PREETI RUNGTA AGARWAL vs. UNION OF INDIA AND ORS.

PDF · subscribers
WPA/8150/2022HC CalcuttaWBCHCA017145202206 May 2022Bench: HON'BLE JUSTICE MD. NIZAMUDDIN4 pages
AI SummaryDismissed

What did the High Court hold?

The High Court, in these writ petitions, dismissed the challenges to the Section 148 notices. The court relied heavily on the Supreme Court's judgment dated May 4, 2022, in the case of Union of India & Ors. v. Ashish Agarwal. Following the Supreme Court's directions, the impugned Section 148 notices, issued under the unamended Act after April 1, 2021, were deemed to have been issued under Section 148A of the Income Tax Act, 1961, as substituted by the Finance Act, 2021. These notices were to be construed as show-cause notices under Section 148A(b). The Assessing Officer was directed to provide the assessees with the information and material relied upon within thirty days, allowing the assessees two weeks to reply. The requirement of conducting an enquiry under Section 148A(a) was dispensed with as a one-time measure. The Assessing Officer was then to pass orders under Section 148A(d) and subsequently issue notices under Section 148 as substituted. All defenses available to the assessees and revenue under the Finance Act, 2021, and law were preserved. The court noted that this order was applicable PAN INDIA and would govern pending writ petitions with similar issues.

What were the facts?

These two writ petitions, WPA No.8150 of 2022 and WPA No.8153 of 2022, were filed by Preeti Rungta Agarwal and Mr. Brejesh Kumar Singh respectively. The petitioners challenged notices issued under Section 148 of the Income Tax Act, 1961 (old Act) post-March 31, 2021. They contended that these proceedings should be 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 observed, rendering the notices invalid. The petitions were heard by the High Court at Calcutta.

What were the issues?

1. Whether notices issued under Section 148 of the Income Tax Act, 1961 (unamended) after March 31, 2021, are valid, or if they should be governed by the amended provisions of Section 147 of the Income Tax Act, 1961, requiring compliance with new formalities. Assessee's contention: The petitioners argued that the notices issued under the old Section 148 were bad in law because the assessment proceedings should have followed the newly amended provisions of Section 147 of the Income Tax Act, 1961, and the prescribed formalities were not met. Revenue's contention: The judgment does not explicitly record the revenue's specific arguments. However, the court's decision was based on the Supreme Court's judgment 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

06-05-2022 Item No.33 & 34 Subrata IN THE HIGH COURT AT CALCUTTA Constitutional Writ Jurisdiction Appellate Side WPA No.8150 of 2022 Preeti Rungta Agarwal -vs- Union of India & Ors. with WPA No.8153 of 2022 Mr. Brejesh Kumar Singh Mr. Subhash Agarwal …for the petitioners Mr. Soumen Bhattacharya …for the respondents Heard learned advocates appearing for the respective parties. In these writ petitions, petitioners have challenged the impugned notice under section 148 of the Income Tax Act, 1961 (old Act) which was issued post-31st March 2021 by contending that the present case should be governed by the newly amended provisions relating to proceeding under section 147 of the Income Tax Act, 1961 and the formalities of which has not been observed and complied with and, as such the same is bad in law. Taking note of the recent judgement of the Hon’ble Supreme Court dated May 4, 2022 in the case of Union of India & Ors. v. Ashish Agarwal passed 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 below, 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

2 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 assessees 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 thirty days from today provide to the respective assessees information and material relied upon by the Revenue, so that the assessees 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 assessees; 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 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 judgments and orders passed by different High Courts on the

3 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 judgments 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 judgments and orders passed by the High Court of Allahabad and the similar judgments and orders passed by various High Courts, more particularly, the respective judgments and orders passed by the various High Courts particulars of which are mentioned hereinabove, shall stand modified/substituted to the aforesaid extent only.” Accordingly, these writ petitions – WPA No.8150 of 2022 and WPA No.8153 of 2022 – are dismissed. The assessing officer concerned shall proceed with the impugned reassessment proceedings in accordance with the guidelines and law laid down in the aforesaid judgement of the Hon’ble Supreme Court. [Md. Nizamuddin, J]

More judgments on Section 148

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

Recent GST High Court judgments

Search GST case law →