Md. Yasin Construction Pvt. Ltd. V. Principal Commissioner of Income Tax (Central) and Assistant Commissioner of Income Tax, Central Circle-1, Ranchi and Deputy Commissioner/Assistant Commissioner of Income Tax, Central Circle-2 Ranchi

WPC/2175/2022

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The case involves Md. Yasin Construction Pvt. Ltd., which challenged the notices and reassessment orders issued under the unamended Section 148 of the Income Tax Act, 1961 for the assessment years 2015-16, 2016-17, and 2017-18. The notices were issued following the Finance Act, 2021, which amended Section 148. The petitioner argued that the reassessment orders were invalid as they did not comply with the procedural requirements of the amended Section 148A. The Supreme Court's decision in Ashish Agarwal vs. Union of India, which treated similar notices as show-cause notices under Section 148A(b), was pivotal in this case. Consequently, the High Court of Jharkhand at Ranchi disposed of the petitions, allowing the Income Tax Department to proceed under the amended Section 148A.

• Counselvise Citation: [2022] 140 COUNSELVISE.COM (IT) 804480 (HC-JHARKHAND)
• Appeal Type: Others
• Pronouncement Date: 26-07-2022
• Assessment Year: misc
• Other Referred Cases: Union of India and others vs. Ashish Agarwal
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: RAHUL LAMBA
• Assessee Lawyers: LAVANYA GADODIA
• Keywords: Amended Section 148A; Income Tax; Notice; Reassessment; Unamended section 148
• Section: 147; 148; 143(3); 142(1); 143(2); 148A(b)

Judgement Text

"IN THE HIGH COURT OF JHARKHAND AT RANCHI W.P.(T) No. 2153 of 2022 With W.P.(T) No. 2095 of 2022 With W.P.(T) No. 2175 of 2022 Md. Yasin Construction Pvt. Ltd., a Company incorporated under the Companies Act, 1956, having its registered office at College Road, P.O. & P.S. Simdega, District-Simdega (Jharkhand), Pin-835223, through its Director namely Md. Tasin, aged about 47 years, son of Late Md. Yasin, resident of 1B Sir-Syed Aalia Villa, Jamia Nagar, Kadru, P.O.-Doranda, P.S. Argora, District- Ranchi (Jharkhand), PIN- 834002. ..… Petitioner (in all cases) Versus 1. Principal Commissioner of Income Tax (Central), having its office at 3rd floor, C.R. Building, B.C. Patel Marg, P.O. & P.S. Patna, District- Patna, PIN- 800001. 2. Assistant Commissioner of Income Tax, Central Circle-1, Ranchi, having its office at Mahavir Tower, Main Road, P.O. G.P.O Kotwali, District-Ranchi (Jharkhand), PIN- 834001. 3. Deputy Commissioner/Assistant Commissioner of Income Tax, Central Circle-2 Ranchi, having its office at Mahavir Tower, Main Road, P.O. G.P.O & P.S.- Kotwali, District- Ranchi (Jharkhand), PIN-834001. ..... Respondents (in all cases) --------- CORAM: Hon’ble Mr. Justice Aparesh Kumar Singh Hon’ble Mr. Justice Deepak Roshan --------- For the Petitioner : Ms. Lavanya Gadodia, Advocate For the Respondents : Mr. Rahul Lamba, Advocate --------- 03/ 26.07.2022 These petitions, preferred for common reliefs, relate with the same petitioner. 2. Notice under unamended Section 148 of the Income Tax Act, 1961 was issued on 24th June, 2021 for relevant assessment years- 2016-17, 2015-16 and 2017-18 respectively upon the petitioner after coming into force of the Finance Act, 2021 stating that the assessing officer has reasons to believe that income chargeable to tax for the relevant assessment year had escaped assessment within the meaning of 147 of the Income Tax Act, 1961. The petitioner was asked to submit its return within 30 days of the service of notice. The notice was issued after obtaining the necessary satisfaction of the Joint Commissioner, Central PTN at RNC. 3. Notices under Section 142 (1) were thereafter issued on 14th February, 2022 in connection with the assessment for the relevant assessment years asking the petitioner to furnish the accounts and documents specified therein by 23rd February, 2022. -2- 4. Thereafter, notices were issued under Section 143 (2) upon the petitioner for the relevant assessment years to submit evidence in support of his return of income. Petitioner furnished his reply within one day on 31st March, 2022 itself in relation to the notices issued in respect to AY 2016-17, 2017-18, subject matter of W.P.(T) No. 2153 of 2022 and 2175 of 2022. The reply was also submitted in respect of notice under Section 143(2) on 23rd March, 2022 for AY 2015-16, subject matter of W.P.(T) No.2095 of 2022. Thereafter, order under Section 143 (3), read with Section 147 was passed on 31st March, 2022 in respect of AY- 2016- 17, 2017-18 and on 29th March, 2022 in respect of AY 2015-16. These notices dated 24th June, 2021 & 29th June, 2021 issued after the amendment to Section 148 w.e.f. 1st April, 2021 and the reassessment order dated 31st March, 2022, were made subject matter of challenge in these three writ petitions on inter alia number of grounds taken herein. The relevant dates in respect of the three writ petitions concerning AY 2016-17, 2015-16 and 2017-18 respectively in that order are furnished in the form of a comparative table hereunder: W.P.(T) No. Notice under 148 Notice under 142(1) Notice under 143(2) Order u/Sec 147 Notice under New 148A(b) 2153/22 AY-2016-17 24/06/21 14/02/22 30/03/22 31/03/22 01/06/22 2095/22 AY-2015-16 29/06/21 14/02/22 23/03/22 29/03/22 01/06/22 2175/22 AY-2017-18 24/06/21 14/02/22 30/03/22 31/03/22 01/06/22 5. The last column in the above chart is the notice issued on 1st June, 2022 under the amended Section 148A (b) in continuity with the notice issued on 24th June, 2021. This notice in respect of each of these assessment years has been brought on record through a supplementary affidavit in the respective writ petitions. The opening paragraph of the notice itself shows that it is pursuant to the department instruction number 1 of 2022 dated 11th May, 2022 issued by the CBDT, New Delhi pursuant to the order of the Hon’ble Supreme Court dated 4th May, 2022 (2022 SCC On Line SC 543) in the case of Union of India and others vs. -3- Ashish Agarwal. The instant letter discloses the information relied upon for issuance of the assessment notice to the applicant for the relevant assessment years which is the requirement of Section 148 A (b) as brought into force w.e.f. 1st April, 2021 under the Finance Act, 2021. This information is also to be supplied by the department in view of the judgment rendered by the Apex Court in the case of Ashish Agarwal (supra) whereunder all notices issued under unamended Section 148 after coming into force of the Finance Act, 2021 were to be treated as deemed to be issued under Section 148 A (b) of the amended Income Tax Act, 1961. In this background, para 26 to 29 of the judgment rendered by the Apex Court in the case of Ashish Agarwal (supra) on the issue of notice under unamended Section 148 of the Income Tax Act, 1961 after coming into force of Finance Act, 2021 w.e.f. 01.04.21 is extracted hereunder: “26. 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 have been issued under section 148A 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- à-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); -4- (iv) 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. 27. The present order shall be applicable PAN INDIA and all judgments and orders passed by different High Courts on the issue and under which similar notices which were issued after 01.04.2021 issued under section 148 of the Act are set aside and shall be governed by the present order and shall stand modified to the aforesaid extent. The present order is passed in exercise of powers under Article 142 of the Constitution of India so as to avoid any further appeals by the Revenue on the very issue by challenging similar judgments and orders, with a view not to burden this Court with approximately 9000 appeals. We also observe that present order shall also govern the pending writ petitions, pending before various High Courts in which similar notices under Section 148 of the Act issued after 01.04.2021 are under challenge. 28. The impugned common judgments and orders passed by the High Court of Allahabad and the similar judgments and orders passed by various High Courts, more particularly, the respective judgments and orders passed by the various High Courts particulars of which are mentioned hereinabove, shall stand modified/substituted to the aforesaid extent only. 29. All these appeals are accordingly partly allowed to the aforesaid extent.” 6. The requirement of conducting inquiry with prior approval of specified Authority under Section 148 A (a) was dispensed with by the Apex Court as one time measure vis-à-vis those notices issued under Section 148 of the unamended Act from 1st April, 2021 till that date including those which had been quashed by the High Courts. The assessing officer was required to provide information to the respective assessees within 30 days from the date of the judgment relied upon by the revenue for reopening assessment. 7. This notice of 1st June, 2022 has been issued in compliance of the order of the Apex Court and as per amended Section 148 A which makes the re-assessment order dated 31st March, 2022 and 29th March, 2022 in the respective writ petitions as of no legal effect. To this proposition of the petitioners, learned counsel for the respondents does not have any dispute on instructions. 8. Learned counsel for the petitioners has relied upon the judgment of the Bombay High Court in Writ Petition No.5293 of 2022, in the case of Emcure Pharmaceuticals Limited vs. Assistant Commissioner of Income Tax Central Circle 2(1), Pune and Ors. and analogous cases, -5- dated 5th May, 2022, passed on similar lines after taking note of the judgment of the Apex Court in the case of Ashish Agarwal (Supra). 9. What emerges from the aforesaid narration of facts and the events that have unfolded on issuance of the notice dated 1st June, 2022, under Section 148A (b) of the amended Income Tax Act, 1961 in consequence of the order of the Hon’ble Supreme Court dated 4th May, 2022 that the department has chosen to adopt the procedure prescribed under the amended Section 148 A in respect of the opening of reassessment proceedings concerning the petitioner for the relevant assessment years, subject matter of the respective writ petitions. In effect the assessment orders passed earlier on 31st March, 2022 in W.P.(T) Nos. 2153 of 2022 and 2175 of 2022 and 29th March, 2022 in W.P.(T) No. 2095 of 2022 ceases to have any legal effect. Consequently, any demand issued pursuant to these reassessment orders would also have no legal effect. 10. In the aforesaid facts and circumstances and the legal position, learned counsel for the petitioner submits that the writ petitions may be disposed of so that the proceedings now being conducted under Section 148A (amended) can be carried out to its logical conclusion. 11. Learned counsel for the respondent does not have any objection. 12. The writ petitions are accordingly disposed of so that the proceedings under amended Section 148A of the Income Tax Act, 1961 against the petitioner for the relevant assessment years can be concluded in accordance with law. The interlocutory applications are also closed. (Aparesh Kumar Singh, J.) (Deepak Roshan, J.) sm/pramanik "