Heard v. Ashishagarwal (Civil Appeal

HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR D. B. Civil Writ Petition No. 14894/2021 Shree Hari Agro Industries Ltd, Khasra No. 123/664,124,125,and 132/2 Benara Road, Village Mansar Kheri, Tehsil Bassi303001 Jaipur Rajasthan, through its Authorised Signatory ShriMukesh Kumar Gupta, S/o Lt. Shri Ramniwas Gupta, aged about52 years, R/o 73/215, Mansarovar, Jaipur 302020 ----PetitionerVersus 1. Deputy Commissioner of Income Tax, Central Circle,Alwar NCR Building, Moti Doongri, Alwar.Alwar NCR Building, Moti Doongri, Alwar. 2. Union of India, through Finance Secretary, Ministry ofFinance (Department of Revenue), Central Board of DirectTaxes, North Block, New Delhi 110002Finance (Department of Revenue), Central Board of DirectTaxes, North Block, New Delhi 110002 ----Respondents For Petitioner For Respondents : Mr. Gunjan Pathak Advocate with Ms. Ishita Rawat Advocate. Ishita Rawat Advocate. : Mr. Siddharth Bapna Advocate on behalf of Mr. Anil Mehta Senior Standing Counsel. behalf of Mr. Anil Mehta Senior Standing Counsel. HON'BLE THE ACTING CHIEF JUSTICE MR. MANINDRA MOHAN SHRIVASTAVA HON'BLE MR. JUSTICE VINOD KUMAR BHARWANI HON'BLE MR. JUSTICE VINOD KUMAR BHARWANI Order 01/09/2022 Heard. Challenge in this petition is to the initiation ofproceedings under Section 148 of the Income Tax Act, 1961 (forshort ‘the Act’) on the ground that after amendment with effectfrom 01.02.2021, proceedings under Section 148 of the Act couldnot be initiated without first drawing proceedings under Section148A of the Act. (2 of 5) According to learned counsel for the petitioner, thenotice bears date 31.03.2021 but it was digitally signed on02.04.2021. Therefore, the proceedings are without jurisdictionand authority of law and the Hon’ble Supreme Court has decidedthe issue in the case of Union of India & Others Vs. AshishAgarwal (Civil Appeal No. 3005/2022 and batch of appeals decided on 04.05.2022) and directions have been issued. Hewould further submit that while this matter remained pending,interim order was operative having been passed on 20.12.2021,but in the garb of aforesaid decision rendered by the Hon’bleSupreme Court, the respondents proceeded to give notice drawingthe proceedings under Section 148A of the Act and haveproceeded to pass an order under Section 148A(d) of the Act.However, the proceedings after passing of order under Section148A(d) of the Act have been kept in abeyance because a noticefor initiation of contempt proceedings was given by the petitioner.He would further submit that when the interim order wasoperating in favour of the petitioner, the respondents could nothave even initiated any proceedings in view of directions issued by the Hon’ble Supreme Court in the case of Union of India &Others Vs. Ashish Agarwal (supra) without seeking leave ofthis Court. Therefore, only on that ground, all the proceedingsdrawn subsequently are illegal. Learned counsel for the respondents would submit thateven if the case of the petitioner is accepted that the notice wasdigitally signed on 02.04.2021, that situation is also governed bythe judgment of the Hon’ble Supreme Court in the case of Unionof India & Others Vs. Ashish Agarwal (supra), and, therefore, the Department proceeded to issue notice under Section 148A ofthe Act and passing the order under Section 148A(d) of the Act,though further proceedings have been kept in abeyance because acontempt notice was given in the matter. Having heard learned counsel for the parties, we findthat on 20.12.2021, this Court had protected the petitioner takinginto consideration that the notice under Section 148 of the Act wasdigitally signed only on 02.04.2021. The Hon’ble Supreme Courtby its authoritative pronouncement in the case of Union of India & Others Vs. Ashish Agarwal (supra) passed followingdirections and order: the Department proceeded to issue notice under Section 148A ofthe Act and passing the order under Section 148A(d) of the Act,though further proceedings have been kept in abeyance because acontempt notice was given in the matter. Having heard learned counsel for the parties, we findthat on 20.12.2021, this Court had protected the petitioner takinginto consideration that the notice under Section 148 of the Act wasdigitally signed only on 02.04.2021. The Hon’ble Supreme Courtby its authoritative pronouncement in the case of Union of India & Others Vs. Ashish Agarwal (supra) passed followingdirections and order: “10. In view of the above and for the reasonsstated above, the present Appeals are ALLOWEDIN PART. The impugned common judgments andorders passed by the High Court of Judicature atAllahabad in W.T. No. 524/2021 and other alliedtax appeals/petitions, is/are hereby modified andsubstituted as under:- (i) The impugned section 148 notices issued to therespective assessees which were issued underunamended section 148 of the IT Act, which werethe subject matter of writ petitions before thevarious respective High Courts shall be deemed tohave been issued under section 148A of the IT Actas substituted by the Finance Act, 2021 andconstrued or treated to be show-cause notices interms of section 148A(b). The assessing officershall, within thirty days from today provide to therespective assessees information and materialrelied upon by the Revenue, so that the assesseescan reply to the show-cause notices within twoweeks thereafter; (ii) The requirement of conducting any enquiry, ifrequired, with the prior approval of specifiedauthority under section 148A(a) is herebydispensed with as a one-time measure vis-à-visthose notices which have been issued undersection 148 of the unamended Act from01.04.2021 till date, including those which havebeen quashed by the High Courts. Even otherwise as observed hereinaboveholding any enquiry with the prior approval ofspecified authority is not mandatory but it is forthe concerned Assessing Officers to hold anyenquiry, if required; (iii) The assessing officers shall thereafter passorders in terms of section 148A(d) in respect ofeach of the concerned assessees; Thereafter afterfollowing the procedure as required under section148A may issue notice under section 148 (assubstituted); (iv) All defences which may be available to theassessees including those available under section149 of the IT Act and all rights and contentionswhich may be available to the concernedassessees and Revenue under the Finance Act,2021 and in law shall continue to be available.” The Hon’ble Supreme Court further declared that theorder shall be applicable PAN INDIA and all the judgments andorders passed by different High Courts on the issue shall begoverned by the order and held as below: “11. The present order shall be applicable PANINDIA and all judgments and orders passed bydifferent High Courts on the issue and underwhich similar notices which were issued after01.04.2021 issued under section 148 of the Actare set aside and shall be governed by thepresent order and shall stand modified to theaforesaid extent. The present order is passed inexercise of powers under Article 142 of theConstitution of India so as to avoid any furtherappeals by the Revenue on the very issue bychallenging similar judgments and orders, with aview not to burden this Court with approximately9000 appeals. We also observe that presentorder shall also govern the pending writ petitions,pending before various High Courts in whichsimilar notices under Section 148 of the Actissued after 01.04.2021 are under challenge. 12. The impugned common judgments and orderspassed by the High Court of Allahabad and thesimilar judgments and orders passed by variousHigh Courts, more particularly, the respectivejudgments and orders passed by the various HighCourts particulars of which are mentioned hereinabove, shall stand modified/substituted tothe aforesaid extent only. All these appeals are accordingly partlyallowed to the aforesaid extent.In the facts of the case, there shall be noorder as to costs.” In view of the aforesaid directions and order passed by the Hon’ble Supreme Court, the interim order, which was passed by this Court on 20.12.2021 came to an automatic end. We find that the department has proceeded to pass the order under Section 148A(d) of the Act against the petitioner. In these changed circumstances, particularly taking intoconsideration the scope and ambit of the pending petition, we areinclined to close this writ petition also, however, giving liberty tothe petitioner to challenge order passed under Section 148A(d) ofthe Act on such grounds as may be available to the petitionerunder the law. Writ petition is, accordingly, disposed off, with aforesaid liberty. (VINOD KUMAR BHARWANI),J(MANINDRA MOHAN SHRIVASTAVA),ACTING CJ MANOJ NARWANI /18