VK FAMILY TRUST vs. INCOME TAX OFFICER

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CW/5899/2022HC RajasthanRJHC02029593202210 May 2022Bench: PRAKASH GUPTA,SAMEER JAIN3 pages
AI SummaryRemanded

What did the High Court hold?

The High Court held that the writ petition is finally disposed of in terms of the order dated 04.05.2022 passed by the Hon'ble Supreme Court in the case of Ashish Agarwal. The Supreme Court's directions, as incorporated by the High Court, state that impugned Section 148 notices issued under the unamended Act shall be deemed to have been issued under Section 148A and construed as show-cause notices. The Assessing Officer is to provide information relied upon within thirty days, and assessees have two weeks to reply. The requirement of enquiry under Section 148A(a) is dispensed with as a one-time measure. The Assessing Officers are to pass orders under Section 148A(d) and then issue notices under the substituted Section 148. All defenses available to assessees and Revenue under the Finance Act, 2021, and law shall continue to be available. The Supreme Court's order, passed under Article 142 of the Constitution, is applicable PAN India and modifies judgments of various High Courts to this extent. The High Court directed the authorities to proceed in accordance with these Supreme Court directions.

What were the facts?

The petitioner, VK Family Trust, filed a writ petition before the Rajasthan High Court challenging notices issued under Section 148 of the Income Tax Act, 1961. The petitioner argued that the issue in their petition was covered by a recent Supreme Court judgment. The Supreme Court, in the case of Union of India & Others Vs. Ashish Agarwal, had passed an order on 04.05.2022 concerning similar notices issued under the unamended Section 148 of the IT Act. The High Court noted that the Supreme Court's order was applicable PAN India and would govern pending writ petitions before various High Courts where similar notices were under challenge. Consequently, the High Court disposed of the present writ petition in terms of the Supreme Court's order.

What were the issues?

1. Whether the Section 148 notices issued to the assessee, which were issued under the unamended Section 148 of the IT Act, should be deemed to have been issued under Section 148A of the IT Act as substituted by the Finance Act, 2021, and construed as show-cause notices under Section 148A(b)? (Question of law) 2. Whether the requirement of conducting any enquiry, if required, with the prior approval of the specified authority under Section 148A(a) is dispensed with as a one-time measure for notices issued under the unamended Section 148 from 01.04.2021 till date? (Question of law) Assessee's Contention: The petitioner argued that the issue raised in their writ petition was covered by the Supreme Court's order in Union of India & Others Vs. Ashish Agarwal. Revenue's Contention: The judgment does not record any specific contentions from the Revenue; however, the Supreme Court's order, which the High Court followed, addresses the Revenue's position regarding the validity of notices issued under the unamended Section 148.

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 BENCH AT JAIPUR D.B. Civil Writ Petition No. 5899/2022 VK Family Trust, Having Its Address At 211, Kanwar Nagar, Jaipur 302002 In The State Of Rajasthan Through Its Trustee Shri Thawardas. ----Petitioner Versus 1. Income Tax Officer, Ward 5(1), Jaipur Having Its Address At New Central Revenue Building, Bhagwan Dass Road, Jaipur 302005 2. Central Board Of Direct Taxes, Ministry Of Finance, Having Its Address At North Block, New Delhi-110011 Through Its Chairman. ----Respondents For Petitioner(s) : Mr. Siddharth Ranka, Advocate HON'BLE MR. JUSTICE PRAKASH GUPTA HON'BLE MR. JUSTICE SAMEER JAIN Order 10/05/2022 When this case came up for hearing today, learned counsel for the petitioner submitted that the issue raised in this petition is 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

(2 of 3) [CW-5899/2022] tax 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

(3 of 3) [CW-5899/2022] 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 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 of in terms of order dated 04.05.2022 passed by the Hon’ble Supreme Court in the case of 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. Consequent upon the disposal of the writ petition, the stay application filed therewith does not survive and the same also stands disposed of accordingly. (SAMEER JAIN),J (PRAKASH GUPTA),J KuD/MR/10

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