D.K. POLYPLAST PRIVATE LIMITED V. UNION OF INDIA INDIA AND 3 OTHERS

WTAX/484/2022

AI Insights

The case involves D.K. Polyplast Private Limited as the petitioner and the Union of India along with three others as respondents, concerning a notice issued under Section 148 of the Income Tax Act, 1961, for the Assessment Year 2013-14. The petitioner contested the notice, arguing that the limitation period for reassessment had expired, and no reassessment order had been passed. The respondents acknowledged the expiration of the limitation period but did not extend it. The court found the notice to be potentially without jurisdiction and noted the expiration of the limitation period, leading to the disposal of the writ petition as infructuous.

• Counselvise Citation: [2022] 140 COUNSELVISE.COM (IT) 723531 (HC-ALLAHABAD)
• Appeal Type: Others
• Pronouncement Date: 05-05-2022
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: ANANT KUMAR TIWARI; GAURAV MAHAJAN; KRISHNA AGARWAL
• Assessee Lawyers: ABHINAV MEHROTRA
• Keywords: Faceless Assessing Officer; Income Tax; Jurisdiction; Limitation; Reassessment order
• Section: 147; 148; 68

Judgement Text

"Court No. - 3 Case :- WRIT TAX No. - 484 of 2022 Petitioner :- D.K. Polyplast Private Limited Respondent :- Union Of India India And 3 Others Counsel for Petitioner :- Abhinav Mehrotra Counsel for Respondent :- A.S.G.I.,Anant Kumar Tiwari,Gaurav Mahajan Hon'ble Surya Prakash Kesarwani,J. Hon'ble Jayant Banerji,J. 1. Heard Sri Abhinav Mehrotra, learned counsel for the petitioner and Sri Krishna Agarwal, learned Senior Standing Counsel for the Income Tax Department. 2. Affidavit of compliance dated 30.04.2022 on behalf of the respondent no.3 has been filed on 05.05.2022 in which respondent no.3 has dictated as under:- 4. That with respect to the aforesaid issue the deponent most respectfully submits as under:- (1) As reported by Office of Directorate of Income Tax (Systems), Delhi, Assessment proceeding for Assessment Year 2013-14 is still pending with the Faceless Assessing Officer and no order of reassessment with respect to the notice u/s 148 dated 30.03.2021 for A.Y. 2013-14 has been passed till date. (2) That Faceless Assessing Officer has extended the Time Barring date in Income Tax Business Application to 30.05.2022 by selecting the category others with the remarks \"writ filed by the assessee\". 3. We asked Sri Krishna Agarwal, learned Senior Standing Counsel for the respondent nos. 2,3, and 4, as to whether limitation for passing assessment order/reassessment order for the Assessment Year 2013-14 expired on 31.03.2022, has been extended by any statutory provision or Government order.? He replied that the limitation has not been extended by any statutory enactment or by the Central Government and the limitation has already expired on 31.03.2022. 5. On 26.04.2022, this Court passed the following order:- 1. Heard Shri Abhinav Mehrotra, learned counsel for the petitioner and Shri Krishna Agarwal, learned Senior Standing Counsel for the respondent-Income Tax Department. 2. On 11.04.2022, this Court passed the following order:- \"Learned counsel for the petitioner states that limitation for passing reassessment order for the A.Y. 2013-14, pursuant to the impugned notice under Section 148 of the Income Tax Act, 1961, dated 30.03.2021, has expired on 31.03.2022 and since no reassessment order has been passed, therefore, the entire proceedings has become time barred. Sri Krishna Agarwal, learned Senior Standing Counsel for the respondent - Income Tax Department prays for and is granted a day's time to obtain specific instructions with respect to the statement made by learned counsel for the petitioner as aforenoted. Put up on 13.04.2022 as a fresh case.\" 3. On 13.04.2022, the following order was passed :- \"Heard Sri Abhinav Mehrotra, learned counsel for the petitioner and Sri Manu Ghildyal, learned Standing Counsel for the Income Tax Department. The impugned notice under Section 148 of the Income Tax Act, 1961 for the Assessment Year 2013-14 dated 30.03.2021, has been issued by the respondent No.2 forming reason to believe on the ground that a sum of Rs.1,68,87,000/- was transferred in the account of the petitioner from the account of M/s Agarwal Agency Prop. Dinesh Kumar Agarwal and a sum of Rs.25,18,119/- has been paid to M/s J.J. Polyimpex Pvt. Ltd. during the year under consideration. The aforesaid transaction was specifically a point for determination in the regular assessment proceedings whereby an addition of Rs.2,06,63,892/- was made invoking the provisions of Section 68 of the Income Tax Act, 1961. Against the aforesaid regular assessment order, the petitioner filed an appeal before the CIT (Appeals)-1, Kanpur which was partly allowed by order dated 23.03.2018 and whereby the aforesaid addition was deleted by the Appellate Authority. It further appears that against the aforesaid order of the CIT (Appeals), the Department as well as the petitioner/ assessee have filed cross appeals before the Income Tax Appellate Tribunal, Lucknow, which are stated to be pending. In view of the facts briefly noted above, prima facie, it appears that the impugned notice under Section 148 of the Act, 1961 is wholly impermissible and without jurisdiction inasmuch as the subject matter of reason to believe recorded by the Assessing Authority for issuing notice under Section 148 of the Act, 1961, has already been considered and addition was made by the Assessing Authority while passing the regular assessment order and addition so made has been deleted by the CIT (Appeals). Learned Senior Standing Counsel for the respondents prays for and is granted five days' time to obtain instructions or to file counter affidavit. Put up as a fresh case before the appropriate bench on 19.04.2022.\" 4. Today, a counter affidavit on behalf of the respondent nos.2, 3 and 4 has been filed by Shri Mahendra Kumar, Income Tax Officer, Ward-2(3)(1), Kanpur, which is taken on record. 5. Perusal of the counter affidavit shows that the respondents have submitted evasive reply and despite the controversy crystalised by us in our order dated 13.04.2022, the respondents have deliberately avoid to reply. 6. Under the circumstances, we direct the respondent no.3 to file a supplementary counter affidavit by means of his personal affidavit within three days in which he shall clearly reply to the following points:- (i) Whether the subject matter of the impugned show cause notice dated 30.03.2021 issued under Section 148 of the Income Tax Act, 1961, was the subject matter of consideration in regular assessment proceedings of the petitioner? (ii) Whether initiation of impugned notice under Section 147/148 of the Act, 1961 for the Assessment Year 2013-14, is based on change of opinion? (iii) Whether the information on the basis of which the assessing authority had the 'reason to believe', was made basis for addition in the regular assessment proceedings of the petitioner and whether in appeal filed by him against the assessment order, the relief was partly granted to him by the appellate authority and the order of the appellate authority has been challenged by the Department before the Income Tax Appellate Tribunal? (iv) Whether, under the circumstances of the case, the impugned reassessment order under Section 148 of the Act, 1961, is without jurisdiction? 7. In the event, the personal affidavit is not filed by respondent no.3 on the next date fixed, then he shall remain personally present before this Court on the next date fixed and shall show cause. 8. Put up as a fresh case on 29.04.2022. 6. On 29.04.2022, this Court passed the following order:- Heard Shri Abhinav Mehrotra, learned counsel for the petitioner, Shri Anant Kumar Tiwari, learned counsel for respondent no.1 and Shri Krishna Agarwal, learned counsel for the respondent nos.2, 3 and 4. Pursuant to our order dated 26.04.2022, a supplementary counter affidavit dated 28.04.2022 has been filed today by the learned Senior Standing Counsel for the Income Tax Department, which is taken on record. Prima-facie, the affidavit reflects adamant affirmation by the respondent no.3 of the arbitrary exercise of powers by the Assessing Officer under Section 147/148 of the Income Tax Act, 1961. However, in our earlier order, we have specifically noted the averment of affidavit made by the petitioner/assessee that reassessment order has not been passed as yet, and, therefore, the limitation for passing the reassessment order for the Assessment Year 2013-14 has expired on 31.03.2022. Let an affidavit be filed by the respondent no.3 clearly stating as to whether the reassessment order for the Assessment Year 2013-14 has been passed or not?, and if it has been passed, then a copy of that order may also be brought on record. As prayed, put up as a fresh case on 04.05.2022. 7. Although, it prima facie appears that the impugned notice under Section 148 of the Income Tax Act, 1961 issued by the respondents to the petitioner for the Assessment Year 2013-14 was without jurisdiction, yet we are not entering into to decide the issue for the simple reason that as per admitted case of the respondents as afore-noted, the limitation for passing the reassessment order for the Assessment Year 2013-14 has already expired on 31.03.2022. No reassessment order can now be passed unless the limitation is extended by the Legislature or by the Central Government under delegated authority, if any, under the Act. Since it has been admitted before us that the limitation for passing the reassessment order has expired on 31.03.2022 and it has not been extended, therefore, no reassessment order pursuant to the impugned notice, can now be passed. Therefore, for all practical purposes, the writ petition has become infructuous. 8. In view of the aforesaid, writ petition is disposed off. Order Date :- 5.5.2022/T.S. Digitally signed by TRIBHUWAN SINGH Date: 2022.05.09 17:42:40 IST Reason: Location: High Court of Judicature at Allahabad "