High Court of Bombay decision regarding the issue of improper sanction having been obtained has been raised.
Title : Chandar Mahadev Naik v. Income Tax Officer, Ward 5 and Ors.
Case No. : W.P (L) NO. 17578/2023
CORAM : HONBLE JUSTICE K.R. SHRIRAM & NEELA GOKHALE.
Decided on : 30 th OCTOBER 2023
Introduction
High Court of Bombay decision regarding the issue of improper sanction having been obtained has been raised. These petitions relate to A.Y. 2016-2017. Counsel states that in these petitions the issue of improper sanction having been obtained has been raised amongst other grounds.
Fact of the Case
the issue of improper sanction has been decided by this court in Siemens Financial Services Private Limited Vs. Deputy Commissioner of Income Tax & Ors. 1 wherein the court has held that for A.Y. 2016-2017 the sanction should have been given under Section 151(ii) and not under Section 151(i) of the Income Tax Act 1961 (the Act). 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.
Case Analysis and Judgment
Findings in Siemens Financial Services Pvt Ltd. (Supra) would squarely apply to these petitions as well on the issue of sanction. If the notice has to be quashed, if there is an assessment order passed subsequently, those assessment orders having been passed relying on an incorrect sanction will also have to be quashed.
Therefore, impugned Assessment Order dated 27th May 2023 issued under Section 144 read with Section 147 of the Act is hereby quashed and set aside. In view of the above, all consequential proceedings including Notice of Demand, Penalty proceedings also stands quashed and set aside. Petition is disposed.
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