Sunil Kumar Jain Shrishrimal V. The Chief Commissioner of Income Tax and Assistant Commissioner of Income Tax Circle-1 (1)

WPT/119/2023

AI Insights

The petitioner, Sunil Kumar Jain Shrishrimal, proprietor of M/s Saheli Jewelers, challenged the notices and orders issued under Sections 148A(b) and 148A(d) of the Income Tax Act, 1961, for the assessment year 2016-17. The petitioner argued that the notices were issued without providing the necessary documents and information, violating the principles of natural justice and the Supreme Court's directives in Ashish Agrawal. The respondents admitted that the information and material were not supplied along with the notice. The court found that the procedure followed by the respondents was not in compliance with the statutory requirements and the Supreme Court's guidelines, leading to the quashing of the notices and orders.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 810503 (HC-CHHATTISGARH)
• Appeal Type: Others
• Pronouncement Date: 04-05-2023
• Assessment Year: misc
• Other Referred Cases: Union of India vs. Ashish Agarwal
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: AJAY KUMRANI
• Assessee Lawyers: GANESH PUROHIT; ANAND DADARIYA
• Keywords: Assessment Reopening; Certiorari; Certiorari; Income Tax; Mandamus; Natural Justice
• Section: 148; 148A(b); 148A(d)

Judgement Text

" 1 NAFR HIGH COURT OF CHHATTISGARH, BILASPUR WPT No. 119 of 20 23 • Sunil Kumar Jain Shrishrimal S/o Late Shri Mohanlal Shrishrimal Aged About 62 Years Occupation Proprietor M/s Saheli Jewelers, Gandhi Chowk, Durg (C.G.) - 491001 PAN No. AJCPS2009Q. ------Petitioner VERSUS 1. The Chief Commissioner of Income Tax Central Revenue Building, Raipur (C.G.) 2. Assistant Commissioner of Income Tax Circle-1 (1), Income Tax Office 32/32 Bungalows, Bhilai (C.G.) - 490031. -------Respondents (cause title is taken from Case Information System) For Petitioner : Mr. Ganesh Purohit, Sr. Advocate with Mr. Anand Dadariya, Advocate For Respondents : Mr. Ajay Kumrani, Advocate on behalf of Mr. Amit Choudhary, Advocate Single Bench: Hon'ble Shri Parth Prateem Sahu, Judge ORDER 04 /05/2023 1. Petitioner has filed this writ petition seeking following reliefs. “10.1 To call for the records from the respondents for kind perusal of this Hon’ble Court. 10.2 The Hon’ble Court may kindly be pleased to issue a writ or writs in the nature of certiorari quashing the notice under Section 148A(b) order under Section 148A(d) and the notice under Section 148 Annexure P-1 and P-2 as illegal, void and in contravention of provisions of the Income Tax Act and directions of the Hon’ble Apex Court. 10.3 The Hon’ble Court may kindly be pleased to issue a writ or writs in the nature of mandamus directing the respondents to close the proceedings initiated under Section 148 Annexure P-2 and all possible subsequent proceedings in consequence of such a notice. 10.4 That, the Hon’ble Court may kindly be pleased to allow the cost of this petition. 10.5 Any other relief considered just and expedient under the facts of the case by the 2 Hon’ble Court may kindly be allowed to the petitioner.” 2. Learned counsel for petitioner submits that the petitioner is engaged in the business of purchase and sell of jewelry as proprietor of M/s Saheli Jewelers and having Permanent Account Number (PAN) with the respondent-department. Petitioner submitted income tax return for assessment year 2016-17 on 10.10.2016 declaring the total income of ₹ 88,80,040/-. Respondent No. 2/ department had issued notice under Section 148A(b) of the Income Tax Act, 1961 (henceforth “Act of 1961) on 27.03.2023 which was served upon the petitioner on 31.03.2023 to reopen the assessment for the assessment year 2016-17. He contended that though in the notice it is mentioned that the documents are enclosed however documents were not enclosed with the notice and supplied to the petitioner. Petitioner made request in the letter dated 03.04.2023 submitted with respondent-department on 05.04.2023 but then also respondent-department has not responded to the request made by petitioner. The proper opportunity for filing of reply under Section 148A(b) of the Act of 1961 was not granted to petitioner, respondent-department had erroneously treated the case as “NON PAN” which is per se wrong in the facts of the case. Petitioner also submitted its reply through E-mail on 05.04.2023 but while passing the order under Section 148A(d) respondent-department has not dealt with the contention of petitioner and therefore also the order passed under Section 148A(d) of the Act of 1961 is bad in law. The action on the part of respondent-department is violative to the dictum of Hon’ble Supreme Court in the case of Union of India vs. Ashish Agarwal reported in (2023) 1 SCC 617; (2022) 444 ITR 1 SC as the Hon’ble Supreme Court has clearly observed that along with notice under Section 148A(b) information and relevant material relied upon by the Revenue has to be supplied to the assessee to enable him to submit reply but that was not 3 followed and therefore there is violation of principle of natural justice. He contended that apart from the aforementioned ground, petitioner has also raised other grounds in the petition that the notice issued to petitioner is barred by limitation. 3. Learned counsel for respondents though opposes the submission of learned counsel for petitioner however he submits that as per his oral instructions received from the department, alongwith the notice under Section 148A(b) of the Act of 1961 information and relevant material relied upon by the Revenue was not supplied to him. 4. I have heard learned counsel for the parties and also perused the record. 5. The main contention of petitioner is that the order under Section 148A(d) of the Act of 1961 is passed without providing proper opportunity of hearing to petitioner as the respondent has not supplied information and material which form basis and relied upon by the Revenue, this submission is not opposed by the counsel for respondent-department. The Central Board of Direct Taxes (CBDT) has issued guidelines/ instructions dated 01.08.2022 in this regard, relevant portion of which reads as under: “enclose copy of all the relevant information” * available on which reliance is being placed, along with supporting documents (if any). In the cases where information is received from the Investigation Wing or any other law enforcement agency, details of letter, brief summary of information along with relevant portion of such report and details of relied upon documents may be enclosed. Such a portion as does not bear reference to the assessee concerned may be appropriately redacted. Details of enquiry conducted, if any, be shared if reliance is being placed by the AO on it. Judicial order (ie. case laws) on which reliance is being placed, if any.” 4 6. Hon’ble Supreme Court in the case of Ashish Agrawal (supra), has further observed with regard to procedure to be followed by the respondent-department for issuance of notice under Section 148A(b), relevant portion(s) of the said judgment is reproduced 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 148A of the IT Act as substituted by the Finance Act, 2021 and treated to be showcause notices in terms of section 148A(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 148A(a) be dispensed with as a onetime measure vis àvis 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; 25.3 The assessing officers shall thereafter pass an order in terms of section 148A(d) after following the due procedure as required under section 148A(b) in respect of each of the concerned assessees; 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 and; 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. x x x x 27. x x x x 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 W.T. No. 524/2021 and other allied tax 5 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 148A of the IT Act as substituted by the Finance Act, 2021 and construed or treated to be showcause 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 showcause notices within two weeks thereafter; 28.2 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 onetime measure vis àvis 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. 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 concerned Assessing Officers to hold any enquiry, if required; 28.4 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); 28.5 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.” 7. Considering the grounds raised in this writ petition, submission of learned counsel for the parties, particularly the submission of learned counsel for respondents admitting that the information and material has not been supplied to petitioner along with notice under Section 148A(b) and also the instruction/ guidelines issued by the CBDT dated 01.08.2022 as also the decision of Hon’ble Supreme Court in the case of Ashish Agrawal (supra) , I am inclined to allow this writ petition. 8. Accordingly this writ petition is allowed and the order dated 10.04.2023 6 passed under Section 148A(d) as also the notice dated 10.04.2023 under Section 148 of the Act of 1961 are hereby quashed. The matter is remitted back to Respondent No. 2 for passing the orders afresh on the notice under Section 148A(b) of the Act after supplying all the relevant materials and information relied upon by the Revenue keeping in mind the observation made by Hon’ble Supreme Court in Ashish Agrawal (supra). 9. Writ petition is disposed of with above observation and direction. Sd/- (Parth Prateem Sahu) Judge /pāwān "