Buddha Sortex Rice Industries Private Limited V. Principal Commissioner Of Income Tax And 3 Others

WTAX/449/2022

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Buddha Sortex Rice Industries Private Limited filed a writ petition against the Principal Commissioner of Income Tax 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 normal period of limitation without the necessary prior approval from the Principal Commissioner. However, the respondents contended that the notice was validly issued within the extended period of limitation due to the Taxation and Other Laws (Relaxation of Certain Provisions) Ordinance, 2020, which extended the deadline due to the COVID-19 pandemic. The court agreed with the respondents, stating that the notice was issued within the valid timeframe and did not require prior approval under the applicable provisions.

• Counselvise Citation: [2022] 140 COUNSELVISE.COM (IT) 805193 (HC-ALLAHABAD)
• Appeal Type: Others
• Pronouncement Date: 29-03-2022
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: HIGH COURT
• Department Lawyers: GAURAV MAHAJAN
• Assessee Lawyers: PARV AGARWAL
• Keywords: Certiorari; Certiorari; Jurisdiction; Limitation Period; Mandamus; Notice; Reassessment; Writ petition
• Section: 148; 151; 149(1)(b); 149(1)(a)

Judgement Text

"AFR Court No. - 3 Case :- WRIT TAX No. - 449 of 2022 Petitioner :- Buddha Sortex Rice Industries Private Limited Respondent :- Principal Commissioner Of Income Tax And 3 Others Counsel for Petitioner :- Parv Agarwal Counsel for Respondent :- Gaurav Mahajan Hon'ble Surya Prakash Kesarwani,J. Hon'ble Jayant Banerji,J. 1.Heard Sri Parv Agarwal, learned counsel for the petitioner and Sri Gaurav Mahajan, learned Senior Standing Counsel for the Income Tax Department. 2.This writ petition has been filed praying for the following reliefs:- \"(a) Issue a writ, order or direction in the nature of certiorari quashing the notice dated 30.03.2021 issued by the respondent no.2 under Section 148 of the Act as also the order dated 28.02.2022 passed by6 respondent no.3, rejecting the objections filed by the petitioner against the 'reasons to believe' for assumption of jurisdiction against the petitioner for th Assessment Year 2015-16. (b) Issue a writ, order or direction in the nature of mandamus restraining the respondents from proceeding with the reassessment proceedings against the petitioner for the AY-2015-16.\" 3.The only argument advanced by the learned counsel for the petitioner before us is that the normal period of limitation for issuing notice under Section 148 of the Income Tax Act, 1961 (hereinafter referred to as the Act of 1961) would be six years where escapement of income from tax is one lacs or more. In this regard, he referred to the provision of Section 149(1) (b) of the Act of 1961. He further submits that since prior approval of the Principal Commissioner in terms of provisions of Section 151 of the Act of 1961 has not been obtained for issuance of notice under Section 148(1) of the Act of 1961, therefore, issuance of notice after expiry of four years but before expiry of six years, the notice is bad and without jurisdiction. No other arguments have been made before us by the learned counsel for the petitioner. 4.Sri Gaurav Mahajan, learned Senior Standing Counsel appearing for the Income Tax Department submits that the normal period of limitation for re-opening as provided under Section 149(1) (a) of the Act of 1961 is four years in all cases but where four years have expired but not six years and escaped assessment amounts to or likely to amount to Rs. one lac or more for that year, then still notice may be issued but after obtaining approval of the Principal Commissioner as per the provisions of Section 151 of the Act of 1961. 5.Since, in the present set of fact, the normal period of limitation for re-opening for the assessment year 2015-2016 was available till 31.3.2020 which was extended by the Taxation and other Law ( Relaxation of Certain Provisions) Ordinance, 2020 and the notification issued thereunder, taking into the situation created due to pandemic Covid-19, the normal period of limitation was available till 31.3.2021. The impugned notice has been issued prior to the expiry of normal period of limitation, therefore, the impugned notice does not suffer from any infirmity and is valid. 6.We have carefully considered the submissions of the learned counsel for the parties. 7.Section 149 of the Act of 1961 provides for limitation for issuance of notice under Section 148. Section 149 as is extended prior to amendment of Finance Act, 2021 is reproduced below: \"149. Time limit for notice- (1) No notice under section 148 shall be issued for the relevant assessment year- (a) if four years have elapsed from the end of the relevant assessment year, unless the case falls under clause (b) or clause (c). (b) if four years, but not more than six years, have elapsed from the end of the relevant assessment year unless the income chargeable to tax which has escaped assessment amounts to or is likely to amount to one lakh rupees or more for that year, (c) if four years, but not more than sixteen years, have elapsed from the end of the relevant assessment year unless the income in relation to any asset (including financial interest in any entity) located outside India, chargeable to tax, has escaped assessment.\" 8.The provisions of Section 149(1) of the Act of 1961 are plain and unambiguous. Bare reading of clause (a) of sub-section (1) of Section 149 leaves no manner of doubt that normal period of limitation for issuance of notice under Section 148 of the Act of 1961 is four years from the end of the relevant assessment year, unless the case falls under clause (b) or clause (c). Thus, after normal period of limitation of four years has expired, larger period of limitation under clause (b) or (c) of sub-section (1) of Section 149 of the Act of 1961 may be invoked, if circumstances so exist. 9.In the present set of fact, the normal period of limitation of four years was available to the Assessing Authority till 31.3.2020 which was extended for one year by the aforesaid Ordinance, 2020 and the notification issued thereunder. Thus, the normal period of limitation available to the Assessing Authority on the facts of the present case was till 31.3.2021. The impugned notice under Section 148 of the Act, 1961 was issued by the Assessing Authority on 30.3.2021 which does not require any prior approval of the Principal Commissioner in terms of the then existing provisions of Section 151 of the Act, 1961. Therefore, the impugned notice under Section 148 of the Act of 1961 issued by the Assessing Authority is wholly valid and same has been issued well within the period of limitation. 10.For all the reasons aforestated, we do not find any merit in this writ petition. Consequently, the writ petition fails and is hereby dismissed. Order Date :- 29.3.2022 sfa/ Digitally signed by SYED FAHEEM AHMAD Date: 2022.04.04 14:50:57 IST Reason: Location: High Court of Judicature at Allahabad "