Case Law Details
JSVM Plywood Industries Ltd Vs Union of India (Gauhati High Court)
Prima facie opinion of the Court, for the purpose of interim order, is that by virtue of notifications dated 27.02.2021 and 31.03.2021 issued by the Central Board of Direct Taxes, as referred herein before, though extends the period of limitation in respect of issuance of notice under section 148 of the Income Tax, Act, but the said notification is not found to empower the Central Board of Direct Taxes to put into oblivion the provision of section 148A of the Income Tax Act, which was inserted by virtue of the Finance Act, 2021 and was notified w.e.f. 01.04.2021, as if the said section 148A would not apply till limitation prescribed under section 148 does not lapse or expire.
The implementation of the effective date of section 148A which is notified to be 01.04.2021, was certainly not extended by virtue of notification dated 27.02.2021 and 31.03.2021 and therefore, the Court finds that the decision rendered by the Allahabad High Court as well as Rajasthan High Court to have more persuasive value in respect of the issue raised by the petitioner with all respect to the decision rendered by the Chhattisgarh High Court. The opinion expressed herein before is only for the purpose of granting interim relief to the petitioner and is not a conclusive opinion of the Court on the merit of the writ petition.
Accordingly, the Court is inclined to stay the operation of the impugned notice issued under section 148 of the Income Tax Act.
FULL TEXT OF THE JUDGMENT/ORDER OF GAUHATI HIGH COURT
Heard Ms. N. Havelia, learned counsel for the petitioner and Mr. S. Sharma, learned Senior Standing counsel for the respondents.
2. By filing this writ petition under Article 226 of the Constitution of India, the petitioner has assailed the impugned notice dated 30.06.2021 issued under section 148 of the Income Tax, 1961.
3. It is submitted by the learned counsel for the petitioner that by passing of the Finance Act, 2021 a new section being section 148A has been introduced in the Income Tax Act, 1961 w.e.f. 01.04.2021. The said provision reads as follows:
“148A. 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, with the prior approval of specified authority, 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 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.
Explanation.- For the purposes of this section, specified authority means the specified authority referred to in section 151.”
4. Referring to the said newly inserted provision of section 148A of the Income Tax Act, it is projected that the Assistant Commissioner of Income Tax (respondent no.2) had given a go-bye to the said mandatory provisions which requires the said authority to conduct an inquiry, if required, with prior approval of the competent authority and also to provide an opportunity of being heard to the assesses by issuing a notice to show-cause as to why a notice under section 148 should not be issued.
5. In support of her submission, the learned counsel for the petitioner has placed reliance on the cases of (i) Ashok Kr. Agarwal Vs. Union of India and others, MANU/ UP/2307/2021 (DB) decided by the Allahabad High Court on 30.09.2021, (ii) Bpip Infra Pvt. Ltd. Vs. IT officer, S.B. Civil Writ Petition No.13297/2021 and other connected cases decided by a common judgment and order dated 25.11.2021 by the Rajasthan High Court, Jaipur Bench.
6. Per contra, the learned Departmental Senior counsel has referred to two notifications dated 27.02.2021 and 31.03.2021 issued by the Ministry of Finance, Department of Revenue, Central Board of Direct Taxes by virtue of which in exercise of power conferred by sub-section (1) of section 3 of the Taxation and Other laws (Relaxation and Amendment of Certain Provisions) Act, 2020. By the notification dated 27.02.2021, time-limit for various provisions, but without interfering with the time-limit provided in section 148 of the Income Tax Act, were extended. Accordingly, the said notification is of no relevance in the present case. By notification dated 31.03.2021, the time limit prescribed for compliance of any action including issuance of notice under section 148 was extended till 30.06.2021. Accordingly, it is submitted that the notice under section 148 of the Income Tax Act, which is impugned in this case was issued under the earlier regime of section 148 i.e. as it stood prior to 01.04.2021, was saved and was lawful and sustainable on facts and in law.
7. It is submitted that by virtue of delegated legislation, the notifications issued by the Central Board of Direct Taxes, are binding on all in view of the provisions of section 119 of the Income Tax Act. It is further submitted that the period of limitation has been extended by the Supreme Court of India by virtue of various orders passed in Suo-Moto Writ Petition no. 3/2020 as well as various miscellaneous/ interlocutory proceedings therein. Accordingly, it is submitted that despite the insertion of section 148A of the Income Tax Act w.e.f. 01.04.2021, the respondent no.2 was having authority and competence to issue impugned notice dated 30.06.2021 (Annexure-XV), under section 148 of the Income Tax Act.
8. In support of his submission, the learned Senior Standing counsel for the respondents has placed reliance on the judgment dated 23.08.2021 by the High Court of Chhattisgarh in WP(T) 149/2021- Palak Khatuja Vs. Union of India and others and other connected cases. By the said judgment, the High Court of Chhattisgarh had accepted the proposition made by the Revenue side that the effect of the notification by the Central Board of Direct Taxes and taking into account the pandemic and lockdown prevailing in the country that the power to issue notice under section 148 of the Income Tax Act which existed prior to amendment was saved and a result it was held that notice issued on 30.06.2021 in that case would also be saved.
9. Let a notice returnable on 24.01.2022 be issued. Requisite additional copies of the writ petition be served on the learned State and Departmental counsel.
10. Heard both sides on the prayer for interim relief.
11. Having considered the materials available on record as well as the decisions cited at the Bar, the prima facie opinion of the Court, for the purpose of interim order, is that by virtue of notifications dated 27.02.2021 and 31.03.2021 issued by the Central Board of Direct Taxes, as referred herein before, though extends the period of limitation in respect of issuance of notice under section 148 of the Income Tax, Act, but the said notification is not found to empower the Central Board of Direct Taxes to put into oblivion the provision of section 148A of the Income Tax Act, which was inserted by virtue of the Finance Act, 2021 and was notified w.e.f. 01.04.2021, as if the said section 148A would not apply till limitation prescribed under section 148 does not lapse or expire.
12. The implementation of the effective date of section 148A which is notified to be 01.04.2021, was certainly not extended by virtue of notification dated 27.02.2021 and 31.03.2021 and therefore, the Court finds that the decision rendered by the Allahabad High Court as well as Rajasthan High Court to have more persuasive value in respect of the issue raised by the petitioner with all respect to the decision rendered by the Chhattisgarh High Court. The opinion expressed herein before is only for the purpose of granting interim relief to the petitioner and is not a conclusive opinion of the Court on the merit of the writ petition.
13. Accordingly, the Court is inclined to stay the operation of the impugned notice issued under section 148 of the Income Tax Act bearing DIN & Notice no. ITBA/ AST/ S/ 148/202122/1033881564(1) issued by the ACIT/DCIT CIR1 DIB dated 30.06.2021 (Annexure XV). The petitioner shall produce a certified copy of this order before the said authority. Moreover, the Senior Standing counsel for the respondents shall also send a downloaded copy of this order to the concerned respondents.
14. List the matter on 24.01.2022.
15. An affidavit-in-opposition may be filed at least 2(two) days prior to the next date of listing.
