JINESH KUMAR HUF vs. UNION OF INDIA AND ORS

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WPO/1736/2022HC CalcuttaWBCHCO002371202229 March 2022Bench: HON'BLE JUSTICE MD. NIZAMUDDIN4 pages
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What did the High Court hold?

The Court, in view of the submissions made by both counsel and relying on the judgments of the Allahabad High Court, Rajasthan High Court, Delhi High Court, and this Court's own prior decisions in Manoj Jain and Bagaria Properties and Investment Private Limited, allowed the writ petition. The Court declared Explanations A(a)(ii)/A(b) to the Notifications dated March 31, 2021, and April 27, 2021, as ultra vires the Relaxation Act, 2020, and consequently held them to be bad in law and void. Accordingly, 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 Finance Act, 2021, and after complying with all legal formalities. The Court also imposed a cost of Rs. 5000/- on the petitioner for the delay in filing the writ petition, to be paid to the High Court Legal Services Committee.

What were the facts?

The petitioner, Jinesh Kumar Jain HUF, 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 to declare Explanations A(a)(ii)/A(b) to Notifications No. 20 and 38, dated March 31, 2021, and April 27, 2021, respectively, as ultra vires the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020. The impugned notice was issued on April 6, 2021, and the writ petition was filed in March 2022, approximately ten months later, without explanation for the delay.

What were the issues?

1. Whether the impugned notice issued under Section 148 of the Income Tax Act, 1961, post-April 1, 2021, is barred by limitation and invalid due to non-compliance with Section 148A of the Act. 2. Whether 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 parent legislation, the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020, to the extent they extend the applicability of Section 148, Section 149, and Section 151 of the Act as they stood before March 31, 2021, beyond that date. The assessee/petitioner argued that the notice under Section 148 is barred by limitation and that the mandatory procedural requirements of Section 148A were not followed. The assessee also contended that the aforementioned notifications extending the old provisions are ultra vires the Relaxation Act, 2020. Both parties jointly submitted that the issues are covered by previous judgments 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 this Court's own judgments in 'Manoj Jain Vs. Union of India' and 'Bagaria Properties and Investment Private Limited & Anr.'. The revenue did not present any arguments contrary to this joint submission.

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 – 50 ORDER SHEET WPO/1736/2022 IN THE HIGH COURT AT CALCUTTA CONSTITUTIONAL WRIT JURISDICTION ORIGINAL SIDE JINESH KUMAR JAIN HUF VS UNION OF INDIA AND ORS. BEFORE: The Hon'ble JUSTICE MD. NIZAMUDDIN Date : 29th March, 2022. Appearance: Mr. Farhan Ghaffar, Adv. …For the Petitioner Mr. Prithu Dudhoria, 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 by the respondent Income Tax Authority concerned under Section 148

2 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.1736/2022 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 6th April, 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 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/

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