Kusum Healthcare Private Limited Vs DCIT (Delhi High Court)
The Delhi High Court, in Kusum Healthcare Private Limited vs DCIT, examined the legality of reassessment proceedings initiated under Sections 148A and 148 of the Income Tax Act, 1961, for Assessment Year (AY) 2016–17. The Court’s ruling focused solely on the validity of the sanction accorded by the Principal Commissioner of Income Tax (PCIT) before issuing the reassessment notice.
Background and Relief Sought
The petitioner, Kusum Healthcare Pvt. Ltd., challenged three specific actions by the tax authorities:
1. The notice dated June 1, 2022, issued under Section 148A(b).
2. The order dated July 29, 2022, passed under Section 148A(d).
3. The consequential notice dated July 29, 2022, under Section 148.
The petitioner also sought to set aside CBDT Instruction No. 1/2022 dated May 11, 2022, claiming it was ultra vires to the Act. However, during the hearing, arguments were confined to the issue of sanction — specifically, whether the PCIT was the correct authority to grant approval for the reassessment in question.
Statutory Framework – Section 151 of the Income Tax Act
The Court began by examining Section 151 of the Income Tax Act, which prescribes the “specified authority” competent to approve reassessment actions:
