The Bombay High Court quashed the impugned notice dated 31st March 2021 as it failed to obtain approval of issuance from the Principal Chief Commissioner of Income-tax in terms of Section 151(ii) of the Relaxation and Amendment of Certain Provisions) Act, 2020 (“Relaxation Act”). A division bench comprising Hon’ble Justice Dhiraj Singh Thakur and Kamal Khata held that since the Relaxation Act had extended the period of limitation, the authority which was otherwise supposed to approve under section 151(i) could have approved beyond the period of three years.
Brief Facts:
In this petition, the Petitioner challenged the notice dated 31st March 2021 issued by the Assessing Officer u/s. 148 of the Income Tax Act, 1961 (‘the Act’) for the assessment year 2015-16. On a perusal of the notice, it was evident that the same had been issued after obtaining necessary approval from the Additional Commissioner of Income Tax of Income-tax, Range (3)(2), Mumbai. The notice was challenged on the ground that it was issued beyond the period of four years, therefore, approval for issuance of the same ought to have been obtained from the Principal Chief Commissioner of Income-tax in terms of section 151(ii) of the Relaxation Act instead of the Additional Commissioner of Income Tax of Income-tax, Range (3)(2), Mumbai.
Contentions of the Petitioner:
The learned Counsel for the Petitioner submitted that in terms of the Relaxation Act, the limitation inter-alia, under provisions of sections 151(i) and 151(ii) of the Act, which were originally expiring on 31st March 2020, stood extended to 31st March 2021. It was, thus, urged that since the Relaxation Act had extended the period of limitation, the authority which was otherwise supposed to grant approval in regard to cases falling within the ambit of section 151(i) of the Act could have granted approval beyond the period of three years based upon the Relaxation Act.
The Counsel had placed reliance on J.M. Financial & Investment Consultancy Services (P) Ltd. Vs. Assistant Commissioner of Income Tax & Ors. Writ Petition No.1050 of 2022 dt.4th April 2022 in which it was held that the Relaxation Act would apply only to cases where the limitation was expiring on 31st March 2020 and since for the assessment year 2015-16, the limitation period was to expire only on 31st March 2022, the said provisions would not be applicable. It was further urged that the case of the Petitioner fell u/s. 149(b), and therefore, the period of limitation of six years for issuance of notice u/s. 148 for the assessment year 2015-16 would expire on 31st March 2022.
Observation of the Court:
This Court concurred with the submissions of the learned Counsel for the Petitioner and believed that the present case is squarely covered by the view taken by the Court in J.M. Financial & Investment Consultancy Services (P) Ltd. (Supra). Therefore, it was held that the approval for issuance of notice u/s. 148 should not have been obtained from the Additional Commissioner of Income Tax but from the authority specifically mentioned u/s. 151(ii) of the Act i.e. Principal Chief Commissioner of Income-tax due to the reasons highlighted by the learned Counsel for the Petitioner.
The decision of the Court:
The Bombay High Court allowed the writ petition and quashed the impugned notice dated 31st March 2021.
Case Title: MA Multi-Infra Development Pvt. Ltd. vs ACIT
Coram: Hon’ble Justice Dhiraj Singh Thakur and Kamal Khata
Case no.: WRIT PETITION NO. 1650 OF 2022
Advocate for the Appellant: Mr.Jeet Kamdar
Advocate for the Respondent: Mr.Akhileshwar Sharma
Read Judgment ;
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