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of <h1>Notice Under Sections 148 and 148A(d) Quashed Due to Invalid Sanction by PCIT, Violating Section 151(ii).</h1> <h3>Balkrishna Barsha Sutar Versus Income-Tax Officer And Others</h3> In the case before the Bombay HC, the petitioner contested the validity of a notice and order under sections 148 and 148A(d) of the Income-tax Act, 1961, ... Validity of reassessment proceedings - sanction has been admittedly issued by the Principal Commissioner of Income-tax ('PCIT') and not by the Principal Chief Commissioner of Income-tax ('PCCIT') - HELD THAT:- The impugned order and the impugned notice both dated July 20, 2022 state that the authority that has accorded the sanction is the Principal Commissioner of Income-tax-27, Mumbai. The matter pertains to assessment year ('AY') 2017-18 and since the impugned order as well as the notice are issued on July 20, 2022, both have been issued beyond a period of three years. Therefore, the sanctioning authority has to be the Principal Chief Commissioner of Income-tax as provided u/s 151(ii). The proviso to section 151 of the Act has been inserted only with effect from April 1, 2023 and, therefore, shall not be applicable to the matter at hand. As held by this court in Siemens Financial Services Pvt. Ltd.[2023 (9) TMI 552 - BOMBAY HIGH COURT] the sanction is invalid and consequently, the impugned order and impugned notice both dated July 20, 2022 u/s 148A(d) and 148 of the Act are hereby quashed. Decided in favour of assessee. Petition challenges notices under sections 148 and 148A(d) and a notice under section 148A(b) for AY 2017-18, all dated July 20, 2022. Key contention: sanction was accorded by the Principal Commissioner of Income-tax, not the Principal Chief Commissioner of Income-tax. For notices issued beyond three years, sanction must be by the Principal Chief Commissioner as required by section 151(ii); the proviso to section 151 is effective only from April 1, 2023 and therefore does not apply. The court rejected the maintainability argument that the assessee's failure to respond could cure an invalid sanction-answer is 'No'. Applying precedent (Siemens Financial Services and Vodafone Idea Ltd.), the sanction was held invalid; consequently the impugned order and notices dated July 20, 2022 under sections 148A(d) and 148 were 'quashed and set aside'. All rights and contentions are kept open.
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