Court quashes Income Tax notice for AY 2011-2012 due to lack of administrative approval

The High Court quashed the notice under Section 148 of the Income Tax Act for AY 2011-2012 and the subsequent order due to insufficient evidence of administrative approval. The petitioner successfully challenged the notice by providing evidence of filing the Income Tax Return for the relevant year, which the Revenue acknowledged. The Court emphasized the importance of clear administrative approval records and ruled in favor of the petitioner, directing the Revenue to cover costs and disposing of the writ petition.

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Issues:
1. Validity of notice issued under Section 148 of the Income Tax Act, 1961 for AY 2011-2012.
2. Administrative approval for the notice issuance.
3. Filing of Income Tax Return (ITR) for AY 2011-2012 by the petitioner-assessee.

Analysis:

Issue 1: Validity of notice under Section 148:
The petitioner challenged the notice dated 27.03.2018 issued by the Revenue under Section 148 of the Income Tax Act for AY 2011-2012. The petitioner contended that the notice was issued without necessary administrative approval. The Revenue argued that administrative approval was obtained on 26.03.2018. However, the Court found discrepancies between the communication in the counter-affidavit and the impugned order dated 28.09.2018, highlighting the lack of explanation regarding the administrative approval process. The Court concluded that the notice was untenable due to insufficient evidence of administrative approval.

Issue 2: Administrative approval for notice issuance:
The petitioner's counsel argued that the notice was issued before obtaining administrative approval, which was crucial under Section 151 of the Act. The Revenue claimed that approval was obtained before issuing the notice, citing the approval date as 26.03.2018. However, the Court found the explanation unsatisfactory and emphasized the importance of providing a clear record of administrative approval. The lack of supporting evidence led the Court to quash the notice and the order dated 28.09.2018.

Issue 3: Filing of ITR for AY 2011-2012:
The petitioner asserted that they had filed the ITR for AY 2011-2012, contrary to the Revenue's claim in the notice under Section 148. The petitioner provided proof of filing, including receipts and acknowledgments. The Revenue acknowledged the petitioner's submission and admitted that the return for AY 2011-2012 was filed and acknowledged by them. As the Revenue did not dispute the petitioner's evidence, the Court upheld the challenge to the notice and order based on the lack of merit in the Revenue's claim.

In conclusion, the High Court quashed the notice dated 27.03.2018 and the order dated 28.09.2018 due to the absence of proper administrative approval and the petitioner's submission of evidence regarding the filing of the ITR for AY 2011-2012. The Court directed the Revenue to pay costs to the petitioner and disposed of the writ petition accordingly.

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