DELIGHTED HOLDINGS PRIVATE LIMITED vs. UNION OF INDIA AND ORS.

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WPO/764/2021HC CalcuttaWBCHCO002354202120 September 2021Bench: HON'BLE JUSTICE MD. NIZAMUDDIN2 pages
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What did the High Court hold?

The Hon'ble High Court held that the impugned second notice dated March 27, 2018, issued under Section 148 of the Income Tax Act, 1961, for assessment year 2013-14, is illegal and invalid on the face of it. The Court reasoned that there is no provision under the Income Tax Act, 1961, that authorizes the Assessing Officer to reopen an assessment twice and issue a second notice under Section 148 in respect of the same assessment year, especially when a prior notice under Section 148 had already been issued and a reassessment order under Section 147 had been passed. Consequently, the second impugned notice dated April 16, 2021, was found to be not sustainable in law and was quashed. The writ petition was allowed.

What were the facts?

The petitioner, Delighted Holdings Private Limited, challenged a notice dated March 27, 2018, issued under Section 148 of the Income Tax Act, 1961, for assessment year 2013-14. The petitioner argued that a previous notice under the same section for the same assessment year had already been issued, leading to a final assessment order dated November 16, 2018, under Section 147/143(3). An appeal against this order was pending before the CIT(Appeals). The petitioner contended that a second notice under Section 148 for the same assessment year, after a final assessment order had been passed, was invalid and illegal as there is no provision in the Income Tax Act, 1961, for such a procedure. The revenue authorities could not provide any legal justification for issuing the second notice.

What were the issues?

1. Whether the issuance of a second notice under Section 148 of the Income Tax Act, 1961, for assessment year 2013-14 is legally valid when a prior notice under Section 148 for the same assessment year has already culminated in a final assessment order under Section 147/143(3) and an appeal against it is pending. Assessee's Contention: The petitioner argued that the second notice under Section 148 is invalid and illegal because the Income Tax Act, 1961, does not permit issuing a second notice under Section 148 when a previous notice under the same section has already led to a final assessment order. They relied on the absence of any such provision in the Act. Revenue's Contention: The learned advocate for the income tax authorities/respondents could not satisfy the Court with any legal provision to justify the issuance of the second notice under Section 148 of the Income Tax Act, 1961.

Which sections of the Income-tax Act were involved?

Section 148,Section 147,Section 143(3)

AI-generated summary — verify with the full judgment below

OD 11 WPO 764 of 2021 IN THE HIGH COURT AT CALCUTTA CONSTITUTIONAL WRIT JURISDICTION ORIGINAL SIDE DELIGHTED HOLDINGS PRIVATE LIMITED VERSUS UNION OF INDIA & ORS.

BEFORE: The Hon'ble JUSTICE MD. NIZAMUDDIN Date : 20th September, 2021. APPEARANCE: Mr. Pranit Bag,Adv. Mr. Anirudhya Dutta,Adv. Mr. Y.J.Dastoor,Sr. Adv. Mr. Debasish Chowdhury,Adv. Mr. Sushil Kr. Mishra,Adv. The Court:- Affidavit of service filed in Court today be kept with the record. Heard both the parties. In this writ petition petitioner has challenged the legality and validity of the notice dated 27th March, 2018 relating to assessment year 2013-14 under Section 148 of the Income Tax Act, 1961 on the ground that the assessing officer/respondent concerned in respect of the same assessment year has already issued notice earlier on 27th March, 2018 under the same Section 148 of the Income Tax Act, 1961 which has culminated into the final assessment order dated 16th November, 2018 under Section 147/143 (3) of the Income Tax Act, 1961 and against the said assessment order, petitioner has already filed appeal before the CIT appeal which is still pending. Learned Advocate appearing for the petitioner submits that the second notice under Section 148 of the Act in respect of the same assessment year is invalid and illegal since there is no provision under the Income Tax Act, 1961 for issuing second notice under Section 148 of the Act when the first notice under

Section 148 of the Act has culminated into final assessment order under Section 147 of the Act. Learned Advocate appearing for the income tax authorities/respondents could not satisfy this Court from any legal provision for justification of such action of the respondent, income tax authority in issuing second notice under Section 148 of the Income Tax Act, 1961. Considering the submissions of the parties and what appears from record, in my considered opinion impugned second notice under Section 148 of the Income Tax Act, 1961, is illegal and invalid on the face of it since nowhere under the Income Tax Act, 1961, there is any provision which authorizes the Assessing Officer to reopen an assessment twice and to issue second notice under Section 148 of the Income Tax Act, 1961, in respect of the same assessment year where already a notice under Section 148 of the Income Tax Act, 1961 was issued and reassessment order under Section 147 of the Income Tax Act, 1961, was passed. In my considered opinion second impugned notice dated 16th April, 2021 under Section 148 of the Income Tax Act, 1961 relating to assessment year 2013-14 is not sustainable in law and is accordingly quashed. This writ petition, being WPO 764 of 2021 is, accordingly, disposed of by allowing the same with no order as to cost. (MD. NIZAMUDDIN, J.) S.Chandra 2

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