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2024 Supreme(Raj) 32
IN THE HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR
ASHUTOSH KUMAR, ARUN BHANSALI, JJ.
Bijendra Singh, S/o. Pohap Singh - Petitioner
Versus
Principal Chief Commissioner of Income Tax, Jaipur, Income-Tax Department and Anr. - Respondents
D.B. Civil Writ Petition No. 6852 Of 2022
Decided On : 04-01-2024
For the Petitioner: Mr. Priyesh Kasliwal & Mr. Rahul Pandya.
For the Respondents: Mr. Anuroop Singhi with Mr. N.S. Bhati and Mr. Aditya Khandelwal.
IMPORTANT POINT
The main legal point established in the judgment is the requirement of compliance with the provisions of Section 148A(b) of the Income Tax Act and the limitation under Section 149(1)(a) for the issuance of notices and orders under the Act.
Headnote:
Income Tax Act - Pre-assessment Notice - Section 148A(b), Section 148A(d), Section 148 - [148A(b), 148A(d), 148]
Fact of the Case:
The petitioner filed a writ petition aggrieved by a pre-assessment notice, an order passed under Section 148A(d) of the Income Tax Act, and a notice issued under Section 148 of the Act. The petitioner argued that the notice issued was contrary to the provisions of Section 148A(b) and was barred by limitation under Section 149(1)(a) of the Act. The petitioner also contended that the notice was not served on him and that the entire proceedings initiated by the respondents should be quashed and set aside.
Finding of the Court:
The court found that the notice issued to the petitioner did not comply with the requirement of Section 148A(b) of the Act in terms of the time granted for responding. The court also held that the notice was barred by limitation under Section 149(1)(a) as the amount involved was less than Rs.50,00,000/- and the notice was issued beyond three years for the relevant assessment year. The court criticized the mechanical exercise of powers by the respondents in passing the order under Section 148A(d) of the Act without ensuring whether the notice sent to the petitioner had been served.
Issues: The issues involved in the case included the compliance with the provisions of Section 148A(b) of the Act, the limitation under Section 149(1)(a), and the procedural irregularities in the initiation of proceedings by the respondents.
Ratio Decidendi: The court held that the notice issued to the petitioner did not comply with the requirement of Section 148A(b) of the Act and was barred by limitation under Section 149(1)(a) for the relevant assessment year. The court also criticized the mechanical exercise of powers by the respondents in passing the order under Section 148A(d) of the Act without ensuring whether the notice sent to the petitioner had been served.
Final Decision: The writ petition filed by the petitioner was allowed, and the notice issued under Section 148A(b) of the Act, the order passed under Section 148A(d) of the Act, and the notice issued under Section 148 of the Act were quashed and set aside.
ORDER :
1. This writ petition has been filed by the petitioner, aggrieved of pre-reassessment notice dated 16.03.2022 (Annex.1) issued under Section 148A (b) of the Income Tax Act, 1961 (‘the Act’), the order dated 27.03.2022 (Annex.4) passed under Section 148A (d) of the Act and the notice dated 27.03.2022 (Annex.5) issued under Section 148 of the Act.
2. It is, inter-alia, indicated that the petitioner was issued notice (Annex.1) dated 16.03.2022 under Section 148A (b) of the Act calling upon him to file his response by 23.03.2022, which notice is contrary to the requirement of provisions of Section 148A (b) of the Act, which requires a notice of not less than seven days. Submissions have been made that the days 16.03.2022 and 23.03.2022 have to be excluded, and as the time left is less than seven days, notice issued is bad.
3. Further submissions have been made that the notice issued is barred by limitation, as provided under Section 149(1)(a) of the Act, inasmuch as the amount involved is less than Rs.50,00,000/- and for the Assessment Year 2015-16, these notices have been issued after lapse of three years and as such the notice being without jurisdiction, deserves to be quashed and set aside.
4. Submissions have also been made that from the material produced by the respondents, it is apparent that the notice, which was issued to the petitioner, was not served on the petitioner and was received back by the Department on 28.03.2022, however, the order under Section 148A(d) of the Act was passed on 27.03.2022 itself, which clearly indicates the manner in which the respondents have proceeded and, therefore, the entire proceedings initiated by the respondents, deserve to be quashed and set aside.
5. Learned counsel appearing for the Department made submissions that as the petitioner didn’t file any response to the notice, the respondents were constrained to pass the order impugned. Further submissions have been made that insofar as the challenge laid to the jurisdiction in terms of Section 149(1)(a) of the Act is concerned, the said aspect could only be determined by the authority concerned and merely on account of the indications made by the petitioner, the said plea cannot be accepted.
6. However, it was fairly submitted that the notice as issued, does not comply with the requirement of Section 148A(b) of the Act, insofar as time granted for responding is concerned. It was prayed that the matter may be remanded back to the authority to provide opportunity to the petitioner as per law and thereafter pass a fresh order.
7. We have considered the submissions made by counsel for the parties and have perused the material available on record.
8. The notice under Section 148A(b) of the Act was issued to the petitioner pertaining to Assessment Year 2015-16, with the allegations that the petitioner has deposited in cash amount of Rs.42,15,000/- in his saving bank account with Bank of Baroda and again it has been indicated that he has deposited cash aggregate Rs.41,65,000/- in the bank account maintained with Bank of Baroda. The notice also invoked the provisions of Section 149(1)(b) along with explanation, which provides extended period of limitation up to ten years, in case where the amount involved is more than Rs.50,00,000/-.
9. The notice is dated 16.03.2022 and the petitioner has been called upon to file his response on or before 23.03.2022. It appears that the notice was never served on the petitioner, as in reply to the petition, the respondents have produced the envelope, by which the notice was sent to the petitioner and was returned back ‘undelivered’ to the respondent Department, wherein the same has been received in the office on 28.03.2022. The postal receipt pertaining to sending of the notice indicates the date of 17.03.2022.
10. Section 148A(b) of the Act requires providing opportunity of being heard to the assessee by serving upon him/her notice to show cause within such time, as may be specified in the notice being ‘n
