MAGNA VANIJYA P. LTD. vs. UNION OF INDIA AND ORS.

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WPA/12487/2021HC CalcuttaWBCHCA023880202108 September 2021Bench: HON'BLE JUSTICE MD. NIZAMUDDIN3 pages
AI SummaryRemanded

What did the High Court hold?

The Tribunal noted that the petitioner had challenged the notice under Section 148 of the Income Tax Act, 1961, for assessment year 2013-2014, alleging non-compliance with Section 148A. The petitioner also challenged the constitutional validity of the Taxation and other Law (Relaxation and Amendment of Certain Provisions) Act, 2020. The petitioner relied on a previous order staying a similar notice for non-compliance with Section 148A. The respondents could not deny the non-compliance or distinguish the cited case. The Court directed the respondents to file an affidavit-in-opposition within two weeks after the Puja vacation, with the petitioner to file a reply within one week thereafter. The matter was listed for final hearing on December 6, 2021. In the interim, the respondents were restrained from proceeding further on the basis of the impugned notice dated April 26, 2021. The Court requested parties to be ready with short written notes of argument.

What were the facts?

The petitioner, Magna Vanijya Private Limited, has challenged a notice dated April 26, 2021, issued under Section 148 of the Income Tax Act, 1961, for assessment year 2013-2014. The challenge is based on the ground that the Assessing Officer failed to comply with the mandatory provisions of Section 148A of the Act before issuing the Section 148 notice. Additionally, the petitioner has challenged the constitutional validity of the Taxation and other Law (Relaxation and Amendment of Certain Provisions) Act, 2020. The petitioner relies on a previous order in a similar case where a Section 148 notice was stayed due to non-compliance with Section 148A. The respondents could not deny the non-compliance or distinguish the cited precedent.

What were the issues?

1. Whether the notice issued under Section 148 of the Income Tax Act, 1961, is invalid for non-compliance with the mandatory provisions of Section 148A of the Act, concerning assessment year 2013-2014? 2. Whether the provisions of the Taxation and other Law (Relaxation and Amendment of Certain Provisions) Act, 2020, are constitutionally valid? Assessee's Contentions: The petitioner argues that the notice under Section 148 is bad in law as the Assessing Officer failed to comply with the mandatory procedural requirements of Section 148A before issuing it. The petitioner relies on the order in WPA No.244 of 2021 (Bagaria Properties and Investments Private Limited & Anr. vs. Union of India & Ors.) where a similar notice was stayed. The petitioner also challenges the constitutional validity of the Taxation and other Law (Relaxation and Amendment of Certain Provisions) Act, 2020. Revenue's Contentions: The respondents, represented by the learned Additional Solicitor General, were unable to deny the petitioner's allegation of non-compliance with Section 148A and were also unable to distinguish the precedent cited by the petitioner.

Which sections of the Income-tax Act were involved?

Section 148,Section 148A

AI-generated summary — verify with the full judgment below

8.9.2021 ks WPA 12487 of 2021 sl. 20 Magna Vanijya Private Limited Vs Union of India & Ors. Mr. Pradeep Kumar Jewrajka, Ms. Pooja Jewrajka, Mr. Rahul Poddar, Ms. Jyoti Rauth … For the Petitioner. Mr. Y.J. Dastoor, Ld. A.S.G., Mr. D. Trivedi, Ms. Madhu Jana … For the Respondent/Income Tax. Affidavit-of-service filed in court be kept on the record. In this matter petitioner has challenged the impugned notice dated 26th April, 2021 relating to assessment years 2013-2014 under Section 148 of the Income Tax Act, 1961 on the ground that before issuing notice under Section 148 of the Act, mandatory provisions of Section 148A of the Act which cast statutory obligation on the part of the Assessing Officer to comply the provisions of the same before issuing any notice under Section 148 of the Act has not been complied with by the Assessing Officer. Petitioner has also challenged the Constitutional validity of the provisions of the Taxation and other Law (Relaxation and Amendment of Certain Provisions) Act, 2020. Learned Advocate appearing for the petitioner in support of his contention has relied on my order dated

2 15th July, 2021 in WPA No.244 of 2021 in the case of Bagaria Properties and Investments Private Limited & Anr. vs. Union of India & Ors. on the similar issue where I have stayed the impugned notice under Section 148 of the Income Tax Act, 1961 for non compliance of the provisions of Section 148A of the Act. The learned Advocate for the respondents is not able to deny the allegations of the petitioner that Section 148A provisions of the Income Tax Act, 1961 was not complied with in this case before issuing notice under Section 148 of the said Act and was not able to distinguish the aforesaid unreported decisions. Considering the submissions of the parties, I direct the respondents to file affidavit-in-opposition within two weeks after the Puja vacation. Petitioner to file reply thereto, if any, within one week thereafter. List the matter after for final hearing on 6.12.2021. In the meantime, respondents are restrained from proceeding any further on the basis of the aforesaid impugned notice dated 26th April, 2021 being Annexure P-2 to the writ petition. At the time of hearing parties should be ready with the short written notes of argument. ( Md. Nizamuddin, J. )

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