Holiday Developers Private Limited Vs ITO (Bombay High Court)
The Bombay High Court allowed a writ petition challenging an order passed under Section 148A(d) and the consequential notice issued under Section 148 of the Income Tax Act, 1961, both dated 7 April 2022, as well as the earlier notice issued under Section 148A(b) dated 17 March 2022. The petitioner raised multiple grounds, including that the order under Section 148A(d) and the notice under Section 148 incorrectly recorded that approval had been granted by the Principal Commissioner of Income Tax (PCIT), Mumbai-5 on 7 April 2022.
The Court noted that the relevant Assessment Year was 2018-19 and that more than three years had elapsed from the end of the assessment year. Consequently, under Section 151(ii) of the Act, the competent sanctioning authority was required to be the Principal Chief Commissioner of Income Tax (PCCIT) and not the PCIT. The petitioner relied on the Bombay High Court’s earlier decision in Siemens Financial Services Private Limited v. Deputy Commissioner of Income Tax & Others, contending that the sanction granted by the PCIT was invalid.
Accepting this contention, the Court held that the case was covered by the decision in Siemens. It found no reason to merely issue Rule and keep the matter pending. Accordingly, the Court quashed and set aside the order passed under Section 148A(d) and the notice issued under Section 148 of the Act. The petition was disposed of without any order as to costs, and all rights and contentions of the parties were kept open.
