VIRENDRA KUMAR SURANA (HUF) vs. UNION OF INDIA AND ORS.

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WPO/1333/2022HC CalcuttaWBCHCO001809202227 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, which mandate the issuance of a notice under Section 148A before issuing any notice under Section 148. The Court found that this mandatory compliance was not observed in the present case. Considering the facts and circumstances, and in light of 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. Consequently, the Court quashed the impugned notice and all subsequent proceedings. However, 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, Virendra Kumar Surana (HUF), 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 observe the statutory formalities prescribed under Section 148A of the Act, which became applicable from April 1, 2021. The respondent's advocate submitted that a final assessment order had already been passed. It was also noted that while the impugned notice bore the date and signature of March 31, 2021, it was actually uploaded for communication after March 31, 2022, which should be treated as the date of issuance.

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 mandatory procedural requirements of Section 148A of the Income Tax Act, 1961, before issuing the notice under Section 148, considering the applicability of the Finance Act, 2021, from April 1, 2021. Assessee's Contentions: The petitioner argued that the notice under Section 148 was time-barred. Furthermore, the petitioner contended that the respondent failed to follow the mandatory procedural formalities stipulated in Section 148A of the Act, which were applicable for notices issued on or after April 1, 2021. The petitioner relied on the amended provisions of the Act and the principles laid down in the cases of Bagaria Properties and Investment Private Limited & Anr. v. Union of India & Ors. and Monoj Jain v. Union of India. Revenue's Contentions: The respondent's advocate submitted that a final assessment order had already been passed. The respondent also noted that the notice, though dated March 31, 2021, was uploaded for communication after March 31, 2022, and this later date should be considered 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

OD – 99 ORDER SHEET WPO/1333/2022 IN THE HIGH COURT AT CALCUTTA CONSTITUTIONAL WRIT JURISDICTION ORIGINAL SIDE VIRENDRA KUMAR SURANA (HUF) VS UNION OF INDIA & ORS. BEFORE: The Hon'ble JUSTICE MD. NIZAMUDDIN Date : 27th April, 2022. Appearance: Mr. Anurag Bagaria, Adv. Ms. Riya Debnath, Adv. For petitioner Mr. Prithu Dudhoria, 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. 1333 of 2022 stands disposed of. (MD. NIZAMUDDIN, J.) sb.

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