Umang Mahendra Shah Vs Union of India (Bombay High Court)
In a recent judgment, the Bombay High Court rendered a significant decision in the case of Umang Mahendra Shah vs. Union of India. The core issue revolved around the legality of an order issued under Section 148A(d) of the Income Tax Act, 1961, without obtaining the necessary sanction under Section 151.
The petitioner challenged a notice issued by Respondent No. 2 under Section 148, which was preceded by a notice under Section 148A(b) and an order under Section 148A(d). The crux of the petitioner’s argument was that the order under Section 148A(d) lacked the sanction required under Section 151(ii) of the Act. According to the petitioner, the sanction obtained under Section 151(i) was insufficient, as the circumstances of the case necessitated sanction under Section 151(ii) due to the elapsed time from the relevant assessment year.
Counsel for the petitioner referred to the decision of the Division Bench in Siemens Financial Services Pvt. Ltd. vs. Deputy Commissioner of Income Tax, which held that an order passed under Section 148A(d) without the appropriate sanction under Section 151 renders both the order and the consequent notice under Section 148 illegal.
The court examined the provisions of Section 151 and noted that while the sanction under Section 151(1) was indeed obtained, it was not in accordance with the requirements specified under Section 151(ii). The court reaffirmed the principle laid down in Siemens Financial Services Pvt. Ltd. that procedural safeguards must be strictly adhered to in tax proceedings.
