Officer Authorised to record necessary satisfaction is Chief Commissioner / Commissioner of Income Tax, not Jt. CIT: Orissa HC quashes Reassessment Notice [Read Order]

The Orissa High Court has quashed the reassessment notice and held that the Officer authorised to record necessary satisfaction is Chief Commissioner/ Commissioner of Income Tax and not Jt. CIT.

The petitioners have challenged the notice issued by the Income Tax Department under Section 148 of the Income Tax Act, 1961 as it stood prior to the amendment by the Finance Act of 2021 with effect from 1st April, 2021. In other words, in each of these cases, the notice under Section 148 of the Income Tax Act has been issued prior to 1st April, 2021. In many of them, in fact, the date of the notice is 31st March, 2021.

In each of these cases, the relevant assessment year in relation to which such notice has been issued is more than four years prior to the date of the reopening i.e. it is beyond four years from the expiry of the AY in question and is clearly therefore, time barred in terms of the first proviso to Section 147 of the Income Tax Act.

The Revenue contended that in view of the notifications issued by the Central Government in terms of the provisions of the Taxation and other laws (Relaxation and Amendment of Certain Provisions) Act, 2020, the said time limits stood extended is clearly untenable as those notifications were issued to deal with the situation arising from the amendment to the IT Act by the Finance Act, 2021 with effect from 1st April, 2021 whereas in these cases the notices were issued prior to 1st April, 2021.

The division bench headed by Chief Justice Dr. S. Muralidhar and Justice S. Mishra has held that in the notice issued under Section 148 of the IT Act on 31st March, 2021 which has been challenged in W.P.(C) No.41826 of 2021 it has been stated that the notices had been issued after obtaining “necessary satisfaction of the Jt. CIT Range-I, Cuttack” whereas the Officer authorized to record the necessary satisfaction had to be the Chief Commissioner of Income Tax / Commissioner of Income Tax.

“The impugned notice under Section 148 of the Income Tax Act is hereby quashed. The writ petitions are allowed, but in the circumstances, with no order as to costs,” the court said.

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