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matter of fact and matter
The petitioner aggrieved by the issue of notice under section 148 (abbreviated ‘IT Act’) of the Income Tax Act, 1961 has filed this writ petition seeking the following relief:-
- In the light of the facts and illegality made by the respondents, the Hon’ble High Court may graciously issue suitable direction, order or writs to quash the impugned notice in the nature of mandamus, certiorari, prohibition etc. Direct the quashing of proceedings under section 148 and 147.
- To grant such other relief as the Hon’ble Court may deem fit.
Mr. Mool Chand Jain, learned counsel for the petitioner, will submit that the petitioner is a private limited company and is engaged in the business of manufacturing and selling MS ingots and re-rolled products. During the assessment year 2014-15, the petitioner’s company had issued 25,000 shares in the name of Amarnath Agarwal and Smt. The face value of Ramadevi Agarwal is Rs.100/- per share. The sale of shares is disclosed in their returns. After receiving the notice under section 142(1) of the IT Act, the petitioner has furnished the details required to be furnished by the petitioner under the notice. The petitioner vide letter dated 22.12.2016 had very clearly mentioned that due to the loss caused to the steel industry and no buyer in the market, the company was facing shortage of funds and hence, its face value But the shares have been allotted. After considering the reply to the notice, the final assessment order under section 143(3) of the IT Act has been passed. He argued that the notice issued under section 148 of the IT Act is after a lapse of 4 years and once the petitioner has disclosed all the transactions, especially the sale of shares and the reason for transfer of the share at face value to the Authority. also stated that, which was accepted by the Assessing Officer, there was no ground available for the respondents to issue notice under section 148 of the IT Act as the return on the part of the assessee and all material facts were fully and correctly furnished. There was no failure to disclose. He further said that the notice issued under section 148 of the IT Act is also not sustainable, as the reason for issuing the notice is transfer of shares, attracting the provision of section 56(2)(vii)(c)(ii). Is. IT Act. He argued that the dependent provision to cause trust is for ‘individual and Hindu undivided family’. The petitioner is a company. Since there was no valid reason/ground for issue of notice under section 148 of the IT Act, the notice issued to the petitioner/company should be quashed.
Opposite the Respondent, Shri Amit Choudhary, learned Counsel for the Respondents, would oppose the submissions of the learned Counsel for the Petitioner and submit that the notice under section 148 of the IT Act is issued after following due procedure provided under the IT Act. has been done. The reason and grounds for issuing the notice are specifically mentioned in the annexure to the notice. However, he does not dispute the submission of learned counsel for the petitioner regarding the provision under section 56 of the IT Act.
Court View
The court heard learned counsel for the parties.
The main thrust of the petitioner’s counsel challenging the notice under section 148 of the IT Act is that the provisions under section 56(2)(vii)(c)(ii) of the IT Act will not attract.
A perusal of the above provisions under section 56 of the IT Act shows that section 56 refers to income from other sources. Section 56 (vii) deals with income received in any previous year by an individual or a Hindu undivided family. The petitioner is a company and in view of the specific provision under section 56(2)(vii) of the IT Act, reliance by the Assessing Officer for issue of notice shall not apply to the petitioner which is a company. For issue of notice under section 148 of IT Act, there must be tangible material and mandatory compliance of section 147 of IT Act. Revaluation proceedings have been initiated against the company, which is not in dispute, after a lapse of 4 years from the date of filing the return. Under the first provision of section 147 of the IT Act, for initiating reassessment proceedings after a gap of 4 years, the Assessing Officer shall record his finding that the assessment is fully and truly necessary on the part of the assessee. There was a failure to disclose the facts. of that particular assessment year which does not appear from the reading of the annexure i.e. the reason for issue of notice.
Having regard to the aforesaid facts and circumstances of the case, the reason for issuing the notice and having regard to the provisions contained therein, in the opinion of this Court, there is nothing for the Assessing Officer to issue a notice under section 148 of the IT Act. Reason/Aadhaar not available. The issuance of notice under section 148 of the IT Act to the petitioner is not in accordance with the first provision of section 147 of the IT Act, therefore, it is not sustainable, which is liable to be set aside.
conclusion
Accordingly the writ petition is allowed.
hariom-ingots-and-power-private-ltd-vs-pcit-chhattisgarh-high-court
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