PURSHOTTAM LAXMINARAYAN INDANI vs. THE UNION OF INDIA THROUGH THE SECRETARY AND OTHERS

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WP/12018/2022HC BombayHCBM03042269202212 September 2024Bench: HON'BLE SHRI JUSTICE RAVINDRA V. GHUGE,HON'BLE SHRI JUSTICE Y. G. KHOBRAGADE3 pages
AI SummaryRemanded

What did the High Court hold?

The High Court held that the notice issued under Section 148 of the Income Tax Act, 1961, was unsustainable because it was not issued by the Faceless Assessing Officer (FAO) as required by the scheme framed under Section 151A of the Income Tax Act. The Court relied on its previous decision in Hexaware Technologies Limited Vs. the Assistant Commissioner of Income Tax and Others, which held that such notices issued by the JAO are unsustainable and liable to be quashed. Consequently, the notice dated 03.05.2024 was quashed and set aside. Any further demand or penalty notices issued in furtherance of this unsustainable notice were also set aside. The Court left open all contentions of both sides that were not covered by the Hexaware Technologies judgment and could be initiated by the FAO under the scheme.

What were the facts?

The petitioner, Purshottam Laxminarayan Indani, filed a writ petition challenging a notice issued by the Jurisdictional Assessing Officer (JAO). The petitioner contended that the notice should have been issued by the Faceless Assessing Officer (FAO) in accordance with Section 151A of the Income Tax Act, 1961. The revenue was represented by the Union of India and other income tax authorities. The High Court of Judicature at Bombay, Bench at Aurangabad, heard the arguments from both sides. The procedural history involves the issuance of an impugned notice which the petitioner sought to quash.

What were the issues?

1. Whether the notice issued under Section 148 of the Income Tax Act, 1961, is sustainable when it was issued by the Jurisdictional Assessing Officer (JAO) instead of the Faceless Assessing Officer (FAO) as mandated by the scheme framed under Section 151A of the Income Tax Act, 1961? Assessee's contention: The notice could only have been issued by the FAO, not the JAO, in terms of Section 151A of the Income Tax Act, 1961. The petitioner relied on the judgment in Hexaware Technologies Limited Vs. the Assistant Commissioner of Income Tax and Others. Revenue's contention: The judgment records no specific argument from the revenue on this point.

Which sections of the Income-tax Act were involved?

Section 151A,Section 148

AI-generated summary — verify with the full judgment below

- 1 - IN THE HIGH COURT OF JUDICATURE AT BOMBAY

BENCH AT AURANGABAD 912 WRIT PETITION NO. 12018 OF 2022 PURSHOTTAM LAXMINARAYAN INDANI VERSUS THE UNION OF INDIA THROUGH THE SECRETARY AND OTHERS Mr.D.R.Jethliya a/w Mr.Aditya Navandar, Advocate for the Petitioner. Mr.R.B.Bhosale, Standing Counsel for Respondent No.1. Mr.Alok Sharma, Advocate for Respondent Nos. 2 and 3. ( CORAM : RAVINDRA V. GHUGE AND Y.G.KHOBRAGADE, JJ.) DATE : SEPTEMBER 12, 2024 PER COURT : 1. We have heard the learned Advocates for the respective sides. Several issues have been raised in this Petition, inter alia, that the impugned notice could not have been issued by the Jurisdictional Assessing Officer (JAO) and which could have been issued in terms of the provisions of Section 151(A) of the Income Tax Act, 1961 by the Faceless Assessing Officer (FAO). 2. The learned Advocates for the respective sides submit that the judgment dated 03.05.2024, delivered at the Principal Seat in WP khs/Sep.2024/12018 2024:BHC-AUG:22076-DB

- 2 - No.1778/2023 (Hexaware Technologies Limited Vs. the Assistant Commissioner of Income Tax and Others), settles this issue. The notice could not have been issued, save and except by the Faceless Assessing Officer. If it is not issued by the FAO, this Court has ruled in Hexaware Technologies (supra), that such notice is unsustainable and, accordingly, the notice was quashed and set aside. 3. It is, thus, obvious that the ground of notice being not in accordance with the scheme framed u/s 151(A) of the Income Tax Act, 1961, the view taken in Hexaware Technologies (supra), would be applicable to this case. 4. In view of the above and considering the conclusions drawn in Hexaware Technologies (supra), the notice issued u/s 148 would be unsustainable. The same is, therefore, quashed and set aside. Any further demand notice or penalty notice in furtherance thereof, would also not survive and stands set aside, if any. 5. With the above directions, the Writ Petition is disposed off. Needless to state, all the contentions of both the sides, save and except, khs/Sep.2024/12018

- 3 - those which are covered by the Hexaware Technologies (supra), and which are available to the parties in the proceeding, which can be initiated by the FAO under the scheme framed u/s 151(A) of the Income Tax Act, are left open. ( Y.G.KHOBRAGADE, J. ) ( RAVINDRA V. GHUGE, J.) khs/Sep.2024/12018

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