Bombay High Court
Nds Art World Private Limited vs Additional Commissioner Of Income Tax … on 28 January, 2025
Author: M. S. Sonak
Bench: M. S. Sonak
2025:BHC-OS:1389-DB
Sayyed 2-WP.2930.2024.docx
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
WRIT PETITION NO.2930 OF 2024
ND'S Art World Private Limited ...Petitioner
Versus
Additional Commissioner of
Income Tax (OSD) (OT & WT) & Ors. ...Respondents
_____________________________________________________
Ms. Priyanka Jain a/w Mr. Pankaj Soni i/b. Vaish Associates for the
Petitioner.
Mr. P. A. Narayanan for the Respondents.
_____________________________________________________
CORAM : M. S. Sonak &
Jitendra Jain, JJ.
DATED: 28 January 2025
ORAL JUDGMENT:- (Per M. S. Sonak, J.)
1. Heard Ms. Jain, learned counsel for the Petitioner and Mr.
Narayanan, learned counsel for the Respondents.
2. Rule. The Rule is made returnable immediately at the request
of and with the consent of the learned counsel for the parties.
3. The Petitioner challenges the order dated 24 January 2024,
which dismissed the Petitioner’s application for condonation of a delay
of around 10 months in filing the return of income for the assessment
year 2020-2021.
4. Ms. Jain submits that the impugned order in this case has
been made by the Additional Commissioner of Income Tax (CIT) (OSD)
(OT & WT) “with the approval of competent authority”. She submits
that the power to consider and dispose of an application for
condonation of delay is vested in the Central Board of Direct Taxes
(CBDT) under the provisions of Section 119(2)(b) of the Income Tax
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Sayyed 2-WP.2930.2024.docx
Act, 1961 (“the IT Act“). She submits that the impugned order is neither
by CBDT nor any of its members. There is no clarity about which
competent authority has approved the making of this order. She submits
that in any event, even if the CBDT or its members approve the order, it
cannot be regarded as an order made by the CBDT or its members. She
submits that on this short ground, the impugned order is liable to be set
aside. She relies on R. K. Madhani Prakash Engineers J V vs. Union of
India1, Tata Autocomp Gotion Green Energy Solutions (P.) Ltd. vs.
Central Board of Direct Taxes2 and Bharat Education Society vs. The
Assessing Officer, Income Tax Exemption-1(1) Mumbai 3 in support of
her contention.
5. Ms. Jain, without prejudice to the above, submits that the
Petitioner showed sufficient cause, but without assigning any good
reasons, this cause has not been considered. She submits that the period
in question was affected by the COVID-19 pandemic. Genuine hardships
were pleaded and demonstrated. She submits that all these relevant
materials were not considered when making the impugned order.
6. Mr. Narayanan defends the impugned order based on the
reasoning reflected therein. He refers to the Central Secretariat Manual
for Office Procedure and stresses paragraph 9.3, which deals with the
authentication of Government orders. He also refers to the Central
Boards of Revenue Act, 1963, to justify making the impugned order by
the Additional CIT (OSD) (OT & WT). He submits that the Petitioner
was found to be a habitual defaulter when it comes to filing the return
of income. For all these reasons, Mr. Narayanan submits that this
petition may be dismissed.
7. The rival contentions now fall for our determination.
1 [2023] 154 taxmann.com 16 (Bombay)
2 [2024] 163 taxmann.com 643 (Bombay)
3 Writ Petition (L) No.21487 of 2024 dtd. 21 January 2025.
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8. As noted earlier, the impugned order has been signed by the
Additional CIT (OSD) (OT & WT). The last line states that it was passed
“with the approval of competent authority.”
9. The affidavit does not throw much light on the status of
competent authority approving the making of this order by the
Additional CIT (OSD) (OT & WT). In any event, this Court had to
interfere with similar orders made by officers who neither had any
authorisation from the CBDT to make such orders nor any authorisation
from CBDT members. This is assuming that the CBDT or its members
could have delegated such powers to the officers like Additional CIT
(OSD) (OT & WT). There is a difference between the CBDT or its
authorised member making an order and some other officers making an
order with the approval, even of the member of the CBDT.
10. In Bharat Education Society (supra) , the affidavit was filed on
behalf of the Commissioner of Income Tax (Exemptions), in which an
order similar to that made in this petition was sought to be justified by
contending the following: –
“12. In the affidavit filed by Mr Salil Mishra, Commissioner of
Income Tax (Exemptions), the contention regarding the impugned
order not being made by the CBDT or its Member is answered in
paragraph 9, which reads as follows:-
“9. Further the petitioner has taken the plea in the writ petition that
the order has been passed by an officer without jurisdiction, as the
show cause notice dated 06.07.2023 was issued by the DCIT(OSD)
(ITA Cell) and the condonation order has been passed by the Addl.
CIT (ITACell) with the approval of Member(IT).
Member(IT). The petitioner has
also contended whether the DCIT(OSD)(ITA Cell) or the Addl.CIT
(ITA Cell) were competent to issue the show cause notice and pass
the order and whether the authority as per whose
direction/approval the said order has been passed, has applied his
mind to the issues arising in the case.
In this connection, it is submitted that CBDT functions through its
Members and the work allocation has been done amongst the
Members. All the Members of the CBDT are the Special Secretaries
to the Govt. of India and have office for processing all the matters
dealt by them. Applications/petitions u/s 119(2)(b) of the Income-
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Sayyed 2-WP.2930.2024.docx
tax Act, 1961 received in the Board are processed in the office of
the concerned Member after proper consideration of facts and
circumstances of each case. The work relating to the Order under
section 119 of the Income-tax Act, 1961 on matters related to
Sections 10, 11, 12 & 13 have been assigned to Member (IT) in
CBDT. The orders in these cases are approved by Member
concerned and after approval; these orders are issued with the
signature of the officer, who is not below the rank of Under
Secretary to Govt. of India, in the office of the Member. Member.
Considering the extant office procedure and practices being
followed, the Addl. CIT (ITA Cell) has signed the order after taking
approval of the Member concerned In last para of the Order, it has
been clearly mentioned that the Order issues with the approval of
Member (IT), CBDT.”
11. The above explanation was not accepted by this Court and the
reasoning in this regard is in paragraph 13, which reads as follows:-
“13. The reply suggests that the CBDT functions through its
Members, and the works are allotted amongst the Members of the
CBDT who are Special Secretaries to the Government of India. The
affidavit states that the member is allocated the work of
considering applications/Petitions under Section 119(2)(b) of the
IT Act to consider the facts and circumstances of each case. There
is a specific statement in the affidavit that the work relating to
orders under Section 119 of the IT Act on matters pertaining to
Sections 10, 11, 12 and 13 have been assigned to Member (IT) in
the CBDT.”
12. In R. K. Madhani Prakash Engineers J V (supra), a similar
justification for a similar order was not accepted by yet another Division
Bench of this Court. Paragraph 6 of R. K. Madhani Prakash Engineers J
V (supra) reads as follows: –
“6. Before we proceed further, we should note that pursuant to
Circular F No.312/22/2015-OT dated 9th June 2015 issued by
CBDT, application/claim for amount exceeding Rs.50 lakhs shall be
considered by the Board. We say this because the last sentence in
the impugned order dated 24th December 2020 reads; “This order
is passed with the approval of the Member (TPS & Systems),
CBDT.” There is nothing to indicate that Board has considered
petitioner’s application. We also find that copy of the impugned
order dated 24th December 2020 is sent to, (a) the Principal Chief
Commissioner of Income Tax, Mumbai, (b) Principal Commissioner
of Income Tax-21, Mumbai, (c) Director of Income Tax, Centralized
Processing Cell, Bengaluru, (d) the applicant and (e) the GuardPage 4 of 6
Sayyed 2-WP.2930.2024.docxFile but it is not sent to the Member on whose approval the said
order is supposed to have been passed. In our view, this means the
Member has not passed the order but has been passed by the
Director. On this ground alone, this order has to be quashed and
set aside.”
13. Similar view was taken in Tata Autocomp Gotion Green
Energy Solutions (P.) Ltd. (supra) .
14. Paragraph 9.3 of the Central Secretariat Manual of Office
Procedure only relates to authentication of Government orders. This
paragraph does not dispense with the requirement of CBDT or its
members making orders on the application seeking condonation of
delay. Section 119(2)(b) empowers the CBDT to decide such
applications. The CBDT, as a part of its functioning, may have allocated
the work amongst its members. However, nothing was shown to us
regarding any further allocation or delegation to the Additional CIT
(OSD) (OT & WT). At this stage, we do not make any observations on
the permissibility of any such further delegation. Similarly, there is
nothing in the Central Boards of Revenue Act, 1963 or at least nothing
was shown to us based upon which the making of the order by the
Additional CIT (OSD) (OT & WT) could be held as valid or validated.
15. Therefore, by following the previously decided cases, we
quash and set aside the impugned order dated 24 January 2024 and
remand the matter to the CBDT or its duly allocated member to pass an
order on the Petitioner’s application for condonation of delay. Needless
to add the Petitioner / its representatives must be heard before such an
order is made. A reasoned order must be communicated to the
Petitioner. This exercise must be completed within 3 months of
uploading this order.
16. However, all parties’ contentions on merits are kept open.
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Sayyed 2-WP.2930.2024.docx
17. The Rule is made absolute in the above terms without any
cost order.
18. All concerned to act on an authenticated copy of this order.
(Jitendra S. Jain, J.) (M. S. Sonak, J.)
Signed by: Sayyed Saeed Ali
Designation: PA To Honourable Judge Page 6 of 6
Date: 30/01/2025 14:34:47