TaxTMI 
TaxTMI 
2026 (2) TMI 147
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.... court's decision that in such an instance, the necessary sanction could not be obtained from the PCIT as the facts herein, in light of Communist Party of India (M) Vs. ITO, (2025) 174 taxmann.com 925 (Del.) deciding the very issue against the department as follows: "7. The learned AO was not persuaded with the explanation provided by the petitioner and passed an order dated 29.07.2022 under Section 148A(d) of the Act, holding that it was a fit case for reopening the assessment proceedings under Section 147/148 of the Act. The said order was issued with the approval of the Commissioner of Income Tax (Exemption) [CIT(E)] on an assumption that the CIT(E) was a specified authority under the provisions of Section 151 of the Act. 8. The AO issued a notice dated 29.07.2022 under Section 148 of the Act accompanied with the order dated 29.07.2022 passed under Section 148A(d) of the Act. It is the petitioner's case that the said notice is barred by limitation. 9. It is material to note that the original notice under Section 148 of the Act [deemed to be a show cause notice under Section 148A(b) of the Act in terms of the decision in the case of Union of India & Ors....
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....the period of limitation as extended by TOLA required the prior sanction in terms of Section 151 of the Act, as in force after 31.03.2021 or as in force prior to the said date, has fell for consideration of this court in several cases including Twylight Infrastructure Pvt. Ltd. v. Income Tax Officer Ward 25 3 Delhi & Ors.: Neutral Citation No.2024:DHC:259-DB and Abhinav Jindal HUF v. Income Tax Officer Ward 54(1) Delhi & Ors.: Neutral Citation No.: 2024:DHC:7238-DB. This court had held that TOLA would have no relevance for determining the specified authority whose approval was mandatory under Section 151 of the Act for issuance of a notice under Section 148 of the Act. We consider it apposite to refer to the following extract from the decision of this court in Abhinav Jindal HUF v. Income Tax Officer Ward 54(1) Delhi & Ors. (supra). The same is set out below: "17. As was noticed in the introductory parts of this decision, the respondents had, contrary to the above, argued that once a notice for reassessment comes to be issued after the expiry of four years by virtue of the extended period of time made available by TOLA, all the impugned notices would fall within the ken of....
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....v. Income Tax Officer Ward 25 3 Delhi & Ors.(supra), a Coordinate Bench of this court examined the validity of initiation of reassessment proceedings, in cases where the income alleged to have escaped assessment was Rs. 50,00,000/- or less. In the aforesaid context, this court also considered the question as to the specified authority, whose prior approval was required and held as under: "10. As indicated above, the specified authority changes depending on the time limit prescribed in section 151 of the Act. It is on this account that there is a linkage between ruling rendered in Ganesh Dass Khanna [Ganesh Dass Khanna v. ITO, (2024) 460 ITR 546 (Delhi); 2023 SCC OnLine Del 7286; 2023 : DHC : 8187-DB.] and the instant matters. 11. It may also be noted that in Ganesh Dass Khanna [Ganesh Dass Khanna v. ITO, (2024) 460 ITR 546 (Delhi); 2023 SCC OnLine Del 7286; 2023 : DHC : 8187-DB.], we had recorded the stand of the Revenue that the issue concerning limitation and the specified authority are "intertwined". For convenience, the relevant part of the judgment is extracted hereafter (page 567 of 460 ITR): "24. On behalf of the Revenue, the following broad submis....
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....continue to hold this position. The only liberty that they seek is that if, based on the judgment in Ganesh Dass Khanna [Ganesh Dass Khanna v. ITO, (2024) 460 ITR 546 (Delhi); 2023 SCC OnLine Del 7286; 2023: DHC : 8187DB.], the impugned orders and notices are set aside, liberty be given to the Revenue to commence the reassessment proceedings afresh. 13. Therefore, having regard to the aforesaid, the impugned notices and orders in each of the abovecaptioned writ petitions are quashed on the ground that there is no approval of the specified authority, as indicated in section 151(ii) of the Act. The direction is issued with the caveat that the Revenue will have liberty to take steps, if deemed necessary, albeit as per law." 14. In J M Financial & Investments Consultancy Services Private Limited v. ACIT, Circle 3(2)(1) & Ors., W.P. No. 1050/2020, decided on 04.04.2022, the Bombay High Court had made observations to the effect that even if the time to issue notice may have been extended by TOLA, the same would not amend the provisions of Section 151 of the Act. The relevant extract of the said decision is set out below: "5. Respondents have relied upon a lette....
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....es of section 148 and section 148A is the Principal Chief Commissioner or Principal Director General or where there is no Principal Chief Commissioner or Principal Director General, the Chief Commissioner or Director General if more than three years have elapsed from the end of the relevant assessment year. The present petition relates to the assessment year 2016-17, and as the impugned order and impugned notice are issued beyond the period of three years which elapsed on March 31, 2020 the approval as contemplated in section 151(ii) of the Act would have to be obtained which has not been done by the Assessing Officer. The impugned notice mentions that the prior approval has been taken of the "Principal Commissioner of Income-tax-8" ("PCIT-8") which is bad in law as the approval should have been obtained in terms of section 151(ii) and not section 151(i) of the Act and the Principal Commissioner of Income- tax-8 cannot be the specified authority as per section 151 of the Act. Further, even in the affidavit-inreply, the Department has accepted that the approval obtained is of the "Principal Commissioner of Incometax-8" and, hence, such an approval would be bad in law. 25. T....
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....e time limit under pre-amended section 149 does not apply, but on the ground that sanction was not granted by the specified authority. Therefore, it remains to be considered as to whether the application of the proviso to section 149 has the effect of incorporating by reference to pre-amended section 151. In order to substantiate the contention that preamended section 151 gets incorporated by reference, learned standing counsel relied on sub-section (2) to the pre-amended section 149. It should be noticed that the proviso to sub-section (1) of the amended section 149 does not even incorporate the whole of pre-amended section 149. It merely makes the time limit prescribed therein applicable to the issuance of notices for reassessment in respect of any assessment year beginning before April 1, 2021. A fortiori the proviso certainly does not incorporate pre-amended section 151 by reference and make it applicable. 14. The next question to be examined is the impact of the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020. Undoubtedly, the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 extended the time limits ....
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....: "2. In each of these cases, the challenges to a notice issued by the Income- tax Department (hereinafter "Department") under section 148 of the Income-tax Act, 1961, (IT Act) as it stood prior to the amendment by the Finance Act of 2021 with effect from April 1, 2021. In other words, in each of these cases, the notice under section 148 of the Income-tax Act has been issued prior to April 1, 2021. In many of them, in fact, the date of the notice is March 31, 2021. 3. In each of these cases, the relevant assessment year (AY) in relation to which such notice has been issued is more than four years prior to the date of the reopening, i.e., it is beyond four years from the expiry of the assessment year in question and is clearly therefore, time barred in terms of the first proviso to section 147 of the Income-tax Act. 4. The stand of the Revenue that in view of the notifications issued by the Central Government in terms of the provisions of the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020, the said time limits stood extended is clearly untenable as those notifications were issued to deal with the situation arising from t....