Balkrishna Barsha Sutar Vs ITO (Bombay High Court)
In the case of Balkrishna Barsha Sutar vs. ITO, the petitioner challenged a notice issued under Section 148 of the Income Tax Act, 1961, along with an order passed under Section 148A(d) of the Act, both dated July 20, 2022. Additionally, they contested a notice dated May 25, 2022, issued under Section 148A(b) of the Act. One of the grounds raised was the invalidity of the sanction to pass the order under Section 148A(d) as it was issued by the Principal Commissioner of Income Tax (PCIT) instead of the Principal Chief Commissioner of Income Tax (PCCIT).
The petitioner relied on a previous order dated February 6, 2024, in the case of Vodafone Idea Limited v. Deputy Commissioner of Income Tax, which addressed similar sanctioning issues. Although the respondent argued that the petition might be deemed not maintainable because the assessee did not respond to the notice, the court emphasized that lack of response does not validate an invalid notice.
The impugned order and notice indicated that the sanctioning authority was the PCIT-27, Mumbai. However, since the issuance date of both documents was beyond three years from the relevant assessment year (AY 2017-2018), Section 151(ii) of the Act mandated that the sanctioning authority should have been the PCCIT. Given that the proviso to Section 151 was not applicable to the case at hand, the court concluded, following precedent (Siemens Financial Services Private Limited v. Deputy Commissioner of Income Tax), that the sanction was invalid. Consequently, both the impugned order and notice dated July 20, 2022, were quashed and set aside.
