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2023 Supreme(Bom) 1379
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
K.R. SHRIRAM, FIRDOSH P. POONIWALLA, JJ.
Kartik Sureshchandra Gandhi – Petitioner
Versus
Asst. Commissioner of Income Tax, Mumbai – Respondent
Writ Petition No. 1812 of 2023
Decided On : 01-08-2023
Advocate Appeared:
For the Petitioners: Tanzil Padvekar, Tejal Kharkar.
For the Respondents: Subir Kumar, Sruti Kalyanikar.
Headnote:
Constitution of India, 1950 – Article 226 –Income Tax Act, 1961 – Section 148, 151 – Challenging reassessment – Jurisdiction – Pre-requisite conditions – Quash and set aside order – Held, Court are satisfied that there is no valid sanction – There is no evidence that PCIT has even granted any valid sanction – If respondents say there was a sanction by respondent no. 2, then it is an obvious case of utter non application of mind because he would otherwise have not granted sanction if he had only read and applied his mind to what is stated in box 9, i.e. time limit for current proceedings covered under is stated to be under Section 149(1)(b), or he would have sent it back to respondent no. 1 refusing to grant approval – Court are of opinion that if only respondent no. 2 had read report carefully, he would have never come to conclusion that there is any material before him to treat it as a fit case to issue notice under Section 148 of Act or pass order under Section 148A(d) of Act – Safeguards provided in Sections 148 and 151 were lightly treated by respondent nos.1 and respondent no. 2. Both of them appear to have taken duty imposed on them under these provisions as of little importance – Petition disposed.
JUDGMENT :
K.R. SHRIRAM, J.
1. Rule. Rule made returnable forthwith. By consent, the petition is taken up for final hearing at the admission stage.
2. Petitioner has approached this Court in our jurisdiction under Article 226 of the Constitution of India challenging reassessment notice dated 12th April 2023 for Assessment Year 2019-2020 issued under Section 148 of the Income Tax Act, 1961 (the Act) and order dated 12th April 2023 passed under Section 148A(d) of the Act.
3. It is petitioner’s case that the notice issued under Section 148 of the Act was wholly without jurisdiction as it does not meet the pre-requisite conditions stipulated under the amended scheme of reassessment. It is also petitioner’s case that the notice under Section 148A(b) and order under Section 148A(d) of the Act suffered from total non application of mind. So also, the approval granted under Section 151 of the Act by the specified authority reflects non application of mind.
4. Petitioner, an individual earning income from salaries, house properties and other sources, filed his return of income for Assessment Year 2019-2020 on 19th August 2019. The return of income was accompanied by computation of income. Thereafter, petitioner filed a revised income tax return on 8th November 2019.
5. Petitioner received notice dated 27th March 2023 under Section 148A(b) of the Act issued by respondent no. 1 calling upon petitioner to show cause as to why notice under Section 148 of the Act should not be issued to petitioner. The notice was accompanied by a two page note stating details of third party information. The notice mentioned that it was based on insight portal of the department in relation to a donation made by petitioner during the relevant Assessment Year 2019-2020 to a charitable organisation called All India Social Education Charitable Trust. Petitioner was called upon to file a response by 5th April 2023.
6. By a letter dated 5th April 2023, petitioner filed his objections under Section 148A(c) of the Act. Respondent no. 1 rejected the objections filed by petitioner and passed the impugned order dated 12th April 2023 under Section 148A(d) of the Act. It is petitioner’s case that the impugned order passed under Section 148A(d) of the Act has been passed without application of mind. The quantum of alleged income escaping assessment is Rs.5 lakhs. Petitioner has claimed deduction under Section 80G of the Act where only 50% deduction is allowable. Therefore, the alleged amount of Rs.5 lakhs is factually incorrect because petitioner has only been allowed to claim as deduction an amount of Rs.2,50,000/-. This itself indicates non application of mind.
7. Mr. Padvekar submitted that one of the main grievance of petitioner is that the approving authority has granted approval for issuance of the impugned notice under Section 148 and order under Section 148A(d) of the Act in a mechanical manner. Mr. Padvekar submitted that while granting approval under Section 151 of the Act, it was obligatory on the approving authority to verify the material available on record. The purpose of Section 151 of the Act is to introduce a supervisory check over the work of the Assessing Officer particularly, in the context of reopening of assessment. If an error has crept in while the Assessing Officer exercises his jurisdiction, the law expects the superior officer to be able to correct that error. In the case at hand, instead of correcting such an error, the approving authority has certified the errors committed as correct without even applying his mind.
8. Mr. Padvekar, relying on a judgment of the Allahabad High Court in Vikas Gupta vs. Union of India, (2022) 142 Taxmann.com 253 (All) submitted that the approving authority not having digitally signed the approval granted under Section 151 of the Act, the effect thereof would be that no valid sanction has been granted. Mr. Padvekar submitted that even the Miscellaneous - Digital Signature Certificate (DSC) Policy 2018 mandates that every le
