AO rightly takes Approval from PCIT for Reassessment not Elapsed more than 3 years:  Calcutta HC upholds addition [Read Order]

A Single Bench of the Calcutta High Court has held that the Assessing Officer (AO) rightly took the approval from the Principal Commissioner of Income Tax (PCCIT) for the reassessment elapsed more than 3 years. Thus, dismissed the writ petition.

The Petitioner Gemini Overseas Limited has challenged the impugned order dated 24th April, 2023 under Section 148A(d) of the Income Tax Act, 1961 relating to assessment year 2019-20 on the ground that the same has been passed without approval from the “Specified Authority” as described under Section 151(ii) of the Income Tax Act, 1961.

The revenue contended that the approval has been taken from the PCIT when admittedly the specified authority for approval in this case is Principal CIT since three years has not been passed from the end of the relevant assessment year on the date when the aforesaid impugned order was passed.

Dudhoria, advocate appeared for the respondent Income Tax Authority has brought to the notice of the Court the recent amendment under Section 151 of the Income Tax Act which is relevant and is quoted as hereunder :

“151. Specified authority for the purposes of section 148 and section 148A shall be, -

(i) Principal Commissioner or Principal Director or Commissioner or Director, if three years or less than three years have elapsed from the end of the relevant assessment year ;

(ii) Principal Chief Commissioner or Principal Director General or Chief Commissioner or Director General, if more than three years have elapsed from the end of the relevant assessment year

Provided that the period of three years for the purposes of clause (i) shall be computed after taking into account the period of limitation as excluded by the third or fourth or fifth provisos or extended by the sixth proviso to sub-section (1) of section 149”.

Considering the facts and circumstances of this case, the bench observed that it is an admitted position that after taking into consideration the period allowed to the Assessing Officer under the aforesaid fifth and sixth proviso to Section 149(1) of the Income Tax Act, the impugned order under Section 148A(d) of the Income Tax Act by excluding the time granted to the petitioner to file response to the notice under Section 148A(b) of the Act.

Further observed that period of seven days from the date of expiry of normal period of three years for the purpose of assessment, the impugned order passed under Section 148A(d) of the Act is very much within three years in this case and as such for passing the aforesaid Impugned order Principal CIT and not the Principal Chief CIT is “Specified Authority” for approval of the same.

The bench of Justice Md. Nizamuddin “In view of the aforesaid factual and legal position “Specified Authority” for the purpose of approval in this case is Principal CIT and the assessing officer has rightly taken approval from the Principal CIT concerned and such approval for passing the impugned order under Section 148A(d) of the Act is perfectly legal and valid and the aforesaid impugned order does not call for any interference by this Writ Court”.

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