TaxTMI 
TaxTMI 
TaxTMI 
2025 (10) TMI 1372
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....he assessee is that the approval should have been taken from PCCIT as per the provisions of Section 151 of the Act. The ld. D/R strongly contended that the notice has been approved as per the appropriate authority relevant at that point of time. The provisions of Section 151 of the Act reads as under:- "151. Specified authority for the purposes of section 148 and section 148A shall be:- (i) Principal Commissioner or principal Director or Commissioner or Director, if three years or less than three years have elapsed from the end of the relevant assessment year. (ii) Principal Chief Commissioner of Principal Director General or Chief Commissioner or Director General, if more than three years have elapsed from the end of the relevant assessment year;] [Provided that the period of three years for the purposes of clause (i) shall be computed after taking into account the period of limitation as excluded by the third or fourth or fifth provisos or extended by the sixth proviso to sub-section (1) of Section 149]" 4. This issue has been considered by the Hon'ble Jurisdictional High Court in the case of Vodafone India Limited in W.P. No. 2678 of 202....
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....d of three years. Therefore, the sanctioning authority has to be the PCCIT as provided under Section 151(ii) of the Act. The proviso to Section 151 of the Act has been inserted only with effect from 1 April 2023 and, therefore, shall not be applicable to the matter at hand. 5. In the circumstances, as held by this Court in Siemens Financial Services Private Limited Vs. Deputy Commissioner of Income Tax & Ors, the sanction is invalid and consequently, the impugned order and impugned notice both dated 5* April 2022 under Sections 148A(d) and 148 of the Act are hereby quashed and set aside." 6. The Hon'ble Jurisdictional High Court again had the occasion to consider a similar grievance in the case of Purnima Jitendra Navsariwala vs. ITO in W.P. No. 7 of 2024. The relevant findings read as under:- "3. Petitioner is impugning a notice dated 7 April 2022 issued under Section 148 of the Income Tax Act, 1961 ("the Act") and the order also dated 7" April 2022 passed under Section 148Ad) of the Act. One of the grounds raised is that the sanction to pass the order under Section 148A(d) of the Act and issuance of notice under Section 148 of the Act is invalid inasmuch as t....
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....ed the facts, there is no need to repeat them. Suffice to say, the Assessing Officer (AO), while assuming jurisdiction u/s. 147 of the Act to reopen the assessment for Assessment Year 2018-19 has issued show cause notice u/s. 148A(b) of the Act on 20.03.2022. In response to the said show cause notice, the assessee furnished its reply on 30.03.2022. After considering the reply of the assessee, the AO passed an order u/s. 148A(d) of the Act on 06.04.2022. Simultaneously, on the very same day, the AO issued the notice u/s. 148 of the Act, after seeking approval of CIT(IT), Mumbai-1. The aforesaid factual position remains uncontroverted. The assessee has pleaded before us that after expiry of three years from the end of the assessment year under dispute, as per Section 151(ii) of the Act, the specified authority, who can grant sanction/approval u/s. 148A and 148 of the Act is the Principal Chief Commissioner of Income Tax (PCCIT) or Principal Director General or Chief Commissioner or Director General. It is the say of the assessee that since approval/sanction in the instant case has been obtained from CIT it is invalid. Hence, all actions taken in pursuance to such approval would also ....
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....the time or extended time allowed to the assessee as per show cause notice issued u/s. 148A(b) of the Act or the period during which proceeding u/s. 148 is stayed by an order of injunction of any court shall be excluded. The fourth proviso to Section 149(1) of the Act provided that immediately after exclusion of period referred in third proviso, if the period of limitation available to the AO for passing an order under Section 148A(d) of the Act is less than seven days, such remaining period shall be extended to seven days and accordingly the period of limitation for issuance of notice u/s. 148 shall be deemed to have been extended. 5. Interestingly, sub section (2) to Section 149 of the Act provides that the limitation prescribed under sub section (1) of Section 149 of the Act for issuance of notice shall be subject to the provisions of Section 151 of the Act. The use of word 'shall' in sub section (2) of Section 149 of the Act makes it clear that the limitation prescribed u/s. 149 of the Act for issuance of notice u/s. 148 of the Act is subject to the timeline prescribed u/s. 151 of the Act. In other words, the limitation prescribed u/s. 149(1) of the Act would not override th....
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....ars from the end of the relevant assessment year and without benefit of further extension in terms with third, fourth or fifth proviso under sub section (1) of Section 149 of the Act. 8. Therefore, keeping in view the provision contained under sub section (2) of Section 149 of the Act, which makes the limitation provided u/s. 149(1) of the Act subject to the timeline provided u/s. 151 of the Act, the limitation provided u/s. 149(1) of the Act including the provisos cannot get imported for the purpose of extending the limitation u/s. 151(i) of the Act prior to the amendment of section 151 of the Act by Finance Act, 2023. That being the case, the timeline for sanction by specified authority fixed u/s. 151 of the Act has to be scrupulously followed. 9. At this stage, it is to be noted that the Hon'ble Jurisdictional High Court in the decisions referred to by my learned brother Accountant Member in his order has specifically held that the proviso inserted to Section 151 of the Act by Finance Act, 2023, effective from 01.04.2023 will not apply prior to its effective date. Pertinently the line of argument taken by the Department in the case of Albert Joseph Rozario vs. ITO (Supra) ....
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....missioner of Income Tax (PCCIT"). 2. Petitioner's request for a copy of the sanction has also been denied. Even in the affidavit in reply, the Department is refusing to give the sanction which makes us wonder what is the national secret involved in that, that Assessee is being refused what he is rightfully entitled to receive from the Department. In the affidavit in reply, the stand taken by the Revenue is it will be made available during the reassessment proceeding. 3. The impugned order and the impugned notice both dated 7th April 2022 state that the Authority that has accorded the sanction is the PCIT, Mumbai 5. The matter pertains to Assessment Year ("AY") 2018-19 and since the impugned order as well as the notice are issued on 7th April 2022, both have been issued beyond a period of three years. Therefore, the sanctioning authority has to be the PCCIT as provided under Section 151 (ii) of the Act. The proviso to Section 151 has been inserted only with effect from 1" April 2023 and, therefore, shall not be applicable to the matter at hand. 4. In this circumstances, as held by this Court in Siemens Financial Services Private Limited Vs. Deputy Comm....
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.... of learned Bench deciding the case of Albert Joseph Rozario (Supra), a different view might have been taken. In any case of the matter, the point of time from which the proviso to Section 151 of the Act would be applicable was considered by the Hon'ble Jurisdictional High Court in at least four judgments. Three of these judgments have already been referred to in the decision of my learned brother Accountant Member. Even in case of Agnello Oswin Dias vs. ACIT [2014] 161 taxmann.com 16 (Bombay), the Hon'ble Jurisdictional High Court, while reiterating the view that after expiry of three years from the end of the relevant assessment year, the specified authority in terms of Section 151(ii) of the Act is PCCIT, has held that the proviso to Section 151 of the Act having been inserted w.e.f. 01.04.2023 shall not be applicable prior to 01.04.2023. Meaning thereby, the proviso will not have retrospective effect. These decisions of the Hon'ble Jurisdictional High Court, being directly on the issue, constitute binding precedents. 12. In any case of the matter, Sections 149 and 151 of the Act have been enacted for different purposes and operate in different situations. While Section 149 o....