QUEST GLOBAL ENGINEERING SERVICES PRIVATE LIMITED vs. THE ASSISTANT COMMISSIONER OF INCOME TAX

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WP/102256/2022HC KarnatakaKAHC02008492202212 September 2024Bench: JYOTI MULIMANI3 pages
AI SummaryAllowed

What did the High Court hold?

The High Court held that since the proceedings initiated under Section 147 of the Income Tax Act, 1961, were dropped by the National Faceless Assessment Center (NeFAC) on 29.03.2022, and no further action was being taken in connection with the assessment proceedings for the Assessment Year 2017-18, the notice issued under Section 148 of the Act was liable to be quashed. The Court ordered the quashing of the notice dated 30.03.2021. The principle derived is that a notice issued under Section 148, which initiates reassessment proceedings, becomes infructuous and liable for quashing if the underlying proceedings under Section 147 are dropped by the competent authority.

What were the facts?

The petitioner, Quest Global Engineering Services Private Limited, filed a writ petition seeking to quash a notice dated 30.03.2021 issued by the Assistant Commissioner of Income Tax under Section 148 of the Income Tax Act, 1961. This notice pertained to the Assessment Year 2017-18. The respondents, including the Assistant Commissioner of Income Tax and the National Faceless Assessment Center, filed a statement of objections. In their objections, the respondents stated that the proceedings initiated under Section 147 of the Act were dropped on 29.03.2022 by the National Faceless Assessment Center (NeFAC). Consequently, no further action was being taken in connection with the assessment proceedings for the Assessment Year 2017-18.

What were the issues?

1. Whether the notice dated 30.03.2021 issued by the first respondent under Section 148 of the Income Tax Act, 1961, for the Assessment Year 2017-18, is liable to be quashed, considering that the proceedings initiated under Section 147 of the Act were dropped by the National Faceless Assessment Center. The petitioner argued that the notice under Section 148 should be quashed. The revenue, in its statement of objections, conceded that the proceedings under Section 147 were dropped and no further action was being initiated. The revenue did not present any arguments against the quashing of the notice.

Which sections of the Income-tax Act were involved?

Section 148,Section 147

AI-generated summary — verify with the full judgment below

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NC: 2024:KHC-D:13066 WP No. 102256 of 2022

IN THE HIGH COURT OF KARNATAKA, DHARWAD BENCH DATED THIS THE 12TH DAY OF SEPTEMBER, 2024 BEFORE THE HON'BLE MS. JUSTICE JYOTI MULIMANI WRIT PETITION NO. 102256 OF 2022 (T-IT) BETWEEN:

QUEST GLOBAL ENGINEERING SERVICES PRIVATE LIMITED (FOR THE MERGED ENTITY M/S. QUEST ENGINEERING AND SOFTWARE TECHNOLOGIES PRIVATE LIMITED), NO.437/A, PLOT NO.2, AEQUS SPECIAL ECONOMIC ZONE, HATTARAGI VILLAGE, HUKKERI TALUKA, BELAGAVI, KARNATAKA-591 245, REPRESENTED BY ITS MANAGING DIRECTOR, MR. ASHUTOSH GUPTA. …PETITIONER (BY SRI. K.R.PRADEEP AND SMT. GIRIJA G.P., ADVOCATES)

AND:

1.

ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE 1, BELAGAVI, FEROZ KHIMJIBHAI COMPLEX, OPP. CIVIL HOSPITAL, DR. AMBEDKAR ROAD, BELAGAVI-590 001.

2.

NATIONAL FACELESS ASSESSMENT CENTER, ROOM NO.401, 2ND FLOOR, E-RAMP JAWAHARLAL NEHUR STADIUM, DELHI-110 003, REPRESENTED BY ADDITIONAL COMMISSIONER OF INCOME TAX.

3.

PRINCIPAL COMMISSIONER OF INCOME TAX RANGE, BELAGAVI,

Digitally signed by THEJASKUMAR N Location: HIGH COURT OF KARNATAKA

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NC: 2024:KHC-D:13066 WP No. 102256 of 2022

FEROZ KHIMJIBHAI COMPLEX, OPP. CIVIL HOSPITAL, DR. AMBEDKAR ROAD, BELAGAVI-590 001. …RESPONDENTS (BY SRI. M.THIRUMALESH., ADVOCATE)

THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA, SEEKING CERTAIN RELIEFS.

THIS WRIT PETITION IS LISTED FOR PRELIMINARY HEARING IN ‘B’ GROUP, THIS DAY, AN ORDER IS MADE AS UNDER: ORAL ORDER Sri.K.R.Pradeep., counsel for the petitioner and Sri.M.Thirumalesh., counsel for the respondents have appeared in person. 2. The captioned Writ Petition is filed seeking a Writ of Certiorari to quash the notice dated 30.03.2021 issued by the first respondent under Section 148 of the Income Tax Act in DIN & NOTICE No.ITBA/AST/S/148/2020-21/1031970508(1) for the Assessment Year 2017-18 vide Annexure-A. 3. Heard the arguments and perused the Writ papers and the statement of objections with care.

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NC: 2024:KHC-D:13066 WP No. 102256 of 2022

4.

Suffice it to note that in the statement of objections that has been filed by the respondents, it has been stated that the proceedings initiated under Section 147 of the Act were dropped on 29.03.2022 by NeFAC and no further action viz., issue of notices and letters is initiated in connection with the assessment proceedings for the Assessment Year 2017-18. Because of the dropping of proceedings under Section 147 of the Act, notice issued under Section 148 of the Act is liable to be quashed and so, it is quashed. 5. The Writ of Certiorari is ordered. The notice dated 30.03.2021 issued by the first respondent under Section 148 of the Income Tax Act, 1961 in DIN & NOTICE No.ITBA/AST/S/148/2020-21/1031970508(1) for the Assessment Year 2017-18 vide Annexure-A is quashed. 6. Resultantly, the Writ Petition is allowed.

Sd/- (JYOTI MULIMANI) JUDGE TKN LIST NO.: 2 SL NO.: 30.4

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