ACIT International Tax Vs Linkedin Singapore Pte. Limited (Supreme Court of India)
The dispute arose from reassessment proceedings relating to Assessment Year 2019–2020. The Bombay High Court considered the validity of the approval granted under Section 151 of the Income Tax Act, 1961 for passing an order under Section 148A(d) and issuing a notice under Section 148. The High Court noted that the facts of the case were almost identical to those in Kartik Sureshchandra Gandhi v/s. Assistant Commissioner of Income Tax.
The High Court recorded that the approval under Section 151, as reflected in the copy annexed to the affidavit-in-reply, indicated in Box-9 that the proceedings were covered under Section 149(1)(b) of the Act, i.e., where the time limit exceeded three years but did not exceed ten years. The assessee contended that, in such a situation, the approval was required to be granted by the Principal Chief Commissioner of Income Tax, whereas the approval had been granted by the Commissioner of Income Tax.
The Revenue submitted that the entry in Box-9 was generated automatically by the system because the assessment year was 2019–2020 and the approval date was 27 April 2023. The High Court observed that, even if this explanation were accepted, the approving Commissioner should have returned the approval for correction or at least recorded an appropriate handwritten remark. The High Court also observed that the approval form annexed to the petition was unsigned, making it unclear whether it had been signed by the same Commissioner who had granted the approval.
The High Court further noted that the order-sheet produced before it showed that the Commissioner of Income Tax (International Taxation-3), Mumbai had granted approval to the draft order under Section 148A(d) on 27 April 2023. According to the High Court, since the approval was granted more than three years after the expiry of Assessment Year 2019–2020, if any period was required to be excluded under the fifth proviso to Section 149 of the Act, that fact ought to have been recorded in the order-sheet. In the absence of such a reference, the High Court observed that it would amount to exercising jurisdiction which the approving authority did not possess.
On these findings, the Bombay High Court quashed and set aside the order dated 27 April 2023 passed under Section 148A(d) of the Income Tax Act, 1961, as well as the notice dated 27 April 2023 issued under Section 148. The writ petition was accordingly disposed of.
The Revenue challenged the High Court’s judgment before the Supreme Court by filing a Special Leave Petition. The Supreme Court first noted that there was a gross delay of 411 days in filing the Special Leave Petition and held that the delay had not been satisfactorily explained.
The Supreme Court further observed that, even otherwise, it found no good ground to interfere with the impugned judgment of the High Court. Accordingly, the Special Leave Petition was dismissed on the grounds of both delay and merits. The Court also disposed of all pending applications, if any.
As a result of the dismissal of the Special Leave Petition, the Bombay High Court’s judgment quashing the order passed under Section 148A(d) and the notice issued under Section 148 remained undisturbed.
Read HC Order in this case: Bombay HC Quashed Reassessment Notice to Linkedin as Approval Granted by Incorrect Authority
FULL TEXT OF THE SUPREME COURT JUDGMENT/ORDER
1. There is a gross delay of 411 days in filing the Special Leave Petition which has not been satisfactorily explained by the petitioner.
2. Even otherwise, we see no good ground to interfere with the impugned order passed by the High Court.
3. The Special Leave Petition is, therefore, dismissed on the ground of delay as well as merits.
4. Pending application(s), if any, stand disposed of.
