Adil Aspi Engineer Vs ITO (Bombay High Court)
The Bombay High Court disposed of multiple writ petitions relating to Assessment Years 2016–2017 and 2017–2018, where one of the key grounds raised was the issue of improper sanction for reopening assessments under the Income Tax Act, 1961. The Court noted that this issue had already been conclusively decided in an earlier judgment, which held that for Assessment Year 2016–2017, sanction for issuance of notice ought to have been granted under Section 151(ii) and not under Section 151(i) of the Act. Since the sanction had been obtained under an incorrect provision, it was held to be invalid.
Read SC Judgment in this case: SC Upholds Quashing of Reassessments for Sanction Under Wrong Provision
The Court reiterated that where the sanction itself is invalid, the notice issued pursuant to such sanction is also invalid and liable to be quashed. It further clarified that even if an assessment order has subsequently been passed based on such invalid notice, the assessment order would also have to be set aside, as it rests on an incorrect and unlawful sanction. Accordingly, all notices and assessment orders for Assessment Year 2016–2017 that were founded on such improper sanction were quashed.
In addition, the Court held that all consequential notices and demands issued under Sections 156 or 271 of the Act, being dependent on the invalid assessment proceedings, would also stand quashed. The petitions were thus allowed on this ground.
The Court further recorded the submission of counsel that the findings of the earlier judgment would equally apply to Assessment Year 2017–2018. Accepting this position, the Court quashed and set aside all notices, assessment orders, and consequential orders issued for Assessment Year 2017–2018 as well.
While disposing of the petitions, the Court clarified that all other grounds raised by the parties were kept open and could be agitated at the appropriate stage in any other proceeding. Consequent to the disposal of the main petitions, all pending interim applications were also disposed of.
FULL TEXT OF THE JUDGMENT/ORDER OF BOMBAY HIGH COURT
