AJAY BASU vs. Union of India AND ORS

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WPO/1115/2022HC CalcuttaWBCHCO001507202227 April 2022Bench: HON'BLE JUSTICE MD. NIZAMUDDIN2 pages
AI SummaryRemanded

What did the High Court hold?

The Calcutta High Court held that the case clearly fell under the amended provisions of the Act relating to proceedings under Section 147. The Court found that the issuance of a notice under Section 148A was mandatory before issuing any notice under Section 148 of the amended Act, and this compliance was not observed in the present case. Considering the facts, particularly the date of upload of the notice, the Court treated its issuance date as after March 31, 2022, making the amended provisions applicable. 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 Court concluded that the impugned notice under Section 148 and all subsequent proceedings were not sustainable in law and were accordingly quashed. The Court clarified that this quashing would 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, Ajay Basu, filed a writ petition before the Calcutta High Court challenging a notice issued under Section 148 of the Income Tax Act, 1961. The petitioner contended that the notice was barred by limitation and that the respondent income tax authority failed to comply with the mandatory procedural formalities prescribed under Section 148A of the Act, as amended by the Finance Act, 2021, which became applicable from April 1, 2021. The respondent submitted that a final assessment order had already been passed. Although the impugned notice bore the date March 31, 2021, it was uploaded for communication after March 31, 2022, and thus, its issuance date was to be considered after the amended provisions became effective.

What were the issues?

1. Whether the notice issued under Section 148 of the Income Tax Act, 1961, is barred by limitation. 2. Whether the issuance of the notice under Section 148 of the Income Tax Act, 1961, is sustainable in law, considering the non-compliance with the mandatory procedural requirements of Section 148A of the Act, as amended by the Finance Act, 2021. Assessee's Contentions: The petitioner argued that the notice under Section 148 was time-barred. Furthermore, it was contended that the respondent-income tax authority had not followed the statutory formalities under Section 148A of the Act before issuing the Section 148 notice, which are mandatory for notices issued on or after April 1, 2021. The petitioner relied on the fact that the notice, though dated March 31, 2021, was uploaded for communication after March 31, 2022. Revenue's Contentions: The respondent submitted that a final assessment order had already been passed in the case. The respondent did not explicitly address the arguments regarding limitation or the procedural non-compliance with Section 148A.

Which sections of the Income-tax Act were involved?

Section 148,Section 148A,Section 147

AI-generated summary — verify with the full judgment below

OD – 93 ORDER SHEET WPO/1115/2022 IN THE HIGH COURT AT CALCUTTA CONSTITUTIONAL WRIT JURISDICTION ORIGINAL SIDE AJAY BASU VS UNION OF INDIA & ORS. BEFORE: The Hon'ble JUSTICE MD. NIZAMUDDIN Date : 27th April, 2022. Appearance: Mr. Sourav Chunder, Adv. Mr. Suryaneel Das, Adv. Mr. Aditya Mondal, Adv. For petitioner Mr. Soumen Bhattacharjee, Adv. For respondents The Court : Heard learned advocates appearing for both the 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 bared 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 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 signed on March 31,

2 2021, but it was actually uploaded for communication after 31st March, 2022 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 concerned to issue any fresh notice in future in accordance with law. With the above observations, WPO No. 1115 of 2022 stands disposed of. (MD. NIZAMUDDIN, J.) sb.

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