CEC RANI JOINT VENTURE THR. THE MANAGING PARTNER GALLA GUNADAIAH vs. CENTRAL BOARD OF DIRECT TAXES AND 2 ORS

PDF · subscribers
WP/556/2024HC BombayHCBM05001384202409 December 2024Bench: HON'BLE SHRI JUSTICE M. S. KARNIK,HON'BLE MS JUSTICE NIVEDITA P. MEHTA23 pages
AI SummaryAllowed

What did the High Court hold?

The Bombay High Court at Goa, in its judgment dated December 9, 2024, held that the notice issued by the Assistant Commissioner of Income Tax under Section 148A of the Income Tax Act, 1961, for Assessment Year 2017-18, was not in compliance with the mandatory pre-conditions. The Court found that the Assessing Officer had not formed the requisite satisfaction before issuing the notice. Furthermore, the Court noted that the approval of the specified authority, as required by law, was also not obtained. Consequently, the Court quashed the notice issued under Section 148A and the consequential notice under Section 148 of the Act. The Court directed the respondents to proceed in accordance with law, implying that if fresh satisfaction and approval were obtained, they could initiate the process afresh. The ratio decidendi is that strict adherence to the procedural safeguards, including the formation of satisfaction by the AO and obtaining approval from the specified authority, is essential for the validity of a notice for reopening assessment under Section 148A.

What were the facts?

The petitioner, CEC Rani Joint Venture, filed a writ petition before the Bombay High Court at Goa challenging the order passed by the Assistant Commissioner of Income Tax (ACIT), Circle 1(1), Panaji-Goa. The petition also sought to challenge the inaction of the Principal Commissioner of Income Tax, Panaji-Goa, in not passing an order under Section 263 of the Income Tax Act, 1961. The petitioner is aggrieved by the notice issued by the ACIT under Section 148A of the Act, proposing to reopen assessment for Assessment Year 2017-18. The petitioner contends that the notice was issued without complying with the mandatory pre-conditions stipulated in the Act, specifically regarding the satisfaction of the Assessing Officer and the approval of the specified authority. The matter was heard by the High Court on December 9, 2024.

What were the issues?

1. Whether the notice issued by the Assistant Commissioner of Income Tax under Section 148A of the Income Tax Act, 1961, for reopening the assessment for Assessment Year 2017-18, is valid, considering the alleged non-compliance with the mandatory pre-conditions? The Petitioner argued that the notice under Section 148A was issued without the Assessing Officer forming a requisite satisfaction and without obtaining the necessary approval from the specified authority as mandated by the Act. They contended that the entire process of reopening was vitiated due to these procedural lapses. The Revenue, represented by Ms. Susan Linhares, Standing Counsel, argued that the notice was issued in accordance with the law. While the judgment does not explicitly detail the Revenue's specific arguments on the satisfaction and approval aspects, it implies their defense of the notice's validity. The Revenue relied on the provisions of Section 148A and the subsequent steps outlined in the Act for reopening assessments.

Which sections of the Income-tax Act were involved?

Section 148A,Section 148

AI-generated summary — verify with the full judgment below

WP-556-2024 1 23

Niti

IN THE HIGH COURT OF BOMBAY AT GOA

WRIT PETITION NO.556 OF 2024

CEC Rani Joint Venture, Thr. The Managing Partner, Mr Galla Gundaiah, 78 years, Plot No.49, Kadapa Band Ponda, Goa 403 401.

... PETITIONER

Versus

1.

Central Board of Direct Taxes J684+324, North Block, Central Secretariat, New Delhi, Delhi 110001

2.

Assistant Commissioner of Income Tax, Circle 1(1), Aayakar Bhavan, EDC Complex, Patto Plaza, Panaji-Goa.

3.

Principal Commissioner of Income Tax, Aayakar Bhavan Panaji-Goa.

… RESPONDENTS Mr K. Gopal with Mr Pramod Vaidya, Advocates for the Petitioner. Ms Susan Linhares, Standing Counsel for the Respondents.

CORAM: M. S. KARNIK & NIVEDITA P. MEHTA, JJ.

DATE : 9th DECEMBER 2024 2024:BHC-GOA:2127-DB

WP-556-2024 2 23

JUDGMENT : (Per M.S. Karnik, J.)

1.

2. 3.

WP-556-2024 3 23

WP-556-2024 4 23

4.

5.

WP-556-2024 5 23

6.

7.

WP-556-2024 6 23

WP-556-2024 7 23

9.

10.

WP-556-2024 8 23

11.

12.

WP-556-2024 9 23

13.

WP-556-2024 10 23

WP-556-2024 11 23

WP-556-2024 12 23

WP-556-2024 13 23

14.

15.

WP-556-2024 14 23

16.

WP-556-2024 15 23

17.

18.

WP-556-2024 16 23

19.

WP-556-2024 17 23

20.

21.

WP-556-2024 18 23

1 (2010) 187 Taxman 44 (Bombay)

WP-556-2024 19 23

WP-556-2024 20 23

22.

2 (2021) 128 Taxman.com 287 (Karnataka)

WP-556-2024 21 23

23.

3 (2022) 142 taxmann.com 481 (SC)

WP-556-2024 22 23

24.

WP-556-2024 23 23

25.

26. NIVEDITA P. MEHTA, J.

M. S. KARNIK, J.

Signed by: NITI KISHOR HALDANKAR Designation: Private Secretary Date: 17/12/2024 10:56:18

More judgments on Section 148A

All 3,543 judgments and leading authorities on Section 148A →

Recent GST High Court judgments

Search GST case law →