AAKASH INVESTMENTS vs. INCOME TAX OFFICER, WARD-7 (1) , PUNE AND ORS

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WP/2988/2023HC BombayHCBM01010378202306 March 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 High Court held that the sanction for the order under Section 148A(d) and the notice under Section 148 of the Income Tax Act, 1961, was invalid. The court noted that the impugned order and notice, both dated April 11, 2022, were issued for Assessment Year 2018-19 and were beyond a period of three years. Consequently, the sanctioning authority should have been the Principal Chief Commissioner of Income Tax (PCCIT) as provided under Section 151(ii) of the Act. The proviso to Section 151, which was inserted with effect from April 1, 2023, was not applicable to the present case. Relying on its own previous decision in Siemens Financial Services Private Limited Vs. Deputy Commissioner of Income Tax & Ors., the court found the sanction to be invalid. The court quashed and set aside the impugned order and notice. The petition was disposed of with no order as to costs, and all rights and contentions were kept open.

What were the facts?

The petitioner, Aakash Investments, filed a writ petition before the Bombay High Court challenging notices dated March 21, 2022, and March 31, 2022, issued under Section 148A(b) of the Income Tax Act, 1961. The petitioner also challenged the order dated April 11, 2022, passed under Section 148A(d) and the notice dated April 11, 2022, issued under Section 148 of the Act. The assessment year in question is 2018-19. A key ground raised was that the sanction for the order under Section 148A(d) and the notice under Section 148 was granted by the Principal Commissioner of Income Tax (PCIT) instead of the Principal Chief Commissioner of Income Tax (PCCIT). The impugned order and notice were issued on April 11, 2022, which was beyond a period of three years from the relevant assessment year.

What were the issues?

1. Whether the sanction for passing an order under Section 148A(d) and issuing a notice under Section 148 of the Income Tax Act, 1961, is invalid if granted by the Principal Commissioner of Income Tax (PCIT) instead of the Principal Chief Commissioner of Income Tax (PCCIT) when the assessment year is 2018-19 and the notices were issued beyond three years. Assessee's Contention: The assessee argued that the sanctioning authority must be the PCCIT as per Section 151(ii) of the Act, given that the notices were issued beyond three years from the end of the relevant assessment year. They relied on the High Court's decision in Siemens Financial Services Private Limited Vs. Deputy Commissioner of Income Tax & Ors. Revenue's Contention: The revenue's counsel agreed with the assessee's submission, acknowledging that the petition was covered by the High Court's order in Vodafone Idea Limited Vs. Deputy Commissioner of Income Tax, Circle 5(2)(1), Mumbai & Ors. The judgment records no other specific arguments from the revenue.

Which sections of the Income-tax Act were involved?

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

AI-generated summary — verify with the full judgment below

1/2 916-wp-2988-23.doc IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURISDICTION WRIT PETITION NO. 2988 OF 2023 Aakash Investments

….Petitioner V/s. Income Tax Officer, Ward 7(1), Pune & Ors ....Respondents ---- Mr. Sagar Tilak a/w Ms Payal Rathod i/b Mr. Sachin Hande for Petitioner. Mr. Suresh Kumar for Respondent ---- CORAM : K. R. SHRIRAM & Dr. NEELA GOKHALE, JJ.

DATED : 6th MARCH 2024 P.C. : 1 This petition relates to Assessment Year 2018-19. 2 Commissioner of Income Tax, Circle 5(2)(1), Mumbai & Ors.1 Counsel for respondent agrees. 3 Petitioner is impugning a notices dated 21st March 2022 and 31st March 2022 issued under Section 148A(b) of the Income Tax Act, 1961 (“the Act”), the order dated 11th April 2022 passed under Section 148A(d) of the Act and the notice also dated 11th April 2022 issued under Section 148 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 in as much as the sanction has been 1 Writ Petition No.2768 of 2022 dated 6th February 2024 Meera Jadhav MEERA MAHESH JADHAV MEERA MAHESH JADHAV Date: 2024.03.07 18:04:20 +0530

2/2 916-wp-2988-23.doc admittedly issued by the Principal Commissioner of Income Tax (“PCIT”) and not by the Principal Chief Commissioner of Income Tax (PCCIT”). 4 The impugned order and the impugned notice both dated 11th April 2022, state that the Authority that has accorded the sanction is the PCIT, Mumbai. The matter pertains to Assessment Year (“AY”) 2018-19. Since the impugned order as well as the notice are both issued on 11th April 2022, both have been issued beyond a period of three years; therefore, the Income Tax & Ors.2 the sanction is invalid. Mr. Suresh Kumar agrees. Consequently, the impugned order and impugned notice, both dated 11th April 2022, issued under section 148A(d) and 148, respectively, 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.) 2 (2023) 457 ITR 647 (Bom) Meera Jadhav

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