The Calcutta High Court Clarifies Specified Authority’s Scope under Section 151(ii) of Income Tax Act.
Facts
Petitioner has challenged the impugned order under Section 148A(d) of the Income Tax Act, 1961 relating to assessment year 2019-20 on the ground that the same has been passed without approval from the “Specified Authority” as described under Section 151(ii) of the Income Tax Act, 1961 by contending that the approval has been taken from the Principal Commissioner of Income Tax when admittedly the specified authority for approval in this case is Principal CIT since three years has not been passed from the end of the relevant assessment year on the date when the aforesaid impugned order was passed.
Decision
The single judge bench of Justice Md. Nizamuddin said that on a plain reading of the fifth proviso under Section 149(1) it appears that for the purposes of computing the period of limitation for passing order under Section 148A of the Act, the time or extended time allowed to the assessee, as per show-cause notice under clause (b) of section 148A or the period during which the proceeding under section 148A is stayed by an order or injunction of any court, shall be excluded.
The bench further said that it also appears on a plain reading of the sixth proviso under Section 149(1) of the Act that in addition to the time available to the assessing officer for the purpose of limitation as per the aforesaid fifth proviso further time of seven days is available to him while computing the limitation period for the purpose of passing order under Section 148A(d) of the Act.
The court observed that it is an admitted position that after taking into consideration the period allowed to the Assessing Officer under the aforesaid fifth and sixth proviso to Section 149(1) of the Act, the impugned order under Section 148A(d) of the Act by excluding the time granted to the petitioner to file response to the notice under Section 148A(b) of the Act and a further period of seven days from the date of expiry of normal period of three years for the purpose of assessment, the impugned order passed under Section 148A(d) of the Act is very much within three years in this case and as such for passing the aforesaid impugned order Principal CIT and not the Principal Chief CIT is “Specified Authority” for approval of the same.
It was held by the court that the “Specified Authority” for the purpose of approval in this case is Principal CIT and the assessing officer has rightly taken approval from the Principal CIT concerned and such approval for passing the impugned order under Section 148A(d) of the Act is perfectly legal and valid.
Case title: Gemini Overseas Limited Vs Union Of India And Ors.
Citation: WPO/1207/2023
