Pinki Rajesh Modi v. Income Tax Officer, Ward-5(3

IN THE HIGH COURT OF JUDICATURE AT BOMBAYNAGPUR BENCH, NAGPUR. WRIT PETITION NO.1333 OF 2022 Pinki Rajesh Modi, Aged about 48 years, Residing at 402, Guru Vandana Apartment, Chhapru Nagar Chowk, Lakadganj, Nagpur 440008, Maharashtra, India … Petitioner vs. 1. Income Tax Officer, Ward-5(3), Nagpur Income Tax Department, Saraf Chambers, Sadar, Nagpur, Maharashtra, India 2. Additional/Joint/Deputy/Assistant Commissioner of Income Tax/Income-Tax Officer, National Faceless Assessment Centre, Delhi Email: Commissioner of Income Tax/Income-Tax Officer, National Faceless Assessment Centre, Delhi Email: 3. Additional/Joint Commissioner of Income Tax, Range-4, Aayakar Bhawan, Civil Lines, Nagpur Range-4, Aayakar Bhawan, Civil Lines, Nagpur 4. Pr. Commissioner of Income Tax-1, Aayakar Bawan, Civil Lines, Nagpur Aayakar Bawan, Civil Lines, Nagpur 5. The Union of India, through its Secretary, Department of Revenue, Ministry of Finance, Government of India, New Delhi-110002 Department of Revenue, Ministry of Finance, Government of India, New Delhi-110002 6. Central Board of Direct Taxes, through its Chairman, Ministry of Finance, North Block, New Delhi – 110002 Chairman, Ministry of Finance, North Block, New Delhi – 110002 … Respondents Shri Kapil Hirani, Advocate for the petitioner.Shri Anand Parchure, Advocate with Shri Bhushan Mohta, Advocate for respondentNos.1 to 4. Ms Nisha N. Burange, Advocate for respondent No.5. CORAM : A. S. CHANDURKAR AND MRS VRUSHALI V. JOSHI, JJ. DATE : JUNE 16, 2023 Judgment : (Per : A. S. Chandurkar, J.) 1.Rule. Rule made returnable forthwith and heard the learned counsel for 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 30/03/2021. 2. The relevant facts giving rise to the present proceedings are that thepetitioner is an individual assessed to income tax with regard to Assessment Year2015-16. The respondent No.1 issued notice under Section 148 of the Act of1961 on 30/03/2021 stating therein that the said Officer proposed to assess/re-assess the income/loss of the petitioner for the said Assessment Year and hencecalled upon the petitioner to submit a return in the prescribed form. It wasstated in the said notice that the same was issued after obtaining necessarysatisfaction of the Additional/Joint Commissioner of Income Tax, Range-4,Nagpur. The petitioner on 01/07/2021 sought details in the matter of thereasons recorded for issuance of the said notice as well as the letter accordingsanction for issuance of notice under Section 148 of the Act of 1961. In replythe petitioner was informed by the respondent No.1 that prima facie therewas non-genuine profit/loss of Rs.30,30,000/- for the financial year 2014-15 and hence it was a fit case for issuance of notice under Section 148 of the Actof 1961. After getting on-line approval from the Competent Authority thesaid notice came to be issued. It is the specific case of the petitioner that theapproval obtained under Section 151 of the Act of 1961 was from theAdditional/Joint Commissioner of Income Tax, Range-4, Nagpur. Thereafternotice under Section 142(1) came to be issued on 22/11/2021 to which thepetitioner filed objection on 09/12/2021. The said objections were turneddown by the respondent No.1 on 25/01/2022. In the aforesaid backdrop thenotice dated 30/03/2021 has been challenged. and hence it was a fit case for issuance of notice under Section 148 of the Actof 1961. After getting on-line approval from the Competent Authority thesaid notice came to be issued. It is the specific case of the petitioner that theapproval obtained under Section 151 of the Act of 1961 was from theAdditional/Joint Commissioner of Income Tax, Range-4, Nagpur. Thereafternotice under Section 142(1) came to be issued on 22/11/2021 to which thepetitioner filed objection on 09/12/2021. The said objections were turneddown by the respondent No.1 on 25/01/2022. In the aforesaid backdrop thenotice dated 30/03/2021 has been challenged. 3. Shri Kapil Hirani, learned counsel for the petitioner, inter aliasubmitted 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 Income Tax, 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. 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 andAmendment 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 30/03/2021, 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 dated30/03/2021 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 Financial “ 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. “ 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 orPrincipal 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. allowed in terms of prayer clause (A) which reads as under : (A) Issue a writ of/or order and or directions in the natureof certiorari, prohibition, mandamus or any otherappropriate writ, order or direction quashing impugnednotice dated 30/03/2021 issued by Respondent No.1 underSection 148 of the Income Tax Act, 1961 and proceedingsinitiated and completed pursuant thereto; Order accordingly. Rule is made absolute in aforesaid terms with noorder as to costs. (Mrs Vrushali V. Joshi, J.) (A. S. Chandurkar, J.) Asmita