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Income Tax Appellate Tribunal, DELHI BENCH: “SMC” NEW DELHI
Before: SHRI SATBEER SINGH GODARA
per clause (a)(ii) of sub-section(1) of section 3 thereof, time limits for grant of sanction or approval were also extended. Since the petitioner does not challenge the sanction with respect to the time limit, clause (a) of sub-section (1) of section 3 is immaterial. Indeed, the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020, which extends the time limits for completion of specified tasks up to March 31, 2021, itself becomes irrelevant because of the nature of the challenge in these writ petitions. 15. In Siemens Financial Services [Siemens Financial Services Pvt. Ltd. v. Dy. CIT, (2023) 457 ITR 647 (Bom); 2023 SCC OnLine Bom 2822; (2023) 154 taxmann.com 159 (Bom).] , the Division Bench of the Bombay High Court concluded, in substantially similar facts and circumstances, that the amended section 151 and not the preamended section 151 would apply. For reasons set out above, I concur with the conclusion in Siemens Financial Services [Siemens Financial Services Pvt. Ltd. v. Dy. CIT, (2023) 457 ITR 647 (Bom); 2023 SCC OnLine Bom 2822; (2023) 154 taxmann.com 159 (Bom).] and Ganesh Das Khanna v. ITO [(2024) 460 ITR 546 (Delhi); (2023) 6 HCC (Del) 516; (2023) 156 taxmann.com 417 (Delhi).] as subsequently followed in Twylight Infrastructure [Twylight Infrastructure Pvt. Ltd. v. ITO, (2024) 463 ITR 702 (Delhi); 2024 SCC OnLine Del 330.] . Consequently, the validity of sanction for issuing the orders under section 148A(d) and the notices under section 148 should be tested with reference to amended section 151. If so tested, it is evident that sanction was not granted by an authority specified under clause (ii) of section 151. Hence, the orders under section 148A(d) and the notices under section 148 are quashed. As a corollary, the draft assessment orders under section 144B/144C cannot survive and are also quashed. 16. These writ petitions are allowed on the above terms. There will be no order as to costs. Consequently, the connected miscellaneous petitions are also closed." 17. We may also note the view of the Orissa High Court in Ambika Iron and Steel Pvt. Ltd. v. Principal Commissioner of Income Tax: 2022 SCC OnLine Ori 4162 which is also similar to the view as expressed by this court. The relevant extract of the said decision is reproduced below: "2. In each of these cases, the challenges to a notice issued by the Income- tax Department (hereinafter "Department") under section 148 of the Income-tax Act, 1961, (IT Act) as it stood prior to the amendment by the Finance Act of 2021 with effect from April 1, 2021. In other words, in each of these cases, the notice under section 148 of
11 | P a g e the Income-tax Act has been issued prior to April 1, 2021. In many of them, in fact, the date of the notice is March 31, 2021.
In each of these cases, the relevant assessment year (AY) in relation to which such notice has been issued is more than four years prior to the date of the reopening, i.e., it is beyond four years from the expiry of the assessment year in question and is clearly therefore, time barred in terms of the first proviso to section 147 of the Income-tax Act.
The stand of the Revenue that in view of the notifications issued by the Central Government in terms of the provisions of the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020, the said time limits stood extended is clearly untenable as those notifications were issued to deal with the situation arising from the amendment to the Income-tax Act by the Finance Act, 2021 with effect from April 1, 2021 whereas in these cases the notices were issued prior to April 1, 2021.
This court had an occasion in similar circumstances to quash an identical notice under section 148 of the Income-tax Act by its order dated November 20, 2019 in Writ Petition (C) No. 7618 of 2009 and which order stood confirmed by this court by the dismissal of the Department's review petition, i. e., RVWPET No. 188 of 2020 by the order dated December 3, 2021 which reads as under : "1. Although the point made by the Revenue in this review petition is that this court in its order dated November 20, 2019 erred in drawing a distinction between an Additional Commissioner and Commissioner in terms of their authority, the point involved was that for the purpose of section 151(1) of the Income-tax Act, 1961 since the reopening of the assessment was beyond four years, it had to have the prior approval of the Commissioner of Income-tax, and there was no such approval in the present case.
Consequently, no ground is made out for reviewing the order dated November 20, 2019 in Writ Petition (C) No. 7618 of 2009.
3. The review petition is dismissed."
Indeed in the notice issued under section 148 of the Income-tax Act on March 31, 2021 which has been challenged in Writ Petition (C) No. 41826 of 2021 it has been stated that the notices had been issued after obtaining "necessary satisfaction of the Joint Commissioner of Income-tax Range-I, Cuttack" whereas the Officer authorized to record the necessary satisfaction had to be the Chief Commissioner of Income-tax/Commissioner of Income-tax. 12 | P a g e
For all the aforesaid reasons, in each of the above cases, the impugned notice under section 148 of the Income-tax Act is hereby quashed. The writ petitions are allowed, but in the circumstances, with no order as to costs." 18. In view of the above, the order dated 29.07.2022 passed under Section 148A(d) of the Act is not sustainable. Consequently, the subsequent proceedings, including the assessment order dated 23.05.2023, cannot be sustained. Accordingly, the impugned order passed under Section 148A(d) of the Act, the notice issued under Section 148 of the Act as well as the assessment order dated 23.05.2023 and the demand raised pursuant thereto, are hereby set aside. 19. The petition is, accordingly, allowed.”
3. I adopt their lordships’ detailed discussion mutatis mutandis to accept the assessee’s instant legal ground and quash the impugned reopening in very terms. Ordered accordingly. All other pleadings between the parties on merits stand rendered academic.