RR CONSRUCTIONS AND INFRASTRUCTURE INDIA PRIVATE LIMITED. vs. ASSISTANT COMMISSIONER OF INCOME TAX AND ANR.

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WP/1741/2024HC BombayHCBM01000172202404 September 2024Bench: HON'BLE SHRI JUSTICE G. S. KULKARNI,HON'BLE SHRI JUSTICE SOMASEKHAR SUNDARESAN4 pages
AI SummaryAllowed

What did the High Court hold?

The High Court held that the notices issued under Section 148 of the Income-tax Act, 1961, were invalid because they were issued outside the faceless mechanism mandated by Section 144B of the Act. The Court referred to its earlier decision in Hexaware Technologies Limited Vs. Assistant Commissioner of Income Tax & Ors., wherein it was held that the Jurisdictional Assessing Officer lacks the jurisdiction to issue a notice under Section 148 without adhering to the faceless mechanism as stipulated by Section 144B read with the Scheme under Section 151A dated March 29, 2022. Consequently, the Court found that the proceedings were covered by the Hexaware decision. The revenue's contentions regarding central charges were also found to be covered by the decision in Ganesh Nivrutti Jagtap. The Court allowed the petitions in terms of prayer clause (a) of each petition, which typically seeks quashing of the impugned notices and assessment orders. No issue was expressly left undecided.

What were the facts?

This judgment concerns a batch of eight writ petitions filed by RR Constructions and Infrastructure India Pvt. Ltd. (the petitioner-assessee) against the Assistant Commissioner of Income Tax, Central Circle-1(3) & Anr. (the respondents-revenue). The petitions challenge notices issued under Section 148 of the Income-tax Act, 1961, and consequential assessment orders. The assessment years involved range from 2013-14 to 2020-21. The notices under Section 148 were issued between March 2023 and May 2023, and the assessment orders, where applicable, were dated March 31, 2024. The core of the challenge lies in the issuance of these notices and assessments outside the faceless assessment mechanism.

What were the issues?

1. Whether the notices issued under Section 148 of the Income-tax Act, 1961, are invalid as they were issued de hors the faceless mechanism mandated by Section 144B of the Act, and consequently, whether Section 151A of the Act, which governs the approval for such notices, was correctly applied. Assessee's contention: The petitioner argues that the impugned notices under Section 148 are contrary to Section 151A of the Act because they were issued outside the faceless mechanism prescribed by Section 144B. They rely on the Bombay High Court's decision in Hexaware Technologies Limited Vs. Assistant Commissioner of Income Tax & Ors. Revenue's contention: The revenue initially contended that the assessment orders fell within Central Charges and were governed by CBDT orders dated March 31, 2021, and September 6, 2021. They also relied on the Bombay High Court's decisions in Ganesh Nivrutti Jagtap vs. Assistant Commissioner of Income-tax and Abhin Anilkumar Shah vs. Income Tax Officer to support their position regarding the applicability of Section 151A and Section 144B to Central charges. However, the revenue's counsel did not dispute the High Court's findings in the cited cases regarding the issuance of notices outside the faceless mechanism.

Which sections of the Income-tax Act were involved?

Section 148,Section 151A,Section 144B

AI-generated summary — verify with the full judgment below

915.WP1738_2024.DOC

IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURISDICTION WRIT PETITION NO. 1738 OF 2024 WITH WRIT PETITION NO. 1748 OF 2024 WITH WRIT PETITION NO. 1749 OF 2024 WITH WRIT PETITION NO. 1741 OF 2024 WITH WRIT PETITION NO. 1739 OF 2024 WITH WRIT PETITION NO. 1744 OF 2024 WITH WRIT PETITION NO. 1745 OF 2024 WITH WRIT PETITION NO. 1742 OF 2024 RR Constructions and Infrastructure India Pvt. Ltd. … Petitioner Versus Assistant Commissioner of Income Tax, Central Circle 1(3) & Anr. …Respondents Mr. Rahul Hakani a/w. Mr. Ravi Sawana i/b. Niyati Mankad Hakani for the petitioner. Mr. Suresh Kumar for the respondents. _______________________ CORAM: G. S. KULKARNI & SOMASEKHAR SUNDARESAN, JJ. Date : 4 September, 2024 _______________________ PC: 1. Rule. Rule made returnable forthwith. Learned Counsel for the Respondents waives service. By consent of the parties, heard finally. Page 1 of 4 4 September , 2024

2024:BHC-AS:36135-DB

915.WP1738_2024.DOC 2. This is a batch of petitions in which the petitioner-assessee is common. The challenge in these petitions is to a notice issued under section 148 of the Income-tax Act, 1961 and the assessment orders. The notices are annexed at Exhibit ‘A’. There are also consequential assessment orders (except in Writ Petition No. 1742 of 2024), which are annexed at Exhibit ‘E’, which are dated 31 March, 2024 in all these petitions. For convenience, we note the assessment years, impugned notice under section 148 and the assessment order, in the following statement as provided to us by the learned counsel for the petitioner: Writ Petition No. A.Y. Notice u/s. 148 Asst. Order 1738/2024 2017-18 09.03.2023 31.03.2024 1748/2024 2013-14 09.03.2023 31.03.2024 1749/2024 2015-16 16.03.2023 31.03.2024 1741/2024 2014-15 09.03.2023 31.03.2024 1739/2024 2016-17 09.03.2023 31.03.2024 1744/2024 2018-19 09.03.2023 31.03.2024 1745/2024 2019-20 28.03.2023 31.03.2024 1742/2024 2020-21 17.05.2023 31.03.2024 3. Learned counsel for the petitioner, at the outset, would submit that the impugned assessment would fall under the Central Charges and as the revenue would contend falling within the purview of the orders dated 31 March, 2021 and 6 September, 2021 issued by the Central Board of Direct Page 2 of 4 4 September , 2024

915.WP1738_2024.DOC Taxes. Learned counsel for the petitioner would submit that the challenge of the petitioner is to a notice under section 148, being contrary to the provisions of Section 151A of the Act, as issued de’hors the faceless mechanism as postulated under section 144B of the Act. He submits that the issue would stand covered by the decision of this Court in Hexaware Technologies Limited Vs. Assistant Commissioner of Income Tax & Ors.1 . 4. Insofar as the revenue’s contentions in regard to the applicability of the orders dated 31 March, 2021 and 6 September, 2021are concerned, it is submitted that the issue would stand covered by the decision of this Court in Ganesh Nivrutti Jagtap vs. Assistant Commissioner of Income-tax, Central Circle-5(3), Mumbai & Ors.2 as also the observations made by this Court in Abhin Anilkumar Shah vs. Income Tax Officer, International Tax, Ward Circle 4(2)(1) & Ors.3 wherein this Court had the occasion to consider the purport of the said orders and in the context of applicability of the provisions of Section 151A of the Act read with Section 144B on the issue of applicability of the scheme notified under section 151A to the Central charges. 1 (2024) 464 ITR 430 2 Writ Petition (L) No. 10683 of 2023 decided on 28.08.2023 3 Writ Petition (L) No. 16750 of 2024 dated 26.08.2024 Page 3 of 4 4 September , 2024

915.WP1738_2024.DOC 5. Mr. Suresh Kumar, learned counsel for the revenue would not dispute as to what is held by this Court in the decisions referred hereinabove as also to the fact that in the present case, the notice under section 148 was issued outside the faceless mechanism, the proceedings would stand covered by the decision in Hexaware (supra) as also the Revenue’s contention on central charges would also stand covered by the decision in Ganesh Nivrutti Jagtap (supra). 6. To avoid prolix, we do not intend to extract what has held by this Court in Hexaware (supra) suffice it to observe that it is held that the Jurisdictional Assessing Officer would not have jurisdiction to issue notice under section 148 de’ hors the faceless mechanism as mandated under section 144B read with the Scheme under section 151A dated 29 March, 2022. In this view of the matter, we are inclined to allow these petitions in terms of prayer clause (a) of each of these petitions. Ordered accordingly. 7. Rule is made absolute in the aforesaid terms. No costs.

(SOMASEKHAR SUNDARESAN, J.) (G. S. KULKARNI , J.) Page 4 of 4 4 September , 2024

Signed by: Vidya S. Amin Designation: PS To Honourable Judge Date: 09/09/2024 14:28:42

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