TaxTMI 
TaxTMI 
2026 (3) TMI 1743
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....on 25.04.2022. The reassessment was completed denying the deduction u/s. 80P of the Act for the reason that the assessee did not file the return of income before the due date specified u/s. 139(1) of the Act. Aggrieved, the assessee filed further appeal before the CIT(A). Before the CIT(A), the assessee raised a legal contention that the approval for reopening beyond three years period has not been obtained from the appropriate authority. However, the CIT(A) rejected the said contention stating that the notice u/s. 148A(b) was issued on 18.03.2022 which is well within time limit of three years and therefore, the notice reopening the assessment is valid. 3. The Ld. AR submitted that the notice under section 148 of the Act which is dated 25.04.2022 is beyond the period of 3 years and therefore as per the provisions of Section 151 of the Act, the AO should have obtained the approval from Principle Chief Commissioner of Income Tax (PCCIT). The Ld. AR further submitted that in the present case the AO has obtained approval from Principle Commissioner of Income Tax (PCIT) while issuing notice under section 148 and therefore the notice is invalid. The ld AR in this regard placed relianc....
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....he expiry of the 3 years from the end of the relevant A.Y., the competent authority in this regard should be Principal Chief Commissioner or Principal Director General or where there is no Principal Chief Commissioner or Principal Director General, Chief Commissioner or Director General 44. Now, let us examine the facts of the present case by keeping in mind the above legal position. The Show Cause Notice in terms of Section 148A(b) of the Act came to issue on 23.03.2022 after obtaining prior approval from the office of the PCIT, Madurai - 1 and thereafter the order in terms of Section 148A(d) of the Act came to be passed on 19.04.2022 along with the notice u/s.148 of the Act being issued on the same day, i.e. 19.04.2022. We find that both the order passed u/s.148A(d) of the Act as well as the notice u/s.148 of the Act dated 19.04.2022 was issued after getting approval from the office of the PCIT, Madurai - 1. The assessment year under consideration being A.Y.2018-19, the notice u/s.148 of the Act / order passed u/s. 148A(d) of the Act being issued / passed on 19.04.2022, it can be said that same were passed / issued after the expiry of 3 years from the end of the....
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....an irrefutable fact that the amendment brought in by Finance Act, 2023 in introducing the proviso to Section 151 of the Act by giving effect to the exclusion of time limit by operation of 3rd to 5th proviso to Section 149(1) of the Act would take effect only from 01.04.2023. 50. Hence, it can be said that the said amendment would not come to the rescue of the revenue on the facts of the present case in view of the fact that the notice u/s. 148 as well the order u/s.148A(d) of the Act being issued / passed well prior to the introduction of the said amendment, i.e. on 19.04.2022. 51. Before us, the Ld. DR argued that the said amendment introduced by Finance Act, 2023 ought to be reckoned as clarificatory and would have retrospective applicability, thereby validating the sanction accorded by the PCIT, Madurai - 1 on the facts of the present case. He further relied on the judgement of the Hon'ble Calcutta High Court in the case of Giriraj Commercial (P.) Ltd. v. Union of India reported in 169 taxmann.com 168 in support of his contentions. 52. This argument of the ld. DR is unable to be countenanced by us for the simple reason that the said amendment was i....
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.... a scenario wherein the competent authority was according sanction / approval in terms of Section 151 of the Act for issuing notice u/s.148 of the Act even prior to reply of the assessee to the Show Cause Notice u/s.148A(b) of the Act and even prior the decision of the AO in reckoning whether it was a fit case or not for issuing notice u/s. 148 of the Act. 57. Furthermore, if the said argument were to be accepted, then the very purpose behind introduction of provisions in Section 148A of the Act by way of Finance Act, 2021 to grant an opportunity to the tax payer to demonstrate his case for dropping the proceedings before issuing notice u/s. 148 of the Act would stand defeated. 58. Thus, on the facts of the present case, we find that although the sanction was granted to the AO for issuing the Show Cause Notice u/s.148A(b) of the Act, a separate sanction is to be granted for the purpose of issuance notice u/s. 148 of the Act as well as the passing of the order u/s.148A(d) of the Act, in the event of the AO finding it fit to do so. Hence, we reject this argument of the ld.DR also. 59. We further find that the Hon'ble Madras High Court in the case of Cor....
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....on-est re-assessment order and further could not have directed the AO to pass a fresh assessment order." 4. The ld. DR, on the other hand, argued that the AO initiated the proceedings by issue of notice u/s. 148A(b) on 18.03.2022 which is within 3 years and therefore the AO has rightly obtained the approval from PCIT. The ld DR placed reliance on the decision of the Hon'ble Calcutta High Court in the case of Girija Commercial (P) Ltd vs UOI 2024 169 taxmann.com 168 (Calcutta). 5. We heard the parties and perused the material on record. From the perusal of the decision of the coordinate bench in the case of Meganapuram Primary Agricultural cooperative Credit Society (supra), we notice that the ratio laid down is that a separate sanction is to be granted for the purpose of issue of notice u/s. 148 of the Act from the appropriate authority u/s.151 of the Act. The coordinate bench has further held that and that if the argument of the ld DR to be accepted it would defeat purpose of introduction of section 148A of the Act whereby the assessee is granted an opportunity to demonstrate his case for dropping the proceedings before issuing notice u/s.148 of the Act. In this regard, ....