In a recent ruling the Bombay High Court quashed notice for re assessment issued after six years without approval of the Principal Chief Commissioner of Income-tax (PCIT).
The petitioner,MA Multi-Infra Development Pvt Ltdchallenges the notice under Section 148 of the Income Tax Act, 1961 for the assessment year 2015-16, inter-alia, on the ground that since the same has been issued beyond the period of four years, approval for issuance of the same ought to have been obtained from the Principal Chief Commissioner of Income-tax in terms of section 151(ii) of the Income Tax Act.
On a perusal of the notice issued under Section 148 of the Income Tax Act by the Assessing Officer shows that the same has been issued after obtaining necessary satisfaction. The approval was obtained from the Additional Commissioner of Income Tax of Income-Tax. The said officer, it is stated, was competent to grant approval in view of the applicability of the Taxation and the Relaxation and Amendment of Certain Provisions) Act, 2020.
In terms of the Relaxation Act, the limitation under provisions of sections 151(i) and 151(ii) of the Income Tax Act, which were originally expiring on 31st March 2020, stood extended to 31st March 2021. It was, thus, urged that since the RelaxationAct had extended the period of limitation, the Authority which was otherwise supposed to grant approval in regard to cases falling within the ambit of section 151(i) of the Act could have granted approval beyond the period of three years based upon the Relaxation Act.
InJ.M. Financial & Investment Consultancy Services (P) Ltd. v. Assistant Commissioner of Income Tax &Ors, the Bombay High Court held that the Relaxation Act would apply only to cases where the limitation was expiring on 31st March 2020 and since for the assessment year 2015-16, the limitation period was six years which was to expire only on 31st March 2022, the said provisions would not be applicable. It was held while the time to issue notice may have been extended but that would not amount to amending the provisions of section 151 of the Act.
A Bench comprising Justice Dhiraj Singh Thakur and Justice Kamal Khata observed that “We accordingly hold that the approval for issuance of notice under Section 148 ought not have been obtained from the Additional Commissioner of Income Tax but from the authority specifically mentioned under Section 151(ii) of the Act.”
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