Rajeev Bansal Judgment Can’t Be Construed Or Read As Affirming Joint Commissioner’s Authority To Accord Approval U/S 151 ITA: Delhi HC
|The Delhi High allowed a Writ Petition questioning the invocation of Section 148 of ITA by the Income Tax Officer (ITO).
The Delhi High Court held that the Supreme Court’s Judgment in the case of Union of India and Ors. v. Rajeev Bansal (2024) cannot be construed or read as affirming the Joint Commissioner’s authority to accord approval under Section 151 of the Income Tax Act, 1961 (ITA).
The Court held thus in a Writ Petition seeking to question the invocation of Section 148 of ITA by the Income Tax Officer (ITO) in relation to Assessment Year (AY) 2015-16.
A Division Bench comprising Justice Yashwant Varma and Justice Dharmesh Sharma observed, “… the Supreme Court in Rajeev Bansal had merely alluded to the time frames within which approval could be sought and obtained and that being regulated by the extended timelines which TOLA had introduced. However, Rajeev Bansal cannot possibly be construed or read as affirming the authority of a Joint Commissioner to accord approval or the said authority being viewed as the competent authority for the purposes of grant of approval post 01 April 2021.”
Senior Advocate Salil Aggarwal represented the Petitioner while SSC Debesh Panda represented the Respondent.
Factual Background
The challenge in this case was in relation to the digital signing of the notice under Section 148 on April 9, 2021 although it bore a date of March 31, 2021. The Petitioner contended that since the notice would be deemed to have been issued on April 9, 2021, it would be the reassessment regime as introduced by virtue of the Finance Act, 2021 which would have been applicable. This according to the Petitioner would have required the Respondent (ITO) to follow the procedure as prescribed by Section 148A of Act which had come to be introduced by virtue of Finance Act, 2021. It was these aspects which were noticed by the Court originally when it entertained the Writ Petition on February 15, 2022 and led to the passing of an Interim Order, providing that while it would be open for the Assessing Officer (AO) to frame an Order of assessment, the same would not be given effect to.
The senior counsel for the Petitioner contended that since the notice was digitally signed on April 9, 2021, it would be that date which would be liable to be viewed as the date of issuance of notice. It was further submitted that the challenge raised in the Petition would in any event be liable to be answered in Petitioner’s favour in light of the concession made on behalf of the Respondent before the Supreme Court in Rajeev Bansal case. The issue which arose before the High Court was whether the Joint Commissioner could be considered to be the competent authority or the purposes of granting approval as contemplated under Section 151 of the Act.
Reasoning
The High Court after hearing the arguments from both sides, said, “We had in Abhinav Jindal HUF v. Commissioner of Income Tax and Ors dealt with a similar issue and where the respondents had sought to contend that the provisions of TOLA would salvage approvals that may have been granted by Joint Commissioners and notwithstanding the hierarchical change which had come to be incorporated in Section 151 post Finance Act, 2021.”
The Court was of the view that the reassessment action impugned in the Petition cannot be sustained basis the pecuniary threshold as comprised in Section 149(1)(b) as well as on the action having not been approved by the competent authority under Section 151.
“We further observe that the final order of assessment was, in terms of our initial interim order, subject to the outcome of the present petition. Since we have come to hold that the Section 148 notice itself is unsustainable, the said order dated 31 March 2022 also would not survive. It too, shall consequently, stand set aside”, it concluded.
Accordingly, the High Court allowed the Writ Petition and quashed the impugned notice.
Cause Title- Rohit Kumar v. Income Tax Officer (Neutral Citation: 2025:DHC:167-DB)
Appearance:
Petitioner: Senior Advocate Salil Aggarwal, Advocates Mahir Aggarwal, Uma Shankar, and Madhur Aggarwal.
Respondent: SSC Debesh Panda, JSC Zehra Khan, Advocates Vikramaditya Singh, Kanishk Aggarwal, Anauntta Shankar, and Ruchir Joshi.