YAANA APAPRELS PRIVATE LIMITED vs. UNION OF INDIA AND ORS.

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WPA/21025/2021HC CalcuttaWBCHCA040291202119 January 2022Bench: HON'BLE JUSTICE MD. NIZAMUDDIN5 pages
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What did the High Court hold?

The High Court, in view of its previous judgments dated January 17, 2022, in the cases of Manoj Jain Vs. Union of India & Ors. and Bagaria Properties and Investment Private Limited & Anr., allowed all the writ petitions. The Court declared Explanations A(a)(ii)/A(b) to the Notifications dated March 31, 2021, and April 27, 2021, as ultra vires the Relaxation Act, 2020, holding them to be bad in law and void. Consequently, all impugned notices issued under Section 148 of the Income Tax Act were quashed. The Assessing Officers were granted liberty to initiate fresh re-assessment proceedings in accordance with the relevant provisions of the Act as amended by the Finance Act, 2021, and after complying with all statutory formalities. The ratio decidendi is that the extension of pre-amendment reassessment provisions beyond March 31, 2021, through notifications, without legislative backing from the Relaxation Act, 2020, is invalid.

What were the facts?

The petitioners, Shivangan Agencies Pvt. Ltd. and others, are aggrieved by notices issued under Section 148 of the Income Tax Act, 1961. They contend these notices are barred by limitation and that the respondent Income Tax Authorities failed to observe the statutory formalities prescribed under Section 148A of the Act, as amended by the Finance Act, 2021, which became applicable from April 1, 2021. The petitioners are challenging notices issued on or after April 1, 2021, arguing that the pre-amendment provisions of Section 148 should not apply. They also challenge Explanations A(a)(ii)/A(b) to Notifications dated March 31, 2021, and April 27, 2021, which extend the applicability of Section 148, 149, and 151 as they stood before March 31, 2021, to periods beyond that date, deeming them ultra vires the parent legislation, the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020.

What were the issues?

1. Whether the impugned notices issued under Section 148 of the Income Tax Act, 1961, post-March 31, 2021, are barred by limitation and invalid due to non-compliance with Section 148A of the Act, as amended by the Finance Act, 2021. 2. Whether Explanations A(a)(ii)/A(b) to Notification No. 20 [S.O. 1432 (E) dated March 31, 2021] and Notification No. 38 [S.O.1703 (E)] dated April 27, 2021, to the extent they extend the applicability of Section 148, 149, and 151 of the Act as they stood on March 31, 2021, to the period beyond March 31, 2021, are ultra vires the parent legislation, the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020. Assessee's Contentions: The petitioners argued that the notices are barred by limitation and that the authorities failed to comply with the mandatory pre-requisites under Section 148A. They also contended that the impugned Explanations in the notifications are ultra vires the Relaxation Act, 2020. They relied on decisions from the Allahabad High Court in 'Ashok Kumar Agarwal –vs- Union of India', Rajasthan High Court in 'Bpip Infra Private Limited –vs.- Income Tax Officer', Delhi High Court in 'Man Mohan Kohli –vs- Assistant Commissioner of Income Tax', and this Court's own judgments in 'Manoj Jain Vs. Union of India' and 'Bagaria Properties and Investment Private Limited & Anr.'. Revenue's Contentions: The judgment does not record any specific contentions made by the revenue.

Which sections of the Income-tax Act were involved?

Section 148,Section 148A,Section 149,Section 151

AI-generated summary — verify with the full judgment below

19-01-2022 Item No.—24 ks IN THE HIGH COURT AT CALCUTTA Constitutional Writ Jurisdiction Appellate Side WPA No.633 of 2022 Shivangan Agencies Pvt. Ltd. -vs- Union of India & Ors. With WPA Nos. 635/2022, 637/2022, 640/2022, 641/2022, 642/2022, 647/2022, 648/2022, 652/2022, 656/2022, 657/2022/, 662/2022, 664/2022, 732/2022, 733/2022, 15193/2021, 16367/2021, 17289/2021, 17303/2021, 17642/2021, 20899/2021, 21025/2021, 21027/2021, 21378/2021. Mr. Arun Kumar Mishra, Mr. Divyanshu Agarwal, Mr. Avra Majumder, Sk. Md. Bilwal Hossain, Mrs. Sudeshna Mazumder, Mr. Kapil Goel, Mr. Sandeep Goesl Mr. Vivek Murarka, Mr. Dinnath Dey, Mr. Pradeep Jewrajka, Ms. Pooja Jewrajka, Mr. Anuj Kumr Mshra, Mr. Subash Agarwal, Mr. Brijesh Kr. Singh, Mr. Avijit Dey, Ms. Manju Agarwal, Mr. Bajrang Manot, Mr. Pranit Bag, Mr. Balaram Patra …for the petitioner. Mr. Tilak Mitra, Ms. Sucharita Biswas, Mr. Prabir Kumar Bhoumick …….for the respondents. Heard Learned Counsels appearing for the parties.

2 In view of involvement of common question of law and similarity of facts in all these Writ Petitions, with the consent of the parties all these Writ Petitions have been heard together and are being decided by the present common judgment and order. Common facts and issues involved in all these Writ Petitions as appear on perusal of relevant record and upon considering the submissions of the parties are that the petitioners are aggrieved by the issuance of impugned notices under Section 148 of the Income Tax Act, 1961 on the ground that the same are barred by limitation and the respondent Income Tax Authority concerned, before issuing the impugned notices under Section 148 of the Income Tax Act, have not observed the statutory formalities under Section 148 A of the Income Tax 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 Act on or after 1st April, 2021. Issues arising in all the present Writ Petitions are purely legal and in all these Writ Petitions the assessees/petitioners have sought relief of quashing of the impugned re-assessment notices issued post 31st March, 2021 by the respondent Income Tax Authority concerned under Section 148 of the Income Tax Act, assessees/petitioners have also sought relief by way of a declaration declaring Explanations A(a)(ii)/A(b) to the

3 Notification No. 20 [S.O. 1432 (E) dated 31st March, 2021 and Notification No. 38 [S.O.1703 (E)] dated 27th April, 2021 to the extent that the same extend the applicability of the “provisions of Section 148, Section 149 and Section 151 of the Act, as the case may be, as they stood as on the 31st March, 2021, before the commencement of the Finance Act, 2021” to the period beyond 31st March, 2021 as ultra vires the parent legislation, viz., The Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 (hereinafter referred to as ‘ Relaxation Act, 2020’). At the outset, all the counsels appearing for the parties jointly submitted that the issues involved in these Writ Petitions are covered by the decision of the Division Bench of the Allahabad High Court dated 30th September, 2021 in the case of ‘Ashok Kumar Agarwal –vs- Union of India through its Revenue Secretary North Block & Ors.’ (Writ Tax No. 524/2021) decided in favour of assessees/petitioners on 30.09.2021 and order of Rajasthan High Court dated 25th November, 2021 in the case of Bpip Infra Private Limited –vs.- Income Tax Officer, Ward 4 (1), Jaipur (S. B. Civil Writ Petition No.13297/2021) and the order of Delhi High Court 15th December, 2021 in the case of Man Mohan Kohli –vs- Assistant Commissioner of Income Tax & Anr. in (W.P. (C) 6176 of 2021) and judgment and order of this Court dated 17th January, 2022 in the case of Manoj Jain Vs. Union of India & Ors. in WPA No.11950 of 2021 and in

4 the case of Bagaria Properties and Investment Private Limited & Anr. in WPO 244 of 2021. In view of judgments and orders of this Court dated 17th January, 2022 in the case of Manoj Jain Vs. Union of India & Ors. in WPA No.11950 of 2021 and in the case of Bagaria Properties and Investment Private Limited & Anr. in WPO 244 of 2021, all these writ petitions herein are disposed of by allowing the same. Explanations A(a)(ii)/A(b) to the Notifications dated 31st March, 2021 and 27th April, 2021 are declared to be ultra vires the Relaxation Act, 2020 and are therefore bad in law and null and void. All the impugned notices under Section 148 of the Income Tax Act are quashed with liberty to the Assessing Officers concerned to initiate fresh re-assessment proceedings in accordance with the relevant provisions of the Act as amended by Finance Act, 2021 and after making compliance of the formalities as required by the law. Urgent certified photo copy of this judgment, if applied for, be supplied to the parties upon compliance with all requisite formalities. [Md. Nizamuddin, J]

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