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High Court of Madras regarding issuance of Writ of Certiorarified Mandamus, calling for the records of the case in DIN.

Title : Duraiswamy Kumaraswamy v. The Principal Commissioner of Income Tax

Case No. : W.P.No.5834 of 2022

CORAM : THE HONOURABLE MR.JUSTICE KRISHNAN RAMASAMY

Decided on : 06.10.2023.

Introduction

Writ Petition filed under Article 226 of the Constitution of India for issuance of Writ of Certiorarified Mandamus, calling for the records of the case in DIN and order No.ITBA/REV/ F/REV7/2021-22/1039075246(1) dated 25.01.2022 for the Assessment year 2019-20 on the file of the 1st respondent and quash the same.

Fact of the Case

This Writ Petition has been filed to quash the order of the 1st respondent in DIN and order No.ITBA/REV/ F/ REV7/ 2021- 22/1039075246(1) dated 25.01.2022 for the Assessment year 2019- 2020 and to direct the 1st respondent to condone the delay in filing Form-67 and grant the Foreign Tax Credit claim of Rs.23,23,484/-.The petitioner was employed in Kenya during the year 2016-2018 as CEO. For the financial year 2018-2019, the petitioner was a resident of India, including his Kenya income, he has filed. his Indian Income Tax return, and claimed the benefit of Foreign Tax Credit (FTC) under Section 90/91 of the Income Tax Act, 1961, read with Article 24 of the India-Kenya Double Taxation Avoidance Agreement. During the year, he had income of both Kenya and India. The petitioner has filed the income tax return for the income at Kenya.

Case Anlayis and judgment

Court remits the matter back to the respondent to make reassessment by taking into consideration of the FTC filed by the petitioner on 02.02.2021. The respondent is directed to give due credit to the Kenya income of the petitioner and pass the final assessment order. Further, it is made clear that the impugned order is set aside only to the extent of disallowing of FTC claim made by the petitioner and hence, the first respondent is directed to consider only on the aspect of rejection of FTC claim within a period of 8 weeks from the date of receipt of copy of this order.

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Written by- Nimisha Sunny

High Court of Bombay decision regarding the issue of improper sanction having been obtained has been raised.

Title : Chandar Mahadev Naik v. Income Tax Officer, Ward 5 and Ors.

Case No. : W.P (L) NO. 17578/2023

CORAM : HONBLE JUSTICE K.R. SHRIRAM & NEELA GOKHALE.

Decided on : 30 th OCTOBER 2023

Introduction

High Court of Bombay decision regarding the issue of improper sanction having been obtained has been raised. These petitions relate to A.Y. 2016-2017. Counsel states that in these petitions the issue of improper sanction having been obtained has been raised amongst other grounds.

Fact of the Case

the issue of improper sanction has been decided by this court in Siemens Financial Services Private Limited Vs. Deputy Commissioner of Income Tax & Ors. 1 wherein the court has held that for A.Y. 2016-2017 the sanction should have been given under Section 151(ii) and not under Section 151(i) of the Income Tax Act 1961 (the Act). Consequently, the sanction is invalid. The court has stated that in view of the invalid sanction, the notice issued itself will be invalid and has to be quashed.

Case Analysis and Judgment

Findings in Siemens Financial Services Pvt Ltd. (Supra) would squarely apply to these petitions as well on the issue of sanction. If the notice has to be quashed, if there is an assessment order passed subsequently, those assessment orders having been passed relying on an incorrect sanction will also have to be quashed.

Therefore, impugned Assessment Order dated 27th May 2023 issued under Section 144 read with Section 147 of the Act is hereby quashed and set aside. In view of the above, all consequential proceedings including Notice of Demand, Penalty proceedings also stands quashed and set aside. Petition is disposed.

Written by Nimisha Sunny