120 MEDIA COLLECTIVE PRIVATE LIMITED vs. Assistant Commissioner of Income Tax

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WP/536/2025HC Bombay18 November 2024Author: HON'BLE SHRI JUSTICE G. S. KULKARNI, HON'BLE JUSTICE ADVAIT M. SETHNA3 pages
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What did the High Court hold?

The High Court held that the impugned assessment order could not have been passed as it was barred by limitation. The Court noted that the revenue did not dispute the petitioner's contentions regarding limitation. Citing the Bombay High Court's observations in Akhila Sujith, which followed Hexaware Technology Ltd., the Court found that the notice under Section 148 was illegal and without jurisdiction as it was time-barred. This illegality permeated the order under Section 148A(d) and the consequent assessment order under Section 147. The Court concluded that relegating the petitioner to an alternate remedy of appeal would be an empty formality due to the inherent and incurable defect of limitation. The petition was allowed, quashing the notice under Section 148, the order under Section 148A(d), and the assessment order under Section 147. No issue was expressly left undecided.

What were the facts?

The petitioner, 120 Media Collective Pvt. Ltd., challenged a notice dated July 30, 2022, issued under Section 148 of the Income Tax Act for assessment year (AY) 2015-16. Also challenged were an order dated July 29, 2022, passed under Section 148A(d) pursuant to a notice dated June 17, 2021, under Section 148A(b), and a consequent assessment order dated May 17, 2023, passed under Section 147 read with Section 144B. The petitioner contended that these proceedings were barred by limitation under Section 149(1)(b) of the Act, as the six-year period from the end of AY 2015-16 expired on March 31, 2022. The revenue did not dispute the limitation argument.

What were the issues?

1. Whether the notice dated July 30, 2022, issued under Section 148 of the Income Tax Act for AY 2015-16 is barred by limitation as per Section 149(1)(b) of the Act? 2. Whether the order dated July 29, 2022, passed under Section 148A(d) and the assessment order dated May 17, 2023, passed under Section 147 read with Section 144B are illegal and liable to be quashed on grounds of limitation? Assessee's Contentions: The petitioner argued that the proceedings were barred by limitation. The six-year period for issuing a notice under Section 148, as stipulated by Section 149(1)(b), expired on March 31, 2022, for AY 2015-16. Therefore, the impugned notice, order under Section 148A(d), and assessment order were illegal. Reliance was placed on the Bombay High Court's decisions in Hexaware Technology Ltd. Vs. Assistant Commissioner of Income Tax and Akhila Sujith Vs. Income Tax Officer, International, and the Supreme Court's decision in Union of India Vs. Ashish Agarwal. Revenue's Contentions: The revenue did not dispute the contentions regarding limitation.

Which sections of the Income-tax Act were involved?

Section 148,Section 148A,Section 148A(b),Section 148A(d),Section 147,Section 144B,Section 149(1)(b)

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances
9-WPL-25601-2024.DOC IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION WRIT PETITION (L) NO. 25601 OF 2024 120 Media Collective Pvt. Ltd. ...Petitioner Versus Assistant Commissioner of Income Tax, Circle - 16(1) & Ors. ...Respondents _______ Mr. Rahul Hakani for Petitioner. Mr. P. A. Narayanan for Respondent. _______ CORAM: G. S. KULKARNI & ADVAIT M. SETHNA, JJ. DATED: 18 NOVEMBER 2024

Oral Judgment (Per: G. S. Kulkarni, J.)

1.

Rule. Respondents waive service. By consent of the parties, heard finally.

2.

This petition under Article 226 of the Constitution of India challenges legality of the notice dated 30 July 2022 issued to the petitioner under Section 148 of the Income Tax Act (for short the “IT Act”) for the assessment year 2015-16. 3. There is also a challenge to an order dated 29 July 2022 passed under Section 148A(d) of the Act passed in pursuance of a notice under Section 148A(b) dated 17 June 2021 and the consequent assessment order dated 17 May 2023 passed under Section 147 read with 144B of the IT Act.

4.

The primary contention as urged on behalf of the petitioner is that the impugned assessment order as also the action taken against the petitioner under Section 148A(b) are illegal for the reason that such proceedings were barred by limitation, considering the provisions of Section 149(1)(b) of the IT Act which 18 November 2024 Kiran Kawre PRASHANT VILAS RANE PRASHANT VILAS RANE Date: 2024.11.19 21:35:11 +0530 CNR No : HCBM020256082024 Uploaded on - 19/11/2024 Downloaded on - 31/10/2026 00:11:07

2024:BHC-OS:18743-DB

9-WPL-25601-2024.DOC Commissioner of Income Tax,1 (for short “Hexaware”), as also the decision of this 5. Learned counsel for the respondents / revenue would not dispute the contentions as urged on behalf of the petitioner in regard to the limitation as would be applicable to pass the assessment order in question. In this context in Akhila Sujith (supra) considering the position in law, this Court observed thus:- “9. Having heard learned counsel for the parties and having perused the record, in our opinion, considering the observations as made by the Division Bench in Hexaware, we find that the impugned notice itself was illegal and without jurisdiction. There was no foundation on jurisdiction for an assessment order to be passed on the basis of a notice under section 148 which itself was time barred. Thus there is no basis on which we can hold the impugned assessment order to be legal and valid as not only the impugned notice under Section 148 of the Act but also the order passed under Section 148A(d) of the Act were barred by limitation as per the first proviso to Section 149 as held in Hexaware. For such reason, we are of the clear opinion that no useful purpose would serve relegating the petitioner to avail an alternate remedy of an appeal, as filing of such appeal itself would be an empty formality. 1 2024 162 Taxmann.com 225 2 [2024] 166 taxmann.com 478 (Bombay) 3 2021 (138) taxmann.come 64 18 November 2024 Kiran Kawre Uploaded on - 19/11/2024 Downloaded on - 31/10/2026 00:11:07

9-WPL-25601-2024.DOC

10.

In the aforesaid circumstances, the inherent illegality of the impugned notice under Section 148 of the Act being time-barred, which percolates into the assessment order passed thereunder is an incurable defect, regardless of the forum before which the same is agitated. In these circumstances, it cannot be said that it was not appropriate for the Petitioner to invoke the jurisdiction of this Court under Article 226 when the assessing officer has acted without jurisdiction.”

6.

In the light of the above discussion, we are inclined to hold that the impugned assessment order could not have been passed as the same was barred by limitation. We, accordingly allow this petition in terms of prayer clause (a) which reads thus: (a) that this Hon’ble Court may be pleased to issue a Writ of Certiorari or a Writ in the nature of Certiorari or any other appropriate Writ, order or direction, calling for the records of the Petitioner’s case and after going into the legality and propriety thereof, to quash and set aside (i) Notice u/s 148 dated July 30 2022 [Ex-A] issued by the Respondent No.1 for AY 2015-16, (ii) the impugned order dated July 29, 2022 passed under Section 148A(d) [ex-B] by the Respondent No. 1 for AY 2015-16 and (iii) Notice u/s 148A(b) dated June 17, 2021 [Ex-E] for AY 2015-16 and (iv) Assessment Order dated May 17, 2023 u/s 147 r.w.s 144B (Ex-D) issued by the Respondent No.1.”

7.

Rule is made absolute in the aforesaid terms.

8.

Disposed of. No costs. (ADVAIT M. SETHNA, J.) (G. S. KULKARNI , J.) 18 November 2024 Kiran Kawre Uploaded on - 19/11/2024 Downloaded on - 31/10/2026 00:11:07 Powered by TCPDF (www.tcpdf.org)

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