Muktha Foundations Pvt.Ltd v. The Income Tax Officer

IN THE HIGH COURT OF JUDICATURE AT MADRAS

DATED : 21.02.2022 CORAM :

THE HONOURABLE MR.JUSTICE R.SURESH KUMAR W.P.NO.3235 OF 2022 AND W.M.P.NOS.3373 & 3374 OF 2022 Muktha Foundations Pvt. Ltd., Rep. By its Director, Sanjay Karumanchi Narayanan, S/o, Karumanchi Narayanan, No.4, W- Block, 5th Main Road, Anna Nagar, Chennai - 600 040.

...Petitioner

Vs.

The Income Tax Officer, Corporate Ward 4(1), Room No.429, Main Building, IV Floor, No.121, Mahatma Gandhi Road, Nungambakkam, Chennai - 600 034.

...Respondent

Prayer : Petition filed under Article 226 of the Constitution of India praying for issuance of a Writ of Certiorari calling for the records in DIN & Notice No:ITBA/AST/S/148/2021-22/1033873799

(1) dated 30.06.2021 on the file of the respondent relating to A.Y. 2017-18 and quash the same.

For Petitioner :

Mr.G.Baskar For Respondent :

Mrs.Hema Muralikrishnan Senior Standing Counsel

ORDER

The prayer sought for herein is for a Writ of Certiorari calling for the records in DIN & Notice No:ITBA/AST/S/148/202122/ 1033873799(1) dated 30.06.2021 on the file of the respondent relating to A.Y. 2017-18 and quash the same.

2. In order to initiate proceedings for opening of the assessment under Section 147 of the Income Tax Act, 1961 (in short 'the Act'). Notice under Section 148 of the Act was issued dated 30.06.2021 to the assessee. The said notice is under challenge herein on the sole ground that, since the provision has got amended under Section 148A, which comes into effect from 01.04.2021, in which, the procedure contemplated under the amended provision has to be followed before issuing notice under Section 148 of the Act.

3. However, the cases where if Section 148 notice were issued on or before 31.03.2021, the earlier unamended provision would apply. On that ground, since the impugned notice under Section 148 of the Act has been issued on 31.06.2021, admittedly, without following the procedure contemplated under the amended provision, it is vitiated and citing this reason, Mr.G.Baskar, learned counsel appearing for the petitioner would submit that, the impugned notice would not stand in the legal scrutiny and it is liable to be set aside.

4. Heard Mrs.Hema Muralikrishnan, learned Senior Standing Counsel appearing for the respondent, who would submit that, in fact, the issue had been considered in a batch of writ petitions by the First Bench of this Court and it was decided on 04.02.2022 in the matter of Vellore Institute of Technology Vs. The Central Board of Direct Taxes and another in W.P.No.15019 of 2021 etc. batch, where, the Division Bench has passed the following order:

"19. In view of the ratio propounded by the Allahabad and Delhi High Courts on the subject, the reassessment notices under Section 148 of the Act of 1961 served on the petitioners on or after 1.4.2021 are set aside having been issued in reference to the unamended provisions and the Explanations are to be read as applicable to reassessment proceedings if initiated on or prior to 31.3.2021, but it would be with liberty to the assessing authorities to initiate reassessment proceedings in accordance with the provisions of the Act of 1961, as amended by the Finance Act, 2021, after making all the compliances as required by law, if limitation for it survives."

5. In view of the said judgment, since this notice under Section 148 of the Act was issued / dated 30.06.2021 without following the amending provisions under Section 148A, therefore, it is covered under the said decision of the Division Bench, she contended.

6. Having considered the said submission made by the learned counsel appearing for both sides and having gone through the said judgment of the Division Bench of this Court referred to above, as admittedly the impugned notice under Section 148 of the Act was issued on 30.06.2021 or dated 30.06.2021 without following the procedure made through the amended provision of Section 148A, this Court has no hesitation to hold that, the impugned notice shall not stand in the legal scrutiny, therefore, it is liable to be set aside. Accordingly, the impugned notice is set aside. However, it is open to the Revenue to issue fresh notice as per the amended provision, as has been indicated in the said Division Bench judgment dated 04.02.2022.

7. With the above observation, this Writ Petition is disposed of. No costs. Consequently, connected miscellaneous petitions are closed.

Sd/- Assistant Registrar(CO) //True Copy// Sub Assistant Registrar Sgl To The Income Tax Officer, Corporate Ward 4(1), Room No.429, Main Building, IV Floor, No.121, Mahatma Gandhi Road, Nungambakkam, Chennai - 600 034.

+1cc to Mr.G.Baskar, Advocate, S.R.No.11263 +1cc to M/s.Hema Muralikrishnan, Advocate, S.R.No.11359 W.P.No.3235 of 2022 GJ(CO) RLP(08/03/2022)