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Reassessment Notice U/s 148:
Approval should be before issue of notice, Taxpayers need to be careful and cautious in the matter of procedures followed
Reassessment notices are often challagend for its improper issuance or improper service. Further, for issuing notice under section 148 for reopening of assessment, prior approval is required.
Such approvals are now being given online and are digitally signed in token of approval.
AO can issue notice only after approval has been received. Accordingly, the time of such digital signature on approval should be prior to the time of digital signature of AO on 148 notice.
Recently Bombay High Court quashed 148 proceedings as the time of digital signature of AO on 148 notice was at 2.40 pm whereas the time of digital signature of Jt CIT giving approval was at 2.55 pm.
Hence it was held that notice was issued prior to approval.
Considering this, it will be advisable to verify this aspect while filing objections to reopening of assessment under section 148 and also where time limitation is relevant.
Further, with DIN now being mandatory on all notices/ communication and a continuous serial no. being allotted while generating DIN number, it is possible to identify at what time DIN stated on the notice would have been created by comparing DIN no on other notices / communication of your other clients or clients of other professionals.
The higher serial no. of DIN can’t be earlier in time and date, to time and date of lower serial no. of DIN no. stated in any other notice/ correspondence of any assesses.
So in case any notice/ communication is recd beyond the time and on such notice/ communication earlier date is mentioned, it will be advisable to first verify the time and date when it was digitally signed and then further to correlate DIN no mentioned on it with the DIN serial no going on for other assesses at that point of time and date.
Following is the BOMBAY HIGH COURT judgment quashing 148 notice on the issue of approval being signed by Jt CIT later in time at 2.55 pm as against notice under section 148 for reopening of assessment being signed by AO at 2.40 pm.
‘SVITZER HAZIRA PVT. LTD. VERSUS ASSISTANT COMMISSIONER OF INCOME TAX, MUMBAI, JOINT / ADDL. COMMISSIONER OF INCOME-TAX, THE UNION OF INDIA’
In above case, the court has held as under:
“It is clear from the digital signature on the notice issued by Respondent No.1 that the notice was issued at 2.40 p.m. on 31/03/2019. The sanction by the authority under Section 151 was digitally signed at 2.55 p.m. on 31/03/2019. The explanation furnished by Respondent No. 1 in the order of disposing of objections that initially physical approval was granted and thereafter online approval was granted has not been supported by any material on record. We fail to understand the need to grant online approval at 2.55 p.m. if physical approval was already granted before 2.40 p.m. In the absence of valid explanation by cogent material, we cannot accept explanation by Respondent No.1 in the order of disposing of objections that physical approval was granted before issuance of notice u/s 148.”