NAVIN KUMAR BHARTIA,KOLKATA vs. D.C.I.T., CIRCLE - 40, KOLKATA

Per Rajesh Kumar, AM:

This is an appeal preferred by the assessee against the order of the National Faceless Appeal Centre, Delhi (hereinafter referred to as the “Ld. CIT(A)”] dated 29.07.2025 for the AY 2017-18.

ITA No. 2063/KOL/2025 Navin Kumar Bhartia; A.Y. 2017-18 ITR 46 (SC), dated 03.10.2024 and therefore prayed to quash the impugned assessment order.

ITA No. 2063/KOL/2025 Navin Kumar Bhartia; A.Y. 2017-18 of the period allowed to the assessee for furnishing its reply. The assessee was given time upto20.06.2022, to submit its response and the response was filed on 20.06.2022. Therefore, even applying the statutory extension of 7 days, the outer limit for issuance of notice u/s 148 of the Act was expired on 27.06.2022 (i.e. 20.06.2022 + 7 days). However, the ld. AO passed the order u/s 148A(d) of the Act dated 26.07.2022, and issued notice u/s 148 of the Act on 26.07.2022, which is barred by limitation. The following chart makes the position clear:

Sl. Event Date of Event No. 1 Original Notice issued u/s 148 of the Act 28.06.2021 2 Last date of issuance reopening as Per TOLA 30.06.2021 3 Since the time period available is less than 7 days, the same is extended as per 4th proviso of section 149(1) of the Act 4 Date of supply of information as per the decision of UOI Vs Ashish 26.05.2022 Agarwal along with the notice issued u/s 148A(b) of the Act 5 Due date of furnishing the response to the notice issued u/s 09.06.2022 148A(b) of the Act – Adjournment requested 6 Extended due date of furnishing the response to the notice 20.06.2022 issued u/s 148A(b) of the Act 7 Date of response by the Assessee 20.06.2022 8 Last date for issuance of notice u/s 148 of the Act within the 27.06.2022 surviving time period [20.06.2022 + 7 Days] 9 Order passed u/s 148A(d) of the Act along with the notice issued 26.07.2022 u/s 148 of the Act 4. Considering the facts of the assessee's case in the light of decision of the Hon'ble Apex Court in the case of Rajeev Bansal(supra), we are of the considered opinion that the notice is barred by limitation. The case of the assessee find support from the following decisions:-

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ITA No. 2063/KOL/2025 Navin Kumar Bhartia; A.Y. 2017-18 i. Communist Party of India (Marxist) Vs. Income-tax Department reported in (2025) 174 taxmann.com 925 (Delhi)

ii. Dhanraj Govindram Kella Vs. ITO, reported in (2025) 177 taxmann.com 194 (Gujarat)

iii. Ashitkumar Satischandra Patel Vs. ITO reported in (2025) 179 taxmann.com 188 (Gujarat)

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ITA No. 2063/KOL/2025 Navin Kumar Bhartia; A.Y. 2017-18 portion of the decision of the coordinate Bench in the case of Satish Kumar Birdika Vs ITO (supra), is as under:-

“7. Looking into the above facts there is no dispute that under old regime it was the PCIT who was authorized to grant approval, however, after the amendment w.e.f. 01.04.2021 the new regime came into being force and sanction should be granted by PCCIT. We have gone through the order passed by Hon'ble Supreme court in Rajib Bansal case and the relevant portion of the case is hereby reproduced: "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 Sri krishna (P.) Ltd. v. ITO [1996] 87 Taxman 315/221 ITR 538 (SC)/[1996] 9 SCC 534. A table representing the prescription under the old and new regime is set out below:

Regime Time limits Specified authority Section 151(2) of the old Before expiry of four years Joint Commissioner regime from the end of the relevant assessment year Section 151(1) of the old After expiry of four years Principal Chief regime from the end of the relevant Commissioner or Chief assessment year Commissioner or Principal Commissioner or Commissioner Section 151(i) of the new Three years or less than Principal Commissioner or regime three years from the end of Principal Director or the relevant assessment Commissioner or Director year Section 151(ii) of the new More than three years have Principal Chief regime elapsed from the end of the Commissioner or Principal relevant assessment year Director General or Chief Commissioner or Director General

ITA No. 2063/KOL/2025 Navin Kumar Bhartia; A.Y. 2017-18 (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 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 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 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 Page 6 of 9

ITA No. 2063/KOL/2025 Navin Kumar Bhartia; A.Y. 2017-18 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." We have also gone through the order passed by the ITAT, Ahmedabad Bench and the relevant portion of the order is reproduced herein under: "7. We have given our thoughtful consideration and perused the materials available on record including the Paper Book filed by the Assessee. Section 149 of the Act prescribes time limit for issuance of notice u/s. 148 of the Act. Clause (a) to sub-section (1) of Section 149 prescribes three years limitation and clause (b) of sub-section (1) of Section 149 deals with the cases beyond three years but not more than 10 years have elapsed from the end of the relevant assessment year. Further sub-section (2) of section 149 provides that issuance of notice is subject to the approval given as per the provisions of Section 151 of the Act by the Specified Authority. 7.1. Clause (i) of Section 151 describes the Specified Authority as Principal Commissioner or Principal Director or Commissioner or Director, if three years or less than 3 years have elapsed from the end of the relevant assessment year. Whereas clause (ii) of Section 151 describes the following Officers as the specified authority namely Principal Chief Commissioner or Principal Director, Chief Commissioner or Director General, if more than three years have elapsed from the end of the relevant assessment year. It is undisputed fact, the reopening of assessment in the present case is done beyond three years period. Hence the Specified Authority under clause (ii) of Section 151 namely PCCIT or Principal Director or Chief Commissioner or Director General are the Sanctioning Authority required to approve the reopening of assessment. Whereas in this case, approval was obtained from the PCIT-3, Ahmedabad on 23-08-2022, the same is reproduced as follows: 7.1. Since the Sanctioning Authority for reopening of assessment was obtained from a wrong Specified Authority, the entire reopening itself is bad in law and liable to be quashed. Further this issue is no more res-integra by the land mark decision of the Hon'ble Supreme Court in the case of Union of India vs. Rajeev Bansal reported in [2024] 167 taxmann.com 70 deciding the same against the department as under: 7.2. Further the Bombay High Court in the case of Holiday Developers (P.) Ltd. vs. ITO reported in [2024] 159 taxmann.com 178 held that where more than three years had expired Assessment Year: 2017-18 Satish Kumar Birdika from the end of assessment year 2018-19, sanctioning authority under section 151 (ii) should have been Principal Chief Commissioner and not Principal Page 7 of 9

ITA No. 2063/KOL/2025 Navin Kumar Bhartia; A.Y. 2017-18 Commissioner and, thus, order under section 148A(d) and notice under section 148 issued on basis of approval granted by Principal Commissioner were to be quashed and set aside. 7.3. The Delhi High Court in the case of Ashok Kumar Makhija vs. Union of India reported in [2024] 162 taxmann.com 514 held that where reopening of case was occurring after a lapse of more than three years, appropriate authority for issuance of notice under sections 148 and 148A(b) should be either Principal Chief Commissioner or Principal Director General; approval from principal CIT was not valid. 8. Respectfully following the above judicial precedents, the sanction obtained for reopening of assessment from a wrong Specified Authority is not sustainable in law, consequently the entire reassessment proceedings is liable to be quashed. 9. In the result, the appeal filed by the Assessee is hereby allowed." We further find that similar view has also been taken by the Mumbai Bench, ITAT, in the case of Surya Ferrous Alloys Pvt. Ltd. in ITA No. 1406/Mum/2024 for AY 2017-18 dated 24.12.2024 and Shri DevangAjitJhaveri case. 8. In the present case, the Assessment year 2017-18. The reopening of assessment for the said year was not getting time barred up to 31.03.2021. In fact, under the old provision limitation was expiring on 31.03.2024 so in view of the above said judicial pronouncement sanction is to be given by PCCIT not by PCIT. Accordingly, we find substance in the argument of the Ld. Counsel of the assessee that the approval for reopening is bad in law. Since, the reapproval of reopening is bad in law hence, entire assessment proceedings are hereby quashed. Accordingly, the appeal of the assessee is allowed.” 7. The facts involved the above cited judgments are similar to the present case before us which have already been narrated in the above paragraphs. We thus conclude that, where order u/s. 148A(d) was passed beyond three years from the relevant AY 2017-18 and approval was obtained from Principal CIT instead of the required authority prescribed u/s.151(ii) of the Act, and the non-compliance of such statutory mandate vitiates the jurisdiction of Assessing Officer, rendering the said order u/s. 148A(d) and notice u/s.148 liable to be quashed. For these reasons, the notice issued u/s 148 of the Act as well as the Page 8 of 9

ITA No. 2063/KOL/2025 Navin Kumar Bhartia; A.Y. 2017-18 assessment framed vide order dated 29.07.2025, are also invalid and are hereby quashed.

Order pronounced on 11.09.2026.

Sd/- Sd/- (PRADIP KUMAR CHOUBEY) (RAJESH KUMAR) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) Kolkata, Dated: 11.09.2026 Sudip Sarkar, Sr.PS Copy of the Order forwarded to: 1. The Appellant 2. The Respondent 3. CIT DR, ITAT, 4. 5. Guard file. BY ORDER, True Copy//

(Manish Bhoi) Dy. Registrar Income Tax Appellate Tribunal, Kolkata

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