RADHIKA SHARMA vs. INCOME TAX OFFICER WARD 28 AND ANR

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WP/10852/2022HC BombayHCBM01034665202226 September 2023Bench: HON'BLE SHRI JUSTICE K.R. SHRIRAM,HON'BLE JUSTICE KAMAL KHATA2 pages
AI SummaryRemanded

What did the High Court hold?

The High Court held that the findings in the case of Siemens Financial Services Private Limited (Supra) should apply to the present petition. The court noted that in the Siemens case, for AY 2016-2017, sanction was held to be improper as it should have been under Section 151(ii) and not Section 151(i) of the Income Tax Act, 1961. Consequently, the sanction was deemed invalid, and the notice issued was quashed. Applying this precedent, the High Court quashed and set aside the impugned notice dated 25th July 2022 issued to the petitioner for AY 2017-2018, and any consequential orders passed. The ratio decidendi is that an invalid sanction under Section 151 renders the notice issued pursuant thereto void ab initio. The petition was disposed of.

What were the facts?

The petitioner, Radhika Sharma, has filed a writ petition challenging certain actions of the Income Tax Officer, Ward-2(8), for Assessment Year 2017-2018. The primary ground raised by the petitioner concerns the improper sanction obtained for a notice. The petitioner's counsel argues that a previous judgment by the Bombay High Court in Siemens Financial Services Private Limited Vs. Deputy Commissioner of Income Tax & Ors. should be applied. In that case, for Assessment Year 2016-2017, the court held that sanction should have been obtained under Section 151(ii) of the Income Tax Act, 1961, and not Section 151(i), rendering the sanction invalid and the consequent notice liable to be quashed.

What were the issues?

1. Whether the sanction obtained for the notice issued to the petitioner for Assessment Year 2017-2018 is invalid due to being obtained under the incorrect sub-section of Section 151 of the Income Tax Act, 1961, thereby rendering the notice itself invalid? Assessee's Contentions: The petitioner contends that the issue of improper sanction, as decided in Siemens Financial Services Private Limited Vs. Deputy Commissioner of Income Tax & Ors., should squarely apply to the present case. They argue that the sanction, if obtained under Section 151(i) instead of Section 151(ii), is invalid, making the notice issued to them invalid and liable to be quashed. Revenue's Contentions: The judgment does not record any specific contentions made by the revenue.

Which sections of the Income-tax Act were involved?

Section 151

AI-generated summary — verify with the full judgment below

1/2 426-wp-10852-22.doc IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURISDICTION WRIT PETITION NO.10852 OF 2022

Radhika Sharma ...Petitioner Versus Income Tax Officer Ward-2(8) & Anr ...Respondents ---- Mr. Shreyas Shrivastava a/w Mr. Tanmay Bidkar for Petitioner. Mr. Akhileshwar Sharma for Respondents.

---- CORAM : K.R. SHRIRAM & KAMAL KHATA, JJ

DATED : 26th SEPTEMBER 2023

P.C. :

1 This petition relates to A.Y.2017-2018. Counsel states that in this petition the issue of improper sanction having been obtained has been raised amongst other grounds. Counsel state that the issue of improper sanction has been decided by this court in Siemens Financial Services Private Limited Vs. Deputy Commissioner of Income Tax & Ors.1 wherein the court has held that for A.Y.2016-2017 the sanction should have been given under Section 151(ii) and not under Section 151(i) of the Income Tax Act 1961. 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. 2 Counsel state that the findings in Siemens Financial Services Pvt Ltd. (Supra) should squarely apply to this petition as well on the issue of sanction. Therefore, impugned notice dated 25th July 2022 is hereby 1. Writ Petition No.4888 of 2022 dated 25th August 2023. Meera Jadhav MEERA MAHESH JADHAV Digitally signed by MEERA MAHESH JADHAV Date: 2023.09.27 15:10:04 +0530

2/2 426-wp-10852-22.doc quashed and set aside. Any consequential orders passed shall also be quashed and set aside. 3 Petition disposed.

(KAMAL KHATA, J.) (K.R. SHRIRAM, J.) Meera Jadhav

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