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The Delhi High Court considered a writ petition challenging a notice issued under section 148 of the Income Tax Act, 1961, reopening the assessment for the assessment year 2004-05 of a company engaged in the manufacture and sale of polyester chips and film. The key issues considered and analyzed in the judgment are as follows:1. **Sanction Requirement for Notice under Section 148:**The petitioner contended that the notice issued under section 148 required the sanction of the Joint Commissioner of Income Tax as per section 151(1) of the Act. The Court clarified that such sanction is only necessary if the notice is issued by an officer below the rank of Assistant Commissioner or Deputy Commissioner of Income Tax. Since the notice in this case was issued by the Deputy Commissioner of Income Tax, no sanction was required. The objection was rejected.2. **Scrutiny of Disallowances in Original Assessment:**The petitioner argued that certain disallowances were scrutinized in detail in the original assessment under section 143(3), thus questioning the need for reassessment. The Court noted that the revenue did not dispute this contention, indicating that there was scrutiny in the original assessment.3. **Challenge to Retrospective Amendment under Section 115JB:**The petitioner challenged the retrospective amendment under section 115JB brought by the Finance Act, 2008, which affected the deferred tax liability. The Court rejected the challenge, stating that retrospective amendments are within legislative competence. The Court found no grounds to support the challenge and noted that the petitioner did not provide substantial arguments to justify the challenge.4. **Validity of Reopening Assessment based on Retrospective Amendment:**The Court discussed the validity of reopening the assessment based on the retrospective amendment. It was established that the retrospective legislative amendment, which increased the book profit by the deferred tax liability, provided tangible material for the assessing officer to believe that income had escaped assessment. The Court cited precedents to support the validity of reopening assessments based on retrospective amendments.5. **Change of Incumbent of Office under Section 129:**The petitioner argued that the order rejecting objections was passed by an officer different from the one to whom objections were filed, contrary to section 129. The Court clarified that section 129 only applies in cases of a change in the incumbent of the office and does not prohibit the successor-in-office from passing orders on objections filed before the predecessor. The plea was found to lack merit.In conclusion, the Court dismissed the writ petition and imposed costs on the petitioner. The judgment upheld the validity of the notice issued under section 148, rejected challenges to the retrospective amendment under section 115JB, and clarified the application of section 129 regarding a change of incumbent of office.
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