Case Note & Summary
The Petitioner, Svitzer Hazira Pvt. Ltd., a company incorporated under the Companies Act, 1956, providing marine services, challenged a notice dated 31/03/2019 issued under Section 148 of the Income Tax Act, 1961, reopening its assessment for Assessment Year 2014-15. The Petitioner also challenged the order dated 28/11/2019 disposing of its objections against the reopening and the notice dated 09/10/2019 under Sections 143(2) and 142(1) of the Act. The primary ground for challenge was the lack of prior approval under Section 151 of the Act. The court noted that the notice under Section 148 was issued after four years from the end of the relevant assessment year (AY 2014-15 ends on 31/03/2015, and notice was issued on 31/03/2019). Under Section 151(2), if a notice under Section 148 is issued after the expiry of four years from the end of the relevant assessment year, the approval must be obtained from the Principal Commissioner or Commissioner. However, in this case, the approval was granted by the Joint Commissioner of Income Tax, Range-5(3), Mumbai, who is not the 'specified authority' under Section 151(2). The court held that the approval by the Joint Commissioner was invalid, rendering the notice under Section 148 and all subsequent proceedings void. The court allowed the petition, quashing the notice dated 31/03/2019, the order dated 28/11/2019, and the notice dated 09/10/2019.
Headnote
A) Income Tax - Reopening of Assessment - Section 148 read with Section 151 of the Income Tax Act, 1961 - Prior Approval - The Assessing Officer issued a notice under Section 148 to reopen assessment for AY 2014-15. The approval for reopening was granted by the Joint Commissioner of Income Tax, Range-5(3), Mumbai, who was not the 'specified authority' under Section 151(2) as the notice was issued after four years from the end of the relevant assessment year. The court held that the approval must be granted by the 'specified authority' as defined in Section 151(2), i.e., the Principal Commissioner or Commissioner, and not by the Joint Commissioner. Consequently, the notice and all subsequent proceedings were quashed. (Paras 6-10) B) Income Tax - Reopening of Assessment - Section 151 of the Income Tax Act, 1961 - Specified Authority - The court interpreted Section 151(2) to mean that if a notice under Section 148 is issued after the expiry of four years from the end of the relevant assessment year, the approval must be obtained from the Principal Commissioner or Commissioner. In this case, the assessment year was 2014-15, and the notice was issued on 31/03/2019, which is beyond four years. Therefore, the approval by the Joint Commissioner was invalid. (Paras 6-10)
Issue of Consideration
Whether the notice dated 31/03/2019 reopening assessment for AY 2014-15 under Section 148 of the Income Tax Act, 1961, and the subsequent proceedings, are invalid for lack of prior approval under Section 151 of the Act?
Final Decision
The court allowed the petition and quashed the notice dated 31/03/2019 under Section 148 of the Income Tax Act, 1961, the order dated 28/11/2019 disposing of the objections, and the notice dated 09/10/2019 under Sections 143(2) and 142(1) of the Act.
Law Points
- Reopening of assessment
- Prior approval under Section 151
- Jurisdiction of approving authority
- Section 148 notice
- Section 143(2) notice
- Section 142(1) notice
- Income Tax Act
- 1961
