The Twist: Union of India Vs. Ashish Agarwal decided on 04.05.2022 challenged before P & H High Court

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The Twist: Union of India Vs. Ashish Agarwal decided on 04.05.2022 challenged before P & H High Court

 

The Punjab & Haryana High Court has issued notice issued under section 148 for asstt year 2013-14 and also stayed further proceedings, being barred by limitation and the Instruction No 1/2022 issued by CBDT being misleading in view of provision of section 149(1) and Supreme Court judgement in the case of Ashish Aggarwal .

The Court noted:-

“It is argued that the proceedings pertaining to assessment year 2013-2014 are time barred by virtue of the proviso to Section 149 of the Income Tax Act. The proviso to Section 149 specifically provides that no notice under Section 148 shall be issued if such notice could not have been issued at that time on account of being beyond the time limit specified under the provisions of Sub Section (1) (b) of the Section as it stood immediately before

the commencement of Finance Act 2021 as such in terms of proviso to Section 149 as amended w.e.f. 01.04.2021 since more than 06 years had elapsed from the end of assessment year 2013-2014 on 31.03.2020, the re-assessment notice for assessment year 2013-2014 could not be issued.

It is vehemently asserted that the initiation of proceedings by issuance of notice under Section 148 A (d) for assessment year 2013-2014 are wholly without jurisdiction and are time barred.

Further contended that the department is purportedly proceeding on the basis of CBDT instructions dated 11.05.2022 (Annexure P-7) which in turn proceed directly in the teeth of the dictum laid down by Hon’ble Supreme Court in Ashish Agarwal (supra) and on a clear misleading thereof. On such ground a challenge to such circular dated 11.05.2022 at Annexure P-7 has also been raised in the instant petition.”

The Court after taking note of above issued notice of motion and ordered :-

“Further proceedings in the matter shall be kept in abeyance till further orders”

This is a good development and now taxpayers can expect relief for asstt year 2013-14 and AY 2014-15.

 

Full text of order passed is attached as under:

 

CWP-18032-2022 (O&M)

 

KULWANT SINGH VS UNION OF INDIA AND OTHERS

 

Present:-     Ms. Radhika Suri, Sr. Advocate with Mr. Sidhant Suri, Advocate and

Ms. Vralika Bassi, Advocate for the petitioner.

 

Mr. Vaibhav Gupta, Junior Standing Counsel for respondents No.2 and 3.

 

Challenge in the instant petition is to notice dated 13.04.2021 (Annexure P-1) pertaining to assessment year 2013-2014; notice dated 17.05.2022 (Annexure P-8) – treating the earlier notice to be under Clause (b) of Section 148-A of the Act; order dated 28.07.2022 (Annexure P-18) passed under Section 148-A(d) of the Income Tax Act 1961 and all consequential proceedings thereto.

Learned Senior counsel would submit that as per ratio   laid down by the Apex Court in the cases of Union of India & others Vs. Ashish Agarwal decided on 04.05.2022 all defences including the defence under Section 149 of the Act were available to the assessee even if the notice under Section 148 was treated as a notice under Section 148-A of the Act.

It is argued that the proceedings pertaining to assessment year 2013-2014 are time barred by virtue of the proviso to Section 149 of the Income Tax Act.

The proviso to Section 149 specifically provides that no notice under Section 148 shall be issued if such notice could not have been issued at that time on account of being beyond the time limit specified under the provisions of Sub Section (1) (b) of the Section as it stood immediately before

 

Downloaded on – 24-08-2022 17:58:55

 

CWP-18032-2022 (O&M)                                 

 

the commencement of Finance Act 2021 as such in terms of proviso to Section 149 as amended w.e.f. 01.04.2021 since more than 06 years had elapsed from the end of assessment year 2013-2014 on 31.03.2020, the re-assessment notice for assessment year 2013-2014 could not be issued.

It is vehemently asserted that the initiation of proceedings by issuance of notice under Section 148 A (d) for assessment year 2013-2014 are wholly without jurisdiction and are time barred.

Further contended that the department is purportedly proceeding on the basis of CBDT instructions dated 11.05.2022 (Annexure P-7) which in turn proceed directly in the teeth of the dictum laid down by Hon’ble Supreme Court in Ashish Agarwal (supra) and on a clear misleading thereof.    On such ground a challenge to such circular dated 11.05.2022 at Annexure P-7 has also been raised in the instant petition.

Notice of motion returnable for 13.12.2022.

 

Mr. Vaibhav Gupta, Junior Standing Counsel, accepts notice on behalf of respondents No.2 and 3 and waives service.

A complete copy of the writ paper-book already stands furnished.

Further proceedings in the matter shall be kept in abeyance till further orders.

 

(TEJINDER SINGH DHINDSA) JUDGE

 (DEEPAK MANCHANDA) JUDGE

23.08.2022

shweta

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