M/S. Cheer Sagar v. The Commissioner Ofincome Tax & Another

IN THE HIGH COURT OF JUDICATURE FOR RAJASTHANAT JAIPUR BENCH, JAIPUR ORDER S.B. Civil Writ Petition No. 7488/2012S.B. Civil Misc. Stay Application No.6408/2012 (M/s. Cheer Sagar Versus The Commissioner ofIncome Tax & Another) :: 25[th ]May, 2012 Date of Order HON'BLE MR. JUSTICE ALOK SHARMA Mr. Anant Kasliwal, counsel for the petitioner Mr. J.K. Singhi, Sr. Counsel with Mr. AnuroopSingh, Counsel for the respondentsBY THE COURT: The petitioner has challenged thenotice dated 30[th] March, 2012 issued by theIncome Tax Department under Section 148 of theIncome Tax Act, 1961 (here-in-after Act of1961) primarily on the ground that the noticeissued on 30[th] March, 2012 in respect ofAssessment Year 2005-2006 ending on 31[st] March,2005 was wholly beyond jurisdiction and powerof the Assistant Commissioner of Income Tax forthe reason that the pre-conditions for issue ofnotice under section 148 readwith Section 147of the Act of 1961 were not satisfied. It issubmitted that proviso to Section 147 of theAct provides that “where an assessment undersub-section (3) of section 143 or this sectionhas been made for the relevant assessment year,no action shall be taken under this section after the expiry of four years from the end ofrelevant assessment year.” It is furthersubmitted by the petitioner's counsel that theexception to the limitation of the jurisdictionof the Income Tax Department can only beinvoked and the four year limitation providedin law extended only where the escapedassessment is alleged to have been occasionedby the reason of failure on the part of theassessee to make a return under Section 139 orin response to a notice issued under sub-section (1) of Section 142 or Section 148 ofthe Act of 1961 or to disclose fully and trulyall material facts necessary for his assessmentfor that assessment year. Counsel for thepetitioner submits that the extension of thefour year limitation cannot arise in thepresent case as the show cause notice does notcontain even a whisper about any of theconditions warranting extension of the periodof limitation obtaining. Counsel furthersubmits that even apart from the notice u/s.148 of the Act of 61, even reasons for theissue of notice sought by petitioner assesseeand supplied by the department do not allegeany wrong doing or suppression of materialfacts or failure to fully and truly disclose all facts by the assessee. It is hencesubmitted that under the proviso to Section 147of the Act of 1961 the limitation being fouryears from the end of the relevant assessmentyear, the show cause notice dated 30.3.2012u/s. 148 of the Act of 61 for A.Y. 2005-06(F.Y. 2004-05) is without jurisdiction. It issubmitted that the bar of limitation in thepresent case is basically an issue ofjurisdiction and consequently all proceedingsfollowing the notice dated 30[th] March, 2012,would be null and void and the petitioner-assessee cannot be subjected to aforesaidproceedings. 2.Counsel appearing for the respondentMr. J.K. Singhi, Sr. Counsel with Mr. AnuroopSinghi would however submit that the noticeunder Section 148 issued on 30[th] March, 2012 isonly in the nature of show cause and thepetitioner-assessee has the opportunity ofcontesting the said notice raising all thegrounds in defence thereto, as may be availableto him in the matter. It is submitted that theHon'ble Supreme court as also this Court haveheld that the noticee under Section 148 of Actof 1961 should submit to the jurisdiction ofthe department with his defences including that 2.Counsel appearing for the respondentMr. J.K. Singhi, Sr. Counsel with Mr. AnuroopSinghi would however submit that the noticeunder Section 148 issued on 30[th] March, 2012 isonly in the nature of show cause and thepetitioner-assessee has the opportunity ofcontesting the said notice raising all thegrounds in defence thereto, as may be availableto him in the matter. It is submitted that theHon'ble Supreme court as also this Court haveheld that the noticee under Section 148 of Actof 1961 should submit to the jurisdiction ofthe department with his defences including that of lack of jurisdiction on ground of limitationand not approach the writ courts under Article226 of the Constitution of India.3.Having heard the learned counsel forthe parties and perused the writ petition, I amof the view that this writ petition ought to bedisposed of with a direction that the Assistantcommissioner of Income Tax, Circle – III(respondent no.2 herein) address the questionpertaining to his lack of jurisdiction in thecontext inter-alia of Section 147/148 of Act of1961 as a preliminary issue. The petitioner isdirected to submit his preliminary objectionsto the notice dated 30.3.2012 u/s. 148 of theAct of 1961 to Assistant Commissioner of IncomeTax, Circle (III) setting out all his groundscontesting the jurisdiction of the Assistantcommissioner of Income Tax. The preliminaryobjections be filed within a period of oneweek. On the preliminary objections being filedby the petitioner-assessee relating to thejurisdiction of the Assessing Authority in thecontext of the period of limitation under theproviso of Section 147, as also on any otherground, they shall be decided as a preliminaryissue by a reasoned and speaking order dealingwith the judgments of the Apex Court and this Court on the subject cited by the counsel ofthe petitioner-assessee. It is further directedthat for a period of 30 days from the date ofdecision on the petitioner's preliminaryobjections as to the jurisdiction of theAssessing authority and the notice in issuebeing bad for having been issued beyondstatutorily prescribed limitation and also forfailing to satisfy the pre-conditions forresort thereto, no coercive action shall betaken against the petitioner-assessee. Thepetitioner assessee shall be free to approachthis Court afresh following the decision on hispreliminary objections. 4.The writ petition is disposed ofaccordingly. 5.Consequent upon the disposal of writpetition, the stay application, filed herewith,does not survive and the same also standsdisposed off accordingly. (ALOK SHARMA),J. DK All Corrections made in the judgment/order have been incorporated in the judgment/order being emailed.