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Facts
The revenue filed an appeal with a delay. The assessee filed cross objections challenging the validity of reopening of assessment for AY 2018-19.
Held
The tribunal held that the reopening of assessment was invalid because the approval was obtained from the wrong authority (PCIT instead of PCCIT, as it was beyond 3 years). The Delhi High Court's decisions in Kids Dream International Pvt. Ltd. and H and M Hennes and Mauritz Retail P Ltd. were relied upon.
Key Issues
Validity of reopening of assessment due to incorrect sanctioning authority approval under Section 151 of the Income Tax Act, 1961.
Sections Cited
148A, 148, 151
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCH “C”: NEW DELHI
Before: SHRI M. BALAGANESH & SHRI SUDHIR KUMAR
O R D E R PER M. BALAGANESH, A. M.: 1. The appeal in CO 51/Del/2025 for AY 2018-19, arises out of the order of the ld National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as ‘ld. CIT(A)’, in short] dated 22.07.2025 against the order of assessment passed u/s 148A of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’) dated 07.04.2022 by the Assessing Officer, DCIT, ITO, Ward-36(1), Delhi (hereinafter referred to as ‘ld. AO’).
At the outset, we find that there is a delay in filing of appeal before us by the revenue by 43 days. Considering the reasons adduced in the condonation petition, in the interest of substantial justice, we hold that the revenue was prevented from sufficient cause and accordingly inclined to condone the delay and admit the appeal for adjudication.
The assessee has preferred cross objections before us challenging the validity of reopening of assessment. Since this goes to the root of the matter, we deem it fit to first address the said legal issue.
We have heard the rival submissions and perused the material available on record. The issue involved is reopening of assessment for the Assessment Year 2018-19. For this purpose, the Learned AO obtained approval under section 151 of the Act from the Learned PCIT which fact is quite evident from the notice issued under section 148 of the Act dated 7-4-2022. Since the reopening in the instant case has been made beyond 3 years from the end of the relevant assessment year, the specified sanctioning authority for the purposes of section 148 of the Act is Learned PCCIT. We find that in the order passed under section 148A(d) of the Act dated 7-4-2022, it is mentioned in the last paragraph that the order is being passed with prior approval of the Principal Chief Commissioner of Income Tax, Delhi (PCCIT). However, in the notice issued under section 148 of the Act, it is mentioned that the said notice assuming jurisdiction for reopening has been issued after obtaining the prior approval of Principal Commissioner of Income Tax (PCIT). Even this would vitiate the entire reassessment proceedings as it would tantamount to obtaining approval from dual authorities when the law requires only one competent authority to accord approval. Since the approval in the instant case has been obtained from a wrong authority, the entire reassessment proceedings gets vitiated. Reliance in this regard has been rightly placed by the Learned AR before us on the decision of the Hon’ble Jurisdictional Delhi High Court in the case of Kids Dream International Private Limited vs ACIT in W P (C ) 2814/2023 dated 24-2- 2025 . The relevant operative portion of the said order is reproduced below:-
“2. As is evident from the above, the solitary question which was canvassed for our consideration was the issue of sanction as contemplated under section 151 of the Income Tax Act, 1961 [“Act”]. 3.The reassessment action for Assessment Year [“AY”] 2017-18 came to be commenced immediately after a lapse of three years from the end of the relevant AY. It is in the aforesaid backdrop that Mr. Kantoor, learned counsel, had submitted that the said sanction accorded by the Principal Commissioner of Income Tax [“PCIT”] would not sustain.
4. We note that while dealing with the said question, we had in Abhinav Jindal H.U.F. v. Commissioner of Income Tax and Ors [2024 SCC OnLine Del 6585] duly enunciated the legal position which would obtain. We had ultimately in Abhinav Jindal held that the Taxation & Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 [“TOLA”] provisions would have no bearing on the identification of the competent authority under section 151 for according sanction.
5. In view of the aforesaid, and since undisputedly the facts of the present case the sanction was accorded only by the PCIT, the reassessment action would not sustain.
6. Accordingly and for all the aforesaid reasons, we allow the instant writ petition and quash the impugned order referable to section 148A(d) dated 30 July 2022 and notice under section 148 of even date.
Similar view was expressed by the Hon’ble Jurisdictional High Court in the case of H and M Hennes and Mauritz Retail P Ltd vs ACIT reported in 174 taxmann.com 1113 (Del HC) dated 14-5-2025.
Respectfully following the same, the reassessment proceedings are hereby quashed and Cross objection Ground No.1 raised by the assessee is allowed.
Since the entire reassessment is quashed, the other grounds raised by the assessee as well as the revenue on facts need not be gone into and they are left open.
In the result, the appeal of the revenue is dismissed and cross objection of the assessee is allowed.
Order pronounced in the open court on 27/03/2026.