POPULAR PAINTS V. INCOME TAX OFFICER

WP(C)/26860/2021

AI Insights

The case involves multiple writ petitions filed by different petitioners against the Income Tax Officer, Ward 2, Tirur, challenging the notices issued under Section 148 of the Income Tax Act. The petitioners argued that following the amendment to Section 148 by the Finance Act of 2021, the procedure under Section 148A should have been followed before initiating re-assessment proceedings. The Supreme Court's judgment in the case of Union of India (UOI) and Ors. v. Ashish Agarwal was cited, which clarified the procedure for handling such notices under the amended Section 148. The High Court of Kerala, acknowledging the Supreme Court's decision, disposed of the writ petitions by directing that the notices be treated as show-cause notices under Section 148A and to follow the specified procedural requirements.

• Counselvise Citation: [2022] 140 COUNSELVISE.COM (IT) 768673 (HC-KERALA)
• Appeal Type: Others
• Pronouncement Date: 08-07-2022
• Assessment Year: misc
• Other Referred Cases: Union of India (UOI) and Ors. v. Ashish Agarwal; (2022) 444 ITR 1 (SC)
• Laws Referred To: Income Tax Act
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: CHRISTOPHER ABRAHAM
• Assessee Lawyers: LATHA ANAND; M N RADHAKRISHNA MENON; S VISHNU
• Keywords: Finance Act 2021; Income Tax; Re-assessment; Show cause notice
• Section: 148; 148A

Judgement Text

"IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR. JUSTICE GOPINATH P. FRIDAY, THE 8TH DAY OF JULY 2022 / 17TH ASHADHA, 1944 WP(C) NO. 26171 OF 2021 PETITIONER: MANSOOR VENKITTA CHAKRATHODI, AGED 51 YEARS VENKITTA CHAKRATHODI HOUSE, PADAPPARAMBA, VATTALOOR, MALAPPURAM, PIN- 676 507. BY ADVS. LATHA ANAND M.N.RADHAKRISHNA MENON S.VISHNU (ARIKKATTIL) RESPONDENT: INCOME TAX OFFICER, WARD 2, TIRUR, OFFICE OF THE INCOME TAX OFFICER, CHEMBRA, TIRUR, MALAPPURAM DISTRICT, PIN 680 001. BY ADV CHRISTOPHER ABRAHAM, INCOME TAX DEPARTMENT THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 08.07.2022, ALONG WITH WP(C).17655/2021, 26860/2021, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C)NO.26171 OF 2021 & conn.cases 2 IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR. JUSTICE GOPINATH P. FRIDAY, THE 8TH DAY OF JULY 2022 / 17TH ASHADHA, 1944 WP(C) NO. 17655 OF 2021 PETITIONER: JAMAL MOHAMMED ARANHIKKAL AGED 58 YEARS NO.476, ARANHIKKAL HOUSE, PATHAPPIRIYAM EDAVANNA, MALAPPURAM-676123. BY ADVS. LATHA ANAND K.R.PRAMOTH KUMAR S.VISHNU (ARIKKATTIL) RADHAKRISHNA PILLAI B SIDHARTH P.S. ROHITH MOHAN RESPONDENT: INCOME TAX OFFICER WARD-2, TIRUR, OFFICE OF THE INCOME TAX OFFICER, CHEMBRA, TIRUR, MALAPPURAM DISTRICT, PIN-680001. BY ADV CHRISTOPHER ABRAHAM, INCOME TAX DEPARTMENT THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 08.07.2022, ALONG WITH WP(C).26171/2021 AND CONNECTED CASES, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C)NO.26171 OF 2021 & conn.cases 3 IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR. JUSTICE GOPINATH P. FRIDAY, THE 8TH DAY OF JULY 2022 / 17TH ASHADHA, 1944 WP(C) NO. 26860 OF 2021 PETITIONER: POPULAR PAINTS CALICUT ROAD, PERINTHALMANNA, MALAPPURAM, PIN - 679 322, REPRESENTED BY ITS MANAGING PARTNER SRI.V.USMAN. BY ADVS. LATHA ANAND M.N.RADHAKRISHNA MENON S.VISHNU (ARIKKATTIL) B.RADHAKRISHNA PILLAI SIDHARTH P.S. ROHITH MOHAN ARJUN VARMA RESPONDENT: INCOME TAX OFFICER WARD-2, TIRUR, OFFICE OF THE INCOME TAX OFFICER, CHEMBRA, TIRUR, MALAPPURAM DISTRICT, PIN - 680 001. BY ADV CHRISTOPHER ABRAHAM, INCOME TAX DEPARTMENT THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 08.07.2022, ALONG WITH WP(C).26171/2021 AND CONNECTED CASES, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C)NO.26171 OF 2021 & conn.cases 4 JUDGMENT [WP(C) Nos.26171/2021, 17655/2021, 26860/2021] The petitioners in these cases were issued with notices under Section 148 of the Income Tax Act. The petitioners have approached this Court stating that after the amendment brought into Section 148 by the Finance Act of 2021, the procedure under Section 148A had to be followed before re-assessment proceedings were initiated by the Department. 2. Today, when the matter is taken up for consideration, it is the submission of the learned counsel appearing for the petitioners in these cases that the matter now stands covered by the judgment of the Supreme Court in Union of India (UOI) and Ors. v. Ashish Agarwal; (2022) 444 ITR 1 (SC), where it has been held as follows:- “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 WP(C)NO.26171 OF 2021 & conn.cases 5 have been issued under section 148 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-a- 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); 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.” 3. The learned Standing Counsel appearing for the Department does not dispute the above position and states that the judgment of the Supreme Court covers these matters also. WP(C)NO.26171 OF 2021 & conn.cases 6 Accordingly, these writ petitions will stand disposed of directing that notices issued under Section 148 of the Income Tax to the petitioners shall be treated as show-cause notices under Section 148A of the Income Tax Act. Thereafter, the proceedings shall be completed in the manner directed by the Supreme Court in the judgment referred to above. Sd/- GOPINATH P. JUDGE ats WP(C)NO.26171 OF 2021 & conn.cases 7 APPENDIX OF WP(C) 26171/2021 PETITIONER EXHIBITS EXHIBIT P1 TRUE COPY OF THE NOTICE DATED 30.06.2021, ISSUED UNDER SECTION 148 OF THE INCOME TAX ACT. EXHIBIT P2 TRUE COPY OF NOTICE DATED 10.11.2021 UNDER SECTION 142(1) OF THE INCOME TAX ACT. EXHIBIT P3 TRUE COPY OF THE ORDER DATED 03.06.2021 IN WRIT PETITION (L) NO. 11766 OF 2021 OF BOMBY HIGH COURT. EXHIBIT P4 TRUE COPY OF THE INTERIM ORDER DATED 02.09.2021 IN W.P.C NO. 17655 OF 2021. EXHIBIT P5 TRUE COPY OF INTERIM ORDER DATED 29.11.2021 IN W.P.C NO. 20476 OF 2021. WP(C)NO.26171 OF 2021 & conn.cases 8 APPENDIX OF WP(C) 17655/2021 PETITIONER EXHIBITS Exhibit P1 TRUE COPY OF THE ASSESSMENT ORDER DATED 09.12.2019. Exhibit P2 TRUE COPY OF THE NOTICE DATED 25.06.2021 UNDER SECTION 148 OF THE ACT. Exhibit P3 TRUE COPY OF THE ORDER DATED 03.06.2021 IN WRIT PETITION (L) NO.11766 OF 2021. RESPONDENT EXHIBITS ANNEXURE R(a) MINISTRY OF FINANCE NOTIFICATIONS DATED 31.03.2021 ANNEXURE R(b) MINISTRY OF FINANCE NOTIFICATIONS DATED 27.04.2021 ANNEXURE R(c) JUDGMENT OF HIGH COURT OF CHATTISGARH IN WP(T) NO. 149 OF 2021 :PALAK KHATUJA v. UNION OF INDIA AND OTHER CONNECTED CASES, DATED 23.08.2021 WP(C)NO.26171 OF 2021 & conn.cases 9 APPENDIX OF WP(C) 26860/2021 PETITIONER EXHIBITS Exhibit P1 TRUE COPY OF THE NOTICE DATED 30/06/2021, ISSUED UNDER SECTION 148 OF THE INCOME TAX ACT. Exhibit P2 TRUE COPY OF NOTICE DATED 10/11/2021 UNDER SECTION 142(1) OF THE INCOME TAX ACT. Exhibit P3 TRUE COPY OF THE ORDER DATED 03/06/2021 IN WRIT PETITION (L) NO.11766 OF 2021 OF BOMBAY HIGH COURT. Exhibit P4 TRUE COPY OF THE INTERIM ORDER DATED 02/09/2021 IN WPC 17655 OF 2021. Exhibit P5 TRUE COPY OF INTERIM ORDER DATED 29/11/2021 IN WP(C) 20476 OF 2021. "