Communist Party of India (Marxist) Vs Income Tax Department (Delhi High Court)
Delhi High Court held that notice issued u/s. 148 and assessment order thereon is liable to be set aside as sanction of issuance of notice not granted by authority specified under section 151 of the Income Tax Act. Accordingly, appeal of asset allowed and demand set aside.
Facts- The petitioner is a national political party and is registered under Section 29A of the Representation of Peoples Act, 1951. Vide the present petition, the petitioner prays to quash the order under section 147, r.w.s 144B dt. 23.05.2023 with demand notice under section 156, show cause notice dt. 13.05.2023, order under section 148A(d) dt. 29.07.2022 and notice under section 148 issued as on 29.07.2022 by the Respondents.
Conclusion- In J M Financial & Investments Consultancy Services Private Limited v. ACIT, Circle 3(2)(1) & Ors., W.P. No. 1050/2020, decided on 04.04.2022, the Bombay High Court had made observations to the effect that even if the time to issue notice may have been extended by TOLA, the same would not amend the provisions of Section 151 of the Act.
Held that the validity of sanction for issuing the orders under section 148A(d) and the notices under section 148 should be tested with reference to amended section 151. If so tested, it is evident that sanction was not granted by an authority specified under clause (ii) of section 151. Hence, the orders under section 148A(d) and the notices under section 148 are quashed. As a corollary, the draft assessment orders under section 144B/144C cannot survive and are also quashed. Thus, the order dated 29.07.2022 passed under Section 148A(d) of the Act is not sustainable. Consequently, the subsequent proceedings, including the assessment order dated 23.05.2023, cannot be sustained. Accordingly, the impugned order passed under Section 148A(d) of the Act, the notice issued under Section 148 of the Act as well as the assessment order dated 23.05.2023 and the demand raised pursuant thereto, are hereby set aside.
