2024 (5) TMI 1479 - HC - Income Tax

Validity of reopening proceedings - improper sanction having been obtained - sanction should have been given u/s 151(ii) and not u/s 151(i) - HELD THAT - As Counsels state that the issue of improper sanction has been decided by this court in the case of Siemens Financial Services Private Limited 2023 (9) TMI 552 - BOMBAY HIGH COURT wherein the court has held that for AY 2016-2017, the sanction should have been given under Section 151(ii) and not under Section 151(i) and consequently the sanction is invalid. The Court has stated that in view of the invalid sanction, the notice issued itself will be invalid and has to be quashed. We would also add, if the notice has to be quashed, if there is an assessment order passed subsequently, that assessment order having been passed relying on an incorrect sanction, will also have to be quashed. The findings in Siemens Financial Services Private Limited (supra) will squarely apply to this petition. Therefore, all notices and orders impugned in this petition are quashed and set aside. All consequential notices, assessment order and the consequential orders, if any, are also hereby quashed and set aside. Petition disposed. We clarify that all other grounds could be raised by the parties at appropriate stage in any other proceeding.

Summary

The High Court of Bombay quashed all notices and orders related to Assessment Year 2017-18 due to improper sanction, following the precedent set in Siemens Financial Services Private Limited case. The court held that an incorrect sanction renders the notice and subsequent assessment order invalid. The petition was disposed of, allowing parties to raise other grounds in future proceedings.