Income Tax Notice not valid as approval not taken from Principal Chif commissioenr Bombay High Court
Satisfaction of Additional Commissioner, Range 3(2), Mumbai has been obtained whereas under section 151, the sanction for re-opening an assessment beyond the period of four years should have been of the concerned Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner. On this ground alone the notice and the proceedings thereunder set aside.
HIGH COURT OF BOMBAY
Rinku R. Rai
v.
Income-tax Officer*
DHIRAJ SINGH THAKUR AND ABHAY AHUJA, JJ.
WRIT PETITION NO. 2199 OF 2022
AUGUST 23, 2022
Nishit Gandhi, Adv. for the Petitioner. Akhileshwar Sharma, Adv. for the Respondent.
ORDER
- By this petition, petitioner is aggrieved by the Final Assessment Order dated 25th March 2022 passed by the respondent on the ground that the said Assessment Order has been passed in violation of the provisions of section 144B of the Income-tax Act (the “Act”) in as much as the said Order has been passed without passing or issuing the draft Assessment Order as envisaged in section 144B(1)(xvi). Petitioner also seeks to challenge the legality and validity of the notice dated 31st March 2021 under section 148 of the Act issued by the respondent to the petitioner on the ground that the said notice is without jurisdiction, in as much as the necessary satisfaction under section 151 of the Act has not been obtained.
- Mr.Nishit Gandhi, learned counsel for the petitioner, would submit that the relevant Assessment Year is 2015-16 and the notice under section 148 is dated 31st March 2021, thereby clearly indicating that the re-opening sought to be done is beyond a period of four years. He submits that the satisfaction of Additional Commissioner, Range 3(2), Mumbai has been obtained whereas under section 151, the sanction for re-opening an assessment beyond the period of four years should have been of the concerned Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner. He submits that on this ground alone the notice and the proceedings thereunder ought to be set aside.
- Learned counsel also submits that the final Assessment Order dated 25th March 2022 passed by the Assessing Officer, pursuant to the proceedings initiated by the Assessing Officer, is also without jurisdiction, in as much as, the same has been passed without serving upon the petitioner a draft Assessment Order as envisaged under section 144B(1)(xvi) of the Act. He submits that the issuance of draft Assessment Order is mandatory in terms of the Faceless Assessment Scheme as incorporated in Section 144B of the Act. That the non-issuance of the draft Assessment Order is a jurisdictional defect, and therefore, the said order deserves to be set aside.
- Mr.Akhileshwar Sharma, learned counsel for the respondent/Revenue, refers to the Affidavit-in-Reply dated 24th June 2022 filed by the Revenue. He fairly states that in paragraph 14 of the said reply, it has been admitted that the approval for the re-opening was obtained from the Additional Commissioner, Income-tax and submits to the orders of this Court. With respect to petitioner’s grievance on the non-issuance of the draft Assessment Order, he draws the attention of this Court to paragraph 12 of the reply and submits that the same is an uncontroverted fact on record.
- Having heard learned counsel for the parties, we are of the view that the notice dated 31st March 2021 is clearly without jurisdiction and deserves to be quashed. The same is, hereby, quashed and set aside.
- Though it would therefore not be necessary for us to discuss the other issue, however, admittedly, there has been a breach of the provision of section 144B(1)(xvi) as no draft Assessment Order was issued to the petitioner. On this ground as well, the petition deserves to be allowed. The final Assessment Order dated 25th March 2022 is also quashed and set aside.
- The petition is allowed in the above terms. No costs.