Loading judgment…
Facts
The assessee appealed an order of the NFAC for AY 2018-19. The notice u/s 148 was issued beyond 3 years from the end of the assessment year. The sanction for the notice was granted by the Principal CIT, not the designated authority (PCCIT).
Held
The Tribunal held that the sanction for issuing notice u/s 148 was not obtained from the competent authority as required by Section 151(ii) of the Act. This violation renders the notice and subsequent assessment order void.
Key Issues
Whether the notice u/s 148 of the Income Tax Act is valid if the sanction is not granted by the designated authority as per Section 151(ii), especially when issued beyond the prescribed time limit.
Sections Cited
148, 151(ii), 250, 147, 144B
AI-generated summary — verify with the full judgment below
Detected automatically from the text. The count shows how many other judgments on BharatTax rely on the same authority.
Income Tax Appellate Tribunal, MUMBAI BENCH “SMC”, MUMBAI
Before: SHRI NARENDER KUMAR CHOUDHRY
O R D E R
Per : Narender Kumar Choudhry, Judicial Member:
This appeal has been preferred by the Assessee against the order dated 20.06.2025, impugned herein, passed by the National Faceless Appeal Center (NFAC)/ Ld. Commissioner of Income Tax (Appeals) (in short Ld. Commissioner) u/s 250 of the Income Tax Act, 1961 (in short ‘the Act’) for the A.Y. 2018-19.
In the instant case, though the notice u/s 148A(d) of the Act was issued within 3 years from the end of the relevant assessment year, however, it is admitted that the notice u/s 148 of the Act was issued beyond 3 years and/or after the elapsing of 3 years from the end of the relevant assessment year, thus, there is a violation of the provisions of section 151(ii) of the Act with regard to sanction taken from the Ld. PCIT but not from the Ld. PCCIT, who is the Competent Authority as designated under the law, and therefore this Court is inclined to quash notice u/s 148 of the Act along with the assessment order dated 20.02.2024 as involved, by respectively following the judgment of the Coordinate Bench of the Tribunal in the case of PCIT vs. Ms. Asha P. Kedia (2025) 174 Taxman.com 99 (Mumbai - Tribunal), wherein the Hon'ble Coordinate Bench of the Tribunal, respectfully following the judgment of the jurisdictional High Court in the case of Vodafone Idea Ltd. vs. Deputy CIT (Writ Petition No. 276 of 2022 decided on 06.02.2024) on the identical issue, ultimately quashed the assessment order itself, having been issued on the basis of identical sanction as involved in this case, by observing and holding as under:
“7. We have given thoughtful considerations to the peculiar facts and circumstances of the case. Admittedly, the Hon'ble Jurisdictional High Court has dealt with such provisos, as involved in the instant case, in the case of Vodafone India Idea Ltd. vs. DCIT (write petition 2768 of 2022 decided on 06.02.2024), wherein it has been held as under: "3. The impugned order and the impugned notice both dated 7th April 2022 state that the Authority that has accorded the sanction Ms. Asha P Kedia is the PCIT, Mumbai 5. The matter pertains to Assessment Year ("AY") 2018-19 and since the impugned order as well as the notice are issued on 7th April 2022, both have been issued beyond a period of three years. Therefore, the sanctioning authority has to be the PCCIT as provided under Section 151 (ii) of the Act. The proviso to Section 151 has been inserted only with effect from 1st April 2023 and, therefore, shall not be applicable to the matter at hand."
In the instant case, admittedly the notice u/s 148 of the Act was issued for reopening of the case on dated 27.07.2022 i.e. after elapsing of three years from the end of the relevant assessment year and therefore as per sub clause (ii) of section 151 of the Act, the specified authority for granting the approval for issuing the notice u/s 148 of the Act, would have been, either Principal Chief Commissioner or Principal Director or where there is no such post then the Chief Commissioner or Director General, for granting the sanction for issuing of notice u/s 148 of the Act, but not the Ld. PCIT-2, Mumbai who has granted the approval in this case and/or authority specified under sub clause (i) of section 151 of the Act. Relevant provisions of law, which are very much clear and the Hon'ble Jurisdictional High Court in the case of Vodafone India Idea Ltd. has also clearly held that proviso to section 151 of the Act has been inserted w.e.f. 01.4.2023 and therefore shall not be applicable to the A.Y. 2018-19. In effect, the Hon'ble High Court has clarified that provisos to section 151 of the Act would be effective from 01.04.2023 onwards and would not be applicable to the prior period. Thus, the impugned notice dated 27.07.2022 u/s 148 of the Act, as issued by the AO in the instant case by taking approval from the Ld. Pr. CIT-2, Mumbai but not from the Ld. Pr. CCIT and in pursuance to that the assessment order dated 23.01.2023 u/s 147 r.w.s. 144 & 144B of the Act, is liable to be quashed being void, ab- initio and thus, the same is quashed accordingly. Thus, the CO is allowed.
As we have quashed the reopening and therefore the appeal of the Revenue has become infructuous and thus the same is liable to be dismissed.
In the result, the CO filed by the Assessee is allowed, whereas the appeal filed by the Revenue stands dismissed.” 3. Thus, considering the peculiar facts and circumstances as stated above, the notice issued u/s 148 of the Act based on the sanction given by the Principal CIT, but not by the designated authority, as prescribed in section 151(ii) of the Act, would entail quashing of the notice u/s 148 of the Act along with the assessment order dated 20.02.2024 u/s 147 read with section 144B of the Act, being passed in pursuance to such notice u/s 148 of the Act.
As the Assessment order is quashed on the legal aspect itself, thus this this Court is inclined not to delve into the merits of the case, as adjudication of the same would prove to be futile exercise.
In the result, the Assessee's appeal is allowed on legal aspect.
Order pronounced in the open court on 10.11.2025.