Safex Complex Private Limited Vs Union of India and Ors. — Income Tax | Calcutta HC (2024)

Safex Complex Private Limited Vs Union of India and Ors. — Income Tax | Calcutta HC (2024)

What the court decided

AI extract

Outcome

Setting aside of the Single Bench order in WPO No. 1288 of 2023, allowing of the writ petition, setting aside of the Section 148A(d) order dated 20.4.2023 and the consequential Section 148 notice, and remand to the assessing officer to furnish the requisite information and documents, afford a further opportunity to submit a reply, and take a fresh decision in accordance with law.

Issue for consideration

Whether the order passed under Section 148A(d) of the Income Tax Act, 1961 (dated 24th April, 2023 per ¶8; 20.4.2023 per ¶13) should stand, given the alleged violation of natural justice in that the information and documents sought by the assessee in its 31 March 2023 submission were not furnished.

Court's answer

The conclusion cannot be arrived at by examining documents produced during the hearing of the writ petition, unsupported by any affidavit; the proper course is to send the matter back to the assessing officer to redo the exercise, furnishing the requisite documents and information, and thereafter proceed afresh in accordance with law.

Ratio / Principle

The appeal is allowed; consequently the order passed in the writ petition is set aside, the writ petition is allowed, and the order under Section 148A(d) dated 20.4.2023 together with the consequential notice under Section 148 is set aside.

Key takeaways

The matter is remanded to the assessing officer with directions to furnish the requisite information and documents sought for by the appellant, afford a further opportunity to submit a reply, and thereafter take a fresh decision in accordance with law.ratio¶13

Detailed headnote1 paragraphs

Intra-Court appeal APO/122/2023 (Calcutta HC, Original Side; T.S. Sivagnanam CJ & Supratim Bhattacharya J; decided 08.01.2024) by the writ petitioner against the Single Bench order dated 20.07.2023 in WPO No. 1288 of 2023. The writ petition had challenged the order under Section 148A(d) of the Income Tax Act, 1961 dated 24.04.2023 (recorded as 20.4.2023 at ¶13) on the ground of natural-justice violation — the information and documents sought by the assessee in its 31.03.2023 submission (asserting no receipts from M/s. Quetzal Exim Pvt. Ltd. in FY 2018-19; a Section 148 notice for AY 2018-19 already issued) not having been furnished. Holding that conclusions cannot rest on documents produced at the hearing without affidavit support, the Division Bench allowed the appeal, set aside the writ-petition order, allowed the writ petition, set aside the Section 148A(d) order and the consequential Section 148 notice, and remanded the matter to the assessing officer to furnish the requisite information and documents, afford a further opportunity to reply, and take a fresh decision in accordance with law.

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IN THE HIGH COURT AT CALCUTTA CIVIL APPELLATE JURISDICTION ORIGINAL SIDE

APO/122/2023 IA NO: GA/1/2023 SAFEX COMPLEX PRIVATE LIMITED VS UNION OF INDIA AND ORS.

BEFORE :

THE HON’BLE THE CHIEF JUSTICE T.S. SIVAGNANAM AND

THE HON’BLE JUSTICE SUPRATIM BHATTACHARYA DATE : 8^TH January, 2024.

Appearance : Mr. Subhas Agarwal, Adv. Mr. Nitish Bhandary, Adv. ..for appellant Mr. Prithu Dudhoria, Adv. …for respondents

The Court :- This intra-Court appeal by the writ petitioner is directed against the order dated 20^th July, 2023 in WPO No. 1288 of 2023. The appellant had filed the said writ petition challenging the order passed under Section 148A(d) of Income Tax Act, 1961 (the Act) dated 24^th April, 2023. The principal ground on which the order was challenged is alleging violation of principles of natural justice, inasmuch as, the information and documents sought for by the assessee by their submission dated 31^st March, 2023 was not furnished to the assessee. It appears that when the writ petition was heard learned Standing Counsel for department was directed to produce certain documents which the learned Single Bench has recorded that the learned standing Counsel has produced and has come to the conclusion that the assessee entered into a transaction with M/s. Quetzal Exim Pvt. Ltd. As could be seen from the submission dated 31^st March, 2023, the assessee had taken a specific stand that they have not received any amount from M/s. Quetzal Exim Pvt. Ltd. during the financial year 2018-

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19 and in case any information is available with the department the assessee requested to supply the basis of such information along with document in order to justify the information. Furthermore, the assessee pointed out that a notice under Section 148 has already been issued for the assessment year 2018-19. A copy of the same was attached to the submission dated 31.03.2023.

In our view, the conclusion cannot be arrived at by examining the documents, which have been produced during the course of hearing of the writ petition that too not supported by any affidavit. Therefore, the proper course is to send back the matter to the assessing officer to redo the exercises and by furnishing the requisite documents and information to the appellant and thereafter to proceed afresh in accordance with law.

For the above reason, the appeal is allowed.

Consequently, the order passed in the writ petition is set aside and the writ petition is allowed and the order passed under Section 148A(d) dated 20.4.2023 and the consequential notice issued under Section 148 is set aside and the matter stands remanded back to the assessing officer with a direction to the assessing officer to furnish the requisite information and documents sought for by the appellant, as also afford a further opportunity to submit a reply and thereafter take a fresh decision in accordance with law.

(T.S. SIVAGNANAM) CHIEF JUSTICE

(SUPRATIM BHATTACHARYA,J.)

pkd/GH.