2022 (7) TMI 1459 - HC - Income Tax

Reopening of assessment - notice issued after the expiry of period of four years - approval from competent authority - HELD THAT - On a reading of Section 151 it is clear that a notice under Section 148 of the Act, 1961 cannot be issued after the expiry of period of four years from the end of the relevant assessment year, unless the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner was satisfied, on the reasons recorded by the A.O., that it was a ft case for the issue of such a notice. In the present case, it is clear that assessment year under consideration was 2015-16 and, therefore, the notice impugned was admittedly beyond the four years period for which the approval ought to have been granted by any one of the aforementioned four authorities and not by the Joint Commissioner. It is clear that, the A.O. fell in error in holding that the case at hand fell within the four years period, from the end of the assessment year under consideration, which on the face of it appears to be erroneous. WP allowed.

Summary

Issues:
Challenge to notice under Section 148 of the Income Tax Act based on lack of proper approval from the designated authority and exceeding the statutory time limit for issuing the notice.

Analysis:
The petition challenged a notice dated 29th March, 2021, issued under Section 148 of the Income Tax Act for the assessment year 2015-16, alleging that the Assessing Officer (A.O.) did not obtain the required approval from the designated authority as mandated by Section 151 of the Act. The petitioner contended that the notice was unsustainable as it reflected approval from the Joint Commissioner of Income Tax instead of the specified authorities like the Principal Chief Commissioner or Chief Commissioner, as required by law.

Upon examining Section 151 of the Act, it was established that a notice under Section 148 cannot be issued after the lapse of four years from the end of the relevant assessment year without approval from the designated authorities. In this case, the notice issued in 2021 for the assessment year 2015-16 exceeded the statutory four-year limit for obtaining approval from the prescribed authorities. The court noted that the Assessing Officer erred in deeming the case to fall within the permissible four-year period, which was evidently incorrect.

Consequently, the court allowed the writ petition, ruling the notice dated 29th March, 2021, to be invalid due to the lack of proper approval from the designated authorities as mandated by Section 151 of the Income Tax Act. The court set aside the impugned notice, emphasizing the importance of adhering to statutory provisions regarding the issuance of notices under Section 148 to ensure compliance with legal requirements.