M/S SOUTHERN ISPAT AND ENERGY LIMITED V. UNION OF INDIA

WPT/169/2021

AI Insights

In this case, M/s Southern Ispat And Energy Limited challenged the issuance of a notice under Section 148 of the Income Tax Act, 1961, by the Income Tax Department. The petitioner argued that the sanction under Section 151 of the IT Act was void due to the absence of a valid digital signature and a verified DIN. The respondents countered that the sanction was properly issued and that the petitioner had already raised objections which were considered and dismissed before the final assessment order was passed. The court examined the validity of the sanction and the procedural compliance of the Income Tax Department, ultimately finding in favor of the respondents.

• Counselvise Citation: [2022] 140 COUNSELVISE.COM (IT) 686947 (HC-CHHATTISGARH)
• Appeal Type: Others
• Pronouncement Date: 17-03-2022
• Assessment Year: misc
• Other Referred Cases: The Assistant Commissioner of State Tax and others Vs M/s Commercial Steel Limited, Radha Krishan Industries Vs State of Himachal Pradesh and others
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: HIGH COURT
• Department Lawyers: BHUPENDRA PANDEY; AMIT CHAUDHARY; AJAY KUMRANI
• Assessee Lawyers: APURV GOYAL
• Keywords: Competent authority; Digital Signature; Document identification number; Final Assessment Order; Mechanical manner; Natural Justice
• Section: 148; 246A; 151; 282A

Judgement Text

"NAFR HIGH COURT OF CHHATTISGARH, BILASPUR WPT No. 169 of 2021 • M/s Southern Ispat And Energy Limited Through Its Managing Director Shri Vivek Agarwal, Aged About 47 Years, Having Its Registered Office At 14/448(2) Ksn Illam, Ground Floor, Near Sbi Kunnathurmedu (Po), Palakkad, Kerala 678013, District : Palakkad, Kerala ---- Petitioner Versus 1. Union Of India Through Its Secretary, Ministry Of Finance, (Department Of Revenue) No. 137, North Block, New Delhi - 110001 2. National Faceless Assessment Centre, Delhi Through Additional / Joint / Deputy / Assistant Commissioner Of Income Tax / Income Tax Officer, Income Tax Department, North Block, New Delhi - 110001 3. National E-Assessment Centre, Delhi Through Additional / Joint / Deputy / Assistant Commissioner Of Income Tax / Income Tax Officer, Income Tax Department, North Block, New Delhi - 110001. 4. Principal Commissioner Of Income Tax - 2 Raipur, Office Of Commissioner Of Income Tax, New C.R. Building, Civil Lines, Raipur, Chhattisgarh. 5. Joint Commissioner Of Income Tax Range 4, Raipur, New C.R. Building, Civil Lines, Raipur, Chhattisgarh. 6. Income Tax Officer Ward 4(1), Raipur, Office Of Income Tax Officer, Raipur, Civil Lines, Raipur, Chhattisgarh ---- Respondents ------------------------------------------------------------------------------------------------------------------ For Petitioner : Shri Apurv Goyal, Advocate For Respondents-1 to 3 : Shri Bhupendra Kumar Pandey, Advocate For Respondents- 4 to 6 Shri Amit Chaudhary, and Shri Ajay Kumrani, Advocates ------------------------------------------------------------------------------------------------------------------ Hon'ble Shri Justice Parth Prateem Sahu Order on Board 17.03.2022 1. Petitioner/Company in this writ petition has challenged issuance of notice under Section 148 of the Income Tax Act, 1961 (for short,’IT Act’) by Income Tax department on the ground mentioned therein, particularly raising ground that sanction under Section 151 of the IT Act is void, because sanction does not bear a valid digital signature as well as does not have verified DIN (Document Identification Number) and further, objections raised are decided in Wpt 169 of 2021 2 a very mechanical manner, without considering the same in objective manner. Hence there is violation of principles of natural justice. 2. Respondents submitted reply to Writ Petition pleading that approval has been accorded by competent authority. Approval under Section 151 of the IT Act bears DIN of competent authority, which is a computer generated number. He also submits that after receiving notice under Section 148 of the IT Act, petitioner has already submitted an objection to proceeding, which was considered and objection raised by petitioner has been dismissed. Thereafter, final assessment order was passed on 23.09.2021, and therefore, petitioner is having remedy to appeal under Section 246A of the IT Act. 3. Shri Apurv Goyal, learned counsel for the petitioner would submit that in the facts and circumstances of case, even if final assessment order is passed, Writ Petition can be entertained as petitioner has challenged the very authority of sanctioning /approval authority, as the sanction under Section 151 of the IT Act has not been accorded by any competent authority. He submits that after receiving sanction accorded under Section 151 of IT Act, he verified DIN online, but computer shown as ‘no record’ for the given document number. Hence, prima facie the DIN mentioned in the sanction order itself is not correct. He submits that in view of circular dated 14.08.2019 issued by the Central Board of Direct Taxes (CBDT), when proceedings initiated by the Department, does not bear DIN, it shall be treated as invalid and shall be deemed to have never been issued. Hence, in the facts of the case, sanction/ approval accorded under Section 151 of the IT Act is to be treated as not granted by competent authority. Proceeding under Section 148 of the IT Act is initiated without sanction or approval hence in absence of sanction to proceeding, entire proceeding is vitiated in the eyes of law. He also submits that in para-4 of reply filed by respondent it is mentioned that when Assessing Officer Wpt 169 of 2021 3 forwarded the case, sanction has been granted initially manually, but as per document placed on record, it would show that sanction has been accorded on 22.02.2020. Counsel for petitioner places reliance upon judgments passed by Hon’ble Supreme Court in cases of The Assistant Commissioner of State Tax and others Vs M/s Commercial Steel Limited in Civil Appeal- 5121 of 2021 dated 03.09.2021 and Radha Krishan Industries Vs State of Himachal Pradesh and others reported in 2021 SCC Online SC 334 in support of his contention that availability of alternative remedy of appeal will not come in the way in exercise of jurisdiction under Article 226 of Constitution of India. 4. Shri Amit Chaudhary, learned counsel for respondent would submit that as final assessment order has already been issued on 23.09.2021, in view of judgment passed by Division Bench of this Court in WA-521 of 2018, Writ petition will not be maintainable and petitioner is required to file duly constituted appeal under Section 246A of the IT Act. He also submits that ground raised by learned counsel for the petitioner that DIN could not be verified hence, the proceeding is vitiated is not acceptable because, DIN is computer generated number and it is specifically mentioned in sanction order under Section 151 of the IT Act. Requirement under Circulars and provisions of law under the IT Act is that, there shall be mention of DIN in the document issued by competent authority, which is available in the document. He contended that digital signature in internal communication is not required because sanction order is addressed to assessing Officer. Under Section 282A of the IT Act, it mandates that document shall bear name and designation of authority which is already part of sanction order under Section 151 of the IT Act. He contended that last submission of learned counsel for the petitioner that manual sanction was accorded on 06.02.2020 as pleaded in their reply is also not correct. Wpt 169 of 2021 4 5. I have heard learned counsel for the parties. 6. Challenge in this Writ Petition is primarily with respect to initiation of proceeding under Section 148 is raised only on the ground of non-issuance of sanction order under Section 151 of IT Act by competent authority. Perusal of sanction granted by competent authority at Page-35 would reflect that it bears DIN and document number. This document specifically bears name and designation of authority according sanction/approval under Section 151 of the IT Act. Hence, in view of submission of learned counsel for the respective parties and considering documents placed on record, wherein DIN is specifically mentioned, I do not find any merit in submission of learned counsel for the petitioner. 7. Pleading in reply, particularly in paragraph-4, respondents have very categorically pleaded that for obtaining approval under Section 151 of the IT Act, case record was also forwarded to respondent-4. Submission of learned counsel for the petitioner that sanction has been accorded in a perfunctory manner is also not sustainable. Undisputedly, final assessment order has already been passed on 23.09.20221. 8. Hon’ble Supreme Court in case of The Assistant Commissioner (supra) has considered the maintainability of writ petition when alternative statutory remedy is available and held as under: “11. The respondent had a statutory remedy under section 107. Instead of availing of the remedy, the respondent instituted a petition under Article 226. The existence of an alternate remedy is not an absolute bar to the maintainability of a writ petition under Article 226 of the Constitution. But a writ petition can be entertained in exceptional circumstances where there is: (i) a breach of fundamental rights; Wpt 169 of 2021 5 (ii) a violation of the principles of natural justice; (iii) an excess of jurisdiction; or (iv) a challenge to the vires of the statute or delegated legislation” 9. Hon’ble Supreme Court has held that writ petition can be entertained in exceptional circumstances, which are mentioned therein. In the opinion of this Court, none of above exceptions is established. Hence, in view of alternative remedy available in favour of petitioner under Section 246 A of the IT Act. 10. I am not inclined to entertain this writ petition. Case law relied upon by learned counsel for the petitioner to support his contention that writ petition is maintainable is also mentions that writ petition can be entertained only in exceptional circumstances. Hence petitioner cannot get any benefit of aforementioned judgment relied upon. 11. For the foregoing discussions, I do not find any merit in writ petition. It is liable to be dismissed and is accordingly dismissed. However, petitioner will be at liberty to approach appellate authority by way of filing an appeal challenging order of assessment. Sd/- (Parth Prateem Sahu) JUDGE padma "