assessment Unit was required to assign the same to NFAC and the impugned Notice under Section 148 could not have been issued by the respondent- authority and for that reason, the notices are in violation of provisions contained in Section 144B of the Act of 1961. No reason has been assigned as to why no enquiry proceedings were initiated by the Assessing Officer under Section 148A(a) of the Act of 1961 prior to issuance of Notice under Section 148A(b) of the Act of 1961. (3 of 5) [CW-18229/2023]

3.

We have considered the submission of learned counsel for the petitioner.

4.

A notice under Section 148A(b) of the Act of 1961 was issued to the petitioner on 21.03.2023 on the basis of information which suggested that income chargeable to tax for the Assessment Year 2016-17 has escaped assessment. This was based on an information with regard to transaction of purchases of a residential immovable property of the value of Rs.84,55,108/-. The assessee while filing his return of income on 05.08.2016 had declared total income of Rs.3,36, 670/-. A perusal of order dated 30.03.2023 passed under Section 148A(d) of the Act of 1961 shows that it was recorded therein that even though assessee was required to furnish reply on or before 28.03.2023, but no reply has been furnished. This followed issuance of notice under Section 148 of the Act of 1961 on 30.03.2023. However, the petitioner did not challenge issuance of notice under Section 148A(b) of the Act of 1961, nor did challenge the order dated 30.03.2023 passed under Section 148A(d) of the Act of 1961, nor did challenge notice under Section 148 issued on 30.03.2023. Even according to the petitioner, notice under Section 148 of the Act of 1961 was received by him. If the petitioner had any such grievance that the notice and order passed earlier have not been served, it could have challenged the same. As late as on 08.06.2023, the petitioner filed a rectification application under Section 154 of the Act of 1961 wherein, he states that show cause notice under Section 148A(b) of the Act of 1961 was issued on 21.03.2023. In that application, there is no whisper that either notice dated 21.03.2023 or subsequent order passed under Section 148A(d) on

(4 of 5) [CW-18229/2023] 30.03.2023, was not served on him. All that has been stated is that proper enquiry has not been conducted with respect to the information. Petitioner sought to justify that his investment towards purchase was only 50%, i.e., Rs.42,27,554/-. It is, thus, clear that the ground raised in this petition that the petitioner was not served with notice dated 21.03.2023 under Section 148A(b) and subsequent order dated 30.03.2023 passed under Section 148A(d) is an afterthought. The rectification application was rejected vide order dated 06.09.2023. It has been stated in that order that even though assessee was provided sufficient time, he did not avail the same. He did not file any explanation/documentary evidence with regard to the information communicated to him which led to passing of an order under Section 148A(d) of the Act of 1961 after due approval of the Competent Authority. It has also been stated therein that the case of the assessee is pending before the Faceless Assessment Unit with NaFAC to finalize the assessment in the faceless manner after necessary enquiries. It is not the case of the petitioner that the income invested in purchasing immovable property was disclosed while filing return of income. Even according to the petitioner, Rs.42,27,554/- was paid. The petitioner filed income tax return for the concerned assessment year declaring his total income only Rs.3,36, 670/-.

5.

Reliance placed on the judgment of the Division Bench of this Court, at Jodhpur in the case of Rajhans Processors Union of India & Others, D.B. Civil Writ Petition No.16985/2021, decided on 08.02.2023, does not come to the aid of the petitioner as in the present case, the facts are different. In the said case,

(5 of 5) [CW-18229/2023] there was an admission on the part of the authority that in its order, there is no material on record on the basis of which, the A.O. would form a bonafide belief that income of the assessee has escaped assessment for the concerned Assessment Year. In the present case, facts are different.

6.

In view of the above consideration, no case is made out for issuance of notice.

7.

Therefore, the petition is dismissed in limine.

8.

It is, however, made clear that it will be open for the petitioner to raise all the grounds available to him under the law in the re- assessment proceedings against any addition proposed.

(SHUBHA MEHTA),J (MANINDRA MOHAN SHRIVASTAVA),ACTING CJ SANJAY KUMAWAT-52

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