Twylight Infrastructure Pvt Ltd Vs ITO (Delhi High Court)
Introduction: The Delhi High Court has quashed income tax reassessment notices in the case of Twylight Infrastructure Pvt Ltd for Assessment Years 2016-17 and 2017-18. The court emphasized the lack of approval from the specified authority, as mandated by the amended provisions of the Income Tax Act.
Detailed Analysis:
1. The writ petitions concern the assessment years 2016-17 and 2017-18, questioning the sustainability of notices and orders due to the absence of specified authority approval.
2. The core issue revolves around whether the notices and orders are legally valid, considering the petitioners’ argument that they lack the required approval from the specified authority.
3. The court refers to a specific case, Rajesh Gupta HUF v Assistant Commissioner of Income Tax, among the writ petitions to illustrate the common issue. The petitioner filed its return for AY 2017-18, received a notice, and subsequently faced reassessment proceedings.
4. The revenue, in defense, relies on the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020, and relevant instructions issued by the Central Board of Direct Taxes (CBDT).
5. The court notes that the reassessment proceedings were initiated without the approval of the specified authority, as mandated by Section 151 of the Income Tax Act.
6. Referring to a previous judgment (Ganesh Dass Khanna), the court had ruled in favor of assessees concerning the issue of limitation. However, it highlights that the present batch involves escaped income exceeding Rs.50,00,000.
7. The court rejects the revenue’s argument that approval from the specified authority is not mandatory, emphasizing the clear provisions of the amended Section 151.
8. Sections 148, 149, and 151, before and after amendment, are examined, demonstrating the mandatory nature of specified authority approval for issuing reassessment notices.
9. The court observes that the approval is integral to the reassessment process, and the lack thereof renders the impugned notices and orders unsustainable.
10. The court cites the first proviso to Section 148 and Section 151, highlighting the mandatory requirement of specified authority approval for issuing reassessment notices.
11. Considering the specified authorities based on the applicable timeframe, the court quashes the notices and orders due to the absence of specified authority approval, granting the revenue liberty to take lawful steps if necessary.
12. The writ petitions are disposed of, keeping the rights and contentions open for both parties in case reassessment proceedings are initiated.
