MIRA COMMOSALES LLP vs. Union of India AND ORS

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WPO/1998/2022HC CalcuttaWBCHCO002819202220 April 2022Bench: HON'BLE JUSTICE MD. NIZAMUDDIN3 pages
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What did the High Court hold?

The Calcutta High Court, while considering the facts and the arguments presented, held that the impugned notice issued under Section 148 of the Income Tax Act, 1961, and all subsequent proceedings are quashed. The Court's reasoning was based on the violation of the mandatory procedure stipulated by the amended provisions, specifically the requirement to issue a notice under Section 148A before issuing a Section 148 notice. The Court found that this procedural requirement was not met by the Assessing Officer. The quashing of the notice and proceedings, however, does not preclude the Assessing Officer from issuing a fresh notice in the future in accordance with the law. The Court also imposed a cost of Rs. 5000/- on the petitioner for the delay in filing the writ petition without any explanation, to be paid to the High Court Legal Services Committee.

What were the facts?

The petitioner, Mira Commosales LLP, challenged a notice issued under Section 148 of the Income Tax Act, 1961. The notice was issued after March 31, 2021. The petitioner contended that the notice was invalid because it was issued in violation of the newly amended provisions, which mandate a notice under Section 148A of the Act before issuing a Section 148 notice. The petitioner argued that the Assessing Officer had admittedly not followed this mandatory procedure. The petitioner also relied on two Calcutta High Court judgments, Bagaria Properties and Investment Private Limited & Anr. vs. Union of India & Ors. and Monoj Jain vs. Union of India, which dealt with similar issues arising from the amended provisions. The writ petition was filed approximately nine months after the receipt of the impugned notice without any explanation for the delay.

What were the issues?

1. Whether the notice issued under Section 148 of the Income Tax Act, 1961, after March 31, 2021, is invalid for non-compliance with the mandatory requirement of issuing a notice under Section 148A of the Act prior to it. Assessee's Contentions: The petitioner argued that the impugned notice under Section 148 was issued in violation of the amended provisions of the Act. Specifically, they contended that there is a mandatory obligation on the Assessing Officer to issue a notice under Section 148A before issuing any notice under Section 148. The Assessing Officer admittedly failed to do so. The petitioner relied on the decisions in Bagaria Properties and Investment Private Limited & Anr. vs. Union of India & Ors. and Monoj Jain vs. Union of India, both reported in (2022) 134 taxman.com, which supported their contention. Revenue's Contentions: The judgment does not record any specific contentions made by the revenue (Union of India and Ors.).

Which sections of the Income-tax Act were involved?

Section 148,Section 148A

AI-generated summary — verify with the full judgment below

OD – 42 ORDER SHEET WPO/1998/2022 IN THE HIGH COURT AT CALCUTTA CONSTITUTIONAL WRIT JURISDICTION ORIGINAL SIDE MIRA COMMOSALES LLP VS UNION OF INDIA AND ORS. BEFORE: The Hon'ble JUSTICE MD. NIZAMUDDIN Date : 20th April, 2022. Appearance: Mr. Subash Agarwal, Adv. Mr. Brijesh Kumar Singh, Adv. …For the Petitioner Mr. Om Narayan Rai, Adv. …For the U.O.I. The Court : Heard learned advocates appearing for the parties. In this matter, petitioner has challenged the impugned notice under Section 148 of the Income Tax Act, 1961 which was issued after 31st March, 2021 with supporting documents on the ground that this case clearly falls under the newly amended act relating to proceedings under Section 147 of the Act and under which there is a mandatory obligation on the part of the assessing officer to issue notice under Section 148A of the Act before issuing any notice under Section 148 of the Act and which has admittedly not done by the assessing officer and the impugned notice under Section 148 of the Act has been issued violation of Section 148A of the Act. Furthermore this case is directly covered by the orders of this Court in the case of Bagaria Properties and Investment Private Limited & Anr. vs. Union of India & Ors. reported in (2022) 134 taxman.com 196 (Calcutta) and also in the case of Monoj Jain vs. Union of India reported in (2022) 134 taxman.com 173 (Calcutta).

2 Considering these facts I hold the impugned notice under Section 148 of the Act and all subsequent proceedings are quashed. However, quashing of the impugned notice and subsequent proceedings will not debar the assessing officer concerned to issue any fresh notice in future in accordance with law. With the above observations, this Writ Petition being WPO No.1998/2022 is disposed of. 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 24th June, 2021 as appears from record and this writ petition has been filed in April, 2022, that is, almost after nine months from receipt of the impugned notices, 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 ten days from date and such cost will be utilised for the benefit and welfare of the children staying with their parents in the correctional home in West Bengal. Receipt of payment is to be produced by the petitioner before this Court. List this matter as “To be Mentioned” on 2nd May, 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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