KHODAY INDUSTRIES PRIVATE LIMITED vs. UNION OF INDIA

1 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 18TH DAY OF APRIL 2022 PRESENT THE HON’BLE MR. JUSTICE ALOK ARADHE AND THE HON’BLE MR.JUSTICE S. VISHWAJITH SHETTY W.P. No.21728 OF 2021 (T-IT) BETWEEN: KHODAY INDUSTRIES PRIVATE LIMITED A COMPANY REGISTERED UNDER THE COMPANIES ACT AND HAVING ITS REGISTERED OFFICE AT “BREWERY HOUSE” 7TH MILE, KONANAKUNTE CROSS KANAKAPURA ROAD, BENGALURU-560062 REP. BY ITS DIRECTOR SRI. K.L. SWAMY.

... PETITIONER (BY MR. A. SHANKAR, SR. COUNSEL FOR MRS. SWATHI SUKUMAR AND MR. GURUMURTHY M, ADVS.,) AND: 1. UNION OF INDIA

MINISTRY OF FINANCE

NORTH BLOCK, NEW DELHI-110001

REP. BY ITS SECRETARY. 2. CENTRAL BOARD OF DIRECT TAXES

INCOME TAX DEPARTMENT

NORTH BLOCK, NEW DELHI-110001

REP. BY ITS SECRETARY. 3. THE DEPUTY COMMISSIONER OF INCOME TAX

CENTRAL CIRCLE 1(4)

CENTRAL REVENUES BUILDING

QUEEN’S ROAD

BENGALURU-560001.

... RESPONDENTS (BY MR. M.N. KUMAR, CGC FOR R1 MR. K.V. ARAVIND A/W MR. DILIP M, ADVS., FOR R2 & R3) - - - THIS W.P. IS FILED UNDER ARTICLE 226 & 227 OF THE CONSTITUTION OF INDIA, PRAYING TO QUASHING THE NOTICE U/S SECTION 148 ISSUED ON 21.04.2021 VIDE DIN AND NOTICE NO.ITBA/AST/S/148/2021-22/1032566335(1) (ANNEXURE-A). QUASHING THE NOTIFICATION NO.20 OF 2021/S.O. 1432(E), DATED 31ST MARCH 2021, IN F.NO.370142/35/2020-TPL ISSUED BY THE R1 AS ULTRA VIRES, AS IT HAS NO JURISDICTION TO ISSUE THE NOTIFICATION TO EXTEND THE TIME LIMIT FOR ISSUE OF NOTICES U/S 148 TO THE ASSESSES BEYOND 31.3.2021 AND UPTO 30TH APRIL 2021, EVEN AFTER COMING INTO FORCE OF THE FINANCE ACT, 2021, (ANNEXURE-B) & ETC., THIS W.P. COMING ON FOR PRELIMINARY HEARING IN ‘B’ GROUP, THIS DAY, ALOK ARADHE J., MADE THE FOLLOWING: ORDER The petitioner in this writ petition has sought quashment of explanation below Clause (A) in the notification bearing No.20/2021 F.NO.370142/35/2020-TPL dated 31.03.2021 and notification No.38/2021/F.No.370142/35/2020-TPL dated 27.04.2021 issued by Central Board of Direct Taxes, as ultra vires the provisions of Income Tax Act,

3 1961 (hereinafter referred to as ‘1961 Act’ for short) and the provisions of Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 (hereinafter referred to as ‘2020 Act’ for short). The petitioner has also prayed for relief that extension of time limit by the 2020 Act does not apply to notices issued under erstwhile Section 148 of the 1961 Act, after 01.04.2021. The petitioner also seeks a writ of certiorari for quashing the notices dated 21.04.2021 issued under Section 148 of the 1961 Act for the Assessment year 2016-17. 2. We have heard the learned counsel at length. For the reasons assigned by us in the judgment dated 19.04.2022 passed in W.P.No.22348/2021 and for the reasons assigned by division bench of High Court of Allahabad in ASHOK KUAR AGARWAL VS. UNION OF INDIA’, Rajasthan High Court in ‘BPIP INFRA (P.) LTD. VS.

4 INCOME TAX OFFICER, WARD 4(1), JAIPUR, Delhi High Court decision in MON MOHAN KOHLI VS. ASSISTANT COMMISSIONER OF INCOME TAX & ANR. And decision of Bombay High Court in TATA COMMUNICATIONS TRANSFORMATION SERVICES LIMITED, VS. ASSISTANT COMMISSIONER OF INCOME TAX 14(1) AND OTHERS, W.P.NO.1334/2021 the explanation below Clause (A) in the notification bearing No.20/2021370142/35/2020-tl dated 31.03.2021 and notification No.38/2021f. No.370142/35/2020- TPL dated 27.04.2021 issued by Central Board of Direct Taxes is hereby declared as ultra vires the provisions of Income Tax Act, 1961 and the provisions of Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020. The impugned notice dated 21.04.2021 issued under Section 148 of the Act is quashed.

5 3. However, it will be open to the Assessing Officer concerned to initiate fresh re-assessment proceeding in accordance with relevant provisions of the 1961 Act as amended by Finance Act, 2021 after strictly complying with the provisions of the Act. In the result, the writ petition is disposed of. Sd/- JUDGE Sd/- JUDGE SS