Four level of approvals are required before issuance of notice from specified authority .
1. Before conducting enquiry u/s 148A(a)
2. Before issuing notice under section 148A(b)
3. Before passing order under section 148A(d)
4. Before issuing notice under section 148 [proviso to section 148]
In case where procedure under section 148A is not applicable (such as search based assessments), first 3 approvals will not be required. But before issue of notice u/s 148 the approval is required .In search based assessment one approval is required . Other than search based reopening 4 levels of approval are required . Approval means not just an eye wash . Approval has to be given by the specified authority with full application of mind not in a mechanical manner as the same is usually done in no. of cases with one approval . Separate Approval has to be given for each and every case otherwise litigation is generated of high level .
Approval for issue of notice u/s148 is required in search cases as well as non search cases from specified authority .
However, the approval before issuance of notice under section 148 shall still be required even in such cases [refer proviso to section 148]. Thus, the effect of deeming fiction of Explanation 2 to section 148 (which deems that AO is in possession of information for 3 years that income has escaped assessment) is diluted since there shall be a requirement to seek prior approval before issuance of notice under section 148.
Earlier, approval u/s 153D was required before passing assessment order in case of search based assessments. Now there is however no requirement to obtain any approval before passing reassessment order even in case of search based reassessment order.
Specified Authority for the purpose of granting approval under Section 148 and Section 148A
Specified Authority are as under .
If reopening made within 3 years from end of relevant assessment year – Pr. CIT or Pr. DIT or CIT or DIT
If reopening made after 3 years from end of relevant assessment year
Earlier, in case reopening was made within 4 years, approval was required from joint Commissioner. If reopening was made after 4 years, approval was required from Pr. CCIT or CCIT or CCIT or Pr. CIT or CIT.
The authority from which approval is now required is of a higher rank than the authority from which the approval was required earlier.
Time period for issuance of notice under section 148 under new regime
As per substituted section 149, no notice shall be issued for the relevant assessment year if:
3 years have elapsed from the end of the relevant assessment year, unless the case falls under clause (b) below
If 3 years, but not more than 10 years, have elapsed from the end of the relevant assessment year unless the AO has in his possession books of account or other documents or evidence which reveal that the income chargeable to tax, represented in the form of asset, which has escaped assessment amounts to or is likely to amount to INR 50 Lakhs or more for that year.
Explanation to section 149: “Asset” shall include immovable property, being land or building or both, shares and securities, loans and advances, deposits in bank account.Deposit in bank account includes fixed deposits and current deposits .
148A response period excluded while computing limitations under section 149
The time or extended time allowed to the assessee, as per show-cause notice issued under clause (b) of section 148A or the period during which the proceeding under section 148A is stayed by an order or injunction of any court, shall be excluded while computing limitations period for issuance of notice under section 148
Where immediately after the exclusion of the period u/s 148A as above, the period of limitation available to the AO for passing an order under 148A(d) is less than 7 days, such remaining period shall be extended to 7 days and the period of limitations under section 149(1) shall be deemed to be extended accordingly.