SMT. SUMITHRA vs. PRINCIPAL CHIEF COMMISSIONER OF INCOME TAX

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WP/15054/2023HC KarnatakaKAHC01035543202327 July 2023Author: S SUNIL DUTT YADAV4 pages
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What did the High Court hold?

The High Court allowed the writ petition. The Court found that the order under Section 148A(d) indicated that approval was obtained from the Principal Commissioner of Income Tax. However, perusal of Section 151(ii) of the Income Tax Act, 1961, reveals that if a notice is issued after a lapse of more than three years from the end of the relevant assessment year, sanction must be obtained from the Principal Chief Commissioner. In this case, the assessment year was 2016-17, and the notice was issued in 2022, which is beyond the three-year period. Therefore, sanction of the Principal Chief Commissioner was required. The Court held that on this sole ground, the entire proceedings are liable to be set aside, as the proceedings under Section 148A(b) must be preceded by the sanction of the appropriate officer under Section 151(2). Accordingly, the notice at Annexure-A1, the order at Annexure-B, and the notice at Annexure-C were set aside. Liberty was reserved to the respondents to initiate fresh proceedings as permissible in law. All contentions were kept open.

What were the facts?

The petitioner, Smt. Sumithra, challenged a notice dated 19.04.2021 issued under Section 148 of the Income Tax Act, 1961, an order dated 20.07.2022 passed under Section 148A(d), and another notice dated 30.05.2022 stated to be an intimation letter under Section 148. The petitioner contended that the sanction for issuing the notice under Section 148A was obtained from the Principal Commissioner of Income Tax, whereas Section 151(ii) mandates sanction from the Principal Chief Commissioner when the notice is issued after three years from the end of the relevant assessment year. The assessment year in question was 2016-17, and the notice was issued in 2022, which is beyond the three-year period. The respondents are the Principal Chief Commissioner of Income Tax and other income tax authorities.

What were the issues?

1. Whether the notice dated 19.04.2021 issued under Section 148 and the subsequent order dated 20.07.2022 passed under Section 148A(d) are liable to be quashed on the ground that the sanction for issuing the notice under Section 148A was obtained from the Principal Commissioner of Income Tax instead of the Principal Chief Commissioner of Income Tax, as required by Section 151(ii) of the Income Tax Act, 1961, when the notice is issued after the lapse of three years from the end of the relevant assessment year? Assessee's Contention: The petitioner argued that the sanction for the notice under Section 148A was obtained from the Principal Commissioner. However, as the notice was issued after three years from the end of the relevant assessment year (2016-17, notice issued in 2022), Section 151(ii) requires sanction from the Principal Chief Commissioner. Therefore, the initial notice is bad in law, and the order under Section 148A(d) should be set aside. Revenue's Contention: The judgment does not record any specific contentions made by the revenue.

Which sections of the Income-tax Act were involved?

Section 148,Section 148A,Section 151

AI-generated summary — verify with the full judgment below

Before: SMT. SUMITHRA

IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 27TH DAY OF JULY, 2023 BEFORE THE HON'BLE MR JUSTICE S SUNIL DUTT YADAV WRIT PETITION NO. 15054 OF 2023 (T-IT) BETWEEN: 1. SMT. SUMITHRA WIFE OF MR. K. SRINIVAS AGED ABOUT 43 YEARS, RESIDING AT NO.181, SAMETHANAHALLI VILLAGE SAMETHANAHALLI POST HOSKOTE TALUK BANGALORE RURAL DISTRICT - 560 067 … PETITIONER (BY SRI. SYED KHAMRUDDIN., ADVOCATE) AND: 1. PRINCIPAL CHIEF COMMISSIONER OF INCOME TAX KARNATAKA AND GOA REGION GROUND FLOOR, CR BUILDING, NO.1, QUEENS ROAD, BENGALURU - 560 001 2. PRINCIPAL COMMISSIONER OF INCOME TAX-2. KORAMANGALA, Digitally signed by VIJAYA P Location: High Court of Karnataka

3.

INCOME TAX OFFICER WARD 4(2) (3), BANGALORE, INCOME TAX DEPARTMENT, KORAMANGALA 4. ASSESSMENT UNIT INCOME TAX DEPARTMENT, KORAMANGALA … RESPONDENTS (BY SRI. SUSHAL TIWARI., ADVOCATE)

THIS W.P. IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA, PRAYING TO QUASH THE IMPUGNED NOTICE DTD 19/4/2021 BEARING DIN NO.ITBA/AST/S/148/2021-22/1032518473 (1) ISSUED BY THE R-3 (ANNEXURE-A) AND DOCUMENT DTD 30.5.2022 BEARING DIN NO.ITBA/COM/F/17/2022-23/1043255623 (1) ISSUED BY THE R-3 (ANNEXURE-A1) AND ETC.

THIS W.P. COMING ON FOR PRELIMINARY HEARING, THIS DAY, THE COURT MADE THE FOLLOWING: ORDER

The petitioner has assailed the notice dated 19.04.2021 at Annexure-'A' issued under Section 148 of the Income Tax Act, as also the order dated 20.07.2022 passed under Section 148A (d) of the Income Tax Act as

well as the notice at Annexure-C stated to be intimation letter under Section 148 of the Income Tax Act, 1961.

2.

It is the case of the petitioner that in terms of the mandate under Section 151 sanction for issue of notice under Section 148A shall be in terms of Section 151 (i) (ii) and if the notice is issued after the lapse of three years from the end of the relevant assessment year, sanction must be obtained of the Principal Chief Commissioner and in the present case, sanction admittedly has been obtained from the Principal Commissioner and accordingly, if the initial notice is bad in law, order under Section 148A (d) is liable to be set aside.

3.

A perusal of the order under Section 148A (d) would reveal that approval of the Principal Commissioner of Income Tax has been obtained. However, perusal of Section 151 (ii) would require that Principal Chief Commissioner must accord sanction in the event the notice is issued after a lapse of more than three years from the end of the relevant assessment year.

4.

In the present case, the assessment year is 2016-17 and notice is issued in 2022, which is beyond the period of 03 years and accordingly in terms of Section 151 (2) sanction of the Principal Chief Commissioner which ought to be obtained. On this sole ground itself the entirety of proceedings are liable to be set aside as is noticed under Section 148A (b) it should be preceded by sanction of the appropriate officer under Section 151 (2).

5.

Accordingly, the petition is allowed. The notice at Annexure-A1, order at Annexure-B and notice at Annexure-C are set aside. Liberty is reserved to the respondents to initiate fresh proceedings as is permissible in law as regards to the subject matter of the present proceedings. All contentions are kept open. Sd/- JUDGE NP

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