COSMOS REAL ESTATES PRIVATE LIMITED vs. UNION OF INDIA AND ORS.

PDF · subscribers
WPO/1588/2022HC CalcuttaWBCHCO002153202229 March 2022Bench: HON'BLE JUSTICE MD. NIZAMUDDIN4 pages
AI SummaryPartly Allowed

What did the High Court hold?

The High Court, in view of the submissions made by both counsels and relying on the decisions of the Allahabad High Court in 'Ashok Kumar Agarwal –vs- Union of India', Rajasthan High Court in 'Bpip Infra Private Limited-vs.- Income Tax Officer', Delhi High Court in 'Man Mohan Kohli –vs- Assistant Commissioner of Income Tax', and its own previous orders in 'Manoj Jain Vs. Union of India' and 'Bagaria Properties and Investment Private Limited & Anr.', held that the issues involved are covered by these precedents. Consequently, the Explanations A(a)(ii)/A(b) to the Notifications dated March 31, 2021, and April 27, 2021, were declared ultra vires the Relaxation Act, 2020, and thus bad in law and void. The impugned notice under Section 148 of the Income Tax Act was quashed. The Assessing Officers were granted liberty to initiate fresh reassessment proceedings in accordance with the amended provisions of the Act and after complying with the legal formalities. The writ petition was allowed, subject to the petitioner paying a cost of Rs. 5000/- to the High Court Legal Services Committee within seven days.

What were the facts?

The petitioner, Cosmos Real Estates Private Limited, 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 statutory formalities prescribed under Section 148A of the Act, which became applicable from April 1, 2021. The petitioner also seeks a declaration that Explanations A(a)(ii)/A(b) to Notifications No. 20 and 38, dated March 31, 2021, and April 27, 2021, respectively, are ultra vires the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020, to the extent they extend the applicability of pre-amended Section 148, 149, and 151 of the Income Tax Act beyond March 31, 2021.

What were the issues?

1. Whether the impugned notice issued under Section 148 of the Income Tax Act, 1961, is barred by limitation, considering the amendments brought by the Finance Act, 2021. 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, given that the notice was issued after April 1, 2021. 3. Whether Explanations A(a)(ii)/A(b) to Notifications No. 20 and 38, dated March 31, 2021, and April 27, 2021, are ultra vires the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020, by extending the applicability of the pre-amended provisions of Sections 148, 149, and 151 of the Income Tax Act beyond March 31, 2021. Assessee's Contentions: The petitioner argued that the notice is barred by limitation and that the statutory formalities under Section 148A were not observed. The petitioner also contended that the aforementioned notifications are ultra vires the parent legislation. Revenue's Contentions: The judgment records no specific contentions for the revenue.

Which sections of the Income-tax Act were involved?

Section 148,Section 148A,Section 149,Section 151

AI-generated summary — verify with the full judgment below

OD – 26 ORDER SHEET WPO/1588/2022 IN THE HIGH COURT AT CALCUTTA CONSTITUTIONAL WRIT JURISDICTION ORIGINAL SIDE COSMOS REAL ESTATES PRIVATE LIMITED VS UNION OF INDIA AND ORS. BEFORE: The Hon'ble JUSTICE MD. NIZAMUDDIN Date : 29th March, 2022. Appearance: Ms. Swapna Das, Adv. Mr. Siddharth Das, Adv. …For the Petitioner Mr. Aryak Dutt, Adv. …For the U.O.I. The Court : Heard Learned Counsels appearing for the parties. Petitioner is aggrieved by the issuance of impugned notice under Section 148 of the Income Tax Act, 1961 on the ground that the same is barred by limitation and the respondent Income Tax Authority concerned, before issuing the impugned notices under Section 148 of the Income Tax Act, have not observed the statutory formalities under Section 148 A of the Income Tax 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 Act on or after 1st April, 2021. Issues arising in the present Writ Petition is purely legal and in this Writ Petition the assessee/petitioner has sought relief of quashing of the impugned re-assessment notice issued post 31st March, 2021

2 by the respondent Income Tax Authority concerned under Section 148 of the Income Tax Act, assessee/petitioner has also sought relief by way of a declaration declaring Explanations A(a)(ii)/A(b) to the Notification No. 20 [S.O. 1432 (E) dated 31st March, 2021 and Notification No. 38 [S.O.1703 (E)] dated 27th April, 2021 to the extent that the same extend the applicability of the “provisions of Section 148, Section 149 and Section 151 of the Act, as the case may be, as they stood as on the 31st March, 2021, before the commencement of the Finance Act, 2021” to the period beyond 31st March, 2021 as ultra vires the parent legislation, viz., The Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 (hereinafter referred to as ‘ Relaxation Act, 2020’). At the outset, both the counsel appearing for the parties jointly submitted that the issues involved in this Writ Petition is covered by the decision of the Division Bench of the Allahabad High Court dated 30th September, 2021 in the case of ‘Ashok Kumar Agarwal –vs- Union of India through its Revenue Secretary North Block & Ors.’ (Writ Tax No. 524/2021) decided in favour of assessee/petitioner on 30.09.2021 and order of Rajasthan High Court dated 25th November, 2021 in the case of Bpip Infra Private Limited-vs.- Income Tax Officer, Ward 4 (1), Jaipur (S.B. Civil Writ Petition No. 13297/2021) and the order of Delhi High Court 15th December, 2021 in the case of Man Mohan Kohli –vs- Assistant Commissioner of Income Tax & Anr. In (W.P. (C) 6176 of 2021) and judgement and order of this Court dated 17th January, 2022 in the case of Manoj Jain Vs. Union of India & Ors. In WPA No.

3 11950 of 2021 and in the case of Bagaria Properties and Investment Private Limited & Anr. In WPO 244 of 2021. In view of judgment and order of this Court dated 17th January, 2022 in the case of Manoj Jain Vs. Union of India & Ors. In WPA No. 11950 of 2021 and in the case of Bagaria Properties and Investment Private Limited & Anr. in WPO No. 244 of 2021, this Writ Petition being WPO No.1588/2022 is disposed of by allowing the same. Explanations A(a)(ii)/A(b) to the Notifications dated 31st March, 2021 and 27th April, 2021 are declared to be ultra vires the Relaxation Act, 2020 and are therefore bad in law and null and void. Accordingly, impugned notice under Section 148 of the Income Tax Act is quashed with liberty to the Assessing Officers concerned to initiate fresh re- assessment proceedings in accordance with the relevant provisions of the Act as amended by Finance Act, 2021 and after making compliance of the formalities as required by the law. This writ petition is being entertained subject to payment of cost of Rs. 5000/- to the High Court Legal Services Committee since the impugned notice under Section 148 of the Income Tax Act, 1961, has been issued on 4th June, 2021 as appears from record and this writ petition has been filed in March, 2022, that is, almost after eight months from receipt of the impugned notice, without any explanation for such delay in filing this writ petition. Such cost has to be paid by the petitioner to the High Court Legal Services Committee within seven days from date and such cost will be utilised for the welfare of

4 street children. Payment of receipt is to be produced by the petitioner before this Court. List this matter as “To be Mentioned” on 11th April, 2022 for compliance. Urgent certified photocopy of this order, if applied for, be supplied to the parties upon compliance with all requisite formalities. (MD. NIZAMUDDIN, J.) TR/

More judgments on Section 148

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

Recent GST High Court judgments

Search GST case law →