Loading High Court cases…
256 orders · Page 2 of 6
The High Court held that for Assessment Year 2016-2017, the sanction for issuing notices should have been obtained under Section 151(ii) of the Income Tax Act, 1961, and not under Section 151(i). Consequently, the sanction was deemed invalid. The Court reasoned that an invalid sanction renders the notice issued based upon it invalid, and therefore, such notices must be quashed. Furthermore, if assessment orders were passed relying on these invalid sanctions, they too must be quashed. The Court also ordered that all consequential notices/demands issued under Section 156 or 271 of the Act would also be quashed. The Court further held that the findings in the Siemens Financial Services Private Limited case would squarely apply to Assessment Year 2017-2018, leading to the quashing and setting aside of all notices, assessment orders, and consequential orders for that year. The ratio is that a procedurally flawed sanction invalidates subsequent actions taken under the Act.
The High Court held that the sanction obtained for Assessment Year 2016-2017 was improper, as it should have been granted under Section 151(ii) of the Income Tax Act, 1961, and not Section 151(i). Consequently, the sanction was deemed invalid. The Court reasoned that an invalid sanction renders the notice issued based upon it invalid and liable to be quashed. Furthermore, any assessment order passed relying on such an incorrect sanction would also have to be quashed. The Court extended this reasoning to Assessment Year 2017-2018, holding that the findings in Siemens Financial Services Private Limited would squarely apply. Therefore, all notices, assessment orders, and consequential orders issued for both assessment years were quashed and set aside. The Court also ordered the quashing of all consequential notices/demands issued under Section 156 or 271 of the Act. Other grounds raised by the parties were left open to be raised at an appropriate stage in other proceedings.
The High Court quashed and set aside the order dated March 29, 2023, passed under Section 148A(d) and the consequential notice dated March 29, 2023, issued under Section 148 of the Income Tax Act, 1961. The Court found that these actions were taken without hearing or considering the petitioner's case. The petitioner was directed to reply to the notice dated March 8, 2023, issued under Section 148A(b) within three weeks. The notice under Section 148A(b) would be disposed of after giving the petitioner a personal hearing, with at least five working days' advance notice. All rights and contentions of the petitioner were kept open, and the Court explicitly stated that no observations were made on the merits of the matter.
The High Court held that the sanction obtained for Assessment Year 2016-2017 was improper, as it should have been granted under Section 151(ii) of the Income Tax Act, 1961, and not Section 151(i). Consequently, the sanction was deemed invalid. The Court reasoned that an invalid sanction renders the notice issued based upon it invalid and liable to be quashed. Furthermore, any assessment order passed relying on such an incorrect sanction would also have to be quashed. The Court extended this reasoning to Assessment Year 2017-2018, holding that the findings in Siemens Financial Services Private Limited would squarely apply. Therefore, all notices, assessment orders, and consequential orders issued for both assessment years were quashed and set aside. The Court also ordered the quashing of all consequential notices/demands issued under Section 156 or 271 of the Act. Other grounds raised by the parties were left open to be raised at an appropriate stage in other proceedings.
The High Court held that the sanction obtained for Assessment Year 2016-2017 was improper, as it should have been granted under Section 151(ii) of the Income Tax Act, 1961, and not Section 151(i). Consequently, the sanction was deemed invalid. The Court reasoned that an invalid sanction renders the notice issued based upon it invalid and liable to be quashed. Furthermore, any assessment order passed relying on such an incorrect sanction would also have to be quashed. The Court extended this reasoning to Assessment Year 2017-2018, holding that the findings in Siemens Financial Services Private Limited would squarely apply. Therefore, all notices, assessment orders, and consequential orders issued for both assessment years were quashed and set aside. The Court also ordered the quashing of all consequential notices/demands issued under Section 156 or 271 of the Act. Other grounds raised by the parties were left open to be raised at an appropriate stage in other proceedings.
The Tribunal, following its own precedent in Siemens Financial Services Private Limited V/s. Deputy Commissioner of Income Tax and Others, held that for Assessment Year 2016-2017, the sanction for reassessment proceedings should have been obtained under Section 151(ii) of the Income Tax Act, 1961, and not under Section 151(i). Consequently, the sanction was deemed invalid. The Court reasoned that an invalid sanction renders the notice issued for reassessment void. Therefore, any assessment order passed pursuant to such a void notice would also be invalid and liable to be quashed. Accordingly, the Court quashed and set aside the notice dated 8th April 2021 (treated as a show cause notice under Section 148A(b)), the order dated 26th July 2022 passed under Section 148A(d), the notice dated 26th July 2022 under Section 148, the reassessment order dated 18th May 2023 under Section 147 read with Section 144B, the notice of demand dated 18th May 2023 under Section 156, and the penalty notices dated 18th May 2023 under Sections 271(1)(c), 271B, and 271(1)(b). All other grounds and contentions were kept open for future proceedings.
The High Court held that the issue of improper sanction, as raised by the petitioner, squarely applies to the present case. The Court referred to its own decision in Siemens Financial Services Private Limited V/s. Deputy Commissioner of Income Tax and Others, which dealt with Assessment Year 2016-2017. In that case, the Court had ruled that the sanction ought to have been granted under Section 151(ii) of the Income Tax Act, 1961, and not under Section 151(i). The Court found the sanction to be invalid. Consequently, the notice issued under Section 148 was deemed invalid and liable to be quashed. Following this reasoning, the assessment order passed based on the invalid notice and incorrect sanction was also quashed and set aside. The operative direction was to quash and set aside all the impugned notices and the consequential assessment order. No issue was expressly left undecided.
The High Court held that the issue of improper sanction, as raised by the petitioner, squarely applies to the present case. Citing its own decision in Siemens Financial Services Private Limited V/s. Deputy Commissioner of Income Tax and Others, the Court reiterated that for Assessment Year 2016-2017, the sanction ought to have been granted under Section 151(ii) of the Income Tax Act, 1961, and not under Section 151(i). The Court found the sanction to be invalid. Consequently, the notice issued under Section 148, which is predicated on a valid sanction, was deemed invalid. The assessment order passed pursuant to this invalid notice, relying on an incorrect sanction, was also held to be invalid. Therefore, the Court quashed and set aside the order dated 25th July 2022 passed under Section 148A(d), the notice dated 26th July 2022 under Section 148, the notice dated 29th June 2021 (treated as a show cause notice under Section 148A(b)), the assessment order passed under Section 147 read with Section 144B, the notice of demand under Section 156, and the show cause notices for penalties under Sections 271(1)(b) and 274 read with 271(1)(c), all dated 17th May 2023. The ratio is that an assessment proceeding initiated with an invalid sanction is void ab initio.
The High Court decided on the second substantial question of law, stating that the first question regarding write-off of debit balances was not pressed by the assessee due to small amounts, and no opinion was expressed on it. For the second issue, the Court held that the ITAT was not justified in denying the set-off of unabsorbed depreciation. The Court referred to a Division Bench decision in PCIT vs. Gunnebo India Pvt Ltd., which followed the Gujarat High Court's judgment in General Motors (India) Pvt. Ltd. The reasoning emphasized that Section 32(2) of the Act, read with Sections 70, 71, and 72, allows total depreciation, including unabsorbed depreciation from earlier years, to be set off against income under any head. The Court also noted CBDT Circular No. 14 of 2001, which clarified that the 8-year restriction for carry forward and set-off of unabsorbed depreciation was dispensed with by the Finance Act, 2001. Therefore, unabsorbed depreciation from AY 1997-98 up to AY 2001-02, available on April 1, 2002, would be governed by the amended Section 32(2) and available for set-off against subsequent years' profits without limit. The Court quashed the ITAT's order and permitted the set-off of Rs. 13,89,661/- against short-term capital gains. The appeal was disposed of accordingly.
The High Court allowed the petition and quashed the impugned notice, order, and reassessment notice. The Court held that the reopening of the assessment was based on a 'change of opinion' by the Assessing Officer (AO). The Court reasoned that when a query is raised during assessment proceedings, answered by the assessee, and an assessment order is passed, it signifies that the issue was considered by the AO. It is not necessary for the assessment order to explicitly discuss every query raised and answered, as this would make it impossible for the AO to complete assessments. The Court relied on the principle that reassessment proceedings cannot be initiated to review an earlier stand adopted by the AO, citing the Supreme Court's decision in Kelvinator of India Ltd. and the Delhi High Court's decision in Seema Gupta v. ITO. The Court concluded that a 'change of opinion' does not constitute justification to believe that income chargeable to tax has escaped assessment, and therefore, the reassessment proceedings initiated on this basis were invalid and without jurisdiction.
The High Court held that for Assessment Year 2016-2017, the sanction ought to have been granted under Section 151(ii) of the Income Tax Act, 1961, and not under Section 151(i). Consequently, the sanction was deemed invalid. The Court reasoned that an invalid sanction renders the notice issued based upon it invalid. Furthermore, if the notice is invalid, any subsequent assessment order passed relying on such an incorrect sanction must also be quashed. The Court also directed that all consequential notices/demands issued under Section 156 or Section 271 of the Act would also stand quashed. The petitions concerning the invalid sanction were disposed of accordingly. The other petitions were adjourned with ad-interim relief continuing.
The High Court held that the findings in the case of Siemens Financial Services Private Limited (Supra) should apply to the present petition. The court noted that in the Siemens case, for AY 2016-2017, sanction was held to be improper as it should have been under Section 151(ii) and not Section 151(i) of the Income Tax Act, 1961. Consequently, the sanction was deemed invalid, and the notice issued was quashed. Applying this precedent, the High Court quashed and set aside the impugned notice dated 25th July 2022 issued to the petitioner for AY 2017-2018, and any consequential orders passed. The ratio decidendi is that an invalid sanction under Section 151 renders the notice issued pursuant thereto void ab initio. The petition was disposed of.
The High Court held that for Assessment Year 2016-2017, the sanction ought to have been granted under Section 151(ii) of the Income Tax Act, 1961, and not under Section 151(i). Consequently, the sanction was deemed invalid. The Court reasoned that an invalid sanction renders the notice issued based upon it invalid. Furthermore, if the notice is invalid, any subsequent assessment order passed relying on such an incorrect sanction must also be quashed. The Court also directed that all consequential notices/demands issued under Section 156 or Section 271 of the Act would also stand quashed. The petitions concerning the invalid sanction were disposed of accordingly. The other petitions were adjourned with ad-interim relief continuing.
The High Court held that the Tribunal erred in dismissing the petitioner's Original Application. The Court found that on the date of the petitioner's compulsory retirement (June 10, 2019), neither departmental nor criminal proceedings were pending against him. The Court noted that the date of cognisance in the first criminal case was January 20, 2022, and in the second case was July 1, 2021. The departmental charge sheet was issued on April 26, 2021, and departmental proceedings were initiated on June 23, 2021. According to Rule 9(6)(b)(i) of the CCS (Pension) Rules, proceedings are deemed pending only if cognisance is taken by the Magistrate. Under Rule 9(6)(a), departmental proceedings are instituted upon issuing a statement of charges. Since neither condition was met on June 10, 2019, the conditions for invoking Rule 69(1)(a) were not present. Therefore, the order granting provisional pension was incorrect. The Court relied on the Delhi High Court's decision in V.P. Singh v. Government NCT, Delhi, which held that an officer is entitled to full benefits if no proceedings are pending at the time of superannuation. The writ petition was allowed, the impugned order of provisional pension was set aside, and the respondents were directed to take consequential action within four months.
The High Court held that the issue of improper sanction raised by the petitioner should be decided in their favor, squarely applying the findings from the case of Siemens Financial Services Private Limited Vs. Deputy Commissioner of Income Tax & Ors. The court reiterated the principle that if sanction is obtained under the wrong sub-section of Section 151, it is invalid. Consequently, the notice issued based on such invalid sanction is also invalid and liable to be quashed. The court found that the impugned notice dated 25th July 2022 was issued with improper sanction. Therefore, the notice and any consequential orders passed were quashed and set aside. The ratio decidendi is that a notice issued without proper sanction under the relevant provision of Section 151 of the Income Tax Act, 1961, is void ab initio.
The High Court allowed the Petition. On the first issue, the Court found that the Petitioner had made a true and full disclosure to the Assessing Officer (AO) during the original assessment, leading to the allowance of deductions. The Court held that the Revenue failed to demonstrate any non-disclosure of facts by the Petitioner. Regarding the second issue, the Court concluded that the re-opening of assessment was purely based on a 'change of opinion'. The Court noted that the 'reasons to believe' notice indicated that the AO should have arrived at an alternate finding regarding deductions and that the expenditure should have been disallowed. The Court relied on its previous decisions in Ananta Landmark Pvt. Ltd. v. Deputy Commissioner of Income Tax and Ors., Ashraf Chitalwala v. Deputy Commissioner of Income Tax and Ors., and Aroni Commercials Ltd. v Deputy Commissioner of Income Tax, which held that re-opening based on a change of opinion is impermissible. The Court found that the language of the notice and the order rejecting objections clearly revealed distinct views taken by the AO on the same set of facts and material available during the original assessment. Consequently, the impugned notice and order were quashed and set aside.
The High Court held that the notices issued under Section 148 of the Income Tax Act, 1961, were invalid. The Court found that the reasons recorded by the Assessing Officer (AO) did not demonstrate a 'reason to believe' that income chargeable to tax had escaped assessment, but rather indicated a suspicion or a fishing inquiry. The AO had not applied his mind to the information received from the DCIT (Investigation) and had issued the notice based on 'borrowed satisfaction,' which is contrary to established legal principles. The Court emphasized that the AO's belief must be his own, based on tangible material and a rational nexus with the escapement of income. The reasons recorded merely showed a desire to examine the case and verify details, which cannot substitute for the formation of a belief that income had escaped assessment. Citing Prashant Joshi and Commissioner of Income Tax v. Smt. Maniben Valji Shah, the Court concluded that the reasons lacked a reasonable foundation and a rational or intelligible nexus with the belief required for reopening. Consequently, the petitions were allowed, and the notices dated March 25, 2014, along with consequential orders rejecting objections, were set aside.
The High Court held that the notices issued under Section 148 of the Income Tax Act, 1961, were invalid and liable to be set aside. The Court found that the recorded reasons, which cited a letter from the DCIT regarding a cash deposit and subsequent transfer, amounted to a 'suspicion' or a 'fishing inquiry' rather than a 'reason to believe' that income chargeable to tax had escaped assessment. The Court emphasized that the AO must have an independent belief, based on tangible material, that income has escaped assessment, and cannot rely on 'borrowed satisfaction'. The reasons recorded did not indicate any specific amount that had escaped assessment, nor did they demonstrate that the AO had applied his mind to the information received. The Court cited the principle that the AO's belief must be reasonable, based on relevant and material reasons, and not arbitrary or irrational. The Court also referred to the judgment in Prashant Joshi, stating that the AO must notice that the assessee has understated income or claimed excessive relief, which was not evident here. Consequently, the notices dated March 25, 2014, and consequential orders rejecting objections were set aside.
The High Court held that the Assessing Officer (AO) lacked valid reasons to believe that income chargeable to tax had escaped assessment, thus setting aside the notices issued under Section 148 of the Income Tax Act, 1961, and the consequential impugned order. The Court found that the AO's belief was not based on a reasonable foundation, as required by Section 147. The assessee had consistently argued, and previous judicial pronouncements (including the Bombay High Court's decision in its own case for AY 2003-04 and orders for AY 2007-08 and 2008-09) supported the view that advances to associate concerns were made from interest-free funds and for business purposes. The Court emphasized that the existence of a belief, not its sufficiency, is the sine qua non for exercising the power under Section 147. The AO's failure to consider the assessee's objections and previous judicial precedents at the stage of issuing the notice, instead deferring them to assessment proceedings, was also found to be improper. Therefore, the petitions were allowed, quashing the Section 148 notices.
The High Court held that for Assessment Year 2016-2017, the sanction for issuing notices under Section 148 should have been obtained under Section 151(ii) of the Income Tax Act, 1961, and not under Section 151(i). Consequently, the sanction was invalid. The Court reasoned that an invalid sanction renders the notice issued under Section 148 invalid. Following its own precedent in Siemens Financial Services Private Limited v. Deputy Commissioner of Income Tax and Others, the Court quashed the invalid notices. Furthermore, any assessment orders passed relying on such incorrect sanction were also quashed. The Court extended this finding to Assessment Year 2017-2018, holding that the same principle of improper sanction applied, and thus, all notices, assessment orders, and consequential orders for that year were also quashed and set aside. All consequential notices/demands issued under Section 156 or 271 were also quashed. The Court clarified that other grounds could be raised in future proceedings.
The High Court held that for Assessment Year 2016-2017, the sanction for issuing notices under Section 148 should have been obtained under Section 151(ii) of the Income Tax Act, 1961, and not under Section 151(i). Consequently, the sanction was invalid. The Court reasoned that an invalid sanction renders the notice issued under Section 148 invalid. Following its own precedent in Siemens Financial Services Private Limited v. Deputy Commissioner of Income Tax and Others, the Court quashed the invalid notices. Furthermore, any assessment orders passed relying on such incorrect sanction were also quashed. The Court extended this finding to Assessment Year 2017-2018, holding that the same principle of improper sanction applied, and thus, all notices, assessment orders, and consequential orders for that year were also quashed and set aside. All consequential notices/demands issued under Section 156 or 271 were also quashed. The Court clarified that other grounds could be raised in future proceedings.
The Court held that for Assessment Year 2016-2017, the sanction for issuing notices should have been obtained under Section 151(ii) of the Income Tax Act, 1961, and not under Section 151(i). Consequently, the sanction was deemed invalid. The Court reasoned that an invalid sanction renders the notice issued under it invalid, and therefore, such notices must be quashed. Furthermore, if assessment orders were passed relying on an incorrect sanction, those orders would also have to be quashed. This principle was extended to Assessment Year 2017-2018, with the Court finding that the precedent's findings apply equally. Accordingly, all notices, assessment orders, and consequential demands issued for both assessment years based on improper sanction were quashed and set aside. The Court clarified that other grounds could be raised in future proceedings.
The High Court held that the notices issued under Section 148 were invalid. The Court found that the recorded reasons merely indicated a desire to examine the case of the assessees concerning the cash deposit and subsequent transfer, based on information received from another officer. This amounted to a "suspicion subject to a case of fishing inquiry" rather than a "reason to believe" that income chargeable to tax had escaped assessment. The AO had not applied their mind to the information received and had issued the notice on "borrowed satisfaction," which is a breach of settled law. The recorded reasons did not disclose the basis for believing that income chargeable to tax had escaped assessment, nor did they indicate the amount of escaped income. The Court emphasized that the AO's belief must be reasonable, based on relevant and material reasons, and not arbitrary or irrational. Since there was no rational or intelligible nexus between the reasons recorded and the belief of income escapement, the exercise undertaken by the AO was interfered with. Consequently, the notices dated March 25, 2014, and consequential orders rejecting objections were set aside.
The High Court held that the notices issued under Section 148 of the Income Tax Act, 1961, were unsustainable. The Court found that the reasons recorded by the AO did not demonstrate a 'reason to believe' that income chargeable to tax had escaped assessment. Instead, the reasons indicated a desire to examine the case based on information received from another officer, amounting to a 'suspicion' or a 'fishing inquiry'. The AO had not applied their mind to the information received and had relied on 'borrowed satisfaction', which is contrary to settled law requiring the AO to form their own belief. The Court emphasized that the reasons must have a rational and intelligible nexus with the belief of escapement of income and cannot be based on arbitrary whims. Since the prerequisite of having a reason to believe that income had escaped assessment was not met, the notices and consequential orders rejecting objections were set aside. The petitions were allowed.
The Court held that for Assessment Year 2016-2017, the sanction for issuing notices should have been obtained under Section 151(ii) of the Income Tax Act, 1961, and not under Section 151(i). Consequently, the sanction was deemed invalid. The Court reasoned that an invalid sanction renders the notice issued under it invalid, and therefore, such notices must be quashed. Furthermore, if assessment orders were passed relying on an incorrect sanction, those orders would also have to be quashed. This principle was extended to Assessment Year 2017-2018, with the Court finding that the precedent's findings apply equally. Accordingly, all notices, assessment orders, and consequential demands issued for both assessment years based on improper sanction were quashed and set aside. The Court clarified that other grounds could be raised in future proceedings.
The Court held that for Assessment Year 2016-2017, the sanction for issuing notices should have been obtained under Section 151(ii) of the Income Tax Act, 1961, and not under Section 151(i). Consequently, the sanction was deemed invalid. The Court reasoned that an invalid sanction renders the notice issued under it invalid, and therefore, such notices must be quashed. Furthermore, if assessment orders were passed relying on an incorrect sanction, those orders would also have to be quashed. This principle was extended to Assessment Year 2017-2018, with the Court finding that the precedent's findings apply equally. Accordingly, all notices, assessment orders, and consequential demands issued for both assessment years based on improper sanction were quashed and set aside. The Court clarified that other grounds could be raised in future proceedings.
The High Court held that the notices issued under Section 148 of the Income Tax Act, 1961, were unsustainable. The Court found that the reasons recorded by the Assessing Officer (AO) did not constitute a "reason to believe" that income chargeable to tax had escaped assessment, but rather amounted to "reason to suspect" or a "fishing inquiry." The Court emphasized that the AO must have an independent and reasonable belief, based on tangible material, that income had escaped assessment. The reasons recorded merely indicated a desire to examine the case based on information received from another officer (DCIT Investigation), without any application of mind by the AO to form the requisite belief. The Court noted that the recorded reasons did not specify any amount of income that had escaped assessment, further evidencing a lack of proper application of mind. The Court relied on precedents like Prashant Joshi and Commissioner of Income Tax v. Smt. Maniben Valji Shah to underscore that the AO's belief must be reasonable, based on relevant and material reasons, and not arbitrary or irrational. The Court concluded that since the prerequisite of having a "reason to believe" was not satisfied, the impugned notices were liable to be set aside. The petitions were allowed, and the notices dated March 25, 2014, along with consequential orders rejecting objections, were quashed.
The High Court held that for Assessment Year 2016-2017, the sanction for issuing notices should have been obtained under Section 151(ii) of the Income Tax Act, 1961, and not under Section 151(i). Consequently, the sanction was deemed invalid. The Court reasoned that an invalid sanction renders the notice issued under Section 148 invalid. Following the precedent set in Siemens Financial Services Private Limited, the Court held that if the notice is invalid, any assessment order passed subsequently, relying on that incorrect sanction, must also be quashed. The Court further held that all consequential notices and demands issued under Section 156 or Section 271 of the Act would also be quashed. The Court extended this finding to Assessment Year 2017-2018, stating that the principles from the Siemens Financial Services Private Limited case squarely apply. Therefore, all notices, assessment orders, and consequential orders for Assessment Year 2017-2018 were also quashed and set aside. The Court clarified that other grounds raised by the parties could be pursued in appropriate proceedings.
The Court held that for Assessment Year 2016-2017, the sanction for issuing notices should have been obtained under Section 151(ii) of the Income Tax Act, 1961, and not under Section 151(i). Consequently, the sanction was deemed invalid. The Court reasoned that an invalid sanction renders the notice issued under Section 148 invalid, and therefore, such notices must be quashed. Furthermore, if an assessment order was passed relying on an incorrect sanction, that assessment order would also have to be quashed. The Court extended this finding to Assessment Year 2017-2018, holding that the principles from the Siemens case apply, and all notices, assessment orders, and consequential orders for AY 2017-2018 were also quashed and set aside. All consequential notices/demands issued under Section 156 or 271 were also quashed. The Court clarified that other grounds could be raised in future proceedings. All petitions were disposed of.
The High Court held that the notices issued under Section 148 of the Income Tax Act, 1961, were invalid and set them aside. The Court reasoned that the "reasons to believe" recorded by the AO were insufficient to establish that income chargeable to tax had escaped assessment. The recorded reasons merely indicated a desire to examine the case based on information received from another officer, amounting to suspicion or a fishing inquiry, rather than a "reason to believe" as required by Section 147. The AO had not applied his mind independently, leading to a "borrowed satisfaction." The judgment emphasized that the AO's belief must be reasonable, based on relevant and material reasons, and not arbitrary or irrational. The Court cited Prashant Joshi and Commissioner of Income Tax v. Smt. Maniben Valji Shah to support the principle that the AO must have a rational and intelligible nexus between the reasons and the belief of escaped income. Since the AO's satisfaction that income had escaped assessment was not recorded, the impugned notices could not be sustained. The consequential orders rejecting objections were also set aside.
The High Court held that for Assessment Year 2016-2017, the sanction for issuing notices under Section 148 should have been obtained under Section 151(ii) of the Income Tax Act, 1961, and not under Section 151(i). Consequently, the sanction was invalid. The Court reasoned that an invalid sanction renders the notice issued under Section 148 invalid. Following its own precedent in Siemens Financial Services Private Limited v. Deputy Commissioner of Income Tax and Others, the Court quashed the invalid notices. Furthermore, any assessment orders passed relying on such incorrect sanction were also quashed. The Court extended this finding to Assessment Year 2017-2018, holding that the same principle of improper sanction applied, and thus, all notices, assessment orders, and consequential orders for that year were also quashed and set aside. All consequential notices/demands issued under Section 156 or 271 were also quashed. The Court clarified that other grounds could be raised in future proceedings.
The High Court held that for Assessment Year 2016-2017, the sanction for issuing notices should have been obtained under Section 151(ii) of the Income Tax Act, 1961, and not under Section 151(i). Consequently, the sanction was deemed invalid. Following the precedent set in Siemens Financial Services Private Limited v. Deputy Commissioner of Income Tax and Others, the Court ruled that an invalid sanction renders the notice issued under Section 148 invalid. Furthermore, any assessment orders passed relying on such an incorrect sanction are also liable to be quashed. All consequential notices and demands issued under Section 156 or Section 271 of the Act were also ordered to be quashed. The Court extended this finding to Assessment Year 2017-2018, holding that the principles from Siemens Financial Services Private Limited squarely apply, leading to the quashing and setting aside of all related notices, assessment orders, and consequential orders for that year. The Court clarified that other grounds raised by the parties could be pursued in appropriate proceedings.
The High Court held that for Assessment Year 2016-2017, the sanction for issuing notices should have been obtained under Section 151(ii) of the Income Tax Act, 1961, and not under Section 151(i). Consequently, the sanction was deemed invalid. The Court reasoned that an invalid sanction renders the notice issued under Section 148 invalid. Following the precedent set in Siemens Financial Services Private Limited, the Court held that if the notice is invalid, any assessment order passed subsequently, relying on that incorrect sanction, must also be quashed. The Court further held that all consequential notices and demands issued under Section 156 or Section 271 of the Act would also be quashed. The Court extended this finding to Assessment Year 2017-2018, stating that the principles from the Siemens Financial Services Private Limited case squarely apply. Therefore, all notices, assessment orders, and consequential orders for Assessment Year 2017-2018 were also quashed and set aside. The Court clarified that other grounds raised by the parties could be pursued in appropriate proceedings.
The High Court held that for Assessment Year 2016-2017, the sanction for issuing notices should have been obtained under Section 151(ii) of the Income Tax Act, 1961, and not under Section 151(i). Consequently, the sanction was deemed invalid. Following the precedent set in Siemens Financial Services Private Limited v. Deputy Commissioner of Income Tax and Others, the Court ruled that an invalid sanction renders the notice issued under Section 148 invalid. Furthermore, any assessment orders passed relying on such an incorrect sanction are also liable to be quashed. All consequential notices and demands issued under Section 156 or Section 271 of the Act were also ordered to be quashed. The Court extended this finding to Assessment Year 2017-2018, holding that the principles from Siemens Financial Services Private Limited squarely apply, leading to the quashing and setting aside of all related notices, assessment orders, and consequential orders for that year. The Court clarified that other grounds raised by the parties could be pursued in appropriate proceedings.
The High Court held that for Assessment Year 2016-2017, the sanction for issuing notices under Section 148 should have been obtained under Section 151(ii) of the Income Tax Act, 1961, and not under Section 151(i). Consequently, the sanction was invalid. The Court reasoned that an invalid sanction renders the notice issued under Section 148 invalid. Following its own precedent in Siemens Financial Services Private Limited v. Deputy Commissioner of Income Tax and Others, the Court quashed the invalid notices. Furthermore, any assessment orders passed relying on such incorrect sanction were also quashed. The Court extended this finding to Assessment Year 2017-2018, holding that the same principle of improper sanction applied, and thus, all notices, assessment orders, and consequential orders for that year were also quashed and set aside. All consequential notices/demands issued under Section 156 or 271 were also quashed. The Court clarified that other grounds could be raised in future proceedings.
The High Court held that for Assessment Year 2016-2017, the sanction for issuing notices under Section 148 of the Income Tax Act, 1961, should have been obtained under Section 151(ii) and not Section 151(i). Consequently, the sanction was deemed invalid. The Court reasoned that an invalid sanction renders the notice issued under Section 148 invalid. Further, if an assessment order was passed relying on such an incorrect sanction, that assessment order would also have to be quashed. The Court extended this finding to Assessment Year 2017-2018, holding that the same principle regarding improper sanction would apply. Therefore, all notices, assessment orders, and consequential notices/demands (including those under Section 156 or 271) issued for both assessment years based on the improper sanction were quashed and set aside. The Court clarified that other grounds raised by the parties could be pursued in appropriate proceedings.
The High Court held that for Assessment Year 2016-2017, the sanction for issuing notices should have been obtained under Section 151(ii) of the Income Tax Act, 1961, and not under Section 151(i). Consequently, the sanction was deemed invalid. Following the precedent set in Siemens Financial Services Private Limited v. Deputy Commissioner of Income Tax and Others, the Court ruled that an invalid sanction renders the notice issued under Section 148 invalid. Furthermore, any assessment orders passed relying on such an incorrect sanction are also liable to be quashed. All consequential notices and demands issued under Section 156 or Section 271 of the Act were also ordered to be quashed. The Court extended this finding to Assessment Year 2017-2018, holding that the principles from Siemens Financial Services Private Limited squarely apply, leading to the quashing and setting aside of all related notices, assessment orders, and consequential orders for that year. The Court clarified that other grounds raised by the parties could be pursued in appropriate proceedings.
The High Court held that for Assessment Year 2016-2017, the sanction for issuing notices should have been obtained under Section 151(ii) of the Income Tax Act, 1961, and not under Section 151(i). Consequently, the sanction was deemed invalid. The Court reasoned that an invalid sanction renders the notice issued under Section 148 invalid, and therefore, such notices must be quashed. Furthermore, if an assessment order was passed relying on an incorrect sanction, that assessment order would also have to be quashed. The Court extended this finding to Assessment Year 2017-2018, stating that the principles established in the Siemens Financial Services Private Limited case would squarely apply. Therefore, all notices, assessment orders, and consequential orders for both assessment years were quashed and set aside. The Court clarified that other grounds raised by the parties could be pursued in appropriate proceedings.
The High Court held that the notices issued under Section 148 of the Income Tax Act, 1961, were unsustainable. The Court found that the reasons recorded by the Assessing Officer (AO) did not demonstrate a "reason to believe" that income chargeable to tax had escaped assessment. The recorded reasons merely indicated a desire to examine the case based on information received from another officer, which amounted to suspicion or a fishing inquiry rather than a belief founded on tangible material. The Court emphasized that the AO must apply their mind and form an independent belief based on relevant and material reasons, not on "borrowed satisfaction". The judgment cited the principle that while the sufficiency of evidence is not for the court to scrutinize, the existence of a rational and intelligible nexus between the reasons and the belief is crucial. Since the AO's belief was not based on a reasonable foundation, and the recorded reasons did not indicate any escapement of income, the notices were set aside. The consequential orders rejecting objections were also quashed.
The High Court held that the notices issued under Section 148 of the Income Tax Act, 1961, were invalid and liable to be set aside. The Court found that the recorded reasons did not establish a 'reason to believe' that income chargeable to tax had escaped assessment, but rather indicated a mere suspicion or a desire to conduct a fishing inquiry. The AO had not applied their mind to the information received from another officer, leading to a 'borrowed satisfaction' rather than an independent belief. The reasons recorded did not disclose the basis for believing that income had escaped assessment, nor did they indicate the amount of escaped income. The Court relied on precedents like Prashant Joshi and Commissioner of Income Tax v. Smt. Maniben Valji Shah, emphasizing that the AO's belief must be reasonable, based on relevant and material reasons, and not arbitrary or irrational. The Court concluded that the reasons recorded could not lead a prudent person to form an opinion that income had escaped assessment. Consequently, the petitions were allowed, and the notices dated March 25, 2014, along with consequential orders rejecting objections, were set aside.
The High Court held that for Assessment Year 2016-2017, the sanction for issuing notices under Section 148 should have been obtained under Section 151(ii) of the Income Tax Act, 1961, and not under Section 151(i). Consequently, the sanction was invalid. The Court reasoned that an invalid sanction renders the notice issued under Section 148 invalid. Following its own precedent in Siemens Financial Services Private Limited v. Deputy Commissioner of Income Tax and Others, the Court quashed the invalid notices. Furthermore, any assessment orders passed relying on such incorrect sanction were also quashed. The Court extended this finding to Assessment Year 2017-2018, holding that the same principle of improper sanction applied, and thus, all notices, assessment orders, and consequential orders for that year were also quashed and set aside. All consequential notices/demands issued under Section 156 or 271 were also quashed. The Court clarified that other grounds could be raised in future proceedings.
The High Court held that the notices issued under Section 148 were unsustainable. The Court found that the reasons recorded for reopening the assessment did not demonstrate a 'reason to believe' that income chargeable to tax had escaped assessment. Instead, the reasons indicated a mere desire to examine the case based on information received from another officer, amounting to a 'suspicion' or a 'fishing inquiry'. The AO had not applied his mind independently to the information received, leading to a 'borrowed satisfaction', which is contrary to settled law. The Court emphasized that the AO's belief must be reasonable, based on relevant and material reasons, and not arbitrary or irrational. The absence of a recorded belief that income had escaped assessment meant the impugned notices could not be sustained. Consequently, the petitions were allowed, and the notices dated March 25, 2014, along with consequential orders rejecting objections, were set aside.
The High Court held that the notices issued under Section 148 of the Income Tax Act, 1961, were unsustainable. The Court found that the reasons recorded by the Assessing Officer (AO) did not demonstrate a "reason to believe" that income chargeable to tax had escaped assessment, but rather amounted to a "suspicion" or a "fishing inquiry." The reasons merely indicated a desire to examine the case based on information received from another officer, without the AO applying his mind to form an independent belief of escapement. The Court emphasized that the AO's belief must be reasonable, based on relevant and material reasons, and not on "borrowed satisfaction." The judgment cited Prashant Joshi and Commissioner of Income Tax v. Smt. Maniben Valji Shah to support the view that the AO must have a rational and intelligible nexus between the reasons and the belief of escapement. Since the recorded reasons did not show that the AO was satisfied that income had escaped assessment, the notices were quashed. The petitions were allowed, setting aside the notices and consequential orders.
The High Court held that the notices issued under Section 148 of the Income Tax Act, 1961, were invalid. The Court found that the reasons recorded by the Assessing Officer (AO) did not establish a "reason to believe" that income chargeable to tax had escaped assessment. Instead, the reasons indicated a desire to examine the case based on information received from another officer, which amounted to suspicion or a fishing inquiry. The Court emphasized that the AO must form an independent belief based on tangible material, and a "borrowed satisfaction" is not sufficient. The judgment cited the principle that the AO's belief must not be arbitrary or irrational and must be based on relevant and material reasons. The Court noted that the recorded reasons did not even specify the amount of income that allegedly escaped assessment, further evidencing a lack of proper application of mind. Consequently, the notices and consequential orders rejecting objections were set aside. The petitions were allowed.
The High Court held that the notices issued under Section 148 of the Income Tax Act, 1961, were unsustainable. The Court found that the reasons recorded by the Assessing Officer (AO) did not demonstrate a 'reason to believe' that income chargeable to tax had escaped assessment. Instead, the reasons indicated a mere desire to examine the assessee's case concerning a cash deposit, based on information received from another investigating officer. The Court emphasized that the AO must apply their own mind and form an independent belief based on tangible material, not on 'borrowed satisfaction.' The reasons recorded were characterized as a 'suspicion' and a 'fishing inquiry,' lacking a rational or intelligible nexus with the belief of escaped income. The Court cited precedents like Prashant Joshi and Commissioner of Income Tax v. Smt. Maniben Valji Shah, highlighting that the AO's belief must be reasonable, based on relevant and material reasons, and not arbitrary or irrational. Consequently, the notices dated March 25, 2014, and consequential orders rejecting objections were set aside.
The High Court held that the notices issued under Section 148 of the Income Tax Act, 1961, were unsustainable. The Court found that the recorded reasons did not demonstrate a "reason to believe" that income chargeable to tax had escaped assessment. Instead, the reasons indicated a desire to examine the assessee's case based on information received from another officer, which constituted a "suspicion subject to a case of fishing inquiry." The AO had not applied their mind to the information received, leading to a "borrowed satisfaction" rather than their own independent belief. The judgment emphasized that the AO's belief must be reasonable, based on relevant and material reasons, and not arbitrary or irrational. The Court noted that the recorded reasons lacked a rational or intelligible nexus with the belief that income had escaped assessment, and the AO had not recorded satisfaction that income chargeable to tax had escaped assessment. Consequently, the petitions were allowed, and the notices dated March 25, 2014, along with consequential orders, were set aside.
The High Court held that the notices issued under Section 148 of the Income Tax Act, 1961, were invalid and liable to be set aside. The Court found that the reasons recorded by the Assessing Officer (AO) did not demonstrate a 'reason to believe' that income chargeable to tax had escaped assessment, but rather amounted to a suspicion or a fishing inquiry. The AO had not applied his mind independently to the information received from the DCIT (Investigation) and had merely issued the notice based on a 'borrowed satisfaction'. The judgment emphasized that the AO must form his own belief based on tangible material and that the reasons recorded must have a rational and intelligible nexus with the belief of escapement of income. The Court noted that the recorded reasons did not indicate any specific amount of escaped income, further supporting the conclusion that the AO had not formed a reasonable belief. The Court relied on precedents like Prashant Joshi and Commissioner of Income Tax v. Smt. Maniben Valji Shah to support its reasoning. Consequently, the notices dated March 25, 2014, and consequential orders rejecting objections were set aside.
The High Court held that the amendment to Section 54 of the Income Tax Act, 1961, by the Finance (No.2) Act, 2014, inserting the words 'in India', was prospective in nature and not clarificatory. The Court reasoned that the pre-amended Section 54 was neither ambiguous nor vague, and the statute did not expressly state that the amendment was declaratory or clarificatory. Therefore, the amendment could not be applied retrospectively to the petitioner's transaction which occurred prior to April 1, 2015, as it would impose an additional condition retrospectively. The Court found that the petitioner's revision petition rejection was unsustainable, noting his entitlement to a refund and the undisputed deposit in the CGAS. Consequently, the order of the Commissioner was quashed and set aside, with directions to accept the rectified return and decide it in accordance with law by December 31, 2023. The Court explicitly agreed with the petitioner's contention that the amendment was prospective.
The High Court held that the clarification issued by the CBDT in Circular No. 21/2020, in its answer to question no. 73, is not in consonance with Section 9(a)(ii) of the Vivad se Vishwas Act. The Court found that the ineligibility to file a declaration under Section 9(a)(ii) is specifically in respect of tax arrears relating to an assessment year for which prosecution has been instituted. The prosecution against the petitioner was under Section 276C(2) due to delayed payment of self-assessment tax, which cannot be construed as a 'tax arrear' as defined under Section 2(1)(o) of the Act. Therefore, such a prosecution cannot be the basis for debarring the petitioner from filing a declaration for settlement of tax arrears. The Court quashed and set aside the said clarification. Consequently, the declarations filed by the petitioner were to be decided by the PCIT in conformity with the provisions of the DTVSV Act, disregarding the impugned clarification. The petition was allowed to this extent.
The High Court held that the rejection of the petitioner's declarations under the DTVSV Act was invalid. The Court found that the CBDT's clarification in Circular No. 21/2020, particularly the answer to question 73, was not in consonance with Section 9(a)(ii) of the DTVSV Act. The Court reasoned that the ineligibility to file a declaration under Section 9(a)(ii) is specifically linked to a prosecution instituted in respect of 'tax arrear' relatable to an assessment year as on the date of filing the declaration. The prosecution initiated against the petitioner under Section 276C(2) was for delayed payment of self-assessment tax, which the Court determined does not qualify as a 'tax arrear' as defined under Section 2(1)(o) of the Act. Therefore, such a prosecution could not be a basis for debarring the petitioner from the scheme. The Court quashed and set aside the CBDT's clarification and directed the PCIT to decide the petitioner's declarations in conformity with the DTVSV Act, disregarding the impugned clarification. The Court also noted that the petitioner had paid 20% of the demand and was not an assessee in default, and later paid the entire amount.