Calcutta High Court
Lakshman Prasad Agarwal vs Union Of India & Ors on 20 May, 2022
IN THE HIGH COURT AT CALCUTTA
CONSTITUTIONAL WRIT JURISDICTION
ORIGINAL SIDE
Present :- Hon'ble Mr. Justice Md. Nizamuddin
WPO 2006 of 2022
Lakshman Prasad Agarwal
Vs
Union of India & Ors.
For the Petitioner :- Mr. Pranit Bag, Adv.
Mr. Anujit Mookherji, Adv.
Mr. Piyal Gupta, Adv.
For the Respondent :- Mr. Om Narayan Rai, Adv.
Judgment On :- 20.05.2022
MD. NIZAMUDDIN, J.
The Court: Heard learned Counsel appearing for the parties.
In this Writ Petition petitioner has challenged the impugned notice dated
26th March, 2021 under Section 148 and final assessment order dated 31st
March, 2022, under Section 147/143 (3) of the Income Tax Act, 1961, relating
to assessment year 2017-18 raising a demand of Rs. 8,57,19,806/-.
Peculiar facts involved in this case as appears from record annexed to
the Writ Petitioner by the petitioner itself is that on 26th October, 2021
petitioner received the impugned notice under Section 148 of the Act by which
it was asked to file a return in the prescribed form for the relevant assessment
year as appears at Page 38 of the Writ Petition and in response to the said
notice petitioner filed a return on 9th October, 2021. Thereafter, as appears
from Page 45 of the Writ Petition that on 22nd October, 2021 petitioner's
authorised representative one Murarka & Associates asked the Assessing
Officer for furnishing of the recorded reason for issuance of the aforesaid
notice. It appears at Page 48 of the Writ Petition that the respondent Assessing
Officer concerned furnished recorded reason to the petitioner on 26th October,
2021 and after finding no response or any objection from the petitioner against
the impugned notice under Section 148 of the Act, the Assessing Officer
concerned, having no option, proceeded with the impugned reassessment
proceeding by issuing notice under Section 142 (1) of the Act, on 6th December,
2021, asking the petitioner to furnish the relevant accounts and documents as
referred in the said notice, within 13th December, 2021, as appears at Page 51
of the Writ Petition. In compliance of the aforesaid notice dated 6th December,
2021, under Section 142 (1) of the Act, the said authorised representative
submitted relevant documents on 13th December, 2021, with specific request to
the Assessing Officer that "Considering the same, we request you to complete
the proceeding initiated u/s 147 of the Income Tax Act, 1961 without drawing
any adverse inference" as appears from Annexure- P-7 at Page 53 of the Writ
Petition. It appears from the aforesaid compliance letter dated 13th December,
2021, written by the said authorised representative that nowhere it has
challenged the legality and validity of the impugned notice under Section 148
or initiation of the impugned proceeding under Section 147 of the Income Tax
Act, 1961, and petitioner itself had chosen not to object to the aforesaid
impugned notice and proceeding on or after receiving the aforesaid notice
under Section 148 of the Act and the recorded reason rather petitioner himself
had requested the Assessing Officer to complete the impugned reassessment
proceedings under Section 147 of the Act.
It appears from record that after compliance of the aforesaid impugned
notice under Section 142 (1) of the Income Tax Act, 1961 dated 6th December,
2021, by the petitioner, another notice under Section 142 (1) of the Act was
issued on 14th December, 2021, asking the petitioner to furnish relevant
accounts and documents referred therein on or before 20th December, 2021, as
appears from Page 54 of the Writ Petition. Petitioner complied with the
aforesaid second notice also under Section 142 (1) of the Act dated 14th
December, 2021 through the same authorised representative by its letter dated
20th December, 2021 as appears at Page 60 of the Writ Petition and on perusal
of the same I find that even on or before 22nd December, 2021 nowhere
petitioner had objected to the issuance of the aforesaid impugned notice under
Section 148 of the Act or initiation of the impugned proceeding under Section
147 of the Act or prayed for dropping of the said proceeding.
It appears from Page 64 of the Writ Petition that after compliance of the
second notice under Section 142 (1) of the Act, assessee petitioner changed his
authorised representative and one Anujit Mookherji, on 14th January, 2022,
wrote a letter to the Assessing Officer requesting him to provide a copy of the
statement of one Rajal Ashar, recorded under oath on 7th July, 2017, as
referred in the recorded reason for reopening of the assessment. It appears
from Page 66 of the Writ Petition that the said new authorised representative
wrote a letter to the Assessing Officer on February 11, 2022 for the first time
after issuance and compliance of the aforesaid two notices on different dates
under Section 142 (1) of the Act without making objection to the aforesaid
notice under Section 148 of the Act, dated 26th March, 2021, taking a contrary
stand to petitioner's own letter dated 13th December, 2021 where petitioner
himself had requested the Assessing Officer to complete the impugned
reassessment proceedings under Section 147 of the Act and by actively
participating in the impugned reassessment proceedings from time to time. It
appears from Page 72 of the Writ Petition that on 14th February, 2022 another
notice was issued under Section 142 (1) of the Act asking the petitioner to
furnish the relevant accounts and documents on or before 17th February, 2022
and a show-cause notice was issued on 12th March, 2022 to the petitioner
asking him to give reply to the same on or before 16th March, 2022. It appears
from Page 79 of the Writ Petition that now the earlier authorised representative
Murarka & Associates filed its reply on 27th March, 2022, against the aforesaid
show-cause notice dated 12th March, 2022 giving a detailed reply to the
aforesaid show-cause notice and specifically requesting therein that "Thus, the
proceeding u/s 148 must be completed without any adverse remarks on the
assessee and no addition should be made" even without any request to drop
the impugned proceeding. On perusal of the aforesaid letter of the said earlier
authorised representative, dated 27th March, 2022, nowhere I find that any
legality or validity of the impugned notice under Section 148 or jurisdiction to
initiate proceedings under Section 147 of the Act has been challenged by the
petitioner rather petitioner himself has requested the Assessing Officer to
complete the impugned reassessment proceeding on the basis of the aforesaid
notice under Section 148 of the Act.
It appears from Page 105 of the Writ Petition that petitioner's earlier
authorised representative Murarka & Associates wrote another
letter/representation on 28th March, 2022 against the aforesaid show-cause
notice dated 12th March, 2022, and on perusal of the same it appears that the
petitioner himself again requested the Assessing Officer to complete the
impugned reassessment proceedings on the basis of impugned notice under
Section 148 of the Act by stating that "Thus, the proceeding u/s 148 must be
completed without any adverse remarks on the assessee and no addition
should be made". It appears from Pages 144 and 145 of the Writ Petition that
final assessment order under Section 147/143 (3) of the Income Tax Act, 1961
was passed on 31st March, 2022, raising a demand of Rs. 8,57,19,806/-. After
receiving the impugned final assessment order under Section 147/143 (3) of
the Income Tax Act, 1961 dated 31st March, 2022, and after actively
participating in the impugned reassessment proceedings throughout without
challenging the impugned notice under Section 148 of the Act dated 26th
March, 2021 even after receiving the recorded reason on 26th October, 2021
and after complying with the aforesaid several notices under Section 142 (1) of
the Act dated 26th October, 2021, 6th December, 2021, 14th December, 2021,
14th February, 2022 and the show-cause notice dated 12th March, 2022 with
repeated request by himself to complete the impugned reassessment
proceeding, now at this stage after completion of assessment, petitioner has
filed this Writ Petition on 18th April, 2022 against the impugned final
assessment order dated 31st March, 2022 which is an appealable order and
wants this Writ Court to interfere with the impugned notice under Section 148
of the Act and final assessment order passed on the basis of impugned notice
under Section 148 of the Act dated 26th March, 2021 on the ground that the
same is bad in law.
Main ground of challenge to the impugned assessment order, by the
petitioner, in this Writ Petition is that the impugned notice under Section 148
and initiation of proceedings under Section 147 of the Income Tax Act, 1961,
was alleged to be bad in law for the reason of non-compliance of the guidelines
laid down by the Hon'ble Supreme Court in the case of GKN Driveshafts (India)
Pvt. Ltd. -Vs- Income Tax Officers reported in [2003] 259 ITR (SC) 19 by
alleging that the final assessment order under Section 147 of the Act has been
passed without disposing his objection to the impugned notice under Section
148 of the Act and that there is a change of opinion.
Petitioner in support of his such contention, has relied on the following
decisions:
(i) GKN Driveshafts (India) Pvt. Ltd. -Vs- Income Tax Officers & Ors.
reported in [2003] 259 ITR 19 (SC).
(ii) Income Tax Officer Ward No. 16 (2) -Vs- M/s Techspan India Pvt.
Ltd. & Anr. reported in (2018) 6 SCC 685.
(iii) Fast Finance (P.) Ltd. -Vs- Assistant Commissioner of Income Tax
reported in (2022) 136 taxmann.com 304 (Madras).
Learned advocate appearing for the respondents opposing this Writ
Petition submits that it is not maintainable at this stage for interfering with the
impugned final assessment order by invoking constitutional writ jurisdiction of
this Court, which is appealable order under the statute and in view of the fact
that the petitioner has waived his right to immediately file objection to the
impugned notice under Section 148 of the Act after receiving recorded reason
and in view of the conduct of the petitioner that he himself has actively
participated in the impugned reassessment proceeding from the time after
receiving the impugned notice under Section 148 of the Act and recorded
reason till the date of passing of final impugned assessment order by
responding to three notices under Section 142 (1) of the Act from time to time
subsequent to the issuance of notices under Section 148 (1) of the Act and
himself requesting the Assessing Officer concerned to complete the
reassessment proceeding on the basis of impugned notice under Section 148 of
the Act which are matters of record.
Respondents submit that the judgment of the Hon'ble Supreme Court in
the case of GKN Driveshafts (supra) and two other decisions relied upon by the
petitioner are distinguishable and not applicable to the case of the petitioner in
view of exceptional facts and circumstances involve in the instant case as
appears from record.
Considering the submission of the parties, facts and circumstances of the
case as appears from record and decisions relied upon by the petitioner, I am
not inclined to entertain this Writ Petition and dismiss the same for the
following reasons:
It appears from record annexed to the Writ Petition by the petitioner
himself that after receipt of the impugned notice under Section 148 of the
Income Tax Act, 1961, dated 26th March, 2021, though petitioner had asked for
furnishing recorded reason for initiating the impugned assessment proceeding
under Section 147 of the Act which was furnished to him on 26th October,
2021, petitioner did not prefer to object the same by filing any objection and
the Assessing Officer having not received any objection against the aforesaid
impugned notice under Section 148 of the Act from the petitioner, having no
option, had to proceed with the impugned reassessment proceeding by issuing
notice under Section 142 (1) of the Act on 6th December, 2021 and the
petitioner himself having chosen to comply with the aforesaid impugned notice
dated 13th December, 2021 without filing any objection to the aforesaid
impugned notice under Section 148 of the Act and it appears from aforesaid
authorised representative's letter dated 13th December, 2021 that petitioner
himself had requested the Assessing Officer to complete the impugned
reassessment proceedings initiated under Section 147 of the Act even after
receiving the second notice on 14th December, 2021, under Section 142 (1) of
the Act, petitioner by his letter dated 22nd December, 2021, further complied
with the same without making any objection against the impugned notice
under Section 148 of the Act.
It appears from record that the petitioner changed his earlier authorised
representative through whom he had complied the notices under Section 142
(1) of the Act and requested the Assessing Officer to complete the impugned
reassessment proceeding and for the first time on 11th February, 2022,
engaged another authorised representative one Anujit Mookherji who at this
stage of the impugned proceeding, for the first time wrote a letter to the
Assessing Officer objecting to the initiation of the impugned reassessment
proceeding on the alleged ground of change of opinion that is almost after nine
months of receiving the recorded reason and after actively participating in the
impugned reassessment by complying the notices issued from time to time
under Section 142 (1) of the Act and himself requesting the Assessing Officer to
complete the impugned reassessment proceeding which are matters of record
and have been discussed above in detail.
Considering the relevant records annexed to the Writ Petition by the
petitioner himself and the conduct of the petitioner by way of waiving his right
to file any objection against the impugned notice immediately after receiving
the recorded reason and actively participating in the impugned proceeding and
specifically repeatedly requesting the Assessing Officer to complete the
impugned reassessment proceeding, I am of the considered view that the
Assessing Officer concerned has rightly proceeded with the impugned
reassessment proceeding and passed the impugned assessment order. In my
considered opinion none of the judgments cited by the petitioner is applicable
to the instant case in view of exceptional facts and circumstances involved in
this Writ Petition which have been elaborately discussed above in detail.
Judgment of the Hon'ble Supreme Court in the case of GKN Driveshafts
(supra) upon which petitioner has relied, in the facts and circumstances of the
case is not applicable to the present case and rather it goes against the
petitioner since in the said judgment, ratio is that the Assessing Officer will be
bound to furnish the recorded reasons which he had done in this case while
the petitioner after receipt of the recorded reason himself had chosen not to file
any objection immediately against the impugned notice as per the decision in
the case of GKN Driveshafts (supra) and as such question of disposal of
petitioner's objection against the impugned notice under Section 148 of the Act
before issuance of notice under Section 142 (1) of the Act does not arise and
the Assessing Officer after not receiving any objection, having no option, has
rightly proceeded with the impugned reassessment proceedings by issuing
notices under Section 142 (1) of the Act from time to time and the petitioner
himself actively participated in the impugned assessment proceedings by
complying with the aforesaid notices under Section 142 (1) of the Act and
petitioner himself repeatedly requested the Assessing Officer to complete the
impugned reassessment proceeding under Section 147 of the Act which are all
matters of record, has rightly completed the assessment and passed the final
assessment order which is appealable under the statute.
Judgments in the case of Kelvinator of India Ltd (supra) relied by the
petitioner is also not applicable to this case in view of peculiar and exceptional
facts and circumstances involve in the instant case as discussed above.
Judgment in the case of Fast Finance (P) Ltd. (supra) relied upon by the
petitioner is also not applicable to the present case in view of exceptional facts
and circumstances as discussed above. In addition, on perusal of the aforesaid
judgment of the Hon'ble Madras High Court, I find in Paragraph 3 that in that
case immediately after receiving notice under Section 148 of the Act, petitioner
had filed a reply to the same within a month and had specifically requested the
Assessing Officer to close the file and such request was made before issuance
of any notice under Section 142 (1) of the Act and thereafter a detailed
objection was filed and in that case petitioner himself had never requested the
Assessing Officer concerned to complete the reassessment proceeding while in
the present case petitioner did not file any objection or reply after receiving the
recorded reason rather after receiving the same, petitioner complied with
several notices under Section 142 (1) of the Act, and he himself made repeated
request to the Assessing Officer to complete the impugned reassessment
proceeding which are matters of record.
In view of the discussion made above and in view of exceptional facts and
circumstances involve in the instant case this Writ Petition being WPO No.
2006 of 2022 is dismissed. No order as to costs.
Urgent certified photocopy of this judgment, if applied for, be supplied to
the parties upon compliance with all requisite formalities.
[MD. NIZAMUDDIN, J.]
