Case Law Details
Linkedin Singapore PTE. Ltd. Vs ACIT (Bombay High Court)
The case before the Bombay High Court concerned the validity of approval granted under Section 151 of the Income Tax Act, 1961 for initiating reassessment proceedings for Assessment Year 2019–20.
The Court observed that the facts were similar to a prior decision in Kartik Sureshchandra Gandhi v. Assistant Commissioner of Income Tax. In the present case, the approval form indicated in Box-9 that the proceedings were covered under Section 149(1)(b), i.e., beyond three years but within ten years.
The petitioner contended that in such cases, approval must be granted by the Principal Chief Commissioner of Income Tax. However, the approval was granted by a Commissioner of Income Tax (CIT), which was argued to be invalid due to lack of jurisdiction.
The Revenue submitted that the entry in Box-9 was system-generated based on relevant dates. The Court noted that even if this explanation was accepted, the approving authority was required to verify the correctness of the form and either return it for correction or record remarks. The absence of such action indicated lack of due application of mind.
The Court also noted that the approval form annexed to the petition was unsigned, raising doubts about its validity. Although an order sheet dated 27 April 2023 signed by the CIT was produced, the Court observed that the approval was granted more than three years after the relevant assessment year. If any exclusion of time under the proviso to Section 149 was applicable, it should have been recorded in the order sheet.
FULL TEXT OF THE JUDGMENT/ORDER OF BOMBAY HIGH COURT
1. The facts in this case are almost identical to the facts in Kartik Sureshchandra Gandhi v/s. Assistant Commissioner of Income Tax 1. In the case at hand also, the approval under Section 151 of the Income Tax Act, 1961 (“the Act”), copy whereof has been annexed to the affidavit-in-reply filed through one Sanjay V Deshmukh currently holding the post of Commissioner of Income Tax, International Taxation and affirmed on 21St November 2023, in Box-9 for time limit for current proceedings covered under, the answer is, under Section 149(1) (b) of the Act – for more than 3 years, but not more than 10 years.
2. Mr. Kamdar states that in such a case, the approval should be granted by the Principal Chief Commissioner of Income Tax and the approving authority Mr. Vijay Shankar being only the Commissioner of Income Tax (“CIT”), the approval was not valid. Mr. Subir Kumar submitted that it is the system which automatically gives the answer for Box-9, because the assessment year is of 2019-2020 and the approval date is 27th April 2023.
3. Even if for a moment we accept what Mr. Subir Kumar states is correct or is possible, in such a case, the approving authority Mr. Vijay Shankar should have returned the approval for correcting the form or atleast made a remark in his own handwriting. We cannot even make out whether the order-sheet has been signed by the same Mr. Vijay Shankar, CIT, who has given the approval, because the approval form annexed to the petition is unsigned.
4. Mr. Subir Kumar gave to the Court a copy of an order-sheet dated 27th April 2023 signed by the Commissioner of Income Tax (International Taxation-3), Mumbai granting approval to the draft order under Section 148A(d) of the Act. When the approval has been granted only on 27th April 2023, the CIT should have realized that it is more than three years after the expiry of assessment year, which was 2019-2020. If some time has to be excluded as per the fifth proviso to Section 149 of the Act, that should have been mentioned in the order-sheet, otherwise it would only amount to exercising jurisdiction which he never had.
5. In the circumstances, we hereby quash and set aside the impugned order dated 27th April 2023 passed under Section 148A(d) of the Act and the impugned notice also dated 27th April 2023 issued under Section 148 of the Act.
6. Petition disposed.
Note:
1 [2023] 154 taxmann.com 193 (Bombay).
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