BRIJESH ONKARNATH GOVIL vs. COMMISSIONER OF INCOME TAX AND ORS

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WP/2106/2023HC BombayHCBM01008124202309 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 High Court held that the issue of improper sanction, as decided in the case of Siemens Financial Services Private Limited (supra), squarely applies to the present petition. The court reiterated its finding that if the sanction is invalid (i.e., granted under the wrong sub-section of Section 151), the notice issued based on such sanction is also invalid and must be quashed. Consequently, any assessment order passed relying on an incorrect sanction would also have to be quashed. Therefore, all notices and orders impugned in the petition, along with any consequential notices and assessment orders, were quashed and set aside. The court clarified that other grounds could be raised by the parties at an appropriate stage in other proceedings.

What were the facts?

The petitioner, Brijesh Onkarnath Govil, filed a writ petition challenging certain notices and orders related to Assessment Year 2017-2018. The core of the challenge, as stated by both counsels, was the alleged improper sanction obtained by the revenue. The petition also raised other grounds, which were to be considered at an appropriate stage. The case was heard by the Bombay High Court.

What were the issues?

1. Whether the sanction obtained for issuing notices was invalid due to being granted under the incorrect sub-section of Section 151 of the Income Tax Act, 1961, rendering the notices and subsequent orders invalid? Assessee's Contention: The petitioner argued that the sanction was improper. The petitioner relied on the decision in Siemens Financial Services Private Limited Vs. Deputy Commissioner of Income Tax & Ors., which held that for Assessment Year 2016-2017, sanction should have been under Section 151(ii) and not Section 151(i), making the sanction invalid. Revenue's Contention: The judgment records no specific argument from the revenue on this point, but their counsel appeared for the respondents.

Which sections of the Income-tax Act were involved?

Section 151

AI-generated summary — verify with the full judgment below

1/2 908-aswp-2106-2023.doc IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURISDICTION WRIT PETITION NO. 2106 OF 2023 Brijesh Onkarnath Govil …Petitioner Versus Commissioner of Income Tax & Ors. …Respondents Mr. Dharan V. Gandhi, for Petitioner. Mr. Akhileshwar Sharma, for Respondents-Revenue. CORAM: K. R. SHRIRAM & DR. NEELA GOKHALE, JJ. DATED: 9th May 2024 PC:-

1.

This petition relates to Assessment Year 2017-2018. 2. Commissioner of Income Tax & Ors.1 wherein the court has held that for Assessment Year 2016-2017, the sanction should have been given under Section 151(ii) and not under Section 151(i) of the Income Tax Act, 1961 (the Act) and consequently the sanction is invalid. The Court has stated that in view of the invalid sanction, the notice issued itself will be invalid and has to be quashed. We would also add, if 1. (2023) 457 ITR 647 (BOM) Gaikwad RD

2/2 908-aswp-2106-2023.doc the notice has to be quashed, if there is an assessment order passed subsequently, that assessment order having been passed relying on an incorrect sanction, will also have to be quashed.

3.

Counsels further state that the findings in Siemens Financial Services Private Limited (supra) will squarely apply to this petition. Therefore, all notices and orders impugned in this petition are quashed and set aside. All consequential notices, assessment order and the consequential orders, if any, are also hereby quashed and set aside.

4.

Petition disposed.

5.

We clarify that all other grounds could be raised by the parties at appropriate stage in any other proceeding. (DR. NEELA GOKHALE, J.) (K. R. SHRIRAM, J.) Gaikwad RD RAJU DATTATRAYA GAIKWAD DATTATRAYA GAIKWAD Date: 2024.05.13 16:13:02 +0530

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