SALIL SHRIPAD MEHENDALE vs. INCOME TAX OFFICER WARD 10 1, PUNE

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WP/695/2024HC BombayHCBM01049251202309 May 2024Author: HON'BLE SHRI JUSTICE K.R. SHRIRAM,HON'BLE JUSTICE DR. NEELA KEDAR GOKHALE2 pages
AI SummaryRemanded

What did the High Court hold?

The Bombay High Court held that the sanction for the order under Section 148A(d) and the notice under Section 148 were invalid. The court noted that the assessment year was 2018-2019 and the impugned order and notice were issued on April 6, 2022, which is beyond the three-year period from the end of the assessment year. Consequently, the sanctioning authority required was the PCCIT, as stipulated under Section 151(ii) of the Act. The proviso to Section 151, which came into effect from April 1, 2023, was not applicable to the present case. Relying on its previous decision in Siemens Financial Services Private Limited Vs. Deputy Commissioner of Income Tax & Ors., the court found the sanction to be invalid. Therefore, the impugned order dated April 6, 2022, under Section 148A(d) and the notice dated April 6, 2022, under Section 148 of the Act were quashed and set aside. The petition was disposed of, with all rights and contentions kept open.

What were the facts?

The petitioner, Salil Shripad Mehendale, is challenging a notice issued under Section 148 of the Income Tax Act, 1961, and an order passed under Section 148A(d) of the Act, both dated April 6, 2022. A notice under Section 148A(b) dated March 23, 2022, is also under challenge. The assessment year in question is 2018-2019. A key ground for challenge is that the sanction for the order under Section 148A(d) was issued by the Principal Commissioner of Income Tax (PCIT) instead of the Principal Chief Commissioner of Income Tax (PCCIT). Both parties agreed that the petition is covered by a previous order of the Bombay High Court in Vodafone Idea Limited v. Deputy Commissioner of Income Tax. The impugned notices and order were issued beyond three years from the end of the relevant assessment year.

What were the issues?

1. Whether the sanction for the order passed under Section 148A(d) of the Income Tax Act, 1961, and the subsequent issuance of the notice under Section 148 of the Act are invalid due to being accorded by the Principal Commissioner of Income Tax (PCIT) instead of the Principal Chief Commissioner of Income Tax (PCCIT), when the assessment year is 2018-2019 and the impugned actions were taken on April 6, 2022, which is beyond three years from the end of the assessment year. Assessee's Contention: The sanctioning authority should have been the PCCIT as per Section 151(ii) of the Act, given that the assessment year is 2018-2019 and the actions were taken beyond the three-year period. The proviso to Section 151, which was inserted later, is not applicable. Revenue's Contention: The revenue's counsel agreed that the petition is covered by the order in Vodafone Idea Limited v. Deputy Commissioner of Income Tax.

Which sections of the Income-tax Act were involved?

Section 148,Section 148A(d),Section 148A(b),Section 151(ii),Section 151

AI-generated summary — verify with the full judgment below

1/2 902-aswp-695-2024.doc IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURISDICTION WRIT PETITION NO. 695 OF 2024 Salil Shripad Mehendale …Petitioner Versus Income Tax Officer, Ward 10(1), Pune & Ors. …Respondent Mr. Sham Walve, with Mr. Sanket Bora, i/b. SPCM Legal, for Petitioner. Mr. Suresh Kumar, for Respondents-Revenue. CORAM: K. R. SHRIRAM & DR. NEELA GOKHALE, JJ. DATED: 9th May 2024 PC:-

1.

This petition relates to Assessment Year 2018- 2019. 2. Petitioner is impugning a notice issued under Section 148 of the Income Tax Act, 1961 (“the Act”) and the order passed under Section 148A(d) of the Act, both dated 6th April 2022 and the notice dated 23rd March 2022 issued under Section 148A(b) of the Act. One of the grounds raised is that the sanction to pass the order under Section 148A(d) of the Act and issuance of notice under Section 148 of the Act is invalid inasmuch as the sanction has been admittedly issued by the Principal Commissioner of Income Tax (“PCIT”) and not by the Principal Chief Commissioner of Income Tax (PCCIT”).

3.

Counsel for Petitioner state this petition is covered by the order Gaikwad RD

2/2 902-aswp-695-2024.doc dated 6th February 2024 passed by this Court in the case of Vodafone Idea Limited v. Deputy Commissioner of Income Tax, Circle-5(2)(1), Mumbai & Ors.

1.

Counsel for Respondents agrees.

4.

The impugned order and the impugned notice both dated 6th April 2022 state that the Authority that has accorded the sanction is the PCIT, Pune-3. The matter pertains to Assessment Year (“AY”) 2018-2019 and since the impugned order as well as the notice are issued on 6th April 2022, both have been issued beyond a period of three years. Therefore, the sanctioning authority has to be the PCCIT as provided under Section 151(ii) of the Act. The proviso to Section 151 of the Act has been inserted only with effect from 1st April 2023 and, therefore, shall not be applicable to the matter at hand.

5.

In the circumstances, as held by this Court in Siemens Financial Services Private Limited Vs. Deputy Commissioner of Income Tax & Ors.2, the sanction is invalid and consequently, the impugned order and impugned notice both dated 6th April 2022 under Sections 148A(d) and 148 of the Act are hereby quashed and set aside.

6.

Petition disposed. No order as to costs. All rights and contentions are kept open. (DR. NEELA GOKHALE, J.) (K. R. SHRIRAM, J.)

1.

Writ Petition No. 2768 of 2022.

2.

(2023) 457 ITR 647 (Bom.). Gaikwad RD RAJU DATTATRAYA GAIKWAD DATTATRAYA GAIKWAD Date: 2024.05.13 15:56:23 +0530

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