MA Multi-Infra Development Pvt. Ltd. Vs. The Assistant Commissioner of Income-Tax and Ors. - (High Court of Bombay) (09 Jan 2023)

Approval for issuance of notice ought to have been obtained from the authority specifically mentioned under Section 151(ii) of the IT Act

MANU/MH/0074/2023

Direct Taxation

The Petitioner challenges the notice dated 31st March 2021 under Section 148 of the Income Tax Act, 1961 for the assessment year 2015-16, on the ground that since the same has been issued beyond the period of four years, approval for issuance of the same ought to have been obtained from the Principal Chief Commissioner of Income-tax in terms of Section 151 (ii) of the IT Act.

On a perusal of the notice dated 31st March 2021 issued under Section 148 of the Act by the Assessing Officer shows that the same has been issued after obtaining necessary satisfaction of the Additional Commissioner of Income Tax. As per the objections filed by the revenue, the approval was obtained from the Additional Commissioner of Income Tax. The said officer was competent to grant approval in view of the applicability of the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 ('the Relaxation Act').

It is stated that, in terms of the Relaxation Act, the limitation, under provisions of Sections 151(i) and 151 (ii) of the Act, which were originally expiring on 31st March 2020, stood extended to 31st March 2020. It was, thus, urged that since the Relaxation Act had extended the period of limitation, the authority which was otherwise supposed to grant approval in regard to cases falling within the ambit of Section 151(i) of the IT Act could have granted approval beyond the period of three years based upon the Relaxation Act.

This Court in J.M. Financial & Investment Consultancy Services (P) Ltd. Vs. Assistant Commissioner of Income Tax & Ors. has already taken a view holding that, the Relaxation Act would apply only to cases where the limitation was expiring on 31st March 2020 and since for the assessment year 2015-16, the limitation period was six years which was to expire only on 31st March 2022, the said provisions would not be applicable. It was held that, while the time to issue notice may have been extended but that would not amount to amending the provisions of Section 151 of the IT Act.

The present case is squarely covered by the view taken by this Court in J.M. Financial & Investment Consultancy Services (P) Ltd. Vs. Assistant Commissioner of Income Tax & Ors. The approval for issuance of notice under Section 148 of IT Act ought not have been obtained from the Additional Commissioner of Income Tax but from the authority specifically mentioned under Section 151(ii) of the IT Act. The notice impugned notice dated 31st March 2021 is quashed. Petition allowed.

Tags : NOTICE ISSUANCE LEGALITY