The Bombay High Court in the case Siemens Financial Services Pvt Ltd. Versus Deputy Commissioner of Income Taxobserevd and has quashed the reassessment notice which is issued after 3 years without proper approval.
The bench comprising of Justice K.R. Shriram and Justice N. K. Gokhale in the case obserevd that the approval of the specified authority in terms of Section 151(ii) of the Income Tax Act is a jurisdictional requirement and in the absence of complying with the said requirement, thus, the reopening of assessment would fail.
In the present case, the petitioner or assessee is registered with the Reserve Bank of India, RBI as the non bankingfinance company and is being classified as the asset finance company.
Therefore, the assessee after three years received a reassessment notice, wherein the notice issued stated that there being the reason to believe that the assessee’s income chargeable to tax for A.Y. 2016–2017 has escaped assessment within the meaning of Section 147.
The notice issued mentioned that the necessary satisfaction of Range 8(2), Mumbai, has been obtained.
Before the court, it has been contended by the Assessee that the notice, order, and intimation letter were beyond limitation, signed by the wrong specified authority, lacked “information” as it is required under section 148, which resulted from the change of opinion, and was in violation of Section 151A.
Further, it has been contended by the assessee that the provisions as stated under Section 149(1)(b) provide that a notice issued under Section 148 can be beyond a period of three years and up to a period of ten years only if the Assessing Officer has in his possession books of account or other documents or evidence that reveal that income chargeable to tax represented in the form of an asset that has escaped assessment amounts to or is more than an amount of Rs. 50 Lakh.
It has also been contended by the assessee that the Deputy Commissioner of Income Tax has mentioned in the order that prior approval has been taken in the matter from the Principal Chief Commissioner of Income Tax under Section 151(i). therefore, Sanctions would be bad in law and as the Deputy Commissioner of Income Tax should have complied with Section 151(ii) and not Section 151(i).
The court while considering the facts and circumstances of the case held that the approval of the specified authority in terms of Section 151(ii) is a jurisdictional requirement, in the absence of complying with this requirement, thus, the reopening would fail.
The counsel, P. J. Pardiwalla appeared for the petitioner.
The counsel, Suresh Kumar represented the respondent.
