KAVITA VIKRAM DAVE vs. INCOME TAX OFFICER WARD 28 2 1 MUMBAI AND 4 ORS

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WP/2711/2024HC BombayHCBM01008245202427 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 issue of improper sanction, as decided in the case of Siemens Financial Services Private Limited, would squarely apply to the present petition concerning Assessment Year 2017-2018. In Siemens Financial Services, the Court had ruled that for Assessment Year 2016-2017, the sanction should have been granted under Section 151(ii) and not Section 151(i) of the Income Tax Act, 1961, rendering the sanction invalid. Consequently, the notice issued based on such an invalid sanction was also deemed invalid and liable to be quashed. The High Court extended this reasoning to the present case, stating that if the notice is quashed due to an incorrect sanction, any subsequent assessment order passed relying on that incorrect sanction would also have to be quashed. Therefore, all notices issued for Assessment Year 2017-2018 and the orders impugned in the petition were quashed and set aside, along with all consequential notices and orders.

What were the facts?

The petitioner, Kavita Vikram Dave, filed a writ petition before the Bombay High Court challenging actions of the Income Tax Officer, Ward-28(2)(1), Mumbai, for Assessment Year 2017-2018. The core of the challenge revolved around the alleged improper sanction obtained by the revenue. The petitioner contended that the sanction was invalid, rendering subsequent notices and any consequential assessment orders void. The High Court considered a previous ruling in the case of Siemens Financial Services Private Limited Vs. Deputy Commissioner of Income Tax and Others, which dealt with a similar issue of improper sanction for Assessment Year 2016-2017.

What were the issues?

1. Whether the sanction obtained for issuing notices for Assessment Year 2017-2018 was improper, rendering it invalid? Assessee's Contention: The petitioner argued that the sanction obtained was improper, drawing parallels to the High Court's decision in Siemens Financial Services Private Limited, where it was held that sanction for Assessment Year 2016-2017 should have been under Section 151(ii) and not Section 151(i) of the Income Tax Act, 1961, making the sanction invalid. The petitioner contended that this finding would squarely apply to their case for Assessment Year 2017-2018. Revenue's Contention: The judgment does not record any specific arguments made by the revenue on this issue.

Which sections of the Income-tax Act were involved?

Section 151

AI-generated summary — verify with the full judgment below

1/2 906-aswp-2711-2024.doc IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURISDICTION WRIT PETITION NO. 2711 OF 2024 Kavita Vikram Dave …Petitioner Versus Income Tax Officer, Ward-28(2)(1), Mumbai & Ors. …Respondents Mr. Jitendra Singh for Petitioner. Mr. Arjun Gupta for Respondent Nos. 1 & 2. CORAM: K. R. SHRIRAM & DR. NEELA GOKHALE, JJ. DATED: 27th February 2024 PC:- 1. This petition relates to Assessment Year 2017-2018. 2. Counsel states 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. Counsel states that the issue of improper sanction has been decided by this Court in the case of Siemens Financial Services Private Limited Vs. 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”). Consequently, the sanction is invalid. The Court has stated that in view of the invalid sanction, the 1. (2023) 457 ITR 647 (Bom.). Gitalaxmi

2/2 906-aswp-2711-2024.doc 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, that assessment order having been passed relying on an incorrect sanction, will also have to be quashed. 3. Counsel further states that the findings in Siemens Financial Services Private Limited (supra) would squarely apply to this petition as well on the issue of sanction. Therefore, all such notices issued for Assessment Year 2017-2018 and orders impugned in this petition are quashed and set aside. All consequential notices, assessment order and the consequential orders, if any, are also hereby quashed and set aside. 4. Petition disposed. 5. We clarify that all other grounds could be raised by the parties at appropriate stage in any other proceeding. (DR. NEELA GOKHALE, J.) (K. R. SHRIRAM, J.) Gitalaxmi GITALAXMI KRISHNA KOTAWADEKAR Digitally signed by GITALAXMI KRISHNA KOTAWADEKAR Date: 2024.02.28 15:21:05 +0545

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