M.S. Sagar Tradewings Pvt. Ltd. V. Jurisdictional Assessing Officer Ward 1(1), Bilaspur Income Tax Department and Principal Commissioner of Income Tax, Raipur

WPT/112/2023

AI Insights

M.S. Sagar Tradewings Pvt. Ltd., represented by its director Ajay Singh, filed a writ petition against the Jurisdictional Assessing Officer and the Principal Commissioner of Income Tax, challenging the notice and order issued under Section 148A of the Income Tax Act, 1961. The petitioner argued that the notice did not include the necessary information and material that led to the conclusion of tax evasion, which is required for a fair response. The respondents did not dispute the absence of this information. The court, referencing the Supreme Court's decision in Ashish Agarwal, found that the procedural requirements of Section 148A were not met, leading to a violation of natural justice.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 811100 (HC-CHHATTISGARH)
• Appeal Type: Others
• Pronouncement Date: 08-05-2023
• Assessment Year: misc
• Other Referred Cases: Union of India vs. Ashish Agarwal (2023) 1 SCC 617
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: AMIT CHOUDHARY; AJAY KUMRANI
• Assessee Lawyers: ARJIT TIWARI
• Keywords: Income Tax; Natural Justice; Notice Quashing; Tax Evasion; Writ petition
• Section: 139(1); 148A(b); 148A(d); 131(1A); 148A(a)

Judgement Text

" 1 NAFR HIGH COURT OF CHHATTISGARH, BILASPUR WPT No. 112 of 20 23 • M.S. Sagar Tradewings Pvt. Ltd. A Company registered under the Companies Act, 1956 having its office at Om Chambers, through it's Director Ajay Singh, having its Registered Office at Bilaspur Vyapar Vihar Bilaspur, Chhattisgarh. ------Petitioner VERSUS 1. Jurisdictional Assessing Officer Ward 1(1), Bilaspur Income Tax Department, Ward 1(1), Aaykar Bhawan, Vyapar Vihar, Bilaspur Chhattisgarh. 2. Principal Commissioner of Income Tax Income-Tax Department, Office of the Income Tax Officer, Raipur, Chhattisgarh. -------Respondents (cause title is taken from Case Information System) For Petitioner : Mr. Arjit Tiwari, Advocate For Respondents : Mr. Amit Choudhary, Advocate with Mr. Ajay Kumrani, Advocate Single Bench: Hon'ble Shri Parth Prateem Sahu, Judge ORDER 08 /05/2023 1. Petitioner has filed this writ petition seeking following reliefs. “10.1 It is prayed that this Hon’ble Court may kindly be pleased to call for the entire records concerning the case of the petitioner company from the possession of the respondents for its kind perusal. 10.2 That this Hon’ble Court may kindly be pleased to issue an appropriate writ quashing and setting aside the impugned order dated 30.03.2023 passed by Respondent No. 1, Jurisdictional Assessing officer Ward 1(1), Bilaspur in Notice No. ITBA/AST/F/148A/2022-3/1051634143(1). 10.3 That, alternatively, this Hon’ble Court may further kindly be pleased to issue an appropriate order remanding the matter back to the ward 1(1) officer for issuance of an adequate show cause notice with evidence u/s 148A(b) of the IT Act, 1961 and issue a reasoned order. 10.4 Any other relief/reliefs which this Hon’ble Court may think fit and proper in the facts and circumstances of the case, with 2 cost of the petition may also please be granted to the petitioner.” 2. Learned counsel for petitioner submits that the petitioner is a company registered under the Companies Act, 1956, is filing the income tax returns under Section 139(1) of the Income Tax Act, 1961 (henceforth “Act of 1961”). In the process petitioner has submitted return for Financial Year 2018-19 also which was duly processed under Section 139(1) of the Act of 1961. Petitioner was served with a summon under Section 131 (1A) of the Act of 1961 dated 27.09.2022. Pursuant to the summon Director of the petitioner-company appeared before the concerned authority and furnished all the relevant documents and his submission was also recorded. Surprisingly, petitioner company was served with a notice under Section 148(A)(a) of the Act of 1961 for furnishing the details of purchase from the supplier for the Financial Year 2018-19, pursuant thereto petitioner has further submitted a detailed reply along with supporting documents. On 13.03.2023, again a notice under Section 148A(b) of the Act of 1961 was issued. The show-cause notice was not enclosed with the information and relevant material by which the concerned authority came to the conclusion that the petitioner-company has escaped tax. He also contended that according to the decision of Hon’ble Supreme Court in the case of Union of India vs. Ashish Agarwal reported in (2023) 1 SCC 617 it was incumbent upon the respondent-authority to provide the information and material relied upon by the Revenue to the respective assessees for issuance of notice under Section 148A(b) of the Act of 1961, he contended that no such material and information has been supplied to petitioner. He also submits that apart from the above other grounds are also taken in this writ petition challenging the notice under Section 148 of the Act of 1961. 3. Learned counsel for respondents, on instruction, submits that petitioner 3 has already submitted reply to the notice under Section 148A(b) of the Act of 1961. He, on instructions, does not dispute the submission of counsel for petitioner that assessee was not served with the information and material relied upon by Revenue. 4. I have heard learned counsel for the parties and also perused the record. 5. Hon’ble Supreme Court in the case of Ashish Agarwal (supra), considering the grounds taken as also the amended provision under Section 148A of the Act of 1961 has observed thus: “25. Therefore, we propose to modify the judgments and orders passed by the respective High Courts as under: 25.1 The respective impugned section 148 notices issued to the respective assessees shall be deemed to have been issued under section 148A of the IT Act as substituted by the Finance Act, 2021 and treated to be showcause notices in terms of section 148A(b). The respective assessing officers shall within thirty days from today provide to the assessees the information and material relied upon by the Revenue so that the assessees can reply to the notices within two weeks thereafter; 25.2 The requirement of conducting any enquiry with the prior approval of the specified authority under section 148A(a) be dispensed with as a onetime measure vis àvis 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; 25.3 The assessing officers shall thereafter pass an order in terms of section 148A(d) after following the due procedure as required under section 148A(b) in respect of each of the concerned assessees; 25.4 All the defences which may be available to the assessee under section 149 and/or which may be available under the Finance Act, 2021 and in law and whatever rights are available to the Assessing Officer under the Finance Act, 2021 are kept open and/or shall continue to be available and; 25.5 The present order shall substitute/modify respective judgments and orders passed by the respective High Courts quashing the similar notices issued under unamended section 148 of the IT Act irrespective of whether they have been assailed 4 before this Court or not.” 6. In paragraph 25.1, Hon’ble Supreme Court has observed that the respective assessing officers shall within thirty days from today provide to the assessees the information and material relied upon by the Revenue so that the assessees can reply to the notices within two weeks thereafter. Grievance of petitioner in this writ petition is that the respondent authority has not served upon the assessee the information and the relevant material relied upon by the Revenue to the petitioner along with notice under Section 148A(b) of the Act of 1961 which is not disputed by the counsel for respondents, on instructions. 7. In view of the aforementioned facts of the case as there is no proper compliance of the provisions of Section 148A of the Act of 1961, which in the opinion of this court is in violation of provisions under the Act of 1961, directions issued by the Hon’ble Supreme Court in the case of Ashish Agarwal (supra) and also in violation of principle of natural justice and therefore I am inclined to allow this writ petition at this stage. 8. Accordingly, writ petition is allowed and the order under Section 148A(d) as also the notice under Section 148 of the Act of 1961 are hereby quashed. The matter is remitted back to Respondent No. 1 for passing orders afresh on the notice under Section 148A(b) of the Act of 1961 after supplying information and the material relied upon by Revenue. 9. In view of above observation and direction, the petition is disposed of. Sd/- (Parth Prateem Sahu) Judge /pāwān "