Veena Estates P.Ltd vs Commissione Of Income Tax Mumbai ...
2023 Latest Caselaw 6947 Bom

                                                                                          903-itxa 302-02.odt

Prajakta Vartak
                      IN THE HIGH COURT OF JUDICATURE AT BOMBAY
                         ORDINARY ORIGINAL CIVIL JURISDICTION

                               INCOME TAX APPEAL NO. 302 OF 2002

            Veena Estate Pvt. Ltd.                                            ..Appellant
                        Vs.
            Commissioner of Income Tax,
            Mumbai City-IX, Mumbai                                            ..Respondent
                                                __________

            Mr. Aarti Vissanji for Appellant.
            Mr. Madhur Agrawal as Amicus Curiae.
            Mr. Ashutosh Misra with Mr. Umesh Gupta i/b. Mr. Devvrat Singh for
            Respondent.
            Mr. Suresh Kumar with Mr. Devvrat Singh, as Amicus (for Respondent).
                                           __________

                                           CORAM : G. S. KULKARNI &
                                                   JITENDRA JAIN, JJ.

DATE : JULY 13, 2023

P.C.:

1. This appeal was circulated before us on behalf of the appellant

contending that the issue in regard to the alleged defect in the notice

issued under Section 271(1)(c) of the Income-tax Act, 1961 (for short,

"the Act") would stand covered by the decision of a co-ordinate Bench of

this Court in Ventura Textiles Ltd. vs. Commissioner of Income Tax,

Mumbai City-II1.

2. We have perused the observations of the Court in such decision and

more particularly in paragraphs 20.1 and 20.2, whereby the Division 1 [2020] 117 taxmann.com 182 (Bombay)

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Bench has observed that even if a question was not raised before the

tribunal, the same can be raised before the High Court in the proceedings

under Section 260-A of the Act, when the issue is on jurisdiction. In our

opinion, there cannot be any quarrel on such proposition.

3. The question, however, would be whether an assessee can be

permitted to raise a technical plea of vagueness in the notice when the

same was never the case of the assessee before the tribunal. The assessee

never complained that the notice under Section 271(1)(c) of the Act was

never understood by it or the same was in any manner vague or defective

and had caused any prejudice to the assessee. In fact, now merely relying

on the said decision, it is for the first time being contended that this Court

should label the notice to be defective in the proceedings of this appeal

under Section 260-A of the Act, in the absence of any such plea before the

forums below. In our prima facie opinion, the appellant needs to satisfy

the Court whether the appellant can at all urge such contention in the

proceedings of a Section 260-A appeal when admittedly such question of

law is not raised in the present appeal.

4. In our opinion, in the facts of the present case, if the appellant

intends an additional question to be framed in this regard, the same

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cannot be done without the appellant crossing the barrier of the test of

specific prejudice, if any caused to it in responding to such notice issued

under Section 271(1)(c) of the Act, is satisfied.

5. The question therefore would be that when the assessee never raised

a plea that the assessee did not understand such notice issued to him and/

or acquiesced and conceded in the adjudication of such notice, without

any plea of prejudice being taken at any point of time, then in such

circumstances, can the assessee take a plea before the High Court calling

upon it to take a view that although no prejudice on such count was

earlier felt and suffered, merely because it is now technically noticed that

there was a defect in the notice by non striking of the applicable option, it

should be deemed to be presumed that a prejudice was caused to the

assessee and therefore, on such count, the penalty proceedings be

declared illegal.

6. In our opinion, although Ventura Textiles Ltd. (supra) has although

considered such issue being raised as a jurisdictional question in the

proceedings of 260-A of the Income Tax Act, however, as to what would

be the position as would be reflected from the settled principles of law

that there cannot be a plea of breach of principles of natural justice or a

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prejudice, unless the threshold test of a "factual prejudice" being caused is

satisfied, for the Court to accept such plea, is not what has been expressly

considered.

7. It was contended that the decision in Ventura Textiles Ltd. (supra)

was also considered by the Full Bench of this Court in Mohd. Farhan A.

Shaikh v. Deputy Commissioner of Income Tax, Central Circle1,

Belgaum2. We have perused the judgment of the Full Bench and more

particularly paragraphs 85 to 90 and paragraphs 181 to 186, however, the

issue which we have raised appears to have not been answered by the Full

Bench, is what we note.

8. We would accordingly hear the parties on these issues on the

adjourned date of hearing.

9.       Stand over to 27 July, 2023 at 02.30 p.m.




[JITENDRA JAIN, J.]                                    [G. S. KULKARNI, J.]




2 (2021) 125 taxmann.com 253

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                                   13 July, 2023