Notice under Section 148 after 4 years from the end of AY without obtaining a sanction Bad in Law: ITAT [Read Order]

The Jaipur Bench of the Income Tax Appellate Tribunal ( ITAT ) in the case of Smt. Sonu Khandelwal v. Income Tax Officer held that notice under Section 148 of the Income Tax Act after 4 years from the end of AY and without obtaining a sanction violates the provision of Section 151 of the Income Tax Act.

The primary issue in the matter was in relation to the reopening of the assessment.

It was contended on behalf of the assessee that the Assessing Officer (AO) had issued a notice under Section 148 of the Income Tax Act after the expiry of 4 years from the end of the AY without obtaining requisite approvals under Section 151 of the Income Tax Act. Hence, such a reopening is invalid and illegal.

The Departmental Representative, on the other hand, admitted the fact that the AO had not obtained a sanction under Section 148 of the Act since the reopening in the present case was as per provisions of Section 150 based on the order of the Commissioner of Income Tax (Appeals) therefore no sanction is required under the provision since it gives jurisdiction to the AO to reopen the assessment if an assessment of income is in consequence of / or to give effect to any finding or directions contained in the order of the appellate authority. Further, where the limitation of six years as provided in Section 149 of the Act is not applicable then the said time limit of period of 4 years U/s 151 of the Act is also not applicable for issuing notice under Section 148.

The Tribunal bench comprising of before the Justices Vijay Pal rao and Vikram Singh Yadav after going through the arguments of both the parties was of the opinion that “If such notice is issued after expiry of four years from end of the relevant assessment year Section 151 gives jurisdiction to the Assessing Officer to initiate the proceedings U/s 147 and in absence of the sanction of the authority provided U/s 151 of the Act, the notice issued by the Assessing Officer is invalid. The provisions of Section 150 of the Act is only an exception to the limitation provided U/s 149 and therefore, the said Section cannot be taken as an exception to Section 151 of the Act. Hence, we are of the considered view that even if the assessment is reopened to make reassessment in consequence of or to give effect to any finding or direction of the appellate authority the requirement of sanction U/s 151 is mandatory for issuing notice U/s 147 of the Act..”

The Tribunal hence concluded that if the AO issued notice under Section 148 after 4 years from the end of AY and without obtaining a sanction then such a notice violates the provision of Section 151 of the Act, concluding, that the notice under Section 148 of is invalid and is liable to be quashed.