Global Earth Properties & Developers Pvt. Ltd. Vs Union of India & Ors. (Bombay High Court)
Bombay High Court held that notice u/s. 148 of the Income Tax Act issued after obtaining sanction under section 151 from the non-competent authority is invalid and not sustainable in law. Accordingly, notice is liable to be quashed and petition is allowed.
Facts- By this Petition, the Petitioner has challenged the notice dated March 31, 2021 issued under section 148 of the Income-tax Act, 1961 for Assessment Year 2015-16; the order dated January 31, 2022 rejecting the objections of the Petitioner to the reopening of the assessment for the Assessment Year 2015-16; the final assessment order passed under section 147 r.w.s 144 r.w.s 144B of the Act dated March 30, 2022; and the Show-Cause Notice issued under section 274 r.w.s. 271(1)(c) of the Act dated March 30, 2022 during the operation of the ad-interim stay granted by this Court on March 07, 2022.
Conclusion- Held that the notice under section 148 of the Act has been issued after obtaining the sanction of Respondent No. 5 i.e. the Principal Commissioner of Income-tax, Mumbai – 4, who is not the competent Authority to grant sanction under section 151 of the Act to the impugned notice dated 31st March 2021 issued under section 148 of the Act. Where the Income-tax Act has conferred the power of sanction to a specified and distinct Authority, then the mandate of the statute must be strictly followed, and when the statute mandates the satisfaction of a particular functionary for exercise of the power, the satisfaction must be of that Authority alone and not of any other authority.
