NEHA GOEL,DELHI vs. INCOME TAX OFFICER, DELHI

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ITA 1728/DEL/2025Status: DisposedITAT Delhi24 July 2025AY 2017-18Bench: SHRI SATBEER SINGH GODARA (Judicial Member)6 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The tribunal, citing the Supreme Court's decision in Union of India vs. Rajeev Bansal, held that Section 151(ii) approval for reassessment, where more than three years had passed, must be obtained under the 'new regime'. Since a valid Section 151(ii) approval was not secured, the Section 148 reassessment proceedings were deemed unsustainable and were accordingly quashed.

What were the facts?

The assessee appealed against a reassessment order for A.Y. 2017-18, initiated under Section 147 r.w.s. Section 144. The primary contention was that the assessment was invalid due to non-service of the Section 148 notice and a lack of proper sanction under Section 151(ii) as per the 'new regime' provisions, given that more than three years had elapsed.

What were the issues?

The key legal issue was the validity of the sanction obtained for reassessment proceedings under Section 148, specifically whether the approval from the appropriate authority under Section 151(ii) of the Income Tax Act, adhering to the 'new regime' provisions, was correctly secured when more than three years had elapsed from the end of the relevant assessment year.

Which sections of the Income-tax Act were involved?

Section 147,Section 144,Section 148,Section 151,Section 151(1),Section 151(2),Section 151(i),Section 151(ii)

AI-generated summary — verify with the full judgment below

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Income Tax Appellate Tribunal, DELHI BENCH: “SMC” NEW DELHI

Before: SHRI SATBEER SINGH GODARA

For Appellant: Ms. Sanya Khurana, Adv
Hearing: 24.07.2025Pronounced: 24.07.2025

Date of hearing 24.07.2025 Date of pronouncement 24.07.2025 ORDER This assessee’s appeal for assessment year 2017-18, arises against the Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre [in short, the “CIT(A)/NFAC”], Delhi’s DIN and order no. ITBA/NFAC/S/250/2024-25/1072842440(1), dated 03.02.2025 involving proceedings under section 147 r.w.s. 144 of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’). Heard both the parties. Case file perused.

2.

This assessee’s appeal raises the following substantive grounds:

1. 1. On the facts and circumstances of the case, and in Law the Ld. CIT(A) failed to consider that the assessment made u/s 147 is invalid and is void ab initio as the alleged notice u/s 148 has not been served on the assessee within the prescribed time limit in terms of decision of the Hon'ble Supreme Court in the case of Union of India & Ors. v. Rajeev Bansal.

2. On the facts and circumstances of the case, and in Law the Ld. CIT(A) failed to consider that on facts and circumstances of the case, the learned assessing officer has failed to justify the reasons for reopening of the assessment u/s 148 of the Act.

3. On the facts and circumstances of the case, the impugned order has been issued in gross violation of the principles of natural justice as the Ld. CIT (A) has failed to consider the detailed grounds as well as documentary evidence including the valuation report furnished by the Appellant and mechanically remanded the matter back to the Ld. AO for fresh assessment, 4. That the appellant craves leave to add, alter or delete the above grounds of appeal at the time of hearing.

3. Next comes the legal issue between the parties. Learned counsel first of all refers to the Assessing Officer’s section 148 notice dated 28.06.2021 issued after obtaining the necessary satisfaction. She then quotes awarded section 151(ii) of the Act that once the above stated notice has been issued after a period of more than three years having elapsed from the end of relevant assessment year; the necessary sanction ought to have been obtained not from the Principal Commissioner but from the 2 | P a g e “Principal Chief Commissioner or Principal Director……………., as the case may be”.

4.

I notice in this factual backdrop that the instant clinching issue i.e. the learned “prescribed authority” as to whether it should be the jurisdictional commissioner or Principal Commissioner under section 151(i) or the Principal Chief Commissioner under clause (ii) of the Act, as the case may be, is no more res-integra as per hon’ble apex court’s recent landmark decision in Union of India Vs. Rajeev Bansal [2024] 167 taxmann.com 70, deciding the same against the department as under: “73. Section 151 imposes a check upon the power of the Revenue to reopen assessments. The provision imposes a responsibility on the Revenue to ensure that it obtains the sanction of the specified authority before issuing a notice under Section 148. The purpose behind this procedural check is to save the assesses from harassment resulting from the mechanical reopening of assessments. 128 A table representing the prescription under the old and new regime is set out below: Regime Time limits Specified authority Section 151(2) of Before expiry of four Joint the old regime years from the end of the Commissioner relevant assessment year Section 151(1) of After expiry of four years Principal Chief the old regime from the end of the Commissioner or relevant assessment Chief years Commissioner or Principal Commissioner or Commissioner Section 151(i) of the Three years or less than Principal new regime three years from the end Commissioner or Principal Director 3 | P a g e of the relevant or Commissioner or assessment year Director Section 151(ii) of More than three years Principal Chief the new regime have elapsed from the Commissioner or end of the relevant Principal Director assessment year General or Chief Commissioner or Director General

74.

The above table indicates that the specified authority is directly co-related to the time when the notice is issued. This plays out as follows under the old regime: (i) If income escaping assessment was less than Rupees one lakh: (a) a reassessment notice could be issued under Section 148 within four years after obtaining the approval of the Joint Commissioner; and (b) no notice could be issued after the expiry of four years; and (ii) If income escaping was more than Rupees one lakh: (a) a reassessment notice could be issued within four years after obtaining the approval of the Joint Commissioner; and (b) after four years but within six years after obtaining the approval of the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner.

75.

After 1 April 2021, the new regime has specified different authorities for granting sanctions under Section 151. The new regime is beneficial to the assessee because it specifies a higher level of authority for the grant of sanctions in comparison to the old regime. Therefore, in terms of Ashish Agarwal (supra), after 1 April 2021, the prior approval must be obtained from the appropriate authorities specified under Section 151 of the new regime. The effect of Section 151 of the new regime is thus: (i) If income escaping assessment is less than Rupees fifty lakhs: (a) a reassessment notice could be issued within three years after obtaining PART E the prior approval of the Principal Commissioner, or Principal Director or Commissioner or Director; and (b) no notice could be issued after the expiry of three years; and (ii) If income escaping assessment is more than Rupees fifty lakhs: (a) a reassessment notice could be issued within three years after obtaining the prior approval of the Principal Commissioner, or Principal Director or Commissioner or Director; and (b) after three years after obtaining the prior approval of the Principal Chief Commissioner or Principal Director General or Chief Commissioner or Director General.

76.

Grant of sanction by the appropriate authority is a precondition for the assessing officer to assume jurisdiction under Section 148 to issue a reassessment notice. Section 151 of the new regime does not prescribe a time limit within which a specified authority has to grant sanction. Rather, it links up the time limits with the jurisdiction of the 4 | P a g e authority to grant sanction. Section 151(ii) of the new regime prescribes a higher level of authority if more than three years have elapsed from the end of the relevant assessment year. Thus, non- compliance by the assessing officer with the strict time limits prescribed under Section 151 affects their jurisdiction to issue a notice under Section 148.

77.

Parliament enacted TOLA to ensure that the interests of the Revenue are not defeated because the assessing officer could not comply with the pre- conditions due to the difficulties that arose during the COVID-19 pandemic. Section 3(1) of TOLA relaxes the time limit for compliance with actions that fall for completion from 20 March 2020 to 31 March 2021. TOLA will PART E accordingly extend the time limit for the grant of sanction by the authority specified under Section 151. The test to determine whether TOLA will apply to Section 151 of the new regime is this: if the time limit of three years from the end of an assessment year falls between 20 March 2020 and 31 March 2021, then the specified authority under Section 151(i) has an extended time till 30 June 2021 to grant approval. In the case of Section 151 of the old regime, the test is: if the time limit of four years from the end of an assessment year falls between 20 March 2020 and 31 March 2021, then the specified authority under Section 151(2) has time till 31 March 2021 to grant approval. The time limit for Section 151 of the old regime expires on 31 March 2021 because the new regime comes into effect on 1 April 2021.”

5.

Suffice to say, it has come on record in light of their lordship’s detailed discussion hereinabove that section 151(ii) approval in the instant case had to be obtained under the “new” regime only. I accordingly adopt the foregoing detailed discussion mutatis mutandis to conclude that the impugned section 148 proceedings herein are not sustainable in the eyes of law for want of a valid section 151(ii) approval in very terms. The impugned reopening/reassessment stands quashed therefore.

6.

All other pleading on merits stands rendered academic.

7.

This assessee’s appeal is allowed in above terms. 5 | P a g e Order pronounced in the open court on 24th July, 2025

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