Hariom Ingots And Power Pvt. Ltd. 59-60-61, Lightindustrial Area, Bhilai v. The Principal Commissioner Of Income Tax, Raipur - 2,Central Revenue Building, Civil Lines, Raipurchhattisgarh. Central Revenue Building, Civil Lines, Raipurchh

NAFR HIGH COURT OF CHHATTISGARH, BILASPUR WPT No. 56 of 2022 Hariom Ingots and Power Pvt. Ltd. 59-60-61, LightIndustrial Area, Bhilai, Through Its Director SandeepKumar Agrawal, S/o Shri Santosh Kumar Agrawal, AgedAbour 39 Years, Resident of New Khursipar P.O. & City,Bhilai, District Durg, Chhattisgarh. ---- Petitioner Versus 1.The Principal Commissioner of Income Tax, Raipur - 2,Central Revenue Building, Civil Lines, RaipurChhattisgarh. Central Revenue Building, Civil Lines, RaipurChhattisgarh. 2.The Assessing Officer, National Faceless AssessmentCentre, Income Tax Department, Ministry of FinanceGovt. of India, Room No. 401 2[nd] Floor, E-Ramp,Jawaharlal Nehru Stadium, Delhi-110003. Centre, Income Tax Department, Ministry of FinanceGovt. of India, Room No. 401 2[nd] Floor, E-Ramp,Jawaharlal Nehru Stadium, Delhi-110003. 3.The Joint Commissioner of Income Tax, Range-1, Bhilai,Central Revenue Building, New Civic Centre, Bhilai. Central Revenue Building, New Civic Centre, Bhilai. 4.The Assistant Commissioner of Income Tax Circle-1(1),32/32 Banglow, Amdibhata, Bhilai. 32/32 Banglow, Amdibhata, Bhilai. ---- Respondents ------------------------------------------------------------------------------------- Hon'ble Shri Justice Parth Prateem Sahu Order on Board 22.03.2022 1.Petitioner aggrieved by issuance of notice under Section 148of the Income Tax Act, 1961 (in short ‘I.T. Act’) has filed thiswrit petition seeking following relief :- of the Income Tax Act, 1961 (in short ‘I.T. Act’) has filed thiswrit petition seeking following relief :- “10.1 In the light of the facts and illegalitycommitted by the respondents the Hon’bleHigh Court may graciously be pleased toissue suitable directions, orders or writ in the nature of mandamus, certiorari,prohibition etc. to quash the impugnednotice u/s. 148 and give direction to dropthe proceedings u/s 147. 10.2 To grant any other relief, which theHon’ble Court may deem fit.” 2.Mr. Mool Chand Jain, learned counsel for petitioner would submit that petitioner is a private limited company andengaged in the business of manufacturing and sales of M.S.Ingots and Re-Rolled Products. During Assessment Year2014-15, petitioner’s company had issued 25,000 shares inthe name of Amarnath Agrawal and Smt. Ramadevi Agrawalat face value of Rs.100/- per share. The sale of share hasbeen disclosed in their return. After receiving notice underSection 142(1) of the I.T. Act, petitioner has submitted detailsas required to be submitted by petitioner under notice.Petitioner vide letter dated 22.12.2016 had very clearlymentioned that due to losses suffered by Steel Industry andno buyers in the market, company was facing paucity offunds and therefore, shares have been allotted on its facevalue. After considering the reply to notice, final assessmentorder under Section 143(3) of the I.T. Act has been passed.He contended that notice issued under Section 148 of the I.T.Act is after lapse of 4 years and once petitioner has disclosedall the transactions, particularly, sale of share and also explained the authority the reason for transferring of share onthe face value, which was accepted by Assessing Officer,there was no ground available for the respondents to issuenotice under Section 148 of the I.T. Act as there was nofailure on the part of assessee to make return and disclosingall the material facts fully and truly. He further submits thatnotice issued under Section 148 of the I.T. Act is also notsustainable because, the reason assigned for issuance ofnotice is transfer of shares, attracts provision of Section 56(2)(vii)(c)(ii) of the I.T. Act. He contended that the provison reliedfor forming reason to belief is for the ‘Individual and Hinduundivided Family’. Petitioner is a company. As there was novalid reason/ground for issuance of notice under Section 148of the I.T. Act, notice issued to the petitioner/company bequashed. 3.Per contra, Mr. Amit Chaudhari, learned counsel forrespondents opposes the submissions of learned counsel forpetitioner and would submit that notice under Section 148 ofthe I.T. Act has been issued after following due procedure asprovided under the I.T. Act. In Annexure to notice, reason andground for issuance of notice has been specificallymentioned. However, he does not dispute the submission oflearned counsel for petitioner with respect to the provisionunder Section 56 of the I.T. Act. 4.I have heard learned counsel for the parties. 5.The main thrust of counsel for petitioner for challengingnotice under Section 148 of the I.T. Act is that provisionsunder Section 56(2)(vii)(c)(ii) of the I.T. Act will not beattracted, in the fact of the case, I find it appropriate to extractrelevant provisions of Section 56(1) and (2) along withprovisions under Section 56(2)(vii)(c)(i) & (ii) of the I. T. Actfor ready reference : “56. Income from other sources.-(1)Income of every kind which is not to beexcluded from the total income under thisAct shall be chargeable to income-taxunder the head “Income from othersources”, if it is not chargeable to income-tax under any of the heads specified insection 14, items A to E. (2) In particular, and without prejudice tothe generality of the provisions of sub-section (1), the following incomes, shall bechargeable to income-tax under the head“Income from other sources”, namely :— [(vii) where an individual or a Hinduundivided family receives, in any previousyear, from any person or persons on orafter the 1[st] day of October, 2009,— (c) any property, other than immovableproperty,— (i) without consideration, the aggregate fairmarket value of which exceeds fiftythousand rupees, the whole of theaggregate fair market value of suchproperty; (ii) for a consideration which is less thanthe aggregate fair market value of theproperty by an amount exceeding fiftythousand rupees, the aggregate fair marketvalue of such property as exceeds suchconsideration :” 6.Perusal of aforementioned provisions under Section 56 of theI.T. Act would reflect that Section 56 mentions about theincome from other sources. Section 56(vii) talks about theincome received by an individual or a Hindu undivided familyin any previous year. Petitioner is a company and in view ofspecific provision under Section 56(2)(vii) of the I.T. Act,relied by the Assessing Officer for issuance of notice will notbe applicable to the petitioner who is a company. Forissuance of notice under Section 148 of the I.T. Act, thereshould be tangible material and mandatory compliance ofSection 147 of I.T. Act. Proceedings of reassessment hasbeen initiated against company after lapse of 4 years of 6.Perusal of aforementioned provisions under Section 56 of theI.T. Act would reflect that Section 56 mentions about theincome from other sources. Section 56(vii) talks about theincome received by an individual or a Hindu undivided familyin any previous year. Petitioner is a company and in view ofspecific provision under Section 56(2)(vii) of the I.T. Act,relied by the Assessing Officer for issuance of notice will notbe applicable to the petitioner who is a company. Forissuance of notice under Section 148 of the I.T. Act, thereshould be tangible material and mandatory compliance ofSection 147 of I.T. Act. Proceedings of reassessment hasbeen initiated against company after lapse of 4 years of submission of return, which is not in dispute. Under firstproviso to Section 147 of the I.T. Act, for starting thereassessment proceedings after lapse of 4 years, AssessingOfficer has to record his conclusion that there was failure onthe part of assessee in not disclosing fully and truly allmaterial facts necessary for assessment of that particularassessment year, which is not appearing from the reading ofthe Annexure i.e. reasons for issuance of notice. 7. Considering the aforementioned facts and circumstances ofthe case, reason assigned for issuance of notice andprovisions mentioned therein, in the opinion of this Court,there was no reason/ground available with Assessing Officerto issue notice under Section 148 of the I.T. Act. Issuance ofnotice under Section 148 of the I.T. Act to petitioner is not inaccordance with the first proviso to Section 147 of the I.T.Act, therefore, it is not sustainable, which is liable to bequashed and it is hereby quashed. 8.The writ petition is accordingly allowed. Sd/- (Parth Prateem Sahu) Judge