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2022 Supreme(Ker) 805
IN THE HIGH COURT OF KERALA AT ERNAKULAM
GOPINATH P., J.
Lead Advertising – Appellant
Versus
Union Of India – Appellant
WP(C) no. 30620 of 2021
Decided on : 20-10-2022
Advocate Appeared:
For the Appellant : RAVI KRISHNAN, PARVATHY GIRI
For the Respondent: PREMSANKAR R CHRISTOPHER ABRAHAM, adv
Point of Law: Service of Notice Generally - Section 282 of the Income Tax Act reads as service of a notice or summon or requisition or order or any other communication under this Act (hereafter in this section referred to as "communication") may be made by delivering or transmitting a copy thereof, to the person therein named.
Headnote:
Income Tax Act, 1961 - Section 148, 142(1), 282 - Finance Act,2021 - Violation of Principles of Natural Justice - Income Tax - Petitioner has a case that proceedings are in violation of principles of natural justice - Petitioner received notice - This was followed by Ext.P.3 notice calling for information from petitioner for finalizing assessment - Thereafter petitioner received notice to register itself on e-filing portal of Income Tax Department to enable issuance of notices etc. by electronic means - Statutory provisions can be challenged only on three specific grounds - Violation of fundamental rights; lack of legislative competence and on ground of violation of basic structure doctrine – Para 6.
Finding of the Court :
Learned counsel appearing for petitioner states that notice sent by e-mail and notice stated to have been uploaded in portal of petitioner were not received by petitioner - It is submitted that e-mail address to which notice was sent was erstwhile e-mail address of petitioner which was no longer in use and petitioner had updated new e-mail address in e-filing portal of Income Tax Department - It is submitted that taking into consideration aforesaid facts, notice received by petitioner by post alone could be taken into consideration and since same was received petitioner is clearly governed by declaration contained in Ashish Agarwal and therefore assessment can be completed only by following procedure under amended provisions of Act - There is absolutely no ground made out to hold that proceedings are vitiated on account of violation of principles of natural justice - Petitioner has not been denied any opportunity to take part in proceedings - No grounds have been made out to strike down provisions which introduced National Faceless Assessment Scheme - Statutory provisions can be challenged only on three specific grounds - (i) violation of fundamental rights; (ii) lack of legislative competence and (iii) on ground of violation of basic structure doctrine - Possible fourth ground is of “manifest arbitrariness” developed in Shayara Bano & Ors v. Union of India & Ors - None of these grounds have been made out.
Result: Petition dismissed.
JUDGMENT :
The petitioner has approached this Court being aggrieved by the fact that proceedings have been initiated against the petitioner under Section 148 of the Income Tax Act, 1961 (as it stood before 01.04.2021), despite the fact that, notice under Section 148 of the Income Tax Act was received by the petitioner only after 01.04.2021. The petitioner has a case that the proceedings are in violation of the principles of natural justice. It is also contended that the ‘National Faceless Assessment Scheme’ is ‘ultra vires the Constitution and hence void’.
2. The petitioner, a partnership firm, is an asessee under the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’). It received Ext.P.2 notice dated 30.3.2021 issued under Section 148 of the Act. The notice pertains to the assessment year 2015-16. According to the petitioner, the said notice was received by the petitioner only on 15.4.2021. This was followed by Ext.P.3 notice issued on 14.9.2021 under Section 142(1) of the Act calling for information from the petitioner for finalizing the assessment. The petitioner responded to this notice by submitting Ext.P.4 reply. A further notice (Ext.P.5) was issued under the same provision on 23.11.2021. Thereafter the petitioner received Ext.P.6 notice calling upon the petitioner to register itself on the e-filing portal of the Income Tax Department to enable issuance of notices etc. by electronic means. The petitioner has therefore approached this Court raising the contentions already noticed above and impugning the Ext.P.2, P.3, P.5 and P.6 notices issued to the petitioner.
3. Mr.Ravikrishnan, the learned counsel appearing for the petitioner submits that going by the judgment of the Supreme Court in Union of India & Ors. v. Ashish Agarwal, 2022 SCC OnLine SC 543 (judgment dated 04-05-2022 in Civil Appeal No. 3005/2022 and Connected Cases), the proceedings could have been continued only under the amended provisions of the Income Tax Act, as brought into force with effect from 01.04.2021. It is submitted that if the amended provisions were to apply, the petitioner would have to be issued the show cause notice prior to initiation of proceeding under Section 148 of the Income Tax Act. It is submitted that the amendments brought into force with effect from 01-04-2021 are only curative and therefore there must be deemed to have retrospective effect. He relies on Craies on Statute Law[S.G.G. EDGAR, CRAIES ON STATUTE LAW 395 (6th ed. 1963).] , to contend that statutes passed to protect the public from some ‘evil’ or ‘abuse’ should be held retrospective. He also placed reliance on the article “The Supreme Court and the Constitutionality of Retrospective Legislation”[ Charles B. Hochman, The Supreme Court and the Constitutionality of Retrospective Legislation, 73 HARV. LAW REV. 692, 704 -705 (1959 -1960).], to contend that since the amendments brought in are curative, it should be held retrospective. It is submitted that the Supreme Court in Ashish Agarwal (supra) has clarified that in respect of all notices issued after 01.04.2021, the amended provisions will apply and therefore, the petitioner is entitled to a declaration that the proceedings shall be continued against the petitioner only under the amended provisions of the Act. The learned counsel also places reliance on the judgment of the Supreme Court in Allied Motors (Pvt.)Ltd. v. Commissioner of Income Tax, Delhi, AIR 1997 SC 1361 to contend that when the amendment is curative, it has to apply retrospectively and will apply to all pending matters, notwithstanding the fact that the amendment was brought into force only from a particular date.
4. Mr.Christopher Abraham, the learned Standing Counsel appearing for the respondent department contends that the Supreme Court in Ashish Agarwal (supra) has clearly held that the procedure contemplated by the amended provisions of the Act would apply only in respect of notices issued after 01.04.2021 and not to notices issued before that dat
