Bombay HC Quashes Reassessment Notice Issued Beyond 3 Years Without PCCIT Sanction

Mystique Media Pvt. Ltd. Vs ITO (Bombay High Court)

The Bombay High Court considered a writ petition relating to Assessment Year 2018-19 challenging the notice issued under Section 148 of the Income-tax Act, 1961, the order passed under Section 148A(d), both dated 5 April 2022, and the notice issued under Section 148A(b) dated 17 March 2022.

The petitioner contended, inter alia, that the sanction for passing the order under Section 148A(d) and issuing the notice under Section 148 was invalid because it had been granted by the Principal Commissioner of Income Tax (PCIT) instead of the Principal Chief Commissioner of Income Tax (PCCIT).

Counsel for the petitioner submitted that the matter was covered by the Bombay High Court’s order dated 6 February 2024 in Vodafone Idea Limited v. Deputy Commissioner of Income Tax, Circle-5(2)(1), Mumbai & Ors., and counsel for the respondents agreed.

The High Court observed that the impugned order under Section 148A(d) and the notice under Section 148, both dated 5 April 2022, expressly stated that the sanction had been accorded by the PCIT. Since the proceedings related to Assessment Year 2018-19 and the impugned order and notice had been issued beyond a period of three years, the sanctioning authority was required to be the PCCIT under Section 151(ii) of the Act. The Court also observed that the proviso to Section 151 had been inserted only with effect from 1 April 2023 and was therefore inapplicable.