VESSER ENGINEERING SERVICES PRIVATE LIMITED COMPANY V. UNION OF INDIA

WPT/201/2022

AI Insights

The case involves Vesser Engineering Services Private Limited, which challenged several notices and orders issued by the Income Tax authorities under various sections of the Income Tax Act, 1961. The petitioner argued that the assessing authority did not provide sufficient time to respond to the notices, as mandated by Section 148A(b) of the Act. The High Court referenced a similar case, Ester Industries Ltd. Vs. Asstt. Commissioner of Income Tax, where it was held that denying adequate time violated the provisions of Section 148A(b). The court set aside the impugned order and notice, directing the petitioner to submit its clarification within a specified time and the authorities to consider the response before proceeding further.

• Counselvise Citation: [2022] 140 COUNSELVISE.COM (IT) 724411 (HC-CHHATTISGARH)
• Appeal Type: Others
• Pronouncement Date: 02-09-2022
• Assessment Year: misc
• Other Referred Cases: Ester Industries Ltd. Vs. Asstt. Commissioner of Income Tax & another, Divya Capital One Private Limited vs. Assistant Commissioner of Income Tax Circle 7(1) Delhi & Anr., Gian Castings Private Limited Vs. Central Board of Direct Taxes & others
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: NAUSHINA ALI; TOPILAL BARETH
• Assessee Lawyers: SIDDHARTH DUBEY
• Keywords: Assessment; Income Tax; Legal Proceedings; Notice
• Section: 148; 142(1); 148A(b); 148A(d); 148A(a)

Judgement Text

"Page 1 of 5 NAFR HIGH COURT OF CHHATTISGARH, BILASPUR WPT No. 201 of 2022 Vesser Engineering Services Private Limited a company under the companies act through its Director Mr. Baljeet Singh Dhami, S/o Late Shri Gyan Singh Dhami, Aged About 62 Years, R/o Street No. 1/B, Plot No. 417, House No. 1, Smriti Nagar, Bhilai (C.G.) having its office at 108, New Civic Centre, Bhilai, District- Durg (C.G.) 491006, India. --- Petitioner Versus 1. Union of India Through Secretary, Ministry of Finance, Department of Revenue, North Block, New Delhi - 110001, India. 2. Assistant Commissioner of Income Tax, Circle 1 (1) Bhilai, Office of Assistant Commissioner of Income Tax, Circle 1(1), Bhilai, Aayakar Bhawan, Opposite Geet Talkies, New Civic Centre, Sector - 6, Bhilai, District- Durg (C.G.) 3. Chief Commissioner of Income Tax, Raipur, Office of Chief Commissioner of Income Tax, Raipur, Central Revenue Building Civil Lines, Raipur, District- Raipur (C.G.) - 492001, India. --- Respondents For Petitioner : Mr. Siddharth Dubey, Advocate. For respondents : Ms. Naushina Afrin Ali, Advocate & Mr. Topilal Bareth, Advocate. Hon'ble Shri Justice Narendra Kumar Vyas Order on Board 02/09 /2022 1. The petitioner has filed the instant petition assailing notice dated 17.03.2022 (Annexure P/1) issued under Section 148A (a) of the Income Tax Act, 1961 (for short “the Act, 1961”), notice dated 21.03.2022 (Annexure P/2) issued under clause(b) of Section 148A of the Act, 1961, order & notice dated 30.03.2022 (Annexure P/4) passed under Section 148A(d) & Section 148 of the Tax Act, 1961 respectively & notice dated 09.05.2022 (Annexure P/5) issued under Section 142 (1) of the Act, 1961. 2. Learned counsel for the petitioner would submit that the petitioner appeared before assessing authority on 25.03.2022 (Annexure P/3) in pursuance of the notice dated 21.03.2022 (received through Page 2 of 5 email on 22.03.2022) and sought one month's time to submit clarification. The respondent authority has not given sufficient time as per Section 148A(b) of the Act, 1961 whereas this Section provides that the assessing authority can grant time from 7 to 30 days. He would further submit that the assessing authority without considering the request made by the petitioner, has passed the order dated 30.03.2022 (Annexure P/4) under clause (d) of Section 148A of the Act, 1961 and thereafter notice dated 30.03.2022 under Section 148 of the Act, 1961 has been issued. 3. He would further submit that an identical issue has been decided by Hon'ble High Court of Delhi in Ester Industries Ltd. Vs. Asstt. Commissioner of Income Tax & another1, wherein it has been held at paragraph 10 to 13 as under:- “10. By denying an opportunity of adequate time to the petitioner, the mandate of Section 148A(b) has been violated. This Court in the Divya Capital One Private Limited (earlier known as Divya Portfolio Private Limited) vs. Assistant Commissioner of Income Tax Circle 7(1) Delhi & Anr. in W.P.(C) 7406/2022 has observed as under:- “13.It is pertinent to mention that Section 148A(b) permits the Assessing Officer to suo moto provide up to thirty days period to an assessee to respond to the show cause notice issued under Section 148A(b), which period may in fact be further extended upon an application made by the Assessee in this behalf, and such period given to the assessee is excluded in computing the period of limitation for issuance of notice under Section 148 of the Act in terms of the third proviso to Section 149 of the Act.” 11. Consequently, the impugned order dated 31stMarch, 2022 issued under Section 148A(d) of the Act and the notice dated 31stMarch, 2022 issued under Section 148 of the Act are set aside. 12. The petitioner is directed to file its reply within a period of 02 (two) weeks. 13. The respondent is directed to open the e-portal to enable the petitioner to upload its reply. In the event, the Assessing Officer wants clarification or would like the petitioner’s response to any specific information received by the revenue, it shall be open to give a supplementary notice. The respondent is directed to 1 2022 SCC OnLine Del 1827 Page 3 of 5 pass a reasoned order within 08 (eight) weeks after duly considering the reply filed by the respondent. This Court clarifies that it has not commented on the merits of the controversy. The rights and contentions of all the parties are left open.” 4. Learned counsel for the respondent/revenue would submit the petitioner cannot claim as a matter of right to get 30 days time as it is discretionary power of authority to grant such period. She would further submit that as per provisions of Section 148 of the Act, 1961, last date for issuance of notice was 31.03.2022, therefore, assessing authority cannot give time beyond 7 days, as it is discretionary power granted to the assessing authority, which has rightly been given to the petitioner. She would refer judgment rendered by Hon'ble High Court of Punjab and Haryana at Chandigarh in Gian Castings Private Limited Vs. Central Board of Direct Taxes & others2, wherein Hon'ble High Court has dismissed the petition holding that writ petition is not maintainable initiating proceeding under Section 148 of the Income Tax Act as at the intermediate stage when the proceedings initiated are yet to be concluded by a statutory authority. Against that a Special Leave Petition to Appeal (C) No. 10762/2022 was preferred before Hon'ble the Supreme Court and the same has been dismissed by Hon'ble the Supreme Court vide order dated 17.06.2022. She would further submit that this petition is not maintainable. 5. I have heard learned counsel for the parties and perused Section 148A of the Act, 1961. For better understanding, it is expedient for this Court to extract Section 148 of the Act, which is as under:- “148A. Conducting inquiry, providing opportunity before issue of notice under section 148- The Assessing Officer shall, before issuing any notice under section 148,— (a) conduct any enquiry, if required, with the prior approval of specified authority, with respect to the information which suggests that the income chargeable to tax has escaped assessment; (b) provide an opportunity of being heard to the assessee, by serving upon him a notice to show cause within such time, as may be specified in the notice, being not less than seven days and but not exceeding thirty days from the date on which such notice is 2 CWP No. 9142 of 2022 (Decided on 02.06.2022) Page 4 of 5 issued, or such time, as may be extended by him on the basis of an application in this behalf, as to why a notice under section 148 should not be issued on the basis of information which suggests that income chargeable to tax has escaped assessment in his case for the relevant assessment year and results of enquiry conducted, if any, as per clause (a); (c) consider the reply of assessee furnished, if any, in response to the show-cause notice referred to in clause (b); (d) decide, on the basis of material available on record including reply of the assessee, whether or not it is a fit case to issue a notice under section 148, by passing an order, with the prior approval of specified authority, within one month from the end of the month in which the reply referred to in clause (c) is received by him, or where no such reply is furnished, within one month from the end of the month in which time or extended time allowed to furnish a reply as per clause (b) expires: Provided that the provisions of this section shall not apply in a case where, — (a) a search is initiated under section 132 or books of account, other documents or any assets are requisitioned under section 132A in the case of the assessee on or after the 1st day of April, 2021; or (b) the Assessing Officer is satisfied, with the prior approval of the Principal Commissioner or Commissioner that any money, bullion, jewellery or other valuable article or thing, seized in a search under section 132 or requisitioned under section 132A, in the case of any other person on or after the 1st day of April, 2021, belongs to the assessee; or (c) the Assessing Officer is satisfied, with the prior approval of the Principal Commissioner or Commissioner that any books of account or documents, seized in a search under section 132 or requisitioned under section 132A, in case of any other person on or after the 1st day of April, 2021, pertains or pertain to, or any information contained therein, relate to, the assessee; or (d) the Assessing Officer has received any information under the scheme notified under section 135A pertaining to income chargeable to tax escaping assessment for any assessment year in the case of the assessee. Explanation. —For the purposes of this section, specified authority means the specified authority referred to in section 151.” 6. From bare perusal of the record as well as provisions of Section 148A of the Act, 1961, it is quite vivid that the legislature has given time schedule to assessing authority from 7 days to 30 days, as Page 5 of 5 such, there is no impediment on part of assessing authority to grant such time between 7 to 30 days, as the assessing authority has not considered the request of the petitioner for grant of 30 days time and also not assigned any reason why he has given the time prescribed under the Act, 1961 i.e. 7 to 30 days, considering the law laid down by Hon'ble High Court of Delhi in Ester Industries Ltd. (Supra), the impugned order dated 30.03.2022 (Annexure P/4) under clause (d) of Section 148A of the Act, 1961, is set aside. The petitioner is directed to submit clarification within 15 days from today. Till the assessing authority passed order considering the clarification of the petitioner within 15 days and passed order under clause (d) of Section 148A of the Act, 1961, the notice dated 17.03.2022 (Annexure P/1) issued under Section 148A (a) of the Income Tax Act, 1961, shall not be given effect. 7. The respondents are directed to open the e-portal to enable the petitioner to upload its reply. In the event, the assessing officer wants clarification or would like the petitioner's response to any specific information received by the revenue, it shall be open to give the supplementary notice. The respondent is directed to pass a reasoned order within eight weeks after duly considering the reply filed by the respondent. It is made clear that this Court has not commented anything on the merits of the case. The rights and contentions of all the parties are left open and shall be decided by the assessing authority in accordance with law. 8. With the above observations and direction, the instant petition stands disposed of. Sd/- (Narendra Kumar Vyas) Judge Arun "