SANJIV BADHAN HUF THROUGH ITS KARTA SHRI SANJIV BADHAN V. UNION OF INDIA THROUGH THE SECRETARY MINISTRY OF FINANCE DEPARTMENT OF REVENUE

WPC/5412/2021

AI Insights

The case involves multiple writ petitions challenging notices issued under unamended Section 148 of the Income Tax Act, 1961, which were issued after the amendment by the Finance Act, 2021. The petitioners argued that these notices were not sustainable in law post-amendment. The Supreme Court had previously addressed similar issues in a batch of civil appeals, leading to a uniform directive that such notices should be treated as show-cause notices under the newly substituted Section 148A. The High Court of Jharkhand, following the Supreme Court's decision, disposed of the writ petitions, directing adherence to the Supreme Court's ruling.

• Counselvise Citation: [2022] 140 COUNSELVISE.COM (IT) 723482 (HC-JHARKHAND)
• Appeal Type: Others
• Pronouncement Date: 04-05-2022
• Assessment Year: misc
• Other Referred Cases: Union of India and others Vrs. Ashish Agarwal and other analogous civil appeals
• Laws Referred To: Income Tax Act, 1961, Finance Act, 2021
• Result in Favour of: Revenue
• Court: HIGH COURT
• Department Lawyers: RAHUL LAMBA; AMRITA SINHA; PRASHANT PALLAV; PRABHAT SINHA
• Assessee Lawyers: NITIN PASARI; LAVANYA GADODIA
• Keywords: Finance Act 2021; Income Tax; Reassessment notices; Show cause notices; Unamended section 148
• Section: 148; 149; 151; 148A

Judgement Text

" IN THE HIGH COURT OF JHARKHAND AT RANCHI W.P.(T) No. 5376 of 2021 Ajay Kumar Agarwal --- Petitioner Versus 1. Union of India through the Secretary, Ministry of Finance, Department of Revenue, New Delhi 2. Central Board of Direct Taxes, through its Chairman, New Delhi 3. Deputy Commissioner of Income Tax, Circle-I, East Singhbhum, Jamshedpur 4. Assistant Commissioner of Income Tax, Circle-I, East Singhbhum, Jamshedpur --- Respondents With W.P.(T) No. 5412 of 2021 Sanjiv Badhan Huf through its Karta Shri Sanjiv Badhan --- Petitioner Versus 1. Union of India through the Secretary, Ministry of Finance, Department of Revenue, New Delhi 2. Central Board of Direct Taxes, through its Chairman, New Delhi 3. The Income Tax Officer, Ward 3 (1), East Singhbhum, Jamshedpur --- Respondents With W.P.(T) No. 144 of 2022 Mamta Goyal --- Petitioner Versus 1. Union of India through the Secretary, Ministry of Finance, Department of Revenue, New Delhi 2. Central Board of Direct Taxes, through its Chairman, New Delhi 3. The Income Tax Officer, Ward 2 (1), East Singhbhum, Jamshedpur ---- Respondents With W.P.(T) No. 145 of 2022 Priti Lodha --- Petitioner Versus 1. Union of India through the Secretary, Ministry of Finance, Department of Revenue, New Delhi 2. Central Board of Direct Taxes, through its Chairman, New Delhi 3. The Income Tax Officer, Ward 2 (1), East Singhbhum, Jamshedpur With W.P.(T) No. 637 of 2022 Vivek Kumar Agarwal --- Petitioner Versus 1. Union of India through the Secretary, Ministry of Finance, Department of Revenue, New Delhi 2. Central Board of Direct Taxes, through its Chairman, New Delhi 3. The Income Tax Officer, Ward 3 (1), Jamshedpur --- Respondents With W.P.(T) No. 1008 of 2022 Ratan Lal Agarwal (HUF) --- Petitioner Versus 1. Union of India through the Secretary, Ministry of Finance, Department of Revenue, New Delhi 2. Central Board of Direct Taxes, through its Chairman, New Delhi 3. The Income Tax Officer, Ward 2 (1), Jamshedpur --- Respondents -2- With W.P.(T) No. 1211 of 2022 Sevensea Vincom Private Limited. --- Petitioner Versus 1. Union of India through the Secretary, Ministry of Finance, Department of Revenue, New Delhi 2. Central Board of Direct Taxes, through its Chairman, New Delhi 3. Assistant Commissioner of Income Tax, Centre Circle -1, Ranchi. --- Respondents ….... CORAM: HON’BLE MR. JUSTICE APARESH KUMAR SINGH HON’BLE MR. JUSTICE GAUTAM KUMAR CHOUDHARY For the Petitioners : M/s Nitin Kr. Pasari & Sidhi Jalan (rest of the cases) : Ms. Lavanya Gadodia, Advocate (in WPT No. 1211/2022) For the Resp-Dept. : Mr. Rahul Lamba, Advocate (in W.P.T. Nos.5376/21, 5412/21, 1211/2022) : Ms. Amrita Sinha, Advocate (in W.P.(T) Nos. 144/22,145/22, 637/22, 1008/22 For the Resp-UOI : Mr. Prashant Pallav, ASGI & Mr. Prabhat Kr. Sinha, CGC (in WPT No 1211/22) 07/12.05.2022 All these writ petitions were tagged together as they raise common issues. The notices under un-amended section 148 of the Income Tax Act, 1961 are under challenge in these writ petitions on the ground that they are not sustainable in law having been issued after 01.04.2021 i.e. after the amendment to the Income Tax Act, 1961 by the Finance Act, 2021 introducing new provision i.e. Section 147 to 151 which came into force w.e.f. 01.04.2021. Reference may be made to the interim order dated 16.02.2022 passed in W.P.(T) No. 5376 of 2021 and other analogous cases. This Court taking into consideration the orders or final judgment passed by the different jurisdictional High Courts on the same issue and the nature of challenge, restrained the Revenue from taking any further action pursuant to the impugned notices. Similar order has been passed in other analogous writ petitions tagged together which are on board today. 2. Today all these matters have been posted on I.A. No. 4147 of 2022 in W.P.(T) No. 1211 of 2022 preferred by the Revenue in view of the judgment rendered by the Apex Court dated 04.05.2022 in Civil Appeal No. 3005/2022 in the case of Union of India and others Vrs. Ashish Agarwal and other analogous civil appeals, reported in 2022 SCC Online SC 543. The Apex Court has taken note that approximately -3- 90,000 such reassessment notices under Section 148 of the un-amended Income Tax Act were issued by the Revenue after 01.04.2021, which were the subject matter of more than 9000 writ petitions before various High Courts across the country wherein by different judgments and orders including those under challenge the High Courts have taken a similar view and have set aside the respective reassessment notices issued under Section 148 on similar grounds. The Apex Court on consideration of the issues which are common and to avoid multiplicity of proceedings and lessen the burden of the Court, passed an order the order in exercise of the power under Article 142 of the Constitution of India. It has also been held that the instant judgment and order shall govern all the order passed by the various High Courts on similar issues. The operative directions of the Apex Court contained at Para 10 to 12 of the judgment are being quoted here under: “10.In view of the above and for the reasons stated above, the present Appeals are ALLOWED IN PART. The impugned common judgments and orders passed by the High Court of Judicature at Allahabad in W.T. No. 524/2021 and other allied tax appeals/petitions, is/are hereby modified and substituted as under: - (i) The impugned section 148 notices issued to the respective assessees which were issued under unamended section 148 of the IT Act, which were the subject matter of writ petitions before the various respective High Courts shall be deemed to have been issued under section 148A of the IT Act as substituted by the Finance Act, 2021 and construed or treated to be show- cause notices in terms of section 148A(b). The assessing officer shall, within thirty days from today provide to the respective assessees information and material relied upon by the Revenue, so that the assesees can reply to the show-cause notices within two weeks thereafter; (ii) The requirement of conducting any enquiry, if required, with the prior approval of specified authority under section 148A(a) is hereby dispensed with as a one-time measure vis-à-vis those notices which have been issued under section 148 of the unamended Act from 01.04.2021 till date, including those which have been quashed by the High Courts. Even otherwise as observed hereinabove holding any enquiry with the prior approval of specified authority is not mandatory but it is for the concerned Assessing Officers to hold any enquiry, if required; (iii) The assessing officers shall thereafter pass orders in terms of section 148A(d) in respect of each of the concerned assessees; Thereafter after following the procedure as required under section 148A may issue notice under section 148 (as substituted); (iv) All defences which may be available to the assesses including those available under section 149 of the IT Act and all rights and contentions which may be available to the concerned assessees and Revenue under the Finance Act, 2021 and in law shall continue to be available. -4- 11. The present order shall be applicable PAN INDIA and all judgments and orders passed by different High Courts on the issue and under which similar notices which were issued after 01.04.2021 issued under section 148 of the Act are set aside and shall be governed by the present order and shall stand modified to the aforesaid extent. The present order is passed in exercise of powers under Article 142 of the Constitution of India so as to avoid any further appeals by the Revenue on the very issue by challenging similar judgments and orders, with a view not to burden this Court with approximately 9000 appeals. We also observe that present order shall also govern the pending writ petitions, pending before various High Courts in which similar notices under Section 148 of the Act issued after 01.04.2021 are under challenge. 12. The impugned common judgments and orders passed by the High Court of Allahabad and the similar judgments and orders passed by various High Courts, more particularly, the respective judgments and orders passed by the various High Courts particulars of which are mentioned hereinabove, shall stand modified/substituted to the aforesaid extent only. All these appeals are accordingly partly allowed to the aforesaid extent. In the facts of the case, there shall be no order as to costs.” 3. Learned counsel for the Revenue Mr. Rahul Lamba and Ms. Amrita Sinha in the respective writ petitions have submitted that by virtue of the order passed by the Apex Court, all such impugned notices under un-amended Section 148 of the Income Tax Act are deemed to have been issued under Section 148A of the Income Tax Act as substituted by the Finance Act, 2021 and construed and treated to be show cause notices in terms of Section 148A (b). The requirement of conducting any enquiry, if required with the prior approval of specified authority under Section 148A(a) has been dispensed with as a onetime measure vis-a-vis those notices which have been issued under Section 148 of the un-amended Act from 01.04.2021 till date. The assessing officers have been directed to pass orders in terms of Section 148A (d) in respect of each of the concerned assessees. Thereafter, after following the procedure as required under Section 148A, the assessing officer may issue notice under section 148 (as substituted). The Apex Court has also made it clear that all defences which may be available to the assesees including those available under Section 149 of the I.T. Act and all rights and contentions which may be available to the concerned assessees and Revenue under the Finance Act, 2021 and in law shall continue to be available. The order has been made available Pan India and also applies to pending proceedings before various High Courts. Since a time limit of thirty days has been prescribed for the assessing officer to provide -5- information and materials relied upon by the Revenue to the respective assessees so that the assessees can reply to the show cause notices within two weeks thereafter, Revenue is bound to proceed in the matter without any delay. It is submitted that in the light of the judgment rendered by the Apex Court, the challenge made in these writ petitions do not survive. Therefore, interim order passed in these writ petitions may be vacated and writ petitions may be disposed of. 4. Learned counsel for the petitioners also submit that the case of the petitioners would abide by the judgment of the Apex Court. 5. We have taken note of the submission of the learned counsel for the parties and also the judgment passed by the Apex Court in Civil Appeal No. 3005 of 2022 dated 04.05.2022 and other analogous cases, the operative portion whereof, have been quoted herein above. As abundantly made clear at para 11 of the judgment, the order passed by the Apex Court under article 142 of the Constitution of India shall also govern the writ petitions pending before various High Courts in which similar notices under un-amended Section 148 issued after 01.04.2021 are under challenge. As such, nothing survives in the instant writ petitions to be adjudicated upon. 6. All the writ petitions are accordingly disposed of. I.A. No. 4147 of 2022 in W.P.(T) No. 1211 of 2022 also stands disposed of. Interim order granted in the instant writ petitions get vacated. (Aparesh Kumar Singh, J.) (Gautam Kumar Choudhary, J.) A.Mohanty "