ITO Vs Nikhil Chandrakant Dharia (Supreme Court of India)
The litigation concerned reassessment proceedings for Assessment Year (AY) 2019-20 initiated through a notice dated 28th March 2023 under Section 148A(b) of the Income-tax Act, 1961, followed by an order dated 19th April 2023 under Section 148A(d) and a consequential notice dated 19th April 2023 under Section 148.
Before the Bombay High Court, the petitioner principally challenged the approval granted under Section 151, alleging total non-application of mind. The Court noted that the notice under Section 148A(b) related to AY 2019-20 and was issued within three years. Accordingly, the petitioner did not dispute that approval was required from the Principal Commissioner of Income Tax (PCIT), rather than the Principal Chief Commissioner of Income Tax (PCCIT).
The Court found material errors in the approval form. Row 9 stated that the proceedings were covered under Section 149(1)(b), namely proceedings for more than three years but not more than ten years, whereas the notice concerned AY 2019-20 and was dated 28th March 2023, i.e. within three years. Row 22 recorded approval by the PCIT on 19th April 2023. The Court observed that, if Section 149(1)(b) were applicable, approval could be granted only by the Principal Chief Commissioner and not the Principal Commissioner.
