ANURAG AGRAWAL V. UNION OF INDIA AND 2 OTHERS

WTAX/321/2022

AI Insights

The case involves a writ petition filed by Anurag Agrawal against the Union of India and others, challenging a notice issued under Section 148 of the Income Tax Act, 1961 for the Assessment Year 2015-16. The petitioner argued that the notice was issued beyond the permissible period without the required prior permission from higher authorities, and that the reasons recorded did not justify the issuance of the notice. The Income Tax Department defended the notice, citing extensions due to the COVID-19 pandemic and alleging that the petitioner benefited from bogus long-term capital gains. Ultimately, the petitioner decided to withdraw the petition, leading to its dismissal as withdrawn by the court.

• Counselvise Citation: [2022] 140 COUNSELVISE.COM (IT) 686029 (HC-ALLAHABAD)
• Appeal Type: Others
• Pronouncement Date: 16-03-2022
• Assessment Year: misc
• Other Referred Cases: M/s Ambika Iron and Steel Pvt. Ltd. vs. Principal Commissioner of Income Tax & Ors., M/s Sunrise Structures and Developers (P) Ltd. vs. Union of India & Anr.
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: HIGH COURT
• Department Lawyers: ISHAN SHISHU; GAURAV MAHAJAN
• Assessee Lawyers: ANUJ SRIVASTAVA
• Keywords: Assessment Year 2015-16; Bogus Long Term Capital gain; Income Tax; Notice Quashing; Writ of Certiorari; Writ of prohibition
• Section: 148; 10(38); 151(1); 149(1)

Judgement Text

"1 Court No.3 Case :- WRIT TAX No. - 321 of 2022 Petitioner :- Anurag Agrawal Respondent :- Union Of India And 2 Others Counsel for Petitioner :- Anuj Srivastava Counsel for Respondent :- A.S.G.I., Ishan Shishu, Gaurav Mahajan Hon'ble Surya Prakash Kesarwani,J. Hon'ble Jayant Banerji,J. 1. Heard learned counsels for the parties. 2. This writ petition has been filed praying for the following reliefs :- “A. Issue a writ in the nature of Certiorari to quash notice dated 31.03.2021 issued under Section 148 of the Act being illegal, bad in law and without jurisdiction. B. Issue a writ of and/or order and/or direction in the nature of prohibition commanding Respondents to forbear from giving effect to and/or taking any step whatsoever pursuant to and/or in furtherance of the said purported notice under Section 148 of the Act and/or in any proceedings initiated thereunder for the AY 2015-16.\" 3. The petitioner has sought quashing of the notice dated 30.03.2021 issued by the Assessing Authority under Section 148 of the Income Tax Act, 1961 (hereinafter referred to as the 'Act, 1961') for the Assessment Year 2015-16. 4. Learned counsel for the petitioner submits as under :- (i) The impugned notice under Section 148 of the Act, 1961 is illegal, inasmuch as the notice has been issued beyond the period of four years but before six years, without obtaining prior permission or sanction of the Principal Chief Commissioner or 2 Chief Commissioner or Principal Commissioner or Commissioner; and (ii) the reasons recorded by the Assessing Authority do not disclose any material to assume jurisdiction for issuing notice under Section 148 of the Act, 1961. 5. Learned counsel for the petitioner has relied upon a judgment of the Orissa High Court in W.P. (C) No.20919 of 2021 (M/s Ambika Iron and Steel Pvt. Ltd. vs. Principal Commissioner of Income Tax & Ors.) and other connected writ petitions, decided out 24.01.2022 as well as an interim order of the Delhi High Court dated 25.02.2022 in W.P. (C) No.3453 of 2022 (M/s Sunrise Structures and Developers (P) Ltd. vs. Union of India & Anr.). 6. Shri Ashish Kumar Agarwal, learned counsel for the Income Tax Department submits as under :- (i) Normally, the period of limitation available for issuing notice under Section 148 of the Act, 1961 was till 31.03.2020 which stood extended by one year vide Clause 3 of the Taxation and Other Laws (Relaxation of Certain Provisions) Ordinance, 2020 and Notification No.SO2033(E) dated 24.06.2020, as amended by Notification No.SO2512(E) dated 29.07.2020 as corrected by Corrigendum No.SO2126(E) dated 29.06.2020, and notification dated 31.12.2020. The aforesaid Ordinance was replaced by the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020; and (iii) perusal of the reasons recorded by the Assessing Authority reveal that the petitioner is the beneficiary of share transaction in penny scrip Safal Herbs Limited and claimed exemption on income of Rs.1,75,49,995/- as LTCG under Section 10(38) of the Act, 1961. As per information received from the Deputy Director of Income Tax (Investigation), Ahmedabad, the petitioner has taken benefit of bogus long term capital gain. 3 7. We have carefully considered the submissions of learned counsels for the parties. 8. The period of limitation for issuance of notice under Section 148 of the Act, 1961 has been provided in Section 149(1) read with Section 151(1) of the Act, 1961. The normal period of limitation as provided in the aforesaid provisions is four years for the assessment year in question, i.e. A.Y. 2015-16, which was to expire on 31.03.2020. By the amendment by Ordinance, 2020 read with the notifications abovementioned, the period of limitation stood extended for one year, i.e., till 31.03.2021. The impugned notice has been issued on 30.03.2021 after the satisfaction of the Additional Commissioner, who is a Joint Commissioner within the meaning of Section 2(28C) of the Act, 1961. Thus, the impugned notice is not beyond the period of limitation. 9. In the case of Ambika Iron and Steel Pvt. Ltd. (supra), the Orissa High Court has observed in paragraph 4 as under :- “4. The stand of the Revenue that in view of the notifications issued by the Central Government in terms of the provisions of the Taxation and other laws (Relaxation and Amendment of Certain Provisions) Act, 2020, the said time limits stood extended is clearly untenable as those notifications were issued to deal with the situation arising from the amendment to the IT Act by the Finance Act, 2021 with effect from 1st April, 2021 whereas in these cases the notices were issued prior to 1st April, 2021.” 10. Respectfully, we are unable to agree with the observations of the Orissa High Court, as stated in the afore-quoted paragraph 4 of the judgment in the case of Ambika Iron and Steel Pvt. Ltd. (supra), that the provisions of Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 and the notifications issued thereunder were to deal with the situation arising out of 4 amendment of Income Tax Act by the Finance Act, 2021 with effect from 01.04.2021. 11. The aforesaid Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 and the notifications thereunder were issued in the year 2020 itself. Perusal of the Objects and Reasons of the Taxation and Other Laws (Relaxation of Certain Provisions) Ordinance, 2020, which was subsequently converted into Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020, would reveal that it was promulgated to provide relaxation in the provisions of certain Acts and for matters connected therewith or incidental thereto in view of the situation occurred on account of spread of pandemic COVID-19 across many countries of the world including India, causing immense loss to the lives of people and, therefore, it became imperative to relax certain provisions, including extension of time limit in the taxation and other law. Once the languages of the aforesaid Taxation and Other Laws (Relaxation of Certain Provisions) Ordinance, 2020/Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 and the notifications issued thereunder are quite plain and unambiguous, there is no reason to derive other meaning from it. Therefore, we hold that the impugned notice issued by the authority under Section 148 of Act, 1961 is well within the period of limitation. 12. So far as the second submission of learned counsel for the petitioner is concerned, prima facie, we find that relevant reasons indicating escapement of income are available in the hands of the Assessing Authority. Therefore, the impugned notice cannot be said to be without jurisdiction and cannot be interfered with. 13. After the arguments were concluded, learned counsel for the petitioner now states that the petitioner wants to withdraw this writ petition and, therefore, it may be dismissed as withdrawn. 5 14. We deprecate this practice that after the arguments are heard at length and the order is dictated, then a request is made to withdraw the writ petition. 15. Since Shri Anuj Srivastava, learned counsel for the petitioner states that the petitioner wants to withdraw this writ petition and it may be dismissed as withdrawn, we dismiss this writ petition as withdrawn. Date :16.03.2022 SK Digitally signed by SUSHEEL KUMAR Date: 2022.03.23 16:16:19 IST Reason: Location: High Court of Judicature at Allahabad "