Shabbir Taheri Vs ITO (ITAT Mumbai)
The appeal concerns the assessee’s challenge to the reassessment proceedings initiated for Assessment Year (AY) 2018-19 through a notice issued under Section 148 of the Income-tax Act on 06 April 2022 after obtaining approval from the Principal Commissioner of Income Tax (PCIT), Mumbai-17. The assessee contended that the reopening was invalid because, as per Section 151(ii) of the Act, once three years had elapsed from the end of the relevant assessment year, approval for issuing notice under Sections 148 and 148A(d) must come from the Principal Chief Commissioner of Income Tax (PCCIT) or equivalent authority, not from the PCIT. The Department argued that the sanction obtained was in accordance with the relevant provisions applicable at that time.
Section 151 specifies that if three years or less have elapsed, approval must be from the PCIT or equivalent authority, and if more than three years have elapsed, sanction must be given by the PCCIT or equivalent. The assessee argued that since the notice was issued beyond three years from the end of AY 2018-19, approval from the PCCIT was mandatory.
The Tribunal referred to multiple decisions of the Bombay High Court. In Vodafone India Limited, the High Court held that for notices issued in April 2022 pertaining to AY 2018-19, more than three years had elapsed, and therefore sanction from the PCCIT was mandatory. The proviso to Section 151 allowing computation of the three-year period after excluding time allowed under various provisos to Section 149 was inserted only with effect from 1 April 2023 and did not apply to notices issued in April 2022. Similar conclusions were reached in Mystique Media Pvt. Ltd. and Purnima Jitendra Navsariwala, where notices issued in early April 2022 were quashed for lack of proper sanction, since approval had been taken from the PCIT instead of the PCCIT.
