LAKSHMAN PRASAD AGARWAL vs. Union of India AND ORS

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WPO/2093/2022HC CalcuttaWBCHCO003040202210 May 2022Bench: HON'BLE JUSTICE MD. NIZAMUDDIN3 pages
AI SummaryRemanded

What did the High Court hold?

The High Court disposed of the writ petition by setting aside the impugned assessment order dated March 23, 2022. Citing the Supreme Court's judgment in Union of India & Ors. V. Ashish Agarwal, the Court directed that the proceedings be conducted in accordance with the guidelines laid down therein. Crucially, the Court held that the assessing officer need not issue a fresh notice under Section 148A of the Act. Instead, the impugned notice dated March 31, 2021, under Section 148 of the Act would be treated as a notice under Section 148A of the Act. The assessing officer was to proceed from the stage as if a Section 148A notice had been issued. The petitioner was granted liberty to file objections to the notice dated March 31, 2021, treated as a Section 148A(b) notice, within seven days. If objections are filed within the stipulated time, the assessing officer shall proceed with the reassessment in accordance with law and the Court's observations.

What were the facts?

The petitioner, Lakshman Prasad Agarwal, challenged an assessment order dated March 23, 2022, passed under Section 147/143(iii) of the Income Tax Act, 1961. This order was based on a notice dated March 31, 2021, issued under Section 148 of the Act for assessment year 2014-15. Previously, this Court had quashed the Section 148 notice on January 28, 2022, with liberty to initiate fresh reassessment proceedings under the amended provisions, requiring a notice under Section 148A. The petitioner contended that no fresh Section 148A notice was issued, rendering the subsequent assessment order unsustainable. The revenue was represented by the Union of India and other respondents.

What were the issues?

1. Whether the assessment order dated March 23, 2022, passed under Section 147/143(iii) of the Income Tax Act, 1961, based on a Section 148 notice that was previously quashed, is sustainable in law, particularly when no fresh notice under Section 148A of the Act was issued. Assessee's Contention: The petitioner argued that the assessment order is not sustainable because it was passed based on a Section 148 notice that had been quashed by the Court, and no fresh notice under the newly introduced Section 148A of the Income Tax Act, 1961, was issued as required by law following the quashing order. Revenue's Contention: The revenue relied on the Supreme Court's judgment in Union of India & Ors. V. Ashish Agarwal, which provided guidelines for dealing with reassessment proceedings initiated under the old regime but pending when the amended provisions came into effect. The revenue implicitly argued that the Supreme Court's decision provided a mechanism to regularize such proceedings without requiring a completely fresh start.

Which sections of the Income-tax Act were involved?

Section 147,Section 143(iii),Section 148,Section 148A

AI-generated summary — verify with the full judgment below

OD – 62 ORDER SHEET WPO/2093/2022 IN THE HIGH COURT AT CALCUTTA CONSTITUTIONAL WRIT JURISDICTION ORIGINAL SIDE LAKSHMAN PRASAD AGARWAL VS UNION OF INDIA AND ORS BEFORE: The Hon'ble JUSTICE MD. NIZAMUDDIN Date : 10th May, 2022. Appearance: Mr. Pranit Bag, Adv. Mr. Anujit Mookherji, Adv. …For the Petitioner Mr. Prithu Dudhoria, Adv. …For the respondent The Court : Heard learned advocates appearing for the parties. In this matter petitioner has challenged the impugned assessment order dated 23rd March, 2022 under Section 147/143(iii) of the Income Tax Act, 1961 on the basis of notice dated 31st March, 2021 under Section 148 of the Act relating to assessment year 2014- 15 which was quashed by this Court by order dated 28th January, 2022 with liberty to initiate fresh reassessment proceeding in accordance with amended new provision relating to reassessment proceeding under which the assessing officer will have to first issue notice under Section 148A of the Income Tax Act, 1961 but in this case no fresh notice under Section 148A of the Income Tax Act was issued to the petitioner and on the basis of the earlier notice under Section 148 of the Act which was quashed by this Court the assessing officer has passed the impugned assessment order which is not sustainable.

2 Considering the judgment of the Hon’ble Supreme Court dated May 4, 2022 in the case of Union of India & Ors. V. Ashish Agarwal in Civil Appeal No. 3005 of 2022, this writ petition is disposed of by setting aside the impugned assessment order dated 23rd March, 2022 by proceeding in the matter in accordance with the guidelines and law laid down by the Hon’ble Supreme Court in the aforesaid judgment. However, assessing officer need not to issue any fresh notice under Section 148A of the Act in view of the aforesaid judgment of the Hon’ble Supreme Court and the impugned notice under Section 148 of the Act will be treated as notice under Section 148A of the Act and the assessing officer concerned shall now proceed with the aforesaid notice from the stage as if 148A notice has been issued and all further proceedings will be in accordance with the guidelines and law laid down by the Hon’ble Supreme Court. Petitioner is granted liberty to file objection to the aforesaid notice dated 31st March, 2021 under Section 148 of the Act by treating it as it is a notice under Section 148A(b) of the Act, within seven days from date and if the petitioner files such objection within the time stipulated herein, the assessing officer shall proceed with the reassessment proceeding in accordance with law and observation made in this order. (MD. NIZAMUDDIN, J.) TR/

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