Karnataka High Court
A One Steel And Alloys Private Limited vs Deputy Commissioner Of Income Tax on 10 November, 2022
Author: S.R.Krishna Kumar
Bench: S.R.Krishna Kumar
1
IN THE HIGH COURT OF KARNATAKA, BENGALURU
DATED THIS THE 10TH DAY OF NOVEMBER, 2022
BEFORE
THE HON'BLE MR.JUSTICE S.R.KRISHNA KUMAR
WRIT PETITION No.16572 OF 2022
C/W
WRIT PETITION No.13908 OF 2022(T-IT)
W.P.No. 16572/2022
BETWEEN:
A ONE STEELS INDIA PRIVATE LIMITED
(A COMPANY INCORPORATED IN INDIA UNDER THE
PROVISIONS OF THE COMPANIES ACT, 1956
AND REP. BY MR. SUNIL JULLIAN JALLAN
DIRECTOR OF THE PETITIONER COMPANY)
NO.326, FRONT PORTION,
A-ONE HOUSE, CQAL LAYOUT,
60 FEET ROAD, NEAR DEV INTERNATIONAL SCHOOL
SAHAKARNAGAR,
BENGALURU - 560 092.
...PETITIONER
(BY SRI. PRAVIN KISHORE PRASAD, ADVOCATE)
AND:
1. DEPUTY COMMISSIONER OF INCOME TAX
CENTRAL CIRCLE - 1(3), CENTRAL REVENUE
BUILDING, QUEENS ROAD, BENGALURU - 560001
2. PRINCIPAL COMMISSIONER OF INCOME TAX
(CENTRAL), CENTRAL REVENUE BUILDING
QUEENS ROAD, BENGALURU - 560001
3. THE DIRECTOR GENERAL OF INCOME TAX
(INVESTIGATION), CENTRAL REVENUE BUILDING
QUEENS ROAD, BENGALURU - 560001
4. CENTRAL BOARD OF DIRECT TAXES
(REP. BY ITS CHAIRMAN)
DEPARTMENT OF REVENUE,
2
MINISTRY OF FINANCE
NORTH BLOCK, NEW DELHI - 110 001
5. UNION OF INDIA
(REP BY ITS SECRETARY, DEPARTMENT OF REVENUE,
MINISTRY OF FINANCE)
NORTH BLOCK, NEW DELHI - 110 001
...RESPONDENTS
(BY SRI. K.V. ARAVIND., ADVOCATE)
THIS W.P. IS FILED UNDER ARTICLES 226 AND 227 OF
THE CONSTITUTION OF INDIA PRAYING TO QUASH AND
DECLARE AS VOID-AB-INITIO, THE NOTICE BY THE R-1 DTD
12.04.2022 VIDE DIN AND NOTICE NO.ITBA/AST/S/148_1/2022-
23/1042719128(1) READ WITH ITS ANNEXURE THAT IS A LETTER
DTD: 11.04.2022 IN F.NO.148A/DCIT/CC-1(3)/BNG/2021-22 OF THE
ASSESSING OFFICER ADDRESSED TO THE DIRECTOR
GENERAL OF INCOME TAX (INVESTIGATION), BANGALORE
REQUESTING FOR APPROVAL TO ISSUE NOTICE UNDER
SECTION 148 OF THE INCOME TAX ACT, ISSUED TO THE
PETITIONER COMPANY, BY THE DEPUTY COMMISSIONER OF
INCOME TAX, CENTRAL CIRCLE-1(3), BENGALURU I.E., THE R-1
ABOVE, INITIATING THEREBY, THE RE-ASSESSMENT
PROCEEDING IN THE CASE OF THE PETITIONER COMPANY
FOR ASSESSMENT YEAR 2015-16 UNDER SECTION 148 OF THE
INCOME TAX ACT, 1961 (COPY OF THIS IMPUGNED NOTICE
ALONG WITH ITS ANNEXURE HAS BEEN PRESENTED AS ANNX-
A.)
W.P.No.13908/2022:
BETWEEN:
A ONE STEEL AND ALLOYS PRIVATE LIMITED
(A COMPANY INCORPORATED IN INDIA UNDER THE
PROVISIONS OF THE COMPANIES ACT, 1956
AND REP BY MR. SUNIL JULLIAN JALAN
DIRECTOR OF THE PETITIONER COMPANY)
A-ONE HOUSE, NO.326,
CQAL LAYOUT, SAHAKARNAGAR,
BENGALURU - 560 092
...PETITIONER
(BY SRI.PRAVIN KISHORE PRASAD, ADVOCATE)
3
AND:
1. DEPUTY COMMISSIONER OF INCOME TAX
CENTRAL CIRCLE - 1(3) CENTRAL REVENUE
BUILDING, QUEENS ROAD, BENGALURU - 560001
2. PRINCIPAL COMMISSIONER OF INCOME TAX
(CENTRAL), CENTRAL REVENUE BUILDING
QUEENS ROAD, BENGALURU - 560001
3. THE DIRECTOR GENERAL OF INCOME TAX
(INVESTIGATION), CENTRAL REVENUE BUILDING
QUEENS ROAD, BENGALURU - 560001
4. CENTRAL BOARD OF DIRECT TAXES
(REP BY ITS CHAIRMAN)
NORTH BLOCK, NEW DELHI - 110 001
5. UNION OF INDIA
(REP BY ITS SECRETARY, DEPARTMENT OF REVENUE,
MINISTRY OF FINANCE)
NORTH BLOCK, NEW DELHI - 110 001
...RESPONDENTS
(BY SRI. K.V. ARAVIND., ADVOCATE)
THIS W.P. IS FILED UNDER ARTICLES 226 AND 227 OF
THE CONSTITUTION OF INDIA PRAYING TO QUASH AND
DECLARE AS VOID-AB-INITIO, THE NOTICE BY THE R-1 DTD
12.04.2022 VIDE DIN AND NOTICE NO.ITBA/AST/S/148_1/2022-
23/1042719130(1) READ WITH ITS ANNEXURE THAT IS A LETTER
DTD: 11.04.2022 IN F.NO.148A/DCIT/CC-1(3)/BNG/2021-22 OF THE
ASSESSING OFFICER ADDRESSED TO THE DIRECTOR
GENERAL OF INCOME TAX (INVESTIGATION), BANGALORE
REQUESTING FOR APPROVAL TO ISSUE NOTICE UNDER
SECTION 148 OF THE INCOME TAX ACT, ISSUED TO THE
PETITIONER COMPANY, BY THE DEPUTY COMMISSIONER OF
INCOME TAX, CENTRAL CIRCLE-1(3), BENGALURU I.E., THE R-1
ABOVE, INITIATING THEREBY, THE RE-ASSESSMENT
PROCEEDING IN THE CASE OF THE PETITIONER COMPANY
FOR ASSESSMENT YEAR 2015-16 UNDER SECTION 148 OF THE
INCOME TAX ACT, 1961 (COPY OF THIS IMPUGNED NOTICE
ALONG WITH ITS ANNEXURES HAS BEEN PRESENTED AS
ANNX-A).
THESE PETITIONS COMING ON FOR ORDERS, THIS DAY,
THE COURT MADE THE FOLLOWING:-
4
ORDER
In these petitions, the petitioner has sought for the following reliefs:
"In W.P.No.16572/2022:
(i) Issue a Writ of Mandamus and/or writ of Certiorari or any other writ, order and direction quashing and declaring as void-ab-initio, the notice by the Respondent No.1 dtd 12.04.2022 vide DIN and Notice No.ITBA/AST/S/148_1/2022-23/1042719128(1) read with its annexure that is a letter dtd: 11.04.2022 in F.No.148A/DCIT/CC-1(3)/BNG/2021-22 of the assessing officer addressed to the director general of Income Tax (Investigation), Bangalore requesting for approval to issue notice under section 148 of the income tax act, issued to the petitioner company, by the Deputy Commissioner Of Income Tax, Central Circle-1(3), Bengaluru i.e., the Respondent No.1 above, initiating thereby, the re-assessment proceeding in the case of the petitioner company for assessment year 2015-16 under section 148 of the income tax act, 1961 (copy of this impugned notice along with its annexure has been presented as Annx-
A.) In W.P.No.13908/2022:
(i) Issue a Writ of Mandamus and/or Writ of Certiorari or any other writ, order and direction quashing and declaring as void-ab-initio, the notice by the r-1 dtd 5 12.04.2022 vide DIN and Notice no.ITBA/AST/S/148_1/2022-23/1042719130(1) read with its annexure that is a letter dtd: 12.04.2022 in F.No.148A/DCIT/CC-1(3)/BNG/2021-22 of the Assessing Officer addressed to the Director General Of Income Tax (Investigation), Bangalore requesting for approval to issue notice under section 148 of the income tax act, issued to the petitioner company, by the Deputy Commissioner of Income Tax, Central Circle-1(3), Bengaluru i.e., the Respondent No.1 above, initiating thereby, the re-assessment proceeding in the case of the petitioner company for assessment year 2015-16 under section 148 of the income tax act, 1961 (copy of this impugned notice along with its annexures has been presented as Annx-
A).
2. Heard learned counsel for the petitioner and learned counsel for the respondents in both the petitions and perused the material on record.
3. In addition to reiterating the various contentions urged in the petitions and referring to the material on record, learned counsel for the petitioner submits that apart from the various illegalities and infirmities, which would vitiate the impugned proceedings as well as the impugned notice at Annexure-A dated 6 12.04.2022 issued by the respondents under Section 148 of the Income Tax Act, 1961 (for short "the I.T. Act"), the said notice refers to an order said to have been passed on 12.04.2022 and annexed to the impugned notice. In this context, it is submitted that no such order dated 12.04.2022 was neither annexed to the impugned notice nor furnished or provided to the petitioner and in the absence of any order passed under Section 148-A(d) of the I.T. Act prior to issuance of the impugned notice, the impugned notice is illegal, arbitrary and without jurisdiction or authority of law and the same deserves to be quashed.
4. Per contra, learned counsel for the respondents submits that there is no merit in these petitions and that the same are liable to be dismissed.
5. A perusal of the material on record including the impugned notice dated 12.04.2022 said to have been issued under Section 148 of the I.T. Act will clearly indicate that after coming into force of the amended provisions contained in Sections 147 to 151 of the I.T. Act with effect from 01.04.2021 by virtue of the Finance Act, 2021, it is 7 absolutely essential and mandatory that a notice under Section 148 would necessarily have to be preceded by an order passed under Section 148-A(d) after following the procedure prescribed under Section 148-A of the I.T. Act. In other words, the respondents are entitled to issue a notice under Section 148 only after passing an order under Section 148-A(d) and consequently, any notice issued under Section 148 without there being or preceded by an order under Section 148-A(d) would clearly be illegal and without jurisdiction or authority of law.
6. In the instant case, a perusal of the impugned notice at Annexure-A dated 12.04.2022 said to have been issued under Section 148 of the I.T. Act indicates that the same was issued pursuant to an order dated 12.04.2022 said to have been passed under Section 148-A(d) and referred to in the notice; however, despite the specific stance of the petitioner that no such order was passed nor the same annexed or furnished to the petitioner along with the notice, the respondents have not been able to produce any such order passed under Section 148-A(d), muchless 8 the order referred to in the impugned notice. Under these circumstances, in the absence of any order passed under Section 148-A(d) of the I.T. Act prior to and preceding the impugned notices under Section 148 as mandatorily required in law, I am of the considered opinion that the impugned notices deserves to be quashed and the matters be remitted back to the concerned respondents for reconsideration afresh from the stage of issuance of Section 148-A(b) dated 16.03.2022 issued by the respondents and to proceed further in accordance with law.
7. In the result, I pass the following:
ORDER
(i) Petitions are hereby allowed.
(ii) The impugned notices under Section 148 of the Income Tax Act, 1961 dated 12.04.2022 vide Annexure -
A in both the petitions are hereby quashed.
(iii) Both the matters are remitted back to the respondents to proceed from the stage of issuance of notices, both dated 16.03.2022 by the respondents to the 9 petitioner under Section 148A(b) of the Income Tax Act, 1961.
(iv) Liberty is reserved in favour of the petitioner to file additional reply / response along with the documents to the notices under Section 148A(b) of the Income Tax Act, 1961, as stated supra, in addition to the replies dated 05.04.2022 already submitted by the petitioner.
(v) Petitioner is also reserved liberty to submit reply and urge all grounds available to him on facts as well as in law including the grounds in relation to the legality, validity, correctness etc., of the aforesaid notices under Section 148A(b) dated 16.03.2022 issued by the respondents.
(vi) Respondents are directed to consider the replies dated 05.04.2022 and documents produced by the petitioner as well as additional reply and documents to be submitted by the petitioner pursuant to this order and also all contentions urged by the petitioner, to whom the respondents will provide an opportunity of personal hearing before proceeding further, in accordance with law. 10
(viii) All rival contentions are kept open and no opinion is expressed on the same.
Sd/-
JUDGE SV/Bmc