JINDAL EXPORTS AND IMPORTS PVT. LTD. vs. DEPUTY COMMISSIONER OF INCOME TAX CIRCLE 13(1),DELHI & ORS.

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W.P.(C)/6183/2023HC DelhiDLHC01017799202326 July 2023Bench: HON'BLE MR. JUSTICE RAJIV SHAKDHER,HON'BLE MR. JUSTICE GIRISH KATHPALIA5 pages
AI SummaryAllowed

What did the High Court hold?

The High Court held that the notices issued under Section 148A(b) of the Income Tax Act, 1961, dated 02.06.2022 and mailed on 08.06.2022, were invalid. The Court reasoned that these notices were issued after the deadline of 03.06.2022, as stipulated by the CBDT's Instruction No. 1/2022, which was issued in compliance with the Supreme Court's judgment in Union of India vs. Ashish Aggarwal. The Court found that issuing the notices after this date abrogated the mandate of the CBDT instructions. Furthermore, the Court noted that the notices also violated Section 282A of the Act as the name and designation of the issuing officer were not mentioned. The Court relied on a coordinate bench's decision in LSR Medical Pvt. Ltd. vs. DCIT Circle 13(1) & Anr. on similar grounds. Consequently, the impugned notices and orders were set aside, with liberty granted to the revenue to take further steps in accordance with law.

What were the facts?

These four writ petitions, filed by Jindal Exports and Imports Private Limited and Kiran Credits Private Limited, challenge notices issued under Section 148A(b) and orders passed under Section 148A(d) of the Income Tax Act, 1961. The assessment years involved are 2013-14 and 2014-15. The petitioners contend that the notices under Section 148A(b), dated 02.06.2022 and mailed on 08.06.2022, had lost their efficacy as they were issued after the prescribed deadline of 03.06.2022. The petitions were heard together due to similar factual and legal matrices. The respondents are the Deputy Commissioner of Income Tax and others.

What were the issues?

1. Whether the notices issued under Section 148A(b) of the Income Tax Act, 1961, dated 02.06.2022 and mailed on 08.06.2022, are liable to be set aside on the ground that they were issued after the stipulated deadline of 03.06.2022, thereby losing their efficacy? Assessee's Contention: The petitioners argued that the notices under Section 148A(b) of the Act, which were mailed on 08.06.2022, had lost their efficacy because they were issued after 03.06.2022. Consequently, the notices and the subsequent orders under Section 148A(d) are invalid. They relied on the clarificatory Instruction No. 1/2022 issued by the CBDT, which stipulated deadlines for such actions. Revenue's Contention: The judgment does not record specific arguments made by the revenue on this particular issue, other than their appearance through counsel.

Which sections of the Income-tax Act were involved?

Section 148A(b),Section 148A(d),Section 282A,Section 148,Section 151

AI-generated summary — verify with the full judgment below

Heard together (4 matters)

W.P.(C) 6217/2023
W.P.(C) 6891/2023
W.P.(C) 6884/2023
W.P.(C) 6183/2023

Read from the judgment's own cause title. This page is filed under one of them.

W.P.(C) 6217/2023, 6891/2023, 6884/2023 & 6183/2023 Page 1 of 5

$~ * IN THE HIGH COURT OF DELHI AT NEW DELHI %

Judgement reserved on: 13.07.2023

Judgement pronounced on : 26.07.2023

+ W.P.(C) 6217/2023 & CM APPL. 24446/2023

JINDAL EXPORTS AND IMPORTS PRIVATE LIMITED ..... Petitioner Through: Mr Ved Jain & Mr Nischay Kantoor, Advocates.

versus DEPUTY COMMISSIONER OF INCOME TAX CIRCLE 13(1),DELHI & ORS.

..... Respondents Through: Mr Gaurav Gupta, Sr. Standing Counsel with Mr Shivendra Singh & Mr Puneet Singhal, Standing Counsels.

+ W.P.(C) 6891/2023 & CM APPL. 26869/2023

KIRAN CREDITS PRIVATE LIMITED

..... Petitioner Through: Mr Ved Jain & Mr Nischay Kantoor, Advocates.

versus DEPUTY COMMISSIONER OF INCOME TAX CIRCLE 13(1),DELHI & ORS.

..... Respondents Through: Mr Gaurav Gupta, Sr. Standing Counsel with Mr Shivendra Singh & Mr Puneet Singhal, Standing Counsels

+ W.P.(C) 6884/2023 & CM APPL. 26860/2023

KIRAN CREDITS PRIVATE LIMITED

..... Petitioner Through: Mr Ved Jain & Mr Nischay Kantoor, Advocates.

versus DEPUTY COMMISSIONER OF INCOME TAX CIRCLE 13(1),DELHI & ORS.

..... Respondents Through: Mr Gaurav Gupta, Sr. Standing Counsel with Mr Shivendra Singh & Mr Puneet Singhal, Standing Counsels

+ W.P.(C) 6183/2023&CM APPL. 24310/2023

JINDAL EXPORTS AND IMPORTS PVT. LTD. ..... Petitioner Through: Mr Ved Jain & Mr Nischay Kantoor, Advocates. Digitally Signed By:NEELAM SHARMA Signing Date:26.07.2023 15:32:13 Signature Not Verified

W.P.(C) 6217/2023, 6891/2023, 6884/2023 & 6183/2023 Page 2 of 5

versus

DEPUTY COMMISSIONER OF INCOME TAX CIRCLE 13(1),DELHI & ORS.

..... Respondents

Through: Mr Gaurav Gupta, Sr. Standing Counsel with Mr Shivendra Singh & Mr Puneet Singhal, Standing Counsels.

CORAM: HON'BLE MR. JUSTICE RAJIV SHAKDHER HON'BLE MR. JUSTICE GIRISH KATHPALIA

GIRISH KATHPALIA, J.:

1.

The factual matrix being similar and legal matrix being same, these four writ petitions are taken up together for disposal. We heard learned counsel for both sides and examined the relevant legal position.

2.

In these writ petitions, the petitioners have assailed legality of notice under Section 148A(b) of the Act and orders under Section 148A(d) of the Act on multiple grounds. However, the petitions can be disposed of on one of those grounds without traversing through the remaining.

3.

For convenient reference, the relevant dates and particulars of these writ petitions are tabulated below:

Writ Petition No. WP(C) Assessment Year Date of notice under Section 148 of the Act Date of issuance of notice under Section 148A(b) of the Act Date of delivery of notice under Section 148A(b) of the Act Date of reply to notice under Section 148A(b) of the Act Date of order under Section 148A(d) of the Act 6217/2023 2013-14 28.06.2021 02.06.2022 08.06.2022 22.06.2022 30.07.2022 6891/2023 2013-14 23.04.2021 02.06.2022 08.06.2022 19.06.2022 30.07.2022 6884/2023 2014-15 03.06.2021 20.06.2022 08.06.2022 19.06.2022 30.07.2022 Digitally Signed By:NEELAM SHARMA Signing Date:26.07.2023 15:32:13 Signature Not Verified

W.P.(C) 6217/2023, 6891/2023, 6884/2023 & 6183/2023 Page 3 of 5

6183/2023 2014-15 23.04.2021 02.06.2022 08.06.2022 22.06.2022 30.07.2022

4.

One of the grounds on which these writ petitions can be disposed of is as follows. According to the petitioners, notices dated 02.06.2022 under Section 148A(b) of the Act, which were mailed to the petitioners on 08.06.2022 had lost efficacy after 03.06.2022, therefore, the notices as well as the consequent orders under Section 148A(d) of the Act are liable to be set aside.

5.

On the issue of time limits, it would be apposite to traverse through the clarificatory Instruction No. 1/2022 dated 11.05.2022, issued by Central Board of Direct Taxes (CBDT) consequent to the judgment of the Hon’ble Supreme Court in the case of Union of India vs Ashish Aggarwal, 2022(5) TMI 240 SC relevant portions whereof are extracted hereafter: “7.0 Cases where the Assessing Officer is required to provide the information and material relied upon within 30 days: 7.1 Hon'ble Supreme Court has directed that information and material is required to be provided in all cases within 30 days. However, it has also been noticed that notices cannot be issued in a case for AY 2013-14, AY 2014-15 and AY 2015-16 if the income escaping assessment, in that case for that year, amounts to or is likely to amount to less than fifty lakh rupees. Hence, in order to reduce the compliance burden of assessees, it is clarified that information and material may not be provided in a case for AY 2013-14, AY 2014-15 and AY 2015-16, if the income escaping assessment, in that case for that year, amounts to or is likely to amount to less than fifty lakh rupees. Separate instruction shall be issued regarding procedure for disposing these cases. 8.0 Procedure required to be followed by the Assessing Officers to comply with the Supreme Court judgment:

8.1 The procedure required to be followed by the Jurisdictional Assessing Officer/Assessing Officer, in compliance with the order of the Hon'ble Supreme Court, is as under: • The extended reassessment notices are deemed to be show cause notices under clause (b) of section 148A of the Act in accordance with Digitally Signed By:NEELAM SHARMA Signing Date:26.07.2023 15:32:13 Signature Not Verified

W.P.(C) 6217/2023, 6891/2023, 6884/2023 & 6183/2023 Page 4 of 5

the judgment of Hon'ble Supreme Court. Therefore, all requirement of new law prior to that show cause notice shall be deemed to have been complied with. • The Assessing Officer shall exclude cases as per clarification in paragraph 7.1 above. • Within 30 days i.e, by 2nd June 2022, the Assessing Officer shall provide to the assessees, in remaining cases, the information and material relied upon for issuance of extended reassessment notices. • The assessee has two weeks to reply as to why a notice under section 148 of the Act should not be issued, on the basis of information which suggests that income chargeable to tax has escaped assessment in his case for the relevant assessment year. The time period of two weeks shall be counted from the date of last communication of information and material by the Assessing Officer to the assessee. • In view of the observation of Hon'ble Supreme Court that all the defences of the new law are available to the assessee, if assessee makes a request by making an application that more time be given to him to file reply to the show cause notice, then such a request shall be considered by the Assessing Officer on merit and time may be extended by the Assessing Officer as provided in clause (b) of new section 148A of the Act. • After receiving the reply, the Assessing Officer shall decide on the basis of material available on record including reply of the assessee, whether or not it is a fit case to issue a notice under section 148 of the Act. The Assessing Officer is required to pass an order under clause (d) of section 148A of the Act to that effect, with the prior approval of the specified authority of the new law. This order is required to be passed within one month from the end of the month in which the reply is received by him from the assessee. In case no such reply is furnished by the assessee, then the order is required to be passed within one month from the end of the month in which time or extended time allowed to furnish a reply expires. • If it is a fit case to issue a notice under section 148 of the Act, the Assessing Officer shall serve on the assessee a notice under section 148 after obtaining the approval of the specified authority under section 151 of the new law. The copy of the order passed under clause (d) of section 148A of the Act shall also be served with the notice u/s 148. • If it is not a fit case to issue a notice under section 148 of the Act, the order passed under clause (d) of section 148A to that effect shall be served on the assessee.” [Emphasis is ours] 6. The impugned notices under Section 148A(b) of the Act, having been mailed after 03.06.2022, do not just abrogate the mandate of the CBDT Digitally Signed By:NEELAM SHARMA Signing Date:26.07.2023 15:32:13 Signature Not Verified

W.P.(C) 6217/2023, 6891/2023, 6884/2023 & 6183/2023 Page 5 of 5

instructions quoted above but also violate the provisions of Section 282A of the Act insofar as the name and designation of the concerned officer issuing the same find no mention in the same.

7.

That being so, the notices under Section 148A(b) of the Act impugned in these writ petitions cannot be sustained.

8.

In the case of LSR Medical Pvt. Ltd. vs DCIT Circle 13(1) & Anr WP(C) 5129/2023, decided on 24.04.2023 by a co-ordinate bench of this court to which one of us (Rajiv Shakdher, J.) was a member allowed the writ petition on similar grounds.

9.

In view of above discussion, the notices under Section 148A(b) of the Act and orders under Section 148A(d) of the Act, impugned in these writ petitions are set aside and the petitions are allowed, however, granting liberty to the respondent/revenue to take further steps in accordance with law.

10.

Consequently, the pending applications also stand disposed of.

(GIRISH KATHPALIA) JUDGE

(RAJIV SHAKDHER) JUDGE JULY 26, 2023/as Digitally Signed By:NEELAM SHARMA Signing Date:26.07.2023 15:32:13 Signature Not Verified

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