s.148A(d) order upheld where excluded response time plus seven days kept reassessment within three-year period; approval by Principal CIT valid

HC held the impugned order under s.148A(d) valid: because the period excluded (time for response and an additional seven days) meant the order fell within the three-year assessment period, the specified authority for approval was the Principal CIT (not the Principal Chief CIT). The assessing officer's approval from the Principal CIT was therefore lawful, and the s.148A(d) order did not warrant interference. Writ petition dismissed.

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Issues:
Challenge to an order under Section 148A(d) of the Income Tax Act, 1961 for assessment year 2018-19 based on approval from the "Specified Authority" as per Section 151(ii) of the Act.

Analysis:
The petitioner challenged the order dated 7th April, 2023, passed under Section 148A(d) of the Income Tax Act, 1961, for the assessment year 2018-19, claiming that the approval was not obtained from the correct "Specified Authority" as required under Section 151(ii) of the Act. The petitioner argued that approval should have been obtained from the Principal Chief CIT, but it was taken from the Principal Commissioner of Income Tax. The respondent, represented by Mrs. Das De, pointed out recent amendments to Section 151 and Section 149 of the Act, which define the "Specified Authority" based on the time elapsed since the relevant assessment year.

The recent amendment to Section 151 specifies that the "Specified Authority" for approval purposes shall be the Principal Commissioner or Principal Director or Commissioner or Director if three years or less have elapsed from the end of the relevant assessment year, and the Principal Chief Commissioner or Principal Director General or Chief Commissioner or Director General if more than three years have elapsed. The respondent also highlighted amendments in Section 149 regarding the computation of the period of limitation for passing orders under Section 148A of the Act.

Upon examination of the provisions under Section 149(1) of the Act, it was observed that the time allowed to the assessee and the period during which proceedings are stayed by a court order are excluded for computing the limitation period. Additionally, the assessing officer is granted an extra seven days beyond the existing limitation period for passing orders under Section 148A(d) of the Act. In the present case, the notice under Section 148A(b) was issued on 17th March, 2022, and the petitioner responded on 4th April, 2022.

Considering the time excluded for the response and the additional seven days granted to the assessing officer, the impugned order passed on 7th April, 2023, was within the three-year limitation period. Therefore, the Principal CIT, and not the Principal Chief CIT, was the correct "Specified Authority" for approval in this case. The court concluded that the approval obtained for passing the impugned order under Section 148A(d) of the Act was legal and valid, and the order did not warrant interference by the Writ Court. Consequently, the writ petition was dismissed, with appreciation for the assistance provided by the amicus curiae in the matter.

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