2024 (1) TMI 864 - HC - Income Tax

Validity of reopening notices issued u/s 148 and orders passed u/s 148A(d) - authority which sanctioned for issuance of order u/s 148A(d) is the authority u/s 151(i) and not u/s 151(ii) - Section 148 notice which has been issued by respondent No. 2 after the statutory period of four years, is not in the mandatory procedure prescribed under the Act - respondent has also raised a plea of alternative efficacious remedy - HELD THAT - As regards the issue of alternative remedy, the coordinate Bench of this Court in Arvind Sahdeo Gupta 2023 (8) TMI 522 - BOMBAY HIGH COURT has observed that if a jurisdictional issue is raised and the controversy is purely a legal one which does not involve any disputed question of fact, then the writ petition does not deserve to be thrown out threshold. The decision of the Apex Court in Chhabil Dass Agarwal 2013 (8) TMI 458 - SUPREME COURT was distinguished by observing that the challenge in the said case was to the order of assessment, whereas the challenge before the Court was to the notice under Section 148 of the IT Act against which no statutory remedy is available. In the instant case, the challenge raised by the petitioner, that reopening without prior approval of Commissioner of Income Tax, goes to the root of the matter and hence the petition cannot be thrown out on the ground of alternative remedy. Validity of sanction, in Siemens Financial Services Pvt. Ltd. 2023 (9) TMI 552 - BOMBAY HIGH COURT at the Principal Seat has held that the sanction ought to have been granted under Section 151 (ii) and not under Section 151(i) of the Act. Relying upon the said decision in Crompton Greaves Consumer Electrical Ltd 2023 (8) TMI 1419 - BOMBAY HIGH COURT which related to the assessment year 2016-17, the Division Bench of this Court has quashed order under Section 148 A (d) as well as notice under Section 148 of the IT Act, since the authority which sanctioned issuance of order under Section 148 A (d) was the one under Section 151(i) and not under Section 151 (ii) of the Act. The case in hand is squarely covered by the decision of Siemens Financial Services Pvt. Ltd. (supra). The decisions relied upon by learned counsel for the respondents in support of the said contentions have already been considered by the Division Bench of this Court in the said decision. Hence, orders passed under Section 148(A)(d) as well as the notices issued under Section 148 of the I.T. Act are hereby quashed and set aside.

Summary

Issues Involved:
The petition challenges the notice, order, and assessment under the Income Tax Act for the assessment year 2016-17, specifically focusing on the validity of the notice issued beyond the statutory period and the sanction granted.

Validity of Notice Beyond Statutory Period:
The petitioner challenges the notice issued by respondent no. 2 after the statutory period of four years, contending it does not follow the mandatory procedure. The petitioner relies on previous court decisions to support their argument.

Alternative Remedy and Jurisdictional Issue:
The respondents argue that the notices are legal and valid, issued following due procedure under the Act. They also raise the plea of alternative efficacious remedy. The petitioner argues that the challenge to reopening without prior approval of the Commissioner of Income Tax is fundamental and should not be dismissed based on the availability of an alternative remedy.

Sanction under Section 151:
In previous cases, it was held that the sanction for the order should have been granted under Section 151(ii) and not under Section 151(i) of the Act. The court quashes the order and notices under the Act due to the incorrect sanctioning authority, as per the decisions in related cases.

Judgment Summary:
The petition is disposed of based on the precedent set in a previous case. The orders under Section 148(A)(d) and the notices under Section 148 of the Income Tax Act are quashed and set aside, without delving into other issues raised. No costs are awarded in this matter.