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The High Court held that the notice under Section 148 was issued without jurisdiction. Firstly, it was issued beyond the four-year period, and the first proviso to Section 147 strictly applied, as the assessee had not defaulted in fully and truly disclosing all material facts. Secondly, the reasons for reopening did not demonstrate any failure on the part of the assessee to disclose materials. Instead, the reasons were based on the same materials already available to the Assessing Officer during the original assessment under Section 143(3), indicating a change of opinion or an attempt to review the concluded assessment, which is impermissible. The Court rejected the revenue's reliance on Explanation 1 to Section 147, stating it does not dispense with the compliance of the first proviso when reopening occurs after four years. The Court also rejected the contention that the writ petition should not be entertained due to an alternate remedy, as the reopening itself lacked jurisdictional requirements. Therefore, the writ petition was allowed.
The High Court held that the assessment order dated September 30, 2022, was barred by limitation. The Court reasoned that the prior order dated September 21, 2021, did not contain any findings or directions as contemplated by Section 153(6)(i) of the IT Act. The expressions "in consequence of or to give effect to" require the order to guide and control the course of assessment. The Court found that the previous order merely remanded the matter for reconsideration of objections and did not provide any specific findings or directions that would trigger the extended limitation period. Consequently, the limitation for passing the assessment order had expired on November 20, 2021 (60 days from the High Court's order of September 21, 2021, as per the first proviso below Explanation 1 of Section 153). The assessment order was passed approximately ten months after this expiry. The Court was not persuaded by the Revenue's argument that the prior order should be interpreted to have such findings or directions. The petition was allowed, and the impugned assessment order was quashed.
The High Court allowed the petition, quashing and setting aside the impugned order dated September 28, 2023. The Court found that the Commissioner's rejection of the delay condonation application was not legally justified. The reasoning was that the delay of 799 days in filing Form 9A, supported by a reasonable cause (transition to electronic filing as per CBDT circulars), should have been condoned. The Court noted that there was no benefit to the petitioner in delaying the filing, nor would it cause harm to the revenue. The Court emphasized that Section 119(2)(b) of the IT Act, read with the CBDT circulars, empowers Commissioners to condone such delays to mitigate genuine hardship to assessees. The Court found the Commissioner's approach to be hyper-technical and contrary to the legislative intent. The Court also noted that the Commissioner had mixed up the issue of delayed filing with the petitioner's claims for depreciation and capital expenditure. The ratio decidendi is that genuine hardship to an assessee, arising from procedural changes or other reasonable causes, should be considered favorably under Section 119(2)(b) to ensure substantial justice, and assessees should not be non-suited on hyper-technical grounds.
The High Court allowed the petition, quashing the notice for reopening and the order rejecting objections. The Court held that the Assessing Officer could not reopen the assessment under Section 147 of the IT Act when the material relied upon for reopening was already available and considered during the original assessment proceedings under Section 143(3). Such an action would amount to a review or a mere change of opinion, which is not permissible under Section 147. The Court noted that Section 147 is intended for cases where the assessee has withheld information or where fresh tangible material comes to light, not for revisiting concluded assessments based on the same material. Furthermore, the Court referenced its own prior decision in the assessee's own case (Commissioner of Income Tax (Exemptions), Mumbai Vs. Shree Saibaba Sansthan Trust- Shirdi, 2024 SCC OnLine 3224) which held that anonymous donations received in hundi were not taxable under Section 115BBC(1). The Court also found that the ground related to accepting donations in the form of ornaments and not investing in prescribed forms was also of no consequence in light of a prior order by the Aurangabad Bench staying auction of such items. Therefore, the reopening was based on impermissible grounds, leading to the allowance of the petition.
The High Court held that the petitioner should urge all issues concerning the ITAT's order on Miscellaneous Applications in the substantive appeals filed under Section 260A of the Income Tax Act, 1961. The Court was of the opinion that the writ petitions were not the appropriate forum for assailing the ITAT's order on miscellaneous applications, especially when the petitioner had the remedy of filing substantive appeals. The Court noted that the petitioner had already filed appeals. Therefore, all contentions could be raised in those pending appeals. The petitions were disposed of with liberty to the petitioner to raise all contentions in the pending appeals.
The High Court held that the petitioner should urge all their contentions in substantive appeals filed under Section 260A of the Income Tax Act, 1961. The Court was of the opinion that the writ petitions were not the appropriate forum to challenge the ITAT's order rejecting the Miscellaneous Applications. The reasoning was that the petitioner had available to them the remedy of filing substantive appeals against the ITAT's order. The Court noted that the petitioner's counsel informed them that appeals had already been filed. Therefore, all contentions could be raised in those pending appeals. The High Court disposed of the writ petitions with liberty to the petitioner to raise all contentions in the pending appeals. No specific issue was left undecided, as the court directed the petitioner to the appropriate appellate remedy.
The High Court held that the notices issued under Section 148A(b) and Section 148 of the Income Tax Act, 1961, and the order passed under Section 148A(d) were non-est and void ab initio. The Court agreed with the petitioner's submission that a person against whom any action is sought to be taken must be given a reasonable opportunity to defend themselves, a fundamental principle of jurisprudence. Since Mr. Gene Gracious was deceased, he could not defend himself, rendering the entire action invalid. The Court noted that the legislative scheme under Section 148A, requiring a show cause notice and hearing, cannot be undertaken against a dead person. The Court relied on the principle that the department cannot issue such notices to a dead person, as also held in the cited precedents. Consequently, the petition was allowed, and the impugned notices and order were quashed. However, the Court clarified that this would not prevent the Revenue from issuing a fresh notice for reassessment against the legal heirs in accordance with law, provided the requirements of Section 147/148 and the limitation period are satisfied.
The High Court allowed the petitioner to withdraw the writ petitions with liberty to raise all contentions against the principal order passed by the Income Tax Appellate Tribunal in an appeal to be filed under Section 260A of the Income Tax Act, 1961. The Court accepted the petitioner's statement that an appeal would be filed within four weeks. The Court also permitted the petitioner to raise the plea of bonafide pursuit of the writ petitions in the delay condonation application for the future appeal. All contentions of the petitioner in that regard were expressly kept open. The petitions were disposed of without costs.
The High Court held that the impugned notices and order were non-est and void ab initio. The Court agreed with the petitioner's submissions, emphasizing the fundamental principle of jurisprudence that a person against whom action is taken must be given an opportunity to defend themselves. Since Mrs. Meena Wakade was deceased, she could not be heard or defend herself, rendering the entire action under Section 148A(b) and 148A(d) of no consequence. The Court found that the legislative scheme under Section 148A, requiring a prior show-cause notice and hearing, could not be complied with for a dead person. Consequently, the notice under Section 148, preceded by the earlier actions, was held to be non-est and void ab initio. The petition was allowed, quashing the notices and order. However, the Court clarified that this would not prevent the Revenue from issuing a fresh notice for reassessment against the legal heirs in accordance with law, provided the requirements under Sections 147/148 and the limitation period are satisfied.
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.
The High Court held that the appeals must be dismissed as withdrawn. The Court reasoned that the CBDT circulars, including Circular No. 3 of 2018 and Circular No. 5 of 2024, explicitly stated that enhanced monetary limits would apply to pending appeals, and the present appeals, filed before the relevant circulars, should be governed by the instructions operating at the time of filing. The Court found that the Revenue could not prosecute the appeals by relying on exceptions in paragraph 3.1(l) of Circular dated 15.03.2024, as this paragraph, by virtue of paragraph 10, was to be applied only to appeals to be filed henceforth. Furthermore, the Court determined that the Revenue's case did not fall within the exception in paragraph 3.1(l). This exception was interpreted to exclude appeals arising from proceedings taken against a deductor for failure to deduct tax at source and recovery of tax from the payer. The present appeals, concerning disallowance of expenses under Section 40(a)(i) or 40(a)(ia) due to non-deduction of TDS, originated from assessments under Section 143(3), not directly from orders under Section 201. The method of calculating tax effect for regular assessments differed from that for TDS litigation, indicating separate treatment. Therefore, the appeals were dismissed as withdrawn.
The High Court held that the appeals must be dismissed as withdrawn. The Court reasoned that the CBDT's circulars, including Circular No. 3 of 2018 and Circular No. 5 of 2024, explicitly stated that enhanced monetary limits would apply to all pending appeals. The Revenue's argument that Circulars dated 15.03.2024 and 17.09.2024 should be read holistically and given retrospective effect was contrary to their plain terms. Furthermore, the Court found that the Revenue's case did not fall within the exception carved out in paragraph 3.1(l) of Circular No. 5 of 2024. This exception was interpreted to exclude appeals arising from regular assessments (under Section 143(3)) where an expense is disallowed due to failure to deduct TDS, as opposed to proceedings directly related to the recovery of tax from a deductor for failure to deduct tax at source (under Section 201). The Court noted that the Act treats litigation commencing from disallowances in assessment orders under Section 143(3) and those arising from failure to deduct tax at source under Section 201 separately, supporting the interpretation that the exception did not apply. Consequently, the appeals were dismissed as withdrawn.
The High Court expressed its view that the Petitioners lacked the locus standi to file the present Petition for the substantive reliefs sought. Consequently, the learned counsel for the Petitioners, acting on instructions, requested permission to withdraw the Petition unconditionally. Leave was granted by the Court. The Court did not delve into the merits of the substantive reliefs prayed for, as the Petition was disposed of on the preliminary issue of locus standi. The ratio of this decision would be that a party without locus standi cannot maintain a writ petition for substantive reliefs. The operative direction was to dispose of the petition as withdrawn.
The High Court held that the ITAT committed a patent error in exercising jurisdiction under Section 254(2) of the IT Act by allowing the Revenue's Miscellaneous Applications. The Court found substantial merit in the assessee's contentions. Firstly, the ITAT's jurisdiction under Section 254(2) is limited to rectifying mistakes apparent from the record, akin to a civil court's review powers but more restricted. Since the Supreme Court's decision in Checkmate Services Private Limited was rendered after the ITAT's original order, it could not be considered an error apparent on the face of the record that the ITAT had overlooked. The Court emphasized that a subsequent change in law or a subsequent judgment by a coordinate or larger bench, by itself, cannot be a ground for review, as held in Beghar Foundation. Secondly, the Court noted that the Miscellaneous Applications were filed beyond the prescribed six-month limitation period under Section 254(2), and the Revenue had not established any power for the ITAT to condone such delay. Therefore, the impugned order allowing the Miscellaneous Applications was also faulted on the ground of being passed beyond the statutory limitation. The Court agreed with the view taken by a coordinate bench of the Tribunal in ANI Integrated Services Ltd. on a similar issue. Consequently, the writ petitions were allowed, and the impugned order of the ITAT was set aside.
The High Court held that the ITAT committed a patent error in exercising jurisdiction under Section 254(2) of the IT Act by allowing the Revenue's Miscellaneous Applications. The Court found substantial merit in the assessee's contentions. Firstly, the ITAT's jurisdiction under Section 254(2) is limited to rectifying mistakes apparent from the record, akin to a civil court's review powers but more restricted. Since the Supreme Court's decision in Checkmate Services Private Limited was rendered after the ITAT's original order, it could not be considered an error apparent on the face of the record that the ITAT had overlooked. The Court emphasized that a subsequent change in law or a subsequent judgment by a coordinate or larger bench, by itself, cannot be a ground for review, as held in Beghar Foundation. Secondly, the Court noted that the Miscellaneous Applications were filed beyond the prescribed six-month limitation period under Section 254(2), and the Revenue had not established any power for the ITAT to condone such delay. Therefore, the impugned order allowing the Miscellaneous Applications was also faulted on the ground of being passed beyond the statutory limitation. The Court agreed with the view taken by a coordinate bench of the Tribunal in ANI Integrated Services Ltd. on a similar issue. Consequently, the writ petitions were allowed, and the impugned order of the ITAT was set aside.
The High Court held that the ITAT committed a patent error in exercising jurisdiction under Section 254(2) of the IT Act by allowing the Revenue's Miscellaneous Applications. The Court found substantial merit in the assessee's contentions. Firstly, the ITAT's jurisdiction under Section 254(2) is limited to rectifying mistakes apparent from the record, akin to a civil court's review powers but more restricted. Since the Supreme Court's decision in Checkmate Services Private Limited was rendered after the ITAT's original order, it could not be considered an error apparent on the face of the record that the ITAT had overlooked. The Court emphasized that a subsequent change in law or a subsequent judgment by a coordinate or larger bench, by itself, cannot be a ground for review, as held in Beghar Foundation. Secondly, the Court noted that the Miscellaneous Applications were filed beyond the prescribed six-month limitation period under Section 254(2), and the Revenue had not established any power for the ITAT to condone such delay. Therefore, the impugned order allowing the Miscellaneous Applications was also faulted on the ground of being passed beyond the statutory limitation. The Court agreed with the view taken by a coordinate bench of the Tribunal in ANI Integrated Services Ltd. on a similar issue. Consequently, the writ petitions were allowed, and the impugned order of the ITAT was set aside.
The Bombay High Court allowed the petition. The Court strongly deprecated the action of the Assessing Officer in initiating reassessment proceedings that were contrary to the decisions of the jurisdictional High Court and the Supreme Court. The Court emphasized the principle of judicial discipline, stating that revenue officers are bound by the decisions of appellate authorities, and the mere fact that an order is not "acceptable" to the department is no ground for not following it, unless its operation is suspended by a competent court. The Court referred to the Supreme Court's observations in Union of India vs. Kamlakshi Finance Corporation Ltd., criticizing the practice of revenue officials disregarding binding precedents, which leads to undue harassment of assessees and chaos in tax administration. The Court directed that all Assessing Officers bound by the decisions of the Jurisdictional High Court must not resort to proceedings contrary to such decisions. The Court concluded that there was no legal basis for the Assessing Officer to initiate the impugned proceedings, as they were in direct contravention of established legal principles. The petition was allowed in terms of prayer clause (a), and the rule was made absolute.
The High Court held that the impugned notice under Section 148A(b), the consequent order under Section 148A(d), and the notice under Section 148 dated 31 March 2022, could not be sustained and were liable to be quashed and set aside. The Court found that the entire process of according sanction under Section 151 demonstrated a non-application of mind, making the sanction arbitrary. The Court emphasized that the proposal, recommendation, and approval were mechanical, without considering the law and facts or how the ingredients of the law had been met, indicating a failure of the machinery under Section 151. Furthermore, the Court noted that the assessing officer relied on information from the CGST department without undertaking necessary enquiry to ascertain the correct facts and verify its relevance to the assessee's case. The Court followed the principles laid down in "Samp Furniture Private Limited", "Saraswat Co-operative Bank Limited", and "Principal Commissioner of Income Tax -1 vs. SVD Resins & Plastics Pvt. Ltd.". The petition was allowed, quashing the notices and the order. The Court also directed the concerned JAO and PCIT to personally pay costs of Rs. 25,000/- each to the "National Association for Blind" and recommended scrutiny of the officers' conduct.
The Bombay High Court accepted the statement made by the learned counsel for the Revenue. The Revenue undertook to process and pay the interest amount due to the petitioner, calculated up to the date of payment, within six weeks from the date of the order. Consequently, the Court found no further adjudication of the petition to be necessary. The petition was accordingly dismissed. However, the Court explicitly kept open all contentions of the petitioner in the event that such payments are not received within the stipulated timeframe. The operative direction was the dismissal of the petition based on the Revenue's statement, with a liberty to the petitioner to revive their claims if the payment is not made.
The High Court held that considering the communication dated March 11, 2021, and the undisputed entitlement of the petitioner to the refund, it was in the interest of justice to direct the refund to be processed. The Court noted the significant delay, as the tax pertained to Assessment Year 2009-10, approximately 14 years prior. Therefore, the Court ordered that the refund amount, along with any applicable interest, be credited or paid to the petitioner within four weeks from the date of the order. The Court also directed the concerned Income Tax Officer to report compliance to the Registrar Judicial, High Court, Bombay. If compliance was not received within four weeks, the Registrar was to place the matter before the Court for further appropriate orders regarding non-compliance. No issue was expressly left undecided.
The High Court held that the Principal Commissioner of Income Tax (PCIT) erred in rejecting the petitioner's revision application as not maintainable. The Court found that the PCIT's conclusion was contrary to well-settled legal principles regarding the wide powers conferred under Section 264 of the Income-tax Act, 1961. The Court relied on its own decisions in *Smita Rohit Gupta* and *Bahar Infocons (P.) Ltd.*, which emphasized that Section 264 is a salutary provision intended to remedy bona fide mistakes and correct inadvertent situations in assessment proceedings, thereby preventing injustice. The Court noted that the powers under Section 264 are broad enough to rectify errors, even those committed by assessees, and are not limited to merely correcting errors of subordinate authorities. The PCIT's reasoning that the revision was not maintainable due to the petitioner's failure to produce certain materials was considered a manifest error. Therefore, the Court quashed the impugned order and remanded the revision application to the PCIT for a decision on merits within three months.
The High Court granted leave to withdraw the criminal application. The Court reasoned that since the assessment order, which forms the basis of the prosecution for offences under Section 276C read with Section 278E of the Income Tax Act, is under challenge in an appeal pending before the Income Tax Appellate Tribunal, it would be just and proper to keep the criminal prosecution proceeding (R.C.C. No. 256 of 2018) sine die until the decision of the appeal. The application was disposed of as withdrawn. The Court also clarified that if the appeal is decided against the applicant, they would be at liberty to pray for the quashment of the complaint before the High Court.
The High Court held that the impugned assessment order could not have been passed as it was barred by limitation. The Court noted that the revenue did not dispute the petitioner's contentions regarding limitation. Citing the Bombay High Court's observations in Akhila Sujith, which followed Hexaware Technology Ltd., the Court found that the notice under Section 148 was illegal and without jurisdiction as it was time-barred. This illegality permeated the order under Section 148A(d) and the consequent assessment order under Section 147. The Court concluded that relegating the petitioner to an alternate remedy of appeal would be an empty formality due to the inherent and incurable defect of limitation. The petition was allowed, quashing the notice under Section 148, the order under Section 148A(d), and the assessment order under Section 147. No issue was expressly left undecided.
The High Court held that the assessment order dated June 12, 2021, was patently illegal and a nullity. The Court found that the mandatory procedure prescribed under Section 144B of the IT Act, which includes issuing a show cause notice-cum-draft assessment order and providing an opportunity to respond to any prejudicial proposals, was not followed. The Court noted that the assessment order itself contained a false statement regarding the issuance of a show cause notice, which was further corroborated by the RTI response indicating no such notice was found in the department's records. The Court agreed with the petitioner that the assessment order was vitiated due to this inherent and incurable defect. Citing the Supreme Court's decision in Tin Box Co., the Court held that the petitioner should not be relegated to appellate remedies when there is a patent illegality. The Court quashed the impugned assessment order and consequential demand notice, directing the respondent no.1 to issue a show cause notice-cum-draft assessment order and follow the due procedure under the IT Act within three months. All contentions of the parties were expressly kept open for the fresh assessment.
The High Court granted leave to withdraw the criminal application. The Court observed that the prosecution was based on an assessment order that was under challenge before the Income Tax Appellate Tribunal. Therefore, it was deemed just and proper to keep the criminal proceedings (R.C.C. No. 259 of 2018) pending until the decision of the appeal. The application was disposed of as withdrawn. The applicant was granted liberty to pray for quashment of the complaint before the High Court if the Appellate Tribunal decides the appeal against him. The Court did not decide the merits of the criminal prosecution itself.
The High Court found substance in the petitioner's submissions. It observed that the impugned order, passed by the Chief Commissioner of Income Tax, failed to consider the petitioner's primary submission regarding the impact of the COVID-19 pandemic on its ability to estimate book profits for advance tax payments. The Court noted that there was no reference, let alone any findings, on this fundamental contention raised by the petitioner in its waiver application dated November 9, 2022. Furthermore, the Court found that the impugned order also failed to consider or deal with the legal position as reflected in the decisions cited by the petitioner. The Court held that such an approach indicated a non-application of mind to the material contentions raised by the petitioner. Consequently, the Court quashed and set aside the impugned order dated March 30, 2024, and remanded the proceedings back to the Chief Commissioner of Income Tax for a de novo consideration of the waiver application on its own merits and in accordance with law, taking into account the Court's observations. All rival contentions of the parties were expressly kept open. The Chief Commissioner was directed to pass a reasoned order within eight weeks.
The High Court found substantial merit in the Revenue's contention that the writ petition should not be entertained as the petitioner had already availed of alternate remedies. The Court reasoned that once statutory appeals and review proceedings are pending, and these authorities are bound by the jurisdictional High Court's decisions in "Hexaware" and "Siemens," the petitioner is not precluded from raising all contentions before those authorities. The Court opined that it should not entertain writ petitions to adjudicate matters that can be decided by the appellate authority, especially when those authorities are bound by the High Court's pronouncements. Therefore, the Court directed the petitioner to pursue the pending proceedings before the CIT(A) and the Revisionary Authority. However, recognizing the petitioner's contention that if the impugned assessment order and notice are prima facie illegal as per the "Hexaware" and "Siemens" decisions, they ought not to be given effect until the appellate and revisionary proceedings are decided, the Court ordered that the impugned assessment order shall remain stayed till the decision of the Appellate or Revisionary Authority. All contentions of the petitioner on the pending proceedings were expressly kept open.
The High Court held that the Supreme Court decision in Commissioner of Income-tax vs. Harshit Foundation Sehmalpur (supra) is the law declared by the Supreme Court under Article 141 of the Constitution. This decision considered the interplay between Section 12A and Section 12AA(2) and approved the view of the Allahabad High Court Full Bench in Muzafar Nagar Development Authority (supra) that Section 12AA(2) does not envisage any deemed grant of registration if the application is not decided within six months. The Court found that Parliament had carefully and advisedly not provided for such a deeming fiction. Therefore, the High Court disagreed with the Tribunal's finding that registration was deemed to have been granted. The appeal was allowed in favour of the Revenue, answering the question of law in their favour. The issue of the effective date of registration, if granted, was not explicitly decided as the primary issue of deemed registration was resolved against the assessee.
The High Court held that the rent income derived by the assessee from the lease of its properties was assessable as income from profits and gains of business, not as income from house property. The Court found substance in the assessee's contention that the Assessing Officer had consistently treated such income as business income for approximately 11 assessment years. The Court emphasized the principle of consistency, referencing Supreme Court decisions in M/s. Radhasoami Satsang, Saomi Bagh, Agra and Bharat Sanchar Nigam Ltd. & Anr. vs. Union of India & Ors., and a previous decision of the Bombay High Court in Banzai Estates P. Ltd. The Court noted that while res judicata does not strictly apply to income tax proceedings, consistency in treatment of a fundamental aspect across assessment years should not be changed without new material. Therefore, the impugned orders of the Tribunal were set aside. The questions of law were answered in favour of the assessee and against the revenue. The appeals were allowed.
The High Court held that the rent income derived by the assessee from the lease of its properties was assessable as income from profits and gains of business, not as income from house property. The Court found substance in the assessee's contention that the Assessing Officer had consistently treated such income as business income for approximately 11 assessment years. The Court emphasized the principle of consistency, referencing Supreme Court decisions in M/s. Radhasoami Satsang, Saomi Bagh, Agra and Bharat Sanchar Nigam Ltd. & Anr. vs. Union of India & Ors., and a previous decision of the Bombay High Court in Banzai Estates P. Ltd. The Court noted that while res judicata does not strictly apply to income tax proceedings, consistency in treatment of a fundamental aspect across assessment years should not be changed without new material. Therefore, the impugned orders of the Tribunal were set aside. The questions of law were answered in favour of the assessee and against the revenue. The appeals were allowed.
The High Court held that the rent income derived by the assessee from the lease of its properties was assessable as income from profits and gains of business, not as income from house property. The Court found substance in the assessee's contention that the Assessing Officer had consistently treated such income as business income for approximately 11 assessment years. The Court emphasized the principle of consistency, referencing Supreme Court decisions in M/s. Radhasoami Satsang, Saomi Bagh, Agra and Bharat Sanchar Nigam Ltd. & Anr. vs. Union of India & Ors., and a previous decision of the Bombay High Court in Banzai Estates P. Ltd. The Court noted that while res judicata does not strictly apply to income tax proceedings, consistency in treatment of a fundamental aspect across assessment years should not be changed without new material. Therefore, the impugned orders of the Tribunal were set aside. The questions of law were answered in favour of the assessee and against the revenue. The appeals were allowed.
The High Court held that the rent income derived by the assessee from the lease of its properties was assessable as income from profits and gains of business, not as income from house property. The Court found substance in the assessee's contention that the Assessing Officer had consistently treated such income as business income for approximately 11 assessment years. The Court emphasized the principle of consistency in tax proceedings, citing the Supreme Court's decisions in *M/s. Radhasoami Satsang, Saomi Bagh, Agra* and *Bharat Sanchar Nigam Ltd. & Anr. Vs. Union of India & Ors.*, and a previous decision of the same High Court in *Banzai Estates P. Ltd.*. The Court noted that while res judicata does not strictly apply to income tax proceedings, consistency in treating a fundamental aspect across assessment years should not be changed without new material justifying a different view. The impugned orders of the Tribunal were set aside to this extent, and the questions of law were answered in favour of the assessee. The appeals were allowed.
The High Court held that the rent income derived by the assessee from the lease of its properties was assessable as income from profits and gains of business, not as income from house property. The Court found substance in the assessee's contention that the Assessing Officer had consistently treated such income as business income for approximately 11 assessment years. The Court emphasized the principle of consistency in tax proceedings, citing the Supreme Court's decisions in *M/s. Radhasoami Satsang, Saomi Bagh, Agra* and *Bharat Sanchar Nigam Ltd. & Anr. Vs. Union of India & Ors.*, and a previous decision of the same High Court in *Banzai Estates P. Ltd.*. The Court noted that while res judicata does not strictly apply to income tax proceedings, consistency in treating a fundamental aspect across assessment years should not be changed without new material justifying a different view. The impugned orders of the Tribunal were set aside to this extent, and the questions of law were answered in favour of the assessee. The appeals were allowed.
The High Court held that the rent income derived by the assessee from the lease of its properties was assessable as income from profits and gains of business, not as income from house property. The Court found substance in the assessee's contention that the Assessing Officer had consistently treated such income as business income for approximately 11 assessment years. The Court emphasized the principle of consistency in tax proceedings, citing the Supreme Court's decisions in *M/s. Radhasoami Satsang, Saomi Bagh, Agra* and *Bharat Sanchar Nigam Ltd. & Anr. Vs. Union of India & Ors.*, and a previous decision of the same High Court in *Banzai Estates P. Ltd.*. The Court noted that while res judicata does not strictly apply to income tax proceedings, consistency in treating a fundamental aspect across assessment years should not be changed without new material justifying a different view. The impugned orders of the Tribunal were set aside to this extent, and the questions of law were answered in favour of the assessee. The appeals were allowed.
The High Court held that the rent income derived by the assessee from the lease of its properties was assessable as income from profits and gains of business, not as income from house property. The Court found substance in the assessee's contention that the Assessing Officer had consistently treated such income as business income for approximately 11 assessment years. The Court emphasized the principle of consistency in tax proceedings, citing the Supreme Court's decisions in *M/s. Radhasoami Satsang, Saomi Bagh, Agra* and *Bharat Sanchar Nigam Ltd. & Anr. Vs. Union of India & Ors.*, and a previous decision of the same High Court in *Banzai Estates P. Ltd.*. The Court noted that while res judicata does not strictly apply to income tax proceedings, consistency in treating a fundamental aspect across assessment years should not be changed without new material justifying a different view. The impugned orders of the Tribunal were set aside to this extent, and the questions of law were answered in favour of the assessee. The appeals were allowed.
The High Court allowed the appeals, setting aside the impugned orders of the Income Tax Appellate Tribunal. The Court held that the rent income derived by the assessee from the lease of its properties was assessable as income from profits and gains of business. The reasoning was primarily based on the principle of consistency. The Court noted that for a significant number of assessment years (approximately 11 years), the Assessing Officer had consistently treated the assessee's rental income as business income. The Court emphasized that while res judicata does not strictly apply to income tax proceedings, the rule of consistency, as laid down by the Supreme Court in *M/s. Radhasoami Satsang, Saomi Bagh, Agra* and followed in subsequent decisions, should be applied. Since the department had consistently accepted the assessee's treatment of the income as business income in prior years, it was not appropriate to change this position without any new material justifying a different view. The questions of law were answered in favour of the assessee.
The High Court decided to dispose of the writ petition in terms of the directions issued in similar previous cases, specifically citing Rajan Pradeepkumar Dubey vs. Income Tax Officer and Astra Exim Pvt. Ltd. vs. The Income Tax Officer. The court held that it would be appropriate for the petitioner to pursue the appeal already filed before the Commissioner of Income-tax (Appeals). The petitioner was permitted to raise contentions regarding the impugned notice and order being untenable in light of the decision in Hexaware Technologies Limited. Furthermore, the petitioner was allowed to file an application before the appellate authority requesting the disposal of the appeals in view of the Hexaware Technologies Limited decision. The court directed that until the proceedings before the appellate forum are decided, the impugned assessment shall not be acted upon. All contentions of the parties on the pending proceedings were expressly kept open.
The High Court allowed the appeals, setting aside the impugned orders of the Income Tax Appellate Tribunal. The Court held that the rent income derived by the assessee from the lease of its properties was assessable as income from profits and gains of business. The reasoning was primarily based on the principle of consistency. The Court noted that for a significant number of assessment years (approximately 11 years), the Assessing Officer had consistently treated the assessee's rental income as business income. The Court emphasized that while res judicata does not strictly apply to income tax proceedings, the rule of consistency, as laid down by the Supreme Court in *M/s. Radhasoami Satsang, Saomi Bagh, Agra* and followed in subsequent decisions, should be applied. Since the department had consistently accepted the assessee's treatment of the income as business income in prior years, it was not appropriate to change this position without any new material justifying a different view. The questions of law were answered in favour of the assessee.
The High Court disposed of the writ petition by directing the petitioner to pursue its pending appeal before the Commissioner of Income-tax (Appeals). The Court permitted the petitioner to raise contentions regarding the invalidity of the impugned notice and order in light of the High Court's decision in Hexaware Technologies Limited. Furthermore, the petitioner was allowed to file an application before the appellate authority seeking disposal of the appeal in view of the Hexaware Technologies Limited decision. The appellate authority was directed to expeditiously consider such an application. Until the appellate forum decided the proceedings, the impugned assessment was not to be acted upon. All contentions of the parties on the pending proceedings were expressly kept open. The ratio is that when an appeal is pending, the High Court may direct the assessee to pursue the appellate remedy, allowing them to raise relevant contentions, and may stay action on the assessment order pending the appeal's decision.
The Bombay High Court disposed of the writ petition in terms of a specific order. The Court directed the petitioner to pursue its already filed appeal(s) before the Commissioner of Income-tax (Appeals) against the impugned assessment order. It was clarified that it is open to the petitioner to raise contentions regarding the impugned notice and the order being invalid, particularly in light of the decision of the High Court in Hexaware Technologies Limited. The petitioner was also permitted to file an application before the appellate authority praying for the appeal to be disposed of in view of the Hexaware Technologies Limited decision. The appellate authority was directed to expeditiously consider such an application and all contentions raised. Crucially, until the proceedings before the appellate forum are decided, the impugned assessment shall not be acted upon. All contentions of the parties on the pending proceedings were expressly kept open.
The High Court noted that the petitioner had already filed an appeal against the impugned assessment order. Citing its previous decisions in Rajan Pradeepkumar Dubey vs. Income Tax Officer and Astra Exim Pvt. Ltd. vs. The Income Tax Officer, the Court held that it would be appropriate for the petitioner to pursue the pending appeal. The Court permitted the petitioner to raise contentions before the appellate authority regarding the impugned notices and order being untenable in light of the decision in Hexaware Technologies Limited vs. Assistant Commissioner of Income Tax. The petitioner was also allowed to file an application before the appellate authority for expeditious disposal of the appeal in view of the Hexaware Technologies Limited decision. The Court directed that the impugned assessment shall not be acted upon until the proceedings before the appellate forum are decided. All contentions of the parties on the pending proceedings were expressly kept open.
The High Court held that the ITAT's decision to uphold the 10% disallowance was untenable. The Tribunal had itself found that the AO's order disallowing 100% of the purchases was not based on cogent and convincing evidence. While the ITAT noted the assessee's failure to produce suppliers or documents proving goods movement, suggesting grey market purchases, the Court found this approach unreasonable and arbitrary. The Court emphasized that the onus was on the revenue to discharge the burden of proving bogus purchases, which it had failed to do. Relying on CIT vs. Nikunj Eximp Enterprises and Principal Commissioner of Income-tax Vs. Shapoorji Pallonji and Co. Ltd., the Court stated that mere suspicion or information from other authorities without independent inquiry and affording opportunity to the assessee is insufficient. The Court found the ITAT's endorsement of a 10% disallowance as an 'equitable middle ground' to be repugnant, especially after finding the AO's order to be undermined. Consequently, the Impugned Order of the ITAT was set aside, and the appeals were allowed in favour of the assessee.
The High Court held that the ITAT's decision to uphold the 10% disallowance was untenable. The Tribunal had itself found that the AO's order disallowing 100% of the purchases was not based on cogent and convincing evidence. While the ITAT noted the assessee's failure to produce suppliers or documents proving goods movement, suggesting grey market purchases, the Court found this approach unreasonable and arbitrary. The Court emphasized that the onus was on the revenue to discharge the burden of proving bogus purchases, which it had failed to do. Relying on CIT vs. Nikunj Eximp Enterprises and Principal Commissioner of Income-tax Vs. Shapoorji Pallonji and Co. Ltd., the Court stated that mere suspicion or information from other authorities without independent inquiry and affording opportunity to the assessee is insufficient. The Court found the ITAT's endorsement of a 10% disallowance as an 'equitable middle ground' to be repugnant, especially after finding the AO's order to be undermined. Consequently, the Impugned Order of the ITAT was set aside, and the appeals were allowed in favour of the assessee.
The High Court held that the ITAT's decision to uphold the 10% disallowance was untenable. The Court noted that the ITAT itself had found the AO's order, which disallowed 100% of the purchases, to be lacking cogent and convincing evidence. The ITAT also acknowledged that the sales were backed by indirect tax compliance (sales tax returns, VAT audit reports) and that the assessee could not be said to have not sold the goods. Despite these findings, the ITAT upheld the 10% disallowance, partly on the basis that the assessee failed to produce suppliers and documents for goods movement, suggesting purchases from the 'grey market'. The High Court found this approach unreasonable and arbitrary, citing precedents like CIT vs. Nikunj Eximp Enterprises and Principal Commissioner of Income-tax Vs. Shapoorji Pallonji and Co. Ltd., which emphasize the need for independent inquiry by the AO and caution against disallowances based on suspicion or information from other authorities without proper substantiation. The Court concluded that the onus was on the Revenue to prove the purchases were bogus, a burden it had not discharged. Therefore, the Impugned Order of the ITAT was set aside.
The High Court held that in similar circumstances, it would be appropriate for the petitioner/assessee to pursue their appeals before the Commissioner of Income Tax (Appeals). The Court permitted the petitioner to file an interim application before the appellate authority, praying for the appeals to be disposed of in view of the decision of the High Court in Hexaware. The Court directed that the impugned assessment shall not be acted upon until the proceedings before the appellate forum are decided. All contentions of the parties on the pending proceedings were expressly kept open. The ratio decidendi is that when an appeal is pending and relevant High Court precedents exist, the assessee should pursue the appeal and seek expeditious disposal based on such precedents, with a stay on the assessment order until the appellate decision.
The High Court held that the petitioner should pursue their appeals already filed before the Commissioner of Income Tax (Appeals) against the impugned assessment order. The petitioner was permitted to raise contentions regarding the notice and order becoming untenable in light of the High Court's decision in Hexaware. Furthermore, the petitioner was allowed to file an interim application before the appellate authority requesting the disposal of the appeals in view of the Hexaware decision. The appellate authority was directed to expeditiously consider such an application. The Court also ordered that the impugned assessment shall not be acted upon until the proceedings before the appellate forum are decided, keeping all contentions of the parties open.
The High Court held that the provisions of Section 80G and Section 115BBC(2)(b) are compartmentalized and independent. The Court agreed with the Tribunal that the Revenue's reliance on Section 80G registration to ipso facto deny the exclusion under Section 115BBC(2)(b) is untenable. The Court found that the assessee is factually a religious and charitable trust, as evidenced by its objects, the Sai Baba Trust Act, and the Bombay Public Trusts Act. The Court emphasized that the final fact-finding authority is the Tribunal, and the High Court cannot go into factual findings unless they are perverse. The Court held that the assessee rightly claimed entitlement under Section 115BBC(2)(b) as it is a religious and charitable trust. Therefore, the anonymous donations received by such a trust are eligible for exemption from tax under Section 115BBC(2)(b). The view taken by the CIT(A) and confirmed by the Tribunal was found to be correct in law and facts. No substantial question of law arose.
The High Court held that the notices issued under Section 148A(b) and Section 148, as well as the order under Section 148A(d), were illegal, invalid, and non-est. The Court reasoned that once the amalgamating company, Uber India Research and Development Private Limited, ceased to exist due to the approved scheme of amalgamation, there was no legal basis or jurisdiction for the Assessing Officer to proceed against a non-existent entity. The Court relied on the Supreme Court's decision in Principal Commissioner of Income Tax, New Delhi v. Maruti Suzuki India Ltd., which held that issuing a notice to a non-existent company is a substantive illegality and not a procedural defect that can be cured. The Court also noted that this position was followed by this Court in Teleperformance Global Services (P.) Ltd. v. Assistant Commissioner of Income Tax. The Court quashed the impugned notices and order. Any other issues regarding the revenue's entitlement or the rights and liabilities of the petitioner were expressly kept open.
The High Court held that the delay of two days in filing the Return of Income and Form 10-IC for Assessment Year 2021-22 should be condoned. The Court found the delay to be bonafide, citing the reasons provided by the petitioner, including technical issues on the Income Tax portal and the fire incident at the Chartered Accountant's office. The Court relied on its own decision in Jyotsna M. Mehta v/s. Principal Commissioner of Income Tax, emphasizing that bonafide delays caused by circumstances beyond the assessee's control, particularly those involving the Chartered Accountant, warrant condonation. The Court also noted the applicability of Circular No. 19 of 2023. The operative direction was to allow the petition and direct the respondents to condone the delay in filing the return and Form 10-IC, and subsequently, to delete any variation made in the intimation dated December 28, 2022. The Court expressly kept open all contentions of the parties on the merits of the returns.