[S.151 IT Act] SC Judgment In Rajeev Bansal Doesn't Affirm Authority Of Joint Commissioner To Accord Approvals For Reassessment: Delhi HC
The Delhi High Court has held that the Supreme Court's decision in Union of India and Ors. vs. Rajeev Bansal (2024) did not affirm the authority of a Joint Commissioner to grant approval under Section 151 of the Income Tax Act, 1961 for initiation of reassessment proceedings. The provision precludes the Assessing Officer from issuing notice for reassessment after the expiry of four...
The Delhi High Court has held that the Supreme Court's decision in Union of India and Ors. vs. Rajeev Bansal (2024) did not affirm the authority of a Joint Commissioner to grant approval under Section 151 of the Income Tax Act, 1961 for initiation of reassessment proceedings.
The provision precludes the Assessing Officer from issuing notice for reassessment after the expiry of four years from the end of the relevant Assessment Year, unless the Principal Chief Commissioner or Commissioner or Principal Commissioner or Commissioner is satisfied on the reasons recorded by the AO that it is a fit case for the issue of such notice.
This change in authority was brought about by the Finance Act 2021, prior to which the Joint Commissioner was an authority recognised under the unamended section 151.
A division bench of Justices Yashwant Varma and Dharmesh Sharma observed that the Supreme Court in the Rajeev Bansal case “merely alluded to the time frames within which approval under Section 151 of the could be sought for and obtained.”
In the case at hand, the Petitioner-assessee had assailed the reassessment action on the ground of it having been approved by the Joint Commissioner and who, it was contended, cannot be recognised to be the authority competent in law as per Section 151 of the Act.
Significant to note that the Delhi High Court had, in Abhinav Jindal HUF v. Commissioner of Income Tax and Ors (2024), negated the contention that the Joint Commissioner would be entitled to be viewed as the competent authority for purposes of approvals. It had observed,
“Section 151 distributed the powers of approval amongst a set of specified authorities…Thus even if the reassessment was proposed to be initiated with the aid of the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act after the expiry of four years from the end of the relevant assessment year, the authority statutorily empowered to confer approval would be the Principal Chief Commissioner/ Chief Commissioner/ Principal Commissioner/ Commissioner.
It would only be in a case where the reassessment was proposed to be initiated before the expiry of four years from the end of the relevant assessment year that approval could have been accorded by the Joint Commissioner of Income-tax.”
The Department contended that the effect of Abhinav Jindal (supra) would no longer sustain in light of the Rajeev Bansal case.
The High Court however held, “Rajeev Bansal cannot possibly be construed or read as affirming the authority of a Joint Commissioner to accord approval or the said authority being viewed as the competent authority for the purposes of grant of approval.”
Accordingly, the reassessment proceedings were set aside.
Appearance: Mr. Salil Aggarwal, Sr. Adv. with Mr. Mahir Aggarwal, Mr. Uma Shankar and Mr. Madhur Aggarwal, Advs for Petitioner; Mr. Debesh Panda, SSC with Ms. Zehra Khan, JSC, Mr. Vikramaditya Singh, Mr. Kanishk Aggarwal, Ms. Anauntta Shankar and Mr. Ruchir Joshi, Advs for Respondent
Case title: Rohit Kumar v. Income Tax Officer Ward 54 (1), Delhi
Citation: 2025 LiveLaw (Del) 57
Case no.: W.P.(C) 2830/2022