M/S SAMAST ENTERPRIESE LKO. THRU. ITS PARTNER JATIN JAIN V. PRIN. CHIEF COMMISSIONER OF INCOME TAX U.P EAST PRATYAKSH BHAWAN LKO AND 2 OTHERS

/126/2023

AI Insights

The case involves M/S Samast Enterprises, represented by its partner Jatin Jain, challenging certain orders and notices issued under the Income Tax Act, 1961, specifically under sections 148A(d) and 148. The petitioner sought to quash these orders and notices, claiming they were issued without proper jurisdictional authority. The Supreme Court had previously modified similar notices to be treated under the amended Section 148A(b) due to changes in the Income Tax Act effective from April 1, 2021. The High Court of Allahabad, Lucknow Bench, after hearing the arguments, decided not to intervene at this stage and suggested that the petitioner should challenge the final assessment order through the appropriate legal channels, where all issues, including those of jurisdiction, can be addressed.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 747329 (HC-LUCKNOW)
• Appeal Type: Others
• Pronouncement Date: 23-05-2023
• Assessment Year: misc
• Other Referred Cases: Union of India and Ors. Vs. Ashish Agarwal
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: HIGH COURT
• Department Lawyers: KUSHAGRA DIKSHIT
• Assessee Lawyers: PRADEEP AGRAWAL; AMAR MANI TIWARI
• Keywords: Assessment Order; Income Tax; Jurisdictional Error; Section 148A(b); Writ of Certiorari; Section 148A(d)
• Section: 147; 148; 144; 143(3); 148A(d); 151(1)

Judgement Text

"Neutral Citation No. - 2023:AHC-LKO:35867-DB Court No. - 2 Case :- WRIT TAX No. - 126 of 2023 Petitioner :- M/S Samast Enterpriese Lko. Thru. Its Partner Jatin Jain Respondent :- Prin. Chief Commissioner Of Income Tax U.P East Pratyaksh Bhawan Lko And 2 Others Counsel for Petitioner :- Pradeep Agrawal,Amar Mani Tiwari Counsel for Respondent :- Kushagra Dikshit Hon'ble Rajan Roy,J. Hon'ble Manish Kumar,J. Heard Shri Pradeep Agrawal, learned counsel for the petitioner and Shri Kushagra Dikshit, learned counsel for the opposite parties. By means of this writ petition the petitioner has sought the following reliefs:- \"a) Issue a writ, order or direction in the nature of writ of certiorari to quash the order u/s 148A(d) dated 28.07.2022 and the consequential notice issued u/s 148 on 28.07.2022 for the A.Y. 2015-16 as contained in Annexure No.1 and 2 respectively after summoning the record. b) Issue a writ, order or direction in the nature of writ of certiorari to quash the consequential order passed by the Opp. Party No.3 u/s 143(3) read with Section 147 on 05.05.2023 for the A.Y. 2015-16 as contained in Annexure No.9. c) Issue a writ, order or direction in the nature of mandamus directing the Opp. Parties not to proceed to recover the disputed tax for the A.Y. 2015- 16 on the basis of the order passed u/s 147 read with Section 144 on 05.05.2023 and the operation of order be stayed during the pendency of this Writ Petition.\" The facts of the case in brief are that notice under Section 148 of the unamended Income Tax Act, 1961 was issued to the petitioner on 29.06.2021. The said notices were put to challenge before this Court and were quashed. The matter ultimately went up to Hon'ble the Supreme Court and the Special Leave Petitions after being converted into Civil Appeals leading Civil Appeal No. 3005 of 2022 and connected Civil Appeals were decided by judgment dated 04.05.2022. The said notices were ordered to be treated to be deemed as a notice under the amended Section 148A(b) of the Income Tax Act, 1961 (hereinafter referred to as 'the Act, 1961') which came into force w.e.f. 01.04.2021 and further proceedings were ordered to be held. Relevant extracts of the judgement of Hon'ble the Supreme Court reported in (2023) 1 SCC 617; Union of India and Ors. Vs. Ashish Agarwal are quoted herein below:- \"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 148-A of the IT Act as substituted by the Finance Act, 2021 and treated to be show- cause notices in terms of Section 148-A(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 148-A(a) be dispensed with as a one-time measure vis-à-vis those notices which have been issued under Section 148 of the unamended Act from 1-4-2021 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 148-A(d) after following the due procedure as required under Section 148-A(b) in respect of each of the assessees concerned. 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. 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 before this Court or not. 26. There is a broad consensus on the aforesaid aspects amongst the learned ASG appearing on behalf of the Revenue and the learned Senior Advocates/learned counsel appearing on behalf of the respective assessees. We are also of the opinion that if the aforesaid order is passed, it will strike a balance between the rights of the Revenue as well as the respective assessees as because of a bona fide belief of the officers of the Revenue in issuing approximately 90,000 such notices, the Revenue may not suffer as ultimately it is the public exchequer which would suffer. 27. Therefore, we have proposed to pass the present order with a view to avoiding filing of further appeals before this Court and burden this Court with approximately 9000 appeals against the similar judgments and orders passed by the various High Courts, the particulars of some of which are referred to hereinabove. We have also proposed to pass the aforesaid order in exercise of our powers under Article 142 of the Constitution of India by holding that the present order shall govern, not only the impugned judgments and orders passed by the High Court of Judicature at Allahabad, but shall also be made applicable in respect of the similar judgments and orders passed by various High Courts across the country and therefore the present order shall be applicable to PAN INDIA. 28. 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 WT No. 524 of 2021 and other allied tax appeals/petitions, is/are hereby modified and substituted as under: 28.1. 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 148-A of the IT Act as substituted by the Finance Act, 2021 and construed or treated to be show-cause notices in terms of Section 148-A(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 assessees can reply to the show-cause notices within two weeks thereafter. 28.2. The requirement of conducting any enquiry, if required, with the prior approval of specified authority under Section 148-A(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 1-4-2021 till date, including those which have been quashed by the High Courts. 28.3. Even otherwise as observed hereinabove holding any enquiry with the prior approval of specified authority is not mandatory but it is for the assessing officers concerned to hold any enquiry, if required. 28.4. The assessing officers shall thereafter pass orders in terms of Section 148-A(d) in respect of each of the assessees concerned; Thereafter after following the procedure as required under Section 148-A may issue notice under Section 148 (as substituted). 28.5. All defences which may be available to the assessees including those available under Section 149 of the IT Act and all rights and contentions which may be available to the assessees concerned and Revenue under the Finance Act, 2021 and in law shall continue to be available. 29. The present order shall be applicable PAN INDIA and all judgments and orders passed by the different High Courts on the issue and under which similar notices which were issued after 1-4-2021 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 the present order shall also govern the pending writ petitions, pending before various the High Courts in which similar notices under Section 148 of the Act issued after 1-4-2021 are under challenge. 30. The impugned common judgments and orders [Ashok Kumar Agarwal v. Union of India, 2021 SCC OnLine All 799] 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. 31. All these appeals are accordingly partly allowed to the aforesaid extent. In the facts of the case, there shall be no order as to costs.\" In pursuance thereof letter dated 24.05.2022 was issued to the petitioner. This was in respect of the subsequent proceedings with reference to Section 148A(b) as a consequence of the order of Hon'ble the Supreme Court dated 04.05.2022 and this was specifically mentioned therein. The said letter is annexed at Page No. 54 of the writ petition. This letter/notice is not under challenge nor is the earlier notice dated 29.06.2021 which was to be deemed as having issued under the amended provision of Section 148A(b) of the Act, 1961. The petitioner herein has challenged the order dated 28.07.2022 passed under Section 148A(d) of the Act, 1961. Learned counsel for the Income Tax Department says that in pursuance to the impugned order the final assessment has already been made and an assessment order has been passed against the petitioner on 05.05.2023. On being confronted learned counsel for the petitioner submitted that the said order has been annexed with the writ petition as Annexure No. 9. Learned counsel for the Income Tax Department says that against the assessment order there is a remedy of Appeal under Section 246A of the Act, 1961. The contention of the petitioner's counsel was that the initiation of proceedings under Section 148A(b) of the Act, 1961 itself was erroneous and suffered from jurisdictional error, as, such proceedings could not have been initiated without the approval of the Principal Commissioner of Income Tax under Section 151(1) of the Act, 1961, whereas, the said proceedings were initiated with the approval of Joint Commissioner of the Income Tax Range - I, Lucknow who had no jurisdiction under Section 151 in the matter, however, as already stated hereinabove, neither the initial notice dated 29.06.2021 is under challenge before us nor is the subsequent letter/notice dated 24.05.2022 which refers to the approval of the Joint Commissioner. Moreover, we find that the proceedings have been undertaken in pursuance to the judgment of Hon'ble the Supreme Court. In the peculiar facts and the circumstances of the case as noted above, as the final assessment has already been passed, we see no reason as to why we should exercise our extraordinary discretionary jurisdiction under Article 226 of the Constitution of India in the facts of this case when the notice under Section 148A(b) dated 29.06.2021 and letter dated 24.05.2022 are not even under challenge in these proceedings, instead, we relegate the petitioner to avail the remedy prescribed in law against the final assessment order wherein it shall be open for the petitioner to raise all pleas including jurisdictional issues pertaining to initiation of the proceedings under Section 148A(b) and 148A(d) of the Act, 1961 as far as it may be permissible in law which shall be considered accordingly as per law. With the aforesaid observations/directions, the writ petition is disposed of. . (Manish Kumar,J.) (Rajan Roy,J.) Order Date :- 23.5.2023 R.K.P. Digitally signed by :- RAJ KUMAR PATEL High Court of Judicature at Allahabad, Lucknow Bench "