Preethi Himachal & Co V. Union of India and Income Tax Officer, Income Tax Department, Parwanoo and National Faceless Assessment Centre, Income Tax Department, New Delhi and Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, New Delhi and Principal Commissioner of Income Tax, Shimla

CWP/1104/2022

AI Insights

The case involves M/S Preethi Himachal & Co, which challenged the jurisdiction of the Income Tax Department to issue notices under Section 142(1) and Section 148 of the Income Tax Act, 1961, for the assessment year 2017-18. The petitioner argued that these notices were issued without jurisdiction as the matter was already under appeal concerning the same issues of income assessment. The court considered the 3rd proviso to Section 147 of the Income Tax Act, which restricts reassessment if the matter is already under appeal. The court decided to let the Income Tax Officer first address the jurisdictional issue raised by the petitioner.

• Counselvise Citation: [2022] 140 COUNSELVISE.COM (IT) 800498 (HC-HIMACHAL_PRADESH)
• Appeal Type: Others
• Pronouncement Date: 02-03-2022
• Assessment Year: misc
• Laws Referred To: Income Tax Act 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: BALRAM SHARMA
• Assessee Lawyers: AMAR SINGH; ANKIT AWAL
• Keywords: Assessment Year 2017-18; Capital Gains; Income Tax; Jurisdiction; Re-assessment; Stock-in-Trade
• Section: 147; 148; 142(1)

Judgement Text

"1 IN THE HIGH COURT OF HIMACHAL PRADESH AT SHIMLA ON THE 2nd DAY OF MARCH, 2022 BEFORE HON’BLE MR. JUSTICE MOHAMMAD RAFIQ, CHIEF JUSTICE & HON’BLE MS. JUSTICE JYOTSNA REWAL DUA CIVIL WRIT PETITION No. 1104 OF 2022 Between :- M/S PREETHI HIMACHAL & CO, 10/5, ROYAL ENCLAVE, BESANT NAGAR, CHENNAI, TAMIL NADU-600020, THROUGH SH. UMA SHANKAR, K, AUTHORISED SIGNATORY. …PETITIONER (BY MR. AMAR PRATAP SINGH AND MR. ANKIT AWAL, ADVOCATES) AND 1. UNION OF INDIA, THROUGH THE SECRETARY, DEPARTMENT OF REVENUE, NORTH BLOCK, NEW DELHI-110001. 2. INCOME TAX OFFICER, INCOME TAX DEPARTMENT, PARWANOO, HIMACHAL PRADESH-173 220. 3. NATIONAL FACELESS ASSESSMENT CENTRE, INCOME TAX DEPARTMENT, NEW DELHI -110 002. 4. COMMISSIONER OF INCOME TAX (APPEALS), NATIONAL FACELESS APPEAL CENTRE, NEW DELHI-110 002 5. PRINCIPAL COMMISSIONER OF INCOME TAX, SHIMLA, RAILWAY BOARD BUILDING, THE MALL, 2 SHIMLA, HIMACHAL PRADESH-171 003. …RESPONDENTS (MR. BALRAM SHARMA, ASSISTANT SOLICITOR GENERAL OF INDIA) ____________________________________________________ This petition coming on for admission this day, Hon’ble Ms. Justice Jyotsna Rewal Dua, passed the following : O R D E R Petitioner’s case is that notice dated 30.03.2021 (Annexure P-2) under Section 148 and notice dated 04.01.2022 (Annexure P-1) issued to it under Section 142(1) of the Income Tax Act 1961 are without jurisdiction. 2. The aforesaid notices pertain to the assessment year 2017-18. The department in these notices has submitted that the petitioner’s income chargeable to tax for the assessment year 2017-18 had escaped assessment within the meaning of Section 147 of the Act. Therefore, it was proposed to assess/re-assess the income/loss for the said assessment year. Accordingly, notices were issued to the petitioner. 4. Learned counsel for the petitioner invited our attention to the assessment order dated 17.12.2019 (Annexure P-4) and submitted that jurisdictional assessing officer has already made an addition of Rs. 40,13,89,726/- to the total income of the petitioner primarily on the ground that the investments held by the petitioner are to be treated as stock-in- trade and not as capital assets and that the petitioner should 3 have computed the income tax liability under the head ‘profits and gains from business or profession’ and not under the head ‘capital gains’. Learned counsel further submitted that aggrieved against the order dated 17.12.2019, the petitioner has filed an appeal which as on date is pending for decision before the Commissioner of Income Tax (Appeals). In view of these facts, learned counsel submitted that the impugned notices issued to the petitioner are without jurisdiction in light of 3rd proviso to Section 147 of the Income Tax Act which reads as under :- “Provided also that the Assessing Officer may assess or reassess such income, other than the income involving matters which are the subject matters of any appeal, reference or revision which is chargeable to tax and has escaped assessment.” 5. We have heard learned counsel for the parties and gone through the case file. It was brought to our notice that in response to impugned notice dated 30.03.2021, petitioner has filed its reply on 28.04.2021 inter alia stating therein that the Income Tax Officer/respondent No.2 does not have the jurisdiction to initiate the re-assessment proceedings against the petitioner in light of 3rd proviso to Section 147. This fact has not been denied by learned Senior Counsel for the respondents-department. In light of the submissions made by learned counsel for the parties, we dispose of the instant writ petition by directing that the jurisdictional/preliminary issue raised by the petitioner in 4 its reply filed to the impugned notices, shall be decided first by respondent No. 2/Income Tax Officer. In case of decision going against the petitioner, it shall be granted 15 days’ time to avail appropriate remedy in accordance with law for redressal of its grievances in accordance with law. Pending applications, if any, also stand disposed of. ( Mohammad Rafiq ) Chief Justice 2nd March, 2022 (K) ( Jyotsna Rewal Dua ) Judge "