DIGNITY BUSINESS PRIVATE LIMITED vs. UNION OF INDIA AND ORS.

PDF · subscribers
WPA/1283/2022HC CalcuttaWBCHCA002805202227 January 2022Bench: HON'BLE JUSTICE MD. NIZAMUDDIN2 pages
AI SummaryRemanded

What did the High Court hold?

The Calcutta High Court held that the impugned notice under Section 148 of the Income Tax Act, 1961, and all subsequent proceedings were not sustainable in law and were liable to be quashed. The Court reasoned that the notice, though dated March 31, 2021, was uploaded for communication after March 31, 2021, making it subject to the amended provisions of the Act, particularly Section 148A, which requires mandatory compliance before issuing a Section 148 notice. The Court noted that this procedural requirement had not been met. The Court relied on its previous decisions in Bagaria Properties and Investment Private Limited & Anr. v. Union of India & Ors. and Monoj Jain v. Union of India. The quashing of the notice would not prevent the respondent-authority from issuing a fresh notice in accordance with the law in the future. The writ petition was disposed of with these observations.

What were the facts?

The petitioner, Harish Kumar Jain, filed a writ petition before the Calcutta High Court challenging a notice issued under Section 148 of the Income Tax Act, 1961. The petitioner contended that the notice was barred by limitation and that the respondent income tax authority failed to observe the mandatory statutory formalities prescribed under Section 148A of the Act, which became applicable from April 1, 2021. The respondent's counsel submitted that while the notice bore a date of March 31, 2021, it was actually uploaded for communication after March 31, 2021, thus making it subject to the amended provisions. The respondent also confirmed that no final assessment order had been passed.

What were the issues?

1. Whether the notice issued under Section 148 of the Income Tax Act, 1961, is barred by limitation. 2. Whether the respondent-income tax authority complied with the statutory formalities under Section 148A of the Income Tax Act, 1961, before issuing the notice under Section 148. Assessee's Contentions: The petitioner argued that the Section 148 notice was time-barred. Furthermore, the petitioner contended that the amended provisions of Section 148A, which mandate prior inquiry and approval before issuing a Section 148 notice, were not followed. The petitioner highlighted that the Finance Act, 2021, made Section 148A applicable from April 1, 2021, and the notice, though dated March 31, 2021, was effectively issued after this date. Revenue's Contentions: The revenue's counsel acknowledged that the impugned notice under Section 148, despite being dated March 31, 2021, was uploaded for communication after March 31, 2021, thereby falling under the purview of the amended Act. The revenue also confirmed that no final assessment order had been passed.

Which sections of the Income-tax Act were involved?

Section 148,Section 148A

AI-generated summary — verify with the full judgment below

OD – 95 ORDER SHEET WPO/1283/2022 IN THE HIGH COURT AT CALCUTTA CONSTITUTIONAL WRIT JURISDICTION ORIGINAL SIDE HARISH KUMAR JAIN VS UNION OF INDIA & ORS. BEFORE: The Hon'ble JUSTICE MD. NIZAMUDDIN Date : 27th April, 2022. Appearance: Mr. Rajarshi Chaterjee, Adv. Mr. Anil Kr. Dugar,Adv. Mr.Gobinda Dey, Adv. Mr.Gobind Jethalia, Adv. For petitioner Mr. Om Narayan Rai, Adv. For respondents The Court : Heard learned advocates appearing for both the parties. Petitioner in this writ petition is aggrieved by the issuance of impugned notice under section 148 of the Income Tax Act, 1961 on the grounds that the same is bared by limitation and that the respondent-income tax authority concerned, before issuing the impugned notices under section 148 of the 1961 Act, has not observed the statutory formalities under section 148A of the 1961 Act as prescribed by the Finance Act, 2021 which are applicable with effect from 1st April, 2021 before issuance of notices under section 148 of the 1961 Act on or after 1st April, 2021. Learned advocate for the respondent was asked as to whether final assessment order has already been passed or not in this case to which he submits that no final assessment order has already been passed. He further submits on the basis of record that the impugned notice under section 148 of the 1961 Act, though it bears date and signature of the authority showing that it was signed on March 31,

2 2021, but it was actually uploaded for communication after 31st March, 2021 which has to be treated as date of issuance of the impugned notice. Considering these facts, I am of the considered view that this case clearly falls under the amended Act relating to proceedings under section 147 of the Act under which issuance of notice under section 148A of the Act is mandatory before issuing any notice under section 148 of the amended Act which has not been complied with in this case. Considering the above facts and circumstances of the case and in view of the order of this Court in the case of Bagaria Properties and Investment Private Limited & Anr. v. Union of India & Ors. reported in (2022) 134 taxman.com 196 (Calcutta) and also in the case of Monoj Jain v. Union of India reported in (2022) 134 taxman.com 173 (Calcutta), the impugned notice under section 148 of the Act and all subsequent proceedings are not sustainable in law and the same are quashed. However, quashing of the impugned notice and proceeding will not debar the respondent-authority concerned to issue any fresh notice in future in accordance with law. With the above observations, WPO No. 1283 of 2022 stands disposed of. (MD. NIZAMUDDIN, J.) sb.

More judgments on Section 148

All 35,022 judgments and leading authorities on Section 148 →

Recent GST High Court judgments

Search GST case law →