Cipla Pharma And Life Sciences Limited Vs DCIT (Bombay High Court)
The Bombay High Court in Cipla Pharma and Life Sciences Limited vs DCIT addressed the validity of reassessment proceedings initiated for Assessment Year (AY) 2016–17 under Section 148 of the Income-tax Act, 1961. The petitioner challenged the issuance of the notice under Section 148, the order under Section 148A(d), and the consequential reassessment notice, contending that the sanction required under Section 151 of the Act had not been obtained from the proper authority.
The petitioner sought writs of certiorari, mandamus, and prohibition to quash the initial notice dated 28 May 2022, the order dated 30 July 2022, and the subsequent notice dated 30 July 2022. The petitioner’s main argument was that the sanction to issue the reassessment notice had been granted by the Principal Commissioner, whereas under Section 151(ii), the approval should have been obtained from a higher authority, as the reassessment was initiated more than three years after the end of the relevant assessment year.
It was submitted that the impugned notice, having been issued beyond the three-year period, was governed by clause (ii) of Section 151, which mandates sanction from senior authorities such as the Principal Chief Commissioner or Principal Director General of Income Tax. Since the sanction was granted by the Principal Commissioner instead, the notice and order were illegal. The petitioner relied on the earlier judgment of the same court in Siemens Financial Services Pvt. Ltd. vs DCIT, where a similar issue was adjudicated.
