Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2022 Supreme(SC) 1460

SUPREME COURT OF INDIA
M.R. Shah, B.V. Nagarathna, JJ.
Union of India & Ors. – Appellants
Versus
Devoy Benara – Respondent
Petition for Special Leave to Appeal (C) No. 7321 of 2022 (Arising out of impugned final judgment and order dated 30-09-2021 in WT No. 624 of 2021 passed by the High Court of Judicature at Allahabad)
Decided On : 06-05-2022

Advocates appeared:
Mr. Durga Dutt, Advocate, Mr. B.K. Satija, Advocate, Mr. Santosh Kr., Advocate, Mr. Shashank Bajpai, Advocate, Mr. Manish Pushkarna, Advocate, Ms. Alka Agarwal, Advocate, Ms. Gargi Khanna, Advocate, Mr. Gopal Chandra Mishra, Advocate, Mr. Praneet Pranav, Advocate, Mr. Raj Bahadur Yadav, Advocate, For the Appellant.

The court's decision emphasized the applicability of section 148A of the IT Act as substituted by the Finance Act, 2021 to notices issued under unamended section 148 of the IT Act, and the dispensation of the requirement of conducting any enquiry with the prior approval of specified authority as a one-time measure.

Headnote:
IT Act - Section 148A - [10. 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 show-cause 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 assessees can reply to the show-cause notices within two weeks thereafter; (ii) 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 one-time measure vis-a-vis 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. 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; (iii) 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); (iv) 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. 11. The present order shall be applicable PAN INDIA and all judgments and orders passed by different High Courts on the issue and under which similar notices which were issued after 01.04.2021 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 present order shall also govern the pending writ petitions, pending before various High Courts in which similar notices under Section 148 of the Act issued after 01.04.2021 are under challenge. 12. The impugned common judgments and orders 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.
Fact of the Case:

The court modified and substituted 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 appeals/petitions.
Finding of the Court:

The present Appeals are ALLOWED IN PART, and 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 appeals/petitions are modified and substituted.
Issues: The issue revolved around the notices issued to the respective assessees under unamended section 148 of the IT Act and the applicability of the Finance Act, 2021 to these notices.
Ratio Decidendi: The court held that the notices issued under unamended section 148 of the IT Act shall be deemed to have been issued under section 148A of the IT Act as substituted by the Finance Act, 2021. It also dispensed with the requirement of conducting any enquiry with the prior approval of specified authority as a one-time measure and allowed the assessing officers to pass orders in terms of section 148A(d) in respect of each of the concerned assessees.
Final Decision: The present order shall be applicable PAN INDIA, and all judgments and orders passed by different High Courts on the issue shall stand modified to the extent mentioned in the judgment.

ORDER

1. In view of our judgment dated 04.05.2022 passed in Civil Appeal No.3005/2022 and other allied appeals, more particularly paras 10-12 of the said judgment, as such no further orders are required to be passed except disposing of all the Special Leave Petitions, operative order reads as under: -

"10. 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 appeals/petitions, is/are hereby modified and substituted as under: -

(i) 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 show-cause 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 show-cause notices within two weeks thereafter;

(ii) 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 one-time measure vis-a-vis 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.

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;

(iii) 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);

(iv) 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.

11. The present order shall be applicable PAN INDIA and all judgments and orders passed by different High Courts on the issue and under which similar notices which were issued after 01.04.2021 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 present order shall also govern the pending writ petitions, pending before various High Courts in which similar notices under Section 148 of the Act issued after 01.04.2021 are under challenge.

12. The impugned common judgments and orders 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. "

2. All the Special Leave Petitions stand disposed of in terms of judgment dated 04.05.2022 passed by this Court in Civil Appeal No. 3005/2022 and other allied appeals.

3. Pending application(s), if any, shall stand disposed of.

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