PRADEEP MADHUKAR SHROFF,MUMBAI vs. INCOME TAX OFFICER- 19(2)(4), MUMBAI, MUMBAI

आयकर अपीलीय अधिकरण, म ुंबई पीठें, म ुंबई INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES, MUMBAI BENCH: C BEFORE SMT. BEENA PILLAI, HON’BLE JUDICIAL MEMBER AND SHRI JAGADISH, HON’BLE ACCOUNTANT MEMBER ITA 6275/MUM/2026 निर्धारण वर्ा/Assessment Year: 2017-18) PRADEEP MADHUKAR INCOME TAX OFFICER- SHROFF 19(2)(4), MUMBAI 73/7TH FLOOR, EMMANUEL ROOM NO 507, 5TH FLOOR, APTS., NEXT TO EDU. BRIDGE PIRAMAL CHAMBER, LAL Vs. INTERNATIONAL SCHOOL, BAUG, PAREL, MUMBAI GRANT ROAD-EAST, MUMBAI, MUMBAI-400012, MUMBAI-400007, MAHARASHTRA MAHARASHTRA अपीलधर्थी Appellant प्रत्यर्थी Respondent

Permanent Account Number of AABPS8172Q Assessee:

अपीलधर्थी द्वारा/Appellant represented by: Shri Atik Jain, AR प्रत्यर्थी द्वारा/Respondent represented by: Shri Ajay Soneji, Sr. DR सुनवाई की तारीख / Date of conclusion of hearing: 02-Sep-2026 घोषणा की तारीख / Date of pronouncement: 07-09-2026 आदेश / ORDER PER SMT. BEENA PILLAI, JUDICIAL MEMBER: Present appeal is filed by the assessee against the order dated 02/03/2026 passed by the National Faceless Appeal Centre (“Ld. CIT(A)”) u/s 250 of the Income-tax Act, 1961 (“the Act”) for A.Y. 2017-18, on the following grounds of appeal:-

ITA 6275/MUM/2026 PRADEEP MADHUKAR SHROFF “Ground 1. On the facts and circumstances of the case and law, the Ld. CIT(A) failed to considered that reassessment proceeding initiated under section 148 which is bad in law and required to be quashed. Ground 2. On the basis of facts and circumstances of the case and law, the Ld. CIT(A) erred in confirming reassessment proceeding under section 147 in violation of provision of section 149(1)(b) of Income Tax Act, 1961 as there is no asset represented in form of asset escaped assessment. Ground 3. On the facts and circumstances of the case and law, the Ld. CIT(A) failed to considered that notice issued under section 148 of Income Tax Act, 1961 without mentioning the DIN Number on notice itself which is violation of CBDT Circular No. 19 of 2019 dated 14.08.2019. Ground 4. On the basis of facts and circumstances of the case and law, the Ld. CIT(A) failed to considered that permission obtained under section 151 of the Act is not in accordance with law. Ground 5. On the basis of facts and circumstances of the case and law, the Ld. AO failed to consider that when no addition made on the basis of reason recorded for reopening, then no other addition can be made while passing assessment order under 147 of Income Tax Act, 1961. Ground 6. On the basis of facts and circumstances of the case and law, the Ld. CIT(A) failed to considered that addition of Rs.25668500 made on account of Short-Term Capital Gain on sale of property acquired under redevelopment by Ld. AO itself is bad in law and deserved to be deleted. Ground 7. On the basis of facts and circumstances of the case and law, the Ld. CIT(A) failed to considered that the Ld. AO erred in computing capital gain without considering the fact that if cost of acquisition claimed as NIL OR absent, then computation provision of section 48 gets failed and no capital gain arises. Ground 8. On the basis of facts and circumstances of the case and law, the Ld. CIT(A) erred in confirming charging of interest under section 234B of Income Tax Act, 1961. Ground 9. On the basis of facts and circumstances of the case and law, the Ld. CIT(A) erred in confirming invocation of penalty proceeding under section 270A and 272A(1)(d) of Income Tax Act, 1961. Ground 10. The appellant reserves the right to amend, modify and file additional grounds of appeal on OR before the hearing.” 2. Brief facts of the case are as under:-

ITA 6275/MUM/2026 PRADEEP MADHUKAR SHROFF The assessee filed his return of income on 29/03/2018 declaring total income of Rs.8,40,000/-. Information was thereafter received that the assessee had sold an immovable property during the relevant previous year for a consideration lower than its stamp- duty value. As recorded by the Ld. AO, the sale consideration appearing in the agreement was Rs.1,23,50,000/-, whereas the stamp-duty value was Rs.1,33,18,500/-, resulting in a difference of Rs.9,68,500/-.

2.1. A notice u/s 148 was originally issued on 30/06/2021. Consequent to the judgment of the Hon’ble Supreme Court in Union of India vs. Ashish Agarwal reported in (2022) 444 ITR 1 (SC), the said notice was treated as a notice u/s 148A(b) under the substituted reassessment regime. Thereafter, notice u/s 148A(b) was issued on 29/05/2022 and, subsequently, an order u/s 148A(d) and fresh notice u/s 148 were issued on 30/07/2022.

2.2. The assessment proceedings were ultimately completed ex parte u/s 147 r.w.s. 144 and 144B of the Act. During the assessment proceedings, the Ld. AO obtained information from the purchaser and treated an aggregate amount of Rs.2,56,68,500/- as Short Term Capital Gain in the hands of the assessee. The total income was accordingly assessed at Rs.2,65,08,500/-.

Aggrieved, by the assessment order, the assessee preferred appeal before the Ld.CIT(A).

ITA 6275/MUM/2026 PRADEEP MADHUKAR SHROFF that the original assessment was passed ex parte, set aside the assessment to the file of the Ld.AO for passeng fresh assessment after granting reasonable opportunity to the assessee.

Aggrieved by the order so passed, the assessee is in appeal before this Tribunal.

5.1. The Ld.AR relianced on the decision of Hon’ble Bombay High Court in case of Alag Property Construction (P.) Ltd. vs. ACIT reported in (2025) 179 taxmann.com 578. It was submitted that the Hon’ble Bombay High Court held that, once an order u/s 148A(d) and notice u/s 148 are issued after expiry of three years from the end of the relevant assessment year, sanction is required as per

ITA 6275/MUM/2026 PRADEEP MADHUKAR SHROFF the authority prescribed u/s.151(1)(ii) of the Act. He submitted that the said decision also considered the effect of TOLA and decision of Hon’ble Supreme Court in case of UOI vs.Rajeev Bansal reported in (2024) 496 ITR 46.

5.2. The Ld. DR relied upon the orders passed by the authorities below.

We have perused the submissions advanced by both sides in light of the record placed before us.

6.1. There is no dispute regarding the relevant dates. The assessment year before us is A.Y. 2017-18. The order u/s 148A(d) and the notice u/s 148 were issued on 30/07/2022, i.e., after expiry of three years from the end of the relevant assessment year. The material placed before us further reveals that the approval immediately preceding the said proceedings was obtained from PCIT-19, Mumbai, vide approval dated 29/07/2022.

6.2. Section 151, as applicable under the substituted reassessment regime, specifically prescribes the authority competent to grant approval. In a case where more than three years have elapsed from the end of the relevant assessment year, the specified authority is the authority mentioned in clause (ii) of section 151. The Hon’ble Bombay High Court in case of Alag Property Construction (P.) Ltd. vs. ACIT (supra) considered identical issue relating to A.Y. 2017-18. The Hon’ble Court, after considering

ITA 6275/MUM/2026 PRADEEP MADHUKAR SHROFF the decisions of the Hon’ble Supreme Court in Union of India vs. Rajeev Bansal (supra), held that once the order u/s 148A(d) and notice u/s 148 were issued after expiry of three years from the end of A.Y. 2017-18, the approval was required to be obtained from the authority specified in section 151(1) (ii), namely the PCCIT/CCIT, as applicable.

6.3. The facts before us are squarely covered by the aforesaid judgment of the Hon’ble Jurisdictional High Court. In the present case also, the order u/s 148A(d) and notice u/s 148 were issued on 30/07/2022 after expiry of three years from the end of A.Y. 2017-18; however, approval was obtained from the PCIT and not from the specified authority contemplated u/s 151(ii). Grant of sanction by the statutorily prescribed specified authority is a jurisdictional precondition for valid assumption of jurisdiction u/s 148. Approval by an authority other than the authority mandated by the statute cannot confer jurisdiction upon the Ld. AO.

We accordingly hold that the notice issued u/s 148 and the consequential reassessment proceedings suffer from a fundamental jurisdictional defect and deserves to be quashed.

Accordingly, Ground No.4 raised by the assessee stands allowed.

ITA 6275/MUM/2026 PRADEEP MADHUKAR SHROFF 7.1. Ground No. 10 being general in nature requires no separate adjudication.

In the result, the appeal filed by the assessee stands allowed.

Order pronounced in the open court on 07-09-2026

Sd/- Sd/- JAGADISH BEENA PILLAI ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai Dated: 07-09-2026 Shamik Sr.P.S. Copy to: PRADEEP MADHUKAR SHROFF, 73/7TH FLOOR, EMMANUEL APTS., NEXT TO EDU. BRIDGE 1 INTERNATIONAL SCHOOL, GRANT ROAD-EAST, MUMBAI, MUMBAI-400007, MAHARASHTRA INCOME TAX OFFICER- 19(2)(4), MUMBAI, ROOM NO 507, 5TH FLOOR, PIRAMAL 2 CHAMBER, LAL BAUG, PAREL, MUMBAI, MUMBAI-400012, MAHARASHTRA 3 THE PCIT / CIT, 4 THE D.R., ITAT, MUMBAI BENCH 5 GUARD FILE TRUE COPY

ASSISTANT REGISTRAR / SR. PRIVATE SECRETARY I.T.A.T., MUMBAI