Income Tax Act, 1961, Sections
147, 148 & 148A
Reassessment--Order under section 148A(d)--Validity--Sanction/approval under section 151 obtained and granted without
application of mind
Conclusion: Where sanction/approval under section 151 was obtained and granted without
application of mind because in the approval, quantum of income, which had
escaped assessment, was mentioned as Rs. 63,16,784, whereas, as per draft of
order under section 148A(d), income that had escaped assessment was Rs.
97,06,911, order under section 148A(d) and consequent notice under section 148,
were liable to be quashed.
Assessee-company challenged order under section 148A(d) and
notice under section 148, contending that sanction/approval under section 151
was obtained and granted without application of mind because in the approval,
quantum of income, which had escaped assessment, was mentioned as Rs.
63,16,784, whereas, draft of order under section 148A(d), stated that income of
Rs. 97,06,911, had escaped assessment within the meaning of provision of
section 147. Held: If AO, who had sought approval, ACIT/JCIT, who
had recommended grant of approval and PCIT, who granted approval had only
bothered to read request for approval along with draft of order under section
148A(d), they would have certainly noticed the discrepancy. It was therefore,
clear that none of those officers, were even bothered to read the request for
approval or draft of order. In affidavit in reply, it was mentioned as a
typographical error. However, said explanation could not be accepted because a
typographical error could have been committed by AO, who was seeking the
approval, but if only ACIT/JCIT or PCIT had read the approval application and
draft of order to be issued under section 148A(d), they would have certainly
noticed the discrepancy and they should have either refused the approval or
sent the application back AO for filing correct form for approval. Hence, order
under section 148A(d) and consequent notice under section 148, were quashed and
set aside.
Decision: In
assessee s favour
IN THE BOMBAY HIGH COURT
K.R. SHRIRAM & NEELA GOKHALE, JJ.
Teleperformance Global Service (P) Ltd. v. Asstt.
CIT
Writ Petition (L) No. 31772 of 2023
19 March, 2024
Petitioner by: J.D. Mistry,
Senior Advocate, Madhur Agrawal, & Jitendra Singh.
Respondents-Revenue by:
Vikas T. Khanchandani, & Eshaan Saroop.
PC
1. By this petition,
Petitioner is challenging the impugned initial notice dated 21-3-2023 issued
under section 148A(b) of the Income Tax Act, 1961 ( the IT Act ), the
impugned Order dated 31-3-2023 passed under section 148A(d) of the Act
for assessment year 2019-20, and the impugned notice dated 31-3-2023 issued
under section 148 of the Act for assessment year 2019-20.
2. One Intelenet Global
Services (P) Ltd. ( IGSPL ) amalgamated with Petitioner with effect from
7-7-2011 pursuant to an order dated 5-3-2013 passed by this Court. Petitioner
was earlier called M/s. Serco BPO (P) Ltd.
3. Petitioner filed return
of income on 29-11-2019 for assessment year 2019-20 disclosing total income of
Rs. 193,91,30,100 under normal provisions of the Act and Rs. 2,47,10,34,147 as
book profit under section 115JB of the Act. It is averred in the petition that
all the transactions during the relevant year were done by Petitioner being the
transferee company but certain third parties have inadvertently booked the
transactions with Petitioner in the erstwhile PAN of IGSPL and the said
transaction are reflected in the 26AS of IGSPL. Petitioner has, however,
considered all the transactions entered into by Petitioner in its return of
income ( ROI ) irrespective of whether the transactions have been booked in PAN
of Petitioner or IGSPL and claimed credit of all Tax Deducted at Sources
irrespective of whether tax has been deducted in the PAN of Petitioner or
IGSPL.
4. Petitioner, thereafter,
received notice dated 21-3-2023 under section 148A(b) of the Act from
Respondent No. 1. In the notice it was stated, inter alia:
It is seen from the insight
portal of the Income Tax Department that assessee company has transaction by
the company by Intelenet Global Services (P) Ltd. (AACI7387P), now amalgamated
with company M/s. Teleperformance Global Services (P) Ltd., the assessee has
entered into the following transactions:
Information
Code
|
Information
Description
|
Amount
Description
|
Amount
(Rs.)
|
TDS 194J
|
TDS Statement Fees for
professional or technical services
|
Paid or credited
|
27,94,479
|
TDS 194A
|
TDS Statement interest other
than interest on securities
|
Paid or credited
|
5,02,490
|
TDS 194J
|
TDS Statement Fees for
professional or technical services
|
Paid or credited
|
93,158
|
TDS 194J
|
TDS Statement Fees for
professional or technical services
|
Paid or credited
|
63,16,784
|
The Petitioner is given a show
cause as to why in view of the above transactions, information, a notice under
section 148 of the Act, should not be issued.
5. Petitioner replied vide its
Letter dated 29-3-2023. Notwithstanding Petitioner s explanation, an Order
dated 31-3-2023 is passed by Respondent No. 1 rejecting Petitioner s
objections and holding that it was a fit case for issuance of notice under
section 148 of the Act. A consequent notice under section 148 of the Act has
also been issued. The order under section 148A(d) of the Act and the consequent
notice under section 148 of the Act has the approval of the Principal
Commissioner Devindra Kumar Gupta under section 151 of the Act.
6. Various grounds has been
raised in the petition, but the most important ground is that the
sanction/approval under section 151 of the Act has been obtained and granted
without application of mind. We would agree with Petitioner. A copy of the
approval and impugned order under section 148A(d) are annexed to the petition.
In column 7 of the approval, the quantum of income which has escaped assessment
is mentioned as Rs. 63,16,784. In column 18, reasons for the belief that income
has escaped assessment is answered as, Refer order under section 148A(d)
for details . The Additional/Joint Commissioner Rameshwar Prasad Meena has
recommended the issuance of notice under section 148 and in Column 22, reasons
for according approval/rejection by the specified authority reads as under:
Remarks: I have carefully gone
through the proposal submitted by the assessing officer (AO) through the
jurisdictional Range Heard. After examining the details, I find that this is a
fit case for issue of notice under section 148 of the Income Tax Act. The
proposal submitted by the assessing officer is accordingly approved.
Name: Devinder Kumar Gupta
Designation: Principal
Commissioner, Mumbai-5
Date: 31-3-2023.
7. The draft of the order
under section 148A(d) of the Act in paragraph 7 states that income of Rs.
97,06,911 has escaped assessment within the meaning of provision of section 147
of the Act and the same is required to be examined. If the assessing officer
who had sought the approval, the Additional/Joint Commissioner, who had
recommended grant of approval and the Principal Commissioner, who granted the
approval had only bothered to read the request for approval along with draft of
the order under section 148A(d) of the Act, they would have certainly noticed
the discrepancies. It is, therefore, clear that none of these officers have
even bothered to read the request for approval or draft of the order. In the
affidavit in reply, it is mentioned as a typographical error. We are not
inclined to accept this explanation because a typographical error could have
been committed by the assessing officer, who was seeking the approval, but if
only the Additional/Joint Commissioner or the Principal Commissioner had read the
approval application and the draft of the order to be issued under section
148A(d) of the Act, they would have certainly noticed the discrepancy and they
should have either refused approval or sent the application back to the
assessing officer for filing correct form for approval.
8. In the circumstances, in
our view, this is a fit case for us to interfere. We hereby quash and set aside
the Order dated 31-3-2023 under Clause (d) of section 148A of the Act.
The consequent notice issued under section 148 of the Act also dated 31-3-2023
is also quashed and set aside.
9. Petition disposed. No
order as to costs.