Alag Property Construction Private Limited Vs ACIT (Bombay High Court)
In Alag Property Construction Private Limited v. Assistant Commissioner of Income Tax (Bombay High Court), the petitioner challenged the reassessment proceedings for Assessment Year (A.Y.) 2017–18, particularly the order dated 18 August 2022 passed under Section 148A(d) and the notice dated 23 August 2022 issued under Section 148 of the Income Tax Act, 1961. The petitioner argued that these were invalid because the Assessing Officer (AO) had obtained prior approval from the wrong authority, in violation of Section 151 of the Act.
The facts show that an initial notice under Section 148 (old regime) was issued on 20 April 2021. Following the Supreme Court’s decision in Union of India v. Ashish Agarwal (2022), the AO treated the old notice as a show-cause notice under Section 148A(b) (new regime). The petitioner submitted its response, after which the AO passed an order under Section 148A(d) and issued a fresh notice under Section 148 in August 2022.
The petitioner’s principal contention was that since these actions were taken after three years from the end of A.Y. 2017–18, the approval ought to have been obtained from a higher authority as specified under Section 151(ii)—namely, the Principal Chief Commissioner or Principal Director General or Chief Commissioner or Director General. Instead, the AO obtained approval from the Principal Commissioner of Income Tax (PCIT-6, Mumbai), which corresponded to the lower authority under Section 151(i).
