GAJANAN SAHEBRAO MORE vs. INCOME TAX OFFICER AND OTHER

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WP/355/2023HC BombayHCBM03034827202230 July 2024Author: HON'BLE SHRI JUSTICE RAVINDRA V. GHUGE,HON'BLE SHRI JUSTICE Y. G. KHOBRAGADE3 pages
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What did the High Court hold?

The Bombay High Court at Aurangabad Bench held that the notice issued under Section 148 of the Income Tax Act, 1961, dated 30/07/2022, for assessment year 2017-2018, was unsustainable. Following the precedent set in Hexaware Technologies Limited (supra), the Court ruled that such a notice could only be issued by the Faceless Assessing Officer (FAO) and not by the Jurisdictional Assessing Officer (JAO). The Court reasoned that the scheme framed under Section 151(A) of the Act mandates issuance by the FAO. Consequently, the notice was quashed and set aside. Any further demand or penalty notices issued in furtherance of this unsustainable notice were also set aside. The Court left open all contentions of both sides that could be raised in a proceeding initiated by the FAO under the scheme, except those covered by the Hexaware Technologies judgment.

What were the facts?

The petitioner, Gajanan Sahebrao More, filed a Writ Petition challenging a notice issued under Section 148 of the Income Tax Act, 1961, dated 30/07/2022, for assessment year 2017-2018. The notice pertained to income escaping assessment where the alleged escaped income was less than 50 Lakhs. The petition raised several issues, including whether the notice could have been issued by the Jurisdictional Assessing Officer (JAO) or if it should have been issued by the Faceless Assessing Officer (FAO) under Section 151(A) of the Act. The issue of delayed issuance was also raised, referencing a previous judgment. The parties agreed to have the matter decided based on existing judgments.

What were the issues?

1. Whether the notice issued under Section 148 of the Income Tax Act, 1961, dated 30/07/2022, for assessment year 2017-2018, is sustainable when it was issued by the Jurisdictional Assessing Officer (JAO) instead of the Faceless Assessing Officer (FAO) as mandated by the scheme framed under Section 151(A) of the Act. Assessee's Contentions: The assessee argued that the notice could only have been issued by the Faceless Assessing Officer (FAO) in terms of Section 151(A) of the Income Tax Act, 1961, and not by the Jurisdictional Assessing Officer (JAO). The assessee relied on the judgment in WP No.1945/2023 (The New India Assurance Company Ltd. Vs. Assistant Commissioner, Income Tax and others) and WP No.1778/2023 (Hexaware Technologies Limited Vs. the Assistant Commissioner of Income Tax and Others). Revenue's Contentions: The revenue did not record specific contentions against the assessee's arguments but agreed to have the issue settled by the aforementioned judgments.

Which sections of the Income-tax Act were involved?

Section 148,Section 151(A)

AI-generated summary — verify with the full judgment below

355.

23wp (1) IN THE HIGH COURT OF JUDICATURE AT BOMBAY BENCH AT AURANGABAD

WRIT PETITION NO. 355 OF 2023 GAJANAN SAHEBRAO MORE VERSUS INCOME TAX OFFICER AND OTHERS …. Mr Ram Deepak Heda, Advocate for Petitioner Mr Alok Sharma, Advocate for Respondent Nos.1, 2 & 4

CORAM : RAVINDRA V. GHUGE AND Y. G. KHOBRAGADE, JJ.

DATE : 30th July, 2024 PER COURT:

1.

This Writ Petition is not on board. It was mentioned by the learned Advocate for the Petitioner. The same is taken on the Production Board, by the consent of the parties.

2.

In this Writ Petition, notice under Section 148 of the Income Tax Act, 1961, is dated 30/07/2022, for the assessment year 2017-2018. Notice by the Department is issued in relation to income escaping assessment which is less than 50 Lakhs.

3.

We have heard the learned Advocates for the respective sides. Several issues have been raised in this Petition, 2024:BHC-AUG:16637-DB

355.

23wp (2) inter alia, that the impugned notice could not have been issued by the Jurisdictional Assessing Officer (JAO) and which could have been issued in terms of the provisions of Section 151(A) of the Income Tax Act, 1961 by the Faceless Assessing Officer (FAO). The issue of the delayed issuance of the notice is also covered by the Judgment delivered by this Court at the Principal Seat on 15/01/2024 in Writ Petition No.1945/2023 (The New India that the judgment dated 03/05/2024, delivered at the Principal Seat in WP No.1778/2023 (Hexaware Technologies Limited Vs. the Assistant Commissioner of Income Tax and Others), settles this issue. The notice could not have been issued, save and except by the Faceless Assessing Officer. If it is not issued by the FAO, this Court has ruled in Hexaware Technologies (supra), that such notice is unsustainable and, accordingly, the notice was quashed and set aside.

355.

23wp (3)

5.

It is, thus, obvious that, as the ground of notice being not in accordance with the scheme framed u/s 151(A) of the Income Tax Act, 1961, the view taken in Hexaware Technologies (supra), would be applicable to this case.

6.

In view of the above and considering the conclusions drawn in Hexaware Technologies (supra), the notice issued u/s 148 would be unsustainable. The same is, therefore, quashed and set aside. Any further demand notice or penalty notice in furtherance thereof, would also not survive and stands set aside, if any.

7.

With the above directions, this Writ Petition is disposed off. Needless to state, all the contentions of both the sides, which are available to the parties in a proceeding, which can be initiated by the FAO under the scheme framed u/s 151(A) of the Income Tax Act, are left open, save and except, those which are covered by the Hexaware Technologies (supra). (Y. G. KHOBRAGADE, J.) (RAVINDRA V. GHUGE, J.) sjk

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