Castle Constructions Vs ITO (ITAT Hyderabad)
Hyderabad ITAT Quashes Reassessment as Notice under Section 148 Was Approved by Wrong Authority Beyond Three-Year Limitation
The Hyderabad ITAT quashed the reassessment proceedings for AY 2018-19 after holding that the notice under section 148 and the order under section 148A(d) were issued with the approval of the Principal Commissioner of Income-tax (PCIT) instead of the Principal Chief Commissioner/Chief Commissioner, which was the specified authority under section 151(ii) since more than three years had elapsed from the end of the relevant assessment year. The Tribunal held that obtaining approval from an authority not statutorily empowered under section 151 went to the root of jurisdiction, rendering the reassessment proceedings void. Relying on the Supreme Court’s decision in Union of India v. Ashish Agrawal, the Telangana High Court’s ruling in Deloitte Consulting India Pvt. Ltd., and the Supreme Court’s affirmation in ACIT v. LinkedIn Singapore Pte. Ltd., the Tribunal rejected the Revenue’s contention that the later amendment inserted by the Finance Act, 2023 to section 151 could be applied retrospectively. It further observed that the validating provision introduced by the Finance Act, 2026 under section 292BC cures only procedural or administrative defects in approvals and cannot validate an approval granted by an authority lacking statutory jurisdiction. Consequently, the reassessment order passed under sections 147/144/144B was quashed without examining the additions on merits.
Cases Discussed
