Court invalidates notice under Income Tax Act for lack of proper approval

The court allowed the writ petition, ruling the notice dated 29th March, 2021, under Section 148 of the Income Tax Act for the assessment year 2015-16 to be invalid due to lack of proper approval from designated authorities as mandated by Section 151. The court emphasized adherence to statutory provisions for issuing notices under Section 148 to ensure compliance with legal requirements, setting aside the impugned notice.

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Issues:
Challenge to notice under Section 148 of the Income Tax Act based on lack of proper approval from the designated authority and exceeding the statutory time limit for issuing the notice.

Analysis:
The petition challenged a notice dated 29th March, 2021, issued under Section 148 of the Income Tax Act for the assessment year 2015-16, alleging that the Assessing Officer (A.O.) did not obtain the required approval from the designated authority as mandated by Section 151 of the Act. The petitioner contended that the notice was unsustainable as it reflected approval from the Joint Commissioner of Income Tax instead of the specified authorities like the Principal Chief Commissioner or Chief Commissioner, as required by law.

Upon examining Section 151 of the Act, it was established that a notice under Section 148 cannot be issued after the lapse of four years from the end of the relevant assessment year without approval from the designated authorities. In this case, the notice issued in 2021 for the assessment year 2015-16 exceeded the statutory four-year limit for obtaining approval from the prescribed authorities. The court noted that the Assessing Officer erred in deeming the case to fall within the permissible four-year period, which was evidently incorrect.

Consequently, the court allowed the writ petition, ruling the notice dated 29th March, 2021, to be invalid due to the lack of proper approval from the designated authorities as mandated by Section 151 of the Income Tax Act. The court set aside the impugned notice, emphasizing the importance of adhering to statutory provisions regarding the issuance of notices under Section 148 to ensure compliance with legal requirements.

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