In a recent decision, a Single Bench of Justice Md. Nizamuddin of Calcutta High Court invalidated the reassessment order made by the Assessing Officer (AO) in violation of Section 148 of the Income Tax Officer, 1961, without the necessary clearance from the relevant authority.
The petitioner, Excel Movers Private Limited, has contested the impugned order pursuant to Section 148A(d) of the Income Tax Act by posing a pure legal question regarding the jurisdiction of the AO involved in making the impugned order by failing to follow the procedures for obtaining the specified authority’s approval as set forth in Section 151(ii) of the Income Tax Act.
It was acknowledged that the contested order was made in violation of Section 148A(d) of the Income Tax Act and that the Principal Commissioner of Income Tax (PCIT), whose approval was sought before the contested order was made, is not the specified authority in the present matter.
Furthermore, it was clear from a plain reading of Section 151(ii) of the Income Tax Act that the PCIT from whom approval was obtained was not the designated authority for the purposes of approval under Sections 148 and 148A of the Income Tax Act.
After taking into account the relevant facts, circumstances, and arguments made by the parties in the case, the bench annulled the disputed order and all the subsequent procedures.
The High Court further noted that the Income Tax Authorities concerned would not be prevented from starting any further legal procedures in the future after seeking approval from the proper specified authority due to the quashing of the contested notice and related proceedings.
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