MOHAMMAD OSMAN MOHAMMAD SALAR SHAIKH vs. THE UNION OF INDIA THROUGH ITS SECRETARY AND ANOTHER

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WP/11000/2022HC BombayHCBM03035755202221 March 2024Bench: HON'BLE SHRI JUSTICE RAVINDRA V. GHUGE,HON'BLE SHRI JUSTICE R. M. JOSHI3 pages
AI SummaryAllowed

What did the High Court hold?

The High Court allowed the writ petition in terms of prayer clause 'B'. The Court found that the issue regarding the validity of the notice under Section 148 was no longer res integra. The revenue failed to provide any material from the record to establish that the reassessment notice was issued within the three-year period or that the escaped income was in excess of Rs. 50,00,000/-. Consequently, the Court held that the notice was issued contrary to the provisions of Section 149(1)(b) of the Income Tax Act, 1961. The operative direction was to quash and set aside the reassessment notice dated May 7, 2021, the notice dated May 26, 2022, and the order dated July 26, 2022, passed by the Income Tax Officer.

What were the facts?

The petitioner, Mohammad Osman Mohammad Salar Shaikh, filed a writ petition before the Bombay High Court at Aurangabad challenging a reassessment notice dated May 7, 2021, a subsequent notice dated May 26, 2022, and an order dated July 26, 2022, passed by the Income Tax Officer, Ward 1(1), Aurangabad. The petitioner sought to quash these notices and the order. The core of the grievance pertains to the escaped assessment of an amount less than Rs. 50,00,000/-. The notice for reassessment was issued under Section 148 of the Income Tax Act, 1961, for the Assessment Year 2016-2017.

What were the issues?

1. Whether a notice under Section 148 of the Income Tax Act, 1961, for reassessment can be issued beyond three years from the relevant Assessment Year when the amount of escaped assessment is less than Rs. 50,00,000/-, as per Section 149(1)(b) of the Income Tax Act, 1961? Assessee's contention: The petitioner argued that the notice under Section 148 is invalid because it was issued beyond three years from the Assessment Year 2016-2017, and the amount of escaped assessment is less than Rs. 50,00,000/-. Reliance was placed on Section 149(1)(b) of the Income Tax Act, 1961, which stipulates conditions for issuing notices beyond three years. Revenue's contention: The revenue, through its learned counsel, was unable to demonstrate from the record that the impugned notice was issued within three years or that the amount of escaped assessment exceeded 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

*1* 903wp11000o22 IN THE HIGH COURT OF JUDICATURE AT BOMBAY BENCH AT AURANGABAD 903 WRIT PETITION NO. 11000 OF 2022 MOHAMMAD OSMAN MOHAMMAD SALAR SHAIKH VERSUS THE UNION OF INDIA THROUGH ITS SECRETARY AND ANOTHER ... Shri G.R. Syed, Advocate for the Petitioner. Shri Ajay G. Talhar, DSGI for Respondent No.1/UoI. Shri Alok M. Sharma, Advocate for Respondent 2. ...

CORAM : RAVINDRA V. GHUGE &

R.M. JOSHI, JJ. DATE :- 21st March, 2024 Per Court :- 1. The Petitioner has put forth prayer clauses B and C as under:- “B) By issuing writ of certiorari or any other appropriate writ or directions in the like nature this Hon'ble Court may kindly quash and set aside the reassessment notice dated 07.05.2021, 26.05.2022 and order dated 26.07.2022 passed by the Income Tax Officer Ward 1 (1) Aurangabad. C) Pending hearing and final disposal of this Writ Petition, this Hon'ble Court may pleased to stay the effect implement and execution of the reassessment notice dated 07.05.2021 and 26.05.2022 issued by respondent No.2.” 2024:BHC-AUG:6568-DB

*2* 903wp11000o22 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, 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 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 peculiar circumstances, could be issued even within ten years, provided the escaped income has to be 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, the Department is unable to indicate from the record that the impugned notice was issued within three years and that the

*3* 903wp11000o22 amount of escaped assessment was more than Rs.50,00,000/-. 5. In view of the above, this Writ Petition is allowed in terms of prayer Clause ‘B’. kps ( R.M. JOSHI, J. ) ( RAVINDRA V. GHUGE, J. )

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