A Division Bench of the High Court of Allahabad held that Assessing Officer (AO) has no jurisdiction to issue notice under Section 148 of Income Tax Act, 1961 without recording valid satisfaction.
In the batch of writ petitions, the admitted facts are that on the basis of unsigned alleged digital approval under Section 151, Assessing officer issued notices to the assessees under Section 148 of the Income Tax Act, 1961. The point of time when the aforesaid approval under Section 151 of the Income Tax Act, 1961 was signed, is subsequent to the issuance of notices by the Assessing Officer under Section 148 of the Income Tax Act, 1961.
The counsel for the petitioners, Yash Tandon submitted that the notices under Section 148 are wholly without jurisdiction, inasmuch as, it was issued without prior satisfaction of the competent authority under Section 151 of the Act, 1961.
Since at the point of time when notices under Section 148 of the Act, 1961 were issued, there was no valid satisfaction of the competent authority, therefore, the Assessing Officer could not assume jurisdiction to issue notice under Section 148 of the Act, 1961. Section 282A has no relevance with respect to the recording of satisfaction or prior permission by the PCIT under Section 151.
The Counsels for the respondent, C.S.C, Gaurav Mahajan and Sudarshan Singh submitted that unsigned satisfaction of the PCIT stands validated in view of Section 282A inasmuch as the digital or physical unsigned satisfaction recorded by the PCIT shall be deemed to be authenticated under Section 282A read with Rule 127A of the Income Tax Rules, 1962 and Sections 2(d), 2(p) and 2(t) of the Information Technology Act, 2000 inasmuch as satisfaction bears the name and office of a designated income tax authority, i.e. PCIT.
The Counsels also submitted that the moment the PCIT has pushed in “Generate Tap in ITBA System” his satisfaction under Section 151 would be deemed to be an authenticated document in terms of Section 282A and thus is a valid satisfaction under Section 151.
The bench consisting of Justices Surya Prakash Kesarwani and Chandra Kumar Raj held that “In the present set of facts there was no valid satisfaction recorded by the by the Prescribed Authority under section 151 of the Act, 1961 when the Assessing Officer issued notice to the assessees under section 148 of the Act, 1961. At the time when the notice under section 148 of the Act, 1961was issued by the Assessing Officer to the petitioner there was no valid satisfaction recorded by the Prescribed Authority i.e. the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner. Subsequent to issuance of the notice under section 148 of the Act, 1961 by the Assessing Officer, the satisfaction under section 151 was digitally signed by the Prescribed Authority.”
“Therefore, the point of time when the Assessing Officer issued notices under section 148, he was having no jurisdiction to issue the impugned notices under section 148 of the Act, 1961. Consequently the impugned notices issued by the Assessing Officer under section 148 of the Act, 1961 were without jurisdiction.”
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
