Wp/28293/2021 Of Yuvraj v. Income Tax Officer 3(1)

IN THE HIGH COURT OF MADHYA PRADESH AT JABALPURBEFORE HON’BLE SHRI JUSTICE SHEEL NAGU & HON’BLE SHRI JUSTICE MANINDER SINGH BHATTI ON THE 3[rd] OF MARCH, 2022 WRIT PETITION No. 28293 of 2021 Between:- YUVRAJ S/O LATE SUKHVIR SINGH JAIN , AGED ABOUT 61 YEARS,OCCUPATION: GOVT.EMPLOYEES H.A.-1, MUNSHI PREMCHAND PARISAR,AIRPORT ROAD, BHOPAL (MADHYA PRADESH) .....PETITIONER (BY SHRI ASHAY JAIN, ADVOCATE) AND 1.[INCOME TAX OFFICER 3(1) INCOME TAX OFFICER MATRO WALK]BUILDING, BITTAN MARKET, BHOPAL (MADHYA PRADESH)BUILDING, BITTAN MARKET, BHOPAL (MADHYA PRADESH) 2.[PRINCIPAL COMMISSIONER OF INCOME TAX 1 AAYKAR BHAWAN, 48,]ARERA HILLS BHOPAL (MADHYA PRADESH)ARERA HILLS BHOPAL (MADHYA PRADESH) 3.[CENTRAL BOARD OF DIRECT TAXES THR. ITS CHAIRMAN NORTH BLOCK]NEW DELHI (DELHI)NEW DELHI (DELHI) 4.[UNION OF INDIA THR. REVENUE SECRETARY, DEPARTMENT OF REVENUE]MINISTRY OF FINANCE NORTH BLOCK NEW DELHI (DELHI)MINISTRY OF FINANCE NORTH BLOCK NEW DELHI (DELHI) .....RESPONDENTS (BY SHRI SANJAY LAL, ADVOCATE) This appeal coming on for admission and interim relief this day, Hon’ble Shri Justice Maninder Singh Bhatti passed the following: ORDER The present petition has been filed by the petitioner while praying forgrant of following reliefs:- I. To issue a Writ in the nature of Certiorari or any other appropriate writ order or direction, therebyquashing‘theimpugnednoticeno.ITBA/AST/S/148/2020-21/1032088407(1)dated31.03.2021 (served through email on 16.04.2021)(Annexure P/1) and the impugned notice no.ITBA/AST/F/142(1)/2021-22/1037509888(1) dated6.12.2021 (Annexure P/6), for being void and illegal; II. To issue a Writ in the nature of Certiorari or anyother appropriate writ order or direction, therebyquashing and setting aside the impugned Explanation toClause (A) (a) of Notification No. 20/2021, dated31.03.2021 (Annexure P/2) for being void and illegal; III. To issue a Writ in the nature of Certiorari, orany other appropriate writ order or direction, therebyquashing and setting aside the Explanation to clause (A)(b) of Notification No. 38/2021, dated 27.04.2021(Annexure P/3) for being void and illegal; IV. To grant any other relief, which the Hon’bleCourt may deem just and proper on the facts andcircumstances of the case, alongwith the cost of thispetition. 2. The contention of the petitioner is to the effect that a newly enactedprovision i.e. Section 148-A has been inserted in Income Tax Act, 1961(hereinafter referred as ‘the Act, 1961’) makes it mandatory for the AssessingOfficer to give a notice requiring the concerned assessee to furnish theinformation as regards his income including returns. According to the petitionerthe newly inserted section 148-A of the Act, 1961 has come into force witheffect from 1/04/2021. The petitioner submits that an impugned notice has beenissued to the petitioner which has been issued under the omitted section 148 ofthe Act, 1961. Though the same is dated 31/03/2021 but the same was servedupon the petitioner on 16/04/2021 through Email. The contention of thepetitioner is to the effect that since the proceedings for re-assessment weresought to be initiated after 1/04/2021 therefore, it was incumbent upon theAssessing Authority to first issue a notice under section 148-A upon the petitioner and thereafter dealing with the same in accordance with the procedurelaid down in section 148-A, a full fledged enquiry ought to have beenconducted by giving opportunity of hearing to the petitioner/assessee. Thus,according to the petitioner no notice directly under section 148 of the Act, 1961could have been issued on 16/04/2021 when the old section 148 stood omittedupon insertion of new section 148-A which came into force with effect from1/04/2021. Thus, the petitioner submits that the impugned notice which iscontained in Annexure P/1 dated 31/03/2021 (served through Email on16/04/2021) be quashed. The petitioner has also sought quashing of the noticedated 6/12/2021 which is contained in Annexure P/6 as well as the notificationdated 31/03/2021 contained in Annexure P/2 and also the notification dated27/04/2021 contained in Annexure P/3. 3.To deal with the controversy involved in the matter, it is necessary torefer the relevant provisions of Finance Act, 2021 by which the sections 147 to149 and 151 of the Income Tax Act, 1961 stand substituted and a new sectioni.e. section 148-A has been inserted. PRELIMINARY (1) This Act may be balled the Finance Act, 2021. (2) Save as otherwise provided in this Act, (a) Sections 2 to 88 shall come into force on the 1[st] day ofApril, 2021, (b) Sections 108 to 123 shall come into force on such date as the Central Government may, by notification in the Official Gazette, appoint…. Section 40 - For section 147 of the Income-tax Act, the following section shall be substituted, namely:— “147. If any income chargeable to tax, in the case of anassessee, has escaped assessment for any assessmentyear, the Assessing Officer may, subject to the provisionsof sections 148 to 153, assess or reassess such income orrecompute the loss or the depreciation allowance or anyother allowance or deduction for such assessment year(hereafter in this section and in sections 148 to 153 referredtoasyear). therelevantassessment Explanation.—For the purposes of assessment orreassessment or recomputation under this section, theAssessing Officer may assess or reassess the income inrespect of any issue, which has escaped assessment, andsuch issue comes to his notice subsequently in the courseof the proceedings under this section, irrespective of thefact that the provisions of section 148A have not beencomplied with.”. 41. For section 148 of the Income-tax Act, the followingsection shall be substituted, namely:— “148. Before making the assessment, reassessmentor recomputation under section 147, and subject to theprovisions of section 148A, the Assessing Officer shallserve on the assessee a notice, along with a copy of theorder passed, if required, under clause ( d) of section148A, requiring him to furnish within such period, asmaybespecifiedinsuchnotice, a return of his income or the income of any otherperson in respect of which he is assessable under this Actduring the previous year corresponding to the relevantassessment year, in the prescribed form and verified inthe prescribed manner and setting forth such otherparticulars as may be prescribed; and the provisions ofthis Act shall so far as may be, apply accordingly as ifsuch return were a return required to be furnished underSection 139: Provided that no notice under this section shall beissued unless there is information with the AssessingOfficer which suggests that the income chargeable to taxhas escaped assessment in the case of the assessee forthe relevant assessment year and the Assessing Officerhas obtained prior approval of the specified authority toissue such notice. Provided that no notice under this section shall beissued unless there is information with the AssessingOfficer which suggests that the income chargeable to taxhas escaped assessment in the case of the assessee forthe relevant assessment year and the Assessing Officerhas obtained prior approval of the specified authority toissue such notice. Explanation 1.—For the purposes of this section andsection 148A, the information with the Assessing Officerwhich suggests that the income chargeable to tax hasescapedassessmentmeans-(i) any information flagged in the case of theassessee for the relevant assessment year in accordancewith the risk management strategy formulated by theBoardfromtimetotime;(ii) any final objection raised by the Comptroller andAuditor-General of India to the effect that the assessmentin the case of the assessee for the relevant assessmentyear has not been made in accordance with theprovisions of this Act. After section 148 of the Income-tax Act, the following section shall be inserted, namely:— “148A. The Assessing Officer shall, before issuing any notice under section 148 - (a) conduct any enquiry, if required, with the priorapproval of specified authority, with respect to theinformation which suggests that the income chargeableto tax has escaped assessment (b) provide an opportunity of being heard to the assessee,with the prior approval of specified authority, by servingupon him a notice to show cause within such time, asmay be specified in the notice, being not less than sevendays and but not exceeding thirty days from the date onwhich such notice is issued, or such time, as may beextended by him on the basis of an application in thisbehalf, as to why a notice under section 148 should notbe issued on the basis of information which suggests thatincome chargeable to tax has escaped assessment in hiscase for the relevant assessment year and results ofenquiry conducted, if any, as per clause (a);(c) consider the reply of assessee furnished, if any, inresponse to the show-cause notice referred to in clause(b); (d) decide, on the basis of material available on recordincluding reply of the assessee, whether or not it is a fitcase to issue a notice under section 148, by passing anorder, with the prior approval of specified authority,withinonemonthfromtheendofthe month in which the reply referred to in clause (c) isreceived by him, or where no such reply is furnished,within one month from the end of the month in whichtime or extended time allowed to furnish a reply as perclause (b) expires;Provided that the provisions of this section shall notapply in a case where,—(a) a search is initiated under section 132 or books ofaccount, other documents or any assets are requisitionedunder section 132A in the case of the assessee on or afterthe1stdayofApril,2021;or(b) the Assessing Officer is satisfied, with the priorapproval of the Principal Commissioner orCommissioner that any money, bullion, jewellery or othervaluable article or thing, seized in a search under section132 or requisitioned under section 132A, in the case ofany other person on or after the 1st day of April, 2021,belongs to the assessee; or (c) the Assessing Officer is satisfied, with the priorapproval of the Principal Commissioner orCommissioner that any books of account or documents,seized in a search under section 132 or requisitionedunder section 132A, in case of any other person on or after the 1st day of April, 2021, pertains or pertain to, orany information contained therein, relate to, the assessee.Explanation.—For the purposes of this section, specifiedauthority means the specified authority referred to insection 151.” (c) the Assessing Officer is satisfied, with the priorapproval of the Principal Commissioner orCommissioner that any books of account or documents,seized in a search under section 132 or requisitionedunder section 132A, in case of any other person on or after the 1st day of April, 2021, pertains or pertain to, orany information contained therein, relate to, the assessee.Explanation.—For the purposes of this section, specifiedauthority means the specified authority referred to insection 151.” 4.The aforesaid newly inserted section 148-A now specifically provides forissuance of a notice if the Assessing Officer takes a decision to initiate re-assessment and therefore, a procedure has been laid down under section 148-Awhich is required to be adhered to by the Assessing Officer after 1/04/2021 i.e.the date on which the Finance Act, 2021 came into force. 5.The counsel for the parties were heard and during the course of hearing,the counsel for respondent/revenue Shri Sanjay Lal produced a letter dated24/02/2022 bearing no. 1002 issued by Income Tax Officer - 3 (1) of Bhopalwhich was addressed to the counsel for the revenue and in the said letter it wasstated that though in the notice which was issued to the petitioner herein, thedate was mentioned as 31/03/2021 but, the system of the office of therespondents revealed that the Email to the petitioner was infact sent on16/04/2021. Thus, the counsel for respondent does not dispute that the noticewhich is impugned in the petition contained in Annexure P/1 infact was issuedon 16/04/2021 though the date on the same was mentioned as 31/03/2021 butwas issued later on 6/04/2021. 6.In view of the aforesaid letter so produced before us dated 24/02/2022and in view of the admission by the counsel for respondents, we have nohesitation to hold that the impugned notice is bad in the eye of law, containedin Annexure P/1 dated 31/03/2021 (received by the petitioner on 16/04/2021through Email) inasmuch as after 1/04/2021, it is mandatory requirement thatprior to re-assessment proceedings notice under section 148-A of Income TaxAct, 1961 should be issued to assesseee. Since now in view of the admission by the respondents the other reliefs as sought for by the petitioner in the reliefclause have become redundant inasmuch as now there is no dispute about thedate of issuance of the impugned notice. 7.Accordingly, the impugned notice dated 31/03/2021 (served throughEmail to the petitioner on 16/04/2021) stands quashed. However, it is left openfor the respondents to take recourse to the procedure laid down in newlyenacted section 148-A of the Income Tax Act, 1961 if it is required under thelaw. 8.Thus, the writ petition stands allowed to the extent indicated above. ( SHEEL NAGU) JUDGE (MANINDER SINGH BHATTI ) JUDGE nn Digitally signed by NAVEEN NAGDEVE Date: 2022.03.09 16:51:48 +05'30'