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Facts
The assessee appealed against a CIT(A) order for AY 2016-17. A reassessment notice under Section 148 of the Income Tax Act was issued on 23/07/2022, beyond the three-year period, for Rs. 66,89,500/- by denying a deduction under Section 10(38). The prior approval for this notice, for amounts exceeding Rs. 50 lakhs and issued beyond three years, was obtained from the PCIT instead of the statutorily required PCCIT.
Held
The Tribunal ruled that the approval granted by the PCIT instead of the PCCIT for the Section 148 notice, issued beyond three years for a sum exceeding Rs. 50 lakhs, was invalid. Consequently, the Section 148 notice and the assessment order passed thereof were quashed.
Key Issues
The key legal issue was the validity of a Section 148 reassessment notice issued beyond three years, involving a sum over Rs. 50 lakhs, where the mandatory prior approval was granted by the PCIT instead of the PCCIT.
Sections Cited
148, 148A(d), 147, 10(38), 132, 132A, 133A
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Income Tax Appellate Tribunal, “A” BENCH, KOLKATA
Before: SHRI GEORGE MATHAN & SHRI RAJESH KUMAR
आदेश / O R D E R Per Bench :
This is an appeal filed by the assessee against the order of the ld. CIT(A), National Faceless Appeal Centre (NFAC), Delhi, dated 28.02.2025 for the assessment year 2016-2017.
It was submitted by the Ld.AR that the impugned assessment year is 2016-17. It was submission that notice u/s.148 of the Act came to be issued on 23/07/2022. The Ld. AR drew our attention to the copy of the notice issued which reads as follows:-
It was submission that the notice has been issued beyond 03 years. It was also the submission the quantum in the for reopening was more than Rs.50,00,000/-, more specifically Rs.66,89,500/-. It was submission that the approval for the issuance of notice u/s.148 of the Act beyond 3 years and the amount is above 50,00,000/- which should be granted by PCCIT. It was submission that approval has been obtained from the PCIT, Kolkata-9. It was submission that the approval is wrong and consequently, the notice issued 148 of the Act is also bad in law.
4. In reply, Ld.Sr. DR submitted that the principle of TOLA would apply and the law here in which assessment related the has to be applied. He vehemently supported the orders of the AO and CIT(A).
We have considered the rival submissions. A perusal of the facts in the present case clearly shows that the law as on the date for issuance of notice has been repeatedly held by various Hon’ble High Courts and the Hon’ble Apex Court. The perusal of the facts also clearly shows that the reopening has been done for bringing to tax to the extent of Rs.66,89,500/- by denying the assessee the deduction u/s.10(38) of the Act. The notice also been issued on 27/02/2022 as a consequence of an order u/s. 148A(d) of the Act dated 22/07/2022. The notice has been issued beyond the period of 3 years also from the end of the impugned assessment year. As it is noticed that the approval is to be granted in such cases by the PCCIT but the approval has been granted by the PCIT. Therefore, the approval granted is held to be invalid and the notice u/s.148 of the Act stands quashed. Consequently, the assessment order passed as consequence of the invalid notice issued 148 of the Act also stands quashed.