Case Note & Summary
The petitioner, Mrs. Chitra Supekar, a housewife, challenged the notice dated 20th March 2022 issued under Section 148A(b) of the Income Tax Act, 1961 for Assessment Year 2018-19, and the subsequent order dated 5th April 2022 under Section 148A(d) and notice dated 13th April 2022 under Section 148 of the Act. The petitioner had not filed her return of income for AY 2018-19 as her income was below taxable limits, and she held joint bank accounts with her husband through which investments were made and income was considered in her husband's returns. The case was flagged by the CBDT for non-filing of returns and on information that income chargeable to tax had escaped assessment. The primary ground of challenge was that the order under Section 148A(d) and the notice under Section 148 were passed after the expiry of three years from the end of the relevant assessment year (i.e., after 31st March 2022) and required separate approval from the Principal Chief Commissioner of Income Tax (PCCIT) under Section 149 of the Act, which was not obtained. The court considered the legal issue of whether the reassessment proceedings were valid in the absence of such approval. The petitioner argued that the impugned order and notice were invalid for non-compliance with the time limit and approval requirement. The respondents contended otherwise. The court analyzed the provisions of Sections 148A(d), 148, and 149 of the Income Tax Act, 1961, and held that since the order under Section 148A(d) was passed on 5th April 2022, beyond the three-year period from the end of AY 2018-19, it required approval of the Principal Chief Commissioner or Principal Director General under Section 149(1)(b), which was not obtained. Consequently, the notice under Section 148 dated 13th April 2022 was also invalid. The court quashed the impugned order and notice, allowing the petition.
Headnote
A) Income Tax - Reassessment - Time Limit - Section 148A(d), Section 149, Income Tax Act, 1961 - The impugned order under Section 148A(d) was passed on 5th April 2022, after expiry of three years from the end of AY 2018-19 (i.e., 31st March 2022), and required approval of the Principal Chief Commissioner or Principal Director General under Section 149(1)(b) - Held that the order was invalid for want of such approval (Paras 1-3). B) Income Tax - Reassessment - Notice under Section 148 - Section 148, Section 149, Income Tax Act, 1961 - The notice under Section 148 dated 13th April 2022 was issued beyond the three-year period from the end of AY 2018-19 without the requisite approval - Held that the notice was invalid and liable to be quashed (Paras 1-3).
Issue of Consideration
Whether the impugned order under Section 148A(d) and notice under Section 148 of the Income Tax Act, 1961 for AY 2018-19 are valid when passed after expiry of three years from the end of the relevant assessment year without obtaining approval from the Principal Chief Commissioner of Income Tax (PCCIT) as required under Section 149?
Final Decision
The court allowed the petition and quashed the impugned order dated 5th April 2022 under Section 148A(d) and the notice dated 13th April 2022 under Section 148 of the Income Tax Act, 1961 for AY 2018-19.
Law Points
- Reassessment notice beyond three years requires approval of Principal Chief Commissioner or Principal Director General
- Section 148A(d) order passed after expiry of three years from end of relevant assessment year is invalid
- Section 148 notice must be issued within time limits prescribed under Section 149
