SAMRIDDHI VANIJYA PRIVATE LIMITED vs. UNION OF INDIA AND ORS.

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WPA/5774/2022HC CalcuttaWBCHCA012132202218 April 2022Bench: HON'BLE JUSTICE MD. NIZAMUDDIN3 pages
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What did the High Court hold?

The High Court held that the impugned notice under Section 148 of the Income Tax Act, 1961, and all subsequent proceedings were quashed. The reasoning was based on the petitioner's submission that no final assessment order had been passed and that the notice under Section 148 was issued without adhering to the mandatory requirement of issuing a notice under Section 148A, as per the amended provisions. The court found that the case was covered by its previous orders in similar matters. The quashing of the notice and proceedings would not prevent the assessing officer from issuing a fresh notice in accordance with the law. The writ petition was allowed, subject to the petitioner paying costs of Rs. 5,000/- to the High Court Legal Services Committee within seven days, due to the delay in filing the writ petition without explanation.

What were the facts?

The petitioner, Samriddhi Vanijya Private Limited, filed a writ petition challenging a notice under Section 148 of the Income Tax Act, 1961. The petitioner contended that no final assessment order had been passed. The notice was issued after March 31, 2021, and the petitioner argued that it was mandatory for the assessing officer to issue a notice under Section 148A before issuing a notice under Section 148, as per the amended Act. This mandatory procedure was admittedly not followed. The petitioner also relied on previous High Court judgments in similar cases. The writ petition was filed approximately ten months after receiving the impugned notice, without explanation for the delay.

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 requirement of issuing a notice under Section 148A of the Act prior to its issuance, in light of the amended provisions of the Act. Assessee's Contentions: The petitioner argued that the notice under Section 148 was issued in violation of Section 148 of the Act because the mandatory procedure under Section 148A was not followed. They relied on the cases of Bagaria Properties and Investment Private Limited & Anr. v. Union of India & Ors. and Monoj Jain v. Union of India & Ors. Revenue's Contentions: The judgment does not record any specific contentions made by the respondents (Union of India & Ors.).

Which sections of the Income-tax Act were involved?

Section 148,Section 148A

AI-generated summary — verify with the full judgment below

18-04-2022 Item No.24 Subrata IN THE HIGH COURT AT CALCUTTA Constitutional Writ Jurisdiction Appellate Side WPA No.5774 of 2022 Samriddhi Vanijya Private Limited -vs- Union of India & Ors. Mr. Avra Mazumder Sk. Md. Bilwal Hossain …for the petitioner Mr. Om Narayan Rai …for the respondents Heard learned advocates appearing for the respective parties. Learned advocate appearing for the petitioner files supplementary affidavit which is taken on record. It appears from the said supplementary affidavit that in the instant case no final assessment order has been passed. In this writ petition, petitioner has challenged the impugned notice under section 148 of the Income Tax, 1961 which was issued after 31st March 2021 with supporting documents on the grounds that this case clearly falls under the newly amended Act relating to proceedings under section 147 of the Act and under which there is a mandatory obligation on the part of the assessing officer to issue notice under section 148A of the Act before issuing any notice under section 148 of the Act and which has admittedly not done by the assessing officer and that the impugned notice under section 148 of the Act has been issued violation of section 148 of the Act. Furthermore, this case is directly covered by the orders of this court in the case of Bagaria Properties and Investment Private Limited & Anr. v. Union of India &

2 Ors. reported in (2022) 134 taxman.com 196 (Calcutta) and also in the case of Monoj Jain v. Union of India & Ors. reported in (2022) 134 taxman.com 173 (Calcutta). Considering the facts, the impugned notice under section 148 of the Act and all subsequent proceedings are quashed. However, quashing of the impugned notice and subsequent proceedings will not debar the assessing officer concerned to issue any fresh notice in future in accordance with law. With the above observations, this writ petition being WPA No.5774 of 2022 stands disposed of. This writ petition is allowed subject to payment of costs of Rs.5,000/- to the High Court Legal Services Committee, since the impugned notice under section 148 of the Income Tax Act, 1961 has been issued on April 21, 2021 as appears from record and this writ petition has been filed in March 2022, that is, almost after ten months from receipt of the impugned notice, without any explanation for such delay in filing this writ petition. Such costs has to be paid by the petitioner to the High Court Legal Services Committee within seven days from date and such costs is to be utilised by it for the welfare of street children. Receipt of payment is to be produced before this court. List this writ petition under the heading “To Be Mentioned” on April 28, 2022 for compliance. [Md. Nizamuddin, J]

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