Madras High Court
Ramesh Swaminathan (Huf) vs The Central Board Of Direct Tax on 29 November, 2023
Author: Krishnan Ramasamy
Bench: Krishnan Ramasamy
W.P.No.15342 of 2022
IN THE HIGH COURT OF JUDICATURE AT MADRAS
Dated : 29.11.2023
CORAM:
THE HONOURABLE Mr.JUSTICE KRISHNAN RAMASAMY
W.P.No.15342 of 2022
and
W.M.P.No.14504 of 2022
Ramesh Swaminathan (HUF)
Old No.41, New No.12,
Chanrapani Street
West Mambalam
Chennai – 600 033.
... Petitioner
-Vs-
1.The Central Board of Direct Tax,
Income Tax Department,
New Delhi.
2.The Income Tax Officer,
Non Corporate Ward 19(6),
121, Mahatma Gandhi Road,
Nungambakkam, Chennai – 600 034.
3.Additional/Joint/Deputy/Assistant Commissioner of Income Tax,
The Assessing Officer,
National Faceless Assessment Centre,
New Delhi.
... Respondent
1/9
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W.P.No.15342 of 2022
PRAYER :
Writ Petition filed under Article 226 of the Constitution of India
praying for a writ of Certiorari by calling for records of the Petitioner in
PAN: AAHHR3874E on the file of 2nd Respondent and quash the
Impugned Notice issued under Section 148 issued by the 2nd Respondent in
DIN & Notice No: ITBA/AST/S/148/2020-21/1031868736(1) dated
29.03.2021 and impugned reassessment order passed by 3rd respondent in
DIN & Notice No: ITBA/AST/S/147/2021-22/1042222339(1) dated
31.03.2022 for the Assessment year 2016-17.
For Petitioner : Mr.S.P.Chidambaram
For Respondents : Mr.R.S.Balaji, Sr. Standing Counsel
Assisted by Ms.S.PRemalatha,
Jr. Standing Counsel.
******
ORDER
The present Writ Petition has been filed challenging the impugned
show cause notice issued by the second respondent dated 29.03.2021 as
well as the impugned reassessment order made by the third respondent
dated 31.03.2022.
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2.Mr.S.P.Chidambaram, learned counsel appearing on behalf of the
petitioner would mainly contend that the show cause notice issued by the
second respondent has been digitally signed on 29.03.2021 and that
Section 148A of the Finance Act, 2021 [hereinafter referred to as the ‘Act’]
came into effect from 01.04.2021. In that event, if the respondent intends
to issue any notice under Section 148 of the Act, 2021, with effect from
01.04.2021, the respondent has to first issue notice under Section 148A of
the Act and upon receipt of response/objections from the assessee, the
respondent shall come to the conclusion and only thereafter, the respondent
can issue notice under Section 148 of the Act.
3.Therefore, it is the contention of the learned counsel appearing on
behalf of the petitioner that only in order to avoid the procedure
contemplated under Section 148A of the Act, the second respondent has
digitally signed the show cause notice on 29.03.2021, however the same
has been dispatched from the office of the second respondent only on
01.04.2021 and served on the petitioner through post on 03.04.2021 [after
introduction of Section 148A with effect from 01.04.2021]. Hence, for all
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practical purposes it had to be construed that notice has been issued on the
petitioner only on 03.04.2021, after commencement of the provisions of
Section 148A of the Act and therefore, the impugned show cause notice
issued by the second respondent dated 29.03.2021 is contrary to the
provisions of Section 148A of the Act.
4.Per contra, learned Senior Standing Counsel appearing on behalf of
the respondents would submit that in the case of Union of India v. Ashish
Agarwal reported in [2022] 138 taxmann.com 64 (SC), the Hon’ble Apex
Court held that notice issued under Section 148 of the Act shall be deemed
to have been issued under Section 148A and the assessee can be directed to
give their reply to the notices and accordingly, the further proceedings may
continue. It would be appropriate to extracted paragraph 10(i) of the said
decision which reads as follows:
10. In view of the above and for the reasons stated above, the
present Appeals are ALLOWED IN PART. The impugned
common judgments and orders passed by the High Court of
Judicature at Allahabad in W.T.No.524/2021 and other allied
tax appeals/petitions, is/are hereby modified and substituted
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as under:
(i) The impugned Section 148 notices issued to the respective
assessees 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 thirty days from today provide
to the respective assessees information and material relied
upon by the Revenue, so that the assessees can reply to the
show-cause notices within two weeks thereafter;
5.The learned Senior Standing Counsel appearing for the respondent
would submit that though Section 148A of the Act came into effect only
from 01.04.2021, whereas the impugned notice under Section 148 of the
Act was issued on 29.03.2021 [before Section 148A came into force], the
aforesaid principle laid down in Ashish Agarwal case can be applied to the
instant case, if appropriate order is passed by this Court.
6.Considered the submissions made by the learned counsel appearing
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on behalf of the petitioner and the learned Senior Standing Counsel
appearing on behalf of the respondents and perused the records placed
before this Court.
7.Though according to the learned Senior Standing Counsel appearing
on behalf of the respondent the notice under Section 148 of the Act was
issued on 29.03.2021 and Section 148A of the Act came into effect only
from 01.04.2021, the date of service of notice viz., 03.04.2021 will have
significance and hence, for all practical purposes it had to be construed that
notice has been issued on the petitioner only on 03.04.2021, after
commencement of the provisions of Section 148A of the Act.
8.Further, in similar circumstances, the Hon’ble Apex Court in the
case of Union of India v. Ashish Agarwal reported in [2022] 138
taxmann.com 64 (SC) has held that notice issued under Section 148 of the
Act shall be deemed to have been issued under Section 148A and thereby
directing the assessee to give reply to the notice and accordingly, the
further proceedings may continue.
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9.Applying the said principle laid down by the Hon’ble Apex Court in
the case of Union of India v. Ashish Agarwal reported in [2022] 138
taxmann.com 64 (SC), this Court deems it appropriate to direct the
petitioner to consider the notice issued under Section 148 of the Act as the
one issued under Section 148A of the Act and file its reply and thereafter,
the respondents can pass orders, after affording an opportunity of personal
hearing to the petitioner.
10.In such view of the matter, the impugned show cause notice issued
by the second respondent dated 29.03.2021 as well as the impugned
reassessment order made by the third respondent dated 31.03.2022 are set
aside and the petitioner is directed to consider the notice dated 29.03.2021
issued under Section 148 of the Act as a notice issued under Section 148A
of the Act and file its reply along with supporting documents within a
period of 21 days from the date of receipt of a copy of this order and
thereafter, the respondents are directed to dispose of the said reply on
merits and in accordance with law, after affording an opportunity of
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personal hearing to the petitioner and proceed further accordingly.
11.The Writ Petition is disposed of with the above directions.
Consequently, connected miscellaneous is closed. No costs.
29.11.2023
Neutral Citation : Yes/No (2/2)
Internet : Yes/No
Index : Yes/No
pgp
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KRISHNAN RAMASAMY, J.
pgp
Dated : 29.11.2023
(2/2)
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