DEEPAK RAJARAM KUKREJA vs. ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE 1AND ORS

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WP/3416/2023HC BombayHCBM01012776202307 November 2023Bench: HON'BLE SHRI JUSTICE K.R. SHRIRAM,HON'BLE JUSTICE DR. NEELA KEDAR GOKHALE3 pages
AI SummaryRemanded

What did the High Court hold?

The High Court held that the issue of improper sanction, as decided in Siemens Financial Services Private Limited v. Deputy Commissioner of Income Tax and Others, squarely applies to Assessment Year 2017-2018. The Court found that for Assessment Year 2016-2017, the sanction should have been under Section 151(ii) and not Section 151(i) of the Income Tax Act, 1961, making the sanction invalid and the notice issued consequently invalid and liable to be quashed. Following this precedent, the Court quashed and set aside all notices issued for Assessment Year 2017-2018 on the grounds of improper sanction. Furthermore, the Court held that any subsequent assessment orders passed relying on such incorrect sanction would also have to be quashed. Consequently, all consequential notices/demands issued under Section 156 or Section 271 of the Act were also quashed. No issue was expressly left undecided.

What were the facts?

These two writ petitions, WP No. 3416 of 2023 and WP No. 13932 of 2023, pertain to Assessment Year 2017-2018. The petitioners are Deepak Rajaram Kukreja and Poorva Shah, respectively. The respondents are various income tax authorities. A common issue raised in both petitions, and during the hearing, is the alleged improper sanction obtained for the notices issued. The petitioners argue that this issue has been decided by the Bombay High Court in the case of Siemens Financial Services Private Limited v. Deputy Commissioner of Income Tax and Others.

What were the issues?

1. Whether the sanction obtained for issuing notices for Assessment Year 2017-2018 was improper, thereby rendering the notices invalid, in light of the decision in Siemens Financial Services Private Limited v. Deputy Commissioner of Income Tax and Others? Assessee's Contention: The assessee relies on the Bombay High Court's decision in Siemens Financial Services Private Limited (supra), which held that for Assessment Year 2016-2017, sanction should have been obtained under Section 151(ii) and not Section 151(i) of the Income Tax Act, 1961. Consequently, the sanction was invalid, and the notice issued was quashed. The assessee contends that this finding squarely applies to 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,Section 156,Section 271

AI-generated summary — verify with the full judgment below

1/3 910-WP-3416-2023 @ 912-WP-13932-2023.doc IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURISDICTION (910) WRIT PETITION NO. 3416 OF 2023 Deepak Rajaram Kukreja ….Petitioner V/s. Assistant Commissioner of Income Tax Circle - 1 and Ors. …Respondents ---- Mr. Dharan Gandhi for Petitioner. Ms. Samiksha Kanani i/b Mr. Ajeet Manwani for Respondents-Revenue. ---- AND (912) WRIT PETITION NO. 13932 OF 2023 Poorva Shah ….Petitioner V/s. Income Tax Officer, Ward 7(1), Pune and Ors. …Respondents ---- Mr. Sham Walve a/w Mr. Sameer Dalal for Petitioner. Mr. Suresh Kumar for Respondents-Revenue. ---- CORAM : K.R. SHRIRAM & DR. NEELA GOKHALE, JJ.

DATED : 7th NOVEMBER 2023 P.C. : 1. Both these Petitions are relate to Assessment Year 2017-2018. 2. Counsels state that in both 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 Purti Parab PURTI PRASAD PARAB Digitally signed by PURTI PRASAD PARAB Date: 2023.11.09 11:26:54 +0530

2/3 910-WP-3416-2023 @ 912-WP-13932-2023.doc 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.

Counsels further state that the findings in Siemens Financial Services Private Limited (supra) will squarely apply to the Assessment Year 2017-2018 as well. 3. Therefore, all such notices issued for Assessment Year 2017- 2018 are quashed and set aside. 4. 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. 5. 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. 1 (2023) 457 ITR 647 (Bom) Purti Parab

3/3 910-WP-3416-2023 @ 912-WP-13932-2023.doc 6. Both Petitions disposed. (DR. NEELA GOKHALE, J.) (K.R. SHRIRAM, J.) Purti Parab

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