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The High Court held that most of the listed Income Tax matters should be restored to the file of the court in light of the Supreme Court's directions in the Tej Partap Singh case, with the consent of all parties. Specific exceptions were made for certain petitions. Writ Petition No. 3306 of 2022 was to be de-tagged and listed separately for admission hearing after four weeks, as it was wrongly clubbed with time-bound matters. Similarly, Writ Petition No. 5713 of 2022 was to be removed from the current board and listed before the appropriate co-ordinate bench as per roster assignment. For Writ Petition No. 2895 of 2022, the court noted it had already been restored and granted the petitioner two weeks to carry out amendments. The court also directed that upon completion of amendments, parties would correct pagination. Leave was granted to the respondent department to file a reply in the first petition, which would be considered as filed in all connected cases. Existing interim orders were to continue to apply to the restored matters. The matters were then listed for commencement of submissions on August 19, 2026.
The High Court noted the statement made by the learned advocate for the petitioner regarding the instruction to withdraw the writ petition due to subsequent developments. In light of this statement, the Court dismissed the writ petition as withdrawn. No order as to costs was made. The operative direction was the dismissal of the petition. No issues were decided on merits.
The High Court held that no question of law arises for consideration in the present proceedings and dismissed the appeal. The Tribunal's decision was upheld, which had found that the Assessing Officer's action was based merely on the 'base note' and it was undisputed that no incriminating material was found during the search proceedings concerning the assessee being a beneficial owner of the accounts. The Court relied on the Supreme Court's decision in Principal Commissioner of Income-tax, Central-3 vs. Abhisar Buildwell (P.) Ltd. This judgment clarified that in cases of search under Section 132 or requisition under Section 132A, the AO assumes jurisdiction for block assessment under Section 153A. However, if no incriminating material is unearthed during the search, the AO cannot assess or reassess income in respect of completed/unabated assessments by considering other materials. Such completed assessments can only be reopened under Sections 147/148, subject to their conditions. The Court noted that the assessee's appeal before the Tribunal was allowed on the ground that no incriminating material was found during the search. Consequently, the Revenue's appeal was dismissed, with all contentions of the parties on other issues expressly kept open.
The High Court did not decide the merits of the Section 264 order. Instead, considering the statement made by the Revenue, the Court directed Respondent No.2 to decide the Rectification Application filed by the Petitioner as expeditiously as possible, and in any event, within 30 days from the date of uploading of the order on the High Court website. The Court clarified that the Rectification Application would be decided on its own merits and in accordance with law, without being influenced by any observations made by the Principal Commissioner in the Section 264 order. The High Court explicitly stated that it had not entered upon the merits of the matter, which would be decided by Respondent No.2. The Writ Petition was disposed of in terms of this direction.
The High Court upheld the PCIT's decision regarding the characterization of income, finding that Section 69A of the IT Act was attracted due to the Petitioner's failure to provide a satisfactory explanation for the source of undisclosed income for AY 2014-15 and 2015-16, and the minimal compliance during assessment and revisional proceedings. The Court found the PCIT's view plausible and not requiring interference under Article 226. Regarding credit for IDS, 2016 payments, the Court, relying on its decision in Pinnacle Vastunirman Pvt. Ltd. vs. Union of India, held that the Petitioner is entitled to credit for the tax paid under IDS, 2016, as the scheme itself deems the declaration void if full payment is not made, and the Revenue cannot retain tax paid under a void declaration without legal authority. The PCIT's order on this aspect was set aside. For pre-paid taxes (advance tax, TDS, self-assessment tax), the Court agreed with the PCIT's direction for the AO to verify and grant credit based on latest judicial precedents, citing Kamla Chandra Singh Kabali vs. Principal Commissioner of Income Tax.
The Bombay High Court quashed and set aside the impugned order dated June 18, 2024, and condoned the delay of 1128 days in filing Form 10B for AY 2017-18. The Court found the explanation for the delay in filing the condonation application itself satisfactory, noting that there was no strict time limit for filing such an application prior to Circular No. 16/2024. Regarding the core issue, the Tribunal held that the requirement of filing the audit report with the return is procedural and directory, and substantial compliance suffices, relying on the Gujarat High Court's decision in Sarvodaya Charitable Trust. The Court emphasized that denying exemption would cause genuine hardship to the educational institution and its students, aligning with the liberal interpretation of 'genuine hardship' under Section 119(2)(b). The Court also referred to its own judgments in Western Arch Developers and St. Anne’s Church, highlighting that the assessee should not be burdened due to an inadvertent error of their Chartered Accountant. The ratio decidendi is that procedural delays in filing audit reports by charitable trusts, causing genuine hardship, should be condoned under Section 119(2)(b) when supported by reasonable explanations and judicial precedents, especially when the delay is not substantial in terms of the overall compliance timeline or when the primary issue is condonation rather than merits of exemption.
The High Court held that the Petitioner had made out a case for condonation of delay under Section 119(2)(b). The Court reasoned that Taxmann is a renowned publication widely relied upon by tax practitioners, and a bonafide mistake in relying on a misprint in such a publication, on which many depend, should not disentitle the Petitioner from the beneficial provision of Section 119(2)(b). The Petitioner realized its mistake during assessment proceedings and immediately filed Form 9A. The Court found that the delay was inadvertent and that the Petitioner would suffer grave hardship if the delay was not condoned, as it would be saddled with a huge tax liability for not filing Form 9A within time due to a misprint in a publication. The Petitioner would not gain any benefit from this delay. Therefore, the Court quashed and set aside the impugned order rejecting the condonation of delay and condoned the delay in filing Form 9A for AY 2022-23. The Court expressly left no issue undecided.
The High Court quashed and set aside the impugned show cause notices dated August 9, 2024, and August 20, 2024, the impugned order dated August 28, 2024, and the impugned notice dated August 28, 2024. The Court held that the reassessment proceedings initiated by the Assessing Officer were not justified. The reasoning was that the original assessment under Section 143(3) had already considered and accepted the petitioner's claim for accumulation of income under Section 11(2). The subsequent initiation of reassessment proceedings based on the same issue constituted a "change of opinion" and a "non-application of mind" by the Assessing Officer. The Court relied on the principle established in Kelvinator of India Ltd. (supra) and Seema Gupta v. ITO (supra), which state that reassessment proceedings cannot be initiated to review an earlier assessment or on the basis of a mere change of opinion, especially when the Assessing Officer had already applied their mind to the issue during the original assessment. The Court found that the reassessment was based not only on a change of mind but also on a non-application of the mind.
The High Court held that the notice issued under Section 148 of the IT Act to the erstwhile company, Erangal Comtrade and Consultancy Private Limited, is invalid and quashed. The Court reasoned that the erstwhile company ceased to exist upon its conversion into the Petitioner LLP on March 17, 2016, rendering any action against it illegal. This position is supported by the Supreme Court's decision in Principal Commissioner Income Tax Vs. Maruti Suzuki India Ltd., which held that jurisdictional notices issued to entities that have ceased to exist are invalid. Consequently, the assessment order dated March 30, 2022, which emanates from the invalid Section 148 notice, was also quashed. The Court noted that the reassessment was initiated on the ground of non-filing of a return by the erstwhile company, which is illogical for an entity that did not exist during the relevant assessment year. The Court did not decide on the other issues raised by the Petitioner, namely, the non-disposal of objections and the escapement of income, as the primary issue of the invalid notice was dispositive. The Petitioner undertook to withdraw its pending appeal before the CIT (Appeals) concerning the assessment order.
The High Court held that the Notice issued under Section 148 by the Jurisdictional Assessing Officer instead of the Faceless Assessing Officer is fatal to the Notice. The Court found no merit in the Revenue's argument that the decision in Hexaware Technologies Ltd. would not apply due to the case involving international taxation. The Court relied on another Division Bench judgment, Abhin Anilkumar Shah v/s Income-tax Officer, International Taxation [2024] 166 taxmann.com.679 (Bombay), which clearly opined that even in cases of central charges and international taxation, the Notice must be issued under the faceless procedure. Paragraph 17 of Abhin Shah was cited, stating the mandatory faceless procedure applies to international taxation charges. Consequently, the impugned Notice under Section 148 and all consequential proceedings were set aside. The Court granted liberty to the Revenue to revive the Writ Petition if the Supreme Court sets aside the decision in Hexaware Technologies Ltd., and made the rule absolute.
The High Court allowed the application for withdrawal of the appeal. The Court noted the submissions made by the Revenue's Senior Standing Counsel regarding the CBDT Circular No. 9/24-Income tax dated 17.09.2024, which increased the monetary threshold for filing departmental appeals to Rs. 2,00,00,000/-. As the dispute valuation of Rs. 1,12,89,470/- was below this enhanced limit, the Revenue was permitted to withdraw the appeal. Consequently, Income Tax Appeal No. 44 of 2018 was disposed of as withdrawn. The Court also allowed the refund of court fees as per the rules. No specific issue was left undecided, as the appeal was withdrawn before a decision on merits.
The High Court allowed the application for condonation of delay. The Court found that while the application could have been more specific in explaining the delay, refusing to condone it would result in a meritorious matter being thrown out at the threshold, thereby defeating the cause of justice. The Court acknowledged the reasons provided by the Applicant, including a bona fide mistake by the Special Public Prosecutor, issues with ascertaining jurisdiction, and the impact of COVID-19 on office strength, as sufficient to condone the delay. The Court noted that immediate steps were taken to file the appeal after receiving the necessary communication. The appeal would now be decided on its merits after hearing the parties. The Court also expressed concern about the practice of government departments seeking condonation of inordinate delays and suggested that such delays lead to wastage of judicial time.
The High Court held that the ingredients of Section 276 C (2) of the Income Tax Act, 1961, were not met. The Court found that while there was a failure to pay the self-assessment tax along with the return, it could not be inferred that this constituted a 'willful attempt to evade tax'. The petitioner had paid the tax subsequently with interest, and had pleaded financial difficulties. The Court emphasized the distinction between 'failure' to pay tax and 'willful evasion', noting that Section 276 C (2) specifically requires the latter. The averments in the complaint were deemed insufficient to establish willfulness. The Court also noted that the tax was paid on 16.01.2023, and continuing the prosecution would be an abuse of the process of the court. Therefore, the writ petition was allowed, and the order of issuance of process and the complaint were quashed and set aside. The issue of invoking writ jurisdiction under Article 227 was implicitly answered by allowing the petition.
The High Court allowed the application for withdrawal of the appeal. The appeal was disposed of as withdrawn, and the court fee refund was granted.
The High Court allowed the application for withdrawal of the appeal. The appeal was disposed of as withdrawn, and the refund of court fees was granted as per the rules.
The High Court allowed the department's application for withdrawal. Consequently, Income Tax Appeal No. 53 of 2024 was disposed of as withdrawn, and the refund of court fees was also allowed as per rules.
The High Court held that the controversy was squarely covered by its decision in Shantilal Prabhudas & Co. vs. Income-tax Officer. Consequently, the Court directed that the petitioner shall pursue his appeal(s) already filed before the Commissioner of Income-tax (Appeals). The petitioner was permitted to raise contentions on the impugned notice and order being invalid, in light of the decision in Hexaware Technologies Limited. The Court also allowed the petitioner to file an application before the Appellate Authority praying for the appeal to be disposed of in view of the Hexaware Technologies Limited decision, with a direction for expeditious consideration of such an application. 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 petition was disposed of in these terms.
The High Court held that the controversy was squarely covered by its own decision in Shantilal Prabhudas & Co. vs. Income-tax Officer. Consequently, the Court directed the petitioner to pursue their appeal(s) already filed before the Commissioner of Income-tax (Appeals). The petitioner was permitted to raise contentions regarding the invalidity of the impugned notice and order in light of the Hexaware Technologies Limited decision before the Appellate Authority. The Court also allowed the petitioner to file an application before the Appellate Authority for disposal of the appeal in view of the Hexaware Technologies Limited decision, directing expeditious consideration of such an application. Until the proceedings before the Appellate Forum were decided, the impugned assessment was not to be acted upon. All contentions of the parties on the pending proceedings were expressly kept open. The petition was disposed of in these terms.
The High Court held that the controversy was squarely covered by its decision in Shantilal Prabhudas & Co. vs. Income-tax Officer. Consequently, the Court directed the petitioner to pursue his appeal before the Commissioner of Income-tax (Appeals). It was open for the petitioner to raise contentions regarding the impugned notice and order being invalid, specifically in light of the decision in Hexaware Technologies Limited. The Court also permitted the petitioner 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. Until the proceedings before the Appellate Forum were decided, the impugned assessment was not to be acted upon. All contentions of the parties on the pending proceedings were expressly kept open. The petition was disposed of in these terms.
The High Court held that the controversy in the present case was squarely covered by its decision in Shantilal Prabhudas & Co. vs. Income-tax Officer. Consequently, the Court directed that the petitioner should pursue their appeal(s) already filed before the Commissioner of Income-tax (Appeals). The petitioner was permitted to raise contentions on the impugned notice and order being invalid, in light of the decision in Hexaware Technologies Limited (supra). The petitioner was also allowed to file an application before the Appellate Authority for the appeal to be disposed of in view of the Hexaware Technologies Limited (supra) decision. The Appellate Authority was directed to expeditiously consider such an application. Until the proceedings before the Appellate Forum were decided, the impugned assessment was not to be acted upon. All contentions of the parties on the pending proceedings were expressly kept open. The writ petition was disposed of in these terms.
The High Court held that the controversy in the present case is squarely covered by its decision in Shantilal Prabhudas & Co. vs. Income-tax Officer. Consequently, the Court directed the petitioner to pursue his appeal(s) already filed before the Commissioner of Income-tax (Appeals) against the impugned assessment order. The petitioner was permitted to raise contentions regarding the invalidity of the notice and order in light of the Hexaware Technologies Limited decision. The petitioner was also allowed to file an application before the Appellate Authority for disposal of the appeal in view of the Hexaware Technologies Limited decision, and the Appellate Authority was directed to expeditiously consider such an application. 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 held that the controversy was squarely covered by its own decision in Shantilal Prabhudas & Co. vs. Income-tax Officer. Consequently, the court directed that the petitioner shall pursue his appeals already filed before the Commissioner of Income-tax (Appeals) against the impugned assessment order. The petitioner was permitted to raise contentions regarding the impugned notice and order being invalid, in light of the decision in Hexaware Technologies Limited. The court also allowed the petitioner to file an application before the Appellate Authority praying that the appeal be disposed of in view of the Hexaware Technologies Limited decision. If such an application were made, the Appellate Authority was directed to expeditiously consider it and all contentions raised. Until the proceedings before the Appellate Forum were decided, 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 appellate authorities should consider pending appeals in light of relevant High Court decisions, even if an SLP is pending, and assessment orders should be stayed pending such appellate decisions.
The High Court held that the CIT(A) and ITAT had appreciated the facts and recorded concurrent factual findings regarding the alleged bogus purchases. The High Court found that the assessee had discharged the onus of proving the genuineness of purchases by submitting documents like purchase bills, ledger accounts, and proof of bank payments, all made through account payee cheques. The assessee also submitted a certificate from the VAT Auditor regarding the Entech Enterprises transaction. The Court noted that the ITAT had rightly restricted the additions to 15% of the hawala purchases. Furthermore, the Court opined that these issues were findings of fact and did not give rise to any substantial question of law requiring interference. Therefore, the Revenue's appeal was dismissed. The Court emphasized that additions for bogus purchases require proper proof and a well-considered approach by the Assessing Officer, including coordination with other departments, and that superficial inquiries are not permissible. The principle established is that findings of fact, when concurrent and supported by evidence, do not ordinarily warrant interference in an appeal under Section 260A unless a substantial question of law arises.
The High Court held that the ITAT was in patent error in exercising jurisdiction under Section 254(2) of the IT Act. The Court reasoned that Section 254(2) is akin to Order XLVII, Rule 1 of the CPC, allowing rectification of mistakes apparent from the record. On the date the ITAT passed its original order on September 20, 2022, it followed the law as it then stood, relying on the Bombay High Court's decision in Ghatge Patil Transports Ltd. The subsequent overruling of this decision by the Supreme Court in Checkmate Services (P) Ltd. on October 12, 2022, did not constitute a "mistake apparent from the record" at the time the original order was passed. The Court relied on its own Division Bench decision in Infantry Security and Facilities v Income Tax Officer and Supreme Court decisions, including Beghar Foundation, which held that a change in law or a subsequent judgment by itself cannot be a ground for review or rectification. The Court found the Gujarat High Court's view in Suhrid Geygy Limited to be contrary to the established position. The impugned order of the ITAT recalling its earlier order was quashed and set aside, and the original order dated September 20, 2022, was restored. The Revenue was not precluded from challenging the original order under Section 260A.
The High Court held that the Assessing Officer (AO) is strictly bound by the time limit prescribed under Section 144C(13) of the Income Tax Act, 1961, for completing the assessment after receiving directions from the Dispute Resolution Panel (DRP). The Court rejected the Revenue's submission that this timeline does not apply to remand proceedings, stating that the Act makes no distinction between ordinary cases and remand cases in this regard. The Court reasoned that accepting the Revenue's argument would render the provisions of Section 144C(13) redundant. Furthermore, Section 144C(10) clearly states that directions issued by the DRP are binding on the AO. Consequently, the Court declared that the proceedings concerning the transfer pricing addition of Rs. 5,26,86,111 were barred by limitation. The transfer pricing adjustment was treated as non est and ordered to be excluded from the Petitioner's total income for AY 2010-2011. The AO was directed to recompute the income and pay the refund with statutory interest within eight weeks.
The High Court, following its own decision in IPG Advertising and Business Services LLP v. Assistant Commissioner of Income Tax, made the rule absolute and set aside the impugned notice issued under Section 148A of the Income Tax Act and all consequential proceedings. The Court granted liberty to the Revenue to revive the writ petition if the decision in Hexaware Technologies Ltd. is set aside by the Supreme Court. The Court clarified that revival could be done by filing a praecipe, and if the Supreme Court dismisses the SLP challenging Hexaware Technologies Ltd., there would be no question of revival. The Court also noted that if revived, the petition would be decided on its merits, considering other issues raised.
The High Court allowed the application for withdrawal of the appeal. The appeal was disposed of as withdrawn, and court fees were refunded as per rules.
The High Court held that the re-assessment proceedings for Assessment Year 2015-16, initiated by the notice under Section 148 dated April 5, 2022, were barred by limitation and ought to have been dropped. This was based on the concession made by the Revenue before the Hon'ble Supreme Court in the case of Union of India v. Rajeev Bansal (supra), as recorded in paragraph 19(f) of the judgment. The Court agreed with both parties that the notice was also bad in law in view of this Court's decision in Hexaware Technologies Limited v. ACIT. Consequently, since the Section 148 notice dated April 5, 2022, was already quashed by the order dated May 9, 2024, in the writ petition, the consequential re-assessment order dated March 3, 2025, passed under Section 147 read with Section 144B, the notice of demand under Section 156, and all penalty notices under Sections 271F, 271(1)(b), and 271(1)(c) were also quashed and set aside. The Interim Application was disposed of accordingly.
The High Court held that writ petitions challenging orders refusing rectification of assessment orders should not be entertained when an equally efficacious alternative remedy is available. The Court relied on the Apex Court's decision in The State of Maharashtra & Ors. V. Greatship (India) Limited, which stated that in taxation matters, High Courts should not entertain writ petitions if an equally efficacious remedy exists. Consequently, the Court directed the petitioners to avail the appropriate appellate remedy under Section 246A(1)(c) of the Income Tax Act, 1961. The time spent pursuing the writ petitions would be excluded from the period of limitation for filing the appeal. No specific finding was made on the merits of the rectification requests themselves.
The High Court dismissed the appeal filed by the Revenue. The Court found no reason to interfere with the ITAT's order. The reasoning was based on the ITAT's observations that the AO did not provide complete information from the Sales Tax Department to the assessee and did not grant an opportunity to cross-examine the source of adverse evidence, violating principles of natural justice. The Court also referred to the Gujarat High Court's decision in Vijay Proteins Ltd. and the ITAT's own observations in The Principal Commissioner of Income Tax-6 Vs. Colo Colour Pvt.Ltd, which held that penalty under Section 271(1)(c) cannot be levied when additions are sustained purely on an estimate basis or guesswork, or when the materials accepted for assessment are later sought to be used for penalty proceedings without clear evidence of concealment. The Court emphasized that penalty proceedings are penal in nature and require strict construction, and the foundation for initiating them cannot be premised on prejudice to the assessee. The appeal did not give rise to any substantial question of law.
The High Court considered the praecipe filed by the Petitioner's counsel. It found merit in the request to correct the appearance memo of the order dated 30th September 2025. The Court directed that the name of Mr. Dharan Gandhi (Through V.C.) a/w. Mr. Kuldeep Kulkarni for the Petitioner be added to the appearance memo. Concurrently, the name of Mr. S.B. Kalel, A.G.P., for the Respondent-State was to be deleted, as the State was not a party to the writ petition. The Court ordered that the order dated 30th September 2025 be corrected accordingly and the corrected order uploaded on the official website of the High Court of Bombay. The praecipe was disposed of in these terms.
The High Court held that the Assessing Officer's failure to issue a draft assessment order before passing the final assessment order was a breach of a mandatory provision of Section 144C(1) of the Income Tax Act, 1961. The Court found that the Petitioner was an eligible assessee, and the TPO's recommendation for an increased ALP was prejudicial to its interests. Consequently, it was incumbent upon the Assessing Officer to first forward a draft assessment order to the Petitioner, allowing it an opportunity to object before the Dispute Resolution Panel (DRP). By directly passing a final assessment order, the Assessing Officer contravened Section 144C and wrongly assumed jurisdiction. The Court relied on its own decision in SHL (INDIA) PVT. LTD. V. DEPUTY COMMISSIONER OF INCOME-TAX AND OTHERS, [2021] 438 ITR 317 (Bom), to hold that this was a jurisdictional error, not a mere procedural irregularity. The impugned assessment order dated March 28, 2025, was quashed and set aside. The Court clarified that the challenge to the TPO's order under Section 92CA was not pressed and no opinion was given on it.
The High Court observed that there appeared to be an error in the computation set out in Form 2 issued by the Income Tax Department. Consequently, the Court remanded the matter back to the Income Tax Department for a fresh computation of Form 2. The Department was directed to take into consideration taxes already paid by the Petitioner and the assessment order passed under Section 143(3) of the Income Tax Act, which is deemed to have attained finality if the Petitioner opts for the benefits under the Direct Tax Vivad Se Vishwas Scheme, 2024. The writ petition was disposed of in these terms, with no order as to costs.
The High Court accepted the statement made by the learned counsel for Respondent Nos. 1, 2, and 5. This statement clarified that the attachment in question was not in respect of the units B-101, B-102, and B-202 in Khandwala Shopping Centre Co-Operative Housing Society Ltd., Malad East, Mumbai, as alleged by the Petitioner. Based on this clarification, the Court directed Respondent Nos. 1, 2, and 5 to issue a no objection certificate to the Petitioner for completing the transfer of these units in the Petitioner's name. Additionally, Respondent No. 4 was directed to issue maintenance bills for these units in the Petitioner's name. The Writ Petition was disposed of in light of these directions. The Interim Application filed in the petition was also disposed of as it no longer survived.
The Bombay High Court held that there was a bona fide reason for the delay in filing the Return of Income. The Court observed that corporate restructuring is a legitimate tool for enhancing company value in the current competitive environment. The explanation provided for the delay was deemed adequately explained. The Court reiterated its consistent view that authorities considering applications under Section 119(2)(b) of the Income Tax Act, 1961, should adopt a justice-oriented approach, citing the decision in Pushpa Geethan Gada (Legal Heir/Legal Representative of Geethan Damji Gada) v. Principal Commissioner of Income Tax-4, Mumbai & Ors. Consequently, the Court found no justification for not condoning the delay. The impugned order dated April 2, 2024, was quashed and set aside, and the delay in filing the Income Tax Return was condoned. The writ petition was disposed of in terms of these directions, with no order as to costs.
The High Court held that the order under Section 187(3) of the Finance Act, 2016, rejecting the Petitioner's IDS declaration was erroneous. The Court noted that the shortfall of Rs. 54,99,996/- arose because the department had not granted credit for the advance tax of Rs. 55,00,000/- paid by the Petitioner. Relying on its own decision in Rajendra Lilachand Sanghavi, which in turn relied on other High Court judgments, the Court found that credit for advance tax paid prior to the declaration under the IDS should be allowed. Consequently, the Court quashed and set aside the order rejecting the IDS declaration, the notice under Section 148, the assessment order, the demand notice, and the show cause notice. The Court directed the respondents to issue Form No. 4 under the IDS within four weeks, granting credit for the advance tax paid.
The High Court held that there was a bona fide reason for the delay in filing the Income Tax Return for AY 2022-23. The Court found that corporate restructuring, such as mergers, is a legitimate tool in the current business environment and that the explanation provided for the delay was adequate. The Court emphasized that authorities considering applications under Section 119(2)(b) should adopt a justice-oriented rather than a pedantic approach, citing the case of Pushpa Geethan Gada V. Principal Commissioner of Income Tax-4, Mumbai & Ors. The Court found no justification for not condoning the delay and therefore quashed and set aside the impugned order dated April 2, 2024, and condoned the delay in filing the Income Tax Return. The Writ Petition was disposed of accordingly.
The High Court found considerable force in the petitioner's arguments. It noted that the show cause notice dated February 14, 2024, clearly indicated a proposal to treat bank credits of Rs. 5,43,39,761/- as unexplained money under Section 69A. However, the impugned Assessment Order made an addition of Rs. 1,17,00,000/- concerning the purchase of two immovable properties and an addition of Rs. 24,39,420/- under Section 56(2)(x). The Court observed that the petitioner was never called upon to show cause with reference to these specific additions. Consequently, the Court held that the Assessment Order was passed in breach of the principles of natural justice. The Court set aside the Assessment Order, Demand Notice, and Penalty Notices. The matter was remanded back to the Assessing Officer to issue a fresh show cause notice, grant a personal hearing, and pass a speaking order by December 31, 2025. The Court did not decide the applicability of Section 69A to property purchase expenses as the matter was remanded on procedural grounds.
The Tribunal held that the issue raised by the Petitioner was squarely covered by the Division Bench decision of the Bombay High Court in Hexaware Technologies Ltd. V/S Assistant Commissioner of Income-tax, Circle 15(1)(2) [(2024) 162 taxmann.com 225 (Bombay)]. As the Court is bound to follow its own precedents, the impugned Notice issued under Section 148 of the Income Tax Act, 1961, and all consequential proceedings and orders emanating therefrom were set aside. The Court granted liberty to the Revenue to revive the writ petition if the decision in Hexaware Technologies Ltd. is set aside by the Hon'ble Supreme Court. The Court clarified that revival could be done by filing a praecipe, and if revived, the impugned notice would be stayed until further orders. If the Supreme Court dismisses the SLP challenging the Hexaware judgment, there would be no question of revival. The Court also noted that if the petition is revived, it would be decided on its merits, considering other issues raised by the Petitioner. The rule was made absolute, and the writ petition was disposed of.
The High Court, bound by its own Division Bench decision in Hexaware Technologies Ltd. V/S Assistant Commissioner of Income-tax, set aside the impugned Notice issued under Section 148 of the Income Tax Act, 1961, and all consequential proceedings. The Court granted liberty to the Revenue to revive the writ petition if the Supreme Court sets aside the Hexaware Technologies Ltd. judgment. The revival can be done by filing a praecipe, and upon revival, the impugned notice would be stayed until further orders. The Court clarified that if the Supreme Court dismisses the SLP challenging the Hexaware judgment, there would be no revival. It was also noted that if the petition is revived, it would be decided on its merits, considering other issues raised by the petitioner.
The High Court allowed the Interim Application. It noted that the learned advocate for both respondents appeared and confirmed representation for Respondent No. 2. Consequently, the Court ordered that the Writ Petition be restored even with respect to Respondent No. 2. The order dated February 18, 2020, which had dismissed the Writ Petition, was set aside. The Interim Application was disposed of accordingly, with no order as to costs. The principle applied is that where parties consent to the restoration of a case, and the procedural requirements are met, the court will grant it to ensure a fair hearing.
The High Court, following its own decision in IPG advertising and business services LLP vs. Assistant Commissioner of Income Tax, made the rule absolute and set aside the impugned notice issued under Section 148A and all consequential proceedings. The Court granted liberty to the Revenue to revive the writ petition if the decision in Hexaware Technologies Ltd. V/S. Assistant Commissioner of Income-tax is set aside by the Supreme Court. The Court clarified that revival could be done by filing a praecipe and that if the Supreme Court dismisses the SLP challenging the Hexaware decision, there would be no question of revival. The Court also noted that if revived, the petition would be decided on its merits, considering other issues raised. The ratio decidendi is that a notice issued contrary to the mandatory procedure of faceless assessment is void, but liberty can be granted to the Revenue to revive proceedings if the precedent is overturned by a higher court.
The High Court decided the appeals as follows: Regarding Question (A), concerning the employer-employee relationship with consultant doctors, the Court held that it did not give rise to any substantial question of law and dismissed the appeal on this point. Consequently, for Question (C), the aspect of being an assessee in default related to Question (A) would not survive. However, the default status concerning AMCs would depend on the re-examination of that issue. For Question (B), concerning AMCs, the Court found that the ITAT had not independently analyzed the nature of each AMC. The Tribunal merely reproduced the CIT(A)'s findings without acting as the last fact-finding authority. The Court noted that for AY 2011-12, a different CIT(A) had held some AMCs to be for technical services. Therefore, the High Court quashed the ITAT's order on this issue and remanded the matter back to the ITAT for a fresh consideration and independent analysis of each AMC to determine whether TDS should have been deducted under Section 194C or 194J. All contentions of both parties on this issue were kept open for agitation before the ITAT.
The High Court held that Question (A), concerning the employer-employee relationship with consultant doctors, did not give rise to a substantial question of law. Therefore, the appeal on this issue was dismissed. Regarding Question (B), concerning the AMCs, the Court found that the ITAT had not independently analyzed the nature of each AMC. The ITAT had merely reproduced the CIT(A)'s findings and had not acted as the final fact-finding authority. The Court noted that for AY 2011-12, a different CIT(A) had differentiated between routine and specialized AMCs, holding some to be technical services. Consequently, the High Court quashed the ITAT's order on AMCs and remanded the matter back to the ITAT for a fresh examination of each AMC to determine whether TDS should have been deducted under Section 194C or 194J. All contentions on this issue were left open for the ITAT. As for Question (C), the Court held that the assessee's status as an assessee in default, in relation to Question (A), would not survive. However, the determination of whether the Assessee was in default for AMCs would depend on the ITAT's findings after re-examining the matter.
The High Court held that Question (A), concerning the employer-employee relationship with consultant doctors, did not give rise to a substantial question of law. Therefore, the appeal on this issue was dismissed. Regarding Question (B), concerning the AMCs, the Court found that the ITAT had not independently analyzed the nature of each AMC. The ITAT had merely reproduced the CIT(A)'s findings and had not acted as the final fact-finding authority. The Court noted that for AY 2011-12, a different CIT(A) had differentiated between routine and specialized AMCs, holding some to be technical services. Consequently, the High Court quashed the ITAT's order on AMCs and remanded the matter back to the ITAT for a fresh examination of each AMC to determine whether TDS should have been deducted under Section 194C or 194J. All contentions on this issue were left open for the ITAT. As for Question (C), the Court held that the assessee's status as an assessee in default, in relation to Question (A), would not survive. However, the determination of whether the Assessee was in default for AMCs would depend on the ITAT's findings after re-examining the matter.
The High Court held that Question (A), concerning the employer-employee relationship with consultant doctors, did not give rise to a substantial question of law. Therefore, the appeal on this issue was dismissed. Regarding Question (B), concerning the AMCs, the Court found that the ITAT had not independently analyzed the nature of each AMC. The ITAT had merely reproduced the CIT(A)'s findings and had not acted as the final fact-finding authority. The Court noted that for AY 2011-12, a different CIT(A) had differentiated between routine and specialized AMCs, holding some to be technical services. Consequently, the High Court quashed the ITAT's order on AMCs and remanded the matter back to the ITAT for a fresh examination of each AMC to determine whether TDS should have been deducted under Section 194C or 194J. All contentions on this issue were left open for the ITAT. As for Question (C), the Court held that the assessee's status as an assessee in default, in relation to Question (A), would not survive. However, the determination of whether the Assessee was in default for AMCs would depend on the ITAT's findings after re-examining the matter.
The High Court held that Question (A), concerning the employer-employee relationship with consultant doctors, did not give rise to a substantial question of law. Therefore, the appeal on this issue was dismissed. Regarding Question (B), concerning the AMCs, the Court found that the ITAT had not independently analyzed the nature of each AMC. The ITAT had merely reproduced the CIT(A)'s findings and had not acted as the final fact-finding authority. The Court noted that for AY 2011-12, a different CIT(A) had differentiated between routine and specialized AMCs, holding some to be technical services. Consequently, the High Court quashed the ITAT's order on AMCs and remanded the matter back to the ITAT for a fresh examination of each AMC to determine whether TDS should have been deducted under Section 194C or 194J. All contentions on this issue were left open for the ITAT. As for Question (C), the Court held that the assessee's status as an assessee in default, in relation to Question (A), would not survive. However, the determination of whether the Assessee was in default for AMCs would depend on the ITAT's findings after re-examining the matter.
The High Court held that Question (A), concerning the employer-employee relationship with consultant doctors, did not give rise to a substantial question of law. Therefore, the appeal on this issue was dismissed. Regarding Question (B), concerning the AMCs, the Court found that the ITAT had not independently analyzed the nature of each AMC. The ITAT had merely reproduced the CIT(A)'s findings and had not acted as the final fact-finding authority. The Court noted that for AY 2011-12, a different CIT(A) had differentiated between routine and specialized AMCs, holding some to be technical services. Consequently, the High Court quashed the ITAT's order on AMCs and remanded the matter back to the ITAT for a fresh examination of each AMC to determine whether TDS should have been deducted under Section 194C or 194J. All contentions on this issue were left open for the ITAT. As for Question (C), the Court held that the assessee's status as an assessee in default, in relation to Question (A), would not survive. However, the determination of whether the Assessee was in default for AMCs would depend on the ITAT's findings after re-examining the matter.
The High Court held that the ITAT committed a patent error in exercising its jurisdiction under Section 254(2) of the IT Act by recalling its earlier order based on a subsequent Supreme Court judgment. The Court reasoned that a subsequent ruling of a superior court cannot form the basis for invoking Section 254(2) to rectify a "mistake apparent from the record." On the date the original order was passed (September 5, 2022), the ITAT followed the law as it stood then. The subsequent overruling by the Supreme Court in *Checkmate Services* did not mean there was a mistake apparent on the record when the original order was passed. Therefore, the ITAT lacked jurisdiction to invoke Section 254(2). Consequently, the High Court set aside the ITAT's order dated September 17, 2024, passed under Section 254(2), and also set aside the consequential order dated September 17, 2024, dismissing the assessee's appeal under Section 254(1). The Writ Petition was allowed. The Court clarified that the Revenue is not precluded from challenging the original order dated September 5, 2022, under Section 260A if otherwise entitled.
The High Court held that the ITAT was in patent error in exercising jurisdiction under Section 254(2) of the IT Act. The Court found that a subsequent ruling of a Court cannot be a ground for invoking Section 254(2), which is meant for rectifying mistakes apparent from the record. On the date the ITAT passed its original order on September 5, 2022, it followed the law as it stood then. The subsequent overruling by the Supreme Court in Checkmate Services P. Ltd. did not mean there was a mistake apparent on the record at the time of the original order. Therefore, the ITAT lacked jurisdiction to recall its order under Section 254(2). Consequently, the ITAT's order dated September 17, 2024, recalling its earlier order and dismissing the assessee's appeal under Section 254(1) was set aside. The Writ Petition was allowed. The Income Tax Appeal (L) No. 21746 of 2025 was rendered infructuous and dismissed.