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Facts
The assessee filed appeals against the orders of the Commissioner of Income-tax (Appeals) concerning assessment years 2016-17 and 2017-18. The appeals challenged reassessment proceedings initiated under section 147 r.w.s. 144B of the Income Tax Act, 1961.
Held
The Tribunal held that the reassessment proceedings were bad in law due to irregularities in obtaining approval, particularly relying on the Supreme Court's decision in Union of India vs. Rajeev Bansal. The Tribunal found that the approval obtained was not sustainable under law.
Key Issues
Whether the reassessment proceedings were initiated legally, specifically concerning the validity of the approval obtained from the competent authority as per Section 151 of the Income Tax Act, 1961.
Sections Cited
147, 144B, 139, 148, 151, 148A
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Income Tax Appellate Tribunal, DELHI BENCHES: G : NEW DELHI
Before: SHRI ANUBHAV SHARMA & SHRI MANISH AGARWAL
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES: G : NEW DELHI BEFORE SHRI ANUBHAV SHARMA, JUDICIAL MEMBER AND SHRI MANISH AGARWAL, ACCOUNTANT MEMBER ITAs No.6025 & 6026/Del/2024 Assessment Years: 2016-17 &2017-18 Sampark Management Consultancy Vs DCIT, LLP, Circle-5(2)(1), A-176, Sector-40, Noida. Gautam Budha Nagar, Noida – 201301. PAN: ACSFS9969E (Appellant) (Respondent) Assessee by : Shri Amit Goel, CA & Shri Pranav Yadav, Advocate Revenue by : Shri Narpat Singh, Sr. DR Date of Hearing : 23.06.2025 Date of Pronouncement : 25.06.2025 ORDER PER ANUBHAV SHARMA, JM:
These appeals are preferred by the assessee against the orders dated 06.12.2024 of the Ld. Commissioner of Income-tax (Appeals), NFAC, Delhi (hereinafter referred to as the Ld. First Appellate Authority or ‘the Ld. FAA’, for short) in Appeals No.NFAC/2015-16/10261741 and No.NFAC/2016- 17/10261748 arising out of the appeals before it against the orders dated 22.05.2023 and 30.05.2023 passed u/s 147 r.w.s. 144B of the Income Tax Act,
ITAs No.6025 &6026/Del/2024 1961 (hereinafter referred as ‘the Act’) by the Assessment Unit, IT Deptt. (hereinafter referred to as the Ld. AO).
The return of income u/s 139 of the Act in AY 2016-17 as filed on 29.09.2016 and in AY 2017-18 it was filed on 18.09.2017. Notices u/s 148 of the Act in both the years were issued on 31.06.2021. On hearing both the sides, we find that primarily the dispute raised by the assessee is challenging assumption of jurisdiction on the basis of irregularity in assumption of jurisdiction on the basis of approval from an authority which was not competent to grant approval u/s 151 of the Act. The relevant ground in that regard, the grounds No.2 and 3 for AY 2016-17 which are common to both the years are reproduced below:-
“2. On the facts and circumstances of the case and in law, the reassessment proceedings initiated is bad in law, without jurisdiction and contrary to the provisions of law including the specific provisions of section 147 to section 151A of Income Tax Act, 1961 and therefore, the reassessment proceeding initiated along with assessment order passed are liable to be quashed and CIT(A) erred in not holding so.
3. On the facts and circumstances of the case and in law, the ld. CIT(A0 erred in upholding the initiation of reassessment proceedings by wrongly relying upon the decision of Hon’ble Apex Court in the case of Rajeev Bansal v UOI whereas as per this decision of apex court itself, the reassessment proceeding initiated was liable to be quashed.”
We find that section 148 of the Act was substituted by the Finance Act, 2021 w.e.f. 01.04.2021. Notice u/s 148 of the Act as per the old provisions of section 148 of the Act applicable till 31.03.2021 should have been issued only
ITAs No.6025 &6026/Del/2024 upto 31.03.2021. The issue stands settled by the Hon’ble Supreme Court in Union of India vs. Ashish Agarwal, 444 ITR 1 (SC). The assessee company was part of the litigations. The AO has issued notice u/s 148A(b) on 27.05.2022 and on 28.07.2022 order was passed u/s 148A(d) and issued notice u/s 148 of the Act on the same date, i.e., on 28.07.2022 in AY 2016-17 and while in AY 2017-18 on 27.07.2022 order was passed u/s 148A(d) and issued notice u/s 148 of the Act on 28.07.2022 . This notice dated 28.07.2022 u/s 148 of the Act, available at page 14-15 of the paper book for AY 2016-17 and on pages 16-17 for PB for AY 2017-18, and same are shown to be issued after obtaining approval of Principal Commissioner of Income-tax, Noida. This approval is contrary to the provisions of section 151 of the Act as amended/substituted by the Finance Act, 2021 because, as per section 151 of the Act, if more than three years have lapsed from the end of the relevant assessment year, approval of Principal Chief Commissioner of Income-tax or Principal Director General or Chief Commissioner or Director General was required to be obtained. In the present assessment years, notices u/s 148 have been issued on 28.07.2022 after expiry of three years from the end of relevant assessment years. Accordingly, sanction/approval of Principal Chief Commissioner of Income-tax or Principal Director General or Chief Commissioner or Director General was required to be obtained. Reliance in this regard is placed on the decision of the Hon’ble Supreme Court in Union of India vs. Rajeev Bansal, 2024 (10) TMI 264 – SUPREME COURT) and various decisions. Thus, the approval is not 3
ITAs No.6025 &6026/Del/2024