Appeal Kids Dream International Private Limited Vs ACIT (Delhi High Court)
Summary: The Delhi High Court considered a challenge to reassessment proceedings for Assessment Year 2017-18, principally concerning the competence of the authority that accorded sanction under Section 151 of the Income-tax Act, 1961. The reassessment proceedings had commenced after more than three years from the end of the relevant assessment year, while the sanction had been accorded by the Principal Commissioner of Income Tax (PCIT). The Court considered its earlier decision in Abhinav Jindal HUF v. Commissioner of Income Tax and Ors. [2024 SCC OnLine Del 6585], in which it had examined the interaction between Section 151 and the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 (TOLA).
The Court reiterated that TOLA extended statutory timelines during the relevant period but did not alter the distribution of powers or the hierarchy of authorities prescribed under Section 151. Consequently, the authority competent to grant approval continued to depend upon the statutory period elapsed from the end of the relevant assessment year. Since the reassessment in the present case was initiated after three years and the sanction was accorded only by the PCIT, the Court held that the reassessment action could not be sustained. The Court accordingly allowed the writ petition and quashed the order under Section 148A(d) dated 30 July 2022 and the notice under Section 148 issued on the same date.
