Calcutta High Court
The Assistant Commissioner Of ... vs Radhakrishna Bimalkumar Private ... on 26 September, 2023
OD-22
IN THE HIGH COURT AT CALCUTTA
CIVIL APPELLATE JURISDICTION
ORIGINAL SIDE
APOT/231/2023
IA NO: GA/1/2023, GA/2/2023
THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-13(1), KOLKATA
-Versus-
RADHAKRISHNA BIMALKUMAR PRIVATE LIMITED
BEFORE:
The Hon'ble T.S. SIVAGNANAM, CHIEF JUSTICE
-And-
The Hon'ble JUSTICE HIRANMAY BHATTACHARYYA
Date : 26th September, 2023
Appearance :
Mr. Prithu Dudhoria, Adv.
..for the appellant
Ms. Manju Bhuteria, Adv.
Mr. A.K. Upadhyay, Adv.
Mr. Rites Goel, Adv.
Mr. Lokesh Singh, Adv.
...for the respondent
The Court : This appeal by the revenue is directed against the order dated
27th April, 2022 in WPO No. 1706 of 2022, filed by the respondent/assessee
challenging a notice issued under Section 148 of the Income Tax Act, 1961 (the
Act).
There is a delay of 426 days in filing the appeal. Though the explanation
offered by the revenue is not fully satisfactory, since a question of law is being
canvassed before this Court, this Court exercises discretion and condones the
delay in filing the appeal.
We have heard Mr. Prithu Dudhoria, learned standing Counsel appearing
for the appellant and Ms. Manju Bhuteria, learned Counsel appearing for the
respondent.
The short issue which falls for consideration is whether the notice issued
by the appellant department under Section 148 of the Act is barred by limitation.
The Learned Single Bench after taking note of the facts of the case pointed out
that on the basis of the records it is clear that the notice which was impugned in
the writ petition though bears a date and signature of the authority showing that
it was signed on March 31, 2021 but was actually uploaded for communication
after 31st March, 2021, which has to be treated as the date of issuance of the
impugned notice. The Learned Single Judge earlier noted the decision of this
Court in the case of Bagaria Properties and Investment (P.) Ltd. vs. Union of India,
(2022) 134 taxmann.com 196(Cal.) and also the decision in Manoj Jain vs. Union
of India (2022) 134 taxmann.com 173 (Cal.).
These decisions along with other decisions were the subject matter of
appeal filed by the Union before the Hon'ble Supreme Court, which was decided
by the Hon'ble Supreme Court in the decision in Union of India vs. Ashish
Agarwal, (2022) 138 taxmann.com 64 (SC).
In paragraph 10 of the said judgment, the Hon'ble Supreme Court while
allowing the appeals in part and modified the judgments rendered by various
High Courts in Bagaria Properties and Investment (P.) Ltd. Vs. Union of India and
Manoj Jain Vs. Union of India by modifying and substituting the same with the
following directions of which sub-paragraphs (i) to (iv) would be relevant for the
case on hand which is quoted hereinbelow:
"(i) The impugned section 148 notices issues to the respective
assesses 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 30 days from the date of
the judgment of the Hon'ble Supreme Court, that is, 4th May, 2022
provide to the respective assessees information and material relied
upon by the revenue, so that the assessee can reply 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 1-4-
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 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(a) 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 assessees 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".
In terms of the above directions, the Assessing Officer shall, within 30 days
from the date of the judgment of the Hon'ble Supreme Court, that is, 4th May,
2022 provide to the respective assessees information and material relied upon by
the revenue, so that the assessee can reply the show cause notices within two
weeks thereafter. Admittedly, the appellant/revenue did not comply with the said
direction issued by the Hon'ble Supreme Court. However, the present appeal has
been filed belatedly though the appellant/revenue was conscious of the fact that
they failed to comply with the direction issued by the Hon'ble Supreme Court in
Ashish Agarwal, as mentioned above.
After hearing the learned senior counsel for the appellant/revenue and
perusal of the memorandum of appeal, we find that the appellant/revenue had
decided to file the appeal by placing reliance on the decision of the High Court of
Delhi reported in (2022) 143 taxmann.com 11 (Delhi). However on a careful
reading of the entire judgment and the questions which were farmed for
consideration, we find that the decision supports the case of the assessee rather
than the appellant/revenue. The appellant/revenue would reiterate before us
that the notice which was impugned in the writ petition was signed on March 31,
2021 and uploaded on the very same date. In fact, this was one of the issues
which was considered by the High Court of Delhi in Suman Jeet Agarwal and
while answering the said issue which was framed as Question No.(III), the
submission made before us is identical to that of the submission of the
appellant/revenue in the case of Suman Jeet Agarwal. The Court after taking
note of the said submission has rendered the following finding :
"It would also be relevant to note that the time taken by the
ITBA e-mail software system on 31st March, 2021, to despatch
the e-mails was not due to any software glitch. The time taken
by the software system was as per the programming of the
system, as admitted in the Compliance Affidavit. The
programming to despatch the Notices in a controlled manner and
batch mode was a pre-existing fact and to the knowledge of the
Department. The time taken in despatch of the e-mail on 31st
March, 2021, was therefore as per the controls set in the ITBA
system".
In paragraph 26.22 of the said judgment the said question was answered
against the Department and would hold that the time taken by the ITBA's e-mail
software system in triggering the e-mail and transmitting the said e-mails from
the ITBA servers is attributable to the Department and, therefore, for the e-mails
despatched on 1st April, 2021 or thereafter, the notices are held not to have been
issued on 31st March, 2021. Thus, the appellant/revenue appears to have a
wrong impression that the decision in Suman Jeet Agarwal would substantiate
their case. Thus, considering the facts and circumstances of the case, we have no
hesitation to hold that the notice which has been impugned in the writ petition
under Section 148 of the Act is barred by limitation and cannot be enforced.
For the above reasons, the appeal fails and the same is hereby dismissed.
(T.S. SIVAGNANAM)
CHIEF JUSTICE
(HIRANMAY BHATTACHARYYA, J.)
SN./S.Das
AR(CR)
