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Facts
The appeals by the assessee and revenue concern the combined order of the CIT(A) for AY 2015-16 and 2016-17. The primary issue is the validity of reassessment notices issued under Section 148, which the assessee contended were barred by limitation and issued without proper authority approval.
Held
The Tribunal held that for AY 2015-16, notices issued after 1st April 2021 are barred by limitation as per the concession made by the Revenue before the Supreme Court in the Rajeev Bansal case. For AY 2016-17, the notice was invalid due to lack of proper approval from the higher authority as required under Section 151(ii).
Key Issues
Whether the reassessment notices issued under Section 148 for AY 2015-16 were barred by limitation, and whether the notice for AY 2016-17 was invalid due to non-compliance with Section 151 regarding the required approval authority.
Sections Cited
147, 148, 148A, 149, 151, 250
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “A” BENCH, MUMBAI
Before: SHRI SAKTIJIT DEY, VP &
2025 Aditya Birla Sun Life Insurance Co. Ltd. Assessee by : Shri Ronak Doshi, Ms. Vrushti Galani & Ms. Mahi Baldia, AR : Shri Rajesh Kumar Yadav, Revenue by CIT-DR Date of Hearing 20.11.2025 : Date of Pronouncement : 02.12.2025 O R D E R Per Padmavathy S, AM: These cross appeals by the assessee and the revenue are against the combined order of the Commissioner of Income Tax (Appeals)-54, [In short 'CIT(A)'] passed under section 250 of the Income Tax Act, 1961 (the Act) dated 26.03.2025 for Assessment Years (AY) 2015-16 & 2016-17.
AY 2015-16
The assessee is a company engaged in life insurance business. The assessee filed the return of income for AY 2015-16 on 06.11.2015 declaring a total income of Nil. The Assessing Officer (AO) initiated reassessment proceeding by issue of notice u/s. 148 dated 30.06.2021. Pursuant to the directions of the Hon'ble Supreme Court in the case of Union of India vs. Ashish Agarwal (Civil Appeal No. 3005/2022) the said notice was treated as notice u/s. 148A(b). The AO subsequently passed an order u/s. 148A(d) of the Act dated 28.07.2022 and issued the notice u/s. 148 on the same date. The AO completed the assessment u/s. 147 after making various additions / disallowance. Aggrieved the assessee filed further appeal before the CIT(A). Before the CIT(A) the assessee besides contending the additions / disallowances on merits also raised the legal contention that the notice u/s. 148 dated 28.07.2022 is barred by limitation. The CIT(A) accepted the 2025 Aditya Birla Sun Life Insurance Co. Ltd. contention of the assessee and held that the notice u/s. 148 is invalid and barred by limitation. However the CIT(A) proceeded to consider the other grounds raised by the assessee on merits and dismissed the same. Both the assessee and the revenue are in appeal before the Tribunal.
The ld. AR submitted that the grounds in the revenue's appeal pertain to the CIT(A) holding that the notice u/s. 148 is barred by limitation. The ld. AR further submitted that if the said ground of the revenue is considered and dismissed then the grounds raised by the assessee against CIT(A) upholding the additions/disallowances on merits would become infructuous. The ld. AR also submitted that it is a settled legal position that the notice u/s. 148 for AY 2015-16 which is issued beyond six years i.e. on or after 31.03.2022 is barred by limitation. The ld. AR argued that in assessee's case the notice u/s. 148 is issued on 28.07.2022 and therefore the CIT(A) has rightly held that the same is barred by limitation. The ld. AR in this regard relied on the following decisions of the Hon'ble Bombay High Court
(i) Cherian Nallathu Abraham Annamma vs. ITO (W.P. No. 32774 of 2025) (ii) Spicy Sangria Hotels Pvt. Ltd. vs. ITO (W.P. No. 1325 of 2023) (iii) Verjinia Foods Ltd. vs. ITO (I.A. No. 12229 of 2025 in W.P. No. 1428 of 2023)
We heard the parties and perused the material on record. In assessee's case notice u/s.148 was issued on 28.07.2022. The contention of the assessee before the CIT(A) was that the notice for AY 2015-16 which is issued beyond 6 years i.e. on or after 31.03.2022 is barred by limitation. In this regard we notice that the Hon'ble Bombay High Court in the case of Cherian Nallathu Abraham Annamma (supra) has considered an identical issue where it has been held that – 2025 Aditya Birla Sun Life Insurance Co. Ltd. “6. We have heard the learned counsel for the parties. It is not in dispute that the present petition relates to A.Y.2015-16. Further, it is also undisputed that the notice under Section 148 has been issued on 5th April 2022 which is at page 52 of the paperbook. Once these are the facts, paragraphs 19 (e) and (f) of the judgment of the Hon'ble Supreme Court in the case of Rajeev Bansal (supra) become relevant. They read as under:-
Mr. N Venkataraman, learned Additional Solicitor General of India, made the following submissions on behalf of the Revenue- a. --- e. The Finance Act 2021 substituted the old regime for re-assessment with a new regime. The first proviso to Section 149 does not expressly bar the application of TOLA. Section 3 of TOLA applies to the entire Income-tax Act, including Sections 149 and 151 of the new regime. Once the first proviso to Section 149(1)(b) is read with TOLA, then all the notices issued between 1 April 2021 and 30 June 2021 pertaining to assessment years 2013-2014, 2014-2015, 2015-2016, 2016-2017, and 2017-2018 will be within the period of limitation as explained in the tabulation below:
f. The Revenue concedes that for the assessment year 2015-16, all notices issued on or after 1 April 2021 will have to be dropped as they will not fall for completion during the period prescribed under TOLA:" (emphasis supplied)
7. From the above it is clear, that the Department has conceded before the Hon'ble Supreme Court that all the notices issued under Section 148 after 1 2025 Aditya Birla Sun Life Insurance Co. Ltd. April 2021 for A.Y.2015-16 have to be dropped. In the present case, the Notice under Section 148 is dated 5 April 2022 and therefore, has to be dropped.
8. The decision in Rajeev Bansal (supra) has been subsequently followed by the Hon'ble Supreme Court in Deepak Steel and Power Limited (supra). Paragraphs 4 and 5 of the said order is reproduced hereunder:-
4. The learned counsel appearing for the revenue with his usual fairness invited the attention of this Court to a three judge bench decision of this Court in Union of India and Ors. v. Rajeev Bansal, reported in 2024 SCC OnLine SC 2693, more particularly, paragraph 19(f) which reads thus:-
"19. (f) The Revenue concedes that for the assessment year 2015- 2016, all notices issued on or after April 1, 2021 will have to be dropped as they will not fall for completion during the period prescribed under the Taxation and other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020"
As the revenue made a concession in the aforesaid decision that is for the assessment year 2015-2016, all notices issued on or after Ist April. 2021 will have to be dropped as they would not fall for completion during the period prescribed under the taxation and other laws (Relaxation and Amendment of certain Provisions Act, 2020). Nothing further is required to be adjudicated in this matter as the notices so far as the present litigation is concerned is dated 25.6.2021. (emphasis supplied)
9. Similarly, even in the matter of Nehal Ashit Shah (supra), the Hon'ble Supreme Court, relying upon paragraphs 19 (e) and (f) of the decision in case of Rajeev Bansal (supra), dismissed the SLP filed by the Revenue. Paragraph 5 of the said order is reproduced hereunder:-
"5. In this regard, reference could also be made to paragraph 19(e) and (f) in the case of Union of India vs. Rajeev Bansal, Civil Appeal No. 8629 of 2024 on 03.10.2024 (2024 SCC ONLINE 754) under which the learned Additional Solicitor General for India has made a concession insofar as the assessment year 2015-16 is concerned."
10. Lastly, this very Bench has on 6th October 2025, in the matter of Spicy Sangria (supra), allowed the petition filed by the Petitioner therein by noting that since, the notice under Section 148 was issued after 1" April 2021, the same was required to be set aside in light of the concession made by the Revenue before the Hon'ble Supreme Court in the case of Rajeev Bansal (supra).
11. In light of the above discussion, we find merit in the submissions as canvassed by the Petitioner. The Revenue has categorically made a concession that for A.Y.2015-16 they would drop all notices issued under Section 148 after 1 April 2021. Once this is the position, it is appropriate that the notice under Section 148 dated 5 April 2022, and the consequential assessment order, notice of demand, penalty notices/orders as well as the recovery notices be quashed and set aside. It is accordingly so ordered.” 5. From the above it is clear that for AY 2015-16, any notice u/s.148 issued on or after 31.03.2022 is invalid and the consequential assessment is liable to quashed. In assessee's case the notice u/s.148 is issued on 28.07.2022 which beyond the time limit and therefore respectfully following the judicial precedence, we hold that the said notice is not valid and the assessment done on the basis of such invalid notice is liable to be quashed. Therefore, we see no reason to interfere with the decision of CIT(A) in holding that the notice u/s.148 is barred by limitation. Accordingly the ground raised by the revenue is dismissed.
Since we have held that the assessment based on invalid notice is liable to be quashed, the grounds raised by the assessee on the merits of the issue has become infructuous and dismissed accordingly.
7. The assessee filed the return of income for AY 2016-17 on 11.11.2016 declaring a total income of Nil. The Assessing Officer (AO) initiated reassessment proceeding by issue of notice u/s. 148 dated 30.06.2021. Pursuant to the directions of the Hon'ble Supreme Court in the case of Union of India vs. Ashish Agarwal (Civil Appeal No. 3005/2022) the said notice was treated as notice u/s. 148A(b). The AO subsequently passed an order u/s. 148A(d) of the Act dated 28.07.2022 along with the notice u/s. 148 of the even date. The AO completed the assessment u/s. 147 after making various additions / disallowance. Aggrieved the assessee filed further appeal before the CIT(A). Before the CIT(A) the assessee besides contending the additions / disallowances on merits also raised the legal contention that the notice u/s. 148 dated 28.07.2022 is not valid since the same is issued without getting approval from the appropriate authority. The CIT(A) accepted the contention of the assessee and held that the notice u/s. 148 is invalid since the same is issued after taking approval from PCIT whereas as per the provisions of section 151(ii) the approval should have been obtained from PCCIT / CCIT. The CIT(A) proceeded to consider the grounds on merits raised by the assessee and dismissed the same. Both the assessee and the revenue are in appeal before the Tribunal.
8. The ld. AR submitted that the grounds raised by the revenue in its appeal pertain to the decision of the CIT(A) to hold that the notice u/s. 148 as invalid since the same is issued without obtaining approval from the appropriate authority. The ld. AR further submitted that if the said ground of the revenue is considered and dismissed then the grounds raised by the assessee on merits would become infructuous. The ld. AR submitted that the various judicial pronouncements have 2025 Aditya Birla Sun Life Insurance Co. Ltd. been consistently holding that the notice u/s. 148 issued for AY 2016-17 beyond three years should be approved by the appropriate authority as per the provisions of section 151(ii) and the same is invalid if the approval is not obtained in accordance with the said section. The ld. AR relied on the following decisions of the Hon'ble Bombay High Court in this regard.
(i) Vodafone Idea Ltd. vs. DCIT (W.P. No. 2768 of 2022 dated 06.02.2024). (ii) Ramesh Bachulal Mehta vs. ITO [2025] 177 taxmann.com 606 (Bom. HC). (iii) Alag Property Construction Pvt. Ltd. vs. ACIT [2025] 179 taxmann.com 578 (Bom. HC.).
9. We heard the parties and perused the material on record. In assessee's case the notice u/s.148 is issued with the approval of PCIT and this fact has not been disputed by the revenue as can be seen from the orders of the lower authorities. The assessee's contention is that the notice for AY 2016-17 issued u/s.148 dated 28.07.2022 is issued beyond 3 years and therefore the same should have been issued with the approval of PCCIT. The assessee further contents that since in assessee's case the approval is obtained from PCIT, the same is invalid. In this regard we notice that the Hon'ble Bombay High Court in the case of Ramesh Bachulal Mehta (supra) has considered a similar issue where it has been held that – “6. In these facts, the limited point to be examined is whether the order dated 13.07.2022 passed under section 148A(d) for the Assessment Year 2016-17 after obtaining approval of Respondent No.2 [i.e. the PCIT-27, Mumbai], was in accordance with the provisions of section 151.
The Petitioner has drawn our attention to the decision of the Hon'ble Supreme Court in the case of Union of India v. Rajeev Bansal [2024] 167 taxmann.com 70 (SC)/[2024] 301 Taxman 238 (SC)/[2024] 469 ITR 46 (SC) and we deem it appropriate to refer to the said judgment where the Hon'ble Supreme Court has, while dealing with the issue of approval from the specified authority in terms of Section 151 of the Act, made the following observations:
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. A table representing the prescription under the old and new regime is set out below:
Regime Time limits Specified authority Section 151(2) Before expiry of Joint Commissioner of the old four years from the regime end of the relevant assessment year Section 151(1) After expiry of four Principal Chief of the old years from the end Commissioner or Chief regime of the relevant Commissioner or assessment year Principal Commissioner or Commissioner Section 151(i) Three years or less Principal of the new than three years Commissioner or regime from the end of the Principal Director or relevant assessment Commissioner or year Director Section 151(ii) More than three Principal Chief of the new years have elapsed Commissioner or regime from the end of the Principal Director relevant assessment General or Chief year Commissioner or Director General
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 2025 Aditya Birla Sun Life Insurance Co. Ltd. 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.
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 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.
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 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 "elevant 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.
2025 Aditya Birla Sun Life Insurance Co. Ltd.
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 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.
For example, the three year time limit for assessment year 2017-2018 falls for completion on 31 March 2021. It falls during the time period of 20 March 2020 and 31 March 2021, contemplated under Section 3(1) of TOLA. Resultantly, the authority specified under Section 151(i) of the new regime can grant sanction till 30 June 2021.
Under Finance Act 2021, the a sessing officer was required to obtain prior approval or sanction of the specified authorities at four stages: a. Section 148A(a) to conduct any enquiry, if required, with respect to the information which suggests that the income chargeable to tax has escaped assessment; b. Section 148A(b) - to provide an opportunity of hearing to the assessee by serving upon them a show cause notice as to why a notice under Section 148 should not be issued based on the information that suggests that income chargeable to tax has escaped assessment. It must be noted that this requirement has been deleted by the Finance Act 2022; c. Section 148A(d) - to pass an order deciding whether or not it is a fit case for issuing a notice under Section 148; and d. Section 148-to issue a reassessment notice.
In Ashish Agarwal (supra), this Court directed that Section 148 notices which were challenged before various High Courts "shall be deemed to have 2025 Aditya Birla Sun Life Insurance Co. Ltd. been issued under Section 148-A of the Income Tax Act as substituted by the Finance Act, 2021 and construed or treated to be show-cause notices in terms of Section 148-A(b)." Further, this Court dispensed with the requirement of conducting any enquiry with the prior approval of the specified authority under Section 148A(a). Under Section 148A(b), an assessing officer was required to obtain prior approval from the specified authority before issuing a show cause notice. When this Court deemed the Section 148 notices under the old regime as Section 148A(b) notices under the new regime, it impliedly waived the requirement of obtaining prior approval from the specified authorities under Section 151 for Section 148A(b). It is well established that this Court while exercising its jurisdiction under Article 142, is not bound by the procedural requirements of law. 130 81. This Court in Ashish Agarwal (supra) directed the assessing officers to "pass orders in terms of Section 148-A(d) in respect of each of the assesses concerned." Further, it directed the assessing officers to issue a notice under Section 148 of the new regime "after following the procedure as required under Section 148-A." Although this Court waived off the requirement of obtaining prior approval under Section 148A(a) and Section 148A(b), it did not waive the requirement for Section 148A(d) and Section 148. Therefore, the assessing officer was required to obtain prior approval of the specified authority according to Section 151 of the new regime before passing an order under Section 148A(d) or issuing a notice under Section 148. These notices ought to have been issued following the time limits specified under Section 151 of the new regime read with TOLA, where applicable.
On bare reading of the above extract of the judgment of Hon'ble Supreme Court in the case of Rajeev Bansal (supra), we find that the Hon'ble Supreme Court had clarified as under: 8.1 Under the substituted provisions of re-assessment as introduced by the Finance Act, 2021, the Assessing Officer is required to obtain prior approval or sanction of the 'Specified Authority' at four stages: (i) at first stage under Section 148A(a); (ii) at second stage under Section 148A(b); (iii) at third stage under Section 148A(d); and (iv) at fourth stage under Section 148. In the case of Ashish Agarwal (supra) the Hon'ble Supreme Court waived off the requirement of obtaining prior approval under section 148A(a) and Section 148A(b) of the Act only. Therefore, the Assessing Officer was required to obtain prior approval of the 'Specified Authority' according to Section 151 of the new regime before passing an order under Section 148A(d) or for issuing a notice under Section 148. 8.2 Under new regime, if income escaping assessment is more than 2025 Aditya Birla Sun Life Insurance Co. Ltd. Rupees 50 lakhs, a reassessment notice could be issued after the expiry of three years from the end of the relevant assessment year only after obtaining the prior approval of the Principal Chief Commissioner or Principal Director General or Chief Commissioner or Director General. 8.3 Section 151(ii) of the substituted provisions prescribes a higher level of authority if more than three years have elapsed from the end of the relevant assessment year. Thus, non-compliance with the provisions of section 151 vitiates the jurisdiction of the Assessing Officer to issue a notice under section 148. 8.4 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.
In the present case the period of three years from the end of the Assessment Year 2016-17 fell for completion on 31st March 2020. Since the expiry date fell during the time period of 20th March 2020 and 31st March 2021 contemplated under Section 3(1) of Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 (for short "TOLA"), the authority specified under Section 151(i) of the new regime could have granted sanction till 30th June 2021. On perusal of the order, dated 13.07.2022, passed under Section 148A(d) of the Act, we find that the aforesaid order was passed after taking approval from Principal Commissioner of Income Tax (Respondent No.2). Since the aforesaid order was passed after the expiry of three years from the end of the Assessment Year 2016-17, as per the substituted provisions of re-assessment, the authority specified under Section 151(ii) of the Act (i.e. Principal Chief Commissioner or Chief Commissioner) was required to grant approval. Accordingly, we conclude that in the present case the approval has been obtained from the authority specified under Section 151(i) of the new regime instead of the authority specified under Section 151(ii) of the new regime.
The Hon'ble Supreme Court in the above case has drawn an illustration in paragraph 78 of it's order in the context of Assessment Year 2017-18, wherein it is categorically held that the authority specified under section 151(i) can accord sanction only upto 30.06.2021. This illustration makes it absolutely clear that when the period of three years from end of relevant Assessment Year expired between 20.03.2020 and 31.03.2021, the extension by virtue of TOLA was upto 30.06.2021 and not beyond. Thus, it can be said that the period of three years from the end of the relevant Assessment Year (here AY 2016-17) expired on 30.06.2021, whereas the Respondent No.1, despite passing the order 2025 Aditya Birla Sun Life Insurance Co. Ltd. on 13.07.2022 in repsect of Assessment Year 2016-17, has obtained approval of Respondent No.2 who is not the authority as prescribed under section 151(ii).
Non-compliance by Respondent No.1 with the provisions contained in Section 148A(d) read with Section 151(ii) vitiates the jurisdiction of the Respondent No. 1 to issue a notice under Section 148 of the Act.
We are clearly of the view that the present matter stands covered by the decision of Hon'ble Supreme Court in the case of UPI v. Rajeev Bansal (supra). We accordingly hold that the order dated 13.07.2022 passed under Section 148A(d) of the Act and the consequential notice issued under section 148 dated 15.07.2022 are bad in law for being violative of the provisions of Section 151(ii) of the Act. Hence they are required to be quashed and set aside.
We, accordingly, set aside the impugned order dated 13.07.2022 passed under section 148A(d), the Notice issued under Section 148 and all other proceedings/orders emanating therefrom and allow the writ Petition in terms of Prayer Clause (a) of the petition.
10. From the above observations of the Hon'ble High Court it is clear that the notice issued beyond 3 years for AY 2016-17 i.e. on 28.07.2022 in assessee's case should have been issued after obtaining the approval of the PCCIT as per the provisions of section 151(ii). Since in the present case the same is issued with the approval of PCIT, applying the ratio in the above decision we hold that the notice u/s.148 is not valid and the subsequent order passed by the AO is liable to be set aside. Accordingly we see no infirmity in the decision of the CIT(A) in holding that the notice u/s.148 as invalid on the ground that the same is issued without the approval of the appropriate authority. The grounds raised by the revenue in this regard are thus dismissed
11. Since we have held the notice u/s.148 and the subsequent proceedings as invalid, the grounds raised by the assessee contending the additions / disallowances on merits have become infructuous.
2025 Aditya Birla Sun Life Insurance Co. Ltd. 12. In result the appeal of the revenue and of the assessee for AY 2015-16 and 2016-17 are dismissed.