SHRI MUKESH JAIN, S/O CHAGAN LAL JAIN vs. INCOME TAX OFFICER

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CW/9733/2021HC RajasthanRJHC02057088202106 December 2021Bench: PANKAJ BHANDARI2 pages
AI SummaryAllowed

What did the High Court hold?

The High Court allowed the writ petition. The Court held that the notice issued under Section 148 of the Income Tax Act, 1961, to the petitioner was invalid because it was issued after the amendment of the Act effective from 01.04.2021, without adhering to the mandatory procedure laid down in Section 148A of the Act. The Court reasoned that the notice should have been preceded by the inquiry and compliance as stipulated in Section 148A. The ratio decidendi is that re-assessment notices issued post-amendment must strictly follow the Section 148A procedure. The Court quashed the re-assessment notice issued to the petitioner. However, it granted liberty to the Assessing Authority to initiate fresh re-assessment proceedings in accordance with the amended provisions of Section 148A, provided due compliance with the law is made.

What were the facts?

The petitioner, Shri Mukesh Jain, formerly a director of M/s Rubicon Prime Estates Private Limited (struck off), filed a Civil Writ Petition before the Rajasthan High Court, Jaipur Bench. The petition challenged a notice issued under Section 148 of the Income Tax Act, 1961. The counsel for both the petitioner and the respondent (Income Tax Officer, Ward 4(1), Jaipur) agreed that the present case was squarely covered by a previous decision of the High Court in "Bpip Infra Private Limited and Ors. Vs. Income Tax Officer and Ors." in S.B. Civil Writ Petition No. 13297/2021. The respondent's counsel did not dispute this contention.

What were the issues?

1. Whether a notice issued under Section 148 of the Income Tax Act, 1961, after the amendment effective from 01.04.2021, is valid if it does not follow the procedure prescribed under Section 148A of the Act? Assessee's contention: The petitioner contended that the notice under Section 148 was issued after the amendment of the Income Tax Act, which came into force from 01.04.2021. They argued that such notices should only be issued after following the procedure prescribed under Section 148A of the Income Tax Act. The petitioner relied on the decision in "Bpip Infra Private Limited and Ors. Vs. Income Tax Officer and Ors.". Revenue's contention: The respondent's counsel did not dispute the facts presented by the petitioner and implicitly agreed that the case was covered by the aforementioned decision.

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. 9733/2021 Shri Mukesh Jain, S/o Chagan Lal Jain, Aged About 63 Years, R/o - A-12/4, Lal Bahadur Nagar (West), 1St Avenue Jln Marg, Jaipur - 302018. Erstwhile Director Of M/s Rubicon Prime Estates Private Limited, (Struck Off) Having Its Erstwhile Registered Office At 3728, Nahargarh Road, Jaipur, 302001, Rajasthan. ----Petitioner Versus Income Tax Officer, Ward 4(1), 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-9733/2021] 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 /7

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