KAUSHLAYA GUPTA vs. UNION OF INDIA AND ORS.

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WPA/2194/2022HC CalcuttaWBCHCA004731202215 February 2022Bench: HON'BLE JUSTICE MD. NIZAMUDDIN5 pages
AI SummaryDismissed

What did the High Court hold?

The High Court, while hearing the writ petitions, took note of the Supreme Court's judgment dated May 4, 2022, in the case of Union of India & Ors. V. Ashish Agarwal. The Supreme Court had held that impugned Section 148 notices issued under the unamended Act after April 1, 2021, shall be deemed to have been issued under Section 148A of the Act as substituted by the Finance Act, 2021, and treated as show-cause notices under Section 148A(b). The Supreme Court also directed that the Assessing Officer shall provide information to the assessees within thirty days, allowing them two weeks to reply. The requirement of enquiry under Section 148A(a) was dispensed with as a one-time measure. The Assessing Officers were to pass orders under Section 148A(d) and then proceed under Section 148 as substituted. All defenses available to the assessees were preserved. Applying this Supreme Court judgment, the High Court dismissed the writ petitions and directed the Assessing Officer to proceed with the re-assessment proceedings in accordance with the Supreme Court's guidelines.

What were the facts?

The petitioners, Delta International Limited and others, filed multiple writ petitions challenging notices issued under Section 148 of the Income Tax Act, 1961 (Old Act). These notices were issued after March 31, 2021. The petitioners contended that these notices should have been governed by the newly amended provisions of Section 147 of the Income Tax Act, 1961, and that the required formalities under the amended law were not followed, rendering the notices invalid. The case involves multiple writ petitions filed by various assessees against the Union of India and others.

What were the issues?

1. Whether notices issued under the unamended Section 148 of the Income Tax Act, 1961, after March 31, 2021, are valid, or if they should be treated under the amended provisions of Section 147/148A of the Act. Assessee's contention: The notices issued under the old Section 148 after March 31, 2021, are bad in law because the newly amended provisions of Section 147 of the Income Tax Act, 1961, were not complied with. The petitioners argued that the procedure under the amended law should have been followed. Revenue's contention: Not explicitly recorded in the judgment, but implied by the reliance on the Supreme Court's decision in Union of India & Ors. V. Ashish Agarwal.

Which sections of the Income-tax Act were involved?

Section 148,Section 147,Section 148A,Section 149

AI-generated summary — verify with the full judgment below

1 IN THE HIGH COURT AT CALCUTTA Constitutional Writ Jurisdiction Original Side Present :- Hon’ble Mr. Justice Md. Nizamuddin W.P.O. No. 2159 of 2022 DELTA INTERNATIONAL LIMITED Vs. UNION OF INDIA AND ORS. With W.P.O. No. 2189 of 2022, W.P.O. No. 2190 of 2022, W.P.O. No. 2191 of 2022, W.P.O. No. 2192 of 2022, W.P.O. No. 2193 of 2022, W.P.O. No. 2194 of 2022, W.P.O. No. 2195 of 2022, W.P.O. No. 2196 of 2022, W.P.O. No. 2203 of 2022, W.P.O. No. 2204 of 2022, W.P.O. No. 2205 of 2022, W.P.O. No. 2206 of 2022, W.P.O. No. 2207 of 2022, W.P.O. No. 2208 of 2022, For the Petitioners :- Ms. Swapna Das, Mr. Siddharth Das, Advocates

For the Respondents :- Mr. Vipul Kundalia, Mr. Smarajit Roy Chowdhury, Advocates Dated : 6th June, 2022

MD. NIZAMUDDIN, J. Heard learned advocates appearing for the parties. Affidavits of service filed in Court be kept with the records. In these writ petitions, petitioners have challenged the impugned notices under Section 148 of the Income Tax Act, 1961 (Old Act) which were issued after 31st March, 2021 by contending that the present case should be

2 governed by the newly amended provisions relating to proceeding under Section 147 of the Income Tax Act, 1961 and the formalities of which have not been observed and complied with and, as such, the same are bad in law. Taking note of the recent judgment of the Hon’ble Supreme Court dated May 4, 2022 in the case of Union of India & Ors. V. Ashish Agarwal in Civil Appeal No. 3005 of 2022 and in view of the guidelines and law laid down in the aforesaid judgement of the Hon’ble Supreme Court and particularly taking note of paragraphs 10, 11 and 12 of the aforesaid judgement which are quoted hereinbelow, I am not inclined to entertain these writ petitions :- “10. In view of the above and for the reasons stated above, the present Appeals are ALLOWED IN PART. The impugned common judgements and orders passed by the High Court of judicature at Allahabad in W.T. No. 524/2021 and other allied tax appeals/petitions, is/are hereby modified and substituted as under:- (i) The impugned section 148 notices issued to the respective assesses which were issued under unamended section 148 of the IT Act, which were the subject matter of writ petitions before the various respective High Courts shall be deemed to have been issued under section 148A of the IT Act as substituted by the Finance Act, 2021 and construed or treated to be show-cause notices in terms of section 148A(b). The assessing officer shall, within

3 thirty days from today provide to the respective assesses information and material relied upon by the Revenue, so that the assesses can reply to the show- cause notices within two weeks thereafter; (ii) The requirement of conducting any enquiry, if required, with the prior approval of specified authority under Section 148A(a) is hereby dispensed with as a one-time measure vis-à-vis those notices which have been issued under Section 148 of the unamended Act from 01.04.2021 till date, including those which have been quashed by the High Courts. Even otherwise as observed hereinabove holding any enquiry with the prior approval of specified authority is not mandatory but it is for the concerned Assessing Officers to hold any enquiry, if required; (iii) The assessing officers shall thereafter pass orders in terms of Section 148A(d) in respect of each of the concerned asessees; Thereafter after following the procedure as required under Section 148A may issue under Section 148 (as substituted); (iv) All defences which may be available to the assessees including those available under Section 149 of the IT Act and all rights and contentions which may be available to the concerned assessees

4 and Revenue under the Finance Act, 2021 and in law shall continue to be available. 11. The present order shall be applicable PAN INDIA and all judgements and orders passed by different High Courts on the issue and under which similar notices which were issued after 01.04.2021 issued under Section 148 of the Act are set aside and shall be governed by the present order and shall stand modified to the aforesaid extent. The present order is passed in exercise of powers under Article 142 of the Constitution of India so as to avoid any further appeals by the Revenue on the very issue by challenging similar judgements and orders, with a view not to burden this Court with approximately 9000 appeals. We also observe that present order shall also govern the pending writ petitions, pending before various High Courts in which similar notices under Section 148 of the Act issued after 01.04.2021 are under challenge. 12. The impugned common judgements and orders passed by the High Court of Allahabad and the similar judgements and orders passed by various High Courts, more particularly, the respective judgements and orders passed by the various High Courts particulars of which are mentioned hereinabove, shall stand modified/substituted to the aforesaid extent only.”

5 Accordingly, these writ petitions are dismissed and the Assessing Officer concerned will proceed with the impugned re-assessment proceeding in accordance with the guidelines and law laid down by the Hon’ble Supreme Court in the aforesaid judgment. (Md. Nizamuddin, J.) TR/

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