AMIR ABDUL GAFOOR SAYED vs. INCOME TAX OFFICER, WARD 2 , PANVEL AND ORS

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WP/14838/2023HC BombayHCBM01035489202311 December 2023Bench: 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 raised by the petitioner would squarely apply to Assessment Year 2017-2018, following its prior decision in Siemens Financial Services Private Limited V/s. Deputy Commissioner of Income Tax and Others. In the Siemens case, the Court had ruled that if sanction was granted under the wrong sub-section of Section 151 (specifically, Section 151(i) instead of Section 151(ii) for the relevant assessment year), the sanction would be invalid. Consequently, any notice issued based on such invalid sanction would also be invalid and liable to be quashed. The High Court extended this reasoning to the present case, stating that all notices issued for Assessment Year 2017-2018, the assessment orders passed relying on incorrect sanction, and any consequential notices/demands under Section 156 or Section 271 of the Act are quashed and set aside. The petition was disposed of on this basis, with a clarification that other grounds could be raised in future proceedings.

What were the facts?

The petitioner, Amir Abdul Gafoor Sayed, filed a writ petition before the Bombay High Court challenging actions of the Income Tax Officer, Ward 2, Panvel, and others for Assessment Year 2017-2018. The core of the petition, as stated by counsels, revolved around the issue of improper sanction obtained by the revenue. The petitioner argued that the sanction for issuing notices was invalid. The High Court noted that a similar issue concerning improper sanction had been decided in the case of Siemens Financial Services Private Limited V/s. Deputy Commissioner of Income Tax and Others, which dealt with Assessment Year 2016-2017. The court observed that the findings in the Siemens case would apply to the present case for Assessment Year 2017-2018.

What were the issues?

1. Whether the sanction obtained for issuing notices under the Income Tax Act, 1961, for Assessment Year 2017-2018 was improper, rendering the notices invalid, turning on Section 151 of the Act. Assessee's Contention: The assessee 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 Contention: The judgment does not record any specific contentions made by the revenue on this issue. However, the revenue was represented by counsel.

Which sections of the Income-tax Act were involved?

Section 151,Section 156,Section 271

AI-generated summary — verify with the full judgment below

1/2 412-aswp-14838-2023.doc IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURISDICTION WRIT PETITION NO. 14838 OF 2023 Amir Abdul Gafoor Sayed …Petitioner Versus Income Tax Officer, Ward 2, Panvel & Ors. …Respondents Mr. Devendar Jain i/b Ms. Radha Halbe for Petitioner. Mr. Ajeet Manwani a/w Ms. Samiksha Kanani for Respondents. CORAM: K. R. SHRIRAM & DR. NEELA GOKHALE, JJ. DATED: 11th December 2023 PC:- 1. This petition relates to Assessment Year 2017-2018. 2. Counsels state that in this petition 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 1. (2023) 457 ITR 647 (Bom.) Gitalaxmi

2/2 412-aswp-14838-2023.doc there is an assessment order passed subsequently, the assessment order 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. In view of the above, all consequential notices/demands issued under Section 156 or 271 of the Act will also have to be quashed. Ordered accordingly. 5. Petition disposed. 6. We clarify that all other grounds could be raised by the parties at appropriate stage in any other proceeding. 7. In view of disposal of petition, pending interim application, if any, also stands disposed of accordingly. (DR. NEELA GOKHALE, J.) (K. R. SHRIRAM, J.) Gitalaxmi GITALAXMI KRISHNA KOTAWADEKAR Digitally signed by GITALAXMI KRISHNA KOTAWADEKAR Date: 2023.12.12 11:30:02 +0545

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