Wp/1627/2022 Of Invest Assets Securitisation And Reconstruction Private Limited v. Deputy Commissioner Of Income Tax Central Circle 1(1) And 2 Ors

IN THE HIGH COURT OF JUDICATURE AT BOMBAYDigitallysigned byPURTIPURTIPRASAD ORDINARY ORIGINAL CIVIL JURISDICTIONPRASADPARABPARABDate:2023.08.2210:58:56+0530 WRIT PETITION NO. 1627 OF 2022 Invent Assets Securitisation AndReconstruction Private Limited ….Petitioner V/s.Deputy Commissioner ofIncome Tax, Central Circle 1(1) and Ors.…Respondents ---- Mr. Deepak Tralshawala a/w Mr. V.S. Hadade for Petitioner.Mr. Suresh Kumar for Respondents. ---- CORAM : K.R. SHRIRAM & FIRDOSH P. POONIWALLA, JJ. DATED : 18[th] AUGUST 2023 P.C. : 1.Petitioner is impugning a notice dated 31[st] March 2021 issuedunder Section 148 of the Income Tax Act, 1961 (the Act) and the orderdated 11[th] March 2022 rejecting petitioner’s objections to re-open. 2.Petitioner is an asset reconstruction company. Petitioner hadfiled return of income for Assessment Year 2017-18 on 26[th] October 2017declaring total income of Rs.28,94,730/-. The case was selected underscrutiny and assessment under Section 143(3) of the Act was completedvide order dated 24[th] June 2019. 3. Subsequently, petitioner received the impugned notice dated 31[st] March 2021 in which it is stated that the Assessing Officer (A.O.) hadreasons to believe that petitioner’s income chargeable to tax for AssessmentYear 2017-18 has escaped assessment within the meaning of Section 147 ofthe Act. Petitioner subsequently received, vide a communication dated 15[th]November 2021, the reasons for re-opening the assessment. Petitioner wasalso provided the approval obtained under Section 151 of the Act.Petitioner had raised various grounds and one such ground is that themandatory sanction required under Section 151 of the Act issuing noticeunder Section 148 of the Act by A.O. is absent. The reason for petitioner tostate this is because in the approval copy under Section 151 of the Act madeavailable to petitioner states “Reasons to Believe - As per Annexure.” But inthe annexure it is only blank page. In ground (N) to the petition, petitioner has alleged as under : N. That the impugned notice dated 31.03.2021 issued undersection 148 along with all proceedings consequent thereto arewithout jurisdiction and invalid in law because copy of approvalsubsequently provided by the Respondent no.1 on 11.03.2022reveals that the Annexture containing reasons is blank in the saidapproval which makes it evident that the approval was granted byRespondent No.2 without looking at the reasons. 4.In the affidavit in reply filed by one Ms. Sarika Jain affirmed on 31[st] May 2022 it is stated as under : Ground N – The notice u/s 148 dated 31.03.2021 with allproceedings is without jurisdiction and invalid in law because acopy of approval provided by the Respondent No.1 is blank. Comment – The annexure containing the reasons is not blank. Itcontains reasons with the remark “As per Annexure”. A copy of thereasons was provided to the petitioner vide later dated 15.11.2021. 5.Therefore, there is no denial of the fact that the annexure didnot contain any reasons. On this ground alone in our view the impugnednotice and the order on objections have to be quashed and set aside. 4.In the affidavit in reply filed by one Ms. Sarika Jain affirmed on 31[st] May 2022 it is stated as under : Ground N – The notice u/s 148 dated 31.03.2021 with allproceedings is without jurisdiction and invalid in law because acopy of approval provided by the Respondent No.1 is blank. Comment – The annexure containing the reasons is not blank. Itcontains reasons with the remark “As per Annexure”. A copy of thereasons was provided to the petitioner vide later dated 15.11.2021. 5.Therefore, there is no denial of the fact that the annexure didnot contain any reasons. On this ground alone in our view the impugnednotice and the order on objections have to be quashed and set aside. 6.During the hearing Mr. Suresh Kumar tendered photocopy ofthe Form for recording reasons for initiating proceedings under Section 148of the Act for obtaining approval of the Additional Commissioner of IncomeTax – 3(2), Mumbai. To this document is annexed reasons for re-opening.These reasons for re-opening is not there on the Website/Income Tax Portal.There is no reference to these reasons for re-opening in the affidavit in reply.Moreover, the Form for recording the reasons and obtaining approvalindicates that the approval was given on 30[th] March 2021. It would onlymean that either the Form was filled up on 30[th] March 2021 or earlier. Butin the approval which is available on the Website/Income Tax Portal, anextract/copy whereof is annexed at Exhibit “V” to the petition showsapproval is dated 31[st] March 2021 and date of proposal is also shown as 31[st]March 2021. 7.Therefore, we are not inclined to accept the submissions ofMr.Suresh Kumar that there was proper reasons recorded based on whichapproval was obtained under Section 151 of the Act and that there wasapplication of mind by the Additional Commissioner of Income Tax whileaccording the approval. 8.In the circumstances, on this ground also the petition is allowed in terms of prayer clause – (A) which reads as under : (A) That this Hon’ble Court be pleased to quash the impugnednotice dated 31.03.2021 issued under section 148 of the Act andthe impugned order dated 11.03.2022 and all proceedingsconsequent thereto as without jurisdiction and hence illegal andbad in law; 9.Petition disposed. (FIRDOSH P. POONIWALLA, J.) (K.R. SHRIRAM, J.)