QUEST GLOBAL ENGINEEERING SERVICES PRIVATE LTD vs. ASSISTANT COMMISSIONER OF INCOME TAX

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WP/102262/2022HC KarnatakaKAHC02008491202212 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 Centre (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 issued by the first respondent under Section 148 of the Income Tax Act, 1961. Consequently, the Writ Petition was allowed. The ratio decidendi is that a notice issued under Section 148 becomes infructuous and unsustainable if the underlying reassessment proceedings under Section 147 are dropped.

What were the facts?

The petitioner, Quest Global Engineering Services Private Ltd., filed a Writ Petition before the Karnataka High Court, Dharwad Bench. The petition sought a Writ of Certiorari to quash a notice dated 30.03.2021 issued by the Assistant Commissioner of Income Tax (ACIT), Circle-1, Belgaum, under Section 148 of the Income Tax Act, 1961. This notice pertained to the Assessment Year 2017-18. The respondents, including the ACIT and the National Faceless Assessment Centre (NeFAC), filed a statement of objections. In their objections, the respondents stated that the proceedings initiated under Section 147 of the Act had been dropped on 29.03.2022 by NeFAC, and no further action was being taken concerning the assessment for AY 2017-18.

What were the issues?

1. Whether the notice dated 30.03.2021 issued by the Assistant Commissioner of Income Tax under Section 148 of the Income Tax Act, 1961, for the Assessment Year 2017-18, is liable to be quashed, given that the proceedings under Section 147 of the Act have been dropped by the National Faceless Assessment Centre. (Question of law and fact, concerning Section 148 and Section 147 of the Income Tax Act, 1961). Assessee's contention: The petitioner sought to quash the Section 148 notice. While not explicitly detailed, the filing of the writ petition implies the petitioner believed the notice was invalid or no longer sustainable. Revenue's contention: The respondents, in their statement of objections, conceded that the proceedings initiated under Section 147 of the Act were dropped on 29.03.2022 by NeFAC, and no further action was being taken. This admission effectively supports the quashing of the Section 148 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:13069 WP No. 102262 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. 102262 OF 2022 (T-IT)

BETWEEN:

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

AND:

1.

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

2.

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

Digitally signed by THEJASKUMAR N Location: HIGH COURT OF KARNATAKA

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NC: 2024:KHC-D:13069 WP No. 102262 of 2022

3.

PRINCIPAL COMMISSIONER OF INCOME TAX, RANGE, BELGAUM, FEROZKHIMJIBHAI 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/148/2020-21/1031970889(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:13069 WP No. 102262 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/148/2020-21/1031970889(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.: 1 Sl No.: 30

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