JOHN ROASE VEDA SINGH AIR PACKIA SINGH,KANYAKUMARI vs. ITO, WARD-1, NAGERCOIL

PDF · subscribers
ITA 1552/CHNY/2026Status: DisposedITAT Chennai01 September 2026AY 2018-1910 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the notice issued under Section 148 was bad in law because the approval for reopening was not obtained from the specified authority as per Section 151(ii) of the Act, as the reopening was initiated beyond three years. Consequently, the reassessment proceedings were quashed.

What were the facts?

The assessee's assessment for AY 2018-19 was reopened. The notice under Section 148 was issued on April 7, 2022, which was beyond three years from the end of the assessment year. The approval for reopening was obtained from the Principal Commissioner of Income Tax (PCIT), instead of the higher authorities specified for cases beyond three years.

What were the issues?

Whether the notice issued under Section 148 for reopening assessment beyond three years is valid when approval is obtained from the Principal Commissioner of Income Tax instead of the higher authorities specified in Section 151(ii).

Which sections of the Income-tax Act were involved?

Section 147,Section 148,Section 148A,Section 149,Section 151

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘B’ BENCH, CHENNAI

Before: SHRI MANU KUMAR GIRI & SHRI S. R. RAGHUNATHA

For Respondent: Shri. Banoth Akhil Ram Naik, JCIT
Hearing: 15.07.2026Pronounced: 01.09.2026

आदेश /O R D E R

PER S.R. RAGHUNATHA, AM :

The present appeal of the assessee is directed against the order dated 05.03.2026 of the Learned Commissioner of Income Tax (Appeals) , NFAC, Delhi (hereinafter referred to as “the Ld.CIT(A)”), arising out of the assessment order dated 07.09.2023 passed u/s.147 of the Income-tax Act, 1961 (hereinafter referred to as “the Act”) by the Assessment Unit, National Faceless Assessment Centre, Delhi (hereinafter referred to as “the Act”) pertaining to the Assessment Year 2018-19.

:-2-: ITA. No.1552/Chny/2026

2.

The assessee, inter alia, has raised several grounds of appeal including legal issue challenging validity of the notice issued u/s.148 of the Income Tax Act, 1961 (hereinafter referred to as "the Act”) being bad in law for not obtaining approval of the competent authority. According to the Ld.AR, when the notice u/s.148 of the Act was issued on 07.04.2022 which was undisputedly beyond period of three year, therefore, approval was required to be taken as per provisions of the amended section 151 of the Act from the Principal Chief Commissioner or Principal Director General or Chief Commissioner or Director General of Income tax and not from the Principal Commissioner of Income Tax as held by the Hon’ble Supreme Court in the case of UoI v. Rajeev Bansal reported in [2024] 167 taxmann.com 70 (SC). The Ld.AR has invited our attention to the decision of the Hon’ble Supreme Court in the case of Rajeev Bansal (supra) especially to Para No.73 onwards and to a chart reproduced therein; and submitted that assessee’s case would fall in the last column of the chart, since more than three (3) years have lapsed from the relevant assessment year.

3.

The Ld.AR further submitted that in the present case, the AO issued notice for re-opening of assessment for AY 2018-19 as per new regime which had come into operation from 01.04.2021, and issued notice u/s.148A(b) of the Act on 22.03.2022 [after prior approval of the Principal Commissioner of Income Tax (Ld.PCIT, Madurai-1)], allowing the assessee to file reply by 29.03.2022; and then the AO issued order u/s.148A(d) of the Act on 07.04.2022 after approval by the same officer/Ld.PCIT, Madurai-1, and then issued notice u/s.148 of the Act 07.04.2022. In the aforesaid, undisputed factual background, according to the Ld.AR, prior approval taken from the Ld.PCIT (Principal Commissioner of Income Tax) is bad in law, since three (3) years have lapsed from the end of the relevant assessment year, when the notice u/s 148 was issued by AO on 07.04.2022. For buttressing such a contention, he drew our attention to sub-section 151, which prescribes the specified authority that has to accord sanction for issuance of reopening notice. According to Ld.AR, without

:-3-: ITA. No.1552/Chny/2026

sanction/approval u/s.151 of the Act from the Income Tax Authority as specified therein, the AO can’t issue reopening notice u/s.148 of the Act. Accordingly, in the present case, since more than three (3) years have elapsed from the end of the relevant assessment year, the specified authority as per sub clause (ii) of section 151, to sanction issue of notice u/s.148 of the Act, was the Principal Chief Commissioner or Principal Director General or where there is no Principal Chief Commissioner or Principal Director General, then, Chief Commissioner or Director General. Since grant of sanction by the appropriate/specified authority u/s.151 of the Act is a pre-condition for the AO to assume jurisdiction u/s.148 of the Act to issue reopening of assessment notice, according to Ld.AR, valid sanction by the appropriate/specified authority u/s.151 of the Act, is sine qua non for AO to usurp reopening jurisdiction. Therefore, the Ld.AR asserted that notices issued by the AO dated 07.04.2022 u/s.148A(d) of the Act as well as u/s.148 of the Act dated 07.04.2022 are bad in law.

4.

Per contra, the Ld.DR submitted that when notice u/s.148A(b) of the Act was issued on 22.03.2022, which was an event before 31.03.2022 (i.e. before three years from end of the relevant assessment year), the notice issued u/s.148 of the Act on 07.04.2022 doesn’t affect the notice u/s.148 of the Act for validly reopening the AY 2018-19. Therefore, the Ld.DR doesn’t want us to interfere with the action of the AO taking approval from the ld.PCIT for re- opening the case of the assessee, since it was initiated on 22.03.2022 i.e. before 31.03.2022 viz., before three years from the end of the relevant assessment year.

5.

Heard both the parties, and perused the records, and carefully gone through the order of the Hon’ble Supreme Court in Rajeev Bansal (supra), and notes that in the present case, three (3) years’ time limit for AY 2018-19 falls for completion on 31.03.2022. In other words, since three (3) years from the relevant assessment year lapsed on 31.03.2022 for AY 2018-19, the authority empowered u/s.151(1) of the Act to approve reopening on or before 31.03.2022 is the Principal Commissioner of Income Tax (PCIT), but, where sanction need

:-4-: ITA. No.1552/Chny/2026

to be given on or after 01.04.2022, then approval/sanction should be given by the authorities empowered under clause (ii) of section 151 of the new regime i.e. Principal Chief Commissioner of Income Tax, and in his absence, the Chief Commissioner of Income Tax.

6.

Reverting back to the present case, the AO is noted to have issued notice u/s.148A(b) of the Act on 22.03.2022 with prior approval of the Ld.PCIT, which action of AO is as per clause (i) of sub-section 151 and hence, in conformity with the law; but, after the time given for assessee to have filed his response, the AO is noted to have passed the order u/s.148A(d) of the Act on 07.04.2022 as well as issued notice u/s.148 of the Act on 07.04.2022 with the prior approval of the Principal Commissioner, Madurai-1, which notices are not as per clause (ii) of sub-section 151, which is the requirement of law, because the impugned notices issued u/s 148 was after 31.03.2022. Since three years have elapsed from end of the relevant assessment year, when the AO issued the jurisdictional notice u/s 148, the AO ought to have taken sanction from the specified authority as given in clause (ii) of section 151 of the Act i.e. the Principal Chief Commissioner or Principal Director General or where there is no Principal Chief Commissioner or Principal Director General, then, Chief Commissioner or Director General. Admittedly, in this case, since the AO has taken sanction for issue of notice u/s 148 from authority specified under clause (i) of section 151 i.e. Principal Commissioner, Madurai-1 and not of the specified authority under clause (ii) of section 151, we find that the AO didn’t get valid sanction for issuing reopening notice u/s 148 of the Act on 07.04.2022. And since AO didn’t obtain the sanction from the specified authority as specified under clause (ii) of section 151, we are of the view, the assumption of jurisdiction by AO to issue the re- assessment notice u/s.148 of the Act for AY 2018-19, is bad in law.

7.

It is further noted that this legal issue is no longer res integra and note that the aforesaid view of ours have been endorsed by the Hon’ble Jurisdictional High Court in the case of Core Logistic Company V ACIT in [2025] 175 taxmann.com 453 (Madras) wherein their lordships held as under: -

:-5-: ITA. No.1552/Chny/2026

“9. A perusal of Section 151(i) would show that, the specified authority for the purpose of issuing notice under Section 148 within a period of three years from the end of the relevant assessment year is, the Principal Commissioner or Principal Director or Commissioner or Director. Further, in terms of provision of Section 149, three-year time period is fixed for issuance of 148 notice, in the event of the amount is below 50 lakhs. In the present case, the amount involved is Rs.3,65,09,748/-, which is more than 50 lakhs. 148 notice was issued on 25.07.2022, which is beyond the period of three years. So admittedly, the approval has to be obtained from the Principal Chief Commissioner or Principal Director General or Chief Commissioner or Director General as defined under Section 151(ii). But, in the present case, the approval was obtained from the Principal Commissioner in terms of Section 151(i) and no approval was obtained before issuance of 148 notice in terms of provision of Section 151(ii), which is mandatory. Therefore, the notice under Section 148 was issued in the present case in violation of provision of Section 151(ii) of the Income Tax Act. In view thereof, the initiation of proceedings itself is without any jurisdiction. Hence, the same is liable to be quashed.” 8. Respectfully following the binding decision of Hon’ble Jurisdictional High Court in the case of Core Logistic Company (supra), we allow the legal issue raised by the assessee and quash the notice issue u/s.148 of the Act dated 07.04.2022 being bad in law for not obtaining the prior approval of the authorities empowered under sub-clause (ii) of section 151 of the Act. Since the legal issue is held in favour of the assessee, which strikes at the root of the jurisdiction of the AO to have issued notice u/s.148 of the Act, we are not inclined to discuss the merit of the addition made in the re-assessment order dated 07.09.2023, which is null in eyes of law and rendered academic. Hence appeal of assessee is allowed.

9.

Before parting, we would like to deal with the contentions of the Ld.DR that proviso to section 151A of the Act contemplates exclusion of time provided to the tax-payer to respond to show cause notice u/s.148A(b) of the Act to the date of actual passing of the order u/s.148 of the Act, which we note is no longer res-integra as well as the contention that since approval was granted to issue notice u/s.148A(b) prior to Mach, 2022, no separate sanction is required to be obtained from PCCIT. Such contentions of Revenue have been dealt with by this Tribunal in the case of “Meganapuram Primary Agricultural Cooperative

:-6-: ITA. No.1552/Chny/2026

Credit Society vs PCIT (ITA No.895/Chny/2025 dated 19.09.2025 where it has been held that:

“46. contemplates exclusion of time provided to the tax payer to response to Show Cause Notice u/s. 148A(b) of the Act to the date of actual passing of the order u/s. 148A(d) of the Act/notice u/s. 148 of the Act, which proviso reads as follows: "Provided that the period of three years for the purposes of clause (i) shall be computed after taking into account the period of limitation as excluded by the third or fourth or fifth provisos or extended by the sixth proviso to sub- section (1) of section 149." 47. However, we find that the proviso to Section 151 of the Act was only introduced by way of Finance Act, 2023, with effect from 01.04.2023, i.e. the said amendment was introduced only after the sanction was granted on the present case / not available at the time of recording of sanction in terms of Section 151 of the Act in the case of the appellant herein. 48. The Ld. AR took us through the Finance Bill, 2023, wherein clause 71, proposing the said amendment to Section 151 as well the notes of clauses to Finance Bill 2023, where relevant note to the said amendment reads as follows: Clause 71 of the Bill seeks to amend the section 151 of the Income- tax Act relating to sanction for issue of notice. It is proposed to amend clause (ii) of the said section to provide that the specified authority for the purposes of section 148 and section 148A shall be the Principal Chief Commissioner or Principal Director General or Chief Commissioner or Director General if more than three years have elapsed from the end of the relevant assessment year. It is further proposed to insert a proviso in the said section so as to provide that the period of three years for the purposes of clause (i) shall be computed after taking into account the period of limitation as excluded by the third or fourth or fifth provisos or extended by the sixth proviso to sub-section (1) of section 149. These amendments will take effect from 1st April, 2023. 49. Thus, it is an irrefutable fact that the amendment brought in by Finance Act, 2023 in introducing the proviso to Section 151 of the Act by giving effect to the exclusion of time limit by operation of 3rd to 5th proviso to Section 149(1) of the Act would take effect only from 01.04.2023. 50. Hence, it can be said that the said amendment would not come to the rescue of the revenue on the facts of the present case in view of the fact that the notice u/s. 148 as well the order u/s. 148A(d) of the Act being issued/passed well prior to the introduction of the said amendment, i.e. on 19.04.2022.

:-7-: ITA. No.1552/Chny/2026

51.

Before us, the Ld.DR argued that the said amendment introduced by Finance Act, 2023 ought to be reckoned as clarificatory and would have retrospective applicability, thereby validating the sanction accorded by the PCIT, Madurai 1 on the facts of the present case. He further relied on the judgement of the Hon'ble Calcutta High Court in the case of Giriraj Commercial (P.) Ltd. v. Union of India reported in 169 taxmann.com 168 in support of his contentions. 52. This argument of the ld.DR is unable to be countenanced by us for the simple reason that the said amendment was introduced specifically with effect from 01.04.2023 and the plain reading of the notes on clauses as well as the memorandum to Finance Act, 2023 leave no room whatsoever to interpret it otherwise. Moreover, we are not inclined to accept the argument of the Department since the AO could not have foreseen such an amendment while passing the order u/s.148A(d) of the Act / issuing the notice u/s.148 of the Act nor the PCIT, Madurai 1 could have foreseen such amendment while according sanction in terms of Section 151 of the Act. 53. Hence for the reasons discussed above, we hold that the amendment to Section 151 of the Act, introduced by Finance Act, 2023, with effect from 01.04.2023 cannot be reckoned to have retrospective applicability and on this ground we reject the argument put forth by the Id. DR. 54. It was further argued by the Id.DR, that the approval granted by the competent authority, i.e. PCIT, Madurai - 1 to the AO for issuing the notice u/s.148A(b) of the Act vide approval dated 23.03.2022 mandated by Ist proviso to Section 148 of the Act would suffice the requirement as per the Section 151 of the Act and as such there was no requirement for the AO to obtain approval / sanction once again by the competent authority for issuing the notice u/s. 148 of the Act/passing of the order u/s. 148A(d) of the Act. 55. We find that the 1st proviso to Section 148 of the Act as per Finance Act, 2021 reads as follows: "Provided that no notice under this section shall be issued unless there is information with the Assessing Officer which suggests that the income chargeable to tax has escaped assessment in the case of the assessee for the relevant assessment year and the Assessing Officer has obtained prior approval of the specified authority to issue such notice." Thus, on the facts of the present case, the Show Cause Notice u/s. 148A(b) of the Act was issued upon the assessee herein only upon prior approval of the competent authority, PCIT, Madurai - 1. But whether this sanction would also be available / extended to the issuance of notice u/s.148 of the Act/passing of the order u/s. 148A(d) of the Act by the AO by reckoning it was a fit case for issuance of such notice u/s.148 of the Act? 56. We are unable to further accept this argument of the Id.DR. because if it were to be accepted, it would result in a scenario wherein the competent authority was according sanction / approval in terms of Section 151 of the Act for issuing notice u/s.148 of the Act even prior to reply of the assessee to the Show Cause Notice u/s. 148A(b) of the Act and even prior the decision of the AO in reckoning whether it was a fit case or not for issuing notice u/s. 148 of the Act. 57. Furthermore, if the said argument were to be accepted, then the very purpose behind introduction of provisions in Section 148A of the Act by way of Finance Act, 2021 to grant an opportunity to the tax payer to demonstrate

:-8-: ITA. No.1552/Chny/2026

his case for dropping the proceedings before issuing notice u/s. 148 of the Act would stand defeated. 58. Thus, on the facts of the present case, we find that although the sanction was granted to the AO for issuing the Show Cause Notice u/s.148A(b) of the Act, a separate sanction is to be granted for the purpose of issuance notice u/s. 148 of the Act as well as the passing of the order u/s. 148A(d) of the Act, in the event of the AO finding it fit to do so. Hence, we reject this argument of the ld.DR also.” 10. Further, it is noted that in a similar case where notice was issued by the AO u/s.148A(b) on 23.03.2022 (i.e. before 31.03.2022, albeit for AY 2015-16, six years being on 31.03.2022) and the notice u/s.148 was issued in that case on 01.04.2022, the Tribunal is noted to have not accepted the Revenue’s contention regarding extended time of 7 days by holding as under :-

“5."The Ld. Ld. DR on the other hand submitted that in assessee's case A the AO issued notice under section 148A(b) on 22.03.2022 and after enquiry passed the order under section 148A(d) on 31.03.2022. The Id. DR further argued that as per the 3rd proviso to section 149 of the Act for the purpose of computing the period of limitation the time or the extended time allowed to the assessee as per the showcause notice issued under section 148A(b) or the period during which the proceeding under section 148A is stayed by an order or injunction of any Court shall be excluded. The Id. DR also submitted that as per the 4th proviso to section 149(1) if the additional time during which the proceedings were stayed is less than seven days, the AO gets the extended period for issue of notice by seven days. Therefore the Id. DR submitted that in assessee's case the extended time would apply whereby the AO would get time till 07.04.2022 for issuing notice under section 148 of the Act. In the instant case, since the notice was issued on 01.04.2022, the Ld.DR submitted that the same is not barred by period of limitation. 6……. 7…….. 8……… 9…….. 10. The argument of the Ld.DR is that the time allowed to the assessee to respond to the notice issued under section 148A(b) i.e., from 22.03.2022 to 29.03.2022 should be excluded as per the third proviso to section 149(1). We are of the considered view, for the purpose applying the exclusion period, the notice should first survive the test of being issued either under section 149(1)(a) or 149(1)(b) under the new regime. In the given case the notice under section 148 of the Act for AY 2015-16 does not survive the test by virtue of the first proviso and therefore the question of applying the third proviso for calculating the time limit does not arise. In this regard, the Hon'ble Jurisdictional High Court in the case of Sridhar Lokesh vs. ITO in WP No.16526 of 2022 (judgment dated 28.11.2024) was considering the following prayer: -

:-9-: ITA. No.1552/Chny/2026

“Writ Petition filed under Article 226 of the Constitution of India, to issue a writ of certiorari to call for the records on the file of the Respondent and quash the impugned order under Section 148A(d) of the Act in PAN:ADDPL2229A dated 04.04.2022 in DIN & Notice No.ITBA/AST/F/1484/2022-23/1042464779(1) for the AY 2015-16 along with the impugned notice no I issued under Section 148A(b) of the Act in PANADDPL22294 dated 23.03.2022 in DIN & Notice No. ITBA/AST/F/148A(SCN)/2021-22/1041356299(1) for the AY 2015-16 and the impugned notice No.2 under Section 148 of the Act in PAN ADDPL22294 dated 04.04.2022 in DIN & Notice No.ITBA/AST/S/148_1/2022-23/1042466733(1) for the AY 2015-16.” 11. In disposing off the above prayer, the Hon'ble Jurisdictional High Court held as follows: - “2. The issue, as on date is covered by a decision of the Division Bench of the Bombay High Court in Hexaware Technologies Ltd. Vs. Assistant Commissioner of Income Tax [(2024) 162 taxmann.com 225 (Bombay)]. In paras 29 and 30, the Court has examined the issue in the light of the 1st and 3rd proviso to Section 149 of the Income Tax Act, 1961 as in force with effect from 01.04.2021. The 3rd proviso to Section 149 (1) is now the Sth proviso to Section 149 (1) with effect from 01.04.2023. 3. Although, the submissions made by the learned counsel for the respondents appears to be more attractive, I am bound by the decision of the Division Bench of the Bombay High Court in the above case, which had followed an earlier decision rendered in Godrej Industries Vs. The Assistant Commissioner of Income Tax and Ors. rendered on 28.02.2024." 12. In light of the aforesaid discussion and relying on the judicial pronouncements cited supra, we hold that the notice issued u/s.148 of the Act dated 01.04.2022 is barred by limitation. Consequently, the reassessment proceedings based on an invalid notice is quashed and addition made therein is deleted. Since, we have adjudicated the legal ground, the grounds raised on merits is not adjudicated and is left open. It is ordered accordingly.” 11. We further find that the Hon’ble Division Bench of the Madras High Court, in the case of PCIT v. Chokkalingam Thangavel, in T.C.A. No.38 of 2026, dated 12.06.2026, upheld the order of the Tribunal quashing the notice issued u/s.148 of the Act and the consequential assessment order, on the ground that the mandatory approval of the Pr. Chief Commissioner of Income Tax (PCCIT) had not been obtained before issuance of the notice where the reassessment proceedings were initiated beyond a period of three years.

:-10-: ITA. No.1552/Chny/2026

12.

In light of the discussion (supra), we allow the legal issue raised by the assessee by allowing the legal ground of appeal raised by the assessee.

13.

In the result the appeal of the assessee is allowed.

Order pronounced in the court on 01st September, 2026 at Chennai.

Sd/- Sd/- (मनु कुमार गिरर) (एस. आर. रघुनाथा) (MANU KUMAR GIRI) (S. R. RAGHUNATHA) न्यागिक सदस्य/Judicial Member लेखासदस्य/Accountant Member

चेन्नई/Chennai, धदनांक/Dated, the 01st September, 2026. Devadas

आदेश की प्रधतधलधप अग्रेधर्त/Copy to: 1. अपीलाथी/Appellant 2. प्रत्यथी/Respondent 3.आयकर आयुक्त/CIT– Chennai/Coimbatore/Madurai/Salem 4. धवभागीय प्रधतधनधि/DR 5. गार्ा फाईल/GF Digitally signed by DEVADAS DEVADAS GOPALANACHARY GOPALANACHARY Date: 2026.09.03 10:26:37 +05'30'

More judgments on Section 147

All 49,210 judgments and leading authorities on Section 147 →

Latest GST High Court judgments

Search GST case law →