Case Note & Summary
The petitioner, an individual and citizen of India, filed a writ petition challenging the reassessment notice under Section 148 of the Income Tax Act, 1961 for Assessment Year 2012-13, along with subsequent assessment order and penalty notice. The background involves a search and seizure operation under Section 132 conducted on the Ratnamani Group on 23.11.2021. Subsequently, on 29.03.2023, the petitioner was issued the impugned notice for reopening under Section 148 for AY 2012-13, among other assessment years. The petitioner filed preliminary objections against the notice on 07.04.2023, which were disposed of by the respondent on 26.04.2023. Thereafter, the respondent issued a notice under Section 142(1) on 08.04.2023, to which the petitioner replied on 17.04.2023 and 06.05.2023. A show-cause notice was issued on 28.04.2023, and the petitioner replied on 09.05.2023. The respondent passed the assessment order on 02.06.2023 determining income at Rs. 58,08,04,430/- and raising a demand of Rs. 37,70,35,033/-, and also issued a penalty notice under Section 274 read with Section 271(1)(c) on 09.06.2023. The legal issue centered on whether the reassessment notice was valid given the requirement of prior approval under Section 151 of the Act. The petitioner argued that the approval was not obtained from the competent authority as mandated by Section 151, rendering the notice void. The respondent contended that the approval was properly obtained. The court examined the records and found that the approval was granted by an officer not authorized under Section 151, as the assessment year in question was beyond four years from the end of the relevant assessment year, requiring approval from the Principal Commissioner or Commissioner. The court held that the absence of valid sanction under Section 151 makes the reassessment notice void ab initio, and consequently, the assessment order and penalty notice are also invalid. The court quashed the reassessment notice, assessment order, and penalty notice, and allowed the writ petition.
Headnote
A) Income Tax - Reassessment - Section 148, 151 of Income Tax Act, 1961 - Validity of Notice - The petitioner challenged the reassessment notice issued under Section 148 for AY 2012-13 on the ground that the mandatory approval under Section 151 was not obtained from the specified authority. The court examined the records and found that the approval was granted by an officer not authorized under Section 151, rendering the notice void ab initio. Held that the reassessment proceedings are invalid and quashed the notice and consequent assessment order (Paras 1-10).
Issue of Consideration
Whether the reassessment notice under Section 148 of the Income Tax Act, 1961 for Assessment Year 2012-13 is valid when the requisite approval under Section 151 was not obtained from the competent authority
Final Decision
The court quashed the reassessment notice under Section 148 dated 29.03.2023, the assessment order dated 02.06.2023, and the penalty notice under Section 274 read with Section 271(1)(c) dated 09.06.2023. The writ petition was allowed.
Law Points
- Reassessment notice under Section 148 of Income Tax Act
- 1961 requires prior approval of specified authority under Section 151
- absence of valid sanction renders notice void ab initio
- reassessment proceedings cannot be sustained without proper sanction
