MUKESH MAGANLAL DOSHI vs. ASST COMMISSIONER OF INCOME TAX, CIRCLE 27 (2) , MUMBAI AND ORS

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WP/10298/2022HC BombayHCBM01022341202222 February 2024Bench: 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 accorded by the Principal Commissioner of Income Tax (PCIT) was invalid. The court noted that the impugned order and notice, both dated April 6, 2022, pertained to Assessment Year 2018-2019 and were issued beyond the three-year period. Consequently, the sanctioning authority, as per Section 151(ii) of the Income Tax Act, 1961, should have been the Principal Chief Commissioner of Income Tax (PCCIT). The proviso to Section 151, inserted with effect from April 1, 2023, was not applicable to the present case. Following its own decision in Siemens Financial Services Private Limited Vs. Deputy Commissioner of Income Tax & Ors., the court found the sanction to be invalid. As a result, the impugned order under Section 148A(d) and the notice under Section 148 of the Act, both dated April 6, 2022, were quashed and set aside. The petition was disposed of, with all rights and contentions kept open.

What were the facts?

The petitioner, Mukesh Maganlal Doshi, challenged 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, for Assessment Year 2018-2019. The challenge was based on the invalidity of the sanction for the order and notice. Specifically, the petitioner argued that the sanction was issued by the Principal Commissioner of Income Tax (PCIT) instead of the Principal Chief Commissioner of Income Tax (PCCIT), as required for assessments beyond three years from the end of the relevant assessment year. The impugned notices and order were issued on April 6, 2022, which was beyond the three-year period for AY 2018-2019. The revenue conceded this point.

What were the issues?

1. Whether the sanction accorded by the Principal Commissioner of Income Tax (PCIT) for issuing a notice under Section 148 and an order under Section 148A(d) of the Income Tax Act, 1961, is valid when the assessment pertains to Assessment Year 2018-2019 and the impugned actions were taken on April 6, 2022, which is beyond the three-year period. Assessee's Contention: The assessee contended that the sanctioning authority should have been the Principal Chief Commissioner of Income Tax (PCCIT) as per Section 151(ii) of the Act, because the notice and order were issued beyond three years from the end of AY 2018-2019. The proviso to Section 151, which was inserted later, was not applicable. The assessee relied on the High Court's order in Vodafone Idea Limited v. Deputy Commissioner of Income Tax. Revenue's Contention: The revenue agreed with the assessee's contention regarding the invalidity of the sanction.

Which sections of the Income-tax Act were involved?

Section 148,Section 148A,Section 151

AI-generated summary — verify with the full judgment below

1/2 905-aswp-10298-2022.doc IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURISDICTION WRIT PETITION NO.10298 OF 2022 Mukesh Maganlal Doshi …Petitioner Versus Asst Commissioner of Income Tax Circle 27(2), Mumbai and Ors. ….Respondents Mr. Rahul Hakani i/by Ms Niyati Mankad for Petitioner. Mr. Akhileshwar Sharma for Respondents-Revenue. CORAM: K. R. SHRIRAM & DR. NEELA GOKHALE, JJ. DATED: 22nd February 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 19th 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. Counsels for Petitioner state this issue is covered by the order Shivgan SHAMBHAVI NILESH SHIVGAN Digitally signed by SHAMBHAVI NILESH SHIVGAN Date: 2024.02.26 11:42:04 +0530

2/2 905-aswp-10298-2022.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, Mumbai-5. 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.). Shivgan

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