TaxTMI Login
Just a moment...
Press 'Enter' to add multiple search terms. Rules for Better Search
of 
of 
No Folders have been created
Are you sure you want to delete "My most important" ?
NOTE:
of of 
All Case Laws
of of All Case Laws
Note
Bookmark
Share
Don't have an account? Register Here
of <h1>Reassessment notice under section 148 quashed due to invalid approval from wrong authority beyond limitation period</h1> The ITAT Mumbai quashed a reassessment proceeding initiated by the AO under section 148 of the Income Tax Act. The tribunal found that the notice issued ... Validity of reassessment proceeding - non granting approval from the correct authority as mandated by section 151(ii) - HELD THAT:- Accordingly the notice issued on 04.04.2022 by the AO is issued beyond three years and therefore the approval should have been obtained by the authorities as specified under section 151(ii) Principle Chief Commission. As already stated the approval in assessee's case is obtained from CIT(IT) and therefore we are inclined to agree with the contention of the assessee that the notice under section 148 has been issued without obtaining the approval from the correct authority as specified under section 151. As relying on Vodafone Idea case [2024 (2) TMI 1408 - BOMBAY HIGH COURT] we hold that the notice issued by the AO under section 148 without obtaining approval from correct appropriate authority is invalid and the assessment done under section 147 r.w.s. 144(13) of the Act is liable to be quashed. Decided in favour of assessee. ISSUES: Whether the initiation of reassessment proceedings under section 147 by issuance of notice under section 148 without prior approval from the correct specified authority as required under section 151(ii) is valid when the notice is issued beyond three years from the end of the relevant assessment year. Whether the proviso to section 149(1) excluding the time allowed to the assessee under section 148A(b) for computing the period of limitation for issuance of notice under section 148 applies retrospectively to AY 2018-19. Validity of the order passed under section 148A(d) and notice issued under section 148 when approval is obtained from Commissioner of Income Tax instead of Principal Chief Commissioner of Income Tax where the notice is issued after three years. RULINGS / HOLDINGS: The notice issued under section 148 dated 04.04.2022 without obtaining approval from the correct authority as specified under section 151(ii) is invalid and the reassessment order passed under section 147 read with section 144C(13) is liable to be quashed. The proviso to section 149(1) which excludes the time allowed under section 148A(b) from the computation of limitation period for issuance of notice under section 148 was inserted with effect from 01.04.2023 and is not applicable retrospectively to AY 2018-19. Since the notice under section 148 was issued beyond three years from the end of the relevant assessment year without approval from the Principal Chief Commissioner of Income Tax as required under section 151(ii), the approval obtained from the Commissioner of Income Tax (International Tax) is not valid. RATIONALE: The Court applied the statutory provisions of sections 147, 148, 148A, 149, and 151 of the Income-tax Act, focusing on the authority required to sanction reassessment notices and the computation of limitation periods. Section 151(ii) mandates that if more than three years have elapsed from the end of the relevant assessment year, the approval for issuance of notice under section 148 must be obtained from the Principal Chief Commissioner of Income Tax or equivalent higher authority. The proviso to section 149(1), which excludes the time allowed to the assessee under section 148A(b) from limitation computation, was introduced only from 01.04.2023 and therefore does not apply to AY 2018-19, making the notice issued on 04.04.2022 beyond the three-year period. The Court relied on binding precedents from the Hon'ble Bombay High Court, including decisions in Vodafone Idea Ltd and Siemens Financial Services Pvt. Ltd., which held that sanctioning authority's approval must comply strictly with section 151 and that retrospective application of the proviso to section 149 is impermissible. The Court followed the principle that non-compliance with mandatory statutory approval requirements renders the reassessment notice and consequent assessment invalid.
TaxTMI 
TaxTMI 
