Income Tax Case

IN THE HIGH COURT OF JUDICATURE AT BOMBAYNAGPUR BENCH, NAGPUR. WRIT PETITION NO.6158 OF 2022 Urvashi Receators Private Limited Incorporate under the Companies Act PAN No.AAACU 5390 E Registered Office at 3, Adwasi Grh Nirman Society, Ring Road, Bhamti, Nagpur – 44 0022 Through its Director Shri Vineet s/o Ramkant Jaiswal, Aged about 50 years, Plot No.8, Madhumalti Apartments, Trimurti Nagar, Nagpur 44 0022 … Petitioner vs. 1. Income Tax Officer, Ward-1(5), At Ayakar Bhavan, Seminary Hills, Nagpur. 2. Additional/Joint Commissioner of Income Tax, Range-1, At Aayakar Bhawan, Seminary Hills, Nagpur Range-1, At Aayakar Bhawan, Seminary Hills, Nagpur 3. Additional/Joint/Deputy/Assistant Commissioner of Income Tax/Income Tax Officer, National Faceless Assessment Centre, Delhi 4. Principal Commissioner of Income Tax-1, Aayakar Bawan, Civil Lines, Nagpur Aayakar Bawan, Civil Lines, Nagpur … Respondents Shri Kapil Hirani, Advocate for the petitioner.Shri Anand Parchure, Advocate with Shri Bhushan Mohta, Advocate forrespondents. CORAM : A. S. CHANDURKAR AND MRS VRUSHALI V. JOSHI, JJ. DATE : JUNE 16, 2023 Judgment : (Per : A. S. Chandurkar, J.) the parties. A challenge raised in this writ petition is to the notice issued by therespondent No.1 under Section 148 of the Income Tax Act, 1961 (for short, theAct of 1961) dated 16/03/2021 as well as the assessment order dated22/03/2022. 2. The relevant facts giving rise to the present proceedings are that thepetitioner is a Company incorporated under the Companies Act, 1956 assessedto income tax for the Assessment Year 2015-16. The respondent No.1 issuednotice under Section 148 of the Act of 1961 on 16/03/2021 stating therein thatthe said Officer proposed to assess/re-assess the income/loss of the petitionerfor the said Assessment Year and hence called upon the petitioner to submit areturn in the prescribed form. It was stated in the said notice that the same wasissued after obtaining necessary satisfaction of the Additional/JointCommissioner of Income Tax, Range-4, Nagpur. Thereafter an assessmentorder under Section 147 read with Section 144 and Section 144B of the Act of1961 came to be passed on 25/03/2022. It is the specific case of thepetitioner that the approval obtained under Section 151 of the Act of 1961was from the Additional/Joint Commissioner of Income Tax, Range-4,Nagpur. In the aforesaid backdrop the notice dated 16/03/2021 as well asthe assessment order dated 25/03/2022 has been challenged. submitted that the impugned notice issued under Section 148 of the Act of1961 was without jurisdiction since the approval as required under Section151 of the Act of 1961 had not been obtained. The provisions of Section 151came to be amended with effect from 01/04/2021 and as per the amendedprovisions, satisfaction of the Joint Commissioner was necessary underSection 151(2). As per the provisions prior to such amendment, priorsanction and satisfaction of the Principal Chief Commissioner of Income Taxwas necessary. This was for the reason that notice under Section 148 wasproposed to be issued by the Assessing Officer after expiry of period of fouryears from the end of the relevant Assessment Year. Placing reliance on thedecisions in Writ Petition No.1050/2022 (J M Financial and InvestmentConsultancy Services Private Limited vs. Assistant Commissioner of IncomeTax, Circle 3(2) and Ors.) and Writ Petition No.7733/2022 (Johnson andJonson Private Limited vs. Deputy Commissioner of Income Tax Circle 3(4)and ors.) decided at the Principal Seat, it was submitted that the noticeissued under Section 148 of the Act of 1961 was liable to be set aside.Consequently the assessment order dated 25/03/2022 was also liable to beset aside. 4. Shri Anand Parchure, learned counsel for the respondent Nos.1 to 4opposed the writ petition. By relying upon the affidavit in reply it wassubmitted that notice issued under Section 148 was in accordance with law.In the light of the provisions of the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 (for short, the Act of 2020) itwas sufficient that sanction was granted by the Assistant/Joint Commissionerof Income Tax. By virtue of the aforesaid provisions the time limit forissuance of notice under Section 148 and granting of sanction under Section151 of the Act of 1961 had been extended to 31/03/2021 and as theimpugned notice having been issued on 16/03/2021, it was in accordancewith law. Hence there was no reason to interfere with the impugned notice.The writ petition was liable to be dismissed. 5. Having heard the learned counsel for the parties and having perusedthe relevant material, we are of the view that the impugned notice dated16/03/2021 is liable to be set aside on the ground of absence of jurisdictionwith the issuing authority. In the aforesaid decisions, the Division Benchafter considering the provisions of the Act of 2020 held in J M Financialand Investment Consultancy Services Private Limited (supra) as under : “ 6. Even for a moment we agree with the view expressed by thePrincipal Commissioner of Income Tax, still it applies to only cases wherethe limitation was expiring on 31[st] March 2020. In the case at hand, theassessment year is 2015-2016 and, therefore, the six years limitation willexpire only on 31[st] March 2022. Certainly, therefore, the Relaxation Actprovisions may not be applicable. In any event, the time to issue noticemay have been extended but that would not amount to amending theprovisions of Section 151 of the Act. 7. In our view, since four years had expired from the end of therelevant assessment year, as provided under Section 151(1) of the Act, itis only the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner who could have accorded theapproval and not the Additional Commissioner of Income Tax. On thisground alone, we will have to set aside the notice dated 31[st] March 2021issued under Section 148 of the Act, which is impugned in this petition.In view thereof, the consequent orders and notices will also have to go.” 6. The aforesaid position has been reiterated in the subsequent decisionin Johnson and Jonson Private Ltd. (supra). We therefore find that the standtaken by the respondents that by virtue of provisions of the Act of 2020, theapproval of Assistant/Joint Commissioner of Income Tax as granted was validhas been turned down. In view of Section 151(1) of the Act of 1961 prior toits amendment it was only the Principal Chief Commissioner or the ChiefCommissioner of Income Tax who could have accorded the approval. Thus acase for interference has been made out. The notice dated 16/03/2021 isliable to be set aside. Consequently, the assessment order dated 25/03/2022would not survive. 7. In that view of the matter, the writ petition succeeds and the same isallowed in terms of prayer clauses (A) and (B) which read as under : (A) Quashed and set aside notice dated 16/03/2021 atAnnexure A issued by Respondent No.1 (Income Tax Officer1(5), Nagpur) under Section 148 of the Income Tax Act,1961 and proceedings initiated and completed pursuantthereto, Annexure A issued by Respondent No.1 (Income Tax Officer1(5), Nagpur) under Section 148 of the Income Tax Act,1961 and proceedings initiated and completed pursuantthereto, (B) Quashed and set aside order dated 22/03/2022 atAnnexureBpassedbyRespondentNo.3(Additonal/Joint/Deputy/Assistant Commissioner of Income Tax/Income Tax Officer, National Facelss Assessment Centre,Delhi) under Section 147 of the Income Tax Act, 1961 readwith Section 144 and 144B of Income Tax Act.” (A) Quashed and set aside notice dated 16/03/2021 atAnnexure A issued by Respondent No.1 (Income Tax Officer1(5), Nagpur) under Section 148 of the Income Tax Act,1961 and proceedings initiated and completed pursuantthereto, Annexure A issued by Respondent No.1 (Income Tax Officer1(5), Nagpur) under Section 148 of the Income Tax Act,1961 and proceedings initiated and completed pursuantthereto, (B) Quashed and set aside order dated 22/03/2022 atAnnexureBpassedbyRespondentNo.3(Additonal/Joint/Deputy/Assistant Commissioner of Income Tax/Income Tax Officer, National Facelss Assessment Centre,Delhi) under Section 147 of the Income Tax Act, 1961 readwith Section 144 and 144B of Income Tax Act.” The rectification application preferred by the petitioner under Section154 of the Act of 1961 shall be re-considered by the Assessing Officer inaccordance with law in the light of aforesaid. Order accordingly. Rule is made absolute in aforesaid terms with noorder as to costs. (Mrs Vrushali V. Joshi, J.) (A. S. Chandurkar, J.) Asmita