VASUNDHARA APOORVA PATNI vs. ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE 7, PUNE AND ORS

PDF · subscribers
WP/10612/2022HC BombayHCBM01034729202205 December 2023Bench: HON'BLE SHRI JUSTICE K.R. SHRIRAM,HON'BLE JUSTICE DR. NEELA KEDAR GOKHALE4 pages
AI SummaryPartly Allowed

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 V/s. Deputy Commissioner of Income Tax and Others, squarely applies to the present petitions. For Assessment Year 2016-2017, the Court found that the sanction should have been obtained under Section 151(ii) of the Income Tax Act, 1961, and not under Section 151(i). Consequently, the sanction was deemed invalid. The Court reasoned that if the sanction is invalid, the notice issued under Section 148 is also invalid and must be quashed. Furthermore, any subsequent assessment orders passed relying on such an incorrect sanction would also be quashed. This principle was extended to Assessment Year 2017-2018, leading to the quashing and setting aside of all notices, assessment orders, and consequential orders for that year. The Court clarified that other grounds raised by the parties could be pursued at an appropriate stage.

What were the facts?

These writ petitions concern Assessment Year 2016-2017 and 2017-2018. The petitioners, including Arihant Gajendrakumar Patni, Apoorva Ashokkumar Patni, Ashokkumar Sobhagmal Patni, Sadhana Ashokkumar Patni, Vasundhara Apoorva Patni, Maharajkrishna Birmani, and Late Renu Bansilal Birmani (through legal heir), challenged notices and subsequent assessment orders issued by the Assistant Commissioner of Income Tax and other revenue authorities. A key ground raised by the petitioners, and argued during the hearing, was the issue of improper sanction obtained by the revenue for issuing the notices.

What were the issues?

1. Whether the sanction obtained for issuing notices under Section 148 of the Income Tax Act, 1961, was improper for Assessment Year 2016-2017, thereby rendering the notices invalid? (Question of law turning on Section 151 of the Income Tax Act, 1961). 2. Whether the findings of the High Court in Siemens Financial Services Private Limited V/s. Deputy Commissioner of Income Tax and Others regarding improper sanction for Assessment Year 2016-2017 would also apply to Assessment Year 2017-2018? Assessee's Contentions: The petitioners argued that the sanction obtained was improper. They relied on the High Court's decision in Siemens Financial Services Private Limited V/s. Deputy Commissioner of Income Tax and Others, 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 and the notice liable to be quashed. Revenue's Contentions: The judgment does not record specific contentions from the revenue regarding the issue of improper sanction.

Which sections of the Income-tax Act were involved?

Section 151,Section 148

AI-generated summary — verify with the full judgment below

1/4 903-908-aswp-10605-2022+.doc IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURISDICTION (903) WRIT PETITION NO. 10605 OF 2022 WITH (903) WRIT PETITION NO. 10613 OF 2022 Arihant Gajendrakumar Patni …Petitioner Versus Assistant Commissioner of Income Tax Circle 7 & Ors. …Respondents WITH (904) WRIT PETITION NO. 10606 OF 2022 WITH (904) WRIT PETITION NO. 10615 OF 2022 Apoorva Ashokkumar Patni …Petitioner Versus Assistant Commissioner of Income Tax Circle 7 & Ors. …Respondents WITH (905) WRIT PETITION NO. 10608 OF 2022 WITH (905) WRIT PETITION NO. 10617 OF 2022 Ashokkumar Sobhagmal Patni …Petitioner Versus Assistant Commissioner of Income Tax Circle 7 & Ors. …Respondents WITH (906) WRIT PETITION NO. 10610 OF 2022 WITH (906) WRIT PETITION NO. 10620 OF 2022 Sadhana Ashokkumar Patni …Petitioner Versus Assistant Commissioner of Income Tax Circle 7 & Ors. …Respondents WITH (907) WRIT PETITION NO. 10612 OF 2022 WITH Gaikwad RD

2/4 903-908-aswp-10605-2022+.doc (907) WRIT PETITION NO. 10621 OF 2022 Vasundhara Apoorva Patni …Petitioner Versus Assistant Commissioner of Income Tax Circle 7 & Ors. …Respondents WITH (908) WRIT PETITION NO. 1093 OF 2023 WITH (908) WRIT PETITION NO. 1094 OF 2023 WITH (908) WRIT PETITION NO. 1095 OF 2023 Maharajkrishna Birmani …Petitioner Versus The Assistant Deputy Commissioner of Income Tax & Ors. …Respondents WITH (908) WRIT PETITION NO. 1096 OF 2023 Late Renu Bansilal Birmani through legal heir Maharajkrishna Bansilal Biramani …Petitioner Versus The Assistant Deputy Commissioner of Income Tax, Circle 1, Nashik & Ors. …Respondents Mr. Mihir Naniwadekar, with Mr. Rohan Deshpande & Ms. Farzeen Khambatta, for Petitioners. Mr. Suresh Kumar, for Respondents in WP/1093-2023, WP/1094- 2023, WP/1095-2023 and WP/1096/2023. Mr. Ajeet Manwani, with Ms. Samiksha Kanani, for Respondents- Revenue in other Writ Petitions. CORAM: K. R. SHRIRAM & DR. NEELA GOKHALE, JJ. DATED: 5th December 2023 PC:- 1. These are Petitions which relate to Assessment Year 2016-2017 or 2017-2018. Gaikwad RD

3/4 903-908-aswp-10605-2022+.doc 2. Counsels state that in all these Petitions the issue of improper sanction having been obtained has been raised among other grounds, in the petition as well as during the hearing. Counsels state that the issue of improper sanction has been decided by this Court in the case of Siemens Financial Services Private Limited V/s. Deputy Commissioner of Income Tax and Others1, 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 the notice has to be quashed, if there is an assessment order passed subsequently, those assessment orders having been passed relying on an incorrect sanction, will also have to be quashed. Ordered accordingly. 3. Counsels further state that the findings in Siemens Financial Services Private Limited (supra) will squarely apply to the Assessment Year 2017-2018 as well. Therefore, all such notices issued for Assessment Year 2017-2018, the assessment orders and the consequential orders are also quashed and set aside. 4. All Petitions except Writ Petition No.1093 of 2023 and Writ Petition No.1094 of 2023 are disposed. 1. (2023) 457 ITR 647 (Bom.) Gaikwad RD

4/4 903-908-aswp-10605-2022+.doc 5. We clarify that all other grounds could be raised by the parties at appropriate stage in any other proceeding. 6. In view of disposal of Petitions, pending interim application, if any, also stands disposed of accordingly. Writ Petitions No.1093 of 2023 and Writ Petition No.1094 of 2023 7. These Petitions to be listed separately for admission. To be listed as per the date early assigned. (DR. NEELA GOKHALE, J.) (K. R. SHRIRAM, J.) Gaikwad RD RAJU DATTATRAYA GAIKWAD Digitally signed by RAJU DATTATRAYA GAIKWAD Date: 2023.12.05 17:42:31 +0530

More judgments on Section 151

All 4,323 judgments and leading authorities on Section 151 →

Recent GST High Court judgments

Search GST case law →