INCOME TAX OFFICER, WARD-2(1), CHANDIGARH, CHANDIGARH vs. DEVINDER KUMAR SINGLA, CHANDIGARH

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ITA 170/CHANDI/2026Status: DisposedITAT Chandigarh01 September 2026AY 2016-177 pages

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

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that the assessment proceedings were vitiated due to the lack of sanction from the appropriate authority (Pr. CCIT/Pr. CIT) under Section 151(ii). Consequently, the revenue's appeal became academic.

What were the facts?

The revenue appealed an order quashing an assessment, arguing the notice was time-barred. The assessee's cross-objection contended the assessment was vitiated due to improper sanction under Section 151.

What were the issues?

Whether the assessment proceedings are vitiated due to the improper sanction obtained under Section 151 for issuing a notice under Section 148 when more than three years had elapsed and the escaped income exceeded Rs. 50 Lacs.

Which sections of the Income-tax Act were involved?

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

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “A” BENCH, CHANDIGARH

Before: HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM & HON’BLE SHRI RAJESH DAMODARLAL SHARMA, JM

Heard together (2 matters)

ITA No.170/Chandi/2026
C.O. No.18/Chandi/2026

Read from the judgment's own cause title. This page is filed under one of them.

आदेश / O R D E R Per Bench

1.

Aforesaid appeal by revenue for Assessment Year (AY) 2016-17 arises out of an order of Ld. Commissioner of Income Tax (Appeals), NFAC [CIT(A)] dated 19.11.2025 in the matter of an assessment framed by Ld. AO u/s 147 r.w.s. 144B of the Act on 23.05.2023. The sole grievance of the revenue is that assessment order has been quashed by Ld. CIT(A) on the ground that the notice issued u/s 148 on 30.07.2022 was time barred and without jurisdiction. Therefore, order passed u/s 148A(d) dated 30.07.2022 and final assessment order dated 23.05.2023 was quashed by following the decision of Hon’ble Supreme Court in the case of Ashish Agarwal (444 ITR 1) as followed by subsequent decisions of High Courts and Tribunal. Aggrieved, the revenue is in further appeal before us. 2. The assessee has also filed cross-objections (CO) which is delayed by 18 days. Since the delay is minor one, the same is condoned and CO is admitted for adjudication. In this CO, the assessee has contended that the approval u/s 151 has been accorded by Ld. Pr. CIT under clause (i) whereas competent authority to issue such sanction was Pr. Chief Commissioner / Chief Commissioner under clause (ii) since more than three years had elapsed and the quantum of escaped income was more than Rs.50 Lacs. Therefore, the assessment proceedings are without jurisdiction. This fact remain uncontroverted before us.

3.

The basic facts are not in dispute. Upon perusal of table of dates and events as placed on record, it could be seen that initially, a notice u/s 148 was issued by Ld. AO in pre-amended law on 13.04.2021 which is beyond three years from AY 2016-17. Subsequently, Hon’ble Supreme Court in the decision of Ashish Agarwal (supra) directed that all such notices are to be treated as notice u/s 148A(b). Following the same, notice u/s 148A(b) was issued by Ld. AO again on 24.05.2022 alleging escapement of income of Rs.99.22 Lacs. The assessee replied to the same on 07.06.2022 and approval / sanction u/s 151 for reassessment was accorded by Pr. CIT-1, Chandigarh on 29.07.2022. Thereafter, Ld. AO passed order u/s 148A(d) on 30.07.2022 and issued notice u/s 148 on 30.07.2022. The assessee filed return of income on 28.08.2022 and finally, the assessment order was passed on 23.05.2023 making addition of Rs.99.22 Lacs in the hands of the assessee. The Ld. CIT(A), following various decisions, held that notice issued u/s 148 on 30.07.2022 was time barred and the same would vitiate the entire assessment proceedings. However, the assessee, in its cross-objections, has pleaded that the assessment proceedings would be vitiated for want of proper sanction also. 4. We find that identical issue of sanction stood covered in assessee’s favor by the decision of Hon’ble High Court of Madras in the case of Core Logistic Company (WP No.18168 of 2023 dated 05.06.2025) holding as under: -

6.

In the present case, the issue is pertaining to the assessment year 2016-2017. The relevant law applicable for issuance of notice under Section 148 is as follows:

"148. Before making the assessment, reassessment or recomputation under section 147, and subject to the provisions of section 148A. the Assessing Officer shall serve on the assessee a notice, along with a copy of the order passed, if required, under clause (d) of section 148A, requiring him to furnish within such period, as may be specified in such notice, a return of his income or the income of any other person in respect of which he is assessable under this Act during the previous year corresponding to the relevant assessment year, in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed; and the provisions of this Act shall, so far as may be, apply accordingly as if such return were a return required to be furnished under section 139: 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: [Provided further that no such approval shall be required where the Assessing Officer, with the prior approval of the specified authority, has passed an order under clause (d) of section 148A to the effect that it is a fit case to issue a notice under this section.] Explanation 1 - For the purposes of this section and section 148A, the information with the Assessing Officer which suggests that the income chargeable to tax has escaped assessment means, (1) any information [***] in the case of the assessee for the relevant assessment year in accordance with the risk management strategy formulated by the Board from time to time; (ii) any audit objection to the effect that the assessment in the case of the assessee for the relevant assessment year has not been made in accordance with the provisions of this Act, or (iii) any information received under an agreement referred to in section 90 or section 90A of the Act; or (iv) any information made available to the Assessing Officer under the scheme notified under section 135A or (v) any information which requires action in consequence of the order of a Tribunal or a Court Explanation 2 For the purposes of this section, where,

(1) a search is initiated under section 132 or books of account, other documents or any assets are requisitioned under section 132A, on or after the 1st day of April, 2021, in the case of the assessee; or (ii) a survey is conducted under section 133A, other than under sub-section (2A) 22[***] of that section, on or after the 1st day of April, 2021, in the case of the assessee; or (iii) the Assessing Officer is satisfied, with the prior approval of the Principal Commissioner or Commissioner, that any money, bullion, jewellery or other valuable article or thing, seized or requisitioned under section 132 or section 132A in case of any other person on or after the 1st day of April, 2021, belongs to the assessee; or (iv) the Assessing Officer is satisfied, with the prior approval of Principal Commissioner or Commissioner, that any books of account or documents, seized or requisitioned under section 132 or section 132A in case of any other person on or after the 1st day of April, 2021, pertains or pertain to, or any information contained therein, relate to, the assessee, the Assessing Officer shall be deemed to have information which suggests that the income chargeable to tax has escaped assessment in the case of the assessee [where] the search is initiated or books of account, other documents or any assets are requisitioned or survey is conducted in the case of the assessee or money, bullion, jewellery or other valuable article or thing or books of account or documents are seized or requisitioned in case of any other person. Explanation 3. For the purposes of this section, specified authority means the specified authority referred to in section 151]." 7. A perusal of the above provision would show that, before issuing any notice under Section 148, the Assessing Officer has to obtain prior approval of the specified authority to issue such notice. The specified authority is also defined in explanation of the above provision. As per the above provision, specified authority is the authority who referred to in Section 151. 8. At this juncture, it would be relevant to extract the provision of Section 151, which is as follows: "Specified authority for the purposes of Section 148 and Section 148A shall be: (i) Principal Commissioner or Principal Director or Commissioner or Director, if three years or less than three years have elapsed from the end of the relevant assessment year;

(ii) 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." 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. 10. Accordingly, the impugned proceedings of the 3rd respondent dated 30.05.2023 is hereby quashed. 11. In the result, this Writ Petition stands allowed. Consequently, connected miscellaneous petitions are closed

We find that identical facts exist in the present appeal. Respectfully following the same, we would hold the assessment proceedings stood vitiated for want of sanction of appropriate authority i.e., Ld. Pr. CCIT / Pr. CIT u/s 151(ii). Consequently, delving into revenue’s appeal has been rendered academic in nature.

5.

The assessee’s cross-objection stand allowed. The revenue’s appeal stand dismissed as infructuous. Order pronounced on 01st September, 2026

-Sd- -Sd- (RAJESH DAMODARLAL SHARMA) (MANOJ KUMAR AGGARWAL) JUDICIAL MEMBER ACCOUNTANT MEMBER AS Dated: 01-09-2026 आदेश की �ितिलिप अ�ेिषत /Copy of the Order forwarded to : 1. अपीलाथ�/Appellant 2. ��थ�/Respondent 3. आयकरआयु�/CIT 4. िवभागीय�ितिनिध/DR 5. गाड�फाईल/GF

BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL KENDRIYA SADAN, SECTOR – 9A CHANDIGARH

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