SHRI RAGHAV TRADING CORP. vs. INCOME TAX OFFICER

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CW/5126/2022HC RajasthanRJHC01021058202216 May 2022Bench: MANINDRA MOHAN SHRIVASTAVA,MADAN GOPAL VYAS3 pages
AI SummaryRemanded

What did the High Court hold?

The High Court held that the writ petition is disposed of in terms of the Supreme Court's order dated 04.05.2022 in Union of India & Others Vs. Ashish Agarwal. The Supreme Court directed that Section 148 notices issued under the unamended Section 148 of the Income Tax Act, which were subject to writ petitions before various High Courts, shall be deemed to have been issued under Section 148A of the Act as substituted by the Finance Act, 2021. These notices are to be construed as show-cause notices under Section 148A(b). The Assessing Officer is required to provide information and material to the assessees within thirty days, allowing them two weeks to reply. The requirement of conducting an inquiry with prior approval under Section 148A(a) is dispensed with as a one-time measure for notices issued from 01.04.2021 till date. Subsequently, the Assessing Officer shall pass orders under Section 148A(d) and then issue notice under Section 148 as substituted. All defenses available to the assessees and the revenue under the Finance Act, 2021, and law shall remain available. This order is applicable PAN India and modifies/substitutes judgments of various High Courts to this extent.

What were the facts?

This writ petition was filed by Shri Raghav Trading Corp. (the assessee) against the Income Tax Officer, Ward 2, Bikaner, and the Central Board of Direct Taxes (the revenue). The petitioner sought relief concerning notices issued under Section 148 of the Income Tax Act. During the hearing, counsel for both parties jointly submitted that the issue in the present petition is covered by the Supreme Court's order dated 04.05.2022 in the case of Union of India & Others Vs. Ashish Agarwal. Consequently, the High Court decided to dispose of the writ petition in terms of the Supreme Court's directions.

What were the issues?

1. Whether Section 148 notices issued under the unamended provisions of the Income Tax Act, prior to the substitution by the Finance Act, 2021, are valid and can be treated as notices issued under Section 148A of the Act. Assessee's Contention: The judgment does not record specific contentions from the assessee, but the filing of the writ petition implies a challenge to the validity of the Section 148 notices. The assessee would likely rely on the High Court's prior quashing of such notices. Revenue's Contention: The revenue would argue for the applicability of the Supreme Court's decision in Ashish Agarwal, seeking to regularize the Section 148 notices by deeming them issued under Section 148A, thereby avoiding quashing of reassessment proceedings.

Which sections of the Income-tax Act were involved?

Section 148,Section 148A,Section 149

AI-generated summary — verify with the full judgment below

HIGH COURT OF JUDICATURE FOR RAJASTHAN AT JODHPUR D.B. Civil Writ Petition No. 5126/2022 Shri Raghav Trading Corp., Having Address A-12 Karni Nagar Pawanpuri Bikaner 334001, Rajasthan India Through Its Partner Anil Asopa S/o Shyam Sunder Asopa Resident Of Champaram Jewellers Wali Gali A 79,80 Karni Nagar Pawanpuri Bikaner Rajasthan - 341001 ----Petitioner Versus 1. Income Tax Officer, Ward 2, Bikaner Rajasthan, Aaykar Bhawan, Rani Bazaar, Bikaner, Rajasthan-334001 2. Central Board Of Direct Taxes, Ministry Of Finance, North Block, New Delhi 110011 Through Its Chairman. ----Respondents For Petitioner(s) : Mr. Prateek Kedawat For Respondent(s) : Mr. Surbhi Bissa for Mr. K. K. Bissa HON'BLE ACTING CHIEF JUSTICE MR. MANINDRA MOHAN SHRIVASTAVA HON'BLE MR. JUSTICE MADAN GOPAL VYAS Judgment 16/05/2022 When this case came up for hearing today, learned counsel for the parties jointly submitted that the issue raised in this petition would be covered by order dated 04.05.2022 passed by the Hon’ble Supreme Court in the case of Union of India & Others Vs. Ashish Agarwal (Civil Appeal No. 3005/2022 and batch of appeals). Following directions have been issued by the Hon’ble Supreme Court in the aforesaid case: “10. In view of the above and for the reasons stated above, the present Appeals are ALLOWED IN PART. The impugned common judgments and orders passed by the High Court of Judicature at Allahabad in W.T. No. 524/2021 and other allied tax

(2 of 3) [CW-5126/2022] appeals/petitions, is/are hereby modified and substituted as under: (i) The impugned section 148 notices issued to the respective assessees which were issued under unamended section 148 of the IT Act, which were the subject matter of writ petitions before the various respective High Courts shall be deemed to have been issued under section 148A of the IT Act as substituted by the Finance Act, 2021 and construed or treated to be show-cause notices in terms of section 148A(b). The assessing officer shall, within thirty days from today provide to the respective assessees information and material relied upon by the Revenue, so that the assessees can reply to the show-cause notices within two weeks thereafter (ii) The requirement of conducting any enquiry, if required, with the prior approval of specified authority under section 148A(a) is hereby dispensed with as a one-time measure vis-à-vis those notices which have been issued under section 148 of the unamended Act from 01.04.2021 till date, including those which have been quashed by the High Courts. Even otherwise as observed hereinabove holding any enquiry with the prior approval of specified authority is not mandatory but it is for the concerned Assessing Officer to hold any enquiry, if required ; (iii) The assessing officers shall thereafter pass orders in terms of section 148A(d) in respect of each of the concerned assessees; Thereafter after following the procedure as required under section 148A may issue notice under section 148 (as substituted); (iv) All defences which may be available to the assessees including those available under section 149 of the IT Act and all rights and contentions which may be available to the concerned assessees and Revenue under the Finance Act, 2021 and in law shall continue to be available. 11. The present order shall be applicable PAN INDIA and all judgments and orders passed by different High Courts on the issue and under which similar notices which were issued after 01.04.2021 issued under section 148 of the Act are set aside and shall be governed by the present order and shall stand modified to the aforesaid extent. The present order is passed in exercise of powers under Article 142 of the Constitution of India so as to avoid any further appeals by the Revenue on the very issue by challenging similar judgments and orders, with a view not to burden this Court with approximately 9000 appeals. We also observe that present order shall also govern the pending writ petitions, pending

(3 of 3) [CW-5126/2022] before various High Courts in which similar notices under Section 148 of the Act issued after 01.04.2021 are under challenge. 12. The impugned common judgments and orders passed by the High Court of Allahabad and the similar judgments and orders passed by various High Courts, more particularly, the respective judgments and orders passed by the various High Courts particulars of which are mentioned hereinabove, shall stand modified/substituted to the aforesaid extent only. All these appeals are accordingly partly allowed to the aforesaid extent. In the facts of the case, there shall be no order as to costs.” Accordingly, this writ petition is also finally disposed off in terms of order dated 04.05.2022 passed by the Hon’ble Supreme Court in the case of Union of India & Others Vs. Ashish Agarwal (supra), as stated above. The authorities concerned shall proceed to decide the matter in accordance with the directions issued by the Hon’ble Supreme Court in para 10 of the aforesaid order. (MADAN GOPAL VYAS),J (MANINDRA MOHAN SHRIVASTAVA),ACJ 55-nidhi/-

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