DEEPAK SINGHAL,DELHI vs. ITO WARD 36(1), NEW DELHI

That, on the facts and circumstances of the case and in law, the reassessment proceedings for AY 2017-18 initiated vide notice dated 28.06.2021 is illegal, bad in law and without juri iction.

1 Without prejudice, the approval under s. 151 of the Act in respect of notice dated 28.06.2021 ought to have been taken from Pr. CCIT in terms of the amended provisions pursuant to the Finance Act, 2021 whereas the same was taken from Addl./ Joint CIT; and hence, the said notice is a nullity and liable to be quashed as such.

That, on the facts and circumstances of the case and in law, the reassessment proceedings for AY 2017-18 initiated vide notice and order dated 29.07.2022 is without juri iction and is also barred by limitation, and hence, the said notice and order are liable to be quashed.

1 Without prejudice, the approval under s. 151 of the Act in respect of notice and order dated 29.07.2022 ought to have been taken from Pr. CCIT instead of Pr. CIT, and hence, the said notice is bad in law and liable to be quashed.

2 Without prejudice, the order dated 29.07.2022 does not state that an approval has been taken from the competent authority [does not state the said fact which is a sine-qua non for passing the order under s. 148A(d)] and that the mention of the said approval on the notice under s. 148 is an act of window dressing and thus notice dated 29.07.2022 is vitiated in law.

Without prejudice, notice dated 29.07.2022 does not carry a DIN and is thus in violation of CBDT circular 9/2019. 4. Without prejudice to the above, the CIT(A) ought to have adjudicated the grounds on the aspect of juri iction and limitation and also the grounds pertaining to non-supply of information.

That, on the facts and circumstances of the case and in law, the order passed by the Ld. CIT is erroneous and contrary to the principles of natural justice insofar as it adds Rs. 40,00,000 to the appellant's income under s. 69C of the Act.

Next comes the legal issue between the parties. Learned senior counsel first of all refers to the Assessing Officer’s section 148 notice dated 29.07.2022 issued after obtaining the necessary satisfaction. He then quotes section 151(ii) of the Act that once the above stated notice has been issued after a period of more than 3 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 “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 juri ictional 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 4 | P a g e resulting from the mechanical reopening of assessments. 128 A table representing the prescription under the old and new regime is set out below:

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 5 | P a g e 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 juri iction 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 juri iction of the 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 juri iction 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.”

Suffice to say, it has come on record in light of their lordship’s detailed discussion hereinabove that section 151(ii) approval in the 6 | P a g e 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 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. Order pronounced in the open court on 24th July, 2025 (SATBEER SINGH GODARA)