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2022 (5) TMI 61 - HC - Income TaxValidity of Reopening of assessment u/s 147 - four years from the end of the relevant assessment year - rejecting petitioner s objections to re-opening - Validity of sanction granted under Section 151 - as argued sanction has been given by the Additional Commissioner of Income Tax and not Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner of Income Tax - HELD THAT - In the case at hand, the assessment year is 2015-2016 and, therefore, the six years limitation will expire only on 31st March 2022. Certainly, therefore, the Relaxation Act provisions will not be applicable. In any event, the time to issue notice may have been extended but that would not amount to amending the provisions of Section 151 of the Act. In our view, since four years had expired from the end of the relevant assessment year, as provided under Section 151(1) of the Act, it is only the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner who could have accorded the approval and not the Additional Commissioner of Income Tax. On this ground alone, we will have to set aside the notice dated 26th March, 2021 issued under Section 148 of the Act, which is impugned in this petition. In view thereof, the consequent orders and notices will also have to go.
Issues:
1. Validity of notice issued under Section 148 of the Income Tax Act for Assessment Year 2015-16. 2. Approval obtained for issuing the notice under Section 148 of the Act in accordance with Section 151 of the Act. 3. Interpretation of Section 151(1) of the Income Tax Act regarding the approval required for re-opening assessments. Analysis: Issue 1: Validity of Notice The petitioner challenged a notice issued under Section 148 of the Income Tax Act for Assessment Year 2015-16, contending that the sanction granted under Section 151 of the Act was invalid as it was given by the Additional Commissioner of Income Tax, not by the authorized officials specified under the Act. The Court noted that the approval for the notice was obtained after the expiry of four years from the end of the relevant assessment year. As per Section 151(1) of the Act, the approval must be granted by specific officials, namely the Principal Chief Commissioner, Chief Commissioner, Principal Commissioner, or Commissioner. Since the approval in this case was only from the Additional Commissioner, the Court held the notice to be bad in law and set it aside. Issue 2: Approval Requirement The petitioner argued that the approval for issuing the notice under Section 148 was not in compliance with the provisions of Section 151 of the Act. The Court observed that the approval obtained from the Additional Commissioner of Income Tax did not meet the statutory requirement, as it should have been obtained from higher-ranking officials specified under the Act. The Court emphasized that the approval process is crucial for the validity of a notice issued under Section 148, and in this case, the absence of approval from the designated authorities rendered the notice invalid. Issue 3: Interpretation of Section 151(1) The Court examined the provisions of Section 151(1) of the Income Tax Act, which stipulate that no notice shall be issued after four years from the end of the relevant assessment year unless approved by specific authorities. The Court emphasized that in cases where four years have elapsed from the relevant assessment year, only the Principal Chief Commissioner, Chief Commissioner, Principal Commissioner, or Commissioner can grant approval for re-opening assessments. The Court held that the approval obtained from the Additional Commissioner of Income Tax was not in accordance with the statutory requirement, leading to the setting aside of the notice issued under Section 148. In conclusion, the High Court of Bombay held that the notice dated 26th March, 2021 issued under Section 148 of the Income Tax Act for Assessment Year 2015-16 was invalid due to the lack of proper approval from the designated authorities as required by Section 151(1) of the Act. The Court allowed the petition, quashed the notice, and disposed of the matter accordingly.
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