MILESTONE DWELLERS PRIVATE LIMITED vs. INCOME TAX OFFICER

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CW/9377/2021HC RajasthanRJHC02054190202106 December 2021Bench: PANKAJ BHANDARI2 pages
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What did the High Court hold?

The Tribunal held that the notice issued under Section 148 of the Income Tax Act was invalid because it was issued after the amendment effective from April 1, 2021, without following the mandatory procedure prescribed under Section 148A of the Act. The High Court relied on its previous decision in "Bpip Infra Private Limited and Ors. Vs. Income Tax Officer and Ors.", which squarely covered the present case. The reasoning was that the amended provisions of Section 148A are procedural safeguards that must be followed before initiating reassessment proceedings. The ratio decidendi is that reassessment notices issued post-amendment without complying with Section 148A are liable to be quashed. The writ petition was allowed, and the reassessment notice was quashed. However, the Assessing Authority was granted liberty to initiate fresh reassessment proceedings in accordance with Section 148A of the Act, subject to due compliance with the law.

What were the facts?

The petitioner, Milestone Dwellers Private Limited, challenged a notice issued under Section 148 of the Income Tax Act, 1961. The notice was issued after the amendment to the Income Tax Act, effective from April 1, 2021. The petitioner contended that the notice was invalid because it was issued without following the mandatory procedure prescribed under Section 148A of the Act. The respondent, Income Tax Officer, Ward -6(4), Jaipur, did not dispute the petitioner's contentions. The High Court considered a similar case, "Bpip Infra Private Limited and Ors. Vs. Income Tax Officer and Ors.", which dealt with the same issue.

What were the issues?

1. Whether a notice issued under Section 148 of the Income Tax Act, after the amendment effective from April 1, 2021, is valid if it does not comply with the procedure laid down in Section 148A of the Act? (Question of law) Assessee's Contention: The notice under Section 148 is bad in law as it was issued without adhering to the pre-requisite procedure stipulated in Section 148A of the Income Tax Act, which mandates inquiry and opportunity of being heard before issuing such a notice. The amendment to Section 148A came into force from April 1, 2021, and any notice issued thereafter must comply with this new procedure. Revenue's Contention: The revenue did not dispute the facts or the assessee's contentions.

Which sections of the Income-tax Act were involved?

Section 148,Section 148A

AI-generated summary — verify with the full judgment below

HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR S.B. Civil Writ Petition No. 9377/2021 Milestone Dwellers Private Limited, Having Its Registered Office At Sb-59, Udb Tower, 3Rd Floor, Opposite Jaipur Nagar Nigam, Tonk Road, Jaipur, Through Its Director Sh. Ravinder Singh Thakkar. ----Petitioner Versus Income Tax Officer, Ward -6(4), Jaipur New Central Revenue Building, Bhagwan Das Road, C-Scheme, Jaipur. ----Respondent For Petitioner(s) : Mr. Javed Khan For Respondent(s) : Mr. Nikhil Simlote with Mr. Rao Raj for Mr. R.B. Mathur HON'BLE MR. JUSTICE PANKAJ BHANDARI Judgment / Order 06/12/2021 1. It is contended by counsel for the parties that this question was considered by the Single Judge of the High Court in the case of “Bpip Infra Private Limited and Ors. Vs. Income Tax Officer and Ors.” in S.B. Civil Writ Petition No. 13297/2021. It is also contended that the present case is also squarely covered by this decision. 2. Counsel for the respondent has not disputed the above facts. 3. I have considered the contentions. 4. The dispute in this question pertains to a notice which was given under Section 148 of the Income Tax Act, after the amendment of the Income Tax Act which came into force from 01.04.2021. Notices should have been given only after following

(2 of 2) [CW-9377/2021] the procedure as prescribed under Section 148 (A) of the Income Tax Act. 5. In view of the fact that similar cases akin to the present one were decided by Single Judge in “Bpip Infra Private Limited and Ors. Vs. Income Tax Officer and Ors.” (Supra) and the present case is also squarely covered by this decision, I deem it proper to allow the writ petition. 6. Accordingly, this Civil Writ Petition is allowed. Re-assessment issued to the petitioner under Section 148 of the Income Tax Act is quashed. However, it is left open to the Assessing Authority to initiate re-assessment proceedings in accordance with the provisions of Section 148 (A) of the Act as amended by the Finance Act, 2021 after making due compliance as required under the law. (PANKAJ BHANDARI),J NIKHIL KR. YADAV /97

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