Messrs. Elite Pharmaceuticals And Anr v. Income Tax Officer, Ward 22(2), Kolkata

ORDER SHEETWPO/578/2019IN THE HIGH COURT AT CALCUTTACONSTITUTIONAL WRIT JURISDICTIONORIGINAL SIDE MESSRS. ELITE PHARMACEUTICALS AND ANR.VSINCOME TAX OFFICER, WARD 22(2), KOLKATA BEFORE:The Hon'ble JUSTICE MD. NIZAMUDDINDate : 11[th] January, 2023 Appearance:Mr. R.N. Dutt, Adv.Ms. Sutapa Roy Choudhury, Adv.Ms. Aratrika Roy, Adv.…For the PetitionerMr. Soumen Bhattacharjee, Adv.…For the respondent The Court : Heard learned advocates appearing for the parties.A short question of law involved in this writ petition is thatwhether a second notice under Section 148 of the Income Tax Act,1961 issued by the assessing officer after the expiry of one year as perSection 153(6)(i) is valid without disposing the return filed to the firstnotice issued under Section 148 of the Income Tax Act for the verysame assessment year. Here admittedly in this case returns inresponse to notices under Section 148 of the Act and objectionsagainst the same relating to two relevant assessment years 2012-13and 2013-14 and were not disposed of by passing final reassessmentorder on the same as per order passed in earlier Writ Petition, withinthe period of limitation prescribed under Section 153(6)(i) of the Actand without disposing the same, the assessing officer in violation ofthe statutory provision by not making final assessment on the first notices, issued second notices under Section 148 of the Act relating tothe same assessment years, which is not permissible under the law.Learned advocate appearing for the petitioner relies on an unreporteddecision of a Division Bench of this Court dated 13[th] December, 2022of ITAT 187 of 2022 (Principal Commissioner of Income Tax – Kolkata-2 vs. M/s. Coal India Ltd.) where inter alia a similar question of lawwas involved and the Court held in favour of assessee, relevantportion of the said judgment is as follows : “The short issue which arises for consideration in the instantappeal is whether the Assessing Officer could have issued a secondnotice under Section 148 of the Act when the assessee had filed hisreturn of income in response to the first notice issued under Section148A and such return was not disposed of. This question of law hasbeen answered in several decisions and one of the earliest decisions isin the case of S. Raman Chettiar vs. CIT reported in (1961) 42 ITR700, wherein the Court held that when a return is furnished by theassessee in consequence of a notice issued under Section 34 of theIncome Tax Act, 1922, it was not open to the Income Tax Officer toignore that return and issue a further notice under Section 34(1)(a) onthe assumption that there had been an omission or failure on the partof the assessee to make return of his income. This decision wasaffirmed by the Hon’ble Supreme Court in the Commissioner ofIncome Tax, Madras vs. S. Raman Chettiar, (1965) 55 ITR 630. Thereis also a decision of the High Court of Allahabad to the same effect inthe case of Commercial Art Press vs. Commissioner of Income Tax, reported in (1978) 115 ITR 876. The aforementioned decisions werefollowed in the case of A.S.S.P. & Co. vs. CIT reported in 1986 SCCOnLine Mad 317. Further, a learned Single Bench of this Court hasdecided an identical issue in the case of The Indian Tube Co. Ltd. vs.Income Tax Officer, reported in 2004 SCC OnLine Cal 362. Theunderlying legal principle is that, when a notice under Section 148 ofthe Act is issued, the original assessment proceedings are entirelyopened up or left open and the finality which had occurred in the firstassessment order does not exist any longer. Therefore, withoutdisposing of the return of income filed by the assessee in response tothe first notice, the assessing officer could not have issued a secondnotice for reopening of the assessment which, at the relevant point oftime, did not exist in the eye of law.” Mr. Bhattacharjee representing the respondent Income TaxAuthority defending the issuance of second notices under Section 148of the Act relating to same assessment year submits that assessingofficer can issue second notice under Section 148 of the Act withoutwithdrawing the first notice or passing any final assessment order onreturn in response to the first notice if the time to issue notice underSection 148A which is six years from the date of relevant assessmentyear has not expired. Such argument is not acceptable to this Court inview of the provision under Section 153(6)(i) of the Income Tax Act andthe decision of the Division Bench of this Court in Coal IndiaLtd.(supra). Considering the facts and circumstances of the case as appearsfrom record, relevant provision of law under Section 153(6)(i) of theIncome Tax Act, 1961, and the judgment of the Division Bench of thisCourt in the case of Indian Table Co. Ltd. (supra), I am of theconsidered opinion that the respondent assessing officer concernedwas not justified in law in issuing impugned second notices underSection 148 of the Income Tax Act, 1961, relating to the sameassessment years instead of completing the assessment on returnsfiled in response to the first notices under Section 148 of the Act afterdisposing the objection filed by the petitioner by passing a reasonedand speaking order as per earlier order/direction of this Court inearlier writ petition remanding the matter back to the assessingofficer. Action of the assessing officer allowing the expiry of period oflimitation of one year to complete the assessment as per Section153(6)(i) of the Income Tax Act, 1961, from the date of order of thisCourt in earlier writ petition on the first notices under Section 148 ofthe Act relating to same assessment year and issuing second notice inrespect of the very same assessment year is not legal and valid. In view of the reasonings and discussion made above theimpugned second notices under Section 148 of the Income Tax Act,1961, relating to assessment years 2012-13 and 2013-14 and allsubsequent proceedings are quashed. With these observations and directions, this writ petition beingWPO 578 of 2019 is disposed of. (MD. NIZAMUDDIN, J.)