Vodafone Idea Limited Vs DCIT (Bombay High Court)
Summary: The Bombay High Court considered a writ petition filed by Vodafone Idea Limited challenging a notice dated 19th March 2022 issued under Section 148A(b) of the Income Tax Act, 1961, the order passed under Section 148A(d), and the notice under Section 148, both dated 7th April 2022. The principal challenge concerned the validity of the sanction granted for passing the Section 148A(d) order and issuing the Section 148 notice.
The Petitioner contended that the requisite sanction was invalid because it had been granted by the Principal Commissioner of Income Tax (“PCIT”) rather than the Principal Chief Commissioner of Income Tax (“PCCIT”). The Petitioner had also sought a copy of the sanction, but the Department refused to provide it. According to the affidavit in reply, the Department’s position was that the sanction would be made available during the reassessment proceeding.
The Court noted that the impugned order and notice dated 7th April 2022 expressly stated that the sanctioning authority was the PCIT, Mumbai 5. The matter concerned Assessment Year 2018-19. Since the impugned order and notice were issued beyond three years, the Court held that the sanctioning authority was required to be the PCCIT under Section 151(ii) of the Act. The Court further noted that the proviso to Section 151 had been inserted with effect from 1st April 2023 and was therefore not applicable to the matter.
In reaching its conclusion, the Court relied upon its earlier decision in Siemens Financial Services Private Limited Vs. Deputy Commissioner of Income Tax & Ors., (2023) 457 ITR 647 (Bom.). Following that decision, the Court held that the sanction was invalid and consequently quashed and set aside the impugned order under Section 148A(d) and the notice under Section 148, both dated 7th April 2022.
The writ petition was accordingly disposed of, with no order as to costs, while all rights and contentions were kept open. For completion of the record, the Respondents were additionally directed to provide the Petitioner, within one week from uploading of the order, a copy of the approval form and the approval accorded for issuance of the order under Section 148A(d) and Section 148.
Cases Discussed
FULL TEXT OF THE JUDGMENT/ORDER OF BOMBAY HIGH COURT
1. Petitioner is impugning a notice dated 19th March 2022 issued under Section 148A(b) of the Income Tax Act, 1961 (“the Act”), the order passed under Section 148A(d) of the Act and the notice both dated 7th April 2022 issued under Section 148 of the Act. One of the grounds raised is that the sanction to pass the order under Section 148A(d) of the Act and issuance of notice under Section 148 of the Act is invalid inasmuch as the sanction has been admittedly issued by the Principal Commissioner of Income Tax (“PCIT”) and not by the Principal Chief Commissioner of Income Tax (PCCIT”).
2. Petitioner’s request for a copy of the sanction has also been denied. Even in the affidavit in reply, the Department is refusing to give the sanction which makes us wonder what is the national secret involved in that, that Assessee is being refused what he is rightfully entitled to receive from the Department. In the affidavit in reply, the stand taken by the Revenue is it will be made available during the reassessment proceeding.
3. The impugned order and the impugned notice both dated 7th April 2022 state that the Authority that has accorded the sanction is the PCIT, Mumbai 5. The matter pertains to Assessment Year (“AY”) 2018-19 and since the impugned order as well as the notice are issued on 7th April 2022, both have been issued beyond a period of three years. Therefore, the sanctioning authority has to be the PCCIT as provided under Section 151 (ii) of the Act. The provisio to Section 151 has been inserted only with effect from 1st April 2023 and, therefore, shall not be applicable to the matter at hand.
4. In this circumstances, as held by this Court in Siemens Financial Services Private Limited Vs. Deputy Commissioner of Income Tax & Ors.,1 the sanction is invalid and consequently, the impugned order and impugned notice both dated 7th April 2022 under section 148A(d) and 148 of the Act are hereby quashed and set aside.
5. Petition disposed. No order as to costs. All rights and contentions are kept open.
6. For completion of record, Respondents are directed to make available to Petitioner copy of the approval form as well as the approval accorded for issuance of order under Section 148A(d) and Section 148 of the Act within one week from this order being uploaded.
1 (2023) 457 ITR 647. (Bom.)
