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

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WPA/5458/2022HC CalcuttaWBCHCA011466202225 April 2022Bench: HON'BLE JUSTICE MD. NIZAMUDDIN3 pages
AI SummaryRemanded

What did the High Court hold?

The Tribunal held that the case clearly falls under the amended provisions of the Act relating to proceedings under Section 147. It was found that the issuance of a notice under Section 148A of the Act is mandatory before issuing any notice under Section 148 of the amended Act. The Tribunal noted that this mandatory compliance was not observed in the present case. The court considered the fact that the notice, though dated March 31, 2021, was uploaded on April 1, 2021, making it subject to the amended provisions. Relying 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 Tribunal concluded that the impugned notice under Section 148 and all subsequent proceedings are not sustainable in law and are therefore quashed. However, the quashing of the notice and proceedings does 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, Spandan Business Pvt. Ltd., is challenging a notice issued under Section 148 of the Income Tax Act, 1961. The petitioner contends that the notice is barred by limitation and that the respondent-income tax authority failed to comply with the mandatory procedural formalities under Section 148A of the Act, as amended by the Finance Act, 2021, which became effective from April 1, 2021. The notice, though dated March 31, 2021, was uploaded for communication on April 1, 2021, at 6:32 a.m. The respondent confirmed that a final assessment order had already been passed. The court was informed that the impugned notice was issued after the amended provisions of Section 148A became applicable.

What were the issues?

1. Whether the impugned notice 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 prescribed under Section 148A of the Income Tax Act, 1961, before issuing the notice under Section 148, considering the amended provisions applicable from April 1, 2021. Assessee's Contentions: The petitioner argued that the notice under Section 148 is barred by limitation. Furthermore, the petitioner contended that the respondent failed to observe the mandatory procedural requirements of Section 148A of the Act, which are applicable to notices issued on or after April 1, 2021, before issuing the impugned notice under Section 148. The petitioner relied on the amended provisions of the Finance Act, 2021. Revenue's Contentions: The respondent's advocate stated that a final assessment order had already been passed. Regarding the date of issuance, the respondent submitted that although the notice bore the date March 31, 2021, it was actually uploaded for communication on April 1, 2021, at 6:32 a.m., which should be treated as the date of issuance.

Which sections of the Income-tax Act were involved?

Section 148,Section 148A,Section 147

AI-generated summary — verify with the full judgment below

25.04.2022. p.b. Sl. No.30. W.P.A. 5458 of 2022 Spandan Business Pvt. Ltd. Vs. Union of India & Ors. Mr. Brijesh Kumar Singh. ……..for the petitioner. Mr. Amit Sharma. ………for the respondents. Heard learned advocates appearing for the respective 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 barred 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 final

2 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 singed on March 31, 2021, but it was actually uploaded for communication on April 1, 2021 at 6.32 a.m. 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

3 concerned to issue any fresh notice in future in accordance with law. With the above observations, WPA No.5458 of 2022 stands disposed of. (Md. Nizamuddin, J.)

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