SOUMYA GIRDHARI AGRAWAL vs. INCOME TAX OFFICER WARD 3(2) AND ORS

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WP/3354/2022HC BombayHCBM01012015202225 July 2022Author: HON'BLE SHRI JUSTICE DHIRAJ SINGH THAKUR,HON'BLE SHRI JUSTICE ABHAY AHUJA3 pages
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What did the High Court hold?

The High Court held that the notice dated March 29, 2021, issued under Section 148 of the Income Tax Act, 1961, was bad in law and liable to be set aside. The Court reasoned that Section 151 of the Act clearly stipulates that a notice under Section 148 cannot be issued after four years from the end of the relevant assessment year unless the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner is satisfied, based on the A.O.'s reasons, that it is a fit case for issuing such a notice. In this case, the assessment year was 2015-16, making the notice dated March 29, 2021, fall beyond the four-year period. Therefore, the approval ought to have been granted by one of the specified higher authorities, not the Joint Commissioner. The A.O. erred in believing the case fell within the four-year period, which was apparently erroneous. Consequently, the writ petition was allowed, and the impugned notice was set aside.

What were the facts?

The petitioner, Soumya Girdhari Agrawal, filed a writ petition challenging a notice dated March 29, 2021, issued under Section 148 of the Income Tax Act, 1961, by the Assessing Officer (A.O.), Ward 3(2), Thane. The notice was issued on the grounds that the A.O. had reason to believe income chargeable to tax for assessment year 2015-16 had escaped assessment, as per Section 147 of the Act. The respondents, including the Income Tax Officer, Ward 3(2), Thane, had not filed a reply. The matter was taken up for final disposal with the consent of both parties.

What were the issues?

1. Whether the notice dated March 29, 2021, issued under Section 148 of the Income Tax Act, 1961, is unsustainable in law on the ground that the Assessing Officer obtained approval from the Joint Commissioner of Income Tax instead of the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner of Income Tax, as required by Section 151 of the Act. Assessee's contention: The notice is unsustainable because the approval for its issuance was obtained from the Joint Commissioner, whereas Section 151 of the Act mandates approval from higher authorities like the Principal Chief Commissioner or Commissioner for notices issued beyond four years from the end of the relevant assessment year. Revenue's contention: No specific contention is recorded in the judgment for the revenue.

Which sections of the Income-tax Act were involved?

Section 148,Section 147,Section 151

AI-generated summary — verify with the full judgment below

30 WP.3354.2022 AS.doc

IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURISDICTION WRIT PETITION NO. 3354 OF 2022 Soumya Girdhari Agrawal } B1 504 Vihang Garden, } Pokhran Road, 1 Vartak Nagar, } Thane (West) – 400 606 } .. Petitioner Versus Income Tax Ofcer, Ward 3(2), } Ashar IT Park, 6th Floor, Road } No.16Z, Wagle Industrial Estate, } Thane (West) 400 604 & Ors. } .. Respondents **** Mr. Tanzil Padvekar, Advocate for the Petitioner. Mr. Ashok Kotangle a/w Mr. P. A. Narayanan, Mr. Prabhakar Ranshur & Mr. Ajay V. Anand, Advocate for the Respondents. ****

CORAM : DHIRAJ SINGH THAKUR AND ABHAY AHUJA, JJ.

DATE : 25th JULY, 2022

P.C.: . Reply has not been fled by the Respondents. However, with the consent of learned Counsel for the parties, the matter is taken up for fnal disposal at this stage.

2.

The Petitioner challenges the impugned notice dated 29th March, 2021, issued under Section 148 of the Income Tax Act (the Act, 1961) by the Assessing Ofcer (A.O.), Ward 3(2), Thane, in purported exercise of R.V. Patil 1 of 3 RUSHIKESH V PATIL RUSHIKESH V PATIL Date: 2022.07.26 18:49:11 +0530

30 WP.3354.2022 AS.doc power vested in it under Section 148 of the Act, 1961, on the ground that he had reasons to believe that the income chargeable to tax for the assessment year 2015-16 had escaped assessment within the meaning of Section 147 of the Act, 1961. 3. Learned Counsel for the Petitioner urged that the notice impugned was unsustainable in law inasmuch as the notice impugned refects that the A.O. had purportedly obtained an approval from the Joint Commissioner of Income Tax instead of the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner of Income Tax, which was the requirement in terms of Section 151 of the Act, 1961. 4. On a reading of Section 151 it is clear that a notice under Section 148 of the Act, 1961 cannot be issued after the expiry of period of four years from the end of the relevant assessment year, unless the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner was satisfed, on the reasons recorded by the A.O., that it was a ft case for the issue of such a notice. In the present case, it is clear that assessment year under consideration was 2015-16 and, therefore, the notice impugned dated 29th March, 2021 was admittedly beyond the four years period for which the approval ought to have been granted by any one of the aforementioned four authorities and not by the Joint Commissioner. It is clear that, the A.O. fell in error in holding that the case at hand fell within the four years period, R.V. Patil 2 of 3

30 WP.3354.2022 AS.doc from the end of the assessment year under consideration, which on the face of it appears to be erroneous.

5.

For the reasons mentioned above, the writ petition is allowed. The notice impugned dated 29th March, 2021 is held to be bad, and is, accordingly, set aside. (ABHAY AHUJA, J.) (DHIRAJ SINGH THAKUR, J.) R.V. Patil 3 of 3

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